The current members of each Board Committee are indicated in the table below.
2017 Proxy Statement
| | Audit Committee | 17
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Table of Contents
Audit Committee
| |  | | “WithDuring 2021, the Audit Committee continued to oversee financial reporting, internal audit, and legal and regulatory matters, with a heavystrong focus on the Company’s controls and culture of compliance. The Committee is continuing to focus on these areas and risk management and mitigation, with an emphasis on business transformationthe evolving cybersecurity, technology, and data privacy regulatory compliance throughout every facet of the business, we’re focused on the continued integrity of our financial reporting and ensuring we have the proper controls in place.environment.” Jan Siegmund, Committee Chair | | 
| | | Additional Committee Members: Richard A. Goodman, Committee ChairBetsy D. Holden, Timothy P. Murphy, Angela A. Sun, and Solomon D. Trujillo | |
Meetings Held in 2021: 8 Primary Responsibilities: Additional Committee Members: Martin I. Cole, Roberto G. Mendoza, and Michael A. Miles, Jr. Meetings Held in 2016: 8
Primary Responsibilities:Pursuant to its charter, the Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to:
● | •integrity of the Company’s consolidated financial statements; | | | ● | •compliance with legal and regulatory requirements; | | | ● | • review the Company's guidelines and policies that govern the process by which the Company goes about assessing and managing its exposure to risks; • the independent registered public accounting firmfirm’s qualifications, independence and compensation; and | | | ● | •performance of the Company’s internal audit function and independent registered public accounting firm. |
Independence:Each member of the Audit Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as the Board has determined, has no material relationship with the Company. Each member of the Audit Committee is financially literate, knowledgeable, and qualified to review financial statements. The Board has designated each of Mr. Goodman and Mr. Siegmund as a “financial expert” as defined by Item 407(d) of Regulation S-K. Service on Other Audit Committees: No director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit Committee. Currently, none of the Audit Committee members serve on more than two other public company audit committees. Each member of the Audit Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as the Board has determined, has no material relationship with the Company. Each member of the Audit Committee is financially literate, knowledgeable, and qualified to review financial statements. The Board has designated Mr. Goodman as a “financial expert” as defined by Item 407(d) of Regulation S-K. Service on Other Audit Committees: No director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit Committee. Currently, none of the Audit Committee members serve on more than three public company audit committees (including the Company’s Audit Committee).
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2022 Proxy Statement | 19
Table of Contents CORPORATE GOVERNANCE CORPORATE GOVERNANCE | Compensation and Benefits Committee | | | |
| “In 2021, the Compensation and Benefits Committee | |  | “In 2016, the Compensation Committee continued to emphasizefocus on pay-for-performance by designing ourto set the foundation for the long-term strength and performance of the Company through the Company’s executive compensation program so that performance-based and/or at-risk pay elements would constitute a significant portion ofprogram. The Compensation and Benefits Committee also assisted the Board in the CEO succession process and in establishing compensation awarded. The Committee believes this continued emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed byarrangements for the Company’s strategy provides linkage with long-term stockholder value creation.new CEO.”
Michael A. Miles, Jr., Committee Chair | | 
| | | Additional Committee Members: Martin I. Cole, Richard A. Goodman, Betsy D. Holden, Committee Chairand Joyce A. Phillips | |
Meetings Held in 2021: 6 Primary Responsibilities: Additional Committee Members: Richard A. Goodman, Jeffrey A. Joerres, Roberto G. Mendoza, Robert W. Selander, and Solomon D. Trujillo Meetings Held in 2016: 5
Primary Responsibilities:Pursuant to its charter, the Compensation Committee has the authority to administer, interpret, and take any actions it deems appropriate in connection with any incentive compensation or equity-based plans of the Company, any salary or other compensation plans for officers and other key employees of the Company, and any employee benefit or fringe benefit plans, programs, or policies of the Company. Among other things, the Compensation Committee is responsible for:
● | •in consultation with senior management, establishing the Company’s general compensation philosophy, and overseeing the development and implementation of compensation and benefits policies; | | | ● | •reviewing and approving corporate goals and objectives relevant to the compensation of the Chief Executive OfficerCEO and other executive officers, evaluating the performance of the Chief Executive OfficerCEO and other executive officers in light thereof, and setting compensation levels and other benefits for the Chief Executive OfficerCEO (with the ratification by the independent directors of the Board) and other executive officers based on this evaluation; | | | ● | • overseeing the Company’s regulatory compliance with respect to compensation matters; •reviewing and making recommendations to the Board regarding severance or similar termination agreements with the Company’s Chief Executive OfficerCEO or to any person being considered for promotion or hire into the position of Chief Executive Officer;CEO; | | | ● | •approving grants and/or awards of options, restricted stock, restricted stock units, and other forms of equity-based compensation under the Company’s equity-based plans; | | | ● | •reviewing with management and preparing an annual report regarding the Company’s Compensation Discussion and Analysis to be included in the Company’s Proxy Statement and Annual Report; | | | ● | •in consultation with the Chief Executive Officer,CEO, reviewing management succession planning; | | | ● | •reviewing and recommending to the Board of Directors compensation for non-employee directors; and | | | ● | •periodically reviewing the overall effectiveness of the Company’s principal strategies related to human capital management, recruiting, retention, career development, and diversity. |
The Compensation Committee has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee and, in some situations, may also delegate its authority and responsibility with respect to certain compensation and benefit plans and programs to one or more employees. Independence: Independence: Each member of the Compensation Committee meets the definitions of “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) and “non-employee director” under Rule 16b-3 of the Exchange Act. Each member of the Compensation Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE, and the Exchange Act and such other independence or other requirements as may be applicable from time to time, and as the Board has determined, has no material relationship with the Company.
2017 Proxy Statement
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20 | The Western Union Company
Table of Contents CORPORATE GOVERNANCE Compliance Committee
| Compliance Committee |  | | | | “The Compliance Committee continues to demonstrateshares with regulators the Board’s commitment to compliance by focusing solely on oversightgoals of protecting consumers and the integrity of the global money transfer network and remains at the forefront of the Company’s global regulatory compliance program, which includes ongoing significant investment in compliance effortsfocus on the execution and collaboration with regulators around the world, including in lightenhancement of the U.S. government settlement agreements entered into byCompany’s compliance policies and procedures. In 2021, the Company.” Frances Fragos Townsend,Compliance Committee Chair
| |
Additional Committee Members: Hikmet Ersek (non-voting member), Martin I. Cole, Michael A. Miles, Jr., and Solomon D. Trujillo
Meetings Held in 2016: 4
Primary Responsibilities: Pursuant to its charter, the Compliance Committee assists the Audit Committee and the Board in fulfilling the Board’s oversight responsibility for the Company’s compliance with legal and regulatory requirements. Among other things, the Compliance Committee is responsible for reviewing:
● | continued to focus on sustaining and enhancing the Company’s compliance programs in light of increasing regulatory requirements around the globe.” Timothy P. Murphy, Committee Chair | | 
| | | Additional Committee Members: Martin I. Cole, Jan Siegmund, Angela A. Sun, and Solomon D. Trujillo Meetings Held in 2021: 4 Primary Responsibilities: Pursuant to its charter, the Compliance Committee assists the Audit Committee and the Board in fulfilling the Board’s oversight responsibility for the Company’s compliance with legal and regulatory requirements. Among other things, the Compliance Committee is responsible for reviewing and discussing with management: • the Company’s compliance programs, policies and key risk exposures relating to anti-money launderingAML, sanctions, anti-corruption, fraud prevention, consumer protection, and privacy laws, including establishing procedures to be apprised of material investigations or other material matters that may arise in relation to such laws; and | | | ● | •legal, compliance or other regulatory matters that may have a material effect on the Company’s business, financial statements or compliance policies, including material notices to or inquiries received from governmental agencies. |
Independence:Each voting member of the Compliance Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE, and the Exchange Act, and as the Board has determined, has no material relationship with the Company. The Board may appoint non-voting members to the Compliance Committee that are not independent from the Company. Each voting member of the Compliance Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company. The Board may appoint non-voting members to the Compliance Committee that are not independent from the Company. The Company’s Chief Executive Officer is currently a non-voting member of the Compliance Committee. 20
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2022 Proxy Statement | 21
Table of Contents CORPORATE GOVERNANCE
Corporate Governance and Public Policy Committee
| Corporate Governance, ESG, and Public Policy Committee |  | | | | “TheIn 2021, the Committee has recently focused onassisted the Chairman transition processBoard in lightrecruiting, appointing, and onboarding the Company’s new CEO and Board member, with the objective of Mr. Greenberg’s retirement,furthering the Company’s strategic objectives and will continue to look for opportunities to enhanceenhancing the skills, experience, diversity, and effectiveness of the BoardBoard. The Committee also continued to focus on oversight of the Company’s ESG disclosures and strategy development.” Jeffrey A. Joerres, Committee Chair | | 
| | | Additional Committee Members: Michael A. Miles, Jr. and Joyce A. Phillips Meetings Held in 2017.”2021: 5 Primary Responsibilities: Robert W. Selander, Committee Chair | |
Additional Committee Members: Betsy D. Holden, Jeffrey A. Joerres, and Frances Fragos Townsend
Meetings Held in 2016:4
Primary Responsibilities:Pursuant to its charter, the Corporate Governance, ESG, and Public Policy Committee is responsible for:
● | •recommending to the Board of Directors criteria for Board and committee membership; | | | ● | •considering, in consultation with the ChairmanChair of the Board and the Chief Executive Officer,CEO, and recruiting candidates to fill positions on the Board of Directors; | | | ● | •evaluating current directors for re-nomination to the Board of Directors; | | | ● | •recommending the director nominees for approval byto the Board of Directors and the stockholders;Directors; | | | ● | •recommending to the Board of Directors appointments to committees of the Board of Directors; | | | ● | •recommending to the Board of Directors corporate governance guidelines, reviewing the corporate governance guidelinesCorporate Governance Guidelines at least annually, and recommending modifications to the corporate governance guidelinesCorporate Governance Guidelines to the Board of Directors; | | | ● | • advising the Board of Directors with respect to the charters, structure, and operations of the various committees of the Board of Directors and qualifications for membership thereon; • overseeing the development and implementation of an orientation and continuing education program for directors; •establishing and implementing self-evaluation procedures for the Board of Directors and its committees; | | | ● | •reviewing stockholder proposals submitted for inclusion in the Company’s Proxy Statement; | | | ● | •reviewing the Company’s related persons transaction policy, and as necessary, reviewing specific related person transactions; and | | | ● | •reviewing and advising the Board of Directors regarding matters of public policy and social responsibilityESG matters that are relevant to the Company or the industries in which the Company operates. |
Independence: Independence:Each member of the Corporate Governance, ESG, and Public Policy Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company.
2017 Proxy Statement
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22 | The Western Union Company
Table of Contents
CORPORATE GOVERNANCE CHIEF EXECUTIVE OFFICEROFFICER SUCCESSION PLANNING The Company’s Board of Directors has developed a governance framework for Chief Executive OfficerCEO succession planning that is intended to provide for a talent-rich leadership organization that can drive the Company’s strategic objectives. Under its governance framework, the Board of Directors: ● | Reviews succession planning for the Chief Executive Officer on an annual basis. As part of this process, the Chief Executive Officer reviews the annual performance of each member of the management team with the Board and the Board engages in a discussion with the Chief
•Reviews succession planning for the CEO on an annual basis. As part of this process, the CEO reviews the annual performance of each member of the management team |
| Executive Officer and the Chief Human Resources
with the Board and the Board engages in a discussion with the CEO and the Chief People Officer regarding each team member and the team member’s development; •Maintains a confidential plan to address any unexpected short-term absence of the CEO and identifies candidates who could act as interim CEO in the event of any such unexpected absence; and •Ideally three to five years before the retirement of the current CEO, manages the succession process and determines the current CEO’s role in that process. | | | ● | Maintains a confidential plan to address any unexpected short-term absence of the Chief Executive Officer and identifies candidates who could act as interim Chief Executive Officer in the event of any such unexpected absence; and
| | | ● | Ideally three to five years before the retirement of the current Chief Executive Officer, manages the succession process and determines the current Chief Executive Officer’s role in that process.
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COMMUNICATIONS WITH THE BOARD OF DIRECTORS Any stockholder of the Company or other interested party who desires to contact the non-management directors either as a group or individually, or Mr. ErsekMcGranahan in his capacity as a director, may do so by writing to: The Western Union Company, Board of Directors, 12500 East Belford7001 E. Belleview Avenue, Mailstop M21A2, Englewood, CO 80112.Denver, Colorado 80237. Communications that are intended specifically for non-management directors should be be addressed to the attention of the ChairpersonChair of the Corporate Governance, ESG, and Public Policy Committee. All communications will be forwarded to the ChairpersonChair of the Corporate Governance, ESG, and Public Policy Committee unless the communication is specifically addressed to another member of the Board, in which case, the communication will be forwarded to that director.
BOARD ATTENDANCE AT ANNUAL STOCKHOLDERS’ MEETING OF STOCKHOLDERS Although the Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company’s Annual Meeting of Stockholders, it encourages directors to attend. ElevenEight out of eleven of the 12 members of the Board of Directors serving at the time attended the Company’s 20162021 Annual Meeting of Stockholders.
PRESIDING DIRECTOR OF NON-MANAGEMENT DIRECTOR MEETINGS The non-management directors meet in regularly scheduled executive sessions without management. The ChairmanChair of the Board of Directors is the presiding director at these meetings. NOMINATION OF DIRECTORS The Company’s Board of Directors is responsible for nominating directors for election by the stockholders and filling any vacancies on the Board that may occur. The Corporate Governance, ESG, and Public Policy Committee is responsible for identifying, screening, and recommending candidates to the Board for Board membership. The Corporate Governance, ESG, and Public Policy Committee does not have any single method for identifying director candidates, but will consider candidates suggested by a wide range of sources, including by any stockholder, director, or officer of the Company. Mr. McGranahan, who was appointed as a member of the Board in December 2021, was recommended to the Corporate Governance, ESG, and Public Policy Committee by a third-party executive search firm. 222022 Proxy Statement | 23
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Table of Contents CORPORATE GOVERNANCE CORPORATE GOVERNANCEDIRECTOR QUALIFICATIONS, REQUIREMENTS, AND EVALUATIONS
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General criteria for the nomination of director candidates include experience, high ethical standards and integrity, skills, diversity, ability to make independent analytical inquiries, understanding of the Company’s business environment, and willingness to devote adequate time to Board duties–all in the context of an assessment of the perceived needs of the Board at that point in time. In exercising its director nomination responsibilities, the Corporate Governance, ESG, and Public Policy Committee considers diversity in gender, ethnicity, geography, background, and cultural viewpoints when considering director nominees, given the global nature of the Company’s business. However, the Board has not adopted a formal policy governing director diversity. The effectiveness of the nomination process is evaluated by the Board each year as part of its annual self-evaluation and by the Our Corporate Governance and Public Policy Committee asGuidelines also require that a director retire effective at the next annual meeting of stockholders following the time such director reaches the age of 74. The Board may waive this requirement for one year if it evaluates and identifies director candidates. determines it is in the best interests of our Company. Each director is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a Board or Committee member.
The Corporate Governance, ESG, and Public Policy Committee will consider candidates for election to the Board suggested in writing by a stockholder and will make a recommendation to the Board using the same criteria as it does in evaluating candidates submitted by members of the Board of Directors. Any such suggestions should be submitted to the Corporate Secretary, The Western Union Company, 7001 E. Belleview Avenue, Denver, Colorado 80237. If the Company receives such a suggestion, the Company may request additional information from the candidate to assist in its evaluation. Pursuant to our Corporate Governance Guidelines, we evaluate the overall effectiveness of the Board annually. The Board together with the Corporate Governance, ESG, and Public Policy Committee conducts annual self-evaluations of Board and committee performance, including an evaluation of the effectiveness of the nomination process. In addition, the Board conducts annual evaluations of each individual independent director. Stockholders may submit nominations for director candidates by giving notice to the Corporate Secretary, The Western Union Company, 12500 East Belford7001 E. Belleview Avenue, Mailstop M21A2, Englewood, CO 80112.Denver, Colorado 80237. The requirements for the submission of of such stockholder nominations are set forth in Article II of the Company’s By-Laws, which are available on the “Investor Relations, Corporate Governance” section of the Company’s website,www.wu.com. www.westernunion.com.
SUBMISSION OF STOCKHOLDER PROPOSALS Stockholder proposals, including stockholder director nominations, requested to be included in the Company’s Proxy Statement for its 20182023 Annual Meeting of Stockholders must be received by the Company not later than November 30, 2017December 5, 2022 and comply with the requirements of Rule 14a-8, if applicable, and the Company’s By-laws.proxy access By-laws, as applicable. Even if a proposal or director nomination is not submitted in time to be considered for inclusion in the Company’s Proxy Statement for its 20182023 Annual Meeting of Stockholders, a proper stockholder proposal or director nomination may still be considered at the Company’s 20182023 Annual Meeting of Stockholders, but only if the proposal or nomination is received by the Company no sooner than January 11, 201819, 2023 and no later than February 10, 201818, 2023 and otherwise complies with the Company’s By-Laws. All proposals or nominations a stockholder wishes to submit at the meeting should be directed to the Corporate Secretary, The Western Union Company, 12500 East Belford7001 E. Belleview Avenue, Mailstop M21A2, Englewood, CO 80112.Denver, Colorado 80237. In addition to satisfying the foregoing requirements and those under the Company’s By-Laws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 20, 2023.
24 | The Western Union Company
Table of Contents CORPORATE GOVERNANCE CODE OF ETHICS The Company’s Director’s Code of Conduct, Code of Ethics for Senior Financial Officers, Reporting Procedure for Accounting and Auditing Concerns, Attorney’s Professional Conduct Policy, for Attorneys, and the Code of Conduct are available without charge through the “Investor Relations, Corporate Governance” section of the Company’s website, www.wu.comwww.westernunion.com, or by writing to the attention of:
Investor Relations, The Western Union Company, 12500 East Belford7001 E. Belleview Avenue, Mailstop M23IR, Englewood, CO 80112.WU-HQ-10, Denver, Colorado 80237. In the event of an amendment to, or a waiver from, the Company’s Code of Ethics for Senior Financial Officers, the Company intends to post such information on its website,www.westernunion.com. 2022 Proxy Statement www.wu.com| .25
2017 Proxy Statement
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Table of Contents COMPENSATION OF DIRECTORS COMPENSATION OF DIRECTORS
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The following table provides information regarding the compensation of our outside directors for 2016.2021. Mr. Ersek, our former President and Chief Executive Officer, doesCEO, and Mr. McGranahan, our current President and CEO, did not receive additional compensation in 2021 for his servicetheir services as a director.directors, and have been excluded from the table. Please see the “2021 Summary Compensation Table” for the compensation received by Messrs. Ersek and McGranahan with respect to 2021. | 2016 DIRECTOR COMPENSATION | | NAME | | FEES EARNED
OR PAID IN
CASH ($000) | | STOCK
AWARDS
($000)(2) | | OPTION
AWARDS
($000)(3) | | ALL OTHER
COMPENSATION
($000)(4) | | TOTAL
($000)(5) | | Martin I. Cole | | 105.0 | | 140.0 | | — | | 25.0 | | 270.0 | | Richard A. Goodman | | 120.0 | | 140.0 | | — | | 25.0 | | 285.0 | | Jack M. Greenberg | | 125.0 | | 180.0 | | 180.0 | | 50.0 | | 535.0 | | Betsy D. Holden | | 120.0 | | 140.0 | | — | | 20.0 | | 280.0 | | Jeffrey A. Joerres | | 105.0(1) | | 140.0 | | — | | — | | 245.0 | | Linda Fayne Levinson(6) | | 38.3 | | — | | 140.0 | | — | | 178.3 | | Roberto G. Mendoza | | 105.0 | | 140.0 | | — | | — | | 245.0 | | Michael A. Miles, Jr. | | 105.0 | | 140.0 | | — | | — | | 245.0 | | Robert W. Selander | | 121.3(1) | | 70.0 | | 70.0 | | 50.0 | | 311.3 | | Frances Fragos Townsend | | 120.0 | | 140.0 | | — | | — | | 260.0 | | Solomon D. Trujillo | | 105.0 | | 70.0 | | 70.0 | | — | | 245.0 |
2021 DIRECTOR COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | | FEES EARNED | | STOCK | | | OPTION | | | ALL OTHER | | | | | | | | OR PAID IN | | AWARDS | | | AWARDS | | | COMPENSATION | | | TOTAL | | NAME | | CASH ($000) | | ($000)(2) | | | ($000)(3) | | | ($000)(4) | | | ($000)(5) | | Martin I. Cole | | | 105.7 | | | | | 160.0 | | | | — | | | | — | | | | 265.7 | | Richard A. Goodman | | | 110.0 | | | | | — | | | | 160.0 | | | | 25.0 | | | | 295.0 | | Betsy D. Holden | | | 110.0 | | | | | 160.0 | | | | — | | | | 25.0 | | | | 295.0 | | Jeffrey A. Joerres | | | 125.0 | | (1) | | | 360.0 | | | | — | | | | — | | | | 485.0 | | Michael A. Miles, Jr. | | | 120.0 | | | | | 160.0 | | | | — | | | | 25.0 | | | | 305.0 | | Timothy Murphy | | | 128.0 | | | | | 160.0 | | | | — | | | | — | | | | 288.0 | | Joyce A. Phillips | | | 105.0 | | | | | 160.0 | | | | — | | | | 15.0 | | | | 280.0 | | Jan Siegmund | | | 125.0 | | | | | — | | | | 160.0 | | | | — | | | | 285.0 | | Angela A. Sun | | | 110.0 | | | | | 160.0 | | | | — | | | | 25.0 | | | | 295.0 | | Solomon D. Trujillo | | | 110.0 | | | | | 80.0 | | | | 80.0 | | | | — | | | | 270.0 | |
Footnotes: (1) | Messrs.Mr. Joerres and Selander elected to receive theirhis annual retainer feesfee for 20162021 in the form of equity compensation as described below under “—“Compensation of Directors—Equity Compensation.” |
| (2) | The amounts in this column represent the value of stock units granted to each director as annual equity grants. Stock awards consist of fully vested stock units that are settled in shares of Common Stock and may be subject to a deferral election consistent with Code Section 409A.409A of the Internal Revenue Code. The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). See Note 1617 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20162021 for a discussion of the relevant assumptions used in calculating these amounts. |
| (3) | The amounts in this column represent the value of stock options granted to each directordirectors as an annual equity grants.grant. The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See Note 1617 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20162021 for a discussion of the relevant assumptions used in calculating these amounts. |
| (4) | All Other Compensation represents matches under the Company’s gift matching program that the Company made in 2016.2021. Outside directors are eligible to participate in the Company’s gift matching program on the same terms as Western Union’s executive officers and employees. As noted below, contributions made or directed to be made to an eligible organization, up to an aggregate amount of $25,000 per calendar year, will be matched by the Company. Matching contributions to various charities were made in 20162021 on behalf of the following directors: Messrs. Cole, Goodman, Greenberg, and SelanderMiles, Ms. Holden, Ms. Phillips, and Ms. Holden.Sun. Contributions up to $100,000 per calendar year that a director makes to Thethe Western Union Foundation (the “Foundation”) without designating a recipient organization will be matched by the Company $2 for every $1 contributed. The charitable contributions made by Messrs. Greenberg and Selander represent matches made by the Company in 2016 with respect to charitable contributions made by Messrs. Greenberg and Selander in 2015 and 2016. |
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Table of Contents
COMPENSATION OF DIRECTORS(5)
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(5) | As of December 31, 2016,2021, each individual who served as an outside director during 2016 had outstanding the following number of stock units and options: |
| NAME | | STOCK UNITS | | OPTIONS | | | Martin I. Cole | | 1,682 | | 9,208 | | Richard A. Goodman | | 30,896 | | 36,814 | | Jack M. Greenberg | | 53,617 | | 336,144 | | Betsy D. Holden | | 67,545 | | 32,699 | | Jeffrey A. Joerres | | 18,554 | | 11,448 | | Linda Fayne Levinson | | 53,059 | | 138,388 | | | Roberto G. Mendoza | | 45,915 | | 140,608 | | Michael A. Miles, Jr. | | 105,538 | | 32,699 | | Robert W. Selander | | 17,636 | | 77,439 | | Frances Fragos Townsend | | 23,059 | | 39,833 | | Solomon D. Trujillo | | 19,675 | | 74,671 |
| | | | | | | | | | | NAME | | STOCK UNITS | | | OPTIONS | | | Martin I. Cole | | | 15,378 | | | | 9,208 | | | Richard A. Goodman | | | 58,849 | | | | 75,462 | | | Betsy D. Holden | | | 102,190 | | | | — | | | Jeffrey A. Joerres | | | 128,993 | | | | 11,448 | | | Michael A. Miles, Jr. | | | 140,183 | | | | — | | | Timothy Murphy | | | 9,929 | | | | 20,084 | | | Joyce A. Phillips | | | 10,401 | | | | — | | | Jan Siegmund | | | — | | | | 79,247 | | | Angela A. Sun | | | 20,316 | | | | 22,620 | | | Solomon D. Trujillo | | | 36,998 | | | | 177,080 | |
26 | The Western Union Company
Table of Contents COMPENSATION OF DIRECTORS (6) | Ms. Fayne Levinson ceased serving as a director at the 2016 Annual Meeting of Stockholders on May 12, 2016.DETERMINATION OF DIRECTOR COMPENSATION |
The Compensation Committee is responsible for recommending to the Board the compensation of the Company’s outside directors. As part of this process, the Compensation Committee reviews the outside director compensation program annually to evaluate whether it is competitive with market practices by considering input from Meridian, the Compensation Committee’s independent compensation consultant, regarding the Company’s historical practices with respect to outside director compensation as well as market data for the same peer group used for determining executive compensation. In 2016,2021, each outside director (other than our Non-Executive Chairman)Chair) received the following cash compensation for service on our Board and committees of our Board (prorated for partial years of service): ● | •an annual Board retainer fee of $85,000; •an annual committee chair retainer fee of $30,000 for the chairs of the Audit Committee and the Compliance Committee and $25,000 for the chairs of the Compensation Committee and the Corporate Governance, ESG and Public Policy Committee; and •an annual committee member retainer fee of $15,000 for non-chair members of the Audit Committee and $10,000 for non-chair members of $85,000; and
| ● | an annual committee chair retainer fee of $25,000 for the chairperson of each committee of the Board, and a $10,000 committee member retainer fee for each other member of each committee of our Board.
In February 2017, the Board approved an increase in Ms. Fragos Townsend’s Compliance Committee Chair retainer fee to $100,000 for each of 2017 and 2018 to reflectanticipated additional time and responsibilities in leading the Compliance Committee’s oversight of the Company’s compliance with the previously disclosed settlement agreements with certain United States Attorney’s Offices, the United States Federal Trade Commission, the Financial CrimesEnforcement Network of the United States Department of Treasury, and various state attorneys general (the “Joint Settlement Agreements”).
The 20162021 outside director equity awards were granted pursuant to our Long-Term Incentive Plan. All director equity awards will be settled in shares of Common Stock. The purpose of these awards is to advance the interests of the Company and its stockholders by encouraging increased stock ownership by our outside directors and by helping the Company attract, motivate, and retain highly qualified outside directors. Each
In 2021, all of our outside directors (other than our Non-Executive Chair) were eligible to receive an annual equity grant with a value of $160,000 for service on our Board and committees of our Board. The 2021 equity grant will be settled in shares of common stock and have a one-year vesting requirement, subject to pro-rata vesting for a qualifying departure from the Board. For 2021, each outside director hashad the optionchoice of electing to receive such director’s annual retainer fees described above in the form of (a) all cash, (b)equity or a combination of cash, fully vested stock options, and fully vested stock units, (c) all fully vested stock options, (d) all fully vested stock units, (e) a combination of 75% fully vested stock options and 25% fully vested stockunits, (f) a combination of 50% fully vested stock optionsand 50% fully vested stock units, or (g) a combination of 75% fully vested stock units and 25% fully vested stock options. Eachthereof. For 2021, each outside director may also electhad the choice of election to receive suchdirector’ssuch director’s annual equity grant in the form (a) all stock options, (b) all restricted stock units, (c) a combination of any75% stock options and 25% restricted stock units, (d) a combination of the above alternatives, other than alternatives that include cash.50% stock options and 50% restricted stock units, or (e) a combination of 75% restricted stock units and 25% stock options.
Each outside director (other than our Non-Executive Chairman) is eligible to receive an annual equity grant with a value of $140,000 for service on our Board and committees of our Board (prorated for incoming directors joining during the year).
COMPENSATION OF OUR NON-EXECUTIVE CHAIRMAN CHAIR |
In 2016,2021, our Non-Executive ChairmanChair received the following compensation in lieu of the compensation described above for our other outside directors: ●•an annual retainer fee of $125,000; and
●• an annual equity grant with a value of $360,000.
Our Non-Executive ChairmanChair has the optionchoice to receive his annual retainer fee in the forms discussed above under “—“Compensation of Directors—Equity Compensation.” The Non-Executive Chair annual equity grant has a one-year vesting condition, subject to pro-rata vesting for a qualifying departure from the Board. 20172022 Proxy Statement| 27
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Table of Contents COMPENSATION OF DIRECTORS COMPENSATION OF DIRECTORSCHARITABLE CONTRIBUTIONS
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Outside directors may participate in the Company’s gift matching program on the same terms as the Company’s executive officers and employees. Under this program, contributions up to $100,000 per calendar year that the director makes to the Western Union Foundation (the “Foundation”) without designating a recipient organization will be matched by the Company $2 for every $1 contributed. Contributions made or directed to be made to an eligible organization, as defined in the program, up to an aggregate amount of $25,000 per calendar year will be equally matched by the Company through the Foundation. Directors are reimbursed for their expenses incurred by attending Board, committee, and stockholder meetings, including those for travel, meals, and lodging. Occasionally, a spouse or other guest may accompany directors on corporate aircraft when the aircraft is already scheduled for business business purposes and can accommodate additional passengers. In those cases, there is no aggregate incremental cost to the Company and, as a result, no amount is reflected in the 20162021 Director Compensation table. INDEMNIFICATION AGREEMENTS |
Each outside director has entered into a Director Indemnification Agreement with the Company to clarify indemnification procedures. Consistent with the indemnification rights already provided to directors of the Company in the Company’s Amended and Restated Certificate of Incorporation, each agreement provides that the Company will indemnify and hold harmless each outside director to the fullest extent permitted or authorized by the General Corporation Law of the State of Delaware in effect on the date of the agreement or as such laws may be amended or replaced to increase the extent to which a corporation may indemnify its directors. EQUITY OWNERSHIP GUIDELINES |
Each outside director is expected to maintain an equity investment in Western Union equal to five times his or her annual cash retainer, which must be achieved within five years of the director’s initial election to the Board. The holdings that generally may be counted toward achieving the equity investment guidelines include outstanding stock awards or units, shares obtained through stock option exercises, shares owned jointly with or separately by the director’s spouse, and shares purchased on the open market, and outstanding stock options received in lieu of cash retainer fees.market. As of March 13, 2017,the Record Date, all outside directors have met or, within the applicable period, are expected to meet, these equity ownership guidelines. PROHIBITION AGAINST PLEDGING AND HEDGING OF THE COMPANY’S SECURITIES |
The Company’s Insider Trading Policy prohibits the Company’s directors from pledging the Company’s securities or engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. 262022 Proxy Statement | 28
| | | The Western Union Company
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Table of Contents REPORT OF THE AUDIT COMMITTEE REPORT OF THE AUDIT COMMITTEE
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The Audit Committee is currently comprised of foursix independent directors and operates under a written charter adopted by the Board. The Audit Committee reviews the charter at least annually, reviewing it last in December 2016.2021. The charter is available through the “Investor Relations, Corporate Governance” portion of the Company’s websitewww.wu.com.www.westernunion.com. The Board has the ultimate authority for effective corporate governance, including the role of oversight of the management of the Company. The Audit Committee’s purpose is to assist the Board in fulfilling its oversight responsibilities with respect to the Company’s consolidated financial statements, independent registered public accounting firm qualifications and independence, performance of the Company’s internal audit function and independent registered public accounting firm, and other matters identified in the Audit Committee Charter. The Audit Committee relies on the expertise and knowledge of management, the internal auditors and the independent registered public accounting firm in carrying out its responsibilities. Management is responsible for the preparation, presentation, and integrity of the Company’s consolidated financial statements, accounting and financial reporting principles, internal control over financial reporting and disclosure controls, and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. In addition, management is responsible for objectively reviewing and evaluating the adequacy, effectiveness, and quality of the Company’s system of internal control. The Company’s independent registered public accounting firm, Ernst & Young LLP, is responsible for performing an independent audit of the consolidated financial statements and for expressing an opinion on the conformity of those financial statements with United States generally accepted accounting principles. The Company’s independent registered public accounting firm is also responsible for expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee engages in an annual evaluation of the independent public accounting firm’s qualifications, assessing the firm’s quality of service, the firm’s sufficiency of resources, the quality of the communication and interaction with the firm, and the firm’s independence, objectivity, and professional skepticism. In evaluating and selecting the Company’s independent registered public accounting firm, the Audit Committee considers, among other things, historical and recent performance of the firm, an analysis of known significant legal or regulatory proceedings related to the firm, recent Public Company Accounting Oversight Board (the “PCAOB”) reports regarding the firm, industry experience, audit fee revenues, audit approach, and the independence of the firm. The Audit Committee also periodically considers the advisability and potential impact of selecting a different independent public accounting firm. In addition, the Audit Committee is involved in the lead audit partner selection process. During fiscal year 2016,2021, the Audit Committee fulfilled its duties and responsibilities as outlined in its charter. Specifically, the Audit Committee, among other actions: ● | reviewed and discussed with management and the independent registered public accounting firm the Company’s quarterly earnings press releases, consolidated financial statements, and related periodic reports filed with the SEC;
| ● | reviewed with management, the independent registered public accounting firm and the internal auditor, management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the effectiveness of the Company’s internal control over financial reporting; |
● | reviewed with the independent registered public accounting firm, management, and the internal auditor, as appropriate, the audit scope and plans of both the independent registered public accounting firm and internal auditor;
| ● | met in periodic executive sessions with each of the independent registered public accounting firm, management, and the internal auditor;
| ● | received the written disclosures and the annual letter from Ernst & Young LLP provided to us pursuant to Public Company Accounting Oversight Board Ethics and Independence Rule 3526,Communication with AuditCommittees Concerning Independence, concerning their independence and discussed with Ernst & Young LLP their independence; and
| ● | reviewed and pre-approved all fees paid to Ernst & Young LLP, as described in Proposal 4–Ratification of Selectionof Auditors, and considered whether Ernst & Young LLP’s provision of non-audit services to the Company wascompatible
• reviewed and discussed with management and the independent registered public accounting firm the Company’s quarterly earnings press releases, consolidated financial statements, and related periodic reports filed with the SEC; • reviewed with management, the independent registered public accounting firm and the internal auditor, management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the effectiveness of the Company’s internal control over financial reporting; • reviewed with the independent registered public accounting firm, management, and the internal auditor, as appropriate, the audit scope and plans of both the independent registered public accounting firm and internal auditor; • reviewed with the independent registered public accounting firm the critical audit matters expected in their report for the 2021 audit; • met in periodic executive sessions with each of the independent registered public accounting firm, management, and the internal auditor; • received the written disclosures and the annual letter from Ernst & Young LLP provided to us pursuant to PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, concerning their independence and discussed with Ernst & Young LLP their independence; and • reviewed and pre-approved all fees paid to Ernst & Young LLP, as described in Proposal 3–Ratification of Selection of Auditors, and considered whether Ernst & Young LLP’s provision of non-audit services to the Company was compatible with the independence of the independent registered public accounting firm. |
The Audit Committee has reviewed and discussed withthewith the Company’s management and independent registered public accounting firm the Company’s audited consolidated financial statements and related footnotes for the fiscal year ended December 31, 2016,2021, and the independent registeredpublicregistered public accounting firm’s report on those financial statements. Management represented to the Audit Committee that theCompany’sthe Company’s financial statements were prepared in accordance with United States generally accepted accounting principles. 2022 Proxy Statement | 29
Table of Contents REPORT OF THE AUDIT COMMITTEE We have discussed with Ernst & Young LLP the matters required to be discussed with the Audit Committee by Auditing Standard No. 16,Communications with Audit Committees, issued by the Public Company Accounting Oversight Board. The Auditing Standard No. 16applicable requirements of the PCAOB and the SEC. Such communications include,among other items, matters relating to the conduct of an auditofaudit of the Company’s consolidated financial statements under the standards of the Public Company Accounting Oversight Board.PCAOB. This review included a discussion with managementand the independent registered public accounting firm abouttheabout the quality (not merely the acceptability) of the Company’s accounting principles, the reasonableness of significant estimates and judgments, and the disclosures in the Company’s financial statements, including the disclosures relating to critical accounting policies. In reliance on the review and discussions described above, we recommended to the Board of Directors, and the Board approved, that the audited consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20162021 for filing with the SEC.
Audit Committee Richard A. Goodman (Chairperson)
Martin I. Cole
Roberto G. Mendoza
Michael A. Miles, Jr.
| 2017 Proxy StatementJan Siegmund (Chair)
| | | 27Richard A. Goodman
| Betsy D. Holden | Timothy P. Murphy | Angela A. Sun | Solomon D. Trujillo |
30 | The Western Union Company
Table of Contents COMPENSATION AND BENEFITS COMMITTEE REPORT COMPENSATION AND BENEFITS COMMITTEE REPORT
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The Compensation and Benefits Committee has reviewed and discussed the Company’s Compensation Discussion and Analysis with management and based on such review and discussion, the Compensation and Benefits Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement and its Annual Report on Form 10-K.10-K for the fiscal year ended December 31, 2021.
Compensation and Benefits Committee Michael A. Miles, Jr. (Chair) Martin I. Cole Betsy D. Holden (Chairperson)
Richard A. Goodman
Jeffrey A. Joerres
Roberto G. Mendoza
Robert W. Selander
Solomon D. Trujillo 28Joyce Phillips 2022 Proxy Statement | 31
| | | The Western Union Company
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSIS
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EXECUTIVE SUMMARY The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. Western Union offers its services in more than 200 countries and territories. Our business is complex: our regulatory environment is disparate and developing; our consumers are different from those addressed by traditional financial services firms; and our agent and client relationships are numerous and varied. Managing these complexities is at the center of Western Union’s success, and our leadership must be capable of supporting our Company’s goals amid this complexity. The Company’s key strategic priorities for 2016 were the same as 2015 and2021 are set forth in the chart below. The performance goals and objectives under our annual incentive and long-term incentive programs were designed to support these strategies.strategic priorities. 1
Please see our 20162021 Annual Report on Form 10-K for more information regarding our performance. * (1) | See AppendixAnnex A for a reconciliation of measures that are not based on accounting principles generally accepted in the United States (“GAAP”) to the comparable GAAP measure. |
2017 Proxy Statement(2)
| | | 29Consumer-to-Consumer segment money transfer transactions initiated through websites and mobile applications marketed under our brands (“westernunion.com”) and transactions initiated on the internet and mobile applications hosted by our third-party white label or co-branded digital partners.
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32 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION FRAMEWORK COMPENSATION DISCUSSION AND ANALYSIS
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EXECUTIVE COMPENSATION FRAMEWORK
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The Company’s executive compensation framework includes the following, each of which the Company’s Compensation and Benefits Committee (the “Compensation Committee” or the “committee”) believes reinforces our executive compensation philosophy and objectives:objectives and includes the following: What We Do:
✓WHAT WE DO |  Pay-for-performance and At-Risk Compensation.at-risk compensation.
A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”), with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by our Company’s strategy. For 2016,2021, performance-based compensation comprised approximately 90%83% of the targeted annual compensation for the Chief Executive OfficerMr. Ersek and, on average, 66%approximately 64% of the targeted annual compensation for theour other named executive officers.NEOs (excluding new hire NEOs). The remaining components of such NEOs’ 2021 targeted annual compensation consisted of base salary for all of the named executive officers and service-based RSUs, forwith the named executive officers other than the Chief Executive Officer, which areCompensation Committee viewing RSUs as at-risk as their value fluctuates based on our stock price performance.
| ✓ |  Align Compensationcompensation with Stockholder Interests.stockholder interests.
Performance measures for incentive compensation are linked to the overall performance of the Company including the achievement of financial and strategic objectives, as well as individual performance and contributions,are designed to be aligned with the creation of long-term stockholder value.
| ✓ |  Emphasis on future pay opportunity vs. current pay.
Our long-term incentive awards are delivered to our named executive officers in the form of equity-based, compensation, withuse performance and multi-year vesting provisions to encourage retention.retention, and are designed to align our NEOs’ interests with long-term stockholder interests. For 2016,2021, long-term equity compensation comprised approximately 74% of the targeted annual compensation for the Chief Executive OfficerMr. Ersek and, on average, 56%approximately 64% of the targeted annual compensation for theour other named executive officers. In addition, in 2016, the committee elected to deliver the entire increase in the Chief Executive Officer’s total target direct compensation in the form of long-term equity compensation.
| ✓ | NEOs (excluding new hire NEOs).  Mix of performance metrics.
The Company utilizes a mix of performance metrics that emphasize both absolute performance goals, which provide the primary links between incentive compensation and the Company’s strategic operating plan and financial results, and a relative performance goals,goal, which measuremeasures Company performance in comparison to the S&P 500 Index.
| ✓ | Three-year Performance Period for PSUs. In order to link a significant portion of the named executive officers’ targeted annual compensation to the longer-term performance of the Company, our PSUs have a three-year performance period.
| ✓ | Stockholder engagement. As part of the Company’s stockholder outreach program, theThe Compensation Committee chair and members of management seek to engage with stockholders regularly to discuss and understand their perceptions or concerns regarding our executive compensation program.  “Clawback” policy.
| ✓ | OutsideThe Company may recover incentive compensation consultant. paid to certain officers in the event of an accounting restatement or if such officers engaged in detrimental conduct, as defined in the clawback policy. In addition, the Company may recover incentive compensation paid to certain officers for conduct that is determined to have contributed to material compliance failures, subject to applicable laws. The Compensation Committee retains itsRobust stock ownership guidelines.
We require our executive officers to own a meaningful amount of Company stock to align them with long-term stockholder interests (6x base salary in the case of our CEO and 3x base salary for our other NEOs).  Include ESG metrics in compensation program.
Our annual incentive program incorporates ESG metrics, which qualitatively assess progress towards the Company’– three pillars - Integrity of Global Money Movement, Economic Prosperity, and Diversity, Equity and Inclusion. In addition, our annual incentive program incorporates compliance and leadership metrics.  Multi-year vesting and/or performance periods for long-term incentive awards.
 Independent compensation consultant to reviewretained by the Company’s executive compensation program and practices.Compensation Committee.
| ✓ |  “Double “Double trigger” severance benefits in the event of a change-in-control.
 In the event of a change-in-control, severance benefits are payable only upon a “double trigger.”
| ✓ | Maximum payout caps for annual cash incentive compensation and PSUs.
| ✓ | “Clawback” Policy.The Company may recover incentive compensation paid to an executive officer that was calculated based upon any financial result or performance metric impacted by fraud or misconduct of the executive officer.
| ✓ | Robust stock ownership guidelines. Our executive compensation program requires meaningful stock ownership by our executive officers to align them with long-term stockholder interests. Our Chief Executive Officer is required to hold stock equal to a multiple of six times his base salary, and each of our other named executive officers is required to hold stock equal to a multiple of three times his or her base salary. Fifty percent of after-tax shares received as equity compensation must be retained until an executive meets the stock ownership guideline.
| ✓ | Consider Compliance in Compensation Program. Since 2014, the Compensation Committee has included an evaluation of compliance in the Company’s annual incentive program in order to reinforce compliance as an objective throughout the organization. Beginning with the Company’s 2017 executive compensation program, the Compensation Committee will include additional evaluation criteria related to compliance in its executive review and bonus system so that each Company executive is evaluated on what the executive has done to ensure that the executive’s business or department is in compliance with U.S. laws. In addition, the Compensation Committee will also implement a provision that allows the Company to “clawback” bonuses for executives for conduct that is later determined to have contributed to future compliance failures, subject to applicable law. |
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| | | The Western Union Company
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2022 Proxy Statement | 33
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSISWHAT WE DON’T DO
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What We Don’t Do:
✗ | No change-in-control tax gross ups. We do not provide change-in-control tax gross ups to individuals promoted or hired after April 2009. Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments based on Compensation Committee action in 2009.
|  ✗
| No repricing or buyout of underwater stock options. None of our equity plans permit the repricing or buyout of underwater stock options or stock appreciation rights without stockholder approval, except in connection with certain corporate transactions involving the Company.
approval. No change-in-control tax gross-ups.
| ✗ | Following Mr. Ersek’s retirement as CEO, no Company employee is eligible for change-in-control tax gross-up payments.  Prohibition against pledging and hedging of Company securities by senior executives and directors.
| ✗ | Please see “Summary of Corporate Governance Practices” for additional details.  No dividends or dividend equivalents are accruedpaid on unvested or paid onunearned PSUs or RSUs.
 No service-based defined benefit pension plan.
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MANAGEMENT TRANSITION On December 27, 2021, Devin McGranahan succeeded Hikmet Ersek as the Company’s new President and Chief Executive Officer. Upon Mr. McGranahan’s start date, Mr. Ersek assumed the role as Special Advisor to the Chief Executive Officer, with such service expected to continue through June 30, 2022. Please see the section below entitled “CEO Transition Compensation” for a description of the compensation arrangements entered into with Messrs. McGranahan and Ersek in connection with the CEO transition. 2017 MODIFICATIONS TO EXECUTIVE COMPENSATION PROGRAM
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Since 2014, the Compensation Committee has included an evaluation of compliance in the Company’s annual incentive program in order to reinforce compliance as an objective throughout the organization. As previously disclosed, in January 2017, the Company entered into the Joint Settlement Agreements, pursuant to which the Company agreed to make certain enhancements to the Company’s executive compensation program. Specifically, the Company agreed to implement evaluation criteria related to compliance in its executive review and bonus system so that each Company executive is evaluated on what the executive has done to
ensure that the executive’s business or department is in compliance with U.S. laws. A failing score in compliance, including anti-money laundering and anti-fraud programs, will make the executive ineligible for any bonus for that year. Furthermore, the Company agreed to include in its new executive review and bonus system a provision that allows the Company to “clawback” bonuses for executives for conduct that is later determined to have contributed to future compliance failures, subject to applicable law. These changes will be effective beginning with the Company’s 2017 executive compensation program.
FORMER CHIEF EXECUTIVE OFFICER COMPENSATION |
In orderBecause Mr. Ersek served as CEO of the Company until late December 2021, this section describes the compensation paid or granted to more closely alignMr. Ersek in 2021. Mr. Ersek’s total direct compensation with the median level of compensation for chief executive officers, as reported by the Compensation Committee’s compensation consultant, the Compensation Committee increased Mr. Ersek’s total target direct compensation. Consistent with the Company’s long-standing practice of emphasizing future pay versus current pay and aligning compensation with the interests of the Company’s stockholders, the committee allocated the entire increase in total target direct compensation to the equity grant level for Mr. Ersek. Mr. Ersek’s2021 base salary and annual and long-term incentive award targets remained unchanged. As a result ofunchanged from the 2016 long-term incentive award increase,levels set in 2020. Mr. Ersek’s 20162021 compensation approximates thecontinued to be aligned with median compensation for chief executive officers in the 20162021 peer group, based on the most recent publicly available information, as compiled by the Compensation Committee’s independent compensation consultant. For 2021 performance, Mr. Ersek received an annual incentive payout of $1,392,300, reflecting achieved performance of 78% of target, as further described on pages 43-45. In addition, 2021 was the final performance year of the 2019 PSU grants. Primarily, due to the impact of COVID-19 on the Company’s operations in 2020 and 2021, the TSR PSUs did not vest, while the Financial PSUs vested at 28% despite achieving close to target performance for the first year of the three-year performance period.
In structuring2021, Mr. Ersek’s 2016long-term incentive allocation continued to be comprised of 50% Financial PSUs, 20% TSR PSUs, 20% stock options and 10% service-based RSUs. Further information with respect to the 2021 long-term incentive awards can be found on pages 45-49. Mr. Ersek’s 2021 total target direct compensation (which includes base salary, target bonus opportunity and the 2021 long-term incentive grant value) was weighted significantly toward variable and performance-based incentive pay over fixed pay, and long-term, equity-based pay over annual cash compensation, because the Compensation Committee electeddesired to retaintie a significant level of the same mixCEO’s compensation to the performance of awardsthe Company. The percentage of compensation delivered in the form of performance-based compensation was higher for Mr. Ersek as it provided in 2015 - TSR PSUs, Financial PSUs and stock options. PSUs vest based oncompared to our other NEOs because the achievement of pre-established performance goals over a three-year performance period. The Compensation Committee believes that providing a portionthe CEO’s leadership is one of Mr. Ersek’s long-term incentive awards in the formkey drivers of stock options emphasizes the achievement of long-term objectives and encourages long-term value creation as the stock options will only have value to Mr. Ersek if the Company’s stock price appreciates fromsuccess and that a greater percentage of the dateCEO’s total compensation should be variable as a reflection of grant. 2017 Proxy Statement
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Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
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For 2016 performance, Mr. Ersek received a cash payout under the 2016 Annual Incentive Plan of $1,392,000, reflecting a blended payout of 93% of target, as compared to an 118% of target payout for 2015 performance and an 88% of target payout for 2014 performance. The Compensation Committee based Mr. Ersek’s award opportunity under the Annual Incentive Plan entirely on the achievement of corporate and strategic performance goals.
In determining Mr. Ersek’s 2016 annual incentive payout under the Annual Incentive Plan, the committee excluded from the payout calculations charges incurred pursuant to the Joint Settlement Agreements, for the reasons discussed under “– Establishing and Evaluating Executive Compensation – Elements of 2016 Executive Compensation Program –Annual Incentive Compensation” below. The committee also reviewed the Company’s existing clawback policy and determined thatlevel of performance. Market data provided by the clawback policy did not require a clawback of Mr. Ersek’s annual incentive payoutCompensation Committee’s independent compensation consultant supported this practice as a result of the Joint Settlement Agreements based on the same reasons discussed below.well.
The following chart demonstrates thatillustrates our Chief Executive Officer’sCEO pay philosophy of heavily weighting targeted CEO compensation is heavily weighted toward variable, performance-based pay elements, and such elements comprised approximately 90% of the targeted 2016 annual compensation for Mr. Ersek (consisting of target payout opportunity under the Annual Incentive Plan and stock option and PSU components under the Long-Term Incentive Plan). Pay is based on the annual base salary and target incentive opportunities applicable to Mr. Ersek as of December 31, 2016.elements. 
34 CEO 2016 TOTAL DIRECT COMPENSATION| The Western Union Company 
Since a significant portion of Mr. Ersek’s compensation is both performance-based and at-risk, we are providing the following supplemental graph to compare the compensation granted to Mr. Ersek, as required to be reported by the SEC rules in the 2016 Summary Compensation Table, to the compensation “realizable” by him for 2014 to 2016. We believe the “realizable” compensation shown is reflective of the Compensation Committee’s emphasis on “pay-for-performance” in that differences between realizable pay and total reported compensation, as well as fluctuations year-over-year, are primarily the result of our stock performance and our varying levels of achievement against pre-established performance goals under our Annual Incentive Plan and Long-Term Incentive Plan.
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| | | The Western Union Company
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSIS
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CHIEF EXECUTIVE OFFICER TOTAL
REPORTED COMPENSATION
VERSUS TOTAL REALIZABLE COMPENSATION(1)
(1) | This graph and the total realizable compensation reported in this graph provide supplemental information regarding the compensation paid to Mr. Ersek and should not be viewed as a substitute for the 2016 Summary Compensation Table.
| (2) | As reported in the Total column of the 2016 Summary Compensation Table.
| (3) | Amounts reported in the calculation of total realizable compensation include (a) annualized base salary, (b) actual bonus payments made to Mr. Ersek with respect to each of the years shown under the Annual Incentive Plan, (c) actual amounts paid with respect to discretionary bonuses in the year in which such bonuses are earned, (d) the value realized from the exercise of stock options and for unexercised stock options, the difference between the exercise price and the closing stock price on the last trading day of 2016, each reported in the year granted, (e) the value realized upon vesting of RSUs or PSUs and the value of unvested RSUs or PSUs based on the closing stock price on the last trading day of 2016, each reported in the year granted, and (f) amounts reported in the All Other Compensation Table for the respective years. For purposes of this table, the value of the TSR PSUs is based on target performance since the TSR PSUs vest based on the Company’s TSR at the end of the three-year performance period compared to the Company’s TSR at the beginning of the performance period. The Financial PSUs are valued for purposes of this table based on estimated performance as of December 31, 2016.
| (4) | TSR at the 58th percentile of the S&P 500 index. |
As noted above, inThe Company received approximately 94% support for its compensation review process, the Compensation Committee considers whether“say on pay” vote at the Company’s executive compensation2021 Annual Meeting of Stockholders and benefits program serves the interestsan average support level of the Company’s stockholders. In that respect, as part of its ongoing review of the Company’s executive compensation program, the Compensation Committee considered the approval by approximately 97% of the votes cast93% for the Company’s “say on pay” vote atvotes over the Company’s
2016 Annual Meeting of Stockholders.last five years. After considering the 20162021 “say on pay” results, the committee
determined that the Company’s executive compensation philosophy, compensation objectives, and compensation elements continued to be appropriate and did not make any specific changes to the Company’s executive compensation program in response to the 20162021 “say on pay” vote. In early 2017, managementManagement and the Compensation Committee Chair reachedregularly reach out to stockholders who the Company believes collectively held over 55% of the Company’s outstanding Common Stock as of the Record Date to better understand their views on the Company’s executive compensation program, the “say on pay” vote and
our executive compensation disclosure. In 2021, the Company reached out to stockholders who held approximately 70% of the Company’s outstanding common stock to discuss the Company’s executive compensation program and held discussions with all stockholders who accepted the Company’s invitation. Over the past few years, the committee and management have found these discussions to be very helpful in their ongoing evaluation of the Company’s executive compensation program, and intend to continue to obtain this feedback in the future. 20172022 Proxy Statement| 35
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS
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OTHER CORPORATE GOVERNANCE PRACTICES
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The Board of Directors believes that strong corporate governance is key to long-term stockholder value creation. Please see “Corporate Governance–Summary of Corporate Governance Practices” above for a summary of the Company’s corporate governance practices. Highlights include:
Governance Highlights COMPENSATION DISCUSSION AND ANALYSIS
✓ | Annual Election of Directors
| ✓ | Proxy Access
| ✓ | Majority Vote Standard in Uncontested Elections
| ✓ | Stockholder Right to Call Special Meetings
| ✓ | No Stockholder Rights Plan (“Poison Pill”)
| ✓ | No Supermajority Voting Provisions in the Company’s Organizational Documents
| ✓ | Independent Board, except our Chief Executive Officer
| ✓ | Independent Non-Executive Chairman
| ✓ | Independent Board Committees
| ✓ | Confidential Stockholder Voting
| ✓ | Committee Authority to Retain Independent Advisors
| ✓ | Robust Codes of Conduct
| ✓ | Robust Stock Ownership Guidelines for Senior Executives and Directors
| ✓ | Prohibition Against Pledging and Hedging of Company Stock by Senior Executives and Directors
| ✓ | Clawback Policy
| ✓ | Stockholder Engagement |
ESTABLISHING AND EVALUATINGEVALUATING EXECUTIVE COMPENSATION This Compensation Discussion and Analysis describes how the Compensation Committee determined 20162021 executive compensation, the elements of our executive compensation program and the compensation of each of our namedNEOs. executive officers. The information provided should be read together with the information presented in the “Executive Compensation” section of this Proxy Statement. For 2016,2021, the named executive officersNEOs were:
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| 
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| Devin McGranahan
President and Chief Executive Officer | Hikmet Ersek
Senior Advisor to
Chief Executive Officer(1) | Raj Agrawal
Chief Financial
Officer | Michelle Swanback
President, Product
and Platform(2) | Jean Claude Farah
President, Global
EMEA/APAC Region | Gabriella Fitzgerald
President, Americas Region |
Hikmet
On December 27, 2021, Mr. Ersek– retired as the Company’s President and Chief Executive Officer (September 2010and assumed the role of Special Advisor to present) Rajesh K. Agrawal– Executive Vice President and Chief Financial Officer (July 2014the CEO, with such service scheduled to present)
Odilon Almeida– Executive Vice President, President – Global Money Transfer (February 2017 to present); Executive Vice President and President, Americas and European Union (January 2014 to February 2017)
Elizabeth G. Chambers– Executive Vice President, Chief Strategy, Product and Marketing Officer (November 2015 to present)
J. David Thompson– Executive Vice President, Global Operations (November 2012 to present) and Chief Information Officer (April 2012 to present)
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Table of Contentsterminate on June 30, 2022.
COMPENSATION DISCUSSION AND ANALYSIS(1)
| On March 31, 2022, Michelle Swanback separated from the Company. |
36 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS OUR 2016 EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES |
To
The Compensation Committee has adopted the following compensation objectives and guiding principles to align the Company’s incentive compensation program with the Company’s overall executive compensation philosophy, in May 2016, the Compensation Committee adopted the following compensation objectives and guiding principles:philosophy: | | Our Executive Compensation Philosophy | | | | | | The Compensation Committee believes the Company’s executive compensation program should reward actions and behaviors that build a foundation for the long-term strength and performance of the Company, while also rewarding the achievement of short-term performance goals informed by the Company’s strategy.
| | |  
Objectives | ●•Align executive goals and compensation with stockholder interests
• ●Attract, retain and motivate outstanding executive talent• ●Pay-for-performance – Hold executives accountable and reward them for achieving financial, strategic and operating goals
| | |  
Guiding
Principles
| ●•Pay-for-Performance: Pay is significantly performance-based and at-risk, with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by the Company’s strategy.
• ●Align Compensation with Stockholder Interests: Link incentive payouts with the overall performance of the Company, including achievement of financial and strategic objectives, as well as individual performance and contributions, to create long-term stockholder value. • ●Stock Ownership Guidelines: Our program requires meaningful stock ownership by our executives to align them with long-term stockholder interests. • ●Emphasis on Future Pay Opportunity vs. Current Pay: Our long-term incentive awards are delivered in the form of equity-based compensation with multi-year vesting provisions to encourage retention. • ●Hire, Retain and Motivate Top Talent: Offer market-competitive compensation which clearly links payouts to actual performance, including rewarding appropriately for superior results, facilitating the hire and retention of high-caliber individuals with the skills, experience and demonstrated performance required for our Company. • ●Principled Programs: Structure our compensation programs considering corporate governance best practices and in a manner that is understandable by our participants and stockholders.
| | | | | |
THE BOARD OF DIRECTORS AND THE COMPENSATION COMMITTEE |
The Board of Directors oversees the goals and objectives of the Company and of the Chief Executive Officer,CEO, evaluates succession planning with respect to the Chief Executive OfficerCEO and evaluates the Chief Executive Officer’sCEO’s performance. The Compensation Committee supports the Board by establishingby: •Establishing the Company’s general compensation philosophy and overseeingphilosophy; •Overseeing the development and implementation of the Company’s compensation and benefits policies. The Compensation Committee reviewspolicies; •Reviewing and approvesapproving corporate goals and objectives relevant to the compensation of the Chief Executive OfficerCEO and other executive officers, setsofficers; •Approving the compensation levels of each of the Executive Vice Presidents and approvesexecutive officers; •Approving the compensation of the Chief Executive Officer,CEO, with ratification by the independent directors of the Board. Board; and •Overseeing critical role development and succession efforts by providing strategic direction as the Board identifies key executive skills and experience priorities. The Compensation Committee’s responsibilities under its charter are further described in the “Corporate Governance–Governance—Committees of the Board of Directors” section of this Proxy Statement. While 2022 Proxy Statement | 37
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS Mr. Ersek, while not membersa member of the Compensation Committee, the Chairmanattended portions of the Board and the Chief Executive Officer attended all of the meetingseach meeting of the Compensation Committee in 20162021 to contribute to and understand the committee’s oversight of, and decisions relating to, executive compensation. The Chief Executive OfficerMr. Ersek did not attend portions of the meetings relating to his compensation. The Compensation Committee regularly conducts executive sessions without management present. 2017 Proxy Statement
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The Compensation Committee also engages in an ongoing dialog with the Chief Executive OfficerCEO and the committee’s independent compensation consultant in the evaluation and establishment of the elements of our executive compensation program. TheFurther, the committee also received input from employees in the Company’s human resources department, including the Chief Human ResourcesPeople Officer, in making executive compensation decisions. Frederic W. Cook & Co., Inc. (the “Compensation Consultant”) providesDuring 2021, Meridian continued to provide executive and director compensation consulting services to the Compensation Committee. The Compensation Consultant
Meridian is retained by and reports directly to the Compensation Committee and participates in committee meetings. The Compensation ConsultantMeridian informs the committee on market trends, as well as regulatory issues and developments and how they may impact the Company’s executive compensation program. The Compensation ConsultantMeridian also: ● | Participates in the design of executive compensation program to help the committee evaluate the linkage between pay and performance;
•Participates in the design of the executive compensation program to help the committee evaluate the linkage between pay and performance; •Reviews market data and advises the committee regarding the compensation of the Company’s executive officers; •Reviews and advises the committee regarding outside director compensation; and | ● | Reviews market data and advises the committee regarding the compensation of the Company’s executive officers;
| ● | Reviews and advises the committee regarding director compensation; and
|
● | Performs an annual risk assessment of the Company’s compensation program, as described in the “Executive Compensation—Risk Management and Compensation” section of this Proxy Statement.
|
The Compensation Consultant
•Performs an annual risk assessment of the Company’s compensation program, as described in the “Executive Compensation—Risk Management and Compensation” section of this Proxy Statement. Meridian does not provide any other services to the Company. The Compensation Committee has assessed the independence of the Compensation ConsultantMeridian pursuant to the NYSE rules and the Company concluded that the Compensation Consultant’s work performed by Meridian for the Compensation Committee did not raise any conflict of interest. During 2016, the Company also2021, management retained the services of Willis Towers Watson PLC (“WTW”) to assist the Company in evaluating the Company’s annual and long-term incentive programs. The Compensation Committee evaluated the findings of Willis Towers Watson in its review of the 2016 incentive program design. The Compensation Committee has assessed the independence of Willis Towers WatsonWTW pursuant to the NYSE rules and the Company concluded that Willis Towers Watson’sWTW’s work did not raise any conflict of interest. SETTING 20162021 COMPENSATION |
In late 2015,2020, the Compensation Committee, working with the Compensation ConsultantMeridian and the Chief Executive Officer,CEO, engaged in a detailed review of the Company’s executive compensation programsprogram to evaluate whether the design and levels of each compensation element were: ● | Appropriate to support the Company’s strategic performance objectives;
| ● | Consistent with the philosophy and objectives described under “—Our 2016 Executive Compensation Philosophy and Objectives” above; and
| ● | •Appropriate to support the Company’s strategic performance objectives; •Consistent with the philosophy and objectives described under “—Our Executive Compensation Philosophy and Objectives” above; and •Reasonable when compared to market pay practices (see “—Market Comparison” below). |
Design Changes to 2016 Executive Compensation Program
In 2016, after considering market pay practices and the input of the Compensation Consultant,(see “—Market Comparison” below).
For 2021, the Compensation Committee made tworetained the overall structure and design changes toof the Company’s 2020 executive compensation program. First,program, except that the committee changedapproved the Annual Incentive Plan design to include an individualuse of three one-year performance modifier of 25%periods for participants other than the Chief Executive Officer. Based on an assessment of individual performance relating to personalized objectives, the committee may increase or decrease the award payout resulting from the achievementFinancial PSUs in light of the financial and strategic performance objectiveseconomic uncertainty caused by up to 25%, for a maximum annual incentive opportunitythe ongoing COVID-19 pandemic. All of 175% of target. Mr. Ersek’s Annual Incentive Plan award was based entirely on the achievement of corporate and strategicone-year performance goals with a maximum payout opportunity equal to 150% of target. Second,for the committee replaced2021-2023 Financial PSUs were set at the stock option componentbeginning of the long-term incentive design for participants other thanperformance period and any earned PSUs do not vest until the Chief Executive Officer with RSUs that cliff vest on the thirdthree-year anniversary of the grant date based on continued service. The committee maintaineddate. Consistent with the overall percentage of annual equity grants that have vesting provisions that are performance-based and/or at-risk. Accordingly, for 2016, the annual equity awards under the Long-Term Incentive Plan for participants other than the Chief Executive Officer consisted 36
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of 80% PSUs (60% Financial PSUs, incorporating both revenue and operating income growth, and 20% TSR PSUs, with Company performance under the PSUs measured over a three-year period) and 20% RSUs. This design change was made in order to strengthen2020 executive compensation program, the Company’s ability to retain2021 executive talent, while still maintainingcompensation program was
significantly weighted towards performance-based compensation and included a variable compensation element as the valuediversified mix of the RSUs will fluctuate based on our stock price performance. Mr. Ersek’s long-term incentive award continued to be weighted 60% Financial PSUs, 20% TSR PSUs and 20% stock options. awards. The Compensation Committee maintained Mr. Ersek’sset the annual and long-term incentive weightings astargets for the committee believes2021 executive compensation program in February 2021. The Compensation Committee believed at the time that stock options emphasize the achievement of long-term objectivesperformance targets were rigorous yet achievable, and encourage long-term value creation astherefore established the stock options will only have value to Mr. Ersektargets so that they would be achieved, at the target performance level, if the Company’s stock price appreciates fromCompany successfully executed against its operating plan for 2021 and the date of grant.2021-2023 performance period. Setting 2016 Compensation Levels
With respect to setting 2021 compensation levels, in early 2016, Mr. Ersek presented to the Compensation Committee his evaluation ofand recommendation for each of the Executive Vice Presidentsother then-serving NEOs and the level of his or hertheir respective salary, annual bonus targets, under the Annual Incentive Plan, and long-term incentive award targets under the Long-Term Incentive Plan.targets. Mr. Ersek based his assessments on each executive’sa number of factors, including but not limited to: individual performance and relative contributions to the Company’s success,success; the performance of the executive’s respective business unit or functional area, employeearea; retention considerations,considerations; market data,data; compensation historyhistory; and internal equity. After consideration and discussion, the 38 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS Committee reviewed and approved Mr. Ersek also reviewed withErsek’s 2021 recommendations for the committee tally sheets that presented comprehensive historical and current compensation data for each of the Company’s executive officers. Please see “—Use of Tally Sheets” below for a description of this tool. The Compensation Consultant participated in the committee meetings to provide peer group and market data regarding executive compensation. Please see “—Market Comparison” for a discussion of the use of peer group and market data.then-serving NEOs other than himself. Also in early 2016,2021, Mr. Ersek submitted a self-evaluation to the Compensation Committee. The committee shared Mr. Ersek’s goals for the year and his self-evaluation with the independent members of the Board, of Directors, who then evaluated Mr. Ersek’s performance in 20152020 based on his actual performance versus such goals. In setting Mr. Ersek’s 20162021 compensation, the committee considered this evaluation, market data regarding chief executive officer compensation levels provided by the Compensation Consultant,Meridian, and a tally sheet of Mr. Ersek’s historical and current compensation data.data, among other information. No member of management including Mr. Ersek, made any recommendations regarding Mr. Ersek’s compensation or, except for the Company’s Chief People Officer, participated in the portions of the Compensation Committee meeting or in the meeting of the independent directors of the Board during which Mr. Ersek’s compensation was determined or ratified. For 2016,2021, the Compensation Committee considered market pay practices when setting executive compensation, but did not target thepercentile ranks of specific compensation elements or total target direct compensation against the market data. Instead, the committee used market data to assess the overall competitiveness and reasonableness of the Company’s executive compensation program. In evaluating 2016 market data, the committee considered both peer group proxy data and compensation survey data, but did not assign a specific weight to either data source. While the Compensation Committee considers relevant market pay practices when setting executive compensation, it does not believe it is appropriate to establish compensation levels based only on market practices. The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company and individual performance and peer compensation levels. The factors that influence the amount of compensation awarded include, marketbut are not limited to: •Market competition for a particular position, an individual’s experienceposition; •Experience and past performance inside or outside the Company, compensation history, roleCompany; •Role and responsibilities within the Company, tenureCompany; •Tenure with the Company and associated institutional knowledge, long-termknowledge; •Long-term potential with the Company, contributions derived from creative and innovativeCompany; •Innovative thinking and leadership, moneyleadership; •Money transfer or financial services industry expertise, pastexpertise; •Personal performance and contributions; •Succession planning; •Past and future performance objectivesobjectives; and the value •Value of the position within the Company. As further discussed below, the committee considered market data from both an executive compensation peer group and a general industry compensation survey, but did not assign a specific weight to either data source. The Compensation Committee believes that the Company’s executive compensation peer group should reflect the markets in which the Company competes for business, executive talent and capital. Accordingly, the Company’s peer group includes companies meeting either of the following criteria: ● | Global brands providing virtual products or services; or
| ● | Companies involved with payment and processing services.
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2017 Proxy Statement
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Table of Contents•Global brands providing virtual products or services; or
COMPENSATION DISCUSSION AND ANALYSIS•Companies involved with payment and/or processing services.
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The executive compensation peer group used for evaluating 20162021 compensation decisions consisted of the companies below, which isdid not change from the sameexecutive compensation peer group that was used for evaluating 2015to evaluate 2020 compensation decisions. The Compensation ConsultantMeridian compiled compensation information from the peer group based on the publicly filed documents of each member of the peer group. Based on the information below, the Company estimates that it is between the 25th and 50th percentile of the peer group in terms of revenues, above the 75th percentile of the peer group in terms of percentage of total revenues outside of the US, and below the 25th percentile of the peer group in terms of market capitalization. | PEER GROUP | 2015
REVENUES
(IN MILLIONS)* | | 2015
OP INCOME
(IN MILLIONS)* | | EMPLOYEES
(AS OF 12/31/15) | | MARKET CAP
(IN MILLIONS)
(AS OF 12/31/15) | | ADP | $10,939 | | $2,003 | | 55,000 | | $39,073 | | Ameriprise Financial | $12,184 | | $3,331 | | 12,209 | | $18,529 | | Charles Schwab | $6,212 | | $2,160 | | 14,600 | | $43,353 | | CME Group | $3,354 | | $2,014 | | 2,680 | | $30,644 | | Comerica | $2,580 | | $846 | | 9,115 | | $7,393 | | Discover | $7,263 | | $3,839 | | 14,676 | | $22,922 | | eBay | $8,593 | | $2,328 | | 36,500 | | $32,994 | | Fidelity National Info | $6,436 | | $1,266 | | 40,000 | | $19,779 | | Fiserv | $5,202 | | $1,299 | | 21,000 | | $20,902 | | Global Payments | $2,818 | | $470 | | 4,438 | | $8,340 | | Intuit | $4,192 | | $886 | | 7,700 | | $25,476 | | MoneyGram | $1,408 | | $44 | | 2,727 | | $334 | | NASDAQ OMX | $3,458 | | $916 | | 3,687 | | $9,554 | | Northern Trust | $4,698 | | $1,466 | | 15,400 | | $16,669 | | State Street | $10,421 | | $3,122 | | 29,970 | | $26,775 | | Total Systems Services | $2,698 | | $523 | | 9,900 | | $9,163 | | 75th Percentile | $7,596 | | $2,202 | | 23,243 | | $27,743 | | Median | $4,950 | | $1,382 | | 13,405 | | $20,341 | | 25th Percentile | $3,220 | | $876 | | 6,885 | | $9,456 | | Western Union | $5,484 | | $1,109 | | 10,000 | | $8,998 |
2022 Proxy Statement | 39
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | | | | | PEER GROUP | | 2020 REVENUES* (IN MILLIONS) | | | 2020 INTERNATIONAL BUSINESS (% OF TOTAL REVENUES OUTSIDE OF THE US) | | | MARKET CAP (AS OF 12/31/2020) (IN MILLIONS) | | Ameriprise Financial | | $ | 11,958 | | | ** | | | $ | 35,239 | | Broadridge Financial Solutions, Inc. | | $ | 4,529 | | | 12% | | | $ | 21,220 | | CME Group Inc. | | $ | 4,870 | | | 0% | | | $ | 81,379 | | Comerica Incorporated | | $ | 2,375 | | | 0% | | | $ | 12,110 | | Discover Financial Services | | $ | 5,954 | | | 0% | | | $ | 35,357 | | eBay Inc. | | $ | 10,271 | | | 59% | | | $ | 40,371 | | Euronet Worldwide, Inc. | | $ | 2,483 | | | 70% | | | $ | 6,451 | | Fidelity National Information Services, Inc. | | $ | 12,552 | | | 24% | | | $ | 70,959 | | Fiserv, Inc. | | $ | 14,852 | | | 13% | | | $ | 71,543 | | FleetCor Technologies, Inc. | | $ | 2,389 | | | 39% | | | $ | 19,268 | | Global Payments Inc. | | $ | 7,424 | | | 22% | | | $ | 42,484 | | Intercontinental Exchange, Inc. | | $ | 6,036 | | | 35% | | | $ | 74,589 | | MoneyGram International, Inc. | | $ | 1,217 | | | 55% | | | $ | 690 | | Nasdaq, Inc. | | $ | 5,627 | | | 17% | | | $ | 32,612 | | Northern Trust Corporation | | $ | 5,976 | | | 23% | | | $ | 25,839 | | PayPal Holdings, Inc. | | $ | 21,454 | | | 49% | | | $ | 219,900 | | Sabre Corporation | | $ | 1,334 | | | 52% | | | $ | 2,898 | | State Street Corporation | | $ | 11,615 | | | 45% | | | $ | 35,521 | | 25th Percentile | | $ | 2,994 | | | 13% | | | $ | 19,756 | | 50th Percentile | | $ | 5,965 | | | 24% | | | $ | 35,298 | | 75th Percentile | | $ | 11,279 | | | 49% | | | $ | 63,841 | |
* | All data was compiled by the Compensation ConsultantMeridian who obtained peer company financial market intelligence from Capital IQ Compustat.S&P CapitalIQ. The data generally represents revenue and operating income for the most recent four quarters available to the Compensation ConsultantMeridian at the time the Compensation ConsultantMeridian compiled the data in January 2016. Other than for the Company, operating2021. Operating income may reflect measures not in conformity with GAAP. |
** | Data was not available for this metric. |
The Compensation Committee also usesreferenced general industry compensation survey data in evaluating executive pay. Survey data relies upon responses from participating companiespay in order to survey questions, which are compiled and sorted by the surveyor basedconsider a broader perspective on various factors, such as the period covered, the location of the company, and the positions under review. Survey data provides insight into positions that may not generally be reported in proxy statements and information about the compensation of executives of non-public companies. In some instances, survey data is a useful complement to the peer group proxy data.market practices. To assist the committee in its review of the general industry compensation survey data, the Compensation ConsultantMeridian extracts compensation information from the surveys with respect to companies with annual revenues generally ranging from $3 billion to $10$6 billion. For the 20162021 compensation review, the Compensation ConsultantMeridian compiled compensation data from general industry compensation surveys provided by Mercer and AonHewitt (which included data from companies with annual revenues between $5 billion and $10 billion), Willis Towers WatsonWTW (which included data from companies with annual revenues between $3 billion and $6 billion), and Peerpeer group data taken directly from peer group proxy statements
or from the Equilar Top 25 database. Executive positions were matched to the peer group proxy data and third-party survey data based on job title, functional matches, and pay rank. In 2016,2021, Meridian was asked to re-evaluate the Company’s peer group. Based on this review, in connection with its ongoing review ofDecember 2021, the Compensation Committee approved changes to the Company’s peer group to further align the Compensation Committee replaced eBay with PayPal Holdings, Inc. and added Vantiv, Inc. in order to more closely alignmedian revenues of the peer group with the typesCompany’s revenues. As a result, the Compensation Committee approved the removal of services provided byAmeriprise Financial, Inc., Comerica Incorporated, Northern Trust Corporation, Sabre Corporation, and State Street Corporation, and the Company. These changesaddition of Alliance Data Systems Corporation, Genpact Limited, Jack Henry & Associates, Inc., Paychex, Inc., and SS&C Technologies Holdings, Inc. to the Company’s peer group. The revised peer group will be effective with respectused to evaluating 2017 executiveevaluate 2022 compensation decisions. Use of Tally Sheets The Compensation Committee reviews tally sheets that present compensation data for each of the Company’s executives. These tally sheets generally include historical and current compensation data, valuations of future equity vesting, value of option exercises in the past five years, as well as analyses for hypothetical terminations and retirements to allow the Compensation Committee to consider the Company’s obligations under such circumstances. The tally sheets provide additional context for the committee in determining the elements and amounts of compensation paid.assessing NEO compensation. 38
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS THE WESTERN UNION 2021 EXECUTIVE COMPENSATION PROGRAM COMPENSATION DISCUSSION AND ANALYSIS
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THE WESTERN UNION 2016 EXECUTIVE COMPENSATION PROGRAM
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Pay-For-Performance and At-Risk Compensation The principal components of the Company’s 20162021 annual executive compensation program were annual base salary, annual incentive awards, and long-term incentive awards in the form of PSUs, stock options (for the Chief Executive Officer)Mr. Ersek) and RSUs (for participants other than the Chief Executive Officer).RSUs. The Compensation Committee designed the 20162021 executive compensation program so that performance-based pay elements (Annual Incentive Plan awards, PSUs and, if applicable, stock options) will CEO 2016 TOTAL DIRECT COMPENSATION
 Since a significant portion of the compensation of our named executive officers is performance-based and/or at-risk, we are providing the following supplemental table to compare the compensation granted to our named executive officers, as required to be reported by SEC rules in the 2016 Summary Compensation Table, to the compensation “realizable” by such named executive officers for the 2014 to 2016 fiscal years. While the manner for reporting equity compensation as “realizable” compensation differs from the SEC rules relating to the reporting of compensation in the 2016 Summary Compensation Table, we believe this table serves as a useful supplement to the 2016 Summary Compensation Table. The 2016 Realizable Compensation Table and the total
continue towould constitute a significant portion of the executive compensation awarded, determined at target levels. The following charts illustrate the mix of the targeted annual compensation for the Chief Executive OfficerMr. Ersek and the average targeted annual compensation for the other named executive officers,NEOs (excluding Mr. McGranahan and Ms. Fitzgerald), and the portion of that compensation that is performance-based and/or at-risk.
For purposes of these charts, the percentage of targeted annual compensation was determined based on the annual base salary and target incentive opportunities applicable to the named executive officerNEO as of December 31, 2016. NAMED EXECUTIVE OFFICER 2016
TOTAL DIRECT COMPENSATION
“realizable”2021. Mr. McGranahan and Ms. Fitzgerald are excluded from the chart below in light of the fact that they commenced employment with the Company late in 2021 and, in light of their employment commencement dates, their 2021 compensation reported in the table provides supplementaldid not reflect a typical NEO compensation mix. For further information regarding Mr. McGranahan’s and Ms. Fitzgerald’s compensation, please see the compensation paid tosections below entitled the named executive officers“CEO Transition Compensation” and should not be viewed as a substitute for the 2016 Summary Compensation Table.
We believe the “realizable” compensation shown is reflective of“Employment Arrangements” within the Compensation Committee’s emphasis on “pay-for-performance” in that differences between “realizable” payDiscussion and total reported compensation, as well as fluctuations year-over-year are primarily the resultAnalysis section of our stock performance and our varying levels of achievement against pre-established performance goals under our Annual Incentive Plan and Long-Term Incentive Plan.this Proxy Statement.
2017 Proxy Statement
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| 2016 REALIZABLE COMPENSATION TABLE | | NAME | YEAR | | PROXY REPORTED
COMPENSATION
($000)(1) | | TOTAL REALIZABLE
COMPENSATION
($000)(2) | | REALIZABLE
AS A % OF
REPORTED | | Hikmet Ersek | 2016 | | 9,285.5 | | 9,496.5 | | 102% | | 2015 | | 8,569.8 | | 8,465.8 | | 99% | | 2014 | | 8,241.8 | | 10,458.0 | | 127% | | Rajesh K. Agrawal | 2016 | | 3,163.3 | | 3,285.6 | | 104% | | 2015 | | 2,634.5 | | 2,608.5 | | 99% | | 2014 | | 3,378.2 | | 3,990.1 | | 118% | | Odilon Almeida | 2016 | | 2,474.1 | | 2,574.2 | | 104% | | 2015 | | 2,450.3 | | 2,429.6 | | 99% | | 2014 | | 3,038.9 | | 3,634.2 | | 120% | | Elizabeth G. Chambers | 2016 | | 2,344.0 | | 2,433.0 | | 104% | | 2015 | | N/A | | N/A | | N/A | | 2014 | | N/A | | N/A | | N/A | | J. David Thompson | 2016 | | 2,188.6 | | 2,281.2 | | 104% | | 2015 | | 2,532.0 | | 2,543.3 | | 100% | | 2014 | | 2,376.4 | | 2,899.4 | | 122% |
2022 Proxy Statement | 41
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS Footnotes:
| | | (1) | As reported in the Total column of the 2016 Summary Compensation Table. | | | (2) | Amounts reported in the calculation of total realizable compensation include (a) annualized base salary, (b) actual bonus payments made to each eligible executive with respect to each of the years shown under the Company’s Annual Incentive Plan, (c) actual amounts paid with respect to discretionary bonuses in the year in which such bonuses are earned, (d) the value realized from the exercise of stock options and for unexercised stock options, the difference between the exercise price and the closing stock price on the last trading day of 2016, each reported in the year granted, (e) the value realized upon vesting of RSUs or PSUs and the value of unvested RSUs or PSUs based on the closing stock price on the last trading day of 2016, each reported in the year granted, and (f) amounts reported in the All Other Compensation Table for the respective years. For purposes of this table, the value of the TSR PSUs is based on target performance since the TSR PSUs vest based on the Company’s TSR at the end of the three-year performance period compared to the Company’s TSR at the beginning of the performance period. The Financial PSUs are valued for purposes of this table based on estimated performance as of December 31, 2016. |
ELEMENTS OF 20162021 EXECUTIVE COMPENSATION PROGRAM |
The following table lists the material elements of the Company’s 20162021 executive compensation program for the Company’s named executive officers.NEOs. The committee believes that the design of the Company’s executive compensation program balances fixed and variablefocuses on performance based compensation elements, provides alignment with the Company’s shortshort- and long-term financial and strategic priorities at the time through the annual and long-term incentive programs, and provides alignment with stockholder interests. ELEMENT | Fixed | KEY
CHARACTERISTICS | | WHY WE PAY
THIS ELEMENT | | HOW WE
DETERMINE AMOUNT | | 2016 DECISIONSAt-Risk /
Performance-Based | Base salary
| | | | | | | | | | | Base Salary | 
| Annual Incentive Awards | 
| PSUs | 
| Stock Options (CEO only) | 
| RSUs | | | | | | | | | | | 
| Fixed compensation component payable in cash. Reviewed annually and adjusted when appropriate. | | Establish a pay foundation at competitive levels to attract and retain talented executives.
| | Experience, job scope, responsibilities, market data, and individual performance.
| | No base salary increases.
See pages 42 and50-51.
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ELEMENT | | KEY
CHARACTERISTICS | | WHY WE PAY
THIS ELEMENT | | HOW WE
DETERMINE AMOUNT | | 2016 DECISIONS | Annual incentive awards
| | Variable compensation component payable in cash based on performance against annually established performance objectives. | | PSUs vest based on the Company’s achievement of financial performance objectives and the Company’s relative TSR performance. The value of PSUs is also dependent on our stock price over the performance period. Financial PSUs accrue dividend equivalents, with dividend equivalents paid only to the extent the underlying shares vest. TSR PSUs do not accrue or pay dividend equivalents. | | Non-qualified stock options granted with an exercise price equal to fair market value on the date of grant that expire 10 years after grant and become exercisable in 25% annual increments over a four-year vesting period based on continued service during the vesting period. The value of stock options is dependent on our stock price over the option term. | | RSUs generally cliff vest on the third anniversary of the date of grant based on continued service during the vesting period. The value of RSUs is dependent on our stock price over the vesting period. RSUs accrue dividend equivalents, with dividend equivalents paid only to the extent the underlying shares vest. | 
| Establish a pay foundation at competitive levels to attract and retain talented executives. | | Motivate and reward executives for performance on key financial, strategic and/or individual performance goals over the year. Hold our executives accountable, with payouts varying from target based on actual performance against pre-established and communicated performance goals. | | Internal pay equity, market practice and individual performance.
Participants are eligible to receive a cash payout ranging from 0% to 150% of target based on the achievement of corporate financial and strategic goals.
Payouts for participants other than the Chief Executive Officer are subject to a +/- 25% modifier based on individual performance with respect to personalized objectives, including business unit goals.
| | Based on the achievement of corporate financial, strategic and individual goals, the committee certified payouts ranging from 93% to 103% of target for the named executive officers.
See pages 42-45 and 50-51.
| PSUs
| | PSUs vest based on the Company’s achievement of financial performance objectives (“Financial PSUs”) and the Company’s relative TSR performance (“TSR PSUs”).
| | Align the interests of executives with those of our stockholders by focusing the executives on the Company’s financial and TSR performance over a multi-year period. Hold our executives accountable, with payouts varying from target based on actual performance against pre-established and communicated performance goals. | | Internal pay equity, market practice and individual performance.
Financial PSUs: Payout based on revenue and operating income growth over 2016-2018 performance period.
TSR PSUs: Payout based on the Company’s TSR performance relative to the TSR of the S&P 500 Index over 2016-2018 performance period.
| | PSUs represent 80% of the long-term grant value, with 60% of the long-term grant value delivered as Financial PSUs and 20% delivered as TSR PSUs.
See pages 45-47 and 50-51.
| Stock options
| | Non-qualified stock options granted with an exercise price at fair market value on the date of grant that expire 10 years after grant and become exercisable in 25% annual increments over a four-year vesting period.
| | Align interests of the Chief Executive OfficerCEO with those of our stockholders by focusing the executive on long-term objectives over a multi-year period, including stock price appreciation. | | Internal pay equity, market practice and individual performance.
| | Stock options represent 20% ofappreciation over the long-term grant value for the Chief Executive Officer.
See pages 45-47 and 50.
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ELEMENT | KEY
CHARACTERISTICS | WHY WE PAY
THIS ELEMENT | HOW WE
DETERMINE AMOUNT | 2016 DECISIONS | RSUsoption term.
| RSUs cliff vest on the third anniversary of the grant based on continued service during vesting period.
| Competitive with market practices in order to attract and retain top executive talent. Align the interests of executives with those of our stockholders by focusing the executives on long-term objectives over a multi-year vesting period, with the value of the award fluctuating based on stock price performance. | 
| Experience, job scope, responsibilities, market data, internal equity, and individual performance. | | Internal pay equity, market practice, corporate and individual performance. Cash payouts ranging from 0% to 175% of target based on the achievement of financial and strategic goals, with an additional +/- 25% modifier for participants other than Mr. Ersek based on performance with respect to a metric supporting key ESG initiatives, leadership and a personalized objective for each NEO. | | Internal pay equity, market practice and individual performance. Financial PSUs: Vesting ranging from 0% to 200% of target based on revenue and operating margin during the 2021-2023 performance period. TSR PSUs: Vesting ranging from 0% to 200% of target based on the Company’s TSR performance relative to the S&P 500 Index over the 2021-2023 performance period. | | Internal pay equity, market practice and individual performance. | RSUs represent 20% of the long-term grant value for participants other than the Chief Executive Officer.
| See pages 45-47Internal pay equity, market practice and 50-51.individual performance.
|
* | See the “Setting 2021 Compensation” section for further information regarding the determination of 2021 compensation levels. |
42 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS Each of Western Union’s 20162021 executive compensation program elements is described in further detail below and individual compensation decisions are discussed in “–Compensation of Our Named Executive Officers.”below. Base Salary Our philosophy is that base salaries should meet the objectives of attracting and retaining the executives needed to lead the business. Base salary is a fixed compensation component payable in cash. In settingFebruary 2021, Ms. Swanback received a base salary increase of approximately 4% in order to further align her total compensation level with the market data. None of our other NEOs received a base salary increase during 2021. Mr. McGranahan’s base salary was established at the time he agreed to join the Company in November 2021 based on market data, considering the scope of his role and responsibilities within the organization. Similarly, Ms. Fitzgerald’s base salary was established at the time she joined the Company in September 2021 based on market data, considering the scope of her role and responsibilities within the organization. The following table sets forth each NEO’s 2020 and 2021 base salary levels the committee considered peer group and survey data, as well as the performance of the individual executive. In February 2016, the committee approved salary amounts for the named executive officers, which did not increase from the base salary levels set in 2015. Please see “–CompensationDecember 31 of Our Named Executive Officers” for further information regarding the 2016 base salary levels.each year: | | | | | | | EXECUTIVE | | 2020 BASE SALARY ($000) | | 2021 BASE SALARY ($000) | | Devin McGranahan | | N/A | | | 1,000.0 | | Hikmet Ersek | | 1,050.0 | | | 1,050.0 | | Raj Agrawal | | 650.0 | | | 650.0 | | Michelle Swanback | | 625.0 | | | 650.0 | | Gabriella Fitzgerald | | N/A | | | 550.0 | | Jean Claude Farah | | 500.0 | | | 500.0 | |
Annual Incentive Compensation Our Annual Incentive Plan is designed to motivate and reward executive officersour NEOs for achieving short-term performance objectives. The Annual Incentive Plan design is intended to provide annual incentive awards that qualify as “performance-based compensation” under Section 162(m) ofWe believe the Code. Participants in the Annual Incentive Plan in 2016 were Mr. Ersek and the Company’s Executive Vice Presidents, which included all of the named executive officers. Compensation under the Annual Incentive Plan is intended to be a significant component of an executive’s total compensation opportunity in a given year, helping create aprogram supports our “pay-for-performance” culture. Annual Incentive Plan compensation holds executives accountable and rewards them based on the Company’s performance against pre-established objectives informed by the Company’s strategy.
Target payout opportunities under the Annual Incentive Plan are expressed as a percentage of a participant’s annual base salary. For 2021, the Compensation Committee increased the target bonus opportunity for Ms. Swanback from 100% to 110% of base salary to further align her annual incentive target with potentialmarket data and the Company’s internal pay practices. None of our other NEOs received an Annual Incentive Plan target increase with respect to 2021. Ms. Fitzgerald’s target bonus opportunity was established at the time she joined the Company in September 2021 based on market data, considering the scope of her role and responsibilities within the organization. Mr. McGranahan did not participate in the 2021 Annual Incentive Plan because he commenced employment with the Company in late December 2021. Potential payouts rangingranged from 0% to 150%175% of target based on the achievement of pre-established corporate financial and strategic goals. BecauseTo measure individual performance against key objectives for the committee believes that individual objectives are indicators ofCompany as well as the executive’s success in fulfilling the executive’s responsibilities, the total payout under the Annual Incentive Plan for the named executive officersparticipating NEOs other than the Chief Executive Officer isMr. Ersek was subject to a +/- 25% modifier based on the committee’s assessment ofversus a leadership metric and an individual performance includinggoal tailored to each participating NEO’s functional area. Finally, consistent with respectprior years, the Annual Incentive Plan incorporated compliance-related metrics, with each NEO evaluated based on what the NEO has done to ensure that the NEO’s business unit goals. For 2016,or department is in compliance with applicable U.S. laws, with a failing score in compliance resulting in bonus ineligibility for the NEO for the applicable year. The Compensation Committee did not changebelieves the compliance and leadership metrics support key ESG initiatives for the Company. Payouts for the NEOs (other than Mr. Ersek) were capped at 200% of each individual’s target bonus opportunities for the named executive officers, other than Mr. Agrawal. Based on a review of market data and the input of the Compensation Consultant, Mr. Agrawal’s target opportunity increased from 90% of base salary to 100% of base salary to further align his compensation levels with the median of the market data. 42
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The following table sets forth each named executive officer’s 2016 target award opportunity, with the initialMr. Ersek’s payout levelscapped at 175% of his target bonus opportunity.
The Annual Incentive Plan was based on the achievement of corporatefinancial and strategic goals weighted at 70% and 30%, respectively. As discussed further below, theThe weighting of the performance measures reflects the desire of the Compensation Committee to tie a significant portion of annual incentive compensation to corporate performance measures that the committee believes are meaningful to and readily accessible by our investors, while at the same time emphasizing strategic performance objectives that focusfocused on the Company’s growth imperatives. Financial Performance and Goal Setting. Consistent with prior years, the Compensation Committee set the annual incentive targets for the 2021 Annual Incentive Plan in February 2021. In light of the uncertainty due to the ongoing COVID-19 pandemic, for 2021, the committee approved two refinements to the financial component of the Annual Incentive Plan. First, to recognize the economic uncertainty caused by the pandemic, the committee approved a target payout range instead of its prior practice of having one performance goal equating to target payout. As a result of this design change, the committee required a year-over-year growth rate ranging between 6.6% and 7.3% for total revenue and 8.3% and 9.0% for operating profit in order for the NEOs to earn a target payout with respect to the financial component of the Annual Incentive Plan. Second, the committee reduced the threshold payout level for achieving both the minimum performance levels for the revenue and operating income goals from the 50% payout level used in prior years to a 30% payout level. This change was made to account for the significant revenue and operating profit growth required and the continued uncertainty of the impacts 2022 Proxy Statement | 43
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS from COVID-19. The Compensation Committee believed at the time that the performance targets were rigorous yet achievable, and therefore established the targets so that they would be achieved, at the target performance level, if the Company successfully executed against its operating plan for 2021. EXECUTIVE | | TARGET AWARD
OPPORTUNITY
($000) | | | | | | | | | | | Hikmet Ersek | | $1,500.02020 ACTUAL RESULTS* | | TARGET GROWTH RATE FROM 2020 RESULTS | | 2021 TARGET* | | 2021 ACTUAL RESULTS* | | ACHIEVEMENT (%) | | Rajesh K. AgrawalTotal Revenue | | $566.54,918M | | 6.6% - 7.3% | | $5,154M - $5,188M | | $5,012M | | 43% | | Odilon AlmeidaOperating Income | | $550.81,031M | | 8.3% - 9.0% | | $1,090M - $1,097M | | $1,100M | | 107% | | Elizabeth G. ChambersOverall Achievement | | $481.5 | J. David Thompson | | $486.0 | | | | | | 75% | |
* | 2021 target and actual results exclude Argentina inflation and are shown on a constant currency basis, calculated assuming no changes in the currency exchange rates from 2020 currency exchange rates. The performance grid provided payout opportunities for performance ranging from $4,980M to $5,319M for revenue and $1,054M to $1,124M for operating profit. |
When the corporatefinancial and strategic performance measures were established, and consistent with prior years, the committee determined subject to Section 162(m) of the Code, that the effect of currency fluctuations, acquisitions and divestitures, including related costs, restructuring, and other significant charges not included in the Company’s internal 20162021 financial plan should be excluded from both the establishment of goals as well as the determination of payout calculations. Consistentcalculations to more closely align with the Company’s historical practices, under this plan design, bonus targets and results are calculated using the prior year’s actual exchange rates to exclude the impact of currency fluctuations. Specifically, the 2016 Annual Incentive Plan targets were to be measured assuming no changes in the currency exchange rates from 2015 currency exchange rates. The committee also excluded from the payout calculations charges incurred pursuant to the Joint Settlement Agreements after considering (i) the Department of Justice’s statement of facts which noted that, since at least September 2012, the Company took remedial measures and implemented compliance enhancements to improve its anti-fraud and anti-money laundering programs and that these remedial measures and compliance enhancements were taken at the directionunderlying operating performance of the Chief Executive Officer, among others, and reflect their ongoing commitment to enhancing compliance policies and procedures, (ii) over the past five years, the Company increased overall compliance funding by more than 200 percent, and now spends approximately $200 million per year on compliance, with more than 20 percent of its workforce currently dedicated to compliance functions, (iii) that the comprehensive improvements by the Company have added more employees with law enforcement and regulatory expertise, strengthened its consumer education and agent training, bolstered its technology-driven controls and changed its governance structure so that its Chief Compliance Officer is a direct report to the Compliance Committee of the Board, (iv) the incidence of consumer fraud reports associated with the Company’s money transfers has been low – less than one-tenth of 1 percent of all consumer-to-consumer money transfer transactions during the past 10 years, (v) over the last five years, the dollar value of reported fraud in consumer-to-consumer transactions, compared with the total value of all transactions, has dropped more than 60 percent, and (vi) the conduct at issue mainly occurred from 2004 to 2012. Further, the committee reviewed the Company’s existing clawback policy and considered whether any reductions in the annual incentive payouts were warranted under the clawback policy in light of the Joint Settlement Agreements. The committee determined that the clawback policy did not require a clawback of the 2016 annual incentive payouts based on the factors discussed immediately above. In addition, the committee excluded from the payout calculations costs incurred in 2016 related to the start of the Company’s “WU Way” program, which is designed to transform the Company’s operating model to better enable accelerated innovation, improve customer experience, and drive cost efficiencies. The committee viewed the WU Way costs as significant transformation expenses not included in the Company’s internal 2016 financial plan.business.
Financial Performance Metrics. As it had in previous years, the Compensation Committee set the executives’ 2016 annual incentive compensation award targets for2021 financial performance goals by establishing a grid based on the Company’s revenue and operating income. These performance measures were used in order to tie annual incentive compensation to measures of the Company’s financial performance that the committee deemed meaningful to and readily accessible by our investors.
The Compensation Committee established the performance goal grid metrics and corresponding payout percentages based upon input from management regarding the Company’s expected performance in the upcoming year.year and considering the continued uncertainty caused by the ongoing COVID-19 pandemic. The committee designed the grid to encourage strong, focused performance by our executives. The 20162021 performance goal grid provided a payout of 100% of target if the Company achieved between 99.6% and 100.3% of its internal operating plan for operating income and revenue, (revenue of approximately $5.7 billion and operating income of approximately $1.2 billion, each measured on a constant currency basis), with a maximum initial payout level of 150%175% of target if revenue and operating income grew by 5.6%10.0% and 6.1%11.7%, respectively, as compared to 2015 (with such payout further subject to the +/- 25% performance modifier for participants other than Mr. Ersek). Within the grid, a higher rate of increase for one 2017 Proxy Statement
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metric could counterbalance a lower rate of increase for the other metric. For 2016, the grid range for the revenue and operating income performance goals as well as a comparison to 2015 actual results and the 2016 achievement are set forth in the following table, which illustrates that in order to receive
target payouts for both revenue and operating income, the Company had to achieve constant currency revenue and operating income growth of 3.6% and 4.6%, respectively, as compared to 20152020 actual performance.
| | 2015 ACTUAL RESULTS* | | 2016 TARGET* | | TARGET RANGE* | | 2016 ACTUAL RESULTS* | | ACHIEVEMENT (%) | Total Revenue | | $5,484M | | $5,680M | | $5,539M - $5,791M | | $5,640M | | 87% | Operating Income | | $1,145M | | $1,197M | | $1,173M - $1,215M | | $1,195M | | 96% | Overall Achievement | | | | | | | | | | 91% |
* | 2016 target, target range and actual results shown at constant currency - calculated assuming no changes in the currency exchange rates from 2015 currency exchange rates. 2015 actual results exclude the Paymap Settlement Agreement. 2016 actual results exclude the Joint Settlement Agreements and WU Way program costs. Absent the exclusion of $621 million in combined costs associated with the Joint Settlement Agreements and the WU Way program, overall achievement would have been 59% of target. |
Strategic Performance Objectives.and Goal Setting. Participants in the 20162021 Annual Incentive Plan had 30% of their award opportunity tied to the achievement of strategicpre-established performance objectives based upon the Company’s strategic operating plan, with a focus on the Company’s growth imperatives.imperatives (as measured by year-over-year revenue growth with respect to the Company’s enterprise partners consisting primarily of third-party white label or co-branded digital partners and year-over-year growth in average monthly active WU.com customers, each weighted 10%) and implementation and execution of global compliance priorities (weighted 10%). Performance levels of the objectives were designed to be achievable, but required the coordinated, cross-functional focus and effort of the executives. Based on the achievement of the strategic performance objectives, the committee certified a payout equal to 97%85% of each named executive officer’sNEO’s target allocated to the strategic performance objectives. The strategic performance objectives, their respective weightings, as well as the performance assessment for the 2016 Annual Incentive Plan awards are as follows: 2016 ANNUAL INCENTIVE PLAN STRATEGIC PERFORMANCE GOALS | | 2016 ACTUAL
PERFORMANCE | Consumer-to-consumer money transfer revenue growth initiated from wu.com (aggregate weighting 20%)* | | Between threshold &
target performance | Principal from money transfer transactions paid out to a bank account (aggregate weighting 10%) | | Between threshold &
target performance | Performance Level Achievement | | 97% |
* | At constant currency - calculated assuming no changes in the currency exchange rates from 2015 currency exchange rates. |
Individual Performance-Based Modifier.Performance Modifier and Goal Setting. Other than for Mr. Ersek, a participant’seach participating NEO’s payout under the 20162021 Annual Incentive Plan was subject to a +/- 25% modifier based on the committee’s assessment of individual and business unit performance. In making its assessment, the committee considered the recommendations of the Chief Executive OfficerMessrs. McGranahan and Ersek based on histheir review of the performance of each of the named executive officersNEO against the individual objectives established by the committee. The following table summarizescommittee at the beginning of the year with respect to the individual performance modifier. For 2021, the application of the individual performance modifier was determined based on performance with respect to leadership objectives, an individualized key performance indicatorsindicator for each named executive officer underNEO, and an ESG metric, which qualitatively assesses progress towards the 2016 Annual Incentive Plan, as approved by the Compensation Committee. In addition to the performance goals described below, eachCompany’s three pillars - Integrity of these named executive officers was also assessed based on compliance, employee engagement, customer experienceGlobal Money Movement, Economic Prosperity, and leadership.Diversity, Equity and Inclusion. Executive | | Individual Performance Objectives | Rajesh K. Agrawal | | Earnings per share and operating cash flow | Odilon Almeida | | Revenue growth, profit, profit margin, and consumer-to-consumer wu.com revenue, each as measured based on the Americas and Europe region | Elizabeth G. Chambers | | Execution of marketing initiatives, mobile strategy, optimization of marketing and communications investments, and expense management | J. David Thompson | | Information technology projects, digital consumer-to-consumer achievements, call center customer satisfaction and expense management (including information technology compliance) |
The committee believes that the performance objectives established for eachthe application of the named executive officersindividual performance modifier are indicators of the executive’sour executives’ success in fulfilling the executive’stheir responsibilities to the Company, and supportsupporting the Company’s strategic operating plan.plan and executing on key Company initiatives. The committee also believes that including an assessment of contributions towards compliance employee engagement initiatives and customer satisfaction in eachthe Company’s progress towards the Company’s three pillars (Integrity of the named executive officer’s individualGlobal Money Movement, Economic Prosperity, and business unit objectivesDiversity, Equity and Inclusion) reinforces these objectives as priorities throughout the organization. The performance levels ofrequired to receive a positive adjustment under the individual and business unit objectives wereperformance modifier was designed to be achievable, but required strong and consistent performance by the executive.Based on the committee’s assessment of individual and business unit performance, the committee did not approve individual performance modifiers for the participating NEOs. Compliance Evaluation. The Company considers evaluation criteria related to compliance in its executive bonus system so that each Company executive is evaluated on what the executive has done to ensure that the executive’s business or department is in compliance with applicable U.S. laws. A failing score in compliance, including with respect to anti-money laundering and anti-fraud programs, will make the executive ineligible for any bonus for that year. In addition, the 2021 award agreements under the Annual Incentive Plan are subject to the Company’s clawback policy, which specifically authorizes the clawback of annual incentive 44
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS payments due to compliance failures. In early 2022, the Compensation Committee determined that each participating NEO met the compliance-related evaluation criteria and therefore determined that each NEO remained eligible for a bonus with respect to 2021.
NEO Payouts Under the 2021 Annual Incentive Plan. COMPENSATION DISCUSSION AND ANALYSIS |
The following table summarizessets forth each participating NEO’s 2021 target award opportunity expressed (i) as a percentage of 2021 base salary and (ii) in dollars and the annual incentive payouts received by each named executive officer. For additional discussion, please see “–Compensation of Our Named Executive Officers” below.participating NEO. | EXECUTIVE | TARGET
BONUS
AS A %
OF BASE
SALARY | TARGET
AWARD
OPPORTUNITY
($000) | CORPORATE
OBJECTIVES
PAYOUT
AT 91% OF
TARGET
($000) | STRATEGIC
OBJECTIVES
PAYOUT
AT 97% OF
TARGET
($000) | +/- INDIVIDUAL
PERFORMANCE
MODIFIER | FINAL
BONUS
($000) | FINAL
BONUS
AS A % OF
TARGET | | Hikmet Ersek | 150% | $1,500.0 | $955.5 | $436.5 | N/A | $1,392.0 | 93% | | Rajesh K. Agrawal | 100% | $566.5 | $360.9 | $164.9 | 5% modifier | $554.0 | 98% | | Odilon Almeida | 90% | $550.8 | $350.9 | $160.3 | 10% modifier | $566.2 | 103% | | Elizabeth G. Chambers | 90% | $481.5 | $306.7 | $140.1 | 0% modifier | $446.8 | 93% | | J. David Thompson | 90% | $486.0 | $309.6 | $141.4 | 0% modifier | $451.0 | 93% |
| | | | | | | | | | | | | | | | | | | | | EXECUTIVE | | TARGET BONUS AS A % OF BASE SALARY | | | TARGET AWARD OPPORTUNITY ($000) | | | CORPORATE OBJECTIVES PAYOUT ($000) | | | STRATEGIC OBJECTIVES PAYOUT AT 85% OF TARGET ($000) | | | FINAL BONUS ($000) | | Hikmet Ersek | | 170% | | | | 1,785.0 | | | | 937.1 | | | | 455.2 | | | | 1,392.3 | | Raj Agrawal | | 100% | | | | 650.0 | | | | 341.3 | | | | 165.7 | | | | 507.0 | | Michelle Swanback | | 110% | | | | 715.0 | | | | 375.4 | | | | 182.3 | | | | 557.7 | | Gabriella Fitzgerald | | 110% | | | | 605.0 | | | | 317.6 | | | | 154.3 | | | | 471.9 | | Jean Claude Farah | | 110% | | | | 550.0 | | | | 288.8 | | | | 140.2 | | | | 429.0 | |
Long-Term Incentive Compensation The Company’sobjectives for the long-term incentive programawards for 2021 were to: •Align the interests of our executives with the interests of our stockholders by focusing on objectives that result in stock price appreciation; •Increase cross-functional executive focus in the coming years on key performance metrics through Financial PSUs; •Amplify executive focus on stockholder returns through TSR PSUs; and •Retain the services of executives through multi-year vesting provisions. The Company’s stockholder-approved long-term incentive plan allows the Compensation Committee to award various forms of long-term incentive grants, including stock options, restricted stock units,RSUs, and performance-based equity and performance-based cash awards. The Compensation Committee has sole discretion in selecting participants for long-term incentive grants and the Compensation Committee approves all equity grants made to our senior executives, with the equity grants made to the Chief Executive OfficerCEO ratified by the independent directorsmembers of the Board. When making regular annual equity grants, the Compensation Committee’s practice is to approve them during the first quarter of each year as part of the annual compensation review. Among otherIn addition to the factors listed in the table under “Elements of 2021 Executive Compensation Program,” the Compensation Committee also considers dilution of the Company’s outstanding shares when making suchequity grants. 2021 Annual Long-Term Incentive Awards. In early 2021, the Compensation Committee granted the NEOs long-term incentive awards under the Long-Term Incentive Plan. For 2021, the Compensation Committee approved an increase in the target grant value of the long-term incentive awards for Messrs. Agrawal and Farah and Ms. Swanback, with the 2021 long-term incentive awards sized based on market data as well as internal pay equity. None of our other NEOs received a long-term incentive award target increase with respect to 2021. The following table sets forth the target award value, as of the date of grant, of the 2021 long-term incentive awards received by each NEO other than Mr. McGranahan and Ms. Fitzgerald: | | | | | EXECUTIVE (1) | | TARGET GRANT VALUE ($000) | | Hikmet Ersek | | | 8,200.0 | | Raj Agrawal | | | 2,800.0 | | Michelle Swanback | | | 2,500.0 | | Jean Claude Farah | | | 1,500.0 | |
(1) | Mr. McGranahan and Ms. Fitzgerald did not receive 2021 annual long-term incentive awards in light of their December 2021 and September 2021 employment commencement dates, respectively. For a description of the equity awards received by Mr. McGranahan and Ms. Fitzgerald in connection with their commencements of employment, please see the sections below entitled the “CEO Transition Compensation” and “Employment Arrangements.” |
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS Once the target grant value was set for each NEO, the grant value was then allocated among PSUs, RSUs and stock options, as applicable. In 2021, the committee granted the long-term incentive allocation indicated below: The committee believes that this mix is appropriate because it is designed to align the interests of our NEOs with the interests of our stockholders, drive long-term performance with respect to strategic measures, support retention of our NEOs and align with market practices as reported by Meridian. The committee believes that this mix also represents a balanced reflection of stockholder returns and financial performance. Financial PSUs. The 2021 Financial PSU awards will vest based on performance metrics relating to a targeted constant currency compound annual growth rate (“CAGR”) for revenue, excluding the impact of Argentina inflation, and operating margin (each weighted 50%), measured annually during each year of the three-year performance period, with each performance year equally weighted. The performance goals for each year of the three-year performance period were set at the time of the grant. This represents a change from the 2020 Financial PSUs, which vest based on achievement of specific performance goals for revenue and operating margin over a cumulative three-year performance period. The committee approved this design change in light of the continued economic uncertainty caused by the ongoing COVID-19 pandemic. While performance will be measured on an annual basis, the Financial PSUs remain subject to a full three-years of stock price fluctuations as the awards do not vest until the third anniversary of the grant date (February 2024), except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to receive prorated vesting of his 2021 Financial PSUs based upon his period of service during the vesting period. For the first year of the three-year performance period, the committee required a CAGR ranging between 6.6% and 7.3% for total revenue and an operating margin goal ranging between 21.4% and 21.6% in order for the NEOs to earn a target payout with respect to the first year of the three-year performance period for the 2021 Financial PSUs. Similar to the Annual Incentive Plan design, to recognize the economic uncertainty caused by the pandemic, the committee approved a target payout range instead of its prior practice of having one performance goal equating to target payout. Based on 2021 performance, the Company achieved a CAGR of 3.7% for total revenue and subject to Section 162(m)operating margin of 22.5%, resulting in 121% of the Code,portion of the 2021 Financial PSUs attributable to the first year of the three-year performance period eligible for vesting based on the NEO’s continued service through February 2024. The performance goals for the second and third years of the three-year performance period were designed to be rigorous yet achievable, with target payout achievable if the Company successfully executed against its operating plan for 2021-2023. Consistent with the 2020 design, the committee approved the use of revenue and operating margin in order to ensure balance of both revenue and efficient long-term profit growth and stockholder value creation. The Compensation Committee utilized revenue as an element in both the Company’s Annual Incentive Plan and long-term incentive program. When designing the Company’s 2021 executive compensation program, the Compensation Committee evaluated a range of performance metrics for purposes of the Company’s incentive programs and considered input from management and Meridian. Based on such review, the Compensation Committee determined that revenue continues to be viewed as a core driver of the Company’s performance and stockholder value creation and should remain a component in both the Annual Incentive Plan and long-term incentive program. In recognition of the Company’s use of revenue in both the annual and long-term incentive programs, the Compensation Committee continued its historical practice of supplementing the primary performance measures under the Annual Incentive Plan and long-term incentive program with additional performance measures in order to strike an appropriate balance with respect to incentivizing top-line growth, profitability, non- 46 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS financial business imperatives and stockholder returns over both the short-term and long-term horizons. Similar to the Annual Incentive Plan, when the financial performance objectives were established for the annual long-term incentive awards described below,Financial PSUs, the committee determined that the effect of currency fluctuations, acquisitions and divestitures, including related costs, restructuring, and other significant charges not included in the Company’s internal financial plans should be excluded from the payout calculations. Consistent with the Company’s historical practices, under this plan design, the performance results for the Financial PSUs will be calculated using the 2015prior year’s currency exchange rates. 2016 Annual Long-Term Incentive Awards. The Compensation Committee’s objectives for the 2016 long-term incentive awards were to:
● | Align the interests of our executives with the interests of our stockholders by focusing on objectives that result in stock price appreciation;
| | | ● | Increase cross-functional executive focus in the coming years on key performance metrics through Financial PSUs;
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● | Amplify executive focus on stockholder returns through TSR PSUs; and
| | | ● | Retain the services of executives through multi-year vesting provisions.
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Since 2014, the Company’s long-term incentive awards have been delivered to the named executive officers in the form of 80% PSUs (60% Financial PSUs, incorporating both revenue and operating income growth, and 20% TSR PSUs) and 20% stock options. As part of its ongoing review of the executive compensation program and based on input from the Compensation Consultant, in 2016, the committee replaced the stock option component of the long-term incentive grant with RSUs for the named executive officers other than Mr. Ersek. The committee approved this change based on market practices and in order to strengthen the Company’s ability to retain executive talent, while still maintaining a variable compensation element as the value of the RSUs will fluctuate based on our stock price performance. The RSUs vest 100% on the third anniversary of the grant date. For Mr. Ersek, the committee maintained the prior long-term incentive award allocation as the committee believes that providing a portion of Mr. Ersek’s long-term incentive award in the form of stock options emphasizes the achievement of long-term objectives and encourages long-term value creation as the stock options will only have value to Mr. Ersek if the Company’s stock price appreciates from the date of grant. The stock options vest in 25% annual increments over four years and have a 10-year term. The committee believes that the long-term incentive design supports retention and represents a balanced reflection of stockholder returns and financial performance. In approving the 2016 long-term incentive awards, the committee approved increases to the target award values as compared to 2015, primarily to more closely align the named executive officers’ compensation with the median of the market data.
Financial PSUs. The 2016 Financial PSU awards will vest if and only to the extent that specific performance goals for revenue and operating income are met during the performance period. The Compensation Committee utilized revenue and operating income as elements in both the Company’s
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Annual Incentive Plan and long-term incentive program in recognition that both of these measures are viewed as core drivers of the Company’s performance and stockholder value creation. In designing the Company’s executive compensation program, the Compensation Committee supplemented these measures with additional performance measures in order to strike an appropriate balance with respect to incentivizing top-line growth, profitability, non-financial business imperatives and stockholder returns over both the short-term and long-term horizons.
To motivate constant improvement over prior year results, the performance objectives under the 2016 Financial PSUs are based on targeted constant currency compound annual growth rates (“CAGR”) for revenue and operating income. At the beginning of the performance period, the committee established revenue and operating income CAGR goals for each year of the performance period, with each year weighted equally in the determination of the award payout. Under the terms of the awards, as much as 150% of the targeted Financial PSUs may be earned based on the Company’s performance with respect to the revenue and operating income performance objectives. In order to receive a threshold payout under the award, the three-year CAGR for both revenue and operating income must be positive.
The performance objectives for payment of the 2016 Financial PSU awards and their respective weightings are:
● | Targeted CAGR for revenue and operating income (each weighted 50%), comparing 2016 actual performance against 2015 actual performance (weighting 33-1/3%);
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● | Targeted CAGR for revenue and operating income (each weighted 50%), comparing 2017 actual performance against 2016 actual performance (weighting 33-1/3%); and
| | | ● | Targeted CAGR for revenue and operating income (each weighted 50%), comparing 2018 actual performance against 2017 actual performance (weighting 33-1/3%).
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In order to achieve target performance for the first year of the three-year performance period, the Company had to achieve constant currency revenue and operating income growth of 3.6% and 4.6%, respectively, as compared to 2015 actual performance. Based on 2016 performance, the Company achieved revenue and operating income of approximately $5.6 billion and $1.2 billion, respectively, resulting in blended achievement with respect to the first year of the three-year performance period of 91% of target. Similar to the 2016 annual incentive payout calculations and pursuant to the underlying award agreements, the Compensation Committee excluded from this calculation charges incurred in connection with the Joint Settlement Agreements and costs incurred in 2016 related to the Company’s WU Way program for the reasons described under “–Annual Incentive Compensation” above. This portion of the award remains subject to the requirement for a three-year positive CAGR in both revenue and operating income, as well as the participant’s continued service through February 18, 2019 (or, in the case of Mr. Ersek, February 19, 2019).
The following table sets forth each named executive officer’sparticipating NEO’s threshold, target and maximum award opportunity with respect to the 20162021 Financial PSUs: | | | | | | | | | | | | | | | 2021 FINANCIAL PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD (#) | | | TARGET (#) | | | MAXIMUM (#) | | Hikmet Ersek | | | 85,739 | | | | 171,477 | | | | 342,954 | | Raj Agrawal | | | 29,788 | | | | 59,575 | | | | 119,150 | | Michelle Swanback | | | 26,596 | | | | 53,192 | | | | 106,384 | | Jean Claude Farah | | | 15,958 | | | | 31,915 | | | | 63,830 | |
| | 2016 FINANCIAL PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD | | TARGET | | MAXIMUM | | Hikmet Ersek | | 115,449 | | 230,897 | | 346,346 | | Rajesh K. Agrawal | | 27,183 | | 54,366 | | 81,549 | | Odilon Almeida | | 22,241 | | 44,482 | | 66,723 | | Elizabeth G. Chambers | | 19,770 | | 39,539 | | 59,309 | | J. David Thompson | | 20,594 | | 41,187 | | 61,781 |
TSR PSUs.PSUs. In 2016,2021, the Company continued to use a standalonegrant TSR PSU award in orderPSUs to enhance focus on stockholder returns. These TSR PSUs require the Company to achieve 60th percentile relative TSR performance versus the S&P 500 Index over a three-year performance period in order to earn target payout, with 30th30th percentile relative TSR performance resulting in threshold payout and 90th90th percentile relative TSR performance resulting in maximum payout. This portion of the award is also subject to the participant’s continued service through February 18, 2019 (or, in the casethird anniversary of the grant date (February 2024), except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek February 19, 2019).will be eligible to receive prorated vesting of his 2021 TSR PSUs based upon his period of service during the vesting period. The following table sets forth each named executive officer’sparticipating NEO’s threshold, target and maximum award opportunities with respect to the 20162021 TSR PSUs: | | | | | | | | | | | | | | | 2021 TSR PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD (#) | | | TARGET (#) | | | MAXIMUM (#) | | Hikmet Ersek | | | 32,069 | | | | 64,138 | | | | 128,276 | | Raj Agrawal | | | 11,318 | | | | 22,636 | | | | 45,272 | | Michelle Swanback | | | 10,106 | | | | 20,211 | | | | 40,422 | | Jean Claude Farah | | | 6,064 | | | | 12,127 | | | | 24,254 | |
| | 2016 TSR PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD | | TARGET | | MAXIMUM | | Hikmet Ersek | | 42,297 | | 84,593 | | 126,890 | | Rajesh K. Agrawal | | 9,946 | | 19,892 | | 29,838 | | Odilon Almeida | | 8,138 | | 16,275 | | 24,413 | | Elizabeth G. Chambers | | 7,234 | | 14,467 | | 21,701 | | J. David Thompson | | 7,535 | | 15,070 | | 22,605 |
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Annual RSU Awards. Service-vesting RSUs are granted to our NEOs to support retention and alignment of our NEOs’ interests with the interests of our stockholders. The annual RSU grants vest 100% on the third anniversary of the grantdate, subject to the NEO’s continued service or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to receive prorated vesting of his 2021 RSUs based upon his period of service during the vesting period. 2022 Proxy Statement | 47
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS The following table sets forth each participating NEO’s 2021 annual RSU grant: COMPENSATION DISCUSSION AND ANALYSIS
| | | EXECUTIVE | | ANNUAL RSU GRANT (#) | Hikmet Ersek | | 34,296 | Raj Agrawal | | 35,745 | Michelle Swanback | | 31,915 | Jean Claude Farah | | 19,149 |
Stock Option Award. 2014With respect to Mr. Ersek, stock options were granted to further emphasize the achievement of long-term objectives and encourage long-term value creation as the stock options will have value to Mr. Ersek only if the Company’s stock price appreciates from the date of grant. The stock options have a 10-year term and vest in 25% annual increments over four years, subject to Mr. Ersek’s continued service or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. For 2021, Mr. Ersek received a stock option award representing the right to purchase 400,000 shares of the Company’s common stock, subject to the satisfaction of the underlying service-based vesting conditions. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to receive prorated vesting of his 2021 stock option award based upon his period of service during the vesting period. 2019 PSU Awards.Under the terms of the 20142019 PSUs, 20162021 represented the final year of the three-year performance periodsperiod for the 20142019 Financial PSUs and the 20142019 TSR PSUs. The 20142019 Financial PSUs vested based on the extent to which the Company’s CAGR for revenue and operating incomeEBIT (each weighted 50%), met certain goals over a cumulative three-year performance goals based on each performance year’s actual performance as compared to the prior year, as well as a three-year positive CAGR in both revenue and operating income.period. The 20142019 TSR PSUs vestedwere scheduled to vest based on the Company’s achievement of relative TSR performance versus the S&P 500 Index over a three-year performance period. Based on performance over the three-year performance period, as described further below, the 2019 PSUs vested as follows for each of the participating NEOs: | | | | | | | | | EXECUTIVE(1) | | 2019 TARGET FINANCIAL PSUs (#) | | 2019 EARNED FINANCIAL PSUs (#) | | 2019 TARGET TSR PSUs (#) | | 2019 EARNED TSR PSUs (#) | Hikmet Ersek | | 198,526 | | 55,588 | | 105,343 | | — | Raj Agrawal | | 67,265 | | 18,835 | | 34,783 | | — | Jean Claude Farah | | 29,429 | | 8,241 | | 15,218 | | — |
| (1) | Mr. McGranahan, Ms. Swanback and Ms. Fitzgerald commenced employment with the Company following the commencement of the performance period and, accordingly, did not receive 2019 PSUs. |
The 20142019 Financial PSU and 20142019 TSR PSU performance objectives and the achievement levels are set forth in the tables below. While the performance periods for the 2014 2019 PSUs concluded as of December 31, 2016,2021, these awards remained subject to service-based vesting conditions until February 20, 2017. Similar to the 2016 annual incentive payout calculations and pursuantthird anniversary of the grant date (February 2022). Pursuant to the terms of the underlying award agreements and consistent with the adjustment methodology used in prior years, the Compensation Committee excluded from the 20142019 Financial PSU payout calculations chargescosts incurred in connection with the Joint Settlement Agreements and costs incurred in 2016 related to the Company’s WU Way programNext Generation Initiative in 2019 and 2020, the savings associated with the WU Way Next Generation Initiative in 2020 and 2021, expenses incurred in connection with the Company’s acquisition and divestiture activity from 2018 through 2021, debt extinguishment costs associated with the early repayment of debt in 2021, and costs to settle and terminate the Company’s frozen defined benefit plan in 2021. The committee viewed these as significant items not indicative of the Company’s day-to-day performance. Finally, for the reasons described under “–Annual Incentive Compensation” above. Also, similar2019 payout calculation, revenue and operating income were adjusted to its review with respectexclude Speedpay and Paymap due to 2016 annual incentive payouts, the committee reviewed2019 dispositions of these businesses as well as the Company’s existing clawback policy and determined that the clawback policy did not require a clawbackgain on those dispositions. 48 | The Western Union Company
Table of the 2014 PSUs as a result of the Joint Settlement Agreements.Contents
COMPENSATION DISCUSSION AND ANALYSIS 20142019 FINANCIAL PSUs
(PERFORMANCE PERIOD 2014-2016) 2019-2021) | PERFORMANCE OBJECTIVES | | 20142019 FINANCIAL PSU PERFORMANCE GOALS | | ACTUAL PERFORMANCE* PERFORMANCE* | Targeted annual constant currency compound annual growth rate for revenue and operating income (each weighted 50%), comparing 2014 actualEBIT over the three-year performance against 2013 actual performance (weighting 33-1/3%)period | | Revenue growth rate: 3.8%
Operating income growth rate: 5.5% | | Revenue growth rate: 3.1%
EBIT growth rate: 4.3% | | Revenue growth
rate = 4.0%0.2% achievement Operating incomeEBIT growth
rate = 6.7%3.0% achievement
| Targeted annual constant currency growth rate for revenue and operating income (each weighted 50%), comparing 2015 actual performance against 2014 actual performance (weighting 33-1/3%) | | Revenue growth rate: 4.6%
Operating income growth rate: 5.6% | | Revenue growth rate = 3.5% achievement
Operating income growth rate = 4.4% achievement
| Targeted annual constant currency growth rate for revenue and operating income (each weighted 50%), comparing 2016 actual performance against 2015 actual performance (weighting 33-1/3%) | | Revenue growth rate: 5.3%
Operating income growth rate: 7.0% | | Revenue growth rate = 2.8% achievement
Operating income growth rate = 4.4% achievement
| | | | | Overall Attainment Level 85%28 % |
* | At constant currency, - calculated assuming no changes in the currency exchange rates from 2013the prior year’s currency exchange rates. Absent the exclusion of $621 million in combined costs associated with the Joint Settlement Agreements and the WU Way program, the overall attainment level would have been 73% of target. |
20142019 TSR PSUs
(PERFORMANCE PERIOD 2014-2016) 2019-2021) | | | PERFORMANCE GOALS | | | PERFORMANCE OBJECTIVE | | THRESHOLD | | TARGET | | MAXIMUM | | ACTUAL PERFORMANCE | TSR relative to S&P 500 Index* | | 30th percentile | | 60th percentile | | 90th percentile | | 5812th percentile | | | | | | | | | Overall Attainment Level 96%0 % |
* | Relative TSR performance for purposes of the 20142019 TSR PSUs was calculated based on the terms of the 20142019 TSR PSU award agreement, which requires using a beginning stock price calculated as the average company closing stock price for all trading days during December 20132018 and an ending stock price calculated as the average company closing stock price for all trading days during December 2016.2021. In determining the TSR for the companies in the S&P 500 Index, the S&P companies comprising the S&P Index on December 31, 20162021 were used. |
CEO Transition Compensation In connection with Mr. McGranahan joining the Company as CEO, on November 12, 2021, the Company entered into an offer letter agreement with Mr. McGranahan describing the terms of his employment with Western Union, LLC, an affiliate of the Company (the “McGranahan Letter Agreement”). The terms of the McGranahan Letter Agreement were determined after considering the input of Meridian, market data for the CEO role, the compensation received by Mr. McGranahan at his prior employer, including the compensation that would be forfeited upon him joining the Company, and the compensation received by Mr. Ersek in the CEO role. Pursuant to the McGranahan Letter Agreement, Mr. McGranahan’s compensation includes: an annual base salary of $1,000,000; beginning with the 2022 performance year, participation in the Annual Incentive Plan with a target short-term incentive award opportunity equal to 170% of Mr. McGranahan’s annual base salary and any payout determined based on performance and the terms of such plan; beginning in 2022, participation in the Company’s long-term incentive program, with a target grant date fair value for Mr. McGranahan’s annual equity grant which is no less than $8,000,000; 2017 Proxy Statement
| | • | 47a one-time sign-on equity award of service-vesting RSUs with a grant date fair value of $6,500,000, which will vest in two substantially equal installments on August 1, 2022 and February 1, 2023, subject to his continued service except as otherwise provided under the Company’s Executive
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a one-time sign-on equity award of service-vesting stock options with a grant date fair value of $6,600,000, which shall vest in 25% installments on each of the first four anniversaries of the grant date, subject to his continued service except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement; a one-time sign-on cash bonus of $1,000,000, which was payable within 30 days of Mr. McGranahan’s start date (the “McGranahan Sign-On Bonus”), and participation in the Company’s health, welfare, retirement and financial security benefit programs and the Company’s Executive Severance Poligy on the same terms as similarly-situated senior executives of the Company. The sign-on equity awards and McGranahan Sign-On Bonus were intended to compensate Mr. McGranahan for compensation that he forfeited at his prior employer by accepting the position with the Company. While these sign-on awards were deemed necessary to attract a candidate of Mr. McGranahan’s experience, the Committee believes these stock-settled awards provide immediate and direct alignment with stockholders through the risks and rewards of equity ownership. Future equity awards to Mr. McGranahan are expected to be delivered through the same general equity vehicles as granted to the Company’s other executive officers and, consistent with our historical practices, are expected to include performance-based long-term incentives. 2022 Proxy Statement | 49
COMPENSATION DISCUSSION AND ANALYSIS While continuing to support the Company as Special Advisor to the CEO, Mr. Ersek’s base salary and benefits will continue, with an annual incentive opportunity under the Annual Incentive Plan that is prorated for his period of service during 2022, except that Mr. Ersek will not participate in the Company’s long-term incentive program for 2022. In addition, the Company agreed to provide Mr. Ersek with a lump sum payment equal to COBRA premiums for continued healthcare coverage through December 31, 2023, tax filing support services for 2022 and 2023, and repatriation support for Mr. Ersek’s repatriation to Austria in accordance with the Company’s repatriation policy. Finally, due to his satisfaction of the age and servicerequirements under his outstanding equity award agreements, Mr. Ersek will be eligible for retirement vesting in accordance with their terms. Other Elements of Compensation To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees, we provide the benefits listed in the following table to our United States-basedU.S.-based employees: BENEFIT OR PERQUISITE | | NAMED
EXECUTIVE
OFFICERS | | OTHER
OFFICERS
AND KEY
EMPLOYEES | | ALL FULL-TIME
AND REGULAR
PART-TIME
EMPLOYEES | 401(k) Plan | | ✓
| | ✓
| | ✓
| Supplemental Incentive Savings Plan (a nonqualified defined
contribution plan) | | ✓
| | ✓
| | | Severance and Change-in-Control Benefits (Double-Trigger) | | ✓
| | ✓
| | 
| Health and Welfare Benefits | | ✓
| | ✓
| | ✓
| Limited Perquisites | | ✓
| | ✓
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Severance and Change-in-Control Benefits.Benefits. The Company has an executive severance policyExecutive Severance Policy for our executive officers. The policy helps accomplish the Company’s compensation philosophy of attracting and retaining exemplary talent. The committee believes it is appropriate to provide executives with the rewards and protections afforded by the Executive Severance Policy. The policy reduces the need to negotiate individual severance arrangements with departing executives and protects our executives from termination for circumstances not of their doing. The committee also believes the policy promotes management independence and helps retain, stabilize, and focus the executive officers in the event of a change-in-control. In the event of a change-in-control, the policy’s severance benefits are payable only upon a “double trigger.” This means that severance benefits are triggered only when an eligible executive is involuntarily terminated (other than for cause, death, or disability), or terminates his or her own employment voluntarily for “good reason” (including a material reduction in title or position, reduction in base salary or bonus opportunity or an increase in the executive’s commute to his or her current principal working location of more than 50 miles without consent) within 24 months after the date of a change-in-control. Severance benefits under the policy are conditioned upon the executive executing an agreement and release whichthat includes, among other things, non-competition and non-solicitation restrictive covenants and a release of claims against the Company. Due to Mr. Ersek’s retirement from the Company, Mr. Ersek will not receive severance benefits under the Executive Severance Policy. In addition, the Executive Severance Policy prohibits excise tax gross-up payments on change-in-control benefits for those individuals who became executivesexecutive officers of the Company after April 2009. Following Mr. Ersek is the onlyErsek’s retirement as CEO, no Company employee who remainsis eligible for these excise tax gross-up payments. As noted below, Mr. Farah is subject to an employment agreement, which is a customary practice for executives located in the United Arab Emirates (“UAE”). Under the terms of Mr. Farah’s employment agreement, he is required to receive three months’ notice of termination of employment or, in lieu of such notice, three months of pay. In addition, Mr. Farah is also eligible for statutory end of service gratuity/severance amounts in accordance with local law. Any amounts due to Mr. Farah under the Executive Severance Policy will be reduced by any end of service gratuity/severance paid under the terms of his employment agreement or as required by local law. As noted above, Ms. Swanback separated from the Company, effective as of March 31, 2022. In connection with Ms. Swanback’s departure, the Company and Ms. Swanback entered into a mutual separation agreement, which includes a customary release of claims and provides for a separation payment of $1,565,000, payable in nine equal monthly installments from April 2022 through December 2022. In connection with her departure, Ms. Swanback will not receive a bonus for 2022 under the Company’s Annual Incentive Plan, her outstanding and unvested equity awards were forfeited, and she was not eligible for any severance benefits under the Executive Severance Policy. Ms. Swanback remains subject to restrictive covenants, including covenants relating to non-competition, non-solicitation, and non-disclosure. 50 | The Western Union Company
Table of Content COMPENSATION DISCUSSION AND ANALYSIS Please see the “Executive“Executive Compensation—Potential Payments Upon Termination or Change-in-Control”Change-in-Control” section of this Proxy Statement for further information regarding the Executive Severance Policy, andincluding the treatment of awards upon qualifying termination events or a change-in-control. Employment Arrangements. The Company generally executes an offer of employment before an executive joins the Company. This offer describes the basic terms of the executive’s employment, including his or her start date, starting salary, annual incentive target and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will apply as warranted. In August 2021, the Company and Ms. Fitzgerald entered into an offer of employment outlining the basic terms of Ms. Fitzgerald’s employment. In addition to setting forth Ms. Fitzgerald’s start date, starting salary, annual incentive target, 2022 long-term incentive award target and eligibility to participate in the Executive Severance Policy, Ms. Fitzgerald’s offer of employment also included cash and RSU sign-on awards. Ms. Fitzgerald received a cash sign-on award in the amount of $200,000, payable in two equal installments, with the first installment to be paid within 30 days of Ms. Fitzgerald’s start date, and the second installment to be paid following the six-month anniversary of her start date. This cash sign-on award is subject to pro-rata repayment in the event Ms. Fitzgerald voluntarily resigns from the Company or is terminated for cause prior to the one-year anniversary of her start date. Ms. Fitzgerald also received a one-time RSU award of 92,166 RSUs with a target grant date fair value of $2,000,000, with the RSUs scheduled to vest in three substantially equal installments on the first, second, and third anniversaries of the grant date, subject to Ms. Fitzgerald’s continued employment through the applicable vesting date or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and the related award agreement. Ms. Fitzgerald’s sign-on cash and equity awards were granted as compensation for comparable amounts that she would have otherwise earned from her prior employer and to provide a competitive offer for her to accept a position with the Company. Under certain circumstances, the Compensation Committee recognizes that special arrangements with respect to an executive’s employment may be necessary or desirable. For example, Mr. Ersek, the Company, and a subsidiary of the Company entered into agreements in November 2009 relating to his 2009 promotion to Chief Operating Officer, which were amended effective September 2010 to reflect his 2010 promotion to President and CEO. Employment contracts were a competitive market practice in Austria where Mr. Ersek resided at the time he assumed his position as Chief Operating Officer and the Compensation Committee believes the terms of his agreements were consistent with those for similarly situated executives in Austria. Additionally, Mr. Farah and a subsidiary of the Company entered into an employment contract in June 2008 with respect to Mr. Farah’s employment with the Company. Employment contracts are a competitive market practice in the UAE where Mr. Farah resides, and the Compensation Committee believes the terms of his contract are consistent with those for similarly situated executives in the UAE. Please see the “Executive Compensation—Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Arrangements” section of this Proxy Statement for a description of the material terms of the employment agreements with Messrs. Ersek and Farah. Please see the “CEO Transition Compensation” section of this Proxy Statement above for a description of the compensation arrangements entered into with Messrs. McGranahan and Ersek in connection with the CEO transition. Retirement Savings Plans.Plans. The Company executives on United StatesU.S. payroll are eligible for retirement benefits through a qualified defined contribution 401(k) plan, the Incentive Savings Plan, and a nonqualified defined contribution plan, the Supplemental Incentive Savings Plan (“SISP”). The SISP provides a vehicle for additional deferred compensation with matching contributions from the Company. We maintain the Incentive Savings Plan and the SISP to encourage our employees to save some percentage of their cash compensation for their eventual retirement. Mr. Ersek participates in the qualified defined contribution retirement plan made available to eligible employees in Austria. The committee believes that these types of savings plans are consistent with competitive pay practices, and are an important element in attracting and retaining talent in a competitive market. Please see the 20162021 Nonqualified Deferred Compensation Table in the “Executive Compensation” section of this Proxy Statement for further information regarding Western Union’sthe Company’s retirement savings plans. Benefits and Perquisites.Perquisites. The Company’s global benefit philosophy for employees, including executives, is to provide a package of benefits consistent with local practices and competitive within individual markets. EachWhile employed with the Company, each of our named executive officersNEOs participates in the health and welfare benefit plans and fringe benefit programs generally available to all other Company employees in the individual market in which they are located. In addition, in 2016 the Company provided the benefits and perquisites as describedFor example, Mr. Farah resides in the 2016 All Other Compensation Table in the “Executive Compensation” section of this Proxy Statement.UAE where it is customary to provide certain fringe benefits, including annual housing, education, transportation, health and wellness and technology allowances. The Company provided its named executive officersNEOs with limited, yet competitive perquisites and other personal benefits that the Compensation Committee believes are consistent with the Company’s philosophy of attracting and retaining exemplary executive talent and, in some cases, such as the annual physical examination, the Company provides such personal benefits because the committee believes they 48
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are in the interests of the Company and its stockholders. The committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers.NEOs. Employment Arrangements. TheDuring 2018, the Company generally executeshired an offeroutside security provider to perform a comprehensive security assessment with
2022 Proxy Statement | 51
Table of employment before an executive joins the Company. This offer describes the basic terms of the executive’s employment, including his or her start date, starting salary, bonus target and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will apply as warranted.Contents Under certain circumstances, the Compensation Committee recognizes that special arrangements with
COMPENSATION DISCUSSION AND ANALYSIS respect to an executive’s employment maycertain Company personnel, including Mr. Ersek. Based on its security assessment, the outside security provider recommended certain home security services continue to be necessary or desirable. For example,provided to Mr. Ersek and that Mr. Ersek continue to use corporate aircraft for certain business and personal travel. Accordingly, the Company paid for certain security services for Mr. Ersek and corporate aircraft for certain personal travel. Because the Company believed it to be in the best interests of the Company and its stockholders to protect Mr. Ersek against possible security threats to him and his family members, the Company required that Mr. Ersek accept such personal security protection. The Company also believes that the costs of this security are appropriate and necessary. Although the Company does not consider Mr. Ersek’s security services to be a subsidiaryperquisite or other personal benefit for the reasons described above, the Company has reported the costs related to security services for Mr. Ersek as well as the costs of corporate aircraft for personal travel in the “2021 All Other Compensation Table.” Occasionally, Mr. Ersek’s spouse or other guests accompanied him on corporate aircraft when the aircraft was already scheduled for business purposes and could accommodate additional passengers. In those cases, there was no additional aggregate incremental cost to the Company and, as a result, no amount is reflected in the “2021 All Other Compensation Table.” Also, in connection with the Company’s sponsorship of certain events and partnerships with various organizations and venues, certain perquisites, including tickets and parking access, are made available to officers and employees of the Company, entered into agreements in November 2009 relating to his 2009 promotion to Chief Operating Officer, which were amended effective September 2010 to reflect his 2010 promotion to President and Chief Executive Officer. Employment contracts are a competitive market practice in Austria whereincluding Mr. Ersek resided at the time he assumed his position as Chief Operating Officer and the other NEOs. These perquisites have no additional aggregate incremental cost to the Company, and therefore, no amount is reflected in the “2021 All Other Compensation Committee believes the terms of his agreements are consistent with those for similarly situated executives in Austria. Please see the “Executive Compensation—Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment ArrangementsTable.” section of this Proxy Statement for a description of the material terms of Mr. Ersek’s employment agreement.
Stock Ownership Guidelines To align our executives’ interests with those of our stockholders and to assure that our executives own meaningful levels of Company stock throughout their tenures with the Company, the Compensation Committee established stock ownership guidelines that require each of the named executive officersNEOs to own Company Common Stockshares of the Company’s common stock worth a specified multiple of base salary. Under the stock ownership guidelines, the executives must retain, until the required ownership guideline levels have been achieved and thereafter if required to maintain the required ownership levels, at least 50% of after-tax shares resulting from the vesting of restricted stock and restricted stock units,RSUs, including PSUs. The chart below shows the salary multiple guidelines and the equity holdings that count towards the requirement as of March 13, 2017.the Record Date. Each continuing named executive officerNEO has met, or is progressing towards meeting, his or her respective ownership guideline.guideline EXECUTIVE | GUIDELINE | |
| GUIDELINE | | STATUS | Hikmet ErsekDevin McGranahan | | 6x salary | | Meets guideline
| Rajesh K. Agrawal | 3x salary | | Meets guideline
| Odilon Almeida | 3x salary | | Must hold 50% of after-tax shares until guideline is met | Elizabeth G. ChambersRaj Agrawal | | 3x salary | | Meets guideline | Jean Claude Farah | | 3x salary | | Meets guideline | Gabriella Fitzgerald | | 3x salary | | Must hold 50% of after-tax shares until guideline is met | J. David Thompson | 3x salary | | Meets guideline
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WHAT COUNTS TOWARD
THE GUIDELINE | | WHAT DOES NOT COUNT
TOWARD THE GUIDELINE |  ✓ Company securities owned personally
| |  ✕ Unexercised stockStock options
|  ✓ Shares held in any Company benefit plan
| |  ✕ PSUs
|  ✓ After-tax value of time-basedservice-based restricted stock awards and RSUs
| | |
Prohibition Against Pledging and Hedging of the Company’s Securities The Company’s insider trading policy prohibitspolicies prohibit the Company’s executive officers and directors from pledging the Company’s securities, orand prohibit all Company employees, including executive officers, and directors from engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. Clawback PoliciesPolicy The Board of Directors adoptedCompany maintains a clawback policy in 2009. Under the policy,under which the Company may, in the Board’sCommittee’s discretion and subject to applicable law, recover“clawback” incentive compensation paid to an executive officercertain officers of the Company (defined(generally defined as an individual subject to Section 16 of the Exchange Act atas well as the timeCompany’s CCO) in the event of an accounting restatement or if such officer engaged in detrimental conduct, as defined in the clawback policy. In addition, the Company is permitted under the clawback policy, in the Committee’s discretion and subject to applicable laws, to clawback incentive compensation was received by or paid to the officer)such officers for conduct that is determined to have directly contributed to material compliance failures resulting in a failure to comply with applicable laws or regulations. Under this policy, if the Committee determines that incentive compensation resulted fromis subject to clawback, the Company, subject to the direction of the Committee, has broad discretion to effect recovery of such amounts, including requiring a cash payment, canceling outstanding or deferred awards, reducing future compensation, seeking recovery of any 2017 Proxy Statement
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COMPENSATION DISCUSSION AND ANALYSIS
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financial result gain or performance metric impactedprofit realized by the executive officer’s misconductofficer on the sale or fraud.other disposition of any equity-based awards, or other appropriate means. The Board is monitoringCompany continues to monitor this policy to ensure that it is consistent with applicable laws, including any requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). In addition, pursuant to the Joint Settlement Agreements discussed above, the Compensation Committee will implement a provision that allows the
52 | The Western Union Company to “clawback” bonuses for executives for conduct that is later determined to have contributed to future compliance failures, subject to applicable law. This clawback provision will be effective with respect to the Company’s 2017 executive compensation program.
Tax Implications of Executive Compensation Program
Under Section 162(m) of the Code, named executive officer (other than the Chief Financial Officer) compensation over $1 million for any year is generally not deductible for
United States income tax purposes. Performance-based compensation is exempt from the deduction limit, however, if certain requirements are met. The Compensation Committee structures compensation to take advantage of this exemption under Section 162(m) to the extent practicable, while satisfying the Company’s compensation policies and objectives. Because the Compensation Committee also recognizes the need to retain flexibility to make compensation decisions that may not meet the standards of Section 162(m) when necessary to enable the Company to continue to attract, retain, and motivate highly-qualified executives, it reserves the authority to approve potentially non-deductible compensation in appropriate circumstances.
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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Hikmet Ersek
President and Chief Executive Officer
Mr. Ersek’s 2016 compensation was weighted significantly toward variable and performance-based incentive pay over fixed pay, and long-term, equity-based pay over annual cash compensation, because the Compensation Committee desired to tie a significant level of Mr. Ersek’s compensation to the performance of the Company. The percentage of compensation delivered in the form of performance-based compensation is higher for Mr. Ersek than compared to the other named executive officers because the Compensation Committee believes that the Chief Executive Officer’s leadership is one of the key drivers of the Company’s success, and that a greater percentage of the Chief Executive Officer’s total compensation should be variable as a reflection of the Company’s level of performance. Market data provided by the Compensation Consultant supported this practice as well. Accordingly, at target-level performance for 2016, Mr. Ersek’s annual compensation was weighted 10% base salary, 16% annual incentive award, and 74% long-term incentive award. Approximately 90% of Mr. Ersek’s 2016 targeted total annual compensation varies based on the Company’s performance.
In early 2016, the Compensation Committee set Mr. Ersek’s 2016 compensation levels, including his annual and long-term incentive award targets, as discussed below. Mr. Ersek’s total target direct compensation was increased for the first time since 2012 and the committee elected to deliver the entire increase in the form of long-term incentive awards. Mr. Ersek’s compensation as Chief Executive Officer is set higher relative to the other named executive officers. The Compensation Committee considers this to be appropriate,
based on market data provided by the Compensation Consultant, and because his level of pay reflects his ultimate responsibility to oversee the performance of the Company.
● | Base Salary. For 2016, no changes were made to Mr. Ersek’s annual base salary. Accordingly, Mr. Ersek’s annual base salary remained at $1,000,000.
| ● | Annual Incentive Plan Target and Payout Level. For 2016, no changes were made to Mr. Ersek’s Annual Incentive Plan target of $1,500,000. The maximum Annual Incentive Plan award that Mr. Ersek could have earned during 2016 was 150% of Mr. Ersek’s target, or $2,250,000. The Compensation Committee determined that it was appropriate to base Mr. Ersek’s award opportunity under the Annual Incentive Plan entirely on Company financial and strategic performance objectives. Mr. Ersek’s 2016 Annual Incentive Plan award payout was $1,392,000, reflecting a blended payout of 93% of target based on the Company’s level of achievement of the corporate and strategic performance goals.
| ● | Long-Term Incentive Award. For 2016, the committee increased Mr. Ersek’s long-term incentive award target from $6,000,000 to $7,000,000 in order to more closely align his target total direct compensation with the median of the market data.
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Rajesh K. Agrawal
Executive Vice President and Chief Financial Officer
In February 2016, the Compensation Committee set Mr. Agrawal’s 2016 compensation levels after considering the input of the Compensation Consultant and market data.
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Table of Contents EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS
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● | Base Salary. For 2016, no changes were made to Mr. Agrawal’s annual base salary. Accordingly,Mr. Agrawal’s annual base salary remained at $566,500.
| ● | Annual Incentive Plan Target and Payout Level. For 2016, the committee increased Mr. Agrawal’s 2016 annual incentive plan target from 90% of base salary to 100% of base salary, or $566,500, to more closely align his compensation with the median of the market data. The maximum Annual Incentive Plan award that Mr. Agrawal could have earned during 2016 was 175% of Mr. Agrawal’s target, or $991,375. Mr. Agrawal’s 2016 Annual Incentive Plan award payout was $554,037, reflecting a total payout of 98% of target based on the Company’s achievement of corporate and strategic performance goals of 93% of target plus a 5% individual performance modifier based on Mr. Agrawal’s achievement of individual performance goals.
| ● | Long-Term Incentive Award. For 2016, the committee increased Mr. Agrawal’s long-term incentive award target from $1,500,000 to $1,650,000 to more closely align his compensation with the median of the market data.
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Odilon Almeida
Executive Vice President, President — Global Money Transfer (from February 2017), and Executive Vice President and President, Americas and European Union (from January 2014 to February 2017)
In February 2016, the Compensation Committee set Mr. Almeida’s 2016 compensation levels after considering the input of the Compensation Consultant and market data.
● | Base Salary. For 2016, no changes were made to Mr. Almeida’s base salary. Accordingly, Mr. Almeida’s base salary remained at $612,000.
| ● | Annual Incentive Plan Target and Payout Level. For 2016, no changes were made to Mr. Almeida’s Annual Incentive Plan Target of $550,800. The maximum Annual Incentive Plan award that Mr. Almeida could have earned during 2016 was 175% of Mr. Almeida’s target, or $963,900. Mr. Almeida’s 2016 Annual Incentive Plan award payout was $566,222, reflecting a total payout of 103% of target based on the Company’s achievement of corporate and strategic performance goals of 93% of target plus a 10% individual performance modifier based on Mr. Almeida’s achievement of individual performance goals.
| ● | Long-Term Incentive Award. For 2016, the committee increased Mr. Almeida’s long-term incentive award target from $1,200,000 to $1,350,000 to more closely align his compensation with the median of the market data.
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Elizabeth G. Chambers
Executive Vice President, Chief Strategy, Product and Marketing Officer
In February 2016, the Compensation Committee set Ms. Chambers’ 2016 compensation levels after considering the input of the Compensation Consultant and market data. In light of Ms. Chambers’ recent hire by the Company, for 2016, the Committee did not adjust her compensation levels from those established in connection with her November 2015 hire date.
● | Base Salary. For 2016, Ms. Chambers’ base salary was $535,000.
| ● | Annual Incentive Plan Target and Payout Level. For 2016, Ms. Chambers’ Annual Incentive Plan target equaled $481,500. The maximum Annual Incentive Plan award that Ms. Chambers could have earned during 2016 was 175% of Ms. Chambers’ target, or $842,625. Ms. Chambers’ 2016 Annual Incentive Plan award payout was $446,832, reflecting a total payout of 93% of target based on the Company’s achievement of corporate and strategic performance goals of 93% of target and no modification based on Ms. Chambers’ achievement of individual performance goals.
| ● | Long-Term Incentive Award. For 2016, Ms. Chambers’ long-term incentive award target equaled $1,200,000.
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J. David Thompson
Executive Vice President, Global Operations and Chief Information Officer
In February 2016, the Compensation Committee set Mr. Thompson’s 2016 compensation levels after considering the input of the Compensation Consultant and market data.
● | Base Salary. For 2016, no changes were made to Mr. Thompson’s base salary. Accordingly, Mr. Thompson’s base salary remained at $540,000.
| ● | Annual Incentive Plan Target and Payout Level. For 2016, no changes were made to Mr. Thompson’s Annual Incentive Plan target of $486,000. The maximum Annual Incentive Plan award that Mr. Thompson could have earned during 2016 was 175% of Mr. Thompson’s target, or $850,500. Mr. Thompson’s 2016 Annual Incentive Plan award payout was $451,008, reflecting a total payout of 93% of target based on the Company’s achievement of corporate and strategic performance goals of 93% of target and no modification based on Mr. Thompson’s achievement of individual performance goals.
| ● | Long-Term Incentive Award. For 2016, the committee increased Mr. Thompson’s long-term incentive award target from $1,200,000 to $1,250,000.
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2017 Proxy Statement
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Table of Contents
The following table contains compensation information for our named executive officersNEOs for the fiscal year ended December 31, 20162021 and, to the extent required under the SEC executive compensation disclosure rules, the fiscal years ended December 31, 20152020 and December 31, 2014.2019. 20162021 SUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | NAME AND PRINCIPAL POSITION | | YEAR | | SALARY ($000)(1) | | BONUS ($000)(2) | | STOCK AWARDS ($000)(3) | | OPTION AWARDS ($000)(3) | | NON-EQUITY INCENTIVE PLAN COMPENSATION ($000)(4) | | CHANGE IN PENSION VALUE AND NON- QUALIFIED DEFERRED COMPENSATION EARNINGS ($000) | | ALL OTHER COMPENSATION ($000)(5) | | TOTAL ($000) | Devin McGranahan | | 2021 | | 17.4 | | 1,000.0 | | 6,500.0 | | 6,600.0 | | — | | — | | — | | 14,117.4 | President and Chief | | 2020 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Executive Officer | | 2019 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Hikmet Ersek(6) | | 2021 | | 1,050.0 | | — | | 6,560.0 | | 1,640.0 | | 1,392.3 | | — | | 192.3 | | 10,834.6 | Senior Advisor and Former President | | 2020 | | 1,041.7 | | — | | 6,560.0 | | 1,640.0 | | 874.7 | | — | | 220.0 | | 10,336.4 | and Chief Executive Officer | | 2019 | | 1,000.0 | | — | | 5,600.0 | | 1,400.0 | | 1,700.0 | | — | | 399.5 | | 10,099.5 | Raj Agrawal | | 2021 | | 650.0 | | — | | 2,800.0 | | — | | 507.0 | | — | | 48.2 | | 4,005.2 | Chief Financial | | 2020 | | 646.7 | | — | | 2,400.0 | | — | | 377.0 | | — | | 86.7 | | 3,510.4 | Officer | | 2019 | | 630.0 | | — | | 2,400.0 | | — | | 718.2 | | — | | 56.5 | | 3,804.7 | Michelle Swanback | | 2021 | | 645.8 | | — | | 2,500.0 | | — | | 557.7 | | — | | 44.7 | | 3,748.2 | President, Product | | 2020 | | 606.1 | | 500.0 | | 4,700.0 | | — | | 375.0 | | — | | 44.4 | | 6,225.5 | and Platform | | 2019 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Gabriella Fitzgerald | | 2021 | | 166.7 | | 100.0 | | 2,000.0 | | — | | 471.9 | | — | | 11.7 | | 2,750.3 | President, | | 2020 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Americas Region | | 2019 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Jean Claude Farah(7) | | 2021 | | 500.0 | | — | | 1,500.0 | | — | | 429.0 | | — | | 175.7 | | 2,604.7 | President, Global | | 2020 | | 500.0 | | — | | 1,050.0 | | — | | 324.5 | | — | | 174.4 | | 2,048.9 | EMEA/APAC Region | | 2019 | | 500.0 | | — | | 1,050.0 | | — | | 486.0 | | — | | 179.4 | | 2,215.4 |
Footnotes: NAME AND PRINCIPAL
POSITION | | YEAR | | SALARY
($000)(1) | | BONUS
($000) | | STOCK
AWARDS
($000)(2) | | OPTION
AWARDS
($000)(2) | | NON-EQUITY
INCENTIVE
PLAN
COMPENSATION
($000)(3) | | CHANGE IN
PENSION VALUE
AND NON-
QUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($000) | | ALL OTHER
COMPENSATION
($000)(4) | | TOTAL
($000) | | Hikmet Ersek(5) | | 2016 | | 1,000.0 | | — | | 5,179.8 | | 1,400.0 | | 1,392.0 | | — | | 313.7 | | 9,285.5 | | President and | | 2015 | | 1,000.0 | | — | | 4,480.6 | | 1,200.0 | | 1,767.0 | | — | | 122.2 | | 8,569.8 | | Chief Executive | | 2014 | | 1,000.0 | | 115.0 | | 4,478.1 | | 1,200.0 | | 1,314.8 | | — | | 133.9 | | 8,241.8 | | Officer | | | | | | | | | | | | | | | | | | | | Rajesh K. Agrawal | | 2016 | | 566.5 | | — | | 1,518.1 | | — | | 554.0 | | — | | 524.7 | | 3,163.3 | | EVP and Chief | | 2015 | | 563.8 | | — | | 1,120.1 | | 300.0 | | 603.7 | | — | | 46.9 | | 2,634.5 | | Financial Officer | | 2014 | | 472.0 | | 93.4 | | 1,435.6 | | 260.0 | | 442.4 | | — | | 674.8 | | 3,378.2 | | Odilon Almeida | | 2016 | | 612.0 | | — | | 1,242.1 | | — | | 566.2 | | — | | 53.8 | | 2,474.1 | | EVP, President — | | 2015 | | 610.0 | | — | | 896.1 | | 240.0 | | 652.1 | | — | | 52.1 | | 2,450.3 | | Global Money | | 2014 | | 600.0 | | 193.2 | | 1,312.6 | | 240.0 | | 507.6 | | — | | 185.5 | | 3,038.9 | | Transfer | | | | | | | | | | | | | | | | | | | | Elizabeth G. Chambers | | 2016 | | 535.0 | | — | | 1,104.1 | | — | | 446.8 | | — | | 258.1 | | 2,344.0 | | EVP, Chief | | 2015 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | Strategy, Product | | 2014 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | and Marketing | | | | | | | | | | | | | | | | | | | | Officer | | | | | | | | | | | | | | | | | | | | J. David Thompson | | 2016 | | 540.0 | | — | | 1,150.1 | | — | | 451.0 | | — | | 47.5 | | 2,188.6 | | EVP, Global | | 2015 | | 533.3 | | — | | 1,178.4 | | 240.0 | | 524.4 | | — | | 55.9 | | 2,532.0 | | Operations and | | 2014 | | 500.0 | | 9.0 | | 1,118.0 | | 240.0 | | 459.0 | | — | | 50.4 | | 2,376.4 | | Chief Information | | | | | | | | | | | | | | | | | | | | Officer | | | | | | | | | | | | | | | | | | |
Footnotes:(1)
| | | (1) | Except with respect to salary adjustments in connection with promotions, any salary adjustments are effective as of March of each reporting year. |
(2) | The amount reported in this column for Mr. McGranahan for 2021 represents a cash sign-on bonus in the amount of $1,000,000, which was paid within 30 days of Mr. McGranahan’s employment start date. This cash sign-on bonus is subject to pro-rata repayment in the event Mr. McGranahan voluntarily resigns from the Company (other than due to good reason) or is terminated for cause prior to the one-year anniversary of his start date. The amount reported in this column for Ms. Fitzgerald for 2021 represents the first installment of a cash sign-on award in the amount of $200,000, payable in two equal installments, the first installment of which was paid within 30 days of Ms. Fitzgerald’s employment start date. This cash sign-on bonus is subject to pro-rata repayment in the event Ms. Fitzgerald voluntarily resigns from the Company or is terminated for cause prior to the one-year anniversary of her start date. |
(2)(3) | The amounts reported in these columns for 20162021 represent the annual equity grants to the named executive officersNEOs under the Long-Term Incentive Plan. The amounts reported in these columns are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The amounts included in the Stock Awards column for the PSUs granted during 20162021 are calculated based on the probable satisfaction of the performance conditions for such awards as of the date of grant. Assuming the highest level of performance is achieved for the 2021 Financial PSUs, the maximum value of the 20162021 Financial PSUs would be as follows: Mr. Ersek—$5,669,676;Ersek -$8,200,0; Mr. Agrawal—$1,336,588; Mr. Almeida—$1,093,590;Agrawal - $2,800.0; Ms. Chambers—$972,066;Swanback - $2,500.0, and Mr. Thompson—$1,012,582. Farah - $1,500.0. Under FASB ASC Topic 718, the vesting condition related to the TSR PSUs is considered a market condition and not a performance condition. Accordingly, there is no grant date fair value below or in excess of the amount reflected in the table above for the named executive officersNEOs that could be calculated and disclosed based on achievement of the underlying |
2022 Proxy Statement | 53
Table of Contents EXECUTIVE COMPENSATION | market condition. Dividend equivalents with respect to the 2021 Financial PSUs and 2021 RSUs will be paid to the extent the underlying PSUs and RSUs are earned. See Note 1617 to the Consolidated Financial Statements included in our Annual ReportsReport on Form 10-K for the years ended December 31, 2016, 2015,2021, 2020 and 2014,2019, respectively, for a discussion ofon the relevant assumptions used in calculating the amounts reported for the applicable year. In connection with her separation, Ms. Swanback forfeited her outstanding equity awards. |
(4) | | (3) | For 2016,2021, the amounts reflect the actual cash bonus received under the Annual Incentive Plan. |
(5) | | (4) | Amounts included in this column for 20162021 are set forth by category in the 20162021 All Other Compensation Table below. |
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EXECUTIVE COMPENSATION(6)
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(5) | For 2016,2021, Mr. Ersek’s salary iswas denominated in United StatesU.S. dollars but iswas paid to or on behalf of Mr. Ersek in euros, based on a conversion rate that was determined prior to payment each calendar quarter. Contributions made to the Austrian retirement plan on behalf of Mr. Ersek arewere denominated in euros and converted to United StatesU.S. dollars for disclosure in the proxy. The conversion rates 0.91533, 0.901388, 0.889759,of 0.822571, 0.838574, 0.824878, and 0.8909480.845809 were applied for quarters one, two, three, and four, respectively. Mr. Ersek retired from his position as an executive officer, effective as of December 26, 2021, and will continue to support the Company as Special Advisor to the CEO until June 30, 2022. |
(7) | For 2021, Mr. Farah’s salary was denominated in U.S. dollars but was paid to or on behalf of Mr. Farah in Emirati dirham, based on a conversion rate of 0.272242. Contributions made to the CFE retirement fund on behalf of Mr. Farah were denominated in euros and converted to U.S. dollars for disclosure in the proxy. The conversion rates of 1.21372224, 1.193599661, 1.180234087, and 1.158947513 were applied for quarters one, two, three, and four, respectively. |
20162021 ALL OTHER COMPENSATION TABLE
| NAME | | PERQUISITES
& OTHER
PERSONAL
BENEFITS
($000)(1) | | TAX
REIMBURSEMENTS
($000) | | COMPANY
CONTRIBUTIONS
TO DEFINED
CONTRIBUTION
PLANS
($000)(2) | | INSURANCE
PREMIUMS
($000) | | TOTAL
($000) | | Hikmet Ersek | | 219.5 | | — | | 75.4 | | 18.8 | | 313.7 | | Rajesh K. Agrawal | | 159.1 | | 317.4(3) | | 46.8 | | 1.4 | | 524.7 | | Odilon Almeida | | 0.2 | | 0.1 | | 50.6 | | 2.9 | | 53.8 | | Elizabeth G. Chambers | | 177.6 | | 57.4(4) | | 21.8 | | 1.3 | | 258.1 | | J. David Thompson | | 0.8 | | — | | 42.6 | | 4.1 | | 47.5 |
| | | | | | | | | | | NAME | | PERQUISITES & OTHER PERSONAL BENEFITS ($000)(1) | | TAX REIMBURSEMENTS ($000) | | COMPANY CONTRIBUTIONS TO DEFINED CONTRIBUTION PLANS ($000)(2) | | INSURANCE PREMIUMS ($000) | | TOTAL ($000) | Devin McGranahan | | — | | — | | — | | — | | — | Hikmet Ersek | | 87.5 | | — | | 77.6 | | 27.2 | | 192.3 | Raj Agrawal | | 3.7 | | 0.3 | | 41.1 | | 3.1 | | 48.2 | Michelle Swanback | | 2.2 | | 0.1 | | 40.8 | | 1.6 | | 44.7 | Gabriella Fitzgerald | | 1.4 | | 0.5 | | 9.5 | | 0.3 | | 11.7 | Jean Claude Farah | | 144.6 | | — | | 8.7 | | 22.4 | | 175.7 |
Footnotes: (1) | Amounts shown in this column for Mr. Ersek include the incremental cost or valuation of personal jet usage ($200,492)81.2), car service/allowances, sporting event tickets and executive security costs. Following a comprehensive security assessment conducted by an independent security firm in 2018, the Board of Directors advised Mr. Ersek to utilize the Company’s leased aircraft for personal travel at the Company’s expense. Those personal travel expenses reported in this column were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid directly to the third-party vendor from which the Company leases corporate aircraft. For Mr. Agrawal and Ms. Chambers,Farah, the amounts in this column include relocation expenses of $154,700housing ($108.9), education, and $176,964, respectively. These relocation expenses were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid to the service provider or the named executive officer, as applicable.transportation allowances. |
| (2) | Amounts shown in this column represent (i) contributions made by the Company on behalf of each of the named executive officers,NEOs, except for Mr.Messrs. McGranahan, Ersek and Farah, to the Company’s Incentive Savings Plan and/or the Supplemental Incentive Savings Plan, andSISP, (ii) contributions made by the Company on behalf of Mr. Ersek to the Company’s defined contribution plan in Austria, the Victoria Volksbanken Pensionskassen AG. | | (3) | This amount includes $316,985 paid to orAG, and (iii) contributions made by the Company on behalf of Mr. Agrawal in connection with his relocation from the United Kingdom to Colorado, which includes both a 2015 and 2016 United Kingdom tax payment paid in calendar year 2016 on United Kingdom sourced income associated with his former United Kingdom expatriate assignment. These expenses were valued on the basis of the aggregate incremental costFarah to the Company and represent the amount accrued for payment or paid to Her Majesty’s Revenue and Customs (HMRC) for Mr. Agrawal, as applicable. These benefits are generally available to all employees asked to relocate as part of the Company’s relocation program. | | (4) | This amount includes a tax gross-up for Ms. Chambers for relocation expenses. This benefit is generally available to employees asked to relocate as part of the Company’s relocation and immigration programs.CFE retirement fund. |
54 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION The following table summarizes awards made to our named executive officersNEOs in 2016.2021. 20162021 GRANTS OF PLAN-BASED AWARDS TABLE
| | | | | | | | | | | ALL OTHER
STOCK
AWARDS:
NUMBER
OF SHARES
OF STOCK
OR UNITS
(#)(2) | | ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
(#)(3) | | EXERCISE
OR BASE
PRICE OF
OPTION
AWARDS
($/Sh) | | GRANT
DATE
FAIR
VALUE
OF
STOCK
AND
OPTION
AWARDS
($000)(4) | | | | | | | ESTIMATED
POSSIBLE
PAYOUTS UNDER
NON-EQUITY
INCENTIVE PLAN
AWARDS(1) | | ESTIMATED FUTURE
PAYOUTS UNDER EQUITY
INCENTIVE PLAN AWARDS | | | | | NAME | | GRANT
DATE | | APPROVAL
DATE | | TARGET
($000) | | MAXIMUM
($000) | | THRESHOLD
(#) | | TARGET
(#) | | MAXIMUM
(#) | | Hikmet | | | | | | 1,500.0 | | 2,250.0 | | | | | | | | | | | | | | | | Ersek | | | | | | | | | | | | | | | | | | | | | | | | | 2/19/16 | | 2/18/16 | | | | | | 115,449(5) | | 230,897(5) | | 346,346(5) | | | | | | | | 3,779.8 | | | 2/19/16 | | 2/18/16 | | | | | | 42,297(6) | | 84,593(6) | | 126,890(6) | | | | | | | | 1,400.0 | | | 2/19/16 | | 2/18/16 | | | | | | | | | | | | | | 422,961 | | $18.19 | | 1,400.0 | | Rajesh K. | | | | | | 566.5 | | 991.4 | | | | | | | | | | | | | | | | Agrawal | | | | | | | | | | | | | | | | | | | | | | | | | 2/18/16 | | 2/18/16 | | | | | | 27,183(5) | | 54,366(5) | | 81,549(5) | | | | | | | | 891.1 | | | 2/18/16 | | 2/18/16 | | | | | | 9,946(6) | | 19,892(6) | | 29,838(6) | | | | | | | | 330.0 | | | 2/18/16 | | 2/18/16 | | | | | | | | | | | | 18,122 | | | | | | 297.0 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GRANT | | | | | | | ESTIMATED | | | | | | | | ALL OTHER | | ALL OTHER | | | | DATE | | | | | | | POSSIBLE | | | | | | | | STOCK | | OPTION | | | | FAIR | | | | | | | PAYOUTS UNDER | | | | | | | | AWARDS: | | AWARDS: | | EXERCISE | | VALUE OF | | | | | | | NON-EQUITY | | ESTIMATED FUTURE | | NUMBER | | NUMBER OF | | OR BASE | | STOCK | | | | | | | INCENTIVE PLAN | | PAYOUTS UNDER EQUITY | | OF SHARES | | SECURITIES | | PRICE OF | | AND | | | | | | | AWARDS(1) | | INCENTIVE PLAN AWARDS | | OF STOCK | | UNDERLYING | | OPTION | | OPTION | | | GRANT | | APPROVAL | | TARGET | | MAXIMUM | | THRESHOLD | | TARGET | | MAXIMUM | | OR UNITS | | OPTIONS | | AWARDS | | AWARDS | NAME | | DATE | | DATE | | ($000) | | ($000) | | (#) | | (#) | | (#) | | (#)(2) | | (#)(3) | | ($/Sh) | | ($000)(4) | Devin | | | | | | | | | | | | | | | | | | | | | | | McGranahan | | 12/27/2021 | | 11/11/2021 | | | | | | | | | | | | 367,232 | | | | | | 6,500.0 | | | 12/27/2021 | | 11/11/2021 | | | | | | | | | | | | | | 2,149,838 | | 17.70 | | 6,600.0 | | | | | | | | �� | | | | | | | | | | | | | | | | Hikmet | | | | | | 1,785.0 | | 3,123.8 | | | | | | | | | | | | | | | Ersek | | 2/19/2021 | | 2/19/2021 | | | | | | 85,739(5) | | 171,477(5) | | 342,954(5) | | | | | | | | 4,100.0 | | | 2/19/2021 | | 2/19/2021 | | | | | | 32,069(6) | | 64,138(6) | | 128,276(6) | | | | | | | | 1,640.0 | | | 2/19/2021 | | 2/19/2021 | | | | | | | | | | | | 34,296 | | | | | | 820.0 | | | 2/19/2021 | | 2/19/2021 | | | | | | | | | | | | | | 400,000 | | 23.91 | | 1,640.0 | Raj | | | | | | 650.0 | | 1,300.0 | | | | | | | | | | | | | | | Agrawal | | 2/18/2021 | | 2/18/2021 | | | | | | 29,788(5) | | 59,575(5) | | 119,150(5) | | | | | | | | 1,400.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | 11,318(6) | | 22,636(6) | | 45,272(6) | | | | | | | | 560.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | | | | | | | 35,745 | | | | | | 840.0 | Michelle | | | | | | 715.0 | | 1,430.0 | | | | | | | | | | | | | | | Swanback | | 2/18/2021 | | 2/18/2021 | | | | | | 26,596(5) | | 53,192(5) | | 106,384(5) | | | | | | | | 1,250.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | 10,106(6) | | 20,211(6) | | 40,422(6) | | | | | | | | 500.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | | | | | | | 31,915 | | | | | | 750.0 | Gabriella | | | | | | 605.0 | | 1,210.0 | | | | | | | | | | | | | | | Fitzgerald | | 9/13/2021 | | 8/31/2021 | | | | | | | | | | | | 92,166 | | | | | | 2,000.0 | | | | | | | | | | | | | | | | | | | | | | | | Jean | | | | | | 550.0 | | 1,100.0 | | | | | | | | | | | | | | | Claude | | 2/18/2021 | | 2/18/2021 | | | | | | 15,958(5) | | 31,915(5) | | 63,830(5) | | | | | | | | 750.0 | Farah | | 2/18/2021 | | 2/18/2021 | | | | | | 6,064(6) | | 12,127(6) | | 24,254(6) | | | | | | | | 300.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | | | | | | | 19,149 | | | | | | 450.0 |
Footnotes: 2017 Proxy Statement(1)
| | | 53
|
Table of Contents
| | | | | |
ESTIMATED
POSSIBLE
PAYOUTS UNDER
NON-EQUITY
INCENTIVE PLAN
AWARDS(1) | | ESTIMATED FUTURE
PAYOUTS UNDER EQUITY
INCENTIVE PLAN AWARDS | | ALL OTHER
STOCK
AWARDS:
NUMBER
OF SHARES
OF STOCK
OR UNITS
(#)(2) | | ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
(#)(3) | | EXERCISE
OR BASE
PRICE OF
OPTION
AWARDS
($/Sh) | | GRANT
DATE
FAIR
VALUE
OF
STOCK
AND
OPTION
AWARDS
($000)(4) | | NAME | | GRANT
DATE | | APPROVAL
DATE | | TARGET
($000) | | MAXIMUM
($000) | | THRESHOLD
(#) | | TARGET
(#) | | MAXIMUM
(#) | | | | | | Odilon | | | | | | 550.8 | | 963.9 | | | | | | | | | | | | | | | | Almeida | | | | | | | | | | | | | | | | | | | | | | | | | 2/18/16 | | 2/18/16 | | | | | | 22,241(5) | | 44,482(5) | | 66,723(5) | | | | | | | | 729.1 | | | 2/18/16 | | 2/18/16 | | | | | | 8,138(6) | | 16,275(6) | | 24,413(6) | | | | | | | | 270.0 | | | 2/18/16 | | 2/18/16 | | | | | | | | | | | | 14,828 | | | | | | 243.0 | | Elizabeth G. | | | | | | 481.5 | | 842.6 | | | | | | | | | | | | | | | | Chambers | | | | | | | | | | | | | | | | | | | | | | | | | 2/18/16 | | 2/18/16 | | | | | | 19,770(5) | | 39,539(5) | | 59,309(5) | | | | | | | | 648.1 | | | 2/18/16 | | 2/18/16 | | | | | | 7,234(6) | | 14,467(6) | | 21,701(6) | | | | | | | | 240.0 | | | 2/18/16 | | 2/18/16 | | | | | | | | | | | | 13,180 | | | | | | 216.0 | | J. David | | | | | | 486.0 | | 850.5 | | | | | | | | | | | | | | | | Thompson | | | | | | | | | | | | | | | | | | | | | | | | | 2/18/16 | | 2/18/16 | | | | | | 20,594(5) | | 41,187(5) | | 61,781(5) | | | | | | | | 675.1 | | | 2/18/16 | | 2/18/16 | | | | | | 7,535(6) | | 15,070(6) | | 22,605(6) | | | | | | | | 250.0 | | | | 2/18/16 | | 2/18/16 | | | | | | | | | | | | 13,729 | | | | | | 225.0 |
Footnotes:
(1) | These amounts consist of the target and maximum cash award levels set in 20162021 under the Annual Incentive Plan. The amount actually paid to each named executive officerNEO is included in the Non-Equity Incentive Plan Compensation column in the 20162021 Summary Compensation Table. Please see “Compensation Discussion and Analysis” for further information regarding the Annual Incentive Plan.
|
(2) | This amount representsThese amounts represent RSUs granted under the Long-Term Incentive Plan to the named executive officers other thanNEOs as follows: (i) Mr.Ersek. The McGranahan’s RSUs vest in two substantially equal installments on August 1, 2022 and February 1, 2023; (ii) Ms. Fitzgerald’s RSUs vest in three substantially equal installments on the first, second and third anniversaries of the grant date; and (iii) the remaining RSUs reported in this column vest 100% on February 18, 2019,2024 (or, in the case of Mr. Ersek, February 19, 2024), in each case, provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy.Policy, the Long-Term Incentive Plan or the underlying equity award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive prorated vesting of his 2021 RSUs based on his period of service during the vesting period. In connection with her separation, Ms. Swanback forfeited these RSUs. Please see “Compensation
|
2022 Proxy Statement | 55
Table of Contents EXECUTIVE COMPENSATION | “Compensation Discussion and Analysis” for further information regarding these restrictedRSU grants. Each RSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to the Company common stock unit grants.
subject to the award during the RSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying RSUs. |
(3) | These amounts representThis amount represents stock options granted under the Long-Term Incentive Plan to Mr.Messrs. McGranahan and Ersek. These options vest were granted subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant;grant, in each case, provided that Mr. Ersekthe executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy.Policy, the Long-Term Incentive Plan or the underlying equity award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive prorated vesting of his 2021 option award based on his period of service during the vesting period. Please see “Compensation Discussion and Analysis” for further information regarding this award.
these awards.
|
(4) | The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and, in the case of the PSUs, are based upon the probable outcome of the applicable performance conditions.718. See Note 1617 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20162021 for a discussion of the relevant assumptions used in calculating the amounts.
|
(5) | These amounts represent the threshold, target and maximum Financial PSUs granted under the Long-Term Incentive Plan. For actively employed executives, theseThese Financial PSUs are generally scheduled to vest on February 18, 20192024 (or, in the case of Mr. Ersek, February 19, 2019)2024), subject to the achievement of thresholdperformance metrics related to revenue and operating incomemargin, measured annually during each year of the three-year performance goals.period, with each performance year equally weighted. In connection with Mr. Ersek’s departure and as a result of him satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive pro-rated vesting of his 2021 Financial PSUs based on actual performance results and his period of service during the vesting period. In connection with her separation, Ms. Swanback forfeited these PSUs. Please see “Compensation Discussion and Analysis” for further information regarding this award.
The Financial PSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to Company common stock subject to the award during the PSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying Financial PSUs. |
(6) | These amounts represent the threshold, target and maximum TSR PSUs granted under the Long-Term Incentive Plan. TheThese TSR PSUs are generally scheduled to vest on February 18, 20192024 (or, in the case of Mr. Ersek, February 19, 2019)2024) based on the Company’s relative TSR performance versus the S&P 500 Index over a three-year performance period. SeeIn connection with Mr. Ersek’s departure and as a result of him satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive pro-rated vesting of his 2021 TSR PSUs based on actual performance results and his period of service during the vesting period. In connection with her separation, Ms. Swanback forfeited these PSUs. Please see “Compensation Discussion and Analysis” for further information regarding this award. |
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Table of Contents
NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE EMPLOYMENT ARRANGEMENTS As noted in the Compensation“Compensation Discussion and Analysis,” the Company generally executes an offer of employment prior to the time an executive joins the Company which describes the basic terms of the executive’s employment, including his or her start date, starting salary, bonus target, and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will determine the benefits to be received by senior executives, including our named executive officers,NEOs, upon termination of employment from the Company. Please see the “—Potential Payments Upon Termination or Change-in-Control” section for a description of the policy. As noted in the Compensation“Compensation Discussion and Analysis,” under certain circumstances, the Compensation Committee recognizes that special arrangements with respect to an executive’s employment may be necessary or desirable. Accordingly, during 2016, Mr.2021, Messrs. Ersek wasand Farah were each party to an employment agreement, pursuant to which Mr.reflects competitive practices in the employment locations of Messrs. Ersek agreed to serve asand Farah at the Company’s President and Chief Executive Officer.time the respective agreement became effective. The terms of Mr. Ersek’sFarah’s employment agreement provide for, and Mr. Ersek’s agreement provided for, (i)eligibility to participate in the Annual Incentive Planan annual incentive program and Long-Term Incentive Plan and (ii) eligibility to participate in retirement, health, and welfare benefit programs on the same basis as similarly situated employees in Austria.the UAE and Austria, respectively. Mr. Farah’s employment agreement also includes, and Mr. Ersek’s employment agreement also includesincluded, non-competition, non-solicitation, and confidentiality provisions. Mr. Ersek’s employment agreement has been superseded by the terms of his 56 | The Western Union Company
EXECUTIVE COMPENSATION transition agreement with the Company, although the restrictive covenants set forth in his employment agreement survive the termination of his employment agreement. AWARDS In 2016,2021, the Compensation Committee granted the Chief Executive Officer and the Executive Vice Presidents long-term incentive awardsannual equity grants under the Long-Term Incentive Plan consisting of 60%(i) 50% Financial PSUs (incorporating(vesting based on both revenue and operating income growth)margin goals), 20% TSR PSUs, 20% stock options, and 10% service-based RSUs for Mr. Ersek, and (ii) 50% Financial PSUs (vesting based on both revenue and operating margin goals), 20% stock option awardsTSR PSUs, and 30% service-based RSUs for named executive officersthe other thanNEOs (excluding Mr. Ersek, 20% service-based RSUs.McGranahan and Ms. Fitzgerald). Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for further information regarding the 20162021 long-term incentive awards, including the performance metrics applicable to the 20162021 PSUs. Mr. McGranahan and Ms. Fitzgerald also received one-time equity awards in connection with their commencement of employment with the Company. Please see the sections entitled “CEO Transition Compensation” and “Employment Arrangements” within the “Compensation Discussion and Analysis” section of this Proxy Statement for additional information regarding the one-time equity awards. At its February 20162021 meeting, the Compensation Committee established performance objectives to be considered under the Annual Incentive Plan for the 20162021 plan year. As discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, participants are eligible to receive a cash payout ranging from 0% to 150%175% of target based on the achievement of pre-established corporate financial and strategic goals. The total payout under the Annual Incentive Plan for the named executive officersparticipating NEOs other than Mr. Ersek is subject to a +/- 25% modifier based on the committee’s assessment of individual performance with respect to personalized objectives, includingkey performance indicators relating to individual business unit goals.transformation goals, ESG initiatives, leadership and compliance. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for more information regarding the annual incentive awards, including the performance metrics applicable to such awards. SALARY AND BONUS IN PROPORTION TO TOTAL COMPENSATION |
As noted in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Compensation Committee heavily weighted total direct compensation toward the performance-based elements, which include annual incentive compensation, PSUs and long-term incentive compensation,stock options, in order to hold executives accountable and reward them for the results of the Company. Our Compensation Committee structured the compensation program to give our namedNEOs substantial executive officers substantial alignment with stockholders, while also permitting the committee to incentivize the named executive officersNEOs to pursue performance that it believes increases stockholder value. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for a description of the objectives of our compensation program and overall compensation philosophy.
2017 Proxy Statement
57 | The Western Union Company | | | 55
|
Table of Contents
EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION
|
The following table provides information regarding outstanding option awards and unvested stock awards held by each of the named executive officersNEOs on December 31, 2016.2021. 20162021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | OPTION AWARDS | | | STOCK AWARDS | | NAME | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE | | OPTION
EXERCISE
PRICE ($) | | OPTION
EXPIRATION
DATE | | | NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#) | | MARKET
VALUE OF
SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED
($000)(1) | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED (#) | | EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED
($000)(1) | | Hikmet Ersek | | — | | 422,961(2) | | 18.19 | | 2/19/2026 | | | 191,370(6) | | 4,156.6 | | 230,897(13) | | 5,015.1 | | | 84,033 | | 252,102(3) | | 19.27 | | 2/19/2025 | | | 91,941(6) | | 1,997.0 | | 84,593(14) | | 1,837.4 | | | 151,899 | | 151,899(4) | | 15.99 | | 2/20/2024 | | | | | | | 183,580(15) | | 3,987.4 | | | 468,750 | | 156,250(5) | | 14.00 | | 2/20/2023 | | | | | | | 70,135(16) | | 1,523.3 | | | 400,810 | | | | 17.86 | | 2/23/2022 | | | | | | | | | | | | 233,859 | | | | 21.00 | | 2/24/2021 | | | | | | | | | | | | 230,628 | | | | 17.45 | | 9/1/2020 | | | | | | | | | | | | 212,508 | | | | 16.00 | | 2/24/2020 | | | | | | | | | | | | 10,000 | | | | 22.14 | | 2/21/2017 | | | | | | | | | | | Rajesh K. | | 21,008 | | 63,026(3) | | 19.27 | | 2/19/2025 | | | 41,464(6) | | 900.6 | | 54,366(13) | | 1,180.8 | | Agrawal | | 32,911 | | 32,912(4) | | 15.99 | | 2/20/2024 | | | 19,921(6) | | 432.7 | | 19,892(14) | | 432.1 | | | 100,547 | | 33,516(5) | | 14.00 | | 2/20/2023 | | | 18,122(7) | | 393.6 | | 45,895(15) | | 996.8 | | | 86,843 | | | | 17.86 | | 2/23/2022 | | | 14,468(8) | | 314.2 | | 17,534(16) | | 380.8 | | | 24,796 | | | | 16.49 | | 9/15/2021 | | | | | | | | | | | | 16,895 | | | | 21.00 | | 2/24/2021 | | | | | | | | | | | | 24,553 | | | | 16.00 | | 2/24/2020 | | | | | | | | | | | | 21,950 | | | | 11.86 | | 2/17/2019 | | | | | | | | | | | | 32,925 | | | | 20.99 | | 2/21/2018 | | | | | | | | | | | | 21,612 | | | | 22.55 | | 2/7/2017 | | | | | | | | | |
56
| | | The Western Union Company
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| | | | | | | | | | | | | | | | | | | | OPTION AWARDS | | | STOCK AWARDS | | | | | | | | | | | | | | | | | | EQUITY | | | | | | | | | | | | | | | | | | INCENTIVE | | | | | | | | | | | | | | | | | | PLAN | | | | | | | | | | | | | | | | EQUITY | | AWARDS: | | | | | | | | | | | | | | | | INCENTIVE | | MARKET | | | | | | | | | | | | | | | | PLAN | | OR PAYOUT | | | | | | | | | | | | | | | | AWARDS: | | VALUE OF | | | | | | | | | | | | | | | | NUMBER OF | | UNEARNED | | | | | | | | | | | | | | MARKET | | UNEARNED | | SHARES, | | | | | | | | | | | | | | VALUE OF | | SHARES, | | UNITS OR | | | NUMBER OF | | NUMBER OF | | | | | | | NUMBER OF | | SHARES | | UNITS OR | | OTHER | | | SECURITIES | | SECURITIES | | | | | | | SHARES OR | | OR UNITS | | OTHER | | RIGHTS | | | UNDERLYING | | UNDERLYING | | | | | | | UNITS OF | | OF STOCK | | RIGHTS | | THAT | | | UNEXERCISED | | UNEXERCISED | | OPTION | | OPTION | | | STOCK THAT | | THAT HAVE | | THAT | | HAVE NOT | | | OPTIONS (#) | | OPTIONS (#) | | EXERCISE | | EXPIRATION | | | HAVE NOT | | NOT VESTED | | HAVE NOT | | VESTED | NAME | | EXERCISABLE | | UNEXERCISABLE | | PRICE ($) | | DATE | | | VESTED (#) | | ($000)(1) | | VESTED (#) | | ($000)(1) | Devin | | | | 2,149,838(2) | | 17.70 | | 12/27/2031 | | | 367,232(7) | | 6,551.4 | | | | | McGranahan | | | | | | | | | | | | | | | | | | Hikmet Ersek | | — | | 400,000(3) | | 23.91 | | 2/19/2031 | | | 34,296(8) | | 611.8 | | | | | | | 103,535 | | 310,607(4) | | 26.50 | | 2/20/2030 | | | 30,944(9) | | 552.0 | | | | | | | 274,510 | | 274,510(5) | | 17.63 | | 2/21/2029 | | | 39,706(10) | | 708.4 | | | | | | | 287,671 | | 95,891(6) | | 20.09 | | 2/22/2028 | | | 55,588(11) | | 991.7 | | | | | | | 414,202 | | | | 19.99 | | 2/22/2027 | | | | | | | | | | | | 422,961 | | | | 18.19 | | 2/19/2026 | | | | | | | 154,717(12) | | 2,760.2 | | | 336,135 | | | | 19.27 | | 2/19/2025 | | | | | | | 72,184(13) | | 1,287.8 | | | 303,798 | | | | 15.99 | | 2/20/2024 | | | | | | | 171,477(14) | | 3,059.1 | | | 400,810 | | | | 17.86 | | 2/23/2022 | | | | | | | 64,138(15) | | 1,144.2 | Raj Agrawal | | | | | | | | | | | 35,745(8) | | 637.7 | | 45,767(12) | | 816.5 | | | 84,034 | | | | 19.27 | | 2/19/2025 | | | 27,460(9) | | 489.9 | | 21,958(13) | | 391.7 | | | 65,823 | | | | 15.99 | | 2/20/2024 | | | 40,359(10) | | 720.0 | | 59,575(14) | | 1,062.8 | | | 134,063 | | | | 14.00 | | 2/20/2023 | | | 18,835(11) | | 336.0 | | 22,636(15) | | 403.8 | Michelle | | | | | | | | | | | 31,915(8) | | 569.4 | | 41,953(12) | | 748.4 | Swanback | | | | | | | | | | | 25,172(9) | | 449.1 | | 20,129(13) | | 359.1 | | | | | | | | | | | | 47,170(16) | | 841.5 | | 53,192(14) | | 948.9 | | | | | | | | | | | | | | | | 20,211(15) | | 360.6 | Gabriella | | | | | | | | | | | 92,166(17) | | 1,644.2 | | | | | Fitzgerald | | | | | | | | | | | | | | | | | | Jean Claude | | | | | | | | | | | 19,149(8) | | 341.6 | | | | | Farah | | 44,818 | | | | 19.27 | | 2/19/2025 | | | 12,014(9) | | 214.3 | | 20,023(12) | | 357.2 | | | 10,127 | | | | 15.99 | | 2/20/2024 | | | 17,657(10) | | 315.0 | | 9,607(13) | | 171.4 | | | 33,401 | | | | 17.86 | | 2/23/2022 | | | 8,241(11) | | 147.0 | | 31,915(14) | | 569.4 | | | | | | | | | | | | | | | | 12,127(15) | | 216.3 |
Table of Contents
Footnotes: EXECUTIVE COMPENSATION(1)
|
| | OPTION AWARDS | | | STOCK AWARDS | | NAME | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE | | OPTION
EXERCISE
PRICE ($) | | OPTION
EXPIRATION
DATE | | | NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#) | | MARKET
VALUE OF
SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED
($000)(1) | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED (#) | | EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED
($000)(1) | | Odilon | | 16,806 | | 50,421(3) | | 19.27 | | 2/19/2025 | | | 38,275(6) | | 831.3 | | 44,482(13) | | 966.1 | | Almeida | | 30,380 | | 30,380(4) | | 15.99 | | 2/20/2024 | | | 18,389(6) | | 399.4 | | 16,275(14) | | 353.5 | | | 38,672 | | 19,336(5) | | 14.00 | | 2/20/2023 | | | 14,828(7) | | 322.1 | | 36,716(15) | | 797.5 | | | 16,701 | | | | 17.86 | | 2/23/2022 | | | 13,881(9) | | 301.5 | | 14,027(16) | | 304.7 | | | 10,560 | | | | 21.00 | | 2/24/2021 | | | | | | | | | | | | 15,000 | | | | 16.00 | | 2/24/2020 | | | | | | | | | | | | 31,500 | | | | 20.99 | | 2/21/2018 | | | | | | | | | | | Elizabeth G. | | | | | | | | | | | 13,180(7) | | 286.3 | | 39,539(13) | | 858.8 | | Chambers | | | | | | | | | | | 11,334(10) | | 246.2 | | 14,467(14) | | 314.2 | | J. David | | 16,806 | | 50,421(3) | | 19.27 | | 2/19/2025 | | | 38,275(6) | | 831.3 | | 41,187(13) | | 894.6 | | Thompson | | 30,380 | | 30,380(4) | | 15.99 | | 2/20/2024 | | | 18,389(6) | | 399.4 | | 15,070(14) | | 327.3 | | | 68,097 | | 30,938(5) | | 14.00 | | 2/20/2023 | | | 13,729(7) | | 298.2 | | 36,716(15) | | 797.5 | | | 16,976 | | | | 18.29 | | 4/26/2022 | | | 10,199(11) | | 221.5 | | 14,027(16) | | 304.7 | | | | | | | | | | | | 7,394(12) | | 160.6 | | | | |
Footnotes:
(1) | The market value of shares or units of stock that have not vested reflects the closing stock price of $21.72$17.84 per share on December 30, 2016.
31, 2021. |
(2) | These options were awarded on December 27, 2021, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
58 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION (3) | These options were awarded on February 19, 2016, and vest2021, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-termLong-Term Incentive Plan.
In connection with his separation from the Company, Mr. Ersek’s 2021 options will vest on a pro-rated basis based on an anticipated departure date of June 30, 2022, due to his satisfaction of the age and service requirements for retirement vesting. Please see page 66 for additional information related to the post-termination exercise period for stock options in the event of retirement. |
(3)(4) | These options were awarded on February 19, 2015, and vest20, 2020, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-termLong-Term Incentive Plan.
In connection with his separation from the Company, Mr. Ersek’s 2020 options will vest on a pro-rated basis based on an anticipated departure date of June 30, 2022, due to his satisfaction of the age and service requirements for retirement vesting. Please see page 66 for additional information related to the post-termination exercise period for stock options in the event of retirement. |
(4)(5) | These options were awarded on February 20, 2014, and vest21, 2019, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-termLong-Term Incentive Plan.
In connection with his separation from the Company, Mr. Ersek’s 2019 options will vest on a pro-rated basis based on an anticipated departure date of June 30, 2022, due to his satisfaction of the age and service requirements for retirement vesting. Please see page 66 for additional information related to the post-termination exercise period for stock options in the event of retirement. |
(5)(6) | These options vested on February 20, 2017.
22, 2022. |
(6)(7) | Represents PSUsRSUs that vestedare scheduled to vest in two substantially equal installments on August 1, 2022 and February 20, 2017 based1, 2023; provided that the executive is still employed by the Company on the Company’s revenue and operating income performance during the 2014-2016 performance period and the Company’s TSR performance relativevesting date or as otherwise provided for pursuant to the S&P 500 Index overExecutive Severance Policy, the 2014-2016 performance period.
Long-Term Incentive Plan or the equity award agreement. |
(7)(8) | Represents RSUs that are scheduled to vest on February 18, 2019;2024 (or, in the case of Mr. Ersek, February 19, 2024); provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-term Incentive Plan.
| (8) | Represents RSUs that were awarded on July 15, 2014, and vest in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-term Incentive Plan. |
2017 Proxy Statement
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(9) | Represents RSUs that were awarded on March 28, 2014, and vest in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-term Incentive Plan.
| (10) | Represents RSUs that were awarded on November 10, 2015 under the Long-Term Incentive Plan. This award vests in three equal installments. The first installment of these RSUs vested on November 10, 2016, andIn connection with his separation from the remaining two installmentCompany, Mr. Ersek’s RSU awards will vest on November 10, 2017 and 2018; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuanta pro-rated basis due to the Executive Severance Policy or Long-term Incentive Plan.
| (11) | Represents RSUs that were awarded on March 16, 2015 under the Long-Term Incentive Plan. This award vests in three equal installments. The first and second installment of these RSUs vested on February 20, 2016 and 2017, respectively, and the remaining installment will vest on February 20, 2018; provided that the executive is still employed by the Company on the remaining vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-term Incentive Plan.
| (12) | Represents RSUs that were awarded on March 17, 2014, and vest in 25% increments on eachsatisfaction of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise providedage and service requirements for pursuant to the Executive Severance Policy or Long-term Incentive Plan.
retirement vesting. These RSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(13)(9) | Represents PSUsRSUs that are scheduled to vest on February 18, 2019 (or,19, 2023 (or, in the case of Mr. Ersek, February 19, 2019) based on the Company’s revenue and operating income performance during 2016, 2017 and 2018;20, 2023); provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-termLong-Term Incentive Plan. In accordanceconnection with his separation from the SEC executive compensation disclosure rules,Company, Mr. Ersek’s RSU awards will vest on a pro-rated basis due to the amounts reportedsatisfaction of the age and service requirements for retirement vesting. These RSUs were forfeited in this column areconnection with Ms. Swanback’s 2022 separation. |
(10) | Represents RSUs that vested on February 20, 2022 (or, in the case of Mr. Ersek, February 21, 2022). |
(11) | Represents PSUs that vested on February 20, 2022 (or, in the case of Mr. Ersek, February 21, 2022) based on achieving the targetCompany’s revenue and EBIT performance goals.
over the 2019–2021 performance period. |
(14)(12) | Represents PSUs that are scheduled to vest on February 18, 201919, 2023 (or, in the case of Mr. Ersek, February 19, 2019)20, 2023) based on the Company’s TSRrevenue and operating margin performance relative to the S&P 500 Index over the 2016-20182020–2022 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-termLong-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported in this column are based on achieving the target vesting levels.
performance goals. In connection with his separation from the Company, Mr. Ersek’s Financial PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(15)(13) | Represents PSUs that are scheduled to vest on February 19, 2018 based on2023 (or, in the Company’s revenue and operating income performance during 2015, 2016 and 2017; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported in this column are based on achieving the target performance goals.
| (16) | Represents PSUs that are scheduled to vest oncase of Mr. Ersek, February 19, 201820, 2023) based on the Company’s TSR performance relative to the S&P 500 Index over the 2015-20172020–2022 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-termLong-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported in this column are based on achieving the target vesting levels.performance goals. In connection with his separation from the Company, Mr. Ersek’s TSR PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(14) | Represents PSUs that are scheduled to vest on February 18, 2024 (or, in the case of Mr. Ersek, February 19, 2024) based on the Company’s revenue and operating margin performance, measured annually during the 2021-2023 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC |
2022 Proxy Statement | 59
Table of Contents EXECUTIVE COMPENSATION | executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals. In connection with his separation from the Company, Mr. Ersek’s Financial PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(15) | Represents PSUs that are scheduled to vest on February 18, 2024 (or, in the case of Mr. Ersek, February 19, 2024) based on the Company’s TSR performance relative to the S&P 500 Index over the 2021–2023 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals. In connection with his separation from the Company, Mr. Ersek’s TSR PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(16) | Represents RSUs that vested on January 13, 2022. |
(17) | Represents RSUs that were awarded on September 13, 2021, which vest in three substantially equal installments on the first, second and third anniversaries of the grant date; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. |
60 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION The following table provides information concerning the exercise of stock options and vesting of stock awards during 20162021 for each of the named executive officers.NEOs. 20162021 OPTION EXERCISES AND STOCK VESTED TABLE
| | OPTION AWARDS | | STOCK AWARDS | | NAME | | NUMBER OF
SHARES
ACQUIRED ON
EXERCISE
(#) | | VALUE
REALIZED
ON EXERCISE
($) | | NUMBER OF
SHARES
ACQUIRED ON
VESTING
(#) | | VALUE
REALIZED
ON VESTING
($) | | Hikmet Ersek | | 276,127 | | 660,464 | | 214,021 | | 3,893,042 | | Rajesh K. Agrawal | | 9,263 | | 21,918 | | 54,421 | | 1,003,952 | | Odilon Almeida | | 18,525 | | 45,164 | | 53,400 | | 965,138 | | Elizabeth G. Chambers | | — | | — | | 5,668 | | 113,020 | | J. David Thompson | | — | | — | | 52,921 | | 965,628 |
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EXECUTIVE COMPENSATION | | | | | | | | | | | OPTION AWARDS | | STOCK AWARDS | NAME | | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | | VALUE REALIZED ON VESTING ($) | Devin McGranahan | | — | | — | | — | | — | Hikmet Ersek | | 233,859 | | 681,073 | | 191,644 | | 4,580,292 | Raj Agrawal | | 128,534 | | 866,741 | | 89,583 | | 2,141,930 | Michelle Swanback | | — | | — | | 47,170 | | 1,056,136 | Gabriella Fitzgerald | | — | | — | | — | | — | Jean Claude Farah | | 28,157 | | 69,023 | | 39,194 | | 937,129 |
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The following table provides information regarding compensation that has been deferred by our named executive officersNEOs pursuant to the terms of our Supplemental Incentive Savings Plan.SISP. 20162021 NONQUALIFIED DEFERRED COMPENSATION TABLE
| NAME | | EXECUTIVE
CONTRIBUTIONS
IN LAST FY
($000)(1) | | REGISTRANT
CONTRIBUTIONS
IN LAST FY
($000)(2) | | AGGREGATE
EARNINGS
IN LAST FY
($000) | | AGGREGATE
WITHDRAWALS/
DISTRIBUTIONS
($000) | | AGGREGATE
BALANCE
AT LAST
FYE
($000)(3) | | Hikmet Ersek | | — | | — | | — | | — | | — | | Rajesh K. Agrawal | | 58.5 | | 36.2 | | 69.0 | | — | | 660.6 | | Odilon Almeida | | 63.2 | | 40.0 | | 26.7 | | — | | 385.8 | | Elizabeth G. Chambers | | 26.7 | | 10.8 | | 5.9 | | — | | 84.0 | | J. David Thompson | | 85.2 | | 32.0 | | 64.1 | | — | | 517.2 |
| | | | | | | | | | | NAME | | EXECUTIVE CONTRIBUTIONS IN LAST FY ($000)(1) | | REGISTRANT CONTRIBUTIONS IN LAST FY ($000)(2) | | AGGREGATE EARNINGS IN LAST FY ($000) | | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($000) | | AGGREGATE BALANCE AT LAST FYE ($000)(3) | | | | | | | | | | | | Hikmet Ersek | | — | | — | | — | | — | | — | Raj Agrawal | | 51.4 | | 29.5 | | 530.6 | | — | | 2,394.9 | Michelle Swanback | | 51.0 | | 29.2 | | 10.2 | | — | | 182.6 | Jean Claude Farah | | — | | — | | — | | — | | — |
Footnotes: (1) | These amounts represent deferrals of the named executive officer’sNEO’s salary and compensation received under the Annual Incentive Plan and are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the 20162021 Summary Compensation Table.
|
(2) | These amounts are included in the “All Other Compensation” column in the 20162021 Summary Compensation Table.
|
(3) | Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for 20152020 and 20142019 (in $000s): Mr. Agrawal–$149.6, Mr. Almeida–$191.1207.3; and Mr. Thompson–Ms. Swanback-$202.4. |
INCENTIVE SAVINGS PLAN85.1.
|
2022 Proxy Statement | 61
Table of Contents EXECUTIVE COMPENSATION INCENTIVE SAVINGS PLAN We maintain a defined contribution retirement plan (the “Incentive Savings Plan” or “ISP”) for our employees on United States payroll, including each of our named executive officersNEOs other than Mr. Ersek.Messrs. Ersek and Farah. The ISP is structured with the intention of qualifying under Section 401(a) of the Internal Revenue Code. Under the ISP, participants are permitted to make contributions up to the maximum allowable amount under the Internal Revenue Code. In addition, we make matching contributions equal to 100% of the first 3% of eligible compensation contributed by participants and 50% of the next 2% of eligible compensation contributed by participants. For 2016,2021, each participating named executive officerNEO was eligible to receive a Company contribution equal to 4% of his or her eligible compensation. During 2016,2021, Mr. Ersek participated in the qualified retirement savings plan made available to eligible employees in Austria. During 2021, Mr. Farah participated in the Caisse des Français de l’Etranger (the “CFE Retirement Fund”), which provides for continued coverage under the French State Social Security System for French citizens who work outside of France. On behalf of the employee, the CFE Retirement Fund contributes to the National Retirement Insurance Fund (“CNAV”) allowing the employee to receive pension benefits from the CNAV upon retirement. SUPPLEMENTAL INCENTIVE SAVINGS PLAN
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SUPPLEMENTAL INCENTIVE SAVINGS PLAN We maintain a nonqualified supplemental incentive savings plan (the “SISP”) for certain of our employees on United StatesU.S. payroll, including each of our named executive officersNEOs other than Mr. Ersek.Messrs. Ersek and Farah. Under the SISP, participants may defer up to 80% of their salaries, including commissions and incentive compensation (other than annual bonuses), and may make a separate election to defer up to 80% of any annual bonuses and up to 100% of any performance-based cash awards they may earn. The SISP also provides participants the opportunity to receive credits for matching contributions equal to the difference between the matching contributions that a participant could receive under the ISP but for the contribution and compensation limitations imposed by the Internal Revenue Code, and the matching contributions allowable to the participant under the ISP. Participants are generally permitted to choose from among the mutual funds available for investment under the ISP for purposes of determining the imputed earnings, gains, and losses applicable to their SISP accounts. The SISP is unfunded. Participants may specify the timing of the payment of their accounts by choosing either a specified payment date or electing payment upon separation from service (or a date up to five years following separation from service), and in either case may elect to receive their accounts in a lump sum or in annual or quarterly installments over a period of up to ten years. With respect to each year’s contributions and imputed 2017 Proxy Statement
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earnings, the participant may make a separate distribution election. Subject to the requirements of Section 409A of the Internal Revenue Code, applicable Internal Revenue Service guidance, and the terms of the SISP, participants may receive an early payment in the event of a severe financial hardship and may make an election to delay the timing of their scheduled payment by a minimum of five years.
POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL EXECUTIVE SEVERANCE POLICY
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EXECUTIVE SEVERANCE POLICY We maintain the Executive Severance Policy for the payment of certain benefits to senior executives, including our named executive officers,NEOs, upon termination of employment from the Company and upon a change-in-controlchange in control of the Company. Under the Executive Severance Policy, an eligible executive will become eligible for benefits if (i) prior to a change-in-control, he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or (ii) after a change-in-control, he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or terminates hishe or her ownshe terminates employment voluntarily for “good reason” (including(which may arise from a material reduction in title or position, reduction in base salary or bonus opportunity or an increase in the executive’s commute to his or her current principal working location of more than 50 miles without consent) within 24 months after the date of the change-incontrol.change-in-control. Under the Executive Severance Policy, a change-incontrolchange-in-control is generally defined to include: ● | Acquisition by a person or entity of 35% or more of either the outstanding shares of the Company or the combined voting power of such shares, with certain exceptions;
| | | ● | An unapproved change in a majority of the Board members within a 24-month period; and
| | | ● | Certain corporate restructurings, including certain mergers, dissolution and liquidation.
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• The acquisition by a person or entity of 35% or more of either the outstanding shares of the Company or the combined voting power of such shares, with certain exceptions; • An unapproved change in a majority of the Board members within a 24-month period; and • Certain corporate restructurings, including certain mergers, dissolution and liquidation. 62 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION The Executive Severance Policy provided for the following severance and change-in-control benefits as of December 31, 2016:2021: ● | Effective for senior executives hired before February 24, 2011, a
• A severance payment equal to the senior executive’s base pay plus target bonus for the year in which the termination occurs (the “base severance pay”), multiplied by 1.5 (multiplied by two in the case of the CEO and all senior executives who terminate for an eligible reason within 24 months following a change-in-control). For terminations prior to a change-in-control a senior executive employed by the Company for 12 months or less would be entitled to receive a severance payment equal to the base severance pay and, for every month employed in excess of 12 months, an additional severance payment equal to a pro rata portion of the base severance pay, up to a maximum severance payment equal to the senior executive’s base severance pay, multiplied by 1.5 (multiplied by two in the case of the CEO). • A cash payment equal to the lesser of (i) the senior executive’s prorated target bonus under the Annual Incentive Plan for the year in which the termination occurs and (ii) the maximum bonus which could have been paid to the senior executive under the Annual Incentive Plan for the year in which the termination occurs, based on actual Company performance during such year. No bonus will be payable unless the Compensation Committee certifies that the performance goals under the Annual Incentive Plan have been achieved for the year in which the termination occurs (except for eligible terminations following a change-in-control). • A lump sum payment equal to the difference between active employee health care premiums and continuation coverage premiums for 18 months of coverage. • At the discretion of the Compensation Committee, outplacement benefits may be provided to the executive. • All awards made pursuant to our Long-Term Incentive Plan, including those that are performance-based, generally will become fully vested and exercisable if a senior executive is involuntarily terminated without cause or terminates employment for good reason, in either case, within 24 months following a change-in-control. In such event, the right to exercise stock options will continue for 24 months (36 months in the case of the CEO) after the senior executive’s termination (but not beyond the applicable expiration date for the stock options). • If a senior executive is involuntarily terminated without cause and no change-in-control has occurred, awards granted pursuant to our Long-Term Incentive Plan generally will vest on a prorated basis based on the period served during the vesting period, and stock options will remain exercisable until the end of severance period under the Executive Severance Policy, but not beyond the applicable expiration date for the stock options. • Any benefits triggered by a change-in-control are subject to an automatic reduction to avoid the imposition of the Chief Executive Officer and in the case of all senior executives who terminate for an eligible reason within 24 months following a change-in-control). Effective for senior executives hired on and after February 24, 2011, |
| a senior executive employed by the Company for 12 months or less was entitled to receive a severance payment equal to the base severance pay and, for every month employed in excess of 12 months, an additional severance payment equal to a pro rata portion of the base severance pay, up to a maximum severance payment equal to the senior executive’s base severance pay, multiplied by 1.5 (multiplied by two in the case of all senior executives who terminate for an eligible reason within 24 months following a change-in-control).
| | | ● | A cash payment equal to the lesser of the senior executive’s prorated target bonus under the Annual Incentive Plan for the year in which the termination occurs or the maximum bonus which could have been paid to the senior executive under the Annual Incentive Plan for the year in which the termination occurs, based on actual Company performance during such year. No bonus will be payable unless the Compensation Committee certifies that the performance goals under the Annual Incentive Plan have been achieved for the year in which the termination occurs (except for eligible terminations following a change-in-control).
| | | ● | A lump sum payment equal to the difference between active employee health care premiums and continuation coverage premiums for 18 months of coverage.
| | | ● | At the discretion of the Compensation Committee, outplacement benefits may be provided to the executive.
| | | ● | All awards made pursuant to our Long-Term Incentive Plan, including those that are performance-based, generally will become fully vested and exercisable if a senior executive is involuntarily terminated without cause, or terminates for good reason, within 24 months following a change-in-control. In such event, the right to exercise stock options will continue for 24 months (36 months in the case of the Chief Executive Officer) after the senior executive’s termination (but not beyond their original terms).
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● | If a senior executive is involuntarily terminated without cause and no change-in-control has occurred, awards granted pursuant to our Long-Term Incentive Plan generally will vest on a prorated basis based on the period from the grant date to the termination date and stock options will remain exercisable until the end of severance period under the Executive Severance Policy, but not beyond the stock options’ original terms.
| | | ● | With respect to all executives other than the Chief Executive Officer, any benefits triggered by a change-in-control are subject to an automatic reduction to avoid the imposition of excise taxes under Section 4999 of the Internal Revenue Code in the event such reduction would result in a better after-tax result for the executive.
| | | ● | For individuals who were senior executives on or before April 30, 2009 (including our Chief Executive Officer), if benefits payable after a change-in-control exceed 110% of the maximum amount of such benefits that would not be subject to the excise tax imposed by Section
|
| 4999 of the Internal Revenue Code, an additional cash payment in an amount that, after payment of all taxes on such benefits (and on such amount), provides the senior executive with the amount necessary to pay such tax. (If the benefits so payable do not exceed such 110% threshold, the amount thereof will be reduced to the maximum amount not subject to such excise tax.) Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments.
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The provision of severance benefits under the Executive Severance Policy is conditioned upon the executive executing an agreement and release which includes, among other things, non-competition and non-solicitation restrictive covenants, as well as a release of claims against the Company. These restrictive covenants vary in duration, but generally do not exceed two years. As noted earlier, Mr. Farah is subject to an employment agreement, which is a customary practice for executives located in the UAE. Under the terms of Mr. Farah’s employment agreement, he is required to receive three months’ notice of termination of employment or, in lieu of such notice, three months of pay. In addition, Mr. Farah is also eligible for statutory end of service gratuity/severance amounts in accordance with local law. Any amounts due to Mr. Farah under the Executive Severance Policy will be reduced by any end-of-service gratuity/severance paid under the terms of his employment agreement or as required by local law. As noted in the “Compensation Discussion and Analysis” section of this Proxy Statement, effective as of December 26, 2021, Mr. Ersek retired from the position of President and CEO of the Company, and will continue to support the Company as a Special Advisor to the Company’s new CEO until June 30, 2022, during which time his current base salary of $1,050,000 and benefits will continue, with an annual incentive opportunity under the Annual Incentive Plan of 170% of base salary that is prorated for his period of service during 2022. In addition, the Company has agreed to provide Mr. Ersek with a lump sum payment equal to COBRA premiums for continued healthcare coverage through December 31, 2023 (estimated value $48,000), tax filing support services for 2022 and 2023 (estimated value $10,000), continued home monitoring services for the duration of his service as Special Advisor to the CEO (estimated value $300), and repatriation support, including related tax reimbursements, for Mr. Ersek’s repatriation to Austria in accordance with the Company’s repatriation policy (estimated value $100,000) and reimbursement of up to $10,000 in attorneys’ fees for negotiation of the terms of Mr. Ersek’s transition agreement. Finally, due to his satisfaction of the age and service requirements under his outstanding equity award agreements, Mr. Ersek will be eligible for retirement vesting in accordance with the terms of these agreements (estimated value $5,800,000, based on the closing stock price on December 31, 2021 and assuming target payout for the PSUs). On March 31, 2022, Ms. Swanback separated from the Company. In connection with Ms. Swanback’s departure, the Company and Ms. Swanback entered into a mutual separation agreement, which includes a customary release of claims and provides for a separation payment of $1,565,000, payable in nine equal monthly installments from April 2022 through December 2022. In connection with her departure, Ms. Swanback will not receive a bonus for 2022 2022 Proxy Statement | 63
Table of Contents EXECUTIVE COMPENSATION under the Company’s Annual Incentive Plan, her outstanding and unvested equity awards were forfeited, and she was not eligible for any severance benefits under the Executive Severance Policy. Ms. Swanback remains subject to restrictive covenants, including covenants relating to non-competition, non-solicitation, and non-disclosure. For the namedNEOs serving as executive officers as of December 31, 2021, we have quantified the potential payments upon termination under various termination circumstances in the tables set forth below. These tables assume that the covered termination took place on December 31, 2016.2021.
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES TERMINATION FOLLOWING A CHANGE-IN-CONTROL(1) | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000)(2) | | WELFARE BENEFITS ($000)(3) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Devin McGranahan | | 2,700.0 | | — | | 301.0 | | — | | 6,551.4 | | — | | 9,552.4 | Raj Agrawal | | 3,107.0 | | 25.2 | | — | | 3,010.8 | | 1,847.6 | | 508.5 | | 8,499.1 | Michelle Swanback | | 2,953.5 | | 25.2 | | — | | 2,417.0 | | 1,860.0 | | 290.3 | | 7,546.0 | Gabriella Fitzgerald | | 1,626.9 | | 25.2 | | — | | — | | 1,644.2 | | 43.3 | | 3,339.6 | Jean Claude Farah | | 2,529.0 | | — | | — | | 1,461.3 | | 870.9 | | 231.3 | | 5,092.5 |
INVOLUNTARY TERMINATION OTHER THAN FOR DEATH, DISABILITY, OR CAUSE | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000)(2) | | WELFARE BENEFITS ($000)(3) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Devin McGranahan | | 2,700.0 | | — | | 301.0 | | — | | 6,551.4 | | — | | 9,552.4 | Raj Agrawal | | 2,457.0 | | 25.2 | | — | | 1,494.3 | | 1,174.9 | | 258.6 | | 5,410.0 | Michelle Swanback | | 2,432.7 | | 25.2 | | — | | 688.2 | | 1,105.6 | | 162.0 | | 4,413.7 | Gabriella Fitzgerald | | 1,626.9 | | 25.2 | | — | | — | | — | | — | | 1,652.1 | Jean Claude Farah | | 2,004.0 | | — | | — | | 468.7 | | 433.6 | | 101.8 | | 3,008.1 |
DEATH OR DISABILITY | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000) | | WELFARE BENEFITS ($000) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Devin McGranahan | | — | | — | | 301.0 | | — | | 6,551.4 | | — | | 6,852.4 | Raj Agrawal | | — | | — | | — | | 3,010.8 | | 1,847.6 | | 508.5 | | 5,366.9 | Michelle Swanback | | — | | — | | — | | 2,417.0 | | 1,860.0 | | 290.3 | | 4,567.3 | Gabriella Fitzgerald | | — | | — | | — | | — | | 1,644.2 | | 43.3 | | 1,687.5 | Jean Claude Farah | | — | | — | | — | | 1,461.3 | | 870.9 | | 231.3 | | 2,563.5 |
64 | The Western Union Company | TERMINATION FOLLOWING A CHANGE-IN-CONTROL(1) | | | | | | | LONG-TERM INCENTIVES(6) | | | | | | NAME | | SEVERANCE
($000)(2) | | WELFARE
BENEFITS
($000)(3) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | GROSS-UP
($000)(4) | | TOTAL
($000) | | Hikmet Ersek | | 6,500.0 | | 28.7 | | 4,187.3 | | 16,204.4 | | — | | 11,381.0 | | 38,301.4 | | Rajesh K. Agrawal | | 2,832.5 | | 22.9 | | 601.7 | | 3,768.4 | | 707.9 | | — | | 7,933.4 | | Odilon Almeida | | 2,876.4 | | 22.9 | | 446.8 | | 3,201.5 | | 623.6 | | — | | 7,171.2 | | Elizabeth G. Chambers | | 2,514.6 | | 14.6 | | — | | 906.8 | | 532.4 | | — | | 3,968.4 | | J. David Thompson | | 2,538.0 | | 21.1 | | 536.5 | | 3,125.9 | | 680.3 | | — | | 6,901.8 |
| INVOLUNTARY TERMINATION OTHER THAN FOR DEATH, DISABILITY, OR CAUSE | | | | | | | LONG-TERM INCENTIVES(6) | | | | NAME | | SEVERANCE
($000)(2) | | WELFARE
BENEFITS
($000)(3) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | TOTAL
($000) | | Hikmet Ersek | | 6,500.0 | | 28.7 | | 2,397.5 | | 10,347.9 | | — | | 19,274.1 | | Rajesh K. Agrawal | | 2,266.0 | | 22.9 | | 456.6 | | 2,002.4 | | 339.7 | | 5,087.6 | | Odilon Almeida | | 2,295.0 | | 22.9 | | 326.2 | | 2,053.5 | | 301.4 | | 4,999.0 | | Elizabeth G. Chambers | | 1,582.7(5) | | 14.6 | | — | | — | | 199.8 | | 1,797.1 | | J. David Thompson | | 2,025.0 | | 21.1 | | 412.6 | | 1,758.4 | | 387.6 | | 4,604.7 |
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Table of Contents EXECUTIVE COMPENSATION RETIREMENT(5) | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000) | | WELFARE BENEFITS ($000) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Raj Agrawal | | — | | — | | — | | 1,494.3 | | 1,174.9 | | 258.6 | | 2,927.8 |
Footnotes: EXECUTIVE COMPENSATION(1)
|
| DEATH OR DISABILITY | | | | | | | LONG-TERM INCENTIVES(6) | | | | NAME | | SEVERANCE
($000) | | WELFARE
BENEFITS
($000) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | TOTAL
($000) | | Hikmet Ersek | | — | | — | | 4,187.3 | | 16,204.4 | | — | | 20,391.7 | | Rajesh K. Agrawal | | — | | — | | 601.7 | | 3,768.4 | | 707.9 | | 5,078.0 | | Odilon Almeida | | — | | — | | 446.8 | | 3,201.5 | | 623.6 | | 4,271.9 | | Elizabeth G. Chambers | | — | | — | | — | | 906.8 | | 532.4 | | 1,439.2 | | J. David Thompson | | — | | — | | 536.5 | | 3,125.9 | | 680.3 | | 4,342.7 |
| RETIREMENT(7) | | | | | | | LONG-TERM INCENTIVES(6) | | | | NAME | | SEVERANCE
($000) | | WELFARE
BENEFITS
($000) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | TOTAL
($000) | | Hikmet Ersek | | — | | — | | 2,397.5 | | 10,347.9 | | — | | 12,745.4 | | Odilon Almeida | | — | | — | | 326.2 | | 2,053.5 | | 301.4 | | 2,681.1 |
Footnotes:
(1) | Under the Executive Severance Policy, following a change-in-control, an eligible executive will become entitled to severance benefits if he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or terminates hishe or her ownshe terminates employment voluntarily for good reason within 24 months after the date of the change-in-control. |
(2) | | (2) | In accordance with the Executive Severance Policy, amounts in this column represent severance payments equal to (i) the named executive officer’slesser of the NEO’s (x) 2021 target bonus for 2016and (y) 2021 bonus based on actual performance, plus (ii) 1.5 times (two times in the case of the Chief Executive OfficerCEO and in the case of all senior executives who terminate for an eligible reason within 24 months following a change-in-control) the sum of the named executive officer’sNEO’s base salary and target bonus.bonus, with the exception of Mr. McGranahan, Ms. Swanback, and Ms. Fitzgerald, who have each been with the Company for less than two years as of December 31, 2021. Due to this fact, in accordance with the Executive Severance Policy in effect on December 31, 2021, the amounts for Mr. McGranahan and Ms. Fitzgerald represent payments equal to 1 time, and the amount for Ms. Swanback represent payments equal to 1.9 times, respectively, the sum of his or her base salary and target bonus for the current year in the case of an involuntary termination not in connection with a change in control. |
(3) | | (3) | Amounts in this column represent a lump sum cash payment equal to the product of (i) the difference in cost between the named executive officer’sNEO’s actual health premiums and COBRA health premiums (if applicable) as of December 31, 20162021, and (ii) 18, the number of months of continuing COBRA coverage. | | | (4) | Amounts in this column reflect tax gross-up calculations assuming a blended effective tax rate of approximately 47% and a 20% excise tax incurred on excess parachute payments, as calculated in accordance with Internal Revenue Code Sections 280G and 4999. The equity is valued using a closing stock price of $21.72 per share on December 30, 2016. As noted above, the Executive Severance Policy prohibits the Company from providing change-in-control tax gross-ups to individuals promoted or hired after April 2009. Accordingly, Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments. | | | (5) | In accordance with the Executive Severance Policy, the amount for Ms. Chambers represents a reduced severance payment, reflecting her service with the Company of less than 24-months. |
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EXECUTIVE COMPENSATION(4)
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(6) | Amounts in these columns reflect the long-term incentive awards to be received upon a termination or a change-in-control calculated in accordance with the Executive Severance Policy and the Long-Term Incentive Plan. In the case of stock grants, the equity value represents the value of the shares (determineddetermined by multiplying the closing stock price of $21.72$17.84 per share on December 30, 201631, 2021 by the number of unvested RSUs or, in the case of PSUs, by the number of shares to be awarded based on the projected achievement of the applicable performance objectives as of December 31, 2016, that would vest upon a qualifying termination, death or disability).target achievement. In the case of option awards, the equity value was determined by multiplying (i) the spread between the exercise price and the closing stock price of $21.72$17.84 per share on December 30, 201631, 2021 and (ii) the number of unvested option shares that would vest following a qualifying termination or termination due to death or disability. The calculation with respect to unvested long-term incentive awards reflects the following additional assumptions under the Executive Severance Policy and the Long-Term Incentive Plan: |
EVENT | | STOCK OPTIONS OPTIONS** | | RSUsRSUs** | | PSUs | Change-in-ControlChange-in-control and Termination for Eligible Reasonqualifying termination within subsequent 24-month Periodperiod | | Accelerate | | Accelerate Accrued dividend equivalents would be distributed on accelerated RSUs. | | Accelerated vesting and award is payable to the extent earned based on actual performance results.results Accrued dividend equivalents would be distributed on accelerated Financial PSUs. | Change-in-Control (No Termination)Change-in-control (without termination of employment) | | Vesting continues under normal terms.terms | | Vesting continues under normal terms.terms | | Vesting continues under normal terms.terms | Involuntary Termination (Not for Cause prior to a Change-in-Control or aftertermination without cause (outside the 24-month Periodperiod following a Change-in-Control)change-in-control)* *If the NEO would satisfy the age and service requirements for retirement, then the NEO would receive retirement vesting under this termination scenario. | | Prorated vesting by grant based on ratio of days since grant to total days inperiod served during vesting period.period | | Prorated vesting by grant based on ratioperiod served during vesting period; if termination occurs prior to the one-year anniversary of days sincethe grant to total days in vesting period.date, the awards are forfeited Accrued dividend equivalents would be distributed on accelerated RSUs. | | Prorated vesting by grant based on actual performance results and ratio of days since grant to total days inperiod served during vesting period; if termination occurs prior to the one yearone-year anniversary of the grant date, the awards are forfeited.forfeited Accrued dividend equivalents would be distributed on accelerated Financial PSUs. |
2022 Proxy Statement | 65
Table of Contents EXECUTIVE COMPENSATION EVENT | | STOCK OPTIONS** | | RSUs** | | PSUs | Death or Disabilitydisability | | Accelerate | | Accelerate Accrued dividend equivalents would be distributed on accelerated RSUs. | | Accelerated vesting and award is payable to the extent earned based on actual performance results.results Accrued dividend equivalents would be distributed on accelerated Financial PSUs. | Retirement | | Effective for grants on January 31, 2011 and later, prorated
| Prorated vesting by grant based on ratio of days since grant to total days inperiod served during vesting period, with an exercise period equal to the earlier of (i) two years post-termination (three years, in the case of the CEO if termination is a severance-eligible event) and (ii) the expiration date. Grants made prior to January 31, 2011 may be exercised until four years after the termination date or, if earlier until the expiration date.
| | Prorated vesting by grant based on ratio of days since grant to total days inperiod served during vesting period.period Accrued dividend equivalents would be distributed on accelerated RSUs. | | Prorated vesting by grant based on actual performance results and ratio of days since grant to total days inperiod served during vesting period.period Accrued dividend equivalents would be distributed on accelerated Financial PSUs. |
**The new hire awards for Mr. McGranahan provide for accelerated vesting in the event of a termination by the Company other than for cause or by Mr. McGranahan for good reason or in the event of a change in control in which the awards are not assumed by the surviving company. (7)(5) | Messrs. Ersek and Almeida areMr. Agrawal is the only named executive officerscurrent NEO eligible for retirement as of December 31, 2016,2021, as defined under the Long-Term Incentive Plan. |
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RISK MANAGEMENT AND COMPENSATION Appropriately incentivizing behaviors which foster the best interests of the Company and its stockholders is an essential part of the compensation-setting process. The Company believes that risk-taking is necessary for continued innovation and growth, but that risks should be encouraged within parameters that are appropriate for the long-term health and sustainability of the business. As part of its compensation setting process, the Company evaluates the merits of its compensation programs through a comprehensive review of its compensation policies and programs to determine whether they encourage unnecessary or inappropriate risk-taking by the Company’s executives and employees below the executive level. Based on this review, the Company has concluded that the risks arising from its compensation programs are not reasonably likely to have a material adverse effect on the Company. | | Management and the independent compensation consultant review the Company’s compensation programs, including the broad-based employee programs and the programs tied to the performance of individual business units. The team maps the level of “enterprise” risk for each business area, as established | |
Appropriately incentivizing behaviors which foster the best interests of the Company and its stockholders is an essential part of the compensation-setting process. The Company believes that risk-taking is necessary for continued innovation and growth, but that risks should be encouraged within parameters that are appropriate for the long-term health and sustainability of the business. As part of its compensation setting process, the Company evaluates the merits of its compensation programs through a comprehensive review of its compensation policies and programs to determine whether they encourage unnecessary or inappropriate risk-taking by the Company’s executives and employees below the executive level. Based on this review, the Company has concluded that the risks arising from its compensation programs are not reasonably likely to have a material adverse effect on the Company.
Management and the Compensation Consultant review the Company’s compensation programs, including the broad-based employee programs and the programs tied to the performance of individual business units. The team maps the level of “enterprise” risk for each business area, as established through the Company’s enterprise risk management oversight process, with the level of compensation risk for the associated incentive programs. In developing the risk assessment, the team reviews the compensation programs within each business area for:
● | | •The mix of fixed versus variable pay; | | | ● | •The performance metrics to which pay is tied; | | | ● | •Whether the pay opportunity is capped; | |
● | •The timing of payout; | | | ● | •Whether “clawback” adjustments are permitted; | | | ● | •The use of equity awards; and | | | ● | •Whether stock ownership guidelines apply. | |
Annual incentive awards and long-term incentive awards granted to executives are tied primarily to corporate performance goals, including revenue and operating income
66 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION
Annual incentive awards and long-term incentive awards granted to executives are tied primarily to corporate performance goals, including revenue and operating margin growth, and strategic performance objectives. The Compensation Committee believes that these metrics encourage performance that supports the business as a whole. The executive annual incentive awards include a maximum payout opportunity equal to 175% of target, subject to a +/-25% individual performance-based modifier for NEOs other than Mr. Ersek. Our executives are also expected to meet share ownership guidelines in order to align the executives’ interests with those of our stockholders. Further, the Company’s clawback policy permits the Company to recover incentive compensation paid to | |
designated executives (including our officers who are subject to Section 16 of the Exchange Act as well as the Company’s CCO) in the event of an accounting restatement or if the executive engaged in detrimental conduct, as defined in the clawback policy. This policy helps to discourage inappropriate risks, as executives will be held accountable for misconduct which is harmful to the Company’s financial and reputational health. In addition, the Company’s clawback policy and specific clawback provisions in its annual and long-term incentive award agreements allow the Company to “claw back” executive pay if the executive engages in conduct that is determined to have contributed to material compliance failures, subject to applicable law. | |
2022 Proxy Statement | 67
Table of Contents CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Ersek, our former CEO. Under the SEC pay ratio rules, in the case of a CEO transition during the year, the Company is permitted to calculate the CEO pay ratio based on the annualized compensation of the CEO serving on the median employee identification date. Because Mr. Ersek was serving as our CEO on November 1, 2021, the pay ratio is calculated based on his compensation. The total compensation used for purposes of the pay ratio calculation is the same compensation amount reported in the 2021 Summary Compensation Table as there was no impact on Mr. Ersek’s compensation with respect to the annualization of his compensation since he continues to serve as an advisor to the Company with the same base salary level and his annual incentive compensation and equity awards includewere not adjusted to reflect his transition to the role of senior advisor. To understand this disclosure, we think it is important to give context to our operations. As noted above, The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. As a maximum payout opportunity equalglobal organization, approximately 84% of our employees are located outside of the United States, with our employees located in a total of 52 countries. We strive to 150%create a competitive global compensation program in terms of target, subjectboth the position and the geographic location in which the employee is located. As a result, our compensation program varies amongst each local market, in order to allow us to provide a +/-25% individualcompetitive total rewards package Given the leverage of our executive compensation program towards performance-based modifier for named executive officerselements, we expect that our pay ratio disclosure will fluctuate year-to-year based on the Company’s performance against the pre-established performance goals. Ratio For 2021, • The median of the annual total compensation of all of our employees, other than Mr. Ersek. Our executives are also expectedErsek, was $36,393. • Mr. Ersek’s annual total compensation, as reported in the Total column of the 2021 Summary Compensation Table, was $10,834.6 thousand. • Based on this information, the ratio of the annual total compensation of Mr. Ersek to meet share ownership guidelines in orderthe median of the annual total compensation of all employees is estimated to alignbe 298 to 1. Identification of Median Employee We selected November 1, 2021 as the executives’ interests with thosedate on which to determine our median employee. As of that date, we had approximately 10,650 employees. For purposes of identifying the median employee, we considered the aggregate of the following compensation elements for each of our stockholders. Further,employees, as compiled from the Company’s clawback policy permitspayroll records: • Base Salary • Target Annual Bonus • Actual Equity Awards • Target Commissions We selected the Company to recover incentiveabove compensation paid to an executive officer if the compensation resulted from any financial result or metric impacted by the executive officer’s misconduct or fraud. This policy helps to discourage inappropriate risks,elements as executives will be held accountable for misconduct which is harmful tothey represent the Company’s financial and reputational health.principal broad-based compensation elements. In addition, we measured compensation for purposes of determining the median employee using the 12-month period ending December 31, 2021. Using this methodology, we determined that our median employee was a full-time, salaried employee working in 2017Europe. For purposes of this disclosure, we converted such employee’s compensation from the employee’s local currency to U.S. dollars using an exchange rate as partof December 31, 2021. In determining the annual total compensation of the Joint Settlement Agreements,2021 median employee, we calculated such employee’s 2021 compensation in accordance with Item 402(c)(2)(x) of Regulation S-K as required pursuant to SEC executive compensation disclosure rules. This calculation is the Company will addsame calculation used to its incentive programs specific clawback provisions allowingdetermine total compensation for purposes of the Company2021 Summary Compensation Table with respect to “clawback” executive bonuses for conduct that is later determined to have contributed to future compliance failures, subject to applicable law.each of the NEOs. 64
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68 |The Western Union Company |
Table of Contents PROPOSAL 2
ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION PROPOSAL 2
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
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The Company is providing stockholders an advisory vote to approve executive compensation as required by Section 14A of the Exchange Act. Section 14A was added to the Exchange Act by Section 951 of the Dodd-Frank Act. The advisory vote to approve executive compensation is a non-bindingnonbinding vote on the compensation of the Company’s named executive officers,NEOs, as described in the Compensation“Compensation Discussion and AnalysisAnalysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure set forth in this Proxy Statement. The advisory vote to approve executive compensation is not a vote on the Company’s general compensation policies or the compensation of the Company’s Board of Directors. The Dodd-Frank Act requires the Company to hold the advisory vote to approve executive compensation at least once every three years. At the 20112017 Annual Meeting of Stockholders, the Company asked stockholders to indicate if it should hold an advisory vote to approve the compensation of named executive officers every one, two or three years, with the Board recommending an annual advisory vote. Our stockholders approved this recommendation. Accordingly, the Company is again asking stockholders to approve the compensation of named executive officersNEOs as disclosed in this Proxy Statement. At the 20162021 Annual Meeting of Stockholders, the Company provided stockholders with the opportunity to cast an advisory vote to approve the compensation of the Company’s named executive officersNEOs as disclosed in the Proxy Statement for
the 20162021 Annual Meeting of Stockholders, and the Company’s stockholders overwhelmingly approved the proposal, with approval by approximately 97%94% of the votes cast for the proposal at the 20162021 Annual Meeting of Stockholders. The Company believes that its compensation policies and procedures, which are outlined in the Compensation“Compensation Discussion and AnalysisAnalysis” section of this Proxy Statement, support the goals of: ● | Aligning our executives’ goals with our stockholders’ interests;
| | | ● | Attracting, retaining, and motivating outstanding executive talent; and
| | | ● | “
• Aligning our executives’ goals with our stockholders’ interests; • Attracting, retaining, and motivating outstanding executive talent; and • Pay-for-performance” - Holding our executives accountable and rewarding their achievement of financial, strategic and operating goals. |
The Compensation Committee of the Board continually reviews the Company’s executive compensation and benefits program to evaluate whether it supports these goals and serves the interests of the Company’s stockholders. The Company’s executive compensation practices include the following, as discussed in more detail in the Compensation“Compensation Discussion and AnalysisAnalysis” section of this Proxy Statement: What We Do:
✓WHAT WE DO | | WHAT WE DON’T DO |  Pay-for-performance and “at-risk”at-risk compensation.
| | | ✓ |  Align compensation with stockholder interests.
| | | ✓ |  Emphasis on future pay opportunity vs. current pay.
| | | ✓ |  Mix of performance metrics.
| | | ✓ | Three-year Stockholder engagement.
 “Clawback” policy.
 Robust stock ownership guidelines.
 Include ESG metrics in compensation program.
 Multi-year vesting and/or performance periodperiods for PSUs.
| | | ✓ | Stockholder engagement. | | | ✓ | Outsidelong-term incentive awards. Independent compensation consultant.
| | | ✓ | “Doubleconsultant retained by Compensation Committee. “Double trigger” severance benefits in the event of a change-in-control.
| | | ✓ |  Maximum payout caps for annual cash incentive compensation and PSUs.
| | | ✓ | “Clawback” Policy. | | | ✓ | Robust stock ownership guidelines. | | | ✓ | Consider compliance in compensation program. |
2017 Proxy Statement
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Table of Contents No repricing or buyout of underwater stock options without stockholder approval.
 PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
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What We Don’t Do:
✘ | No change-in-control tax gross ups for individuals promoted or hired after April 2009. Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments based No dividends or dividend equivalents paid on Compensation Committee action in 2009.
| | | ✘ | No repricingunvested or buyout of underwater stock options. | | | ✘ | unearned PSUs or RSUs.  Prohibition against pledging and hedging of Company securities by senior executives and directors.
| | | ✘ |  No dividends or dividend equivalents accrued or paid on PSUs or RSUs.service-based defined benefit pension plan.
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Table of Contents PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION We believe that our executive compensation practices, in combination with a competitive market review, limited executive perquisites, and reasonable severance pay multiples contribute to an executive compensation program that is competitive yet strongly aligned with stockholder interests. The Board recommends that you vote in favor of the following “say-on-pay” resolution: RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K in the Compensation“Compensation Discussion and AnalysisAnalysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, each as set forth in the Company’s Proxy Statement for its 20172022 Annual Meeting of Stockholders. The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter is required to approve this Proposal 2. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee may take into account the outcome of the vote when considering future executive compensation arrangements. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTEFOR PROPOSAL 2. |
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PROPOSAL 3
ADVISORY VOTE ON THE FREQUENCY OF THE VOTE ON EXECUTIVE COMPENSATION
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In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, we are providing the Company’s stockholders with the opportunity to cast a non-binding vote on whether a non-binding stockholder vote to approve the compensation of our named executive officers (such as a vote similar to Proposal 2) should occur every one, two or three years. As noted above, Section 14A was added to the Exchange Act by Section 951 of the Dodd-Frank Act.
The Board has determined that an advisory vote on executive compensation every one year continues to be the best approach for the Company based on a number of considerations, including the vote frequency which the Board believes the majority of our investors prefer.
Stockholders are not voting to approve or disapprove of the Board’s recommendation. Instead, the proxy card provides stockholders with four choices with respect to
this proposal: (1) one year; (2) two years; (3) three years or (4) abstaining from voting on the proposal. We are asking our stockholders to indicate their support for the non-binding advisory vote on executive compensation to be held every one year.
Generally, approval of any matter presented to stockholders requires the vote of a majority of the shares of Common Stock represented at the annual meeting and entitled to vote thereon. However, because this vote is advisory and non-binding, if none of the frequency options receive the vote of a majority of the shares of Common Stock represented at the Annual Meeting and entitled to vote thereon, the option receiving the greatest number of votes will be considered the frequency recommended by the Company’s stockholders. Even though this vote will neither be binding on the Company or the Board, the Board of Directors will take into account the result of the vote when determining the frequency of future say-on-pay votes.
The affirmative vote of the holders of a majority of shares on the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is required to approve one year, two years, or three years as the stockholders’ recommended frequency on this Proposal 3. However, if none of the options receives the vote of a majority, the option receiving the greatest number of votes will be considered the frequency recommended by the Company’s stockholders.
Because your vote is advisory, it will not be binding on the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “ONE YEAR” WITH RESPECT TOFOR PROPOSAL 3. |
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70 | The Western Union Company
Table of Contents PROPOSAL 3
RATIFICATION OF SELECTION OF AUDITORS PROPOSAL 4
RATIFICATION OF SELECTION OF AUDITORS
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The Board of Directors and the Audit Committee believe it is in the best interest of the Company and its stockholders to recommend to the stockholders the ratification of the selection of Ernst & Young LLP, independent registered public accounting firm, to audit the accounts of the Company and its subsidiaries for 2017.2022. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since the Company became a public company in 2006. Consistent with the regulations adopted pursuant to the Sarbanes-Oxley Act of 2002, the lead audit partner having primary responsibility for the audit and the concurring audit partner are rotated every five years. A representative of Ernst & Young LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions. SUMMARY OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES FOR 20162021 AND 20152020 |
Fees for professional services provided by our independent auditors, Ernst & Young LLP, for fiscal years 20162021 and 2015,2020, respectively, included the following (in millions): | | | | | | | | 2016 | | 2015 | | 2021 | | 2020 | | Audit Fees(1) | | $5.8 | | $5.7 | | $7.5 | | $6.1 | | Audit-Related Fees(2) | | $1.4 | | $0.5 | | $1.1 | | $1.0 | | Tax Fees(3) | | $0.9 | | $0.6 | | $0.8 | | $0.6 | All Other Fees(4) | | | $0.1 | | $— |
(1) | “Audit Fees” primarily include fees related to (i) the integrated audit of the Company’s annual consolidated financial statements and internal controls over financial reporting; (ii) the review of its quarterly consolidated financial statements; (iii) statutory audits required domestically and internationally; (iv) comfort letters, consents and assistance with and review of documents filed with the SEC; and (v) other accounting and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the Public Company Accounting Oversight BoardPCAOB (United States). |
| (2) | “Audit-Related Fees” primarily include fees, not included in “Audit Fees” above, related to (i) service auditor examinations; (ii) due diligence related to mergers and acquisitions; (iii) attest services that are not required by statute or regulation; and (iv)(iii) consultation concerning financial accounting and reporting standards that are not classified as “Audit Fees.” |
| (3) | “Tax Fees,” which incorporate both tax advice and tax planning services, primarily include fees related to (i) consultations, analysis and assistance with domestic and foreign tax matters, including value-added and goods and services taxes; (ii) local tax authority audits; and (iii) other miscellaneous tax consultations, including tax services requested as part of the Company’s procedures for commercial agreements, the acquisition of new entities, and other potential business transactions. |
(4) | “All Other Fees” consist of fees for professional services other than the services reported above. |
During 20162021 and 2015,2020, all audit and non-audit services provided by the independent registered public accounting firm were pre-approved, consistent with the pre-approval policy of the Audit Committee. The pre-approval policy requires that all services provided by the independent registered public accounting firm be pre-approved by the Audit Committee or one or more members of the Audit Committee designated by the Audit Committee. 682022 Proxy Statement | 71
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Table of Contents PROPOSAL 3 RATIFICATION OF SELECTION OF AUDITORS PROPOSAL 4 RATIFICATION OF SELECTION OF AUDITORSREQUIRED VOTE
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The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter is required to approve this Proposal 4.3. In the event the stockholders fail to ratify the selection of Ernst & Young LLP, the Audit Committee of the Board of Directors will consider it a direction to select another independent registered public accounting firm for the subsequent year. Even if the selection is ratified, the Audit Committee, in its discretion, may select a new independent registered public accounting firm at any time during the year, if it feels that such a change would be in the best interest of the Company and its stockholders. THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND THAT YOU VOTEFOR PROPOSAL 4. |
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Table of Contents PROPOSAL 4 PROPOSAL 5
STOCKHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTIONS DISCLOSURE
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The New York State Common Retirement Fund, 59 Maiden Lane — 30th Floor, New York, NY 10038,STOCKHOLDER PROPOSAL REGARDING
MODIFICATION TO STOCKHOLDER RIGHT TO CALL A SPECIAL MEETING
John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, owner of more than $2,000 worth of shares of the Company’s Common Stock, has notified the Company that ithe intends to present a proposal for consideration at the Annual Meeting. As required by the Exchange Act, the text of the stockholder proposal and supporting statement appear as submitted to the Company by the proponent. The Board and the Company accept no responsibility for the contents of the proposal or the supporting statement. PROPOSAL 4 - SPECIAL SHAREHOLDER MEETING IMPROVEMENT 
| Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. One of the main purposes of this proposal is to give shareholders the right to formally participate in calling for a special shareholder meeting regardless of their length of stock ownership to the fullest extent possible. It is important to adopt this proposal because of the hidden fact that all Western Union shares not held for one continuous year are now 100% disqualified form formally participating in the call for a special shareholder meeting. Under this secretive and ill-conceived Western Union rule management discriminates against shareholders who bought WU stock during the past 12 months. Such shareholders are now second-class shareholders as far as having input to management. And shareholders who recently made the investment decision to buy Western Union stock or increase their holdings can be the most informed shareholders. It currently takes 10% of shares that are owned for more than one continuous year to call a special shareholder meeting. The owners of 10% of shares held for more than a continuous year could determine that they own 20% of our stock when length of stock ownership is factored out. | | And this 20% figure equals 24% of the shares that vote at the annual meeting. It would be hopeless to think that the shares, that do not have the time to vote, would go out of their way to take the special procedural steps to call for a special shareholder meeting. Thus for practical purposes we may be left with a 24% stock ownership threshold to call a special shareholder meeting. It is also important to adopt this proposal to make up for our complete lack of a shareholder right to act by written consent. Many companies provide for a shareholder right to call a special shareholder meeting and a shareholder right to act by written consent. Western Union shareholders gave 51%-support to a shareholder right to act by written consent at a previous Western Union annual meeting. But Western Union is the poster company on abusing shareholder engagement. WU used its so-called shareholder engagement to flip shareholder votes. For example, WU management said that when shareholders gave majority 'support for a shareholder right to act by written consent that the WU shareholder engagement supposedly showed that shareholders did not care about written consent. WU shareholder engagement instead claimed that shareholders wanted a tweak to something other than written consent in spite of their majority vote for written consent. | Please vote yes: Special Shareholder Meeting Improvement -- Proposal 4 |
2022 Proxy Statement Resolved| , that the shareholders73
Table of The Western Union Co. (“Western Union” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:Contents PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT 1.BOARD’S STATEMENT OPPOSING THE PROPOSAL | PoliciesAfter careful consideration, and procedures for making,the following reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders, and the Board recommends voting “AGAINST” this proposal. Our special meeting right is already aligned with corporate fundsbest practices and balances the interests of our broader stockholder base against potential abuse by stockholders with narrow short-term interests. Under our current Charter and By-Laws, one or assets, contributions and expenditures (directmore stockholders of record that together have continuously held, for their own account or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum. | | 2. | Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: |
a. | The identityothers, beneficial ownership of at least a 10% aggregate “net long position” of the recipientCompany’s outstanding capital stock for at least one year prior to the date such request is delivered can require the Company to call a special meeting of its stockholders. Stock ownership is determined under a “net long position” standard to provide assurance that stockholders seeking to call a special meeting possess both (i) full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares.The ownership requirement to exercise the special meeting right was lowered from 20% to 10% after stockholders approved the corresponding amendment to our Charter at the 2018 annual meeting of stockholders. This lower threshold was recommended by the Board after careful consideration and engagement with our stockholders. In discussions with and outreach to stockholders, the one-year holding requirement to call a special meeting has not been identified as well asa concern. In its consideration of this proposal, the amount paidBoard evaluated a number of factors, including the interests of our stockholders, the resources required to each;convene a special meeting, the existing opportunities for stockholders to engage with the Board and | | b. | management between annual meetings, and the characteristics and composition of our stockholder base. The title(s)Board also considered that our special meeting provision is more permissive than those adopted by a majority of S&P 500 companies that provide stockholders with the right to call special meetings. Specifically, of the person(s) in324 S&P 500 companies that provide stockholders with the Company responsible for decision-making. |
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting.
Supporting Statement
As long-term shareholders of Western Union, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, organizations, or ballot measures; direct independent expenditures; or electioneering communications on behalf of federal, state or local candidates.
Disclosure is in the best interest of the company and its shareholder. The Supreme Court affirmed this itsCitizens United decision: “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.
Publicly available records show that Western Union contributed at least $669,000 in corporate funds since the 2004 election cycle (CQ: http://moneyline.cq.com and National Institute on Money in State Politics: http://www.followthemoney.org)
However, publicly available data does not provide a complete picture of the Company’s political spending. For example, The Company’s payments to trade associations and “social welfare organizations” – organized under section 501(c)(4) of the IRS Code – used for political activities are undisclosed and unknown. This proposal asks the Company to disclose all of its political expenditures, including payments to trade associations and other tax-exempt organizations.
This would bring our Company in line with a growing number of leading companies, includingAccenture,ADP andQualcomm, that support political disclosure and accountability and present this information on their websites.
The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.
70right to call special meetings, approximately 82.4% of those companies have a higher ownership threshold than our 10% threshold. Approximately 16.7% of those S&P 500 companies have adopted a 10% threshold.
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PROPOSAL 5 STOCKHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTIONS DISCLOSURE
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BOARD’S STATEMENT OPPOSING THE PROPOSAL
After careful consideration, and for the following reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders, and the Board recommends voting “AGAINST” this proposal.
The Company has historically made an extremely limited number of political contributions, where such contributions are permitted by law. The Company’s political contributions are not financially material to the Company. In 2016, 2015 and 2014, these contributions totaled approximately $2,500, $10,000, and $8,500, respectively. In 2016, the Company’s total expenses relating to political contributions werede minimis when compared to the Company’s total operating costs of approximately $4.9 billion.
The Company is both transparent and accountable regarding its political contributions. On a limited basis, we have pursued and will continue to pursue efforts to help inform public policy decisions that have the potential to affect our customers, employees, and the communities in which we operate. To the extent this is done through a small number of corporate political contributions, such contributions are already strictly controlled. Consider our current standards, policies and practices regarding corporate political contributions:
● | The Company maintains a formal policy regarding political activities, political contributions,Board believes that the current special meeting right, including the one-year holding period and lobbying activities, whichother procedural requirements, is contained in the Company’s Code of Conduct and which is publicly available in the “Corporate Governance” section of our Investor Relations website.
| | | ● | Our policy contains standards for participating in the political process for bothconsistent with best market practices while also protecting the Company and its employees.
| | | ● | With respectbroader stockholder base against risks that a small minority of stockholders will use special meetings to political contributions,advance short-term initiatives and special interests, which may not be in the Company’s Codelong-term interests of Conduct providesthe Company or its stockholders.
The one-year holding requirement to call a special meeting protects the Company and its stockholders from the significant time, financial, and administrative burdens of excessive special meetings. The Board recognizes the right for its stockholders to call special meetings in appropriate circumstances. Given the size of the Company and its large stockholder base, a special meeting of stockholders is a significant undertaking that requires substantial time, financial, and administrative commitments. For every special meeting, the permissionCompany is required to provide each stockholder a notice of meeting and proxy materials, which results in significant legal, printing, and mailing and administrative expenses, as well as other costs normally associated with holding a stockholder meeting. Additionally, preparing for stockholder meetings requires significant attention of the Company’s General Counsel’s officedirectors, officers, and employees, diverting their attention away from performing their primary function, which is needed before any political contributions are made on behalfto operate the Company’s business in the best interests of the Company.stockholders. If the one-year holding period requirement is eliminated from the special meeting ownership threshold, the Company could be subject to regular disruptions by special-interest stockholder groups with agendas that are not in the best interests of the Company or its stockholders. The Board believes that the one-year holding period requirement is part of a reasonable balance between enhancing stockholder rights and protecting against the risk that a small minority of stockholders, including stockholders with short-term special interests, could call one or more special meetings that could result in unnecessary financial expense and disruption to our business. The Board is already highly accountable to stockholders. Our current governance structure and policies implement the goal of accountability to stockholders without the risks outlined above to the Company and its stockholders associated with removing the one-year holding period required for stockholders to meet the 10% ownership threshold necessary to call a special meeting. | | |
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Table of Contents PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT ● | The Company’s CodeCompany has implemented a comprehensive package of Conduct also providescorporate governance practices and policies that a senior executive officer ofenable stockholders to hold the Company’s Government Relations departmentBoard accountable and, the General Counsel’s office be consulted prior to contacting a government official or retaining a lobbyist. |
The Company is also transparent and accountable regarding its membership in trade associations. Participation as a trade association member comes with the understanding that we may not always agree with all of the positions of the organizations or other members but that we believe that the associations we belong to take many positions and address many issues in a meaningful and influential manner and in a way that will be to the Company’s benefit. Consider the following:
● | Although we must pay regular membership dues, we do not normally make additional non-dues contributionswhere necessary, take quick action to support a group’s targeted political contributions.their interests. Elements of this comprehensive package include:
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| No supermajority voting provisions. Our Charter and By-Laws have no supermajority voting provisions. | | | ● | We closely monitor the appropriateness and effectiveness of the political activities undertaken by the most significant trade associations of which we are
| No “poison pill.” Our Company does not have a member.stockholder rights plan, known as a “poison pill.” | | | ●
| Disclosure of political contributions made indirectly through trade associations could place theEngagement with stockholders. The Company at a competitive disadvantage by revealingregularly seeks to engage with its strategies and priorities.stockholders to better understand their perspectives.
| | | ● | Requiring such disclosure may risk misrepresenting our political activities, as trade associations operate on an independent basis, and we do not agree with all positions taken by trade associations on issues.
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Significant disclosure regarding the Company’s political activities and related policies is already publicly available. Consider the following:
● | Under federal law, all contributions by the Western Union Political Action Committee, the sole political action committee affiliated with the Company, are required to be reported, and a listAnnual election of such contributionsdirectors. The Board of Directors is publicly available at the website of the United States Federal Election Commission.declassified.
| | | ● | Contributions made directly by the Company are most frequently made to state-level candidates and representatives who are required by state law to disclose such contributions.
| | | ● | Federal law prohibits corporations from contributing corporate treasury funds to federal candidates or federal campaign committees. Accordingly, we make none.
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PROPOSAL 5 STOCKHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTIONS DISCLOSURE
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Given all of the above, weWe believe that this proposal is unnecessary, costlycomprehensive package of governance practices and largely duplicative of current reporting systems and accountability measures. We believe that participating inpolicies, including our existing special meeting right, provides strong stockholder protections without needing to remove the political process inone-year holding period requirement for stockholders to meet the ownership threshold necessary to call a transparent manner is key to good governance and an important way to enhance stockholder value and promote healthy corporate citizenship. We do not believe, however, that implementing a semiannual report on our political activity would increase stockholder value or provide stockholders with any more meaningful information than is already available. If adopted,special meeting, as requested by the proposal would apply only to Western Union and to no other company and would cause Western Union to incur undue costs and administrative burdens without commensurate benefit to our stockholders.proposal.
Required Vote; Recommendation Only The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is required to approve this Proposal 5.Proposal. Stockholders should be aware that this stockholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may not result in the requested action being taken by the Board, and therefore, its approval would not effectuate the actions requested by the proposal. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 5.
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PROPOSAL 6
STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER ACTION BY WRITTEN CONSENTMajority vote standard in uncontested elections
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John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, CA 90278, owner of more than $2,000 worth of shares of the Company’s Common Stock, has notified the Company that he intends to present a proposal for consideration at the Annual Meeting. As required by the Exchange Act, the text of the stockholder proposal and supporting statement appear as submitted to the Company by the proponent. The Board and the Company accept no responsibility for the contents of the proposal or the supporting statement.
Proposal 6 – Right to Act. In an uncontested election, each director must be elected by Written Consent
Resolved, Shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum numbera majority of votes that would be necessary to authorize the action atcast, rather than by a meeting at whichplurality.
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| Independent Board, except our CEO. Our Board is comprised of all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any topic for written consent consistent with applicable law.independent directors, except our CEO. | This proposal won majority shareholder support at 13 major companies in a single year. This includes 67%-support at both Allstate and Sprint. Hundreds of major companies enable shareholder action by written consent.
| Taking action by written consent in lieu of a meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle. A shareholder right to act by written consent and to call a special meeting are 2 complimentary ways to bring an important matter to the attention of both management and shareholders outside
| Independent non-executive chair. The Chair of the annual meeting cycle. Taking action by written expense saves the expense of holding a special shareholder meeting. Also our company requires 20% of shares (net long – to make it still more difficult) to aggregate their holdings to call a special meeting – a much higher hill to climb than the 10% of shares permitted by Delaware law. Hundreds or dozens of Fortune 500 companies provide for both shareholder rights – to act by written consent and to call a special meeting.
Please vote to enhance shareholder value:
Right to Act by Written Consent – Proposal 6
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PROPOSAL 6 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER ACTION BY WRITTEN CONSENT
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BOARD’S STATEMENT OPPOSING THE PROPOSAL
After careful consideration, and for the following reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders, and the Board recommends voting “AGAINST” this proposal.
The Company believes that permitting stockholder action by written consent could lead to substantial confusion and disruption for stockholders. The board believes that permitting stockholder action by written consent is not an appropriate corporate governance model for a widely-held public company like Western Union. Consider the following:
●Currently, any matter that Western Union or its stockholders wish to present for a stockholder vote must be presented at a meeting of the stockholders, thus allowing all stockholders to consider, discuss and vote on the pending matter.
●In contrast, the written consent proposal at issue would permit a group of stockholders with no fiduciary duties to other stockholders to initiate action without prior notice, either to the other stockholders or to the Company, and without giving all stockholders an opportunity to participate and consider arguments, including those of the Company, for and against the action.
●Stockholder action by written consent would allow for the solicitation of multiple, even conflicting, written consents by multiple stockholder groups, potentially creating substantial confusion and disruption for stockholders.
The Board of Directors is already highly accountable to stockholders. The proposal suggests that the written consent right is necessary to keep the Board accountable to stockholders. Our current policies, however, implement the goal of accountability without the governance risk to stockholders and the Company associated with action by written consent as contemplated by the proposal. The Company has implemented a comprehensive package of corporate governance practices and policies that enable stockholders to hold the Board accountable and, where necessary, take quick action to support their interests. Elements of this comprehensive package include:non-executive independent director.
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| Proxy access ●The Board of Directors is declassified, with majority voting for uncontested Director elections.
●. The Company was among the first U.S. companies to adopt the “proxy access” right for its stockholders.
stockholders that permits qualifying stockholders or groups of qualifying stockholders that have each beneficially owned at least 3% of the Company’s Common Stock for three years to nominate up to the greater of (x) two or (y) an aggregate of 20% of the members of the Board and have information and supporting statements regarding those nominees included in the Company’s Proxy Statement.
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| Special Meeting Right ●A. As discussed above, a stockholder or group of stockholders holding 20%10% or more of our outstanding shares for at least one year may call a special meeting.
●Our Amended and Restated Certificate of Incorporation and By-Laws have no supermajority provisions.
| The Board of Directors has a demonstrated history of commitment to high standards of corporate governance. In recent years, the Board has taken the following actions:
●Adopted majority voting for uncontested Director elections (2007).
●Declassified its Board of Directors, ensuring that directors would be elected annually (process initiated in 2012).
●Added the right for stockholders to call special meetings to the By-Laws (2013).
●Adopted a “proxy access” right for its stockholders (2013).
The Board has repeatedly responded to stockholder concerns. There is, accordingly, no need for stockholders to be given the right to act by written consent.
Required Vote; Recommendation Only
The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is required to approve this Proposal 6. Stockholders should be aware that this stockholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may not result in the requested action being taken by the Board, and therefore, its approval would not effectuate the actions requested by the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 6.4. |
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Table of Contents | | PROPOSAL 7
STOCKHOLDER PROPOSAL REGARDING REPORT DETAILING RISKS AND COSTS TO COMPANY CAUSED BY STATE POLICIES SUPPORTING DISCRIMINATION
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NorthStar Asset Management Funded Pension Plan, P.O. Box 301840, Boston, MA 02130, owner of more than $2,000 worth of shares of the Company’s Common Stock, has notified the Company that it intends to present a proposal for consideration at the 2017 Annual Meeting of Stockholders. As required by the Exchange Act, the text of the stockholder proposal and supporting statement appear as submitted to the Company by the proponent of the proposal. The Board of Directors and the Company accept no responsibility for the contents of the proposal or the supporting statement.
Application of Company Non-discrimination Policies in States with Pro-discrimination Laws
WHEREAS: Western Union has numerous documents and policies regarding nondiscrimination, such as: “We commit to treating each other with dignity and respect at all times”; “We do not discriminate in hiring, promotion, compensation of employees, and employment practices on grounds of race, pregnancy, color, sexual orientation, sex/gender, gender identity”; and that “We have zero tolerance for any discrimination or harassment that is based on these categories”;
Our Company employs people in much of the United States, including states like Colorado, Florida and Nebraska that have recently established or proposed policies that are attacks on LGBT rights and equality:
●EQUITY COMPENSATIOTwo religious freedom bills introduced this year in Colorado HB1123 would have exempted clergy members, ministers and religiously affiliated organizations from participating in any ceremony, including a marriage, that conflicted with their beliefs. HB1180 was an attempt to create a state-level Religious Freedom Restoration Act;
●In Florida last year, one bill introduced would have allowed adoption agencies to refuse service to same-sex couples, while another would have allowed individuals, businesses with five or fewer owners, religious institutions and businesses operated by faith groups to refuse to produce, create or deliver a product or service to a customer if they had a religious or moral objection;
●Nebraska policymakers are considering a bill that opponents say would enable adoption agencies to refuse service to LGBT families;
Many businesses such as PayPal and The Walt Disney Company have spoken out against the new pro-discrimination policies. Executives from companies such as Apple, Intel, Google, Microsoft, EMC, PayPal, and Whole Foods Markets are calling for repeal of certain state pro-discrimination policies.
RESOLVED: Shareholders request that the Company issue a public report to shareholders, employees, customers, and public policy leaders, omitting confidential information and at a reasonable expense, by October 1, 2017, detailing the known and potential risks and costs to the Company caused by any enactment or proposed state policies supporting discrimination against LGBT people, and detailing strategies above and beyond litigation or legal compliance that the Company may deploy to defend the Company’s LGBT employees and their families against discrimination and harassment that is encouraged and enabled by the policies.
SUPPORTING STATEMENT: Shareholders recommend that the report evaluate risks and costs including, but not limited to, negative effects on employee hiring and retention, challenges in securing safe housing for employees, risks to employees’ LGBT children and risks to LGBT employees who need to use public facilities, and litigation risks to the Company from conflicting state and company anti-discrimination policies. Strategies evaluated should include public policy advocacy, human resources and educational strategies, and the potential to relocate operations or employees out of states with discriminatory policies (evaluating the costs to the Company and resulting economic losses to pro-discriminatory states).N PLAN INFORMATION
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PROPOSAL 7 REPORT DETAILING RISKS AND COSTS TO COMPANY CAUSED BY STATE POLICIES SUPPORTING DISCRIMINATION
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BOARD’S STATEMENT OPPOSING THE PROPOSAL
After careful consideration, and for the following reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders, and the Board recommends voting “AGAINST” this proposal.
The Company is strongly committed to diversity and inclusion. Our over 10,000 employees in approximately 50 countries reflect the diverse collection of consumers and markets that Western Union serves, and we recognize the important role we play in engendering respect and tolerance for all people in the communities in which we operate. Our employees are the Company’s greatest asset, and ensuring that each employee is afforded an inclusive work environment is critical to a productive workforce and the delivery of financial results. As a global company, we also recognize that a strong commitment to inclusion and diversity is essential to both retaining current talent and attracting future talent from all backgrounds. Simply put, the Company believes that an inclusive work environment and commitment to supporting diversity is not only consistent with our spirit of promoting human rights, but also smart business practice.
The Company’s existing policies and practices promote tolerance and respect for all, including the lesbian, gay, bisexual and transgender (“LGBT”) community. Our employment and management policies currently in place expressly promote tolerance and the respectful treatment of others and aptly demonstrate our unwavering commitment to inclusion, diversity and the practice of nondiscrimination. As noted by the proponent, we have numerous documents and policies regarding our commitment to nondiscrimination. For example, consider the following policies and practices emphasized in our Code of Conduct:
●The Company’s commitment to “treating each other with dignity and respect at all times” and prohibition against any intimidating or abusive behavior in the workplace.
●We recruit, develop and advance our employees exclusively based on their qualifications, talents and achievements and reward employees for merit-based performance.
●We prohibit discrimination in hiring, promotion and compensation on the basis of “race, pregnancy, color, sexual orientation, sex/gender, gender identity, religion, national origin, age, disability, marital or military service status, citizenship” and any other area protected by applicable law.
●We take a zero-tolerance approach to any discrimination or harassment on the above grounds. We also encourage our employees to report any discrimination or harassment experienced or observed, and we employ a strict prohibition against any retaliation toward reporters.
Additionally, the Company’s Corporate Governance and Public Policy Committee Charter indicates that one of this Committee’s purposes is to review and advise the Board on matters of public policy and social responsibility as they relate to the Company and the industries in which we operate. This committee is composed of independent board members with no material relationship to the Company and has the power to form sub-committees to focus on particular issues of concern. We believe that the established duties and responsibilities of the Corporate Governance and Public Policy Committee and our existing policies and practices that encourage the reporting of discrimination and harassment allow us to monitor and appropriately address any discriminatory or disrespectful conduct at Western Union.
The report contemplated by this proposal would impose an unnecessary burden and expense on the Company with limited, if any, benefit to our stockholders or employees.
As discussed above, the Company’s policies and practices already promote diversity and inclusion and protect against discrimination and harassment. And while we continually evaluate the employment of these efforts, and expand on them as needed, the proponent’s proposed report would impose unnecessary administrative burdens and expenses on the Company. For example, the request for a report on “enacted and proposed state policies” could include not only state law, but also proposed legislation and state agency administrative policies in all fifty states. Such a diversion of Company resources to evaluate the statutory rights of third parties that may in turn effect LGBT persons, whether employees of the Company or not, does not relate to the Company’s core business of global money movement and payment services in any meaningful way, and would be of limited, if any, benefit to our stockholders or employees.
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PROPOSAL 7 REPORT DETAILING RISKS AND COSTS TO COMPANY CAUSED BY STATE POLICIES SUPPORTING DISCRIMINATION
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The Board believes that the Company’s current antidiscrimination framework and vigilant monitoring of social issues relevant to this proposal makes such reporting an unnecessary application of resources that could be used to better serve our stockholders and employees.
Required Vote; Recommendation Only
The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is required to approve this Proposal 7. Stockholders should be aware that this stockholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may not result in the requested action being taken by the Board, and therefore, its approval would not effectuate the actions requested by the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 7.
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EQUITY COMPENSATION PLAN INFORMATION |
The following table gives information, as of December 31, 2016,2021, about our Common Stock that may be issued upon the exercise of options and settlement of other equity awards under all compensation plans under which equity securities are reserved for issuance. The Western Union CompanyCompany’s 2015 Long-Term Incentive Plan, is2006 Long-Term Incentive Plan and 2006 Non-Employee Director Equity Compensation Plan are our only equity compensation planplans pursuant to which our equity securities are authorized for issuance. | | | | | | | PLAN CATEGORY | | NUMBER OF SECURITIES TO
BE ISSUED UPON EXERCISE
OF OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS | | WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS | | NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION
PLANS (EXCLUDING
SECURITIES REFLECTED IN
COLUMN (a)) | | | (a) | | (b) | | (c) | Equity compensation plans | | | | | | | approved by security holders | | 15,504,57914,425,469(1) |
| $17.4618.98(2) |
| 30,501,70815,703,710(3) | Equity compensation plans not | | | | | | | | approved by security holders | | — |
| N/A | | — | Total | | 15,504,57914,425,469(1) |
| $17.4618.98(2) |
| 30,501,70815,703,710(3) |
Footnotes: (1) | Includes 7,448,4437,526,681 restricted stock units, PSUs, deferred stock units, and bonus stock units that were outstanding on December 31, 20162021 under The Western Union Companythe Company’s 2015 Long-Term Incentive Plan, 2006 Long-Term Incentive Plan, and 2006 Non-Employee Director Equity Compensation Plan. Restricted stock unit awards, deferred stock unit awards and bonus stock units may be settled only for shares of Common Stock on a one-for-one basis. The number included for PSUs reflects grant date units awarded. Assuming maximum payout for PSU grants that have not completed the required performance period, the number of securities to be issued would increase by 683,847.1,896,640. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for further information regarding the 20152018 PSUs, including the performance metrics applicable to such awards. |
(2) | | (2) | Only option awards were used in computing the weighted-average exercise price. |
(3) | | (3) | This amount represents shares of Common Stock available for issuance under The Western Union Companythe Company’s 2015 Long-Term Incentive Plan. Awards available for grant under The Western Union Companythe Company’s 2015 Long-Term Incentive Plan include stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, bonus stock units, deferred stock units, performance grants, and any combination of the foregoing awards. |
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76 | The Western Union Company
Table of Contents STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS |
The following table sets forth the beneficial ownership of Common Stock by each person or group that is known by us to be the beneficial owner of more than five percent (5%)5% of our Common Stock, all directors and nominees, each of the executive officers named in the 20162021 Summary Compensation Table contained in this Proxy Statement, and all directors and executive officers as a group. Except as otherwise noted, (i) the information is as of March 13, 2017,23, 2022, (ii) each person has sole voting and investment power of the shares, and (iii) the business address of each person shown below is 125007001 East BelfordBelleview Avenue, Englewood, CO 80112.Denver, Colorado 80237. | NAME OF BENEFICIAL OWNER | | ADDRESS | | AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP | | PERCENTAGE OF
OUTSTANDING
SHARES | | 5% Owners | | | | | | | | | | Capital Research Global Investors, a division of | | 333 South Hope Street, | | | | | | | | Capital Research and Management Company | | Los Angeles, CA 90071 | | 65,346,913 | (1) | | 13.4 | %(1) | | The Vanguard Group | | 100 Vanguard Blvd., | | | | | | | | | Malvern, PA 19355 | | 50,085,149 | (2) | | 10.32 | %(2) | | FMR LLC | | 245 Summer Street, | | | | | | | | | Boston, MA 02210 | | 40,585,663 | (3) | | 8.37 | %(3) | | The Bank of New York Mellon Corporation | | 225 Liberty Street | | | | | | | | | New York, NY 10286 | | 40,031,694 | (4) | | 8.26 | %(4) | | BlackRock, Inc. | | 55 East 52nd Street, | | | | | | | | | New York, NY 10055 | | 31,388,036 | (5) | | 6.5 | %(5) | | DIRECTORS AND NAMED EXECUTIVE OFFICERS(6) | | Martin I. Cole | | | | 16,905 | | | * | | | Hikmet Ersek | | | | 2,766,763 | | | * | | | Richard A. Goodman | | | | 36,814 | | | * | | | Jack M. Greenberg | | | | 408,856 | | | * | | | Betsy D. Holden | | | | 37,699 | | | * | | | Jeffrey A. Joerres | | | | 15,998 | | | * | | | Roberto G. Mendoza | | | | 140,608 | | | * | | | Michael A. Miles, Jr. | | | | 32,699 | | | * | | | Robert W. Selander | | | | 77,439 | | | * | | | Frances Fragos Townsend | | | | 39,833 | | | * | | | Solomon D. Trujillo | | | | 106,134 | (7) | | * | | | Rajesh K. Agrawal | | | | 558,467 | | | * | | | Odilon Almeida | | | | 283,438 | | | * | | | Elizabeth G. Chambers | | | | 3,855 | | | * | | | J. David Thompson | | | | 314,935 | | | * | | | All directors and executive officers as a group | | | | 5,592,953 | | | 1.1% | | | (19 persons) | | | | | | | | |
| | | | | | | | | NAME OF BENEFICIAL OWNER | | ADDRESS | | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | | PERCENTAGE OF OUTSTANDING SHARES | | 5% Owners | | | | | | | | | BlackRock, Inc. | | 55 East 52nd Street, New York, NY 10055 | | 60,702,355(1) | | 15.1%(1) | | The Vanguard Group | | 100 Vanguard Blvd., Malvern, PA 19355 | | 41,754,123(2) | | 10.4%(2) | | Capital Research Global Investors | | 333 South Hope Street, 55th Fl, Los Angeles, CA 90071 | | 22,206,325(3) | | 5.5%(3) | | DIRECTORS AND NAMED EXECUTIVE OFFICERS(4) | | | | | | | | | Martin I. Cole | | | | 44,546 | | * | | Hikmet Ersek | | | | 3,707,942(5) | | * | | Richard A. Goodman | | | | 75,579 | | * | | Betsy D. Holden | | | | 5,000 | | * | | Jeffrey A. Joerres | | | | 15,998 | | * | | Devin B. McGranahan | | | | — | | | | Michael A. Miles, Jr. | | | | 10,078 | | * | | Timothy P. Murphy | | | | 26,776 | | * | | Joyce A. Phillips | | | | 6,692 | | * | | Jan Siegmund | | | | 89,247 | | * | | Angela A. Sun | | | | 29,312 | | * | | Solomon D. Trujillo | | | | 192,226(6) | | * | | Raj Agrawal | | | | 649,341(7) | | * | | Jean Claude Farah | | | | 328,210 | | * | | Gabriella Fitzgerald | | | | — | | * | | Michelle Swanback | | | | 66,089 | | * | | All directors and executive officers as a group (19 persons) | | | | 5,472,602 | | 1.41% | |
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STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS |
(1) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 412 to Schedule 13G filing with the Securities and Exchange Commission filed February 13, 2017,January 27, 2022, which reports ownership as of December 30, 2016.31, 2021. The Schedule 13G filing indicates that the holder had sole voting andpower over 56,883,488 shares, sole dispositive power over 65,346,91360,702,355 shares, and shared voting power over 0 shares, and shared dispositive power over no0 shares. |
| (2) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 49 to Schedule 13G filing with the Securities and Exchange Commission filed February 10, 2017,2022, which reports ownership as of December 31, 2016.2021. The Schedule 13G filing indicates that the holder had sole voting power over 757,0420 shares, sole dispositive power over 49,234,92440,851,990 shares, shared voting power over 88,195357,840 shares, and shared dispositive power over 850,225902,133 shares. |
| (3) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 39 to Schedule 13G filing with the Securities and Exchange Commission filed February 14, 2017, which reports ownership as of December 30, 2016. The Schedule 13G filing indicates that the holder had sole power to vote or direct the vote of 2,861,315 shares, sole power to dispose of or to direct the disposition of 40,585,663 shares, and shared power to vote or direct the vote, and shared power to dispose of or direct the disposition of, no shares. | | (4) | The number of shares held and percentage of outstanding shares were obtained from the Schedule 13G filed by The Bank of New York Mellon Corporation, a parent holding company, on behalf of the subsidiaries listed in Exhibit I therein (collectively, “BNYM”) with the Securities and Exchange Commission on February 3, 2017,11, 2022, which reports ownership as of December 31, 2016. The Schedule 13G filing indicates that BNYM had sole voting power over 35,492,349 shares, sole dispositive power over 39,894,078 shares, shared voting power over 25,246 shares, and shared dispositive power over 68,369 shares. | | (5) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 6 to Schedule 13G filing with the Securities and Exchange Commission filed January 27, 2017, which reports ownership as of December 31, 2016.2021. The Schedule 13G filing indicates that the holder had sole voting power over 26,988,112 shares,and sole dispositive power over 31,388,03622,206,325 shares, and shared voting power over 0 shares, and shared dispositive power over no0 shares. |
2022 Proxy Statement | 77
Table of Contents STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS | (6)(4) | The number of shares reported includes shares covered by options that are exercisable within 60 days of March 13, 201723, 2022 as follows: Mr. Cole, 9,208; Mr. Ersek, 2,204,460;2,579,494; Mr. Goodman, 36,814; Mr. Greenberg, 336,144;75,462; Ms. Holden, 32,699;0; Mr. Joerres, 11,448; Mr. Mendoza, 140,608;McGranahan, 0; Mr. Miles, 32,699;0; Mr. Selander, 77,439;Murphy, 20,084; Ms. Fragos Townsend, 39,833;Phillips, 0; Mr. Siegmund, 79,247; Ms. Sun 22,620; Mr. Trujillo, 94,334;177,080; Mr. Agrawal 433,409; Mr. Almeida, 210,952; Ms. Chambers,(Chief Financial Officer), 283,920; David Cebollero (Interim Chief Legal Officer), 0; Mr. Dye, 219,212; Mr. Farah 150,779; Mr. Schenkel, 15,600; Mr. Thompson, 195,194; Mr.(President, EMEA/APAC Region), 54,945; Ms. Fitzgerald (President, Americas Region), 0; Ms. Molnar (Chief Transformation Officer), 0; Michelle Swanback (President, Product and Platform), 0; Richard Williams 88,021;(Chief People Officer), 53,329; and all directors and executive officers as a group, 4,328,853. 3,366,837. |
(5) | The number of shares reported includes RSUs that will vest within 60 days of March 13, 2017 as follows:680,790 shares held jointly with Mr. Almeida, 6,940; Mr. Farah, 4,627; Mr. Thompson, 3,697.Ersek’s spouse. |
| (7)(6) | Mr. Trujillo shares with his spouse through a family trust the power to vote or direct the vote of, and the power to dispose or direct the disposition of, 11,800 shares. |
80(7)
| | | The Western Union Companynumber of shares reported includes 331,411 shares held jointly with Mr. Agrawal’s spouse. |
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Table of Contents CERTAIN TRANSACTIONS AND OTHER MATTERS CERTAIN TRANSACTIONS AND OTHER MATTERS
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We or one of our subsidiaries may occasionally enter into transactions with certain “related persons.” Related persons include our executive officers, directors, nominees for directors, 5% or more beneficial owners of our Common Stock, and immediate family members of these persons. We refer to transactions involving amounts in excess of $120,000 and in which the related person has a direct or indirect material interest as “related person transactions.” Each related person transaction must be approved or ratified in accordance with the Company’s written Related Person Transactions Policy by the Corporate Governance, ESG, and Public Policy Committee of the Board of Directors or, if the Corporate Governance, ESG, and Public Policy Committee of the Board of Directors determines that the approval or ratification of such related person transaction should be considered by all disinterested members of the Board of Directors, by the vote of a majority of such disinterested members. Other than as described below, there have been no related person transactions since January 1, 2021. During 2021, N.A. Zeid, the brother-in-law of Mr. Farah served as the principal executive officer of one of the Company’s money transfer agents in the Middle East region. In 2021, the agent generated approximately 1% of the Company’s overall revenue and was paid approximately $15.8 million in commissions for its services as a money transfer agent. Mr. Farah does not receive any direct benefit from the Company’s relationship with the agent. Internal controls are in place to preclude Mr. Farah from making decisions on behalf of the Company with respect to the agent or otherwise being involved in the Company’s relationship with the agent. Pursuant to the Company’s Related Person Transactions Policy, the relationship was approved by the Corporate Governance, ESG, and Public Policy Committee. The Corporate Governance, ESG, and Public Policy Committee considers all relevant factors when determining whether to approve or ratify a related person transaction, including, without limitation, the following: ● | • the size of the transaction and the amount payable to a related person;
| ● | the nature of the interest of the related person in the transaction;
| ● | whether the transaction may involve a conflict of interest; and
| ● | whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. |
• the nature of the interest of the related person in the transaction; • whether the transaction may involve a conflict of interest; and • whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. The Company’s Related Person Transactions Policy is available through the “Investor Relations, Corporate Governance” portion of the Company’s website,www.westernunion.comwww.wu.com. 2017* * *
This Proxy Statement is provided to you at the direction of the Board of Directors. Darren Dragovich,
Interim Secretary | | | 81
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Table of Contents ANNEX A SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than 10% of the Company’s Common Stock, as well as certain affiliates of such persons, to file with the SEC and the NYSE initial reports of ownership and reports of changes in ownership of the Company’s Common Stock. Based solely on the Company’s review of the reports that have been filed by or on behalf of such persons in this regard and written representations from our executive officers and directors that no other reports were required, during and for the fiscal year ended December 31, 2016, the Company believes that all Section 16(a) filing requirements applicable to the Company’s directors, executive officers, and greater than 10% stockholders were met, except that one Form 4 for Amintore Schenkel, the Company’s Controller, was inadvertently filed late due to an administrative error.
* * *
This Proxy Statement is provided to you at the direction of the Board of Directors.
John R. Dye
Executive Vice President,
General Counsel and
Secretary
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RECONCILIATION OF NON-GAAP MEASURES Western Union’s management believes the non-GAAP financial measuremeasures presented providesprovide meaningful supplemental information regarding our operating results to assist management, investors, analysts, and others in understanding our financial results and to better analyze trends in our underlying business, because it providesthey provide consistency and comparability to prior periods. A non-GAAP financial measure should not be considered in isolation or as a substitute for the most comparable GAAP financial measure. A non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliation to the corresponding GAAP financial measure, provides a more complete understanding of our business. Users of the financial statements are encouraged to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of a non-GAAP financial measuremeasures to the most directly comparable GAAP financial measuremeasures is included below. All adjusted year-over-year changes were calculated using prior year reported amounts. | CONSOLIDATED METRICS | | FY2015 | | FY2016 | | Revenues, as reported (GAAP) | | | | $5,422.9 | | Foreign currency translation impact(a) | | | | $217.1 | | Revenues, constant currency adjusted | | | | $5,640.0 | | Prior year revenues, as reported (GAAP) | | | | $5,483.7 | | Revenue change, as reported (GAAP) | | | | (1%) | | Revenue change, constant currency adjusted | | | | 3% | | Operating income/(loss), as reported (GAAP) | | | | $483.7 | | Foreign currency translation impact(a) | | | | 90.2 | | Joint Settlement Agreements(c) | | | | 601.0 | | Operating income, constant currency adjusted, excluding Joint Settlement Agreements | | | | $1,174.9 | | 2015 operating income, excluding Paymap Settlement Agreement(b) | | | $1,144.7 | | Operating income change, as reported (GAAP) | | | | (56%) | Operating income change, constant currency adjusted, excluding Paymap Settlement Agreement and
Joint Settlement Agreements | | | | 3% | | | | Operating income/(loss), as reported (GAAP) | | $1,109.4 | | $483.7 | | Paymap Settlement Agreement(b) | | 35.3 | | N/A | | Joint Settlement Agreements(c) | | N/A | | 601.0 | | Operating income, excluding Paymap Settlement Agreement and Joint Settlement Agreements | $1,144.7 | | $1,084.7 | | Operating margin, as reported (GAAP) | | 20.2% | | 8.9% | | Operating margin, excluding Paymap Settlement Agreement and Joint Settlement Agreements | 20.9% | | 20.0% |
Non-GAAP related notes:
(a) | | | REVENUES | | | | | 2021 | Revenues, as reported (GAAP) | | $5,070.8 | Foreign currency translation impact(a) | | (18.3) | Revenues, constant currency adjusted | | $5,052.5 | | | 2020 | Revenues, as reported (GAAP) | | $4,835.0 | Revenue change, as reported (GAAP) | | 5% | Revenue change, constant currency adjusted | | 4% | | | | | | | OPERATING INCOME | | | | | 2021 | Operating income, as reported (GAAP) | | $1,123.1 | Foreign currency translation impact(a) | | (30.5) | Acquisition and divestiture costs(c) | | 15.7 | Operating income, constant currency adjusted, excluding acquisition and divestiture costs | | $1,108.3 | Operating margin, as reported (GAAP) | | 22.1% | Operating margin, excluding acquisition and divestiture costs | | 22.5% | | | 2020 | Operating income, as reported (GAAP) | | $967.3 | Restructuring-related expenses(b) | | 36.8 | Acquisition and divestiture costs(c) | | 2.5 | Operating income, adjusted, excluding restructuring-related expenses acquisition and divestiture costs | | $1,006.6 | Operating margin, as reported (GAAP) | | 20.0% | Operating margin, adjusted, excluding restructuring-related expenses and acquisition and divestiture costs | | 20.8% |
(a) | Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States dollar, net of foreign currency hedges, which would not have occurred if there had been a constant exchange rate. We believe that this measure provides management and investors with information about operating results and trends that eliminates currency volatility and provides greater clarity regarding, and increases the comparability of, our underlying results and trends. |
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(b) | Represents the impact from a settlement agreement reachedexpenses incurred in connection with an overall restructuring plan, approved by the Consumer Financial Protection Bureau regardingBoard of Directors on August 1, 2019, to improve our business processes and cost structure by reducing headcount and consolidating various facilities. While these expenses are specific to this initiative, the Equity Accelerator servicetypes of Paymap, Inc., a subsidiary ofexpenses related to this initiative are similar to expenses that we have previously incurred and can reasonably be expected to incur in the Company (the “Paymap Settlement Agreement”), included in full year 2015 results.future. We believe that, by excluding the effectseffect of significantthese charges associated with the settlement of litigationrestructuring-related activities that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results. |
(c) | | (c) | Represents the impact from expenses incurred in connection with our acquisition and divestiture activity, including for the Joint Settlement Agreements.review and closing of these transactions. We believe that, by excluding the effectseffect of significantthese charges associated with the settlement of litigation that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results. |
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Table of Contents | | | | | | |  | | Shareowner Services
P.O. Box 64945
St. Paul, MN 55164-0945
| | | Address Change? Mark box, sign, and indicate changes below:☐
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| | | | | | | | |
| | | TO VOTE BY INTERNET OR
TELEPHONE, SEE REVERSE SIDE
OF THIS PROXY CARD.
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WesternUnion\\WU Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 Address Change? Mark box, sign, and indicate changes below: TO VOTE BY INTERNET OR TELEPHONE, SEE REVERSE SIDE OF THIS PROXY CARD. FPO TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD. The Board of Directors Recommends a Vote FOR Items 1, 2 and 4,3. Election of directors: FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN 1a. Martin I. Cole ■ ■ ■ 1g. Timothy P. Murphy ■ ■ ■ 1b. Richard A. Goodman ■ ■ ■ 1h. Joyce A. Phillips ■ ■ ■ 1c. Betsy D. Holden ■ ■ ■ 1i. Jan Siegmund ■ ■ ■ 1d. Jeffrey A. Joerres ■ ■ ■ 1j. Angela A. Sun ■ ■ ■ 1e. Devin B. McGranahan ■ ■ ■ 1k. Solomon D. Trujillo ■ ■ ■ 1f. Michael A. Miles, Jr. ■ ■ ■ Other Matters: 2. Advisory Vote to Approve Executive Compensation ■ For ■ Against ■ Abstain 3. Ratification of Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for 2022 ■ For ■ Against ■ Abstain The Board of Directors Recommends a Vote AGAINST Item 4. 4. Stockholder Proposal Regarding Modification to Stockholder Right to Call a Special Meeting ■ For ■ Against ■ Abstain THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1, 2 AND 3, AND AGAINST ITEM 4. For shares held in The Western Union Company Incentive Savings Plan (the Plan), the Plan’s Trustee will vote the shares as directed. If no direction is given on how to vote the shares to the Trustee by mail on or before May 16, 2022 or by Internet or phone by 11:59 p.m. (EDT) on May 16, 2022, the Plan’s Trustee will vote your shares held in the Plan in the same proportion as the shares for which it receives instructions from all other participants in the Plan. Please fold here – Do not separate Date Signature(s) in Box Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and 1 YEAR for Item 3.authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. Election of directors:
| | | | | | | | | | | | | | | | FOR | | AGAINST | | ABSTAIN | | | FOR | | AGAINST | | ABSTAIN | 1a.Martin I. Cole
| | ☐ | | ☐ | | ☐ | 1f.Roberto G. Mendoza
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1b.Hikmet Ersek
| | ☐ | | ☐ | | ☐ | 1g.Michael A. Miles, Jr.
| | ☐ | | ☐ | | ☐ | |  Please fold here – Do not separate 
| | 1c.Richard A. Goodman
| | ☐ | | ☐ | | ☐ | 1h.Robert W. Selander
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1d.Betsy D. Holden
| | ☐ | | ☐ | | ☐ | 1i.Frances Fragos Townsend
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1e.Jeffrey A. Joerres
| | ☐ | | ☐ | | ☐ | 1j.Solomon D. Trujillo
| | ☐ | | ☐ | | ☐ |
Other Matters:
| | | | | | | | | | | 2. | Advisory Vote to Approve Executive Compensation | | ☐ | For | | ☐ | Against | | ☐ | Abstain | | | | | | | | | | | | 3. | Advisory Vote on the Frequency of the Vote on Executive Compensation | ☐ | 1 Year | | ☐ | 2 Years | | ☐ | 3 Years | | ☐ | Abstain | | | | | | | | | | | | | | 4. | Ratification of Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for 2017 | | | | ☐ | For | | ☐ | Against | | ☐ | Abstain | | The Board of Directors Recommends a Vote AGAINST Items 5 through 7.
| | 5.
| Stockholder Proposal Regarding Political Contributions Disclosure
| | ☐ | For | | ☐ | Against | | ☐ | Abstain | | | | | | | | | | | | 6.
| Stockholder Proposal Regarding Action by Written Consent
| | ☐ | For | | ☐ | Against | | ☐ | Abstain | | | | | | | | | | | | 7.
| Stockholder Proposal Regarding Report Detailing Risks and Costs to Company Caused by State Policies Supporting Discrimination
| | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1, 2 AND 4 AND 1 YEAR FOR ITEM 3, AND AGAINST ITEMS 5 THROUGH 7.For shares held in The Western Union Company Incentive Savings Plan (the Plan), the Plan’s Trustee will vote the shares as directed. If no direction is given on how to vote the shares to the Trustee by mail on or before May 8, 2017 or by Internet or phone by 11:59 p.m. (EDT) on May 8, 2017, the Plan’s Trustee will vote your shares held in the Plan in the same proportion as the shares for which it receives instructions from all other participants in the Plan.
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Date | | | | | | | Signature(s) in Box
| | | | | | Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
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Table of Contents
THE WESTERN UNION COMPANY ANNUAL MEETING OF STOCKHOLDERS May 11, 2017
19, 2022 8:00 a.m. (EDT)
505 Fifth(MDT) The Western Union Company Corporate Headquarters 7001 East Belleview Avenue 7th Floor
New York, NY 10017
The Western Union Company
12500 East Belford Avenue
Englewood, CO 80112
| proxy |
Denver, Colorado 80237 The Western Union Company 7001 East Belleview Avenue Denver, Colorado 80237 proxy This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 11, 2017. 19, 2022. The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted “FOR” Items 1, 2 and 4, “1 YEAR” for Item 3, and “AGAINST” Items 5 through 7. Item 4. By signing the proxy, you revoke all prior proxies and appoint Hikmet ErsekDevin McGranahan and John R. Dye,Darren Dragovich and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments and postponements thereof.
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.  |  |  | INTERNET
www.proxypush.com/wu
| PHONE
1-866-883-3382
| MAIL
| Use the Internet to vote your proxy
until 11:59 p.m. (EDT) on
May 10, 2017.
Scan the QR code on front for mobile voting.
| Use a touch-tone telephone to vote
your proxy until 11:59 p.m. (EDT)
on May 10, 2017.
| Mark, sign and date your proxy
card and return it in the
postage-paid envelope provided.
|
: ( * INTERNET PHONE MAIL www.proxypush.com/wu 1-866-883-3382 Mark, sign and date your proxy Use the Internet to vote your proxy Use a touch-tone telephone to card and return it in the until 11:59 p.m. (EDT) on May 18, 2022. vote your proxy until 11:59 p.m. postage-paid envelope provided in time Scan the QR code on front for mobile voting. (EDT) on May 18, 2022. to be received by May 18, 2022. If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.
|
| | |
| | 
, CBC
, CGC
Annual election of directors.
Proxy access. Our By-Laws permit qualifying stockholders or groups of qualifying stockholders that have each beneficially owned at least 3% of the Company’s Common Stock for three years to nominate up to the greater of (x) two or (y) an aggregate of 20% of the members of the Board and have information and supporting statements regarding those nominees included in the Company’s Proxy Statement.
Majority vote standard in uncontested elections. In an uncontested election, each director must be elected by a majority of votes cast, rather than by a plurality.
Stockholder right to call special meetings at 10% ownership threshold.
No stockholder rights plan (“poison pill”).
No supermajority voting provisions in the Company’s organizational documents.
Independent Board, except our CEO. Our Board is comprised of all independent directors, except our CEO.
Independent non-executive chair. The Chair of the Board of Directors is a non-executive independent director.
Independent Board committees. All of our Board Committees are made up of independent directors. Each standing committee operates under a written charter that has been approved by the Board.
Confidential stockholder voting. The Company’s Corporate Governance Guidelines provide that the vote of any stockholder will not be revealed to anyone other than a non-employee tabulator of votes or an independent election inspector, except under
Board Committee authority to retain independent advisors. Each Board Committee has the authority to retain independent advisors.
Robust codes of conduct. The Company is committed to operating its business with honesty and integrity and maintaining the highest level of ethical conduct. These shared values are embodied in our Code of Conduct and require that every customer, employee, agent and member of the public be treated accordingly. The Company Code of Conduct applies to all employees, but the Company’s senior financial officers are also subject to an additional code of ethics, reflecting the Company’s commitment to maintaining the highest standards of ethical conduct. In addition, the Board of Directors is subject to a Directors’ Code of Conduct.
Board oversight of ESG matters. The Board oversees Western Union’s ESG strategy development and relevant ESG matters. To assist the Board with its oversight duties:
The Corporate Governance, ESG, and Public Policy Committee is responsible for reviewing and advising the Board with respect to ESG matters related to the Company.
The Audit Committee oversees ESG internal controls and process as well as integration of ESG risks in the Company’s enterprise risk management framework.
The Compensation Committee oversees the alignment of the Company’s ESG strategy with compensation practices.
The Compliance Committee evaluates executive performance of the Company’s ESG compensation metric related to compliance.
Robust stock ownership guidelines for senior executives and directors. Robust stock ownership requirements for our senior executives and directors strongly link the interests of management and the Board with those of stockholders.
Prohibition against pledging and hedging of Company stock. The Company’s insider trading policies prohibit the Company’s executive officers and directors from pledging the Company’s securities and prohibit all employees (including executive officers) and directors from engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. Please see “Compensation of Directors—Prohibition Against Pledging and Hedging of
Regular stockholder engagement. The Company regularly seeks to engage with its stockholders to better understand their perspectives.
Annual Election of Directors
Proxy Access
Majority Vote Standard in Uncontested Elections
Stockholder Right to Call Special Meetings at 10% Ownership Threshold
No Stockholder Rights Plan (“Poison Pill”)
No Supermajority Voting Provisions in the Company’s Organizational Documents
Independent Board, 
Independent Non-Executive 
Independent Board Committees
Confidential Stockholder Voting
Board Committee Authority to Retain Independent Advisors
Robust Codes of Conduct
Board Committee Oversight of Environmental, Social, and Governance (“ESG”) Matters
Robust Stock Ownership Guidelines for Senior Executives and Directors
Prohibition Against Pledging and Hedging of Company Stock by Senior Executives and Directors
Regular Stockholder Engagement
Align 
Emphasis on future pay opportunity vs. current pay.
Mix of performance metrics.
“Clawback” policy.
Robust stock ownership guidelines.
Include ESG metrics in compensation program.
Multi-year vesting and/or performance periods for long-term incentive awards.
Independent compensation consultant 
“Double trigger” severance benefits in the event of a change-in-control.
Maximum payout caps for annual cash incentive compensation and PSUs.
Prohibition against pledging and hedging of Company securities by senior executives and directors.
No dividends or dividend equivalents are 
No service-based defined benefit pension plan.
By Tablet or Smartphone—If you are a Beneficial Holder, you may vote your shares online with your tablet or smartphone by scanning the QR code above. If you are a Registered Holder, you may vote your shares online with your tablet or smartphone by scanning the QR code on your Proxy Card. The ability to vote in this way by tablet or smartphone will expire at 11:59 p.m., Eastern Time, on May 18, 2022.
At the Annual Meeting–
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
CFO Experience
Financial Literacy
Eligible for Audit
Emerging Markets
Global Operational
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
CEO Experience
CFO Experience
Eligible for Audit
CEO Experience
Financial Literacy
Global Operational
Regulated Industry/
Emerging Markets
CEO Experience
Regulated Industry/
Financial Literacy
Global Operational
Financial Literacy
Global Operational
CEO Experience
CFO Experience
Financial Literacy
Regulated Industry/
CEO Experience
Financial Literacy
Regulated Industry/
Emerging Markets
Global Operational
CFO Experience
Financial Literacy
Eligible for Audit
Global Operational
Financial Literacy
Regulated Industry/
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
