UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.DC 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. )
Filed by the Registrant | Filed by a Party other than the Registrant |
Check the appropriate box: | |
Preliminary Proxy Statement | |
Confidential, for Use of the Commission Only (as permitted by Rule | |
Definitive Proxy Statement | |
Definitive Additional Materials | |
Soliciting Material |
ZEBRA TECHNOLOGIES CORPORATIONZebra Technologies Corporation
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required. | ||
Fee paid previously with preliminary materials. | ||
Fee computed on table | ||
March 31, 2023
On behalf of the Board of Directors, we would like to thank you for your continued investment in Zebra Technologies. It is my privilege to serve as Zebra Technologies' Lead Independent Director, transitioning from Board Chair as of March 1, 2023.
The end of 2022 marked a historic moment for Zebra Technologies with the announcement of Anders Gustafsson's retirement as Chief Executive Officer and transition to Executive Chair of the Board. Mr. Gustafsson joined Zebra as CEO in 2007 and has since transformed the Company into a market leading enterprise asset intelligence solutions provider dedicated to ensuring every front-line worker and asset at the edge is visible, connected and fully optimized.
We are excited to welcome William J. Burns as Zebra's new CEO and member of the Board of Directors. Mr. Burns brings more than 30 years of experience in the technology sector and has served as CEO at two other companies prior to joining Zebra. Mr. Burns has been an integral part of Zebra’s Executive Leadership Team for the past seven years, most recently as Chief Product & Solutions Officer. During this time, Mr. Burns has extended Zebra’s product and solutions market leadership and profitability across its core businesses while expanding into adjacent markets, delivered on the company’s Enterprise Asset Intelligence vision, and strengthened Zebra’s strategic relationships with its customers and partners. Mr. Burns has our every confidence and we wish him great success in this new chapter for Zebra Technologies.
Zebra finished a challenging 2022 with solid sales growth, profitability and free cash flow because of the resiliency and agility of our team when faced with headwinds. We took bold mitigating actions when faced with supply chain disruptions, the war in Eastern Europe and lockdown in China. We continue to execute well in a challenging macro-environment and we have always prioritized our customers' needs. Entering 2023, we are encouraged by our supply chain's performance and indications of abating headwinds.
This past June, Zebra completed its acquisition of Matrox Imaging, a proven developer of advanced machine vision components, software and systems. This acquisition further expanded Zebra's offerings in the fast-growing industrial automation space and built upon our launch of fixed industrial scanning solutions and entry into autonomous mobile robots. These new offerings will allow Zebra customers to improve productivity and quality across operations from manufacturing to warehouse workflows.
The Board is committed to strong governance that facilitates long-term value creation. We continue to prioritize engagement with our stockholders on a range of topics including governance and oversight, sustainability goal-setting and initiatives, and our thoughtful succession planning, among others. We also continue to make strides in our sustainability practices, particularly on our focus areas: human capital management, climate and resource conservation. We are proud to be recognized by the Department of Energy for best practices regarding climate scenario analysis and receive validation that our science-based targets for 2030 are in line with the Paris Climate Accord.
We would like to thank our stockholders, our employees, customers and partners for their continued support and contributions to Zebra’s success. Our future is as bright as ever. We are confident that Zebra will continue to build upon its positive momentum with the Board of Directors' active involvement and support.
Sincerely,
Michael A. Smith Independent Lead Director of the Board |
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March 31, 2023
Please join us for the Zebra Technologies Corporation 2023 Annual Meeting of Stockholders (the “Annual Meeting”) on Thursday, May 11, 2023 at 10:30 a.m., Central Time. The Annual Meeting will be conducted solely by remote communication, in a virtual only format. This decision was made to enable a greater number of stockholders to attend. You may attend the virtual Annual Meeting at www.virtualshareholdermeeting.com/ZBRA2023. Only stockholders of record as of the close of business on March 17, 2023 can participate at the Annual Meeting. Stockholders of record will need their 16-digit control number found on their proxy card, voting instruction form or notice to enter the Annual Meeting. Once admitted, stockholders of record may vote or submit questions during the Annual Meeting by typing their question into the “Ask a Question” field and clicking “Submit.” Only questions pertinent to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints. If any questions pertinent to Annual Meeting matters cannot be answered during the Annual Meeting due to time constraints, we will post and answer a representative set of these questions online at investors.zebra.com, under the Events section. The questions and answers will be available as soon as reasonably practicable after the Annual Meeting and will remain available until one week after posting.
At the Annual Meeting, stockholders will be asked to vote on each of the four proposals set forth in the Notice of Annual Meeting of Stockholders and the Proxy Statement, which describe the formal business to be conducted at the Annual Meeting and follow this letter.
Your vote on the matters to be considered at the Annual Meeting is important, regardless of the size of your holdings. Whether or not you plan to virtually view or participate in the Annual Meeting, we urge you to vote your shares as soon as possible via the Internet or by telephone. If you received a paper copy of the proxy card by mail, you may sign and return the proxy card in the envelope provided, or may request a proxy card to complete, sign, date and return by mail. By voting in advance of the Annual Meeting, you can ensure your shares will be represented and voted at the Annual Meeting, and you will spare Zebra the expense of a follow-up mailing. Even if you vote before the Annual Meeting, you may still attend the Annual Meeting via the internet at www.virtualshareholdermeeting.com/ZBRA2023 and submit questions and vote during the Annual Meeting by entering the 16-digit control number found on your proxy card.
For more information about Zebra and to take advantage of the many stockholder resources and tools available, Iencourage you to visit Zebra’s website at www.zebra.com under Investors.
Sincerely,
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William J. Burns Chief Executive Officer |
Virtual Meeting Information
MAY 11, 2023 10:30 a.m., Central Time Virtual Meeting Website: www.virtualshareholdermeeting.com/ZBRA2023 To the Stockholders of Zebra Technologies Corporation: The Annual Meeting of Stockholders of Zebra Technologies Corporation will be held at 10:30 a.m., Central Time, on Thursday, May 11, 2023. You can attend the Annual Meeting via the Internet by visiting www.virtualshareholdermeeting.com/ZBRA2023. We will have no physical location for the Annual Meeting in order to make the meeting more accessible to stockholders. The Annual Meeting will be held for the following purposes: (1) To elect four Class III directors with terms to expire in 2026; (2) To hold an advisory vote to approve the compensation of our Named Executive Officers; (3) To hold an advisory vote on the frequency of holding an advisory vote to approve the compensation of named executive officers; (4) To ratify the appointment by our Audit Committee of Ernst & Young LLP as our independent auditors for 2023; and (5) To conduct other business if properly presented. The Proxy Statement more fully describes the proposals. Only holders of record of common stock at the close of business on March 17, 2023 are entitled to vote at or otherwise participate in the Annual Meeting. We are pleased to take advantage of rules and regulations adopted by the Securities and Exchange Commission allowing companies to furnish proxy materials to their stockholders over the Internet. On March 31, 2023, we began mailing a Notice of Internet Availability of Proxy Materials to our stockholders containing instructions on how to access our 2023 Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2022, as well as instructions regarding how to receive paper copies of these documents. CristenKogl CorporateSecretary March 31, 2023 |
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Review your proxy statement and vote in one of four ways: | |||
INTERNET | BY TELEPHONE | BY MAIL | ONLINE DURING THE VIRTUAL |
Visit www.proxyvote.com or scan | Call 1-800-690-6903 | Sign, date and return your proxy card in the enclosed envelope | Visit See page |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May Our Please refer to the enclosed proxy materials or the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you. |
Table of Contents
Proxy Summary |
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Proposal |
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This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all the information that you should consider, and we encourage you to read the entire Proxy Statement before voting.
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Date: | May | |
Time: | 10:30 a.m., Central Time | |
Virtual Meeting Website: |
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Record Date: | March | |
Agenda and Voting Recommendations
Voting Matters and Recommendations
Proposal | Board Recommendation | Reasons for Recommendation | More Information |
Proposal 1 | FOR | The Board and the Nominating and Governance Committee believe our director nominees possess the skills, experience and qualifications necessary to effectively provide oversight and support management’s execution of our long-term strategic goals. | Page |
Proposal 2 | FOR | The Board and the Compensation Committee believe our executive compensation structure is aligned with our stockholders’ interests and current market practices, and that it reflects our commitment to pay for performance. | Page |
Proposal 3 | FOR | The Board believes that an annual advisory vote on the compensation of our named executive officers is the most appropriate frequency in consideration of our obligation to disclose the compensation of our named executive officers annually. | Page 85 |
Proposal4— Ratify the appointment of Ernst & Young LLP as our independent auditors for | FOR | Based on the Audit Committee’s assessment, the Board and the | Page |
As part of our efforts to continuously improve our governance practices, improve theenhance readability of our Proxy Statement and respond to stockholder feedback, we have enhancedupdated our disclosures, including our disclosuresin particular those relating to our corporate social responsibilitysustainability initiatives. This year’s key updated disclosures primarily include:
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| Acquisitions and Solutions Launches | Sustainability | Human Capital Management |
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| Employee engagement score is above industry benchmark. |
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| Recognition by Department of Energy (DOE) for best practices regarding climate scenario analysis. | Named |
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| Continue to expand inclusion network groups. Made our Inclusive Leadership Workshop mandatory. Also launched The Green Herd, our first employee network dedicated to sustainability. |
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* $100 invested on 12/31/17 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
$100 invested on 12/31/15 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 10 |
Zebra believes that strongis committed to a corporate governance practices help createstructure that creates long-term value for our stockholders.stockholders by promoting effective Board leadership, accountability and independent oversight. Our key governance practices listed below, and our polices described under Corporate Governance Policies on page 17,18, provide the framework for our corporate governance and assist the Board in fulfilling its duties to stockholders. We are committed to engaging with our stockholders to understand their views so asviews. In addition, we continue to align our policies withreview evolving market practice andin alignment with the needs of our business.
Corporate Governance Highlights |
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| Majority voting in uncontested director elections | |
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| No dual class of stock or controlling stockholder | |
Active Board refreshment, which resulted in the addition of three new directors in the last four years | Our Insider Trading Policy expressly prohibits hedging, pledging and short selling Zebra securities | ||
NEW | Separate Executive Chair and CEO roles with a Lead Independent |
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Independent standing Board committees |
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Regular executive sessions of independent directors |
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Board and committee oversight of environmental, social and governance matters |
| Clawback Policy applicable to all Section 16 Officers and | |
Annual individual director evaluations |
| Risk oversight by the | |
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| Director orientation and continuing educational programs | |
Policy on directors’ outside public company board service |
| Use of outside experts, such as independent auditors, compensation consultants and financial advisors | |
Board reviews executive succession planning and director refreshment regularly | No poison pill in place |
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In 2020,2022, as part of our efforts to understand and be responsive to the views of our stockholders, we continued our targetedrobust stockholder engagement program, which was first initiated in 2019. MembersA cross functional team from investor relations, legal, and executives along with our Independent Chair of our management team and an independent member of ourthe Board conducted outreach to our major stockholders and proxy advisory firms, and we engaged with them on a broad range of business strategy, governance, compensation, and environmental and social topics, including those listed below. For more information on our stockholder engagement program, see Stockholder Engagement on page 22.25.
Corporate Social Responsibility
Zebra’s corporate social responsibility (“CSR”)sustainability priorities support a sustainable business model and align with our values, core competencies and strategy. To ensure a sustainable business model, we embed CSR priorities in Zebra’s overall business strategy. For more information on our CSRsustainability initiatives, see Corporate Social ResponsibilitySustainability on page 23.26.
Human Capital Management |
| Driving a high-performance, inclusive and diverse culture by setting aspirational diversity goals, introducing inclusion and diversity goals for all people leaders and launching inclusion learning tools and resources as well as inclusion networks Strive to consistently be the employer of choice in the communities where we work and live |
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Climate |
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Resource Conservation |
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• Circular economy product |
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Governance |
| Board of Directors oversees risks and opportunities related to
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The Board of Directors consists of eightten directors. SevenEight of our directors are independent under NASDAQNasdaq listing requirements; the eighth director isninth and tenth directors are Zebra’s Chief Executive Officer.Officer and our Executive Chair, newly elected effective March1, 2023. Each of the director nominees currently serves as a director of Zebra. The Board believes that the current director nominees and continuing directors have an appropriate mix of knowledge, experience, skillsets, tenure skills, gender and ethnicitydiversity to effectively oversee and constructively challenge the performance of management in the execution of Zebra’s strategy.
For more information, see Election of Directors on page 27.31.
Name | Age | Director Since | Primary Occupation | Independent | Committee Memberships | Current Other Public Directorships | Age | Director Since | Primary Occupation | Independent | Committee Memberships | Current Other Public Directorships |
Class I Directors | Class I Directors | Class I Directors | ||||||||||
Chirantan “CJ” Desai | 50 | 2015 | Chief Product Officer, ServiceNow | ✔ | CC | 0 | 52 | 2015 | Chief Operating Officer, ServiceNow | CC | 0 | |
Richard L. Keyser | 78 | 2008 | Retired Chairman Emeritus, | ✔ | CC (Chair), NGC | 0 | 80 | 2008 | Retired Chairman, W.W. Grainger, Inc. | CC (Chair), | 0 | |
Ross W. Manire | 69 | 2003 | Retired President and CEO, | ✔ | AC (Chair), NGC | 1 | 71 | 2003 | Retired President and Chief Executive Officer, ExteNet Systems, Inc. | AC (Chair), | 1 | |
Class II Directors | Class II Directors | Class II Directors | ||||||||||
Nelda J. Connors | 57 | 2022 | Founder, Chairwoman and CEO, Pine Grove Holdings, LLC | AC | 3 | |||||||
Frank B. Modruson | 61 | 2014 | Former CIO, Accenture | ✔ | AC, NGC | 1 | 63 | 2014 | President of Modruson & Associates, LLC and Former CIO, Accenture | AC, NGC | 0 | |
Michael A. Smith | 66 | 1991 | Chair of the Board, Zebra Technologies, Chairman and Chief Executive Officer, FireVision LLC | ✔ | AC, CC, NGC (Chair) | 0 | 68 | 1991 | Lead Independent Director, Zebra Technologies, Chairman and Chief Executive Officer, FireVision LLC | CC, | 0 | |
Class III Directors | Class III Directors | Class III Directors | ||||||||||
William J. Burns | 55 | 2023 | Chief Executive Officer, Zebra Technologies |
| None | 0 | ||||||
Linda M. Connly | 55 | 2020 | Expert Partner, Bain & Company | ✔ | AC | 0 | 57 | 2020 | Expert Partner, Bain & Company | AC | 0 | |
Anders Gustafsson | 60 | 2007 | Chief Executive Officer, Zebra Technologies |
| None | 1 | 62 | 2007 | Executive Chair of the Board, Zebra Technologies |
| None | 1 |
Janice M. Roberts | 65 | 2013 | Partner, Benhamou Global Ventures | ✔ | CC | 2 | 67 | 2013 | Partner, Benhamou Global Ventures | CC | 1 | |
AC = Audit Committee, CC = Compensation Committee and NGC = Nominating and Governance Committee | AC = Audit Committee, CC = Compensation Committee and NGC = Nominating and Governance Committee | AC = Audit Committee, CC = Compensation Committee and NGC = Nominating and Governance Committee |
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Zebra’s Board is composed of ten highly qualified directors whose experience, skillsets, tenure and personal characteristics complement those of fellow directors to create a balanced Board with diverse viewpoints and deep expertise. For more information on Board Composition see page 32.
* One female director is also ethnically diverse.
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Compensation Program Highlights
Zebra is seeking your advisory vote to approve the compensation of our Named Executive Officers as disclosed in this Proxy Statement. InvestorsStockholders continue to be supportive of our compensation programprogram’s structure and its alignment of pay with performance. This was conveyed by 95.17%90.29% of votes cast at Zebra’s 20202022 Annual Meeting in support of say-on-pay. Our Compensation Committee believes that ourthe current structure of our compensation program adequately aligns compensation with stockholders’ long-term interests, balancing profitability, growth and growth. Following our annual review of all elements of the compensation program, our Compensation Committee electedability to maintain our program structure in 2020. However, due to the anticipated financial effects of the COVID-19 pandemic, Zebra took proactive stepsattract and implemented temporary pay reductions for our Board of Directors, Executive Officers and certain employees, which are further described under Director Compensation on page 37 and 2020 Base Salaries on page 46. We also made modifications to the measurement periods and capped the overall opportunity of the 2020 Zebra Incentive Plan due to the anticipated impacts of COVID-19, which is further described under 2020 Annual Cash Incentive Awards on page 47retain talent. For more information on Zebra’s compensation program, seeCompensation Discussion and Analysis, beginning on page 40.48.
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| We expressly forbid option and stock appreciation rights |
| We align compensation with stockholder interests by linking incentive compensation to Zebra’s overall performance |
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| We do not provide significant perquisites |
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| We do not guarantee salary increases or non-performance- based bonuses |
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| We do not offer excise tax gross-ups |
| We consider, and attempt to mitigate, risk in our compensation program |
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| Our Insider Trading Policy expressly prohibits hedging, |
| We use an independent compensation consultant |
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| We have “double-trigger” accelerated vesting of equity awards, which requires both a change in control and an involuntary termination |
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| We conduct an annual talent management review, including succession planning |
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| We have a Clawback Policy applicable to all Section 16 Officers |
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20202022 Elements of Compensation
Our Executive Officers are responsible for achievingdriving the Company’s achievement of its long-term strategic goals, and their compensation is weighted toward rewarding long-term value creation for stockholders.
Our emphasis on creating long-term stockholder value is best illustrated in the following charts, which show that long-term incentive compensation accounts for the largest percentage of the Named Executive Officers’ overall target compensation for 2020.2022. In addition, a majority of the Named Executive Officers’ compensation — consisting of target long-term and target short-term incentive compensation combined — is performance-based or “at risk.”
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We are providing you with these proxy materials in connection with the solicitation by Zebra’s Board of Directors of proxies for our 20212023 Annual Meeting of Stockholders. We will hold the virtual Annual Meeting at 10:30a.m., Central Time, on Friday,Thursday, May 14, 2021.11,2023. The Annual Meeting will be conducted solely by remote communication, in a virtual only format, which can be accessed at http://www.virtualshareholdermeeting.com/ZBRA2021.ThisdecisionwasmadeZBRA2023, in lightordertoenableagreaternumber of concernsrelatedstockholders to thespreadofCOVID-19andtosupportthehealthandwellbeingoftheCompany’sstockholders,employeesanddirectors.attend. Stockholders will not be able to attend the Annual Meeting in person.
In accordance with rules and regulations of the Securities and Exchange Commission, instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing the proxy materials, which include this Proxy Statement and the accompanying proxy card, notice of meeting, and Annual Report to stockholders, to our stockholders over the Internet, unless otherwise instructed by the stockholder. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials. The Notice of Internet Availability of Proxy Materials was first mailed on or before April 1, 2021March 31, 2023 to all stockholders of record as of March 19, 2021,17, 2023, the record date.
This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote and information about voting procedures. As used herein, “we,” “us,” “our,” “Zebra” or the “Company” refers to Zebra Technologies Corporation.
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Zebra believes that strong corporate governance practices help create long-term value for our stockholders. Our key governance practices, detailed in the Proxy Summary on page 10,8, and policies, listed below, provide the framework for our corporate governance and assist the Board in fulfilling its duties to stockholders. The Board reviews (and if necessary, modifies) the below policies periodically to ensure they reflect sound corporate governance practices.
Policy | Description | |
Corporate Governance Guidelines | Addresses matters relating to the composition and operations of the Board of Directors and the committees of the Board. The Corporate Governance Guidelines are reviewed annually by the Nominating and Governance Committee and were last amended in | |
Code of Conduct | Applies to directors, Executive Officers and all employees, and addresses Company policies and procedures intended to promote ethical and lawful behavior. All employees are required to complete annual compliance training on our Code of Conduct. | |
Code of Ethics for Senior Financial Officers | Applies to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, and addresses matters such as honest and ethical conduct and compliance with laws and regulations, particularly in relation to financial records and periodic reports. Our Code of Ethics for Senior Financial Officers | |
Related Party Transactions Policy | Applies to directors and Executive Officers, and establishes Zebra’s processes for identifying, approving or ratifying, monitoring and disclosing Related Party Transactions. See Related Party Transactions on page | |
Interlocking Directorate Policy | Applies to directors and Executive Officers, and establishes Zebra’s processes for identifying, approving and monitoring Zebra’s directors’ and Executive Officers’ simultaneous service as a director or Executive Officer at two entities to ensure compliance with anti-trust regulations. Our Interlocking Directorate Policy was adopted in February 2020. | |
Prohibition against hedging, pledging and short selling Zebra securities | Our Insider Trading Policy prohibits our directors, Executive Officers, employees and their family members who share their | |
Clawback Policy | Applies to Section 16 Officers and provides for the recoupment of equity awards and cash incentive payments in the event of either a financial restatement resulting from executive misconduct or gross negligence, or where executive misconduct results, or could result, in termination for cause, including a willful violation of any material obligation under an employment, confidentiality, non-solicitation, non-competition or any similar type of agreement. Our Clawback Policy was adopted in March 2020. |
Zebra’s governance documents, including the charters of the Audit, Compensation and Nominating and Governance committees of the Board, are available on Zebra’s website at http://www.zebra.com under “Investors-Governance-Governance Documents.”
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Selecting Nominees for the Board
How We Find Potential Directors
The Nominating and Governance Committee of our Board of Directors is responsible for identifying individuals who are qualified to serve as directors and for recommending candidates.candidates to the Board. The Nominating and Governance Committee relies on several sources to identify potential directors, including referrals from current Board members and management, suggestions from stockholders, and individual self-nominations. From time to time, the Nominating and Governance Committee engages aself-nominations, search firm to identify prospective candidates for directorfirms as well as organizations that provide diverse candidates.
Consideration of potential Board members typically involves a robust diligence process, including a series of internal discussions, review of the candidates’ qualifications and interviews with promising candidates. Candidates from all sources are evaluated in the same way and are subject to the same standards.
What We Look for in Potential Directors
We are committed to ensuring that the Board is comprised of directors who collectively provide a diverse breadth of experience, knowledge and skillsskillsets to represent the interests of stockholders and provide effective oversight and support management’s execution of our long-term strategy. The Nominating and Governance Committee establishes and periodically reviews criteria for Board membership.membership, as further discussed in Board Composition on page 32. We believe that Board candidates must exhibit certain minimum characteristics, such as: sound judgment and an even temperament, high ethical standards and a healthy view of the relative responsibilities of Board members and management. In addition, our Board members should be independent thinkers, articulate and intelligent, and be able to commit sufficient time and attention to Zebra’s business. The Nominating and Governance Committee also examinesconsiders the independence and diversity of race, ethnicity, gender, nationality, age, cultural background and professional experience of Board candidates. The Nominating and Governance Committee andcandidates, as well as the independence of Board as a whole seek and support the candidacy for Board membership of qualified individuals who would increase the diversity of the Board.candidates.
Each year the Nominating and Governance Committee reviews the performance of current directors. When deciding whether to nominate an existing director for re-election, the Nominating and Governance Committee will confirm that the director meets the criteriacharacteristics described above, but also will consider matters such as whether the director:
represents stockholder interests in deliberations before the Board deliberations,and its committees,
attends meetings regularly,
keeps abreast of corporateZebra’s business and strategy, and the industry changes,in general,
prepares effectively for meetings with Board members and senior management,
communicates effectively at Board and committee meetings and with senior management,
supports the deliberative process as a team member (e.g.(e.g., is courteous, respectful and constructive),
challenges the Board and senior management to set and achieve goals, and
possesses special characteristics that contribute to effectiveness as a Board member.
The Nominating and Governance Committee seeks to have a Board composed of directors with diverse backgrounds and qualifications that providecreate a composite mix of experience, knowledge and skillsskillsets that will allow the Board to fulfill its responsibilities. Although the Board does not have a specific diversity policy, the Nominating and Governance Committee Charter includes a stated commitment to diversity, providing that the Nominating and Governance Committee will consider diversity of race, ethnicity, gender, nationality, age, cultural background, and professional experience and Board tenure in evaluating Board candidates and in nominating existing directors for re-election. The Board views diversity as an important factor because the Board believes that a variety of points of view contribute to a more effective decision-making process. When recommending Board candidates for election or re-election by stockholders, the Board and Nominating and Governance Committee focus on how the experience and skillset of each Board candidate progresses the Company’s strategic objectives and complements those of fellow candidates and members of the Board to create a balanced Board with diverse viewpoints and deep expertise. The Board does not endorse a mandatory retirement age, term limits or automatic re-nomination to serve as a director.
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 19 |
The Board believes that Board and committee self-evaluations, as well as individual director evaluations, are the most effective means of assisting in determining whether the Board and its committees are operating effectively and whether a director should continue to serve in that capacity. Under the direction of the Nominating and Governance Committee, the Board and the committees of the Board conduct annual self-evaluations. In addition, under the direction of the Nominating and Governance Committee, the Chair of the BoardLead Independent Director coordinates annual self-evaluations of the individual directors of the Board.
These assessments typically consist of the directors preparing a self-assessment and the Chair of the BoardLead Independent Director conducting one-on-one interviews with each director and reporting on the process to the Nominating and Governance Committee. The Chair of the BoardLead Independent Director reports to the full Board on the process and discussions as they relate to the Board and its committees. The Board assesses its contribution as a whole and the individual committees’ contributions, as compared to their respective charters, and identifies areas in which improvements may be made. The Chair of the BoardLead Independent Director reports on the process to the Nominating and Governance Committee and the Nominating and Governance Committee determines whether re-election of incumbent directors is appropriate. The Nominating and Governance Committee and the Chair of the BoardLead Independent Director periodically review the evaluation processes of the Board and its committees as well as the evaluation process of the individual directors. In addition, the Chair of the BoardLead Independent Director encourages directors to provide feedback outside of the self-evaluation process. Examples of changes made in response to the self-evaluation process over the last few years include:
prioritizing diversity in our director searches,
adding additional executive sessions of the Board in which the independent directors meet without management or the chair present,
allocating more Board meeting time to strategy and talent,
increasing our directors’ exposure to employees below the executive officer level by meeting with these employees outside of Board and committee meetings, and
improving our Board onboarding process and ensuring our new directors are informed about Zebra’s business, industry, strategy, corporate governance practices and the roles and responsibilities of Zebra’s directors. See Director Onboarding and Development on page 22 for additional information.
The results of the 2022 Board and committee self-evaluations and individual director evaluations confirmed the Board’s belief that the Board and its committees are currently operating effectively.
Under our Corporate Governance Guidelines and NASDAQNasdaq listing rules, a majority of our directors must be independent. Under NASDAQNasdaq listing rules, a director does not qualify as independent unless the Board affirmatively determines that the director has no relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In February 2021,2023, the Nominating and Governance Committee reviewed the independence of all Zebra directors and determined, and the Board formally approved, that each director, except Anders Gustafsson,William J. Burns, our Chief Executive Officer, and Anders Gustafsson, our Executive Chair of the Board, is independent under NASDAQNasdaq listing rules, and that no director other than Mr. Gustafsson or Mr.Burns has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Under our Corporate Governance Guidelines, annually, the Board may be ledshall appoint a chair of the Board from among its members, as determined from time to time by the Board based upon the Board’s assessment at the time of the best governance for Zebra and the Board. If the individual appointed to serve as chair is not an independent Chair, or the roles of the Chair and Chief Executive Officer may be combined. When the Chief Executive Officer also serves as the Chair, the Corporate Governance Guidelines provide thatdirector, the independent directors mustshall also appoint an independent lead director. Thea Lead Independent Director. With the recent CEO succession, the Board has determined that it is in the best interest of the Company at this time to separate the positions of the Chair and Chiefselected Anders Gustafsson, Zebra’s former CEO, as Executive Officer. The Board believes that separating the positions of the Chair and Chief Executive Officer allows our Chief Executive Officer to focus on facilitating strong executive leadership as well as the day-to-day operational, financial and performance matters necessary to operate Zebra’s business while allowing the Chair to focus on leading the Board in providing independent oversight of management.
Michael Smith has served as an independent director since 1991 and as our independent Chair of the Board. Over his tenure as CEO, Mr. Gustafsson has created tremendous value for stockholders and has established himself as a Company leader for stakeholders, making him an invaluable leader for the Board since 2007.at this time. Maintaining separate CEO and chair roles allows for the Company to benefit from Mr. Smith provides independent leadership that reflects his experience with Zebra and the operation and historyGustafsson’s extensive knowledge of the Board. business and industry and to meet governance best practices.
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In his capacity as Executive Chair of the Board, Mr. Smith’sGustafsson’s duties include, but are not limited to, the following:
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Working with the Nominating and Governance Committee and Lead Independent Director with respect to oversight of corporate governance matters; assignment of directors to Board committees and assignment of committee chairs; oversight of continuing education for directors; as well as recruitment, selection and orientation of new Board members | Acting as a liaison between management and the Board |
With the appointment of Anders Gustafsson as Executive Chair, the Board has determined that it is in the best interest of the Company at this time to also appoint a lead independent director. The appointment of a lead independent director ensures that the independent directors continue to have robust leadership in the boardroom. Michael Smith has been appointed as the Lead Independent Director effective March 1, 2023. Mr. Smith has served as an independent director since 1991 and served as our independent Chair of the Board from 2007 to 2023 when Mr. Gustafsson was appointed as Executive Chair. Mr. Smith provides independent leadership that reflects his experience with Zebra and the operation and history of the Board. In his capacity as Lead Independent Director, Mr. Smith’s duties include, but are not limited to, the following:
Calling meetings of independent directors, executive sessions, Board meetings and meetings with individual directors and members of management | Facilitating discussion among independent directors on key issues and concerns outside of full board meetings, including contributing to the oversight of the Chief Executive Officer and management succession planning | |
Serving as liaison between independent directors, the Executive Chair and other members of management | Encouraging director participation at meetings and promotes effective communication on developments occurring between Board meetings | |
Briefing the Chief Executive Officer on issues arising from executive sessions | Making himself available to major stakeholders if requested and where appropriate | |
Collaborating with the Executive Chair and CEO to review and approve Board agendas and relevant information provided to the Board in collaboration with the Executive Chair and CEO | Leading Board meetings when the Executive Chair is not present and providing feedback to Executive Chair and management from any meetings of independent directors, when appropriate | |
Leading the independent Directors’ evaluation of the CEO and Executive Chair’s effectiveness, including meeting with each independent director and gathering feedback | Presiding at all executive sessions of the independent directors | |
Coordinating the Board’s, committees’ and individual director’s self-assessments and evaluation processes, as well as recruitment, selection and orientation of new Board members | Providing advice and counsel to the Executive Chair and Chief Executive Officer |
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The Board and its committees regularly meet in executive session with and without the Executive Chair and/or Chief Executive Officer present. No formal action of the Board is taken at executive sessions, although the independent directors other than CEO may subsequently recommend matters for consideration by the full Board. The independent directors other than the CEO discuss, among other things, priorities for upcoming sessions, considerations for the Annual Meeting of Stockholders, the performance evaluation of the Chief Executive Officer, the compensation of the Chief Executive Officer and other members of senior management, talent management, development and development,succession planning, updates on Zebra’s business, risk management activities and strategies and management’s strategies for achieving Zebra’s long-term strategic goals.goals, including review of merger and acquisition proposals. The independent directors other than the CEO may invite guest attendees, such as management, other employeesor independent consultants, when appropriate, for the purpose of providing the independent directors other than the CEO with information or counsel on specific matters.
During 2020,2022, our Board of Directors met 10eight times. All directors attended 75 percent or more of the meetings of our Board and the standing committees on which they served in 2020.2022. Barring unforeseen circumstances, Zebra expects all directors to attend noticed meetings of the Board and the standing committees on which they serve as well as the Annual Meeting of Stockholders. The full Board attended the 20202022 Annual Meeting.
Limitation on Service on Other Boards
The Corporate Governance Guidelines limit the number of other publicly traded for-profit boards on which a non-employee director may serve to four. Employee directors and Executive Officers, including the Chief Executive Officer, may serve on the board of one publicly traded for-profit entity other than Zebra’s Board,Board. Prior to accepting an invitation to serve on another public company’s board, directors must inform and receive approval from the chair of Zebra’s Board. In approving such board service, the chair considers whether the director’s service on another public company’s board complies with Zebra’s Corporate Governance Guidelines, creates a conflict of interest, including an interlocking directorate, or whether such board service would otherwise interfere with such director’s service as approveda director of Zebra. A director employed by Zebra solely in the capacity of Executive Chair may serve on the board of directors of up to two other publicly traded for-profit entities, subject to approval from the Board.lead independent director. These policies and directors’ compliance with these policies are reviewed at least annually and all directors comply with these limitations.
Director Onboarding and Development
The Nominating and Governance Committee of the Board oversees the onboarding of new directors and continuing director education. Zebra provides robust orientation and on-boarding to new directors that are designed to familiarize them with Zebra and our culture, industry, long-term strategic vision,strategy and operations, including talent development and strategy; financial statements, internal controls and policies,related policies; corporate governance practicespractices; as well as the roleroles and responsibilityresponsibilities of a director and of the Board generally. Zebra’s orientation program includes meetings with the Company’s senior management, invitations to attend the meetings of each committee of the Board and comprehensive background materials, including our governance policies.materials.
Zebra also values and strongly encourages continuing director education. Zebra provides the Board and its committeesdirectors with various forms of training, education and business-specific learning opportunities throughout the year, including Company site visits and site visits to major customers, as appropriate; briefings on business updates; and presentations to the Board and its committees on Zebra’s business (including specific updates on our products, solutions and services), industry and governance trends, regulatory developments and best practices. We regularly provide the Board and its committees with other educational materials on topics relevant to Zebra. Directors are also strongly encouraged to attend additional continuing education programs designed to enhance the performance of individual directors and the Board as a whole. Zebra reimburses the costs of continuing director education programs hostedprovided by third parties.
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Our Board acts as an advisor and counselor to our senior management and monitors their performance. A primary responsibility of our Board is to plan for the succession of the Chief Executive Officer as well as other senior management positions. Management reports regularly to our Board on Zebra’s program for succession and management development, including Zebra’s performance management and talent management processes. Our Board also becomes familiar with potential successors for senior management positions through various means, including, but not limited to, performance evaluations and talent reviews, Board and committee presentations and regular informal meetings. These development and succession planning activities resulted in the successful internal promotion of William J. Burns to Chief Executive Officer in 2023, Robert Armstrong to Chief Marketing Officer in 2023, Joseph White to Chief Product & Solutions Officer in 2023, Tamara Froese to Chief Supply Chain Officer in 2022, and Nathan Winters to Chief Financial Officer over the last year.in early 2021.
The goal of our risk-management program is to provide reasonable assurance that a controllable risk will not have a material or significant adverse effect on Zebra.
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The Audit Committee, Compensation Committee and Nominating and Governance Committee report regularly to the Board regarding their oversight roles, and the Board regularly discusses significant risks facing Zebra. Management categorizes identified risks for more efficient analysis as follows:evaluates risk from these six distinct but overlapping risk areas:
market risks include geo-political, economic environment, competitive landscape, disruptive technologies, insurance and currency/ foreign exchange rates;
strategic risks include succession planning, corporate governance, human capital management, mergers and acquisitions, business continuity and strategic vision;
operational risks include product & solutions development, procurement, manufacturing, logistics, distribution, sales, service execution, environmental, sustainability and workplace safety;
reporting risks include tax, accounting and financial reporting, liquidity, sustainability reporting, and risks surrounding information technology governance, infrastructure and application management;
security and privacy risks include cybersecurity, Zebra product and software security, data privacy and physical security; and
legal and compliance risks include international trade, anti-bribery, product compliance, intellectual property, international laws and regulations and litigation.
With the assistance of Internal Audit, managementManagement identifies top risks affecting Zebra and assesses these identified risks by looking at the potential impact on Zebra, the likelihood of occurrence and Zebra’s level of risk exposure. Management cannot control market risks like general economic conditions, but these risks are evaluated against Zebra’s activities to manage our exposure.
Zebra’s Audit Committee is responsible for risk oversight related to cybersecurity. In connection with this oversight, the Audit Committee monitors the quality and effectiveness of Zebra’s cybersecurity program covering security of its internal information technology systems and its products and servicessolutions as well as Zebra’s cyber incident response plan and resources. Further, Zebra has a robust information security management system supported by a comprehensive set of policies that directly align with ISO27001 and are supported by SOC2 reports and external ISO 27001:2013 certifications for certain parts of our business. Management also briefs the Audit Committee on cybersecurity matters quarterly and the full Board as necessary. Zebra has a documented policy for timely communication to the Audit Committee for any consequential security incident. As part of Zebra’s cybersecurity program, Zebra conducts periodic training about cybersecurity with employees and the Board. This training includes annual training on general cybersecurity concepts, along with more frequent educational opportunities that include real-life simulation and/or “tabletop exercises.” Zebra also conducts an annual privacy and security summit with key internal stakeholders that involves training and information sessions conducted by employees and by third parties. Additionally, cybersecurity and privacy considerations are a key part of our product design, and we regularly stress-test for security vulnerabilities leveraging internal and external resources.
Risks arising out of Zebra’s compensation policies and practices may, depending on the actions or behavior encouraged, be categorized as strategic, operational, reporting, security and privacy or legal and compliance risks. Management conducts an annual assessment of the risks arising out of Zebra’s compensation policies and practices. Management reviews each significant element of compensation for the purpose of determining whether that element—including any related performance goals and targets—encourages identifiable risk-taking behavior and whether any identified risks could have a material adverse effect on Zebra. As part of this review, management considers whether our compensation plan isplans are designed to mitigate or cap risk, including features such as compensation caps under the Zebra Incentive Plan. In February 2020,2022, management reviewed base salaries, the 20202022 Zebra Incentive Plan and equity awards granted under the 2015 Long-Term Incentive Plan and 2018 Long-Term Incentive Plan. Based on this review, management prepared a report and discussed with the Compensation Committee its determination that our policies and practices are not reasonably likely to have a material adverse effect on Zebra.
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Management and Oversight of Risks Resulting from the COVID-19 PandemicBack to Contents
In addition to our regular risk management practices, in 2020, Zebra’s management executed on our business continuity plans and the Board focused on overseeing risk management associated with the Company’s response to the COVID-19 pandemic. Zebra’s activities included mitigating operational, employee, health and safety, economic and other risks to our business associated with COVID-19. Management formed a cross-functional team to continuously monitor COVID-19 developments, assess the impacts on Zebra’s business and provided regular briefings to the Board. Through regular briefings from management, the Board actively engaged in overseeing Zebra’s response to COVID-19. The Board monitored the impact on Zebra’s financial position and operations, and considered the implementation of Zebra’s business continuity plan along with the nature and adequacy of Zebra’s responses to COVID-19, including, but not limited to, health safeguards, employee wellbeing and support for our customers and other stakeholders. The Board continues to work closely with management on COVID-19 related risks and to oversee the development and implementation of business continuity plans and risk mitigation strategies.
Our stockholders’ insights and feedback are important elements of our Board and management’s decision-making process. In 2020, as partThroughout the year, members of our efforts to continuously improve our governance practices, we continued our targetedmanagement and the Board seek stockholder engagement programfeedback to obtain a better understanding of our stockholders’ views ofviews.
In 2022, we continued our business strategy, governance, compensation and sustainability practices.
Members of our senior management and Board reachedrobust stockholder engagement program by reaching out to stockholders who in the aggregate hold approximately 45%held greater than 50% of our stock outstanding. Of the stockholders who accepted our engagement invitation (holding approximately 20%outstanding stock. Members of our stock outstanding),senior management and Chair of the Board ultimately engaged with stockholders representing approximately 30% of our outstanding stock. In these meetings, we discussed:
Zebra’s responsegeneral updates to the COVID-19 pandemic and its impact on ourZebra’s business and operations;execution of our strategy;
progress on Zebra’s environmental and social initiatives and related disclosures, including our diversity and inclusion initiatives and programs, human capital management efforts and diversitydisclosures, carbon emissions disclosures, and inclusion initiatives;chemical safety disclosures;
our governance practices, including board refreshment and changes we made in 2020, including enhancements to our disclosures;diversity; and
compensation practices, including changes we made dueconsideration of sustainability metrics as part of incentive compensation.
In these discussions, several common themes emerged:
We have continued to receive positive feedback on the anticipated financial effects of COVID-19.
Investors appreciated whatwork we have done to position our business in lightfor success and stockholders were pleased with our operational execution to date;
Stockholders appreciated the depth of COVID-19 as well asdisclosure on environmental and social topics, and were pleased with how Zebra has prioritized the healthour initiatives and safety ofprogress towards our employees, which is further described in the Letter from the Chair as well as Key Executive Compensation Decisions in 2020 on page 46. We discussed the evolution of our governance practices with the growth of the Company, and investorscommitments;
Stockholders expressed that they were pleased with the progress we have made on Board and committee refreshment and Board diversity. Our investors were supportive of our approachdiversity and encouraged us to environmental and social initiatives, with the expectation of our continued progress in advancing our efforts. Investors continue to bring diverse perspectives into the boardroom; and
Stockholders shared their views on best practices on executive compensation. Stockholders continue to be generally
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supportive of our compensation program’s structure and its alignment with our strategy. Lastly, we discussedstrategy, as well as Zebra’s decision in 2021 to eliminate the use of stock appreciation rights and to increase the mix of performance-vested restricted stock to 60% of equity awarded to Executive Officers in our rationale behind COVID-19 related salary reductions for employees and cash retainer reductions for non-executive directors, which arelong-term equity compensation program as further discussed under Director Compensationin 2022 Long-Term Equity Incentive Awards on page 37 and 2020 Base Salaries on page 46.58.
Through our engagement efforts, we were able to gain valuable feedback that has helped to inform our business practices and strategic decision making. All feedback was reviewed and discussed with the Nominating and Governance Committee, and the Nominating and Governance Committee reported on such feedback to the full Board. We intend to continue our stockholder outreach program to evolve our practices to best meet the needs of the Company and its stakeholders.
Corporate Social Responsibility
At Zebra, as a responsible corporate citizen, we are committed to a sustainable business that will benefit our stakeholders. We are focused on advancing our efforts across human capital management, climate and resource conservation, with objectives that align with our business model and strategy. Additional information on our corporate social responsibility (“CSR”)sustainability initiatives is available on Zebra’s website at http://www.zebra.com under “Corporate Social Responsibility.”
Our Board of Directors oversees risks and opportunities related to Zebra’s sustainability initiatives as well as related disclosures. Zebra has established a cross-functional Sustainability Council with executive oversight to advance our sustainability initiatives and reporting. Our Sustainability Council provides sustainability program oversight, coordination of goals, and ensures accurate and centralized internal and external reporting. The Sustainability Council reports to Zebra’s Board quarterly on our sustainability initiatives and related reporting.
We are a member of the Responsible Business Alliance, formerly known as Electronic Industry Citizenship Coalition. We deploy responsible sourcing management programs related to supplier engagement, awareness and training, human capital, and conflict minerals. Zebra performs onsite audits of our Tier I manufacturers regularly and engages strategic Tier II component suppliers in third-party validated assessments (EcoVadis). Zebra conducts regular management reviews with suppliers to monitor performance of its responsible sourcing management programs.
Zebra does not have a political action committee and typically does not endorse political candidates or make political contributions. Zebra’s Code of Conduct requires that any Company contributions be pre-approved by our Chief Legal Officer, General Counsel & Corporate Secretary.
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Culture & Development
Zebra’s human capital management initiatives include, but are not limitedaim to cultivatingcultivate a high-performance culture that is inclusive and diverse to consistently beand positions Zebra as the employer of choice in the communities where we work and live. Zebra’s Sustainability Council includes updates on Zebra’s human capital management initiatives and related disclosures in its quarterly sustainability report to the Board, including employee inclusion and diversity, employee benefits and training, and corporate philanthropy and volunteerism. In addition, management annually reports to the Board and the Compensation Committee on the performance, talent management, and succession planning of our senior management.
We believe that our strong Company culture is a key enabler of our success. The values of accountability, integrity, teamwork, agility, and innovation are central to our culture and how we operate and work together. We take proactive steps to ensure that this culture continues to permeate throughout our organization. Employee engagement within the Company is consistently high with the most recent employee engagement survey results scoring above relevant benchmarks for technology companies. Our flexible work model and various employee health and well-being programs bolster our employee engagement and relations. We consider our relations with our employees to be very good. In addition, we believe our compensation structure aligns with our stockholders’ long-term interests by balancing profitability and growth, as well as current market practices, and reflects the Company’s commitment to pay for performance.
We provide amplemany employee development opportunities, starting with our robust onboarding process. Our Zebra Education Network, an online learning platform, offers a wide variety of learning and development resources such as formal learning courses, cross-functional development experiences as well as tools for mentoring and career shadowing. We also offer annual training and certification programs. Additionally, on an annual basis, we conduct a robustcomprehensive talent review to assess our leadership pipeline and align onidentify the skills we need to proactively develop in our employees for the future success of our Company.future. This annual exercise is complemented by quarterly sessions with management to ensure we are making progress toward our critical talent development efforts throughout the year.
Diversity & Inclusion
We believe a diverse workforce and inclusive workplace contributes to our strong Company culture, where all employees are seen, heard, valued and respected. Our culture is deeply embedded within our Inclusion and Diversity Vision. Our Inclusion and Diversity Council provides governance around this framework and reviews our progress in these areas. We continue to encourage joint accountability for an inclusive culture fosterthrough both individual performance goals, and our innovation and enhance our differentiation as an employer.Company-wide performance management process. We expanded ourencourage employees to champion Inclusion & Diversity, programwork in 2020 after formalizing it in 2018. In 2020, we also launched ourtheir community, and exchange ideas with customers to further their personal development.
Our Employee Resources Groups, (internally recognized as Inclusion & Diversity Advisory Council, comprised of senior management andNetworks), are employee-driven, executive sponsored communities which foster a more inclusive workplace by bringing together employees from across the organizationbusiness to overseeempower, support and learn from each other. The inclusion networks promote collaboration and host productive dialogue to help all Zebras understand the unique needs of our strategy and champion our efforts. In addition,diverse employee populations. Currently at Zebra, we have a number of employee-ledeight inclusion groups, including thenetworks: Women’s Inclusion Network (WIN), the LGBTQ+ group called ZEAL (ZebraZebra Equality Alliance)Alliance (ZEAL), the Veterans group called VETZ, the HispanicZebra Veteran’s Inclusion Network called UNIDOZ,(VETZ), Zebras of African Descent (ZAD), Zebra Hispanic/Latinx Inclusion Network (UNIDOS), Zebras of All Abilities (ZoAA), Zebra’s Early Career Inclusion Network (EDGE), and Zebra Asian Inclusion Network (A2Z). In 2022, we launched The Green Herd employee network to support grassroot sustainability efforts, inspire a conversation mindset at each Zebra site, and support and develop focus areas for Inclusionactive employee engagement across the globe.
We have established talent acquisition partnerships with organizations such as Society of Women Engineers (SWE), National Society of Black Engineers (NSBE), Disability:IN, Hispanic Alliance for Career Enhancement (HACE), Hiring our Heroes (HOH), Out in STEM (oSTEM), as well as Hispanic Serving Institutions (HSIs) to enhance our recruitment efforts and Accessibility (ZoAA)deepen our partnership with diverse talent. In addition to external outreach, we provide a variety of training including unconscious bias awareness for all employees, interviewing bias awareness training for hiring managers, and EDGE (Empowering Dynamic Generational Employees), which isa mandatory Inclusive Leadership workshop for all people leaders. There are additional diversity and inclusion learning tools and resources available for all Zebras, including discussion forums and on-demand learning geared towards our Millennial and Gen Z early career professionals. Each group is sponsored by one or more membersspecifically toward focusing on the development of our senior management. We are proud todiverse talent. Additionally, we have been recently recognized as a top workplace by a number of organizations, including Forbes, FastCompany, Computerworldlaunched employee development programs with external coaching and Crain’s.partnered with CEO Action’s Executive Level Mentoring Initiative.
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Zebra’s climate initiatives include, but are not limitedfocused on reducing carbon emissions. In our operations, we are pursuing clean energy sourcing projects and energy reduction initiatives, while collaborating with suppliers and customers to reduce carbon emissions throughout our value chain. We joined the U.S. Department of Energy’s (“DOE”) Better Climate Challenge to significantly reduce carbon emissions. Given the high degree of complexity associated with long-term climate-related risk scenario analysis, Zebra collaborated with scientists at the DOE to gain better insights and understanding of climate-related risks over the long-term. A detailed disclosure of the collaboration and results of the climate scenario analysis are posted on the DOE’s website. We also committed to energy intensity reduction at Zebra sites in partnership with the U.S. Department of EnergyDOE’s Better Plants program and a commitment to pursue science-based targets for carbon reduction across all operations and the supply chain.
Zebra recentlyprogram. In addition, we joined the Science Based Targets initiative, a coalition formed by the Carbon Disclosure Project (“CDP”), the United Nations Global Compact, the World Resources Institute (“WRI”) and the World Wide Fund for Nature (“WWF”)U.S. Environmental Protection Agency’s SmartWay program to define and promotedrive best practices in science-based target settingreducing transportation-related carbon emissions. Zebra’s Sustainability Council includes updates on Zebra’s climate initiatives and aidrelated disclosures in the transitionits quarterly CSR report to the Board, and also informs the Board of any climate-related risks.
Zebra’s commitment includes a 50% reduction in absolute scopes 1 and 2 greenhouse gas (GHG) emissions by 2030 from its 2020 baseline. The company has also committed to reduce absolute scope 3 GHG emissions from purchased goods and services and the use of sold products by 15% within the same timeframe.
The targets covering GHG emissions from Zebra’s operations (scopes 1 and 2) are consistent with reductions required to keep warming to 1.5°C, the most ambitious goal of the Paris Agreement. Zebra’s emissions target from its value chain (scope 3) meets the SBTi’s criteria for ambitious value chain goals, in line with current best practice.
Zebra’s low-carbon economy.
Zebra will be significantly enhancingtransition plan includes supplier engagement to reduce emissions related to purchased goods, product innovation to reduce energy during customer use, and its reportingpartnership with the DOE’s Better Climate Initiative for technical assistance on carbon emissions later this year along with identifying climate-related risks and opportunities.its science-based targets.
Zebra’s resource conservation initiatives include, but are not limited to, sustainable product design, eco-packaging, waste reduction, and circular economy product innovation with certified refurbished devices, eco-packaging and sustainable product design.devices. We have initiatives to address landfill reduction, sustainable products and packaging, as well as to evolve our circular economy offerings with certified refurbished products for rentalreuse and reuse.rental. Zebra’s Sustainability Council includes updates on Zebra’s resource conservation initiatives and related disclosure in its quarterly sustainability report to the Board, and also informs the Board of any risks related to resource conservation.
Zebra established aZebra’s Green Product Council in 2020helps to drive sustainable products and packaging initiatives. We utilize Lean Six Sigma tools to jointly develop manufacturing processes with our suppliers and drive continual improvement through smart digitization to reduce both waste and cost.
Through detailed product life cycle analysis, we can understand the environmental impacts of our solutions from supplier sourcing through to production and customer use. We also:
CSR GovernanceUse full product formulation disclosure data to ensure compliance.
Proactively restrict substances of future concern.
Drive material substitutions to further product differentiation and eco-labeling opportunities.
Our Board of Directors oversees risks and opportunities relatedholistic approach to corporate sustainability. Zebra has established a cross-functional Sustainability Council with executive sponsorship to advance our efforts, providing regular updatesproduct design led to the Board. The newly-created positionindustry’s first compostable print cartridges from potato starch. We launched this product for the home office market in 2021.
In addition, the rugged design of Director,Zebra’s purpose-built enterprise-grade devices and our bundled service and security plans allow enterprise customers to extend the lifecycle of their devices, while our Circular Economy program facilitates refurbishment and reuse of our mobile computers. In 2021, the BusinessIntelligenceGroup recognized the Zebra Circular Economy Program with a Sustainability & Social Responsibility provides program oversight and consolidated reporting to stakeholders.
We are a memberService of the Responsible Business Alliance, formerly known as Electronic Industry Citizenship Coalition. We have ongoing programs to ensure responsible sourcing, focusing on supplier engagement, training, awareness, human capital management and conflict minerals due diligence compliance programs. Zebra performs rigorous onsite audits of our Tier I suppliers on a routine basis and Tier II suppliers on an ad hoc basis. Zebra’s supply chain team also holds regular reviews with suppliers to monitor performance.Year award.
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In May 2021, we updated our Stock Ownership Guidelines to increase the Chief Executive Officer’s multiple of pay requirement from 5x to 6x annual base salary, to remove the number of shares requirement so that stock ownership is measured as a multiple of pay, and to account for Executive Officer title changes. Zebra’s Stock Ownership Guidelines for Executive Officers and non-employee directors impose the following “multiple of pay” or “number of shares” stock ownership requirements:
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Executive Vice President Executive Officers | 4x annual base salary |
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Non-employee directors and covered Executives have five years after becoming subject to the Stock Ownership Guidelines to satisfy the applicable threshold ownership level. Until that ownership requirement is attained, non-employee directors and covered Executives must retain 50% of their after-tax shares acquired upon exercise or vesting of an equity award. The Stock Ownership Guidelines are available on our website at http://www.zebra.com under “Investors-Governance-Governance Documents.”
In February 2021,2023, the Compensation Committee reviewed compliance with the Stock Ownership Guidelines as of December 31, 20202022 for all incumbent non-employee directors and Executive Officers. EachExcept for Nelda Connors (who became a director in February 2022) and Tamara Froese (who became an executive officer in November 2022), each of Zebra’s Executive Officers and non-employee directors satisfied the applicable stock ownership level with the exception of Ms. Connly, who was elected to Zebra’s Board in May 2020. All of Zebra’s Executive Officers satisfied the applicable stock ownership level.
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In October 2019, the Audit Committee adopted a revised Related Party Transactions Policy that aligns with current best practices, tracks the language of applicable regulations and clarifies the previous policy. The Related Party TransactionTransactions Policy applies to any transaction where Zebra is a participant, the aggregate amount involved may exceed $120,000, and a related party has a direct or indirect material interest. For this purpose, a “related party” is any director, executive officer, any beneficial owners of five percent or more of Zebra’s voting securities, and their immediate family members, as well as entities in which a related party is a partner or has a 10%5% or greater beneficial interest. Zebra’s Related Party Transactions Policy is posted on Zebra’s website at http://www.zebra.com under “Investors-Governance-Governance“Investors-Governance- Governance Documents.”
Our Chief Legal Officer, General Counsel & Corporate Secretary and Audit Committee administer the Related Party Transactions Policy. Anyone seeking to engage in a potential related party transaction must provide the Chief Legal Officer, General Counsel & Corporate Secretary with all relevant information concerning the transaction. If the Chief Legal Officer, General Counsel & Corporate Secretary determines that a proposed transaction triggers further review under the Related Party Transactions Policy, the Chief Legal Officer, General Counsel & Corporate Secretary will provide all material information regarding the transaction to the Audit Committee to review and approve, ratify or disapprove. If the Audit Committee determines that the approval or ratification of the transaction should be considered by all of the disinterested members of the Board of Directors, disinterested directors would review the transaction and, if appropriate, approve or ratify it by a majority vote of disinterested directors. The Audit Committee will consider all relevant available facts and circumstances, including:
the size of the potential transaction and the amount payable to the related party;
the nature of the related party’s interest in the transaction;
whether the transaction involves a conflict of interest;
whether the transaction was undertaken in the ordinary course of business on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances;
whether Zebra was notified about the transaction before its commencement, and if not, why pre-approval was not sought and whether subsequent ratification would be detrimental to Zebra;
the impact on a director’s independence;
the availability of sources for comparable products or services;
the benefit to Zebra and its stockholders; and
any other information regarding the transaction or related party that would be material to investors in light of the circumstances.
Notwithstanding the foregoing, transactions specifically excluded by the instructions to Item 404(a) of Regulation S-K, the Securities and Exchange Commission’s related person transaction disclosure rule are not considered related party transactions under our Related Party Transactions Policy. However, such transactions may require approval under other applicable policies, including our Conflicts of Interest Policy.policies.
At the end of each fiscal quarter, we conduct a related party survey that requires each director and executive officer to identify (a)(i) all related parties, which includes family members and entities in which such director, executive officer or any family member has an ownership interest or for which such director, executive officer or any family member serves as a director or officer, and (b)(ii) any transactions between Zebra and such related parties. Zebra has not been a participant in a transaction in fiscal 20202022 in which any related party of Zebra had or will have a direct or indirect material interest, as contemplated by Item 404(a) of Regulation S-K.
Zebra maintains a compliance hotline and website to provide a confidential means for employees or other interested individuals to communicate concerns to management or the Board of Directors, including concerns regarding accounting, internal controls or audit matters and compliance with laws, regulations, Company policies or the Code of Conduct. Our Chief Compliance Officer reports regularly to the Audit Committee on our Compliance and Ethics Program, including information about the communications received via the compliance hotline and website.
Any stockholder who would like to contact our Board of Directors may do so by writing to our Chief Legal Officer, General Counsel & Corporate Secretary at Three Overlook Point, Lincolnshire, Illinois 60069. Communications received in writing will be distributed to the appropriate members of the Board, depending on the content of the communication received.
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Zebra’s Board of Directors currently consists of eightten directors. SevenEight of our directors are independent under NASDAQNasdaq listing requirements; the eighthninth director is the Board’s Executive Chair Anders Gustafsson and the tenth director is Zebra’s Chief Executive Officer.Officer William J. Burns. The Board, based on the recommendation of the Nominating and Governance Committee, nominated Chirantan “CJ” Desai, Richard L. KeyserWilliam J. Burns, Linda M. Connly, AndersGustafsson, and Ross W. ManireJanice M. Roberts to stand for election at the 2023 Annual Meeting.Meeting of Stockholders. Each nominee currently serves as a director of Zebra.
Our Board is divided into three classes with staggered three-year terms. Every year we elect one class. We are asking stockholders to re-elect our threefour Class IIII directors, whose terms expireterm expires this year. If elected, Chirantan “CJ” Desai, Richard L. KeyserWilliam J. Burns, Linda M. Connly, Anders Gustafsson, and Ross W. ManireJanice M. Roberts will serve for a three-year term expiring at the 20242026 Annual Meeting and until their successors are elected and qualified.
All of the nominees have consented to stand for election and to serve if elected. However, if at the time of the Annual Meeting any nominee is unable or declines to serve, the individuals named in this Proxy Statement will, at the direction of the Board, either vote for the substitute nominee or nominees recommended by the Board, or vote to allow the vacancy to remain open until filled by the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF |
The following sets forth information regarding the qualifications and biographical information of nominees for Class IIII directors and the continuing directors.
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Director Experience and Qualifications
Zebra’s Board is composed of eightten highly qualified directors whose experience, skillsets and tenure complementscomplement those of fellow Board members to create a balanced Board with diverse viewpoints and deep expertise. In addition to the personal characteristics that the Nominating and Governance Committee believes are necessary for all directors, which are described in Selecting Nominees for the Board on page 18,19, the below Director Skills chart highlights certain skillsets of our director nominees and continuing directors that the Nominating and Governance Committee believes are necessary for the Board to adequately perform its oversight functions. The Nominating and Governance Committee does not assign specific weights to any of these skillsets, nor does the Director Skills chart reflect all of the attributes possessed by any one director or of each and every member of the Board as a whole. Further information on each director nominee’s and continuing director’s qualifications and relevant experience is provided in the individual biographical descriptions below.
Board Diversity (as of March 31, 2023) | ||||
Total Number of Directors | 10 | |||
| Female | Male | Non-Binary | Did Not Disclose Gender |
Gender Identity | ||||
| 3 | 7 | 0 | 0 |
Demographic Background | ||||
African American or Black | 1 | 0 | 0 | 0 |
Alaskan Native or Native American | 0 | 0 | 0 | 0 |
Asian | 0 | 1 | 0 | 0 |
Hispanic or Latinx | 0 | 0 | 0 | 0 |
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 |
White | 2 | 6 | 0 | 0 |
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 |
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 0 |
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Board Diversity (as of April 1, 2022) | ||||
Total Number of Directors | 9 | |||
| Female | Male | Non-Binary | Did Not Disclose Gender |
Gender Identity | ||||
| 3 | 6 | 0 | 0 |
Demographic Background | ||||
African American or Black | 1 | 0 | 0 | 0 |
Alaskan Native or Native American | 0 | 0 | 0 | 0 |
Asian | 0 | 1 | 0 | 0 |
Hispanic or Latinx | 0 | 0 | 0 | 0 |
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 |
White | 2 | 5 | 0 | 0 |
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 |
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 0 |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 33 |
The following biographical descriptions set forth certain background information about our director nominees and continuing directors, including specific professional experience and individual qualifications that led to the conclusion by our Board that such person should serve as a director of Zebra.
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LINDA M. CONNLY | |
Independent Director since: 2020 Age: 57 Committees: • Audit | ProfessionalHighlights Ms. Connly has served since 2020 as an Expert Partner on sales and go-to-market transformation for Bain & Company’s Commercial Excellence practice, a management consultancy that provides advice to public, private and non-profit organizations. Ms. Connly previously served at Bain & Company as a Strategic Advisor on go-to-market transformations and specializing in high velocity sales models from 2018 to 2020. In addition, Ms.Connly has served since 2018 as Chief Executive Officer of The Connly Advisory Group LLC, a consulting practice she founded that provides services to diagnose sales issues and design go-to-market models. Prior to her current roles, she was Interim Executive Vice President of Rackspace, a managed cloud computing company, where she led transformation for a $1.8 billion managed services business from 2018 to 2019. Prior to that, she held numerous roles at EMC Corporation between 2000 and 2016 including serving as SVP, EMC lead for Global Go-To-Market Integration where she led the 2015 go-to-market integration for Dell Technology and EMC, one of the largest technology mergers in history to date. She continued to serve in leadership roles at Dell Technology after the merger, including SVP, Enterprise Customer Strategy & Advocacy from 2016 to 2017 and SVP, Global Center of Competency, Infrastructure Solutions Group from 2017 to 2018. Ms. Connly serves as a board member of PortCo/Presidio, a leading North American information technology solutions provider focused on digital infrastructure, business analytics, cloud, security and emerging solutions. Most recently, Ms. Connly served as an advisor for Wasabi Technologies, a private company providing cloud storage solutions, and as a trustee at Saint Anselm College. In addition, in 2019, Ms. Connly served as an independent public director for Carbonite (Nasdaq: CARB), a cloud-based backup and security SaaS provider, until its acquisition by OpenText that year. In 2014, Ms. Connly was presented the Boston Chamber of Commerce Pinnacle Award in the category of “Achievement in Management.” In addition, she was also named by VAR Business magazine as one of the “Top 50 Most Powerful Women in Technology” and by CRN (Computer Reseller News) magazine as one of the “Top 100 Unsung Heroes.” |
DirectorQualifications Ms. Connly is an operating executive, director and consultant with over 25 years of broad cross-functional experience. The Board benefits from Ms. Connly’s deep expertise in revenue acceleration, sales resource optimization, go-to-market and high velocity sales channels. Ms. Connly has valuable experience in technology and innovation, mergers and acquisitions as well as experience in overseeing the development and implementation of strategic priorities and business transformation from hardware to software and solutions. Ms.Connly’s service as a public board member has also provided her with proficiency in corporate governance. Ms. Connly’s extensive background and experience in the technology industry and go to market strategies will be valuable to Zebra as we expand into new markets and solutions. |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 35 |
ANDERS GUSTAFSSON | |
ExecutiveChair Director since: 2007 Age: 62 Committees: • None | ProfessionalHighlights Mr. Gustafsson served as Zebra’s Chief Executive Officer and a director from 2007 to March 2023 and has since transitioned to the Executive Chair of the Board. Prior to joining Zebra, Mr.Gustafsson served as Chief Executive Officer of Spirent Communications plc, a publicly-traded telecommunications company, from 2004 until 2007. At Spirent, he redirected that Company’s growth strategy, divested non-core operations, integrated historic acquisitions and streamlined the organization to realize significant cost savings. From 2000 until 2004, he was Senior Executive Vice President, Global Business Operations, of Tellabs, Inc., a communications networking company. Mr. Gustafsson’s other roles at Tellabs included President, Tellabs International; President, Global Sales; and Vice President and General Manager, Europe, Middle East and Africa. Earlier in his career, he held executive positions with Motorola, Inc. Mr. Gustafsson is a member of the board of directors of International Paper Company (NYSE: IP), a leading global producer of renewable fiber-based packaging, pulp and paper products. Previously, Mr.Gustafsson was a member of the board of directors of Dycom Industries Inc. (NYSE: DY), a company that provides construction and specialty services to the telecommunication industry. He is a member of the Technology Committee and the Immigration Committee of the Business Roundtable. He also serves as a trustee of the Shedd Aquarium and is a member of the Civic Committee of the Commercial Club of Chicago. |
DirectorQualifications Mr. Gustafsson has extensive executive level experience that allows him to bring to the Board a broad range of skills, including knowledge of leadership of complex organizations, corporate strategy and planning, financial controls and accounting, corporate finance, international operations, manufacturing, sales and marketing and mergers and acquisitions. In addition, Mr. Gustafsson has gained meaningful experience in technology and innovation, including in product development, disruptive innovation, new business models and business model extension, and technology trends, as well as cybersecurity risk management. While serving as a director on public company boards Mr. Gustafsson has also gained proficiency in risk management and compliance oversights, corporate governance as well as environmental, sustainability and public policy. The Board benefits from Mr. Gustafsson’s deep knowledge of Zebra’s business and industry. |
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JANICE M. ROBERTS | |
Independent Director since: 2013 Age: 67 Committees: • Compensation | ProfessionalHighlights Ms. Roberts is an experienced global technology executive and venture capitalist based in Silicon Valley, where her board experience spans public, private and nonprofit organizations. Ms. Roberts has served as a Partner at Benhamou Global Ventures (BGV) since 2014; an early stage global investor in companies that lead the digital transformation of enterprises. From 2000 to 2013, Ms. Roberts served as Managing Director of Mayfield Fund, investing in wireless, mobile, enterprise and consumer technology companies. Following the acquisition of BICC Data Networks Ltd, where she was Managing Director, from 1992 to 2000, Ms. Roberts was employed by 3Com Corporation (which was later acquired by Hewlett Packard), where she held various executive positions, including Senior Vice President of Global Marketing and Business Development, President of 3Com Ventures, and President of the Palm Computing Business Unit. Ms. Roberts currently serves on the boards of NETGEAR, Inc. (Nasdaq: NTGR), where she serves on the Audit, Compensation and Subscription Service Strategy Committees, Totango Inc. and Uneeq Ltd. Until May 2022, she served as Lead Independent Director and Chair of the Compensation Committee at Zynga Inc. (Nasdaq: ZNGA). Other recent public board positions include serving as a director of RealNetworks, Inc. (Nasdaq: RNWK) for nearly 10 years, until 2020, and ARM Holdings Plc until its acquisition by the SoftBank Group in 2016. Ms. Roberts is also on the board of GBx Global.org, a technology community connecting British entrepreneurs to the San Francisco Bay Area, and she serves on the advisory board of Illuminate Ventures. Ms. Roberts previously served on the Board of Light Blue Optics Ltd. (dba Kaptivo), a developer of collaboration solutions, from 2017 to 2020, and was a Board Director and President of the Ronald McDonald House at Stanford from 2011 to 2017. |
DirectorQualifications Ms. Roberts has almost four decades of global technology operating and venture capital experience, including over 25 years in Silicon Valley. She has held executive roles in Europe and the US, including marketing, sales, business development, mergers, acquisitions and general management, all with global responsibilities. Ms. Roberts is entrepreneurial, product and customer-centric with expertise across multiple product areas and sectors including networking, communications and mobile solutions, software, services, semiconductors and applications, spanning enterprise, small business, service providers and consumer markets. She has a proven track record of success, leadership, execution and innovation in diverse organizations, environments, industries and cultures. Ms. Roberts currently balances a diverse board portfolio of technology growth companies with early stage investing in innovative new businesses. This is particularly relevant to Zebra as it continues to transition to more digital, software and service and intelligent automation business opportunities. Ms. Roberts also has considerable board governance experience and capabilities with public, private and non-profit organizations in North America, Europe and Asia, especially relating to compensation (developing significant new executive programs), and most recently leading special litigation work and diversity and inclusion initiatives. She has worked across all committees in her career, having served as chair of the compensation committee, lead independent director and on audit, compensation and strategy committees. |
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NELDA J. CONNORS | |
Independent Director since: 2022 Age: 57 Committees: • Audit (Financial Expert) | ProfessionalHighlights Ms. Connors is the Founder, Chairwoman and Chief Executive Officer of Pine Grove Holdings, LLC, a woman and minority-owned privately held investment company that acquires lower middle market companies with a high engineering and service component. Prior to founding Pine Grove Holdings, LLC in 2011, Ms. Connors served as President and Chief Executive Officer of Atkore International Inc., formerly the Electrical and Metal Products division of Tyco International, before it became privately held in 2010. Before joining Tyco, she served as Vice President at Eaton Corporation, a global electrical and automotive supplier, where she held several positions in operations, continuous improvement, and general management. In addition, Ms. Connors has held a number of executive and management positions in diversified industrial and automotive end-markets. Ms. Connors currently serves on the boards of Baker Hughes (NYSE: BKR) where she serves on the Audit and Human Capital and Compensation Committees; Otis Worldwide (NYSE: OTIS) where she serves on the Audit and Compensation Committees; and Boston Scientific (NYSE: BSX) where she serves on the Risk and Executive Compensation & Human Resources Committees. Other recent public board positions include serving as a director of BorgWarner (NYSE: BWA) until 2022, Enersys (NYSE: ENS) until 2021, Echo Global Logistics (NASDAQ: ECHO) until 2020, and CNH Industrial (NYSE: CNHI) until 2020. Ms. Connors also currently serves as an independent advisor to Nissan North America, an advisor of Queen’s Gambit Growth Capital, and an advisor to Vibracoustic. Ms. Connors has been recognized by Forbes 50 Over 50 for Investment; Savoy Magazine in its Power 300 Most Influential Black Corporate Directors; Black Enterprise Magazine as one of the Top 75 Powerful Women in Business; and one of Chicago United’s Business Leaders of Color. |
DirectorQualifications Ms. Connors has over 25 years of valuable technical and operating experience in global manufacturing and diversified industrial companies with highly technical products and services. The Board and Audit Committee benefit from Ms. Connors’ executive leadership skills and experience in the areas of operations and financial management, sales and marketing, quality, mergers and acquisitions, engineering, risk management and business strategy. Ms. Connors’ financial acumen, including her proficiency in financial management and financial reporting processes, as well as experience serving as a member of the audit committee on other public companies’ boards, facilitates the Board’s oversight of Zebra’s accounting, internal control and auditing functions and activities. In addition, Ms. Connors’ service as a public board member and as an independent advisor provided her with expertise in corporate governance. |
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CHIRANTAN “CJ” DESAI | |
Independent Director since: 2015 Age: Committees: Compensation | ProfessionalHighlights Mr. Desai |
DirectorQualifications Mr. Desai has decades of experience in the Software and Hardware industry, serving in various product development, engineering and business roles, and provides value to our Board by being a strategic thinker with an affinity for innovation. The Board benefits from Mr. Desai’s deep expertise in software and product security as well as his knowledge of best practices in product development and go-to-market strategy, especially for enterprise clients similar to those Zebra supports. In addition, Mr. Desai has experience in overseeing corporate cybersecurity risk management, including cybersecurity programs, incident response plans and information security and data-privacy protections. Mr. Desai has also gained experience in mergers and acquisitions, business transformation, international business as well as marketing and sales while serving as an executive and in other leadership roles. |
RICHARD L. KEYSER | |
Independent Director since: 2008 Age: Committees: Compensation (Chair) Nominating and | ProfessionalHighlights Mr. Keyser spent much of his career at W.W. Grainger, Inc. (NYSE: GWW), an international distributor of maintenance, repair and operating supplies. He served as President and Chief Operating Officer from 1994 to 1995, Chairman and Chief Executive Officer from 1995 until 2008, Chairman from 2008 Mr. Keyser serves as a trustee of the Shedd Aquarium, a trustee of the Field Museum of Natural History, a life trustee of the North Shore University Health System, a director of the US Naval Academy Foundation, and a director of the National Merit Scholarship Corporation. In addition, Mr. Keyser previously served on the board of The Principal Financial Group In 2010, Mr. Keyser was honored as the National Association of Corporate Directors 2010 Public Company Director of the Year based on his unwavering commitment to integrity, informed judgment and performance. |
DirectorQualifications The Board benefits from Mr. Keyser’s decades of experience with distributor and reseller channels, the primary means by which Zebra sells its products. Mr. Keyser gained executive level experience at Grainger in international operations, operational excellence, customer service, integrated distribution networks, marketing and sales, electronic commerce, executive compensation, strategic planning and mergers and acquisitions. Mr.Keyser also has experience in technology and innovation as well as overseeing corporate cybersecurity risk. In addition, Mr. Keyser obtained experience in corporate governance while serving as a board member of public and private organizations. Mr. Keyser’s background and expertise provide significant strategic and operational benefits to Zebra. |
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ROSS W. MANIRE | |
Independent Director since: 2003 Age: Committees: Audit (Chair) Nominating and | ProfessionalHighlights Mr. Manire founded ExteNet Systems, Inc., a wireless networking company, and served as its President and Chief Executive Officer from 2002 until 2018. He was President of the Enclosure Systems Division of Flextronics International, Ltd., an electronics contract manufacturer, from 2000 to 2002, and President and Chief Executive Officer of Chatham Technologies, Inc., an electronic packaging systems manufacturer that merged with Flextronics, in 2000. Prior to joining Chatham Technologies, Mr. Manire was Senior Vice President of the Carrier Systems Business Unit of 3Com Corporation, a provider of networking equipment and solutions. He served in various executive positions with U.S. Robotics from 1991 to 1997, including Chief Financial Officer, Senior Vice President of Operations, and Senior Vice President of the Network Systems Division prior to its 1997 merger with 3Com. From 1989 to 1991, Mr. Manire was a partner in Ridge Capital, a private investment company. He began his professional career at Ernst & Young, LLP, and served as a partner in the Entrepreneurial Services Group from 1985 to 1989. Mr. Manire is currently |
DirectorQualifications Mr. Manire brings over 30 years of business management, finance and leadership to the Board. His extensive background and experience as an executive officer and as a public company board member |
FRANK B. MODRUSON | |
Independent Director since: 2014 Age: Committees: Audit Nominating and | ProfessionalHighlights Mr. Modruson has served as President of Modruson & Associates, LLC, a management consulting firm, since 2015. Mr. Modruson served from 2003 to 2014 as the Chief Information Officer at Accenture, a global leader in strategy, consulting, digital, technology and operations. As CIO, he was responsible for the information technology strategy, applications and infrastructure supporting 281,000 employees. He also chaired Accenture’s Information Technology Steering Committee and was a member of the Accenture Operating Committee and Global Leadership Council. Prior to becoming CIO, Mr. Modruson held other roles at Accenture, including Partner, for 15 years. Mr. Modruson currently serves on the In 2010, Mr. Modruson was elected to CIO Magazine’s CIO Hall of Fame. In addition, InfoWorld has named him to its list of Top 25 CTOs, and ComputerWorld has named him one of its Premier 100 CTOs. |
DirectorQualifications Mr. Modruson’s technology, strategy and consulting background has provided him with proficiency in cybersecurity and risk-mitigation practices as well as expertise in technology and innovation. The Board benefits from Mr. Modruson’s extensive experience transforming information technology into an asset for Accenture. While serving as an executive, as a public company board member, and in other leadership roles, Mr.Modruson gained significant experience in mergers and acquisitions, business transformation, international business, risk management and corporate governance as well as operations. Mr. Modruson’s technology business transformation expertise will be indispensable as Zebra looks to expand and move into new markets. |
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MICHAEL A. SMITH | |
Director since: 1991 Age: Committees: Audit (until April 22, 2022) Compensation Nominating and | ProfessionalHighlights Mr. Smith Mr. Smith is a member of the Board of Directors of SRAM International Corp., a global designer, manufacturer and marketer of premium bicycle components. |
DirectorQualifications The Board and the Committees on which Mr. Smith serves benefit from his decades of industry experience, his skills in financial services, |
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Our business is managed under the direction of our Board of Directors, which is kept advised of Zebra’s business through regular and special meetings of the Board and its committees, written reports and analyses, and discussions with the Chief Executive Officer and other employees.
Our Board has three standing committees — the Audit Committee, the Compensation Committee and the Nominating and Governance Committee — each of which is composed entirely of independent directors. Each of the standing committees operates pursuant to a written charter, which sets forth the committee’s authority, duties and responsibilities. The committees periodically review the adequacy of their respective charters, all of which are available on Zebra’s website at http://www.zebra.com under “Investors-Governance-Governance Documents.”
The Audit Committee, Compensation Committee and Nominating and Governance Committee report regularly to the Board regarding their oversight roles, as further described below. Further, the Board oversees risks and opportunities in connection with Zebra’s sustainability initiatives (including climate and human capital related matters) and related disclosures as further discussed in the Sustainability section on page 26.
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AuditCommittee Members: Ross W. Manire (Chair) Linda M. Connly Nelda J. Connors Frank B. Modruson
Meetings in | The Audit Committee assists the Board in fulfilling its oversight functions with respect to matters involving financial reporting, independent and internal audit processes, disclosure controls and procedures, internal control over accounting and financial reporting, related-party transactions, risk management, and overseeing the integrity of Zebra’s financial statements and internal controls over financial reporting; overseeing the implementation of new accounting appointing, retaining, compensating, evaluating, approving all auditing services and permitted non-audit services to be provided to Zebra by our independent auditor; • reviewing and discussing with management and the independent auditor Zebra’s annual and quarterly financial statements; communicating with the independent auditor on matters related to the conduct of the audit and on critical audit matters; overseeing our internal audit function; • overseeing, and with management’s recommendations establishing, procedures for (i) the confidential, anonymous receipt, retention and treatment of complaints received by Zebra regarding accounting, internal accounting or financial controls, or auditing matters, and (ii) the confidential, anonymous submission by Zebra employees of concerns regarding questionable accounting, financial or auditing matters; • establishing Zebra’s Compliance Committee, and reviewing our Compliance & Ethics Program, including Zebra’s Code of Conduct; • reviewing and evaluating Zebra’s cybersecurity, disaster recovery and business continuity programs; • reviewing and approving related party transactions and conflicts of interest questions between Board members or senior management and Zebra; and discussing policies and procedures with respect to risk assessment and risk management. The Audit Committee has the authority to engage Our Board has determined that each member of the Audit Committee meets the independence requirements under |
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CompensationCommittee Members: Chirantan Desai Janice M. Roberts Michael A. Smith
Meetings in | The Compensation Committee assists the Board with its responsibilities regarding the compensation of our Executive Officers and non-employee directors by: generally overseeing Zebra’s compensation and benefit programs and overall compensation governance; reviewing our total compensation philosophy, and Zebra’s implementation of that philosophy, annually to ensure the components align with • reviewing and discussing with management the Compensation Discussion and Analysis; overseeing the administration of Zebra’s short-term and long-term compensation plans as well as benefits; establishing and reviewing policies and procedures for the grant of equity-based awards under Zebra’s compensation plans; • overseeing Zebra’s Clawback Policy; • determining (or with respect to the Chief Executive Officer, recommending to the Board) the total compensation and terms of employment for Executive Officers, including establishing performance objectives for the Chief Executive Officer; approving Zebra’s peer group for market-competitive compensation purposes; overseeing Zebra’s Stock Ownership Guidelines for the non-employee directors and Executive Officers; overseeing Zebra’s performance management and talent management processes; recommending to the Board the compensation of non-employee directors; seeking the counsel of an independent compensation consultant and other advisors as needed; and using a sound corporate governance approach that balances an appropriate level of risk tolerance with a total compensation philosophy. Willis Towers Watson served |
Nominatingand Members: Richard L. Keyser Ross W. Manire Frank B. Modruson
Meetings in | The Nominating and Governance
• overseeing, and advising the Board on, matters of corporate governance, including reviewing and recommending to the Board, where appropriate, revisions to Zebra’s
overseeing the self-evaluations of the Board and the committees of the Board, and monitoring the self-evaluations of the individual making recommendations to the Board regarding size, identifying individuals qualified to serve on the Board and recommending director • establishing criteria for Board membership, taking into consideration Zebra’s strategic objectives and needs; • assisting the Board in overseeing engagement efforts with stockholders; and • overseeing the onboarding of new directors and continuing director education. The Nominating and Governance Committee has the authority to retain a search firm to identify director candidates and to engage outside legal counsel or other advisors as needed. |
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Zebra’s director compensation program is designed to attract and retain highly qualified non-employee directors. The annual compensation for our non-employee directors consists of both cash to compensate directors for their services on the Board of Directors and its committees, and equity to align the interests of our directors with those of our stockholders. Decisions regarding our non-employee director compensation are approved by the full Board based on the recommendations of the Compensation Committee. In making such recommendation, the Compensation Committee takes into consideration market data and whether such recommendation aligns with the interests of our stockholders. The Compensation Committee annually reviews non-employee director compensation with Willis Towers Watson, our independent compensation consultant. In 2020, due to the anticipated financial effects of the COVID-19 pandemic, Zebra took a proactive step and temporarily reduced our Board of Directors’ cash retainer payments by 30% for a three-month period.
In October 2019,November 2021, the Compensation Committee reviewed market data on both non-employee director compensation and the financial performance of the peer group as well as general industry data and high-tech industry data for companies similar to Zebra. (For more information on the peer group, see Compensation Discussion and Analysis — Overview of Our Executive Compensation Program,Approach, beginning on page 43)54). In addition, the Compensation Committee reviewed data on the cash compensation awarded to the chairs and members of the Board’s standing committees. Using this data, the Compensation Committee confirmeddetermined that the 20202022 total mix of compensation for the non-employee directors is aligned withwas slightly lower than the peer group and high-tech market medians. Therefore, the Compensation Committee recommended to the Board and the Board decided not to adjust our non-employee director compensation for 2020, except2022. The cash retainer for the reduction innon-executive chair of the Board was increased by $35,000. The annual cash retainer payments due tofor the anticipated financial effectsnon-employee directors was increased by $10,000. Non-employee directors’ annual equity grant was increased by $20,000. The annual cash retainer for the chair of the COVID-19 pandemic.Audit Committee was increased by $5,000. The annual cash retainer for the chair of the Compensation Committee was increased by $5,000. The annual cash retainer for the chair of the Nominating Governance Committee was increased by $5,000. The annual cash retainer for members of the Nominating and Governance Committee was increased by $2,500.
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Elements of Director Compensation
Our non-employee director compensation for 20202022 was awarded inwith a combination of cash and equity, as shown below. Due to the anticipated financial effects of the COVID-19 pandemic, Zebra took a proactive step in April 2020 and temporarily reduced our Board of Directors’ cash retainer payments by 30% for a three-month period.
Annual cash retainer | $ |
Annual cash retainer for the | $ |
Annual equity retainer | Target grant date fair value of Awarded in the form of fully-vested common stock |
Annual cash retainer for committee chairs | $ $ $ |
Annual cash retainer for non-chair committee members | $15,000 for each Compensation Committee member $15,000 for each Audit Committee member $ |
Additional meeting fees | $2,000 for each in-person Board meeting in excess of five in-person Board meetings per year $1,000 for each $1,500 for the |
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Non-employee directors may participate in our non-qualified deferred compensation plan and our group medical and dental plans, and they are reimbursed for expenses incurred in attending Board and committee meetings. Mr. Gustafsson doesand Mr. Burns do not receive additional compensation for histheir service as a director.directors.
20202022 Non-Employee Director Compensation
In May 2020,2022, the Compensation Committee approved annual equity grants for each of the seveneight non-employee directors. These awards had a targetedtarget value of $200,000 and$220,000 but were awarded in the form of 902695 shares of fully-vested common stock for each non-employee director.director with an actual value of $220,120.40.
The following table provides information regarding the compensation of our non-employee directors for 2020.2022.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) |
Linda M. Connly | 64,500 | 200,037 | 0 | 264,537 | 107,000 | 220,120 | 0 | 325,578 |
Nelda J. Connors(2) | 97,480 | 275,779 | 0 | 371,717 | ||||
Chirantan Desai | 92,000 | 200,037 | 0 | 292,037 | 106,000 | 220,120 | 0 | 324,578 |
Richard L. Keyser | 109,500 | 200,037 | 0 | 309,537 | 132,000 | 220,120 | 0 | 350,578 |
Andrew K. Ludwick(2) | 48,500 | 0 | 48,500 | |||||
Ross W. Manire | 109,500 | 200,037 | 0 | 309,537 | 131,000 | 220,120 | 0 | 349,578 |
Frank B. Modruson | 96,750 | 200,037 | 0 | 296,787 | 117,000 | 220,120 | 0 | 335,578 |
Janice M. Roberts | 93,000 | 200,037 | 0 | 293,037 | 107,000 | 220,120 | 0 | 325,578 |
Michael A. Smith | 189,875 | 200,037 | 0 | 389,912 | 225,750 | 220,120 | 0 | 444,328 |
(1) The amounts in the table represent the aggregate grant date fair value for these awards computed in accordance with Financial Accounting Standards Codification 718, Compensation – Stock Compensation. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2020, for a discussion of assumptions made in calculating the grant date fair value of these awards. (2) Mr. Ludwick retired from the Board of Directors effective as of the 2020 Annual Meeting of Stockholders on May 14, 2020. As a result of his retirement, the Company did not grant him a stock award. | ||||||||
(1) The amounts in the table represent the aggregate grant date fair value for these awards computed in accordance with Financial Accounting Standards Codification 718, Compensation — Stock Compensation. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2022, for a discussion of assumptions made in calculating the grant date fair value of these awards. | (1) The amounts in the table represent the aggregate grant date fair value for these awards computed in accordance with Financial Accounting Standards Codification 718, Compensation — Stock Compensation. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2022, for a discussion of assumptions made in calculating the grant date fair value of these awards. | |||||||
(2) Ms. Connor’s compensation includes equity granted when she joined the Board in February 2022. She received a pro rata grant for the period from February to May. | (2) Ms. Connor’s compensation includes equity granted when she joined the Board in February 2022. She received a pro rata grant for the period from February to May. |
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The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth below. Based on that review and discussion, the Compensation Committee has recommended to Zebra’s Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2020.2022.
| CompensationCommittee Richard L. Keyser, Chair |
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Compensation
Discussion and Analysis
Our Compensation Discussion and Analysis (“CD&A”) focuses on the following:
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OverviewofOurExecutiveCompensationProgram | Compensation Components Pay-for-Performance and At-Risk Compensation Role of Our Compensation Committee Say-on-Pay • Role of the Independent Compensation Consultant |
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OurCompensationApproach | How We Establish the Peer Group |
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How |
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| 2022 Base Salaries • 2022 Annual Cash Incentive Awards • 2022 Long-Term Equity Incentive Awards | 55 | |
RestrictedStockthatVested in2022 | • Performance-Vested Restricted Stock Time-Vested Restricted Stock |
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Performance-Vested Restricted Stock with Performance Period ending December 31, 2022 & Employee Benefits | •
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OurExecutiveOfficerEmploymentAgreements |
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2020 Highlights and Performance
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Value at each year-end of $100 initial investment made on December 31, 2015 | ||||||
| 12/15 | 12/16 | 12/17 | 12/18 | 12/19 | 12/20 |
Zebra Technologies Corporation | 100.00 | 123.13 | 149.03 | 228.61 | 366.75 | 551.80 |
S&P 500 | 100.00 | 111.96 | 136.40 | 130.42 | 171.49 | 203.04 |
S&P 500 Information Technology | 100.00 | 113.85 | 158.06 | 157.60 | 236.86 | 340.83 |
The stock price performance included in this graph is not necessarily indicative of future stock price performance. |
This CD&A discusses the compensation of the following individuals, who are referred to as our Named Executive Officers:Officers based on their roles in 2022 and as of December 31, 2022:
ANDERS GUSTAFSSON | Chief Executive Officer |
NATHANWINTERS | Chief Financial Officer |
WILLIAM BURNS | Chief Product & Solutions Officer (CEO effective 3/1/2023) |
JOACHIM HEEL | Chief Revenue Officer |
CRISTEN KOGL | Chief Legal Officer, General Counsel & Corporate Secretary |
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Business Performance |
Solutions Launches | Sustainability | Human Capital Management |
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| Received validation of science-based targets for 2030 in line with the Paris Climate Accord goal. | Employee engagement score is above industry benchmark. |
Completed comprehensive debt refinancing to optimize capital structure providing flexibility for organic and inorganic investment in business as well as return of capital to stockholders, repurchased $751M of shares. | Announced portfolio of highly accurate integrated RFID portals for asset and workflow management and traceability in industrial and commercial environments. | Department of Energy (DOE) recognition of best practices regarding climate scenario analysis. | Named a top workplace by Forbes, named to Newsweek’s list of America’s Most Trusted companies, received CRN’s 5 star rating for Top Channel Partner Program for 6th year in a row. |
Added approximately 500 patents and patent applications, bringing the patent portfolio to over 6,500 patents and patent applications worldwide. | Launched new mobile computing series equipped with latest 5G and Wi-Fi 6E wireless technologies. Also launched series of rugged tablets for Transportation & Logistics and Retail associates for assisted selling, line busting tasks and point of sale capabilities. | Committed to energy intensity reduction at Zebra sites in partnership with the DOE’s Better Plants program. | Continue to expand inclusion network groups. Made our Inclusive Leadership Workshop mandatory. Also launched The Green Herd, our first employee network dedicated to sustainability. |
Mr. Leonetti served as our Chief Financial Officer from November 2016 until his voluntary resignation* $100 invested on August 28, 2020.12/31/17 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Mr. Winters began his service as our Acting Chief Financial Officer on August 28, 2020, and was appointed as our Chief Financial Officer on January 11, 2021.The stock price performance included in this graph is not necessarily indicative of future stock
price performance.
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Value at each year-end of $100 initial investment made on December 31, 2017
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| 12/17 |
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| 12/19 |
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| 12/21 |
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Zebra Technologies Corporation | $ | 100.00 | $ | 153.40 | $ | 246.09 | $ | 370.26 | $ | 573.41 | $ | 247.02 |
S&P 500 | $ | 100.00 | $ | 95.62 | $ | 125.72 | $ | 148.85 | $ | 191.58 | $ | 156.89 |
S&P 500 Information Technology | $ | 100.00 | $ | 99.71 | $ | 149.86 | $ | 215.63 | $ | 290.08 | $ | 208.30 |
Thestockpriceperformanceincludedinthisgraphisnotnecessarilyindicativeoffuturestockpriceperformance.
Our 2022 Zebra Incentive Plan (“2022 ZIP”), which is our annual cash incentive plan, assessed performance against full year consolidated net sales, adjusted EBITDA and Enterprise Asset Intelligence (“EAI”) Index goals. No individual adjustments were applied in 2022, and financial performance resulted in payments of 77.5% of target for all Named Executive Officers.
Performance-vested restricted stock is the majority of our long-term equity offering for our Executive Officers equating to 60% of the mix. Time-vested restricted stock continues to account for 40% of the mix.
Performance-vested restricted stock for which the performance period concluded December 31, 2022 were earned at 108% of target as a result of net sales growth and adjusted EBITDA margin achievement.
Zebra’s 2022 compensation philosophy included the following objectives:
Increasing stockholder value through long-term stock price growth;
Maximizing Zebra’s financial performance;
Facilitating the delivery of the highest quality goods, services and solutions to our customers;
Encouraging our employees to take actions that balance short-term achievements with long-term success without excessive risk;
Motivating behavior to attain Zebra’s objectives; and
Attracting, retaining, developing and rewarding employees who contribute to our success.
On an ongoing basis, our Compensation Committee reviews whether the Company’s compensation governance practices support the Company’s executive compensation philosophies and objectives,philosophy, as shown above and further demonstrated in the table below, and are aligned with stockholder interests. The Compensation Committee determined that the Company’s executive compensation philosophies, objectivesphilosophy and elementscomponents continued to be appropriate. InvestorsStockholders continue to be supportive of our compensation programstructure and its alignment of pay with performance. This was conveyed by 95.17%90.29% of votes cast at Zebra’s 20202022 Annual Meeting in support of say-on-pay. our executive compensation program.
Further, as part of our stockholder engagement program, members of our senior management and Board engaged with our stockholders to understand their views on our compensation structure and its alignment with our strategy (seeStockholder Engagementon page 2225 for additional information). Based on feedback from our stockholders and following our annual review of all components of the compensation program, after increasing the percentage of performance-vested restricted stock to 60% of equity awarded to Executive Officers, our Compensation Committee maintained that percentage in 2022. As further discussed in 2022 Long-Term Equity Incentive Awards on page 58.
Also, as part of our stockholder engagement program, we have proactively sought feedback on investor views on the incorporation of sustainability metrics in the compensation program. The Compensation Committee and Board have extensively discussed the incorporation of ESG metrics to ensure thoughtful and rigorous changes. Zebra has also begun tracking new ESG metrics for evaluation and potential future incorporation within the compensation program.
Our Compensation Committee believes that ourthe current structure of our compensation program adequately aligns compensation with stockholders’ long-term interests, balancing profitability, and growth and the ability to attract and retain talent, and therefore maintained our overall program structure in 2020. However, due2022.
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Contents
| WHAT WE DO |
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| WHAT WE DON’T DO |
A significant portion of |
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| We expressly forbid option and stock appreciation rights | |
We align compensation with stockholder interests by linking incentive compensation to Zebra’s overall performance |
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| We expressly forbid exchanges of underwater options or | |
We |
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| We do not provide significant perquisites | |
We have robust Stock Ownership Guidelines for our |
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| We do not guarantee salary increases or | |
We require |
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| We do not offer excise tax gross-ups | |
We consider, and attempt to mitigate, risk in our compensation program |
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| Our Insider Trading Policy expressly prohibits hedging, | |
We use an independent compensation consultant |
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We have “double-trigger” accelerated vesting of equity awards, which requires both a change in control and an involuntary termination |
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We conduct an annual talent management review, including succession planning |
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We have a Clawback Policy applicable to all Section 16 Officers |
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Overview of Our Executive Compensation Program
Our executive compensation program includes three components: base salary, annual incentive and long-term equity incentive. Each component serves a particular purpose, so each is considered independently, but the three components combined provide a holistic total executive compensation approach. The Compensation Committee does not follow a pre-established formula to allocate total compensation among the various pay components.
For 2020,2022, the Compensation Committee determined each Named Executive Officer’s compensation level other than Mr. Winters’ who served as our Acting Chief Financial Officer, by reviewing market data for each individual compensation component. Base salary, annual incentive, and long-term equity incentive, and total compensation for our Named Executive Officers are targeted atcompared to market median. (For more informationdata as further discussed in Our Compensation Approach on market comparisons, see “Our Compensation Approach” below.)page 54. Actual compensation awarded varies based upon the attainment of financial and individual performance goals, as well as each Executive’s position, responsibilities and overall experience. (ForFor more information on individual performance goals, see “PerformancePerformance Management Process and Individual Adjustments” below.)Adjustments on page 57. We align pay with performance, paying above target when Zebra surpasses target performance goals or an Executive’s individual performance exceeds expectations.
The following table describes the purpose of each compensation component and how that component is related to our pay-for-performance approach and budget.
Compensation
| Purpose of Compensation Component | Compensation Component in Relation to
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Base salary | To attract and retain Executives by compensating them for the primary functions and responsibilities of the position. |
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Annual cash incentiveawards | To attract, retain, motivate and reward Executives for achieving or surpassing key target performance goals at the Company, business unit and individual level. |
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Long-term equity awards | To attract, retain, motivate and reward top talent to increase stockholder value. |
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The objectives of Zebra’s executive compensation approach include:
Increasing stockholder value through long-term stock price growth;
Maximizing Zebra’s financial performance;
Facilitating the delivery of the highest quality goods, services and solutions to our customers;
Encouraging our employees to take actions that balance short-term achievements with long-term success without excessive risk;
Motivating behavior to attain Zebra’s objectives; and
Attracting, retaining, developing and rewarding employees who contribute to our success.
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Pay-for-Performance and At-Risk Compensation
Our Executive Officers are responsible for achievingdriving the Company’s achievement of its long-term strategic goals, and their compensation is weighted toward rewarding long-term value creation for stockholders.
Our emphasis on creating long-term stockholder value is best illustrated in the following charts, which show that target long-term equity compensation accounts for the largest percentage of the Named Executive Officers’ overall compensation for 2020.2022. In addition, a majority of the Named Executive Officers’ compensation — consisting of long-term equity and short-term incentive compensation combined — is performance-based or “at risk.”
The Compensation Committee consists entirely of independent directors, none of whom have ever been employed by Zebra. As further described above under “CommitteesCommittees of the Board” on page 42, the Compensation Committee assists the Board by overseeing Zebra’s compensation and benefit programs, particularly as those programs apply to our Named Executive Officers and non-employee directors. With input from the Chief Executive Officer, the Compensation Committee makes final decisions regarding all aspects of compensation for our Named Executive Officers other than the Chief Executive Officer. The Compensation Committee recommends a compensation package and the related performance targets for the Chief Executive Officer for final approval by all of the independent directors.
Our Board, Compensation Committee and Executive Officers regularly consider changes to our total compensation program to ensure it remains aligned with Zebra’s business strategy and stockholder expectations.
The Compensation Committee engaged Willis Towers Watson (“WTW”) as its independent executive compensation consultant for 2020.2022. In that capacity, WTW provided competitive peer group and executive compensation data, analysis and guidance to help the Compensation Committee:
establish a peer group;
use benchmark compensation surveys;
set Executive Officer and non-employee director compensation;
develop the design of our executive compensation program; and
review performance and determine payouts with respect to performance-based awards.
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In 2022, we paid WTW $344,996 in fees related to recommending the amount or form of executive and director compensation, and $263,925 in additional fees primarily related to services provided to assist Zebra with frontline worker pay review and pay equity reviews. The determination to engage WTW for its additional services was recommended by management and approved by the Compensation Committee.
The Compensation Committee annually assesses WTW’s independence pursuant to relevant Securities and Exchange Commission and NASDAQNasdaq rules. To that end, the Compensation Committee received a letter from WTW addressing WTW’s independence and concluded that no conflict of interest exists that would prevent WTW from providing independent advice.
In designing and implementing our total compensation program for 2020, we were2022, the Compensation Committee was guided primarily by market compensation data of a peer group of comparable publicly traded companiesmarket data as well as market data from technology industry surveys and from broad-based surveys.surveys provided by WTW.
How We Establish the Peer Group
In August 2019,July 2021, the Compensation Committee asked WTW to review Zebra’s peer group and to make recommendations regarding changes. In response, WTW compiled data on the financial performanceand business characteristics (as further described below) of 16 publicly traded companies WTW viewed as comparable to Zebra, including all of the companies in the peer group used for 20192021 executive compensation.
In compiling the recommended peer group, WTW usedfirst determined the universe of potential peers using the following methodology:criteria:
Industry Classification Research –— review of all U.S.-based publicly-listed companies within the Global Industry Classification Standards (“GICS”) for the Technology Hardware and Equipment, Software and Services, Semiconductors and Semiconductor Equipment and Healthcare Equipment and Services;
Peers-of-Peers Analysis –— review of companies that identify Zebra as a peer and a review of companies that are disclosed as peers to companies in Zebra’s peer group; and
Zebra’s 20192021 ISS and Glass Lewis Peer Group –Groups — review of the 2019proxy advisors’ 2021 Zebra peer groupgroups for overall reasonableness and relevance.
The Compensation Committee then reviewed the following company-specific information provided by WTW for the proposed peer group:
business model, industry, cost structures and levels of complexity;
size primarilyof the organization, including in terms of revenue (all 1618 companies had 20182020 revenue of between 50% and 200% of Zebra’s 20182020 revenue of $4.22$4.74 billion);, and whether the companies were currently in the S&P 500;
whether the proposed peer group member competes with Zebra for executive talent;
investorstockholder profile (i.e.(i.e., whether the proposed peer group member is considered a reasonable investment alternative and attracts investorsstockholders with similar risk/return expectations);
market capitalization; and
whether the proposed peer group member creates products or solutions of a technical nature.
In addition to reviewing this data, the Compensation Committee also considered whether potential peer companies regard Zebra as a peer.
For 2020,2022, WTW recommended removing threetwo companies and adding five companiesone company to the peer group used in 2019.2021. The Compensation Committee reviewed the proposal and supporting data, and agreed to remove the threetwo companies (ARRIS International plc, Eastman Kodak Company(Itron, Inc. and Rockwell Collins, Inc.)Lam Research Corporation) and include four of the proposed additions (CommScope Holding Company, Inc., Diebold Nixdorf, Incorporated, Keysight Technologies, Inc and NetApp,addition (ServiceNow, Inc.). The Compensation Committee also added two additional companies (Avaya Holdings Corp. and Rockwell Automation, Inc.) that align with Zebra’s products and solutions offerings. Based on these changes, the Compensation Committee approved the companies shown below as the peer group for purposes of evaluating and determining 20202022 executive compensation. Zebra’s revenue was at the 45th percentile of the revised peer group; market capitalization was at 58th percentile.
Zebra’s Peer Group for | ||
Agilent Technologies, Inc. |
| Motorola Solutions, Inc. |
Analog Devices, Inc. | Diebold Nixdorf, Inc. | NCR Corporation |
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| NetApp, Inc. |
Avaya Holdings Corp. |
| Rockwell Automation, Inc. |
Ciena Corporation | Keysight Technologies, Inc. |
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Citrix Systems, Inc. | KLA Corporation | Trimble Inc. |
CommScope Holding Company, Inc. |
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To establish the compensation of the Named Executive Officers for 2020,2022, the Compensation Committee and Mr. Gustafsson (who made recommendations regarding Named Executive Officers other than himself) reviewed competitive compensation data forof the peer group, market compensation data from technology industry surveys and broad-based surveys and each Named Executive Officer’s historical compensation. Since Mr. Winters was serving as the Acting Chief Financial Officer, effective August 28, 2020, until January 11, 2021 when he was appointed Chief Financial Officer, Mr. Gustafsson did not make recommendations regarding his compensation and the Compensation Committee did not approve his base salary or equity awards for 2020.
The 20202022 compensation packages for the Named Executive Officers are described below.
In 2020, in response to the COVID-19 pandemic, Zebra’s management team executed on our business continuity plans and the Board of Directors focused on overseeing risk management associated with the Company’s response, allowing Zebra to continue to serve our customers, create value for stockholders and protect the health and wellbeing of our employees. We continue to support our employees during COVID-19 by implementing rigorous policies and procedures to ensure a safe work environment, equipping our sites and employees with protective health and safety equipment, expanding opportunities for remote work, broadening our internal well-being resources and making a commitment to no pandemic-related layoffs.
Further, the Compensation Committee and Board took a holistic view of the anticipated impacts of the COVID-19 pandemic and took proactive steps by effecting temporary pay reductions for our Board, Executive Officers and certain employees, which are further described under Director Compensation on page 37 and directly below under 2020
For 2020,2022, based on the Company’s strong performance over a sustained period of time, market compensation data and theirour Named Executive Officers’ individual performance, Mr. Gustafsson recommended increases in the base salaries of ourthe other Named Executive Officers (other than himself) effective as of March 15, 2020.2022. The Compensation Committee discussed Mr.Gustafsson’s recommendations and approved the recommended base salary adjustments for 2020.2022. The Compensation Committee also recommended to the Board, and the Board approved, an increase into maintain Mr. Gustafsson’s 20202022 base salary basedand increase his 2022 equity award as further discussed in 2022 Long-Term Equity Incentive Awards on strong Company performance and his individual performance.
In 2020, due to the anticipated financial effects of the COVID-19 pandemic, Zebra took proactive steps in April 2020 by implementing a three-month temporary pay reduction of 30% for the Chief Executive Officer and 20% for all other Executive Officers, including the Named Executive Officers, and between 10% to 15% for all other applicable employees depending on their position. Due to a stronger than expected recovery in the fourth quarter of 2020, employees below the Executive Officer level who were subject to the pay reduction received a one-time discretionary payment equal to approximately 50% of their salary reduction amount. Executive Officers were not eligible for this one-time payment.page 58.
Our Named Executive Officers’ annual base salaries appear in the following table:
Named Executive Officer | 2019 Salary | 2020 Salary(1) | Percentage Increase | 2021 Salary | 2022 Salary | Percentage Increase | |||||
Anders Gustafsson | $ | 1,100,000 | $ | 1,200,000 | 9.1% | $ | 1,200,000 |
| $ | 1,200,000 | 0% |
Nathan Winters | $ | 550,000 |
| $ | 600,000 | 9% | |||||
William Burns | $ | 501,275 | $ | 551,403 | 10.0% | $ | 606,543 |
| $ | 667,197 | 10% |
Joachim Heel | $ | 489,340 | $ | 508,914 | 4.0% | $ | 559,805 |
| $ | 600,000 | 7% |
Cristen Kogl | $ | - | $ | 476,112 | N/A | $ | 547,529 |
| $ | 580,381 | 6% |
Olivier Leonetti | $ | 567,840 | $ | 601,910 | 6.0% | ||||||
Nathan Winters | $ | - | $ | 377,840(2) | N/A | ||||||
(1) Represents the target salary for each Named Executive Officer and does not include the COVID-19 related salary reductions referenced above. For each Named Executive Officer’s annualized salary, which includes the COVID-19 related salary reductions, see the Summary Compensation Table on page 56. (2) In connection with his appointment as Acting Chief Financial Officer, Mr. Winters’ received a $10,000 per month stipend starting on August 28, 2020. |
20202022 Annual Cash Incentive Awards
The 2020 Zebra Incentive Plan (“ZIP”)2022 ZIP provides for an annual cash incentive award based on the achievement of pre-determined financial performance goals. All Named Executive Officers participated in the 2022 ZIP.
For each Named Executive Officer, the Compensation Committee (or, in the case of Mr. Gustafsson, the Board) establishes a target annual cash incentive award, which is set as a percentage of base salary. The Compensation Committee discussed each Executive’s performance with Mr. Gustafsson and compared each Executive’s target annual incentive — both the percentage of base salary and the absolute dollar amount — to the market.
In light of the anticipated financial effects of the COVID-19 pandemic, the Compensation Committee approved the following changes
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The 20202022 target annual and maximum incentive percentages for Named Executive Officers were established as follows:
Named Executive Officer | 2019 Target Annual Cash Incentive* | 2019 Maximum Annual Cash Incentive* | 2020 Target Annual Cash Incentive* | 2020 Maximum Annual Cash Incentive*+ | 2021 Target Annual Cash Incentive* | 2021 Maximum Annual Cash Incentive*+ | 2022 Target Annual Cash Incentive* | 2022 Maximum Annual Cash Incentive* |
Anders Gustafsson | 125% | 250% | 125% | 125% | 135% | 270% | 135% | 270% |
Nathan Winters | 80% | 160% | 100% | 200% | ||||
William Burns | 85% | 170% | 85% | 85% | 100% | 200% | 100% | 200% |
Joachim Heel | 75% | 150% | 75% | 75% | 85% | 170% | 100% | 200% |
Cristen Kogl | - | - | 75% | 75% | 80% | 160% | 80% | 160% |
Olivier Leonetti | 95% | 190% | 95% | 95% | ||||
Nathan Winters | - | - | 40% | 40% | ||||
* Expressed as a percentage of the Officer’s base salary earned during the calendar year. + In 2020, due to the anticipated financial effects of the COVID-19 pandemic, the ZIP payout was capped at 100% measured on a quarterly basis for all Named Executive Officers. | ||||||||
* Expressed as a percentage of the Executive’s base salary earned during the calendar year. | * Expressed as a percentage of the Executive’s base salary earned during the calendar year. |
Annual Cash Incentive Plan Performance Metrics
Our 2022 ZIP incentivizes and rewards for achievements against full-year financial goals.
For the 20202022 ZIP, the Compensation Committee selected the three financial performance metrics listed below. As originally adopted, theThe performance goals for the 20202022 ZIP were to be measured on an annual basis, generally consistent with prior years. However, in light of the anticipated economic effects of the COVID-19 pandemic, in April 2020, the Compensation Committeeyears and Board of Directors took proactive steps and modified the measurement period and capped the quarterly maximum payout at 100% for the 2020 ZIP. In modifying the measurement period, the Compensation Committee used management’s recommendations of forecasted quarterly performance goals, which were converted from the annual forecasted performance goals originally adopted, due to the uncertainty related to forecasting longer-term supply and demand related to COVID-19. The Compensation Committee adopted these measures to properly incentivize employees and address concerns withexcluding the financial impact of the pandemic on our business.
businesses acquired in 2022:
20202022 consolidated net sales
20202022 “Adjusted EBITDA,” defined as earnings before interest income and expense, taxes, depreciation, amortization and Other Income/Expense,other income/expense, adjusted to remove equity-based compensation expense, adjustments for purchase accounting and certain non-recurring charges
20202022 “Enterprise Asset Intelligence (EAI) Index,” defined as a measure of Zebra’s sales of EAI offerings and is based on sales of specific EAI-related solutions such as SmartLens®, SmartPack™, SmartCount®, Zebra MotionWorks®,Warehouse, Location Solutions and managed services, such as VisibilityIQ™.
The consolidated net sales, Adjusted EBITDA and EAI Index metrics were selected to encourage executivesExecutives to focus on profitable sales growth for Zebra’s business. These metrics balance both short and long-term decisions, allowingfocusing our executives to make decisionsExecutives on growing themaintaining profitability in our core business while expanding into new markets, such as fixed industrial scanning, machine vision, intelligent automation and expanding adjacencies.retail execution. The EAI Index was added in 2019 to encourage executivesExecutives to focus on Zebra’s long-term strategic goal of driving our EAI vision and securing our market position in EAI offerings and specific EAI related solutions.
The Compensation Committee fixed the following threshold, target and maximum performance goals for each metric based on the 20202022 business plan.
Performance Goal | Performance Threshold | Performance Target | Performance Maximum |
Net Sales | 92.5% of net sales target | 100.0% of net sales target | 105.0% or more of net sales target |
Adjusted EBITDA | 80.0% of Adjusted EBITDA target | 100.0% of Adjusted EBITDA target | 112.5% or more of Adjusted EBITDA target |
EAI Index | 75.0% of EAI Index target | 100.0% of EAI Index target | 115.0% or more of EAI Index target |
Associatedpayout | 50%oftarget | 100%oftarget | 200%oftarget |
The net sales, Adjusted EBITDA and EAI Index performance goals were measured on a quarterly basis. These performance goals correspond
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Back to threshold, target and maximum payouts, as shown below.Contents
Performance Metric | Weighting | Threshold payout*# | Target payout# | Maximum payout+# |
Net Sales | 50% | 100% | 100% | |
Adjusted EBITDA | 50% | 100% | 100% | |
EAI Index | 50% | 100% | 100% | |
* Achievement below the threshold results in a 0% payout percentage. + In 2020, all payouts under the ZIP were capped at 100% on a quarterly basis. # The payout for performance between threshold and target and between target and maximum is interpolated on a straight-line basis. |
20202022 Financial Performance Results and Payout Percentage
The table below shows Zebra’s performance for the three ZIP metrics and the corresponding funding for the Named Executive Officers. The Actual Performance Achievement excludes the financial impact of businesses acquired in 2022.
Performance Goal |
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Adjusted EBITDA | Actual Performance Achievement | $ |
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EAI Index | Actual Performance Achievement | $ |
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The payouts on these individual metrics are converted to a ZIP payout percentage as follows:
ZIP payout (percentage of target) = | ( + ( + ( |
Applying this formula to Zebra’s actual performance results leadslead to a ZIP payout for 20202022 of 57.0%,77.5% of target for our Named Executive Officers, as shown below:
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The amounts the Named Executive Officers would earn based on payout percentage shown above can be modified by the Board (for Mr. Gustafsson) or the Compensation Committee (for the other Named Executive Officers) due to performance against individual goals. When establishing those goals and determining compensation levels for the(“Individual Performance Adjustment”). An Individual Performance Adjustment may be made to reduce annual incentive payouts if a Named Executive Officers,Officer fails to meet expectations, or increase annual incentive payouts if a Named Executive Officer exceeds expectations. When determining whether such Individual Performance Adjustment is warranted, the Compensation Committee (and the Board for Mr. Gustafsson) looks to our annual performance management process and the results of our annual talent management review.
Each year, Mr. Gustafssonthe Chief Executive Officer presents an overall talent management review to the Board, discussing the past performance and future potential of each Executive Officer and certain of their direct reports. This review includes a discussion of key skills, competencies, developmental opportunities and succession plans.
In determining the 20202022 individual performance goals, the Compensation Committee (and the Board for Mr. Gustafsson) considered each Named Executive Officer’s prior performance and Zebra’s expectations for the business initiatives under each Executive’s purview. Performance evaluations also may take into account factors such as satisfaction of daily responsibilities, particular or general contributions to Zebra’s overall management and whether the Named Executive Officer exhibitsdemonstrates Zebra’s corporate values.
A Named Executive Officer’s annual incentive payout will not be adjusted if the Executive meets expectations for the individual goals. These payouts may be reduced if a Named Executive Officer fails to meet expectations, or increased—though not above a maximum 100% of target award payout (which was the cap adopted in 2020 to address the financial effects of COVID-19)—if the Named Executive Officer exceeds expectations. The Compensation Committee (and the Board for Mr. Gustafsson) conducted final evaluations for 20202022 in early 2021,2023 and determined no adjustmentsIndividual Performance Adjustments were necessary.warranted.
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Based on the performance and payout calculations shown above, the Named Executive Officers received the following annual cash incentive payments for 2020:2022:
20202022 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
Named Executive Officer | Actual Award As a Percent of Eligible Compensation | Actual Award | Actual Award As a Percent of Eligible Compensation | Actual Award | ||
Anders Gustafsson | 71% | $ | 781,725 | 77.5% | $ | 1,255,500 |
Nathan Winters | 77.5% | $ | 457,548 | |||
William Burns | 48% | $ | 249,981 | 77.5% | $ | 508, 038 |
Joachim Heel | 43% | $ | 205,882 | 77.5% | $ | 459,010 |
Cristen Kogl | 43% | $ | 189,786 | 77.5% | $ | 355,919 |
Olivier Leonetti(1) | - | $ | - | |||
Nathan Winters | 23% | $ | 83,042 | |||
(1) Due to his voluntary resignation in August 2020, Mr. Leonetti was not eligible to receive annual cash incentive payments for 2020 under the 2020 ZIP. |
20202022 Long-Term Equity Incentive Awards
The Compensation Committee believes it is important that all of our Executive Officers are motivated to create stockholder value over a long-term investment horizon. To that end, Zebra granted threetwo forms of long-term equity to the Named Executive Officers:
time-vested stock appreciation rights (“SARs”), which vest ratably over four years;
time-vested restricted stock, which vests ratably over three years; and
performance-vested restricted stock, which is earned (or not) based on Zebra’s results on two financial measures during and over a three-year performance period and cliff vests three years after grant.
These equity awards, which are described in more detail below, were divided as follows (based on the value of the equity award grant) for 2020:2022:
Each year the Compensation Committee reviews the allocation of awards among the equity vehicles to ensure alignment with Zebra’s stockholders and to better reflect current compensation practices. Based on feedback from our stockholders and following its annual review of all components of the compensation program, our Compensation Committee maintained its elimination of the use of stock appreciation rights and kept the mix of performance-vested restricted stock to 60% for Executive Officers. Time-vested restricted stock continued to account for 40% of the mix.
EachFor the Named Executive Officers other than the Chief Executive Officer, each year the Compensation Committee sets long-term equity awards with a target value at the grant date for the Named Executive Officers other than the Chief Executive Officer.date. In March 2020, utilizing2022, the Compensation Committee utilized market median data information for Executive Officers as a guide,well as Mr. Gustafsson madeGustafsson’s recommendations for theseto set the long-term equity awards which the Compensation Committee considered.granted in 2022.
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The Board establishes Mr. Gustafsson’s target annual long-term equity award after hearingbased upon the recommendation of the Compensation Committee. To formulate that recommendation for 2020,2022, the Compensation Committee consulted with WTW and considered factors similar to those considered when determining target equity awards for the other Named Executive Officers. Based on the Company’s strongBoard’s desire to shift a higher proportion of Mr. Gustafsson’s compensation to being performance over a sustained period of time,based, the Compensation Committee recommended to the Board, and the Board approved, a 20202022 equity award to Mr. Gustafsson having a total value at grant date equal to $8,000,000.$12,000,000, an increase from his 2021 equity award of $9,250,000.
The 20202022 long-term incentive awards to the Named Executive Officers were granted effective April 30, 2020.May 5, 2022. When calculating the number of shares of performance-vested restricted stock and time-vested restricted stock, the actual number of shares was set by dividing the value of the equity award grant by $244.97,$367.87, the closing price of our common stock on the day prior to the grant date, without a reductionany adjustment for the restricted nature of the shares. For SARs, the actual number of SARs is set by dividing the value of the equity award grant by the binomial value of a SAR.
In addition, on November 5, 2020, Mr. Winters was granted time-vested restricted stock in connection with his appointment as Acting Chief Financial Officer, the actual number of shares was set by dividing the value of the equity award grant by $329.18, the closing price of our common stock on the day prior to the grant date, without a reduction for the restricted nature of the shares. On December 16, 2020, Ms. Kogl was granted time-vested restricted stock in connection with the assumption of additional functional responsibilities, the actual number of shares was set by dividing the value of the equity award grant by $383.45, the closing price of our common stock on the day prior to the grant date, without a reduction for the restricted nature of the shares.
The following table shows target grant date fair value of long-term equity awarded to each Named Executive Officer in 2020,2022, and how that award was divided among the threetwo types of equity.
Named Executive Officer | Total Value of the Equity Award Grant | Target Shares of Performance- Vested Restricted Stock | Shares of Time-Vested Restricted Stock | Time-Vested SARs | Total Value of the Equity Award Grant | Target Shares of Performance- Vested Restricted Stock | Shares of Time-Vested Restricted Stock | ||
Anders Gustafsson | $ | 8,000,100 | 13,063 | 13,063 | 20,134 | $ | 12,000,000 | 19,573 | 13,049 |
Nathan Winters | $ | 2,500,000 | 4,078 | 2,719 | |||||
William Burns | $ | 1,550,044 | 2,531 | 3,901 | $ | 3,000,000 | 4,894 | 3,263 | |
Joachim Heel | $ | 1,250,465 | 2,042 | 3,146 | $ | 2,250,000 | 3,670 | 2,447 | |
Cristen Kogl | $ | 1,075,079 | 1,592 | 1,853 | 2,454 | $ | 2,000,000 | 3,263 | 2,175 |
Olivier Leonetti | $ | 1,830,461 | 2,989 | 4,606 | |||||
Nathan Winters | $ | 379,767 | 375 | 831 | 578 |
Performance-Vested Restricted Stock
The performance-vested restricted stock awards granted in 20202022 will vest on April 30, 2023.May 5, 2025. These equity awards have a three-year performance period ending on December 31, 2022,2024, and a payout based on two performance metrics:
compound average growth (“CAGR”) in net sales (weighted 60%), and
adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin (weighted 40%).
We believe these two metrics to be meaningful drivers of the value we create for stockholders. The net sales CAGR metric incentivizes and rewards Executives for growth of Zebra’s revenue consistently over a three-year period. The adjusted EBITDA margin percentage performance goal encourages executivesExecutives to focus on long-term profitable sales growth for Zebra’s business while meeting or exceeding a target adjusted EBITDA margin percentage that we believe will create value for our stockholders. This differs from the adjusted EBITDA metric used in the ZIP, which is focused on absolute adjusted EBITDA generated, while this metric is focused on our adjusted EBITDA margin percentage, which looks at how profitable we are in generating EBITDA relative to revenue. The net sales CAGR metric was included to incentivize and reward for growth of Zebra’s revenue consistently over a three-year period. These two metrics are believed to meaningful drivers of the value we create for stockholders.
For each of these metrics, the Compensation Committee set three annual goals (for 2020, 20212022, 2023 and 2022)2024) and a cumulative three-year goal. The Named Executive Officers may earn shares based on Zebra’s results for each of the three years in the performance period, or based on Zebra’s results as of the end of the performance period, whichever is greater. We believe this approach focuses on the fundamentals our executivesExecutives control to drive stockholder value and promotes management’s focus on sustained year-over-year performance while also maintaining a longer-term focus on Company growth and performance. In addition, the combination of time horizons promotes employee retention and employee engagement. In the event of an unanticipated business or economic downturn, the annual banking component, as discussed in the below chart, provides employees with the ability to maintain recognition for years of strong performance and helps sustain employee engagement throughout the aggregate performance period if performance achievements are not consistent.
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HOW PERFORMANCE-VESTED RESTRICTED STOCK ACCRUES
Three annual performance targets | OR | Cumulative three-year performance target* |
20% of the target number of shares will be “banked” each year if Zebra achieves the applicable annual performance target for net sales CAGR, for a possible total of 60% | 60% of the target number of shares will vest if Zebra achieves the performance target for 30% target shares vest for threshold performance (60% target shares for net sales CAGR multiplied by 50% threshold performance)
No shares vest for performance below threshold | |
13.3% of the target number of shares will be “banked” each year if Zebra achieves the applicable annual adjusted EBITDA margin performance target, for a possible total of 40% | 40% of the target number of shares will vest if Zebra achieves the 20% target shares vest for threshold performance (40% target shares for adjusted EBITDA margin multiplied by 50% threshold performance)
No shares vest for performance below threshold | |
* Performance in |
The performance targets for 2020, 20212022, 2023 and 20222024 were set based upon management’s net sales CAGR and adjusted EBITDA margin forecasts when preparing the 20202022 annual plan. The 20222024 cumulative net sales CAGR performance threshold is 1.5% below the 20222024 net sales CAGR performance target, and the 20222024 cumulative net sales CAGR performance maximum is 1.5% above the performance target. The 20222024 adjusted EBITDA margin performance threshold is 1.5% below the 20222024 adjusted EBITDA margin performance target, and the 20222024 adjusted EBITDA margin performance maximum is 1.0% above the performance target.
The number of shares of performance-vested restricted stock that could vest for each of the Named Executive Officers is shown below.
RANGE OF POTENTIAL VESTING OF 20202022 PERFORMANCE-VESTED RESTRICTED STOCK
Named Executive Officers | Fail to Meet Threshold Sales CAGR and Adjusted EBITDA Margin | Attain Threshold Adjusted EBITDA Margin only | Attain Target Sales CAGR and Adjusted EBITDA Margin | Attain Maximum Sales CAGR and Adjusted EBITDA Margin | Fail to Meet Threshold Sales CAGR and Adjusted EBITDA Margin | Attain Threshold Adjusted EBITDA Margin only | Attain Target Sales CAGR and Adjusted EBITDA Margin | Attain Maximum Sales CAGR and Adjusted EBITDA Margin |
Anders Gustafsson | 0 | 2,612 | 13,063 | 23,513 | 0 | 3,915 | 19,573 | 39,146 |
Nathan Winters | 0 | 816 | 4,073 | 8,156 | ||||
William Burns | 0 | 506 | 2,531 | 4,555 | 0 | 979 | 4,894 | 9,788 |
Joachim Heel | 0 | 408 | 2,042 | 3,675 | 0 | 734 | 3,670 | 7,340 |
Cristen Kogl | 0 | 318 | 1,592 | 2,865 | 0 | 653 | 3,263 | 6,526 |
Olivier Leonetti | 0 | 597 | 2,989 | 5,380 | ||||
Nathan Winters | 0 | 75 | 375 | 675 |
To provide a significant long-term perspective and retention incentive, the Compensation Committee determined that the time-vested restricted stock awards granted in 20202022 to all of the Named Executive Officers will vest one-third on each of the first three anniversaries of the grant date.
Time-Vested Stock Appreciation Rights
Consistent with recent annual equity grant award terms, the Compensation Committee determined that the 2020 SAR awards for all of the Named Executive Officers will vest 25% on each of the first four anniversaries of the grant date. The base price of the 2020 SARs is $244.97, the closing price of our common stock on the day prior to the grant date. Once SARs vest, the holder can choose when to exercise them by converting them to cash. Each vested SAR is worth the closing price of Zebra’s stock on the exercise date, minus the base price. When the SARs granted in 2020 vest, the Named Executive Officers may exercise them any time before they expire on April 30, 2027.
How 2020 Compensation for the Named Executive Officers Compares to the Peer Group
For 2020 compensation purposes, WTW presented the Compensation Committee with data regarding compensation for ten executive officer positions. WTW drew this information from 2019 compensation data from our peer group, a general industry survey (conducted by WTW for other purposes) of 700 companies, a high-technology industry survey (conducted by Radford for other purposes) of 134 high-technology companies with annual revenues between $2.1 billion and $8.4 billion, and the WTW Executive Survey (reflecting data from 120 high-technology companies).
WTW compiled compensation data at the 25th percentile, median and 75th percentile levels from each of these data sources, as well as consensus (i.e., average) compensation data, for base salaries, target annual cash incentive awards, target long-term equity awards and total target direct compensation for individual executive officer positions. Using this data, the Compensation Committee confirmed that the 2020 compensation packages for the Named Executive Officers are at an appropriate level in comparison to the market, as shown below, and based on an Executive’s performance. The below does not include the Compensation of Mr. Winters, who served as our Acting Chief Financial Officer, but instead, includes the compensation of Mr. Leonetti, who served as our Chief Financial Officer until he resigned on August 28, 2020.
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Restricted Stock that Vested in
2020
2022Performance-Vested Restricted Stock
On May 11, 2017,2, 2019, Zebra granted the then Named Executive Officers performance-vested restricted stock with a three-year performance period ending December 31, 2019.2021. The 20172019 performance-vested restricted stock awards vested on May 11, 20202, 2022 and was earned at maximum of 180% of target. Although share price was not atarget, reflecting actual performance goal underexceeding the grants,maximum performance goals for both the net sales and adjusted EBITDA margin metrics. This reflects our strong performance during the three-year period fromperformance period. From the May 11, 20172, 2019 grant date until the vesting date on May 11, 2020,2, 2022, the stock price rose from $98.87$205.12 per share to $235.26$379.57 per share. The threshold performance targets and actual performance targets are set forth below:
| Threshold | Target | Maximum | Actual |
2019 Net Sales 3-Year Compound Annual Growth Rate (CAGR) | 1.1% | 2.6% | 4.1% | 8.9% |
2019 adjusted EBITDA margin | 18.0% | 19.0% | 20.0% | 21.6% |
| Threshold | Target | Maximum | Actual |
2019 to 2021 Net Sales 3-Year Compound Annual Growth Rate (CAGR) | 2.0% | 3.5% | 5.0% | 10.1% |
2021 adjusted EBITDA margin | 20.5% | 21.5% | 22.5% | 23.0% |
Set forth below is the number of shares of performance-vested restricted stock that vested for each Named Executive Officer, including the value of the shares on the vesting date.
Named Executive Officers | Target Number of Shares Granted in 2017 | Grant Date Fair Value of Award | Number of Shares Vested | Value of Shares on Date of Vesting | Target Number of Shares Granted in 2019 | Grant Date Fair Value of Award | Number of Shares Vested | Value of Shares on Date of Vesting | ||||
Anders Gustafsson | 20,229 | $ | 2,000,041 | 36,412 | $ | 8,566,287 | 14,626 | $ | 3,000,085 | 26,326 | $ | 9,992,560 |
Nathan Winters | 263 | $ | 53,947 | 473 | $ | 179,537 | ||||||
William Burns | 4,653 | $ | 460,042 | 8,375 | $ | 1,970,303 | 2,731 | $ | 560,183 | 4,915 | $ | 1,865,587 |
Joachim Heel | 3,642 | $ | 360,085 | 6,556 | $ | 1,542,365 | 2,048 | $ | 420,086 | 3,686 | $ | 1,399,095 |
Cristen Kogl | 749 | $ | 74,054 | 1,348 | $ | 317,130 | 1,414 | $ | 290,040 | 2,545 | $ | 966,006 |
Olivier Leonetti | 5,058 | $ | 500,084 | 9,104 | $ | 2,141,807 | ||||||
Nathan Winters | - | $ | - | - | $ | - |
On May 11, 2017, Zebra granted the then Named Executive Officers time-vested restricted stock with three-year cliff vesting on May 11, 2020. During the three-year period from May 11, 2017 until May 11, 2020, Zebra’s stock price rose from $98.87 per share to $235.26 per share. On August 9, 2017, Zebra granted Ms. Kogl time-vested restricted stock in connection with a promotion with three-year cliff vesting on August 9, 2020. During the three-year period from August 9, 2017 until August 9, 2020, Zebra’s stock price rose from $106.65 per share to $283.04 per share. On May 10, 2018, Zebra granted the then Named Executives Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary of the grant date in 2019, 2020 and 2021. During the two-year period from May 10, 2018 until May 10, 2020, Zebra’s stock price rose from $149.57 per share to $242.92 per share. On September 1, 2018, Zebra granted Ms. Kogl time-vested restricted stock in connection with her appointment as an executive officer with annual vesting in one-third increments on each anniversary of the grant date in 2019, 2020 and 2021. During the two-year period from September 1, 2018 until September 1, 2020, Zebra’s stock price rose from $171.74 per share to $287.16 per share. On May 2, 2019, Zebra granted the then Named ExecutivesExecutive Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary of the grant date in 2020, 2021 and 2022. During the one-yearthree-year period from May 2, 2019 until May 2, 2020,2022, Zebra’s stock price rose from $205.12 per share to $225.55$379.57 per share.
On April 30, 2020, Zebra granted the Named Executive Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary of the grant date in 2021, 2022 and 2023. During the two-year period from April 30, 2020 until April 30, 2022, Zebra’s stock price rose from $244.97 per share to $369.66 per share.
On November 5, 2020, Zebra granted Mr. Winters time-vested restricted stock in connection with his appointment to Acting Chief Financial Officer with annual vesting in one-third increments on each anniversary of the grant date in 2021, 2022 and 2023. During the two-year period from November 5, 2020 until November 5, 2022, Zebra’s stock price fell from $329.18 per share to $230.56per share.
On December 16, 2020, Zebra granted Ms. Kogl time-vested restricted stock in connection with the assumption of additional functional responsibilities, with annual vesting in one-third increments on each anniversary of the grant date in 2021, 2022 and 2023. During the two-year period from December 16, 2020 until December 16, 2022, Zebra’s stock price fell from $383.45 per share to $248.92 per share.
On February 16, 2021, Zebra granted Mr. Winters time-vested restricted stock in connection with his appointment as Chief Financial Officer, with annual vesting in one-third increments on each anniversary of the grant date in 2022, 2023 and 2024. During the one-year period from February 16, 2021 until February 16, 2022, Zebra's stock price fell from $477.74 per share to $430.97 per share.
On May 6, 2021, Zebra granted the Named Executive Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary grant date in 2022, 2023, 2024. During the one-year period from May 6, 2021 until May 6, 2022, Zebra’s stock price fell from $482.42 per share to 342.59 per share.
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The table below shows the number of shares of time-vested restricted stock earned by each Named Executive Officer in 2020,2022, and the value of those shares on the vesting date.
Named Executive Officers | Grant Date Fair Value of Award | Number of Shares Vested | Value of Shares on Date of Vesting | Grant Date Fair Value of Award | Number of Shares Vested | Value of Shares on Date of Vesting | ||||
Anders Gustafsson | $ | 3,800,051 | 30,453 | $ | 7,158,010 | $ | 3,299,830 | 11,786 | $ | 4,335,943 |
Nathan Winters | $ | 324,276 | 861 | $ | 380,846 | |||||
William Burns | $ | 820,053 | 6,722 | $ | 1,581,460 | $ | 700,438 | 2,391 | $ | 875,669 |
Joachim Heel | $ | 633,393 | 5,216 | $ | 1,227,327 | $ | 540,412 | 1,848 | $ | 676,798 |
Cristen Kogl | $ | 255,478 | 1,847 | $ | 453,207 | $ | 376,669 | 1,060 | $ | 369,370 |
Olivier Leonetti | $ | 900,052 | 7,370 | $ | 1,734,640 | |||||
Nathan Winters | $ | 87,844 | 555 | $ | 133,309 |
Stockholders Approve Compensation of Zebra’sOn April 30, 2020, Zebra granted the Named Executive Officers (Say-on-Pay)performance-vested restricted stock with a three-year performance period ending December 31, 2022. The 2020 performance-vested restricted stock will vest on April 30, 2023 and shall earn at 108% of target, reflecting actual performance exceeding the maximum performance goal for net sales but not for adjusted EBITDA margin. The threshold performance targets and actual performance targets are set forth below:
| Threshold | Target | Maximum | Actual |
2020 to 2022 Net Sales 3-Year Compound Annual Growth Rate (CAGR) | 3.5% | 5.0% | 6.5% | 8.8% |
2022 adjusted EBITDA margin | 21.5% | 23.0% | 24.0% | 21.4% |
Zebra holds an annual stockholder advisory vote onSet forth below is the compensationnumber of ourshares of performance-vested restricted stock that vested in 2023 for each Named Executive Officers. At ourOfficer from their 2020 Annual Meeting, the say-on-pay proposal regarding 2019 compensation was approved by 95.17% of the votes cast. After considering a number of factors, including the approval of the say-on-pay vote, as well as our investors’ feedback regarding our compensation structure and its alignment with our strategy, the Compensation Committee determined that no changes to our compensation philosophy or strategy were immediately required. Our Board, Compensation Committee and Executive Officers regularly consider changes to our total compensation program to ensure it remains aligned with Zebra’s business strategy and stockholder expectations.award.
Zebra’s employee benefits are designed to align generally with the market median for such programs.
Our Named Executive Officers are eligible to participate in various benefit programs offered generally to Zebra’s U.S. salaried employees, such as our health plans and group disability and life insurance plans. We provide a 401(k) plan to eligible employees with a Company match, as well as a non-qualified deferred compensation plan for highly compensated employees with no Company contributions. We do not provide other long-term compensation plans, supplemental executive retirement plans or a defined benefit pension plan. In addition, our Executive Officers are eligible for an annual executive health screening as well as reimbursement for identity theft protection. We do not provide our executives with any perquisites.unique perquisites or compensation plans except in limited circumstances.
Zebra provides a supplemental executive disability policy to replace the difference between what the group disability policy provides and the 60% earnings replacement cap under the group policy. Zebra pays for this coverage and reimburses covered executivesExecutives to the extent they are taxed on this benefit.
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 62 |
Each Executive Officer has an employment agreement that addresses matters such as compensation and termination of employment and includes confidentiality, non-competition and non-solicitation provisions. These agreements are discussed in more detail under “ExecutiveExecutive Compensation –— Potential Payments upon Termination of Employment or Change in Control.”Control starting on page 71. We believe that having employment agreements helps us attract effective and high-potential executive officershigh-caliber Executive Officers by providing them a minimum level of total compensation.
The employment agreements provide appropriate assurance for Executives concerned about a potential termination of employment in connection with a change in control. Specifically, we believe the severance amounts reflected under “ExecutiveExecutive Compensation –— Potential Payments upon Termination of Employment or Change in Control”Control are fair and reasonable in order to allow the Named Executive Officers to transition from Zebra with minimal disruption to our overall business. Moreover, we believe that, in the event of a change in control, these severance payments will help secure the continued employment and dedication of our Executive Officers, notwithstanding any concern they may have regarding their own employment.
The components of total compensation reflected in the employment agreements are reviewed annually by the Compensation Committee as described in this CD&A. All other provisions of the employment agreements are established when an employee is appointed as an Executive Officer and are reviewed and updated on an as-needed basis.
We believe the confidentiality, non-compete or non-solicitation provisions, where applicable, align with our desire to protect Zebra and our stockholders from negative actions that could be caused by an Executive Officer who joins a competitor or otherwise engages in activities that could result in competitive harm to Zebra or our customers. Zebra’s equity agreements with its Executive Officers are subject to Zebra’s Clawback Policy and contain restrictive covenant provisions that also contain clawback provisions for violation of such covenants.
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The following table summarizes the compensation earned during 2020, 20192022, 2021 and 20182020 by our Chief Executive Officer, our former and current Chief Financial Officer, and our three other most highly compensated Executive Officers as of December 31, 2020.2022. We refer to these sixfive Executive Officers as the Named Executive Officers.
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option/SAR Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4)(5) | Total ($) |
Anders Gustafsson Chief Executive Officer | 2020 | 1,093,846 | 0 | 6,400,086 | 1,600,014 | 781,725 | 202,056 | 10,077,727 |
2019 | 1,076,923 | 0 | 6,000,170 | 1,500,033 | 1,539,164 | 33,819 | 10,150,109 | |
2018 | 988,462 | 0 | 4,800,000 | 1,200,014 | 2,473,973 | 33,643 | 9,496,092 | |
William Burns Chief Product & Solutions Officer | 2020 | 514,386 | 0 | 1,240,038 | 310,006 | 249,981 | 52,980 | 2,367,391 |
2019 | 495,767 | 0 | 1,120,365 | 280,001 | 481,278 | 20,778 | 2,398,189 | |
2018 | 474,196 | 0 | 1,040,110 | 260,002 | 806,666 | 18,448 | 2,599,422 | |
Joachim Heel Chief Revenue Officer | 2020 | 480,909 | 0 | 1,000,458 | 250,007 | 205,882 | 49,968 | 1,987,224 |
2019 | 486,051 | 0 | 840,172 | 210,001 | 416,138 | 22,068 | 1,974,430 | |
2018 | 472,414 | 0 | 800,200 | 200,034 | 709,012 | 18,891 | 2,200,551 | |
Cristen Kogl Chief Legal Officer & Corporate Secretary | 2020 | 442,366 | 0 | 880,064 | 195,015 | 189,786 | 31,440 | 1,738,671 |
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Olivier Leonetti Former Chief Financial Officer | 2020 | 403,277 | 0 | 1,464,430 | 366,031 | 0 | 14,938 | 2,248,676 |
2019 | 562,800 | 0 | 1,200,362 | 300,019 | 610,486 | 21,225 | 2,694,892 | |
| 2018 | 541,154 | 0 | 1,200,150 | 300,027 | 1,029,092 | 17,636 | 3,088,059 |
Nathan Winters Chief Financial Officer | 2020 | 363,875 | 0 | 333,834 | 45,933 | 83,042 | 12,848 | 839,532 |
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(1) In 2020, due to the anticipated financial effects of the COVID-19 pandemic, Zebra took a proactive step and implemented a temporary pay reduction for our employees. From June 2020 to September 2020, base salary payments were reduced by 30% for the Chief Executive Officer and 20% for all other Named Executive Officers. See 2020 Base Salaries on page 46 for additional information. (2) The amounts reflect the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Codification Topic 718, Compensation – Stock Compensation, of restricted stock and stock appreciation rights (“SARs”) granted in 2020, 2019 and 2018. The amounts included in this column include the grant date fair value of time-vested restricted stock and SARs, as well as performance-vested restricted stock, which is calculated based on the probable satisfaction of the performance conditions for such awards. If the highest level of performance is achieved for the performance-vested restricted stock granted in 2020, the grant date fair value of such stock awards would be as follows: Mr. Gustafsson – $5,760,078; Mr. Burns – $1,116,034; Mr. Heel – $900,412; Ms. Kogl – $701,986; Mr. Leonetti – $1,317,988; and Mr. Winters – $165,355. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of assumptions made in calculating the aggregate grant date fair value of these awards. (3) The amounts in this column reflect the annual incentive compensation earned under the 2020 Zebra Incentive Plan. (4) All other compensation for 2020 consists of 401(k) matching contributions (Mr. Gustafsson – $11,400; Mr. Burns – $11,400; Mr. Heel – $11,400; Ms. Kogl – $11,400; Mr. Leonetti – $8,126; and Mr. Winters – $11,400); life insurance premiums (Mr. Gustafsson – $1,080; Mr. Burns – $873; Mr. Heel – $817; Ms. Kogl – $751; Mr. Leonetti – $718; and Mr. Winters – $544); a tax gross up in connection with income recognized for long-term disability premiums paid by Zebra (Mr. Gustafsson – $83,982; Mr. Burns – $19,934; Mr. Heel – $18,717; Ms. Kogl - $8,545; Mr. Leonetti – $2,700; and Mr. Winters – $265); and Zebra paid executive long-term disability insurance premiums (Mr. Gustafsson – $105,594; Mr. Burns – $20,773; Mr. Heel – $19,034; Ms. Kogl - $10,744; Mr. Leonetti – $3,394; and Mr. Winters – $639). (5) The increase in 2020 in “Other Compensation” is attributed to increases in long-term disability insurance premiums paid by Zebra due to changes in the Company’s underlying coverage. |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Option/SAR Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) |
Anders Gustafsson Chief Executive Officer | 2022 | 1,200,000 | 0 | 12,000,000 | 0 | 1,255,500 | 203,243 | 14,658,743 |
2021 | 1,200,000 | 0 | 9,250,404 | 0 | 2,912,760 | 226,452 | 13,589,616 | |
2020 | 1,093,846 | 0 | 6,400,086 | 1,600,014 | 781,725 | 202,056 | 10,077,727 | |
Nathan Winters Chief Financial Officer | 2022 | 600,000 | 0 | 2,500,000 | 0 | 457,548 | 29,390 | 3,587,720 |
2021 | 537,760 | 0 | 1,550,212 | 0 | 771,996 | 16,458 | 2,876,426 | |
2020 | 363,875 | 0 | 333,834 | 45,933 | 83,042 | 12,848 | 839,532 | |
William Burns Chief Product & Solutions Officer | 2022 | 667,197 | 0 | 3,000,000 | 0 | 508,038 | 56,935 | 4,232,170 |
2021 | 557,659 | 0 | 2,300,661 | 0 | 1,071,008 | 82,806 | 4,012,134 | |
2020 | 514,386 | 0 | 1,240,038 | 310,006 | 249,981 | 52,980 | 2,367,391 | |
Joachim Heel Chief Revenue Officer | 2022 | 600,000 | 0 | 2,250,000 | 0 | 459,010 | 111,428 | 3,420,438 |
2021 | 548,061 | 0 | 1,750,702 | 0 | 840,208 | 88,263 | 3,227,234 | |
2020 | 480,909 | 0 | 1,000,458 | 250,007 | 205,882 | 49,968 | 1,987,224 | |
Cristen Kogl Chief Legal Officer, | 2022 | 580,381 | 0 | 2,000,000 | 0 | 355,919 | 70,738 | 3,007,038 |
2021 | 531,048 | 0 | 1,600,187 | 0 | 767,302 | 32,436 | 2,930,973 | |
2020 | 442,366 | 0 | 880,064 | 195,015 | 189,786 | 31,440 | 1,738,671 | |
(2) The amounts reflect the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Codification Topic 718, Compensation — Stock Compensation, of restricted stock and stock appreciation rights. The amounts included in this column include the grant date fair value of time-vested restricted stock and stock appreciation rights, as well as performance-vested restricted stock, which is calculated based on the probable satisfaction of the performance conditions for such awards. If the highest level of performance is achieved for the performance-vested restricted stock granted in 2022, the grant date fair value of such stock awards would be as follows: Mr. Gustafsson — $14,400,639; Mr. Winters — $3,000,348; Mr. Burns — $3,600,712; Mr. Heel — $2,700,166; and Ms. Kogl — $2,400,720. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of assumptions made in calculating the aggregate grant date fair value of these awards. (3) Zebra stopped awarding stock appreciation rights to our Named Executive Officers after 2020. (4) The amounts in this column reflect the annual incentive compensation earned under the 2022 Zebra Incentive Plan. (5) All other compensation for 2022 consists of 401(k) matching contributions (Mr. Gustafsson — $12,200; Mr. Winters — $12,200; Mr. Burns — $12,200; Mr. Heel — $12,200; and Ms. Kogl — $12,200); life insurance premiums (Mr. Gustafsson — $1,080; Mr. Winters — $972; Mr. Burns — $1,080; Mr. Heel — $973; and Ms. Kogl — $940); a tax reimbursement in connection with income recognized for long-term disability premiums paid by Zebra (Mr. Gustafsson — $83,982; Mr. Winters — $2,307; Mr. Burns — $22,011; Mr. Heel — $19,659; and Ms. Kogl — $8,850); Zebra paid executive long-term disability insurance premiums (Mr. Gustafsson — $105,594; Mr. Winters — $2,119; Mr. Burns — $21,644; Mr. Heel — $19,992; and Ms. Kogl — $11,127); a tax reimbursement in connection with the executive health screenings paid by Zebra (Mr. Winters — $5,129; Mr. Heel — $12,898; and Ms. Kogl — $16,666); executive health screenings paid for by Zebra (Mr. Winters — $6,449; Mr. Heel — $13,116; and Ms. Kogl — $20,955); a tax reimbursement for identity theft protection paid by Zebra (Mr. Gustafsson — $171; Mr. Winters — $95; and Mr. Heel — $212); and reimbursement for identify theft protection paid by Zebra (Mr. Gustafsson — $215; Mr. Winters — $119; and Mr. Heel — $215); a reimbursement (expenses and gross up tax) for top earners sales trip paid by Zebra (Mr. Heel — $32,164). |
| Zebra Technologies Corporation ❘ |
|
Grants of Plan-Based Awards in
2020
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Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
| Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock (#)(3) | All Other Options Awards, Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh)(4) | Grant Date Fair Value of Stock and Option Awards ($)(5) | ||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||
Anders Gustafsson |
| 810,000 | 1,620,000 | 3,240,000 |
|
|
|
|
|
|
|
|
5/05/22 |
|
|
|
|
|
|
| 13,049 |
|
| 4,800,336 | |
5/05/22 |
|
|
|
| 9,787 | 19,573 | 39,146 |
|
|
| 7,200,320 | |
Nathan Winters |
| 300,000 | 600,000 | 1,200,000 |
|
|
|
|
|
|
|
|
5/05/22 |
|
|
|
|
|
|
| 2,719 |
|
| 1,000,239 | |
5/05/22 |
|
|
|
| 2,039 | 4,078 | 8,156 |
|
|
| 1,500,174 | |
William Burns |
| 333,599 | 667,197 | 1,334,394 |
|
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|
|
5/05/22 |
|
|
|
|
|
|
| 3,263 |
|
| 1,200,360 | |
5/05/22 |
|
|
|
| 2,447 | 4,894 | 9,788 |
|
|
| 1,800,256 | |
Joachim Heel |
| 300,000 | 600,000 | 1,200,000 |
|
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|
|
|
|
|
|
5/05/22 |
|
|
|
|
|
|
| 2,447 |
|
| 900,178 | |
5/05/22 |
|
|
|
| 1,835 | 3,670 | 7,340 |
|
|
| 1,350,083 | |
Cristen Kogl |
| 232,152 | 464,305 | 928,610 |
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5/05/22 |
|
|
|
|
|
|
| 2,175 |
|
| 800,117 | |
5/05/22 |
|
|
|
| 1,632 | 3,263 | 6,526 |
|
|
| 1,200,360 | |
(1) These amounts represent the threshold, target and maximum potential earnings under the 2022 Zebra Incentive Plan. The actual amounts earned in respect of 2022 are reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. Please see 2022 Annual Cash Incentive Awards starting on page 56 for further discussion of the 2022 Zebra Incentive Plan. (2) These amounts represent the threshold, target and maximum number of shares of performance-vested restricted stock granted under Zebra’s 2018 Long-Term Incentive Plan on May 5, 2022. These awards are scheduled to vest on May 5, 2025 (having a three-year performance period ending on December 31, 2024). Please see 2022 Long-Term Equity Incentive Awards starting on page 58 for further discussion of Zebra’s long-term equity incentive plan and the Potential Payments upon Termination of Employment or Change in Control starting on page 71 for further discussion of vesting terms upon certain termination events. (3) Represents shares of time-vested restricted stock granted under Zebra’s 2018 Long-Term Incentive Plan on May 5, 2022. These awards vest one-third on each of the first three anniversaries of the grant date. Please see 2022 Long-Term Equity Incentive Awards starting on page 58 for further discussion of Zebra’s long-term equity incentive plan and the Potential Payments upon Termination of Employment or Change in Control starting on page 71 for further discussion of vesting terms upon certain termination events. Zebra stopped awarding stock appreciation rights to our Named Executive Officers after 2020. (4) Zebra stopped awarding stock appreciation rights to our Named Executive Officers after 2020. (5) The amounts included in this column were determined in accordance with Financial Accounting Standards Codification Topic 718, Compensation — Stock Compensation and, in the case of performance-vested restricted stock, are calculated based on the probable satisfaction of the performance conditions. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of assumptions made in calculating the aggregate grant date fair value of these awards. |
| Zebra Technologies Corporation ❘ |
|
|
Name | Option/SAR Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/ SARs (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(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 ($)(1) | ||
Anders Gustafsson(2) |
|
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| |
5/12/2016 | 42,256 | 0 |
| 51.42 | 5/12/2026 |
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|
5/11/2017 | 33,514 | 0 |
| 98.87 | 5/11/2024 |
|
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|
|
5/10/2018 | 25,214 | 0 |
| 149.57 | 5/10/2025 |
|
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|
5/02/2019 | 17,534 | 5,845 |
| 205.12 | 5/02/2026 |
|
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|
4/30/2020 | 10,066 | 10,068 |
| 244.97 | 4/30/2027 |
|
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|
4/30/2020(3) |
|
|
|
|
|
| 4,355 | 1,116,666 |
|
|
4/30/2020(4) |
|
|
|
|
|
|
|
| 14,108 | 3,617,432 |
5/06/2021(3) |
|
|
|
|
|
| 5,114 | 311,281 |
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|
5/06/2021(5) |
|
|
|
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|
|
|
| 23,010 | 5,899,994 |
5/05/2022(3) |
|
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|
|
| 13,049 | 3,345,894 |
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5/05/2022(6) |
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|
| 19,573 | 5,018,713 |
Nathan Winters(7) |
|
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|
| |
5/10/2018 | 552 | 0 |
| 149.57 | 5/10/2025 |
|
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|
5/02/2019 | 210 | 105 |
| 205.12 | 5/02/2026 |
|
|
|
|
|
4/30/2020 | 288 | 290 |
| 244.97 | 4/30/2027 |
|
|
|
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|
4/30/2020(3) |
|
|
|
|
|
| 125 | 32,051 |
|
|
4/30/2020(4) |
|
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|
|
| 405 | 988,717 |
11/05/2020(3) |
|
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|
| 152 | 138,974 |
|
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2/16/2021(3) |
|
|
|
|
|
| 866 | 222,051 |
|
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5/06/2021(5) |
|
|
|
|
|
|
|
| 3,856 | 988,717 |
5/05/2022(3) |
|
|
|
|
|
| 2,719 | 697,179 |
|
|
5/05/2022(6) |
|
|
|
|
|
|
|
| 4,078 | 1,045,640 |
| Zebra Technologies Corporation ❘ |
|
Outstanding Equity Awards at 2020 Fiscal Year-End
Name | Option/SAR Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/ SARs (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||
Anders Gustafsson(2) |
|
|
|
|
|
|
|
|
| |
5/3/2013 | 21,201 | 0 |
| 46.07 | 5/3/2023 |
|
|
|
|
|
5/8/2014 | 19,493 | 0 |
| 74.72 | 5/8/2024 |
|
|
|
|
|
5/15/2015 | 21,191 | 0 |
| 108.20 | 5/15/2025 |
|
|
|
|
|
5/12/2016 | 42,256 | 0 |
| 51.42 | 5/12/2026 |
|
|
|
|
|
5/11/2017 | 25,135 | 8,379 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
5/10/2018 | 12,606 | 12,608 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
5/10/2018(3) |
|
|
|
|
|
| 5,349 | 2,055,781 |
|
|
5/10/2018(4) |
|
|
|
|
|
|
|
| 28,882 | 11,100,219 |
5/2/2019 | 5,844 | 17,535 |
| 205.12 | 5/2/2026 |
|
|
|
|
|
5/2/2019(3) |
|
|
|
|
|
| 9,751 | 3,747,601 |
|
|
5/2/2019(5) |
|
|
|
|
|
|
|
| 21,061 | 8,094,374 |
4/30/2020 | 0 | 20,134 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 13,063 | 5,020,502 |
|
|
4/30/2020(6) |
|
|
|
|
|
|
|
| 13,063 | 5,020,502 |
William Burns(7) |
|
|
|
|
|
|
|
|
| |
5/11/2017 | 5,781 | 1,928 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
5/10/2018 | 2,731 | 2,732 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
5/10/2018(3) |
|
|
|
|
|
| 1,159 | 445,438 |
|
|
5/10/2018(4) |
|
|
|
|
|
|
|
| 6,258 | 2,405,137 |
5/2/2019 | 1,091 | 3,273 |
| 205.12 | 5/2/2026 |
|
|
|
|
|
5/2/2019(3) |
|
|
|
|
|
| 1,821 | 699,865 |
|
|
5/2/2019(5) |
|
|
|
|
|
|
|
| 3,932 | 1,511,186 |
4/30/2020 | 0 | 3,901 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 2,531 | 972,739 |
|
|
4/30/2020(6) |
|
|
|
|
|
|
|
| 2,531 | 972,739 |
Name | Option/SAR Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/ SARs (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(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 ($)(1) | ||
William Burns(8) |
|
|
|
|
|
|
|
|
| |
5/11/2017 | 7,709 | 0 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
5/10/2018 | 5,463 | 0 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
5/02/2019 | 3,273 | 1,091 |
| 205.12 | 5/02/2026 |
|
|
|
|
|
4/30/2020 | 1,950 | 1,951 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 844 | 216,410 |
|
|
4/30/2020(4) |
|
|
|
|
|
|
|
| 2,733 | 700,769 |
5/06/2021(3) |
|
|
|
|
|
| 1,272 | 326,154 |
|
|
5/06/2021(5) |
|
|
|
|
|
|
|
| 5,722 | 1,467,178 |
5/05/2022(3) |
|
|
|
|
|
| 3,263 | 836,666 |
|
|
5/05/2022(6) |
|
|
|
|
|
|
|
| 4,894 | 1,254,871 |
Joachim Heel(9) |
|
|
|
|
|
|
|
|
| |
9/15/2014 | 8,572 | 0 |
| 73.50 | 9/15/2024 |
|
|
|
|
|
5/15/2015 | 4,526 | 0 |
| 108.20 | 5/15/2025 |
|
|
|
|
|
5/12/2016 | 8,854 | 0 |
| 51.42 | 5/12/2026 |
|
|
|
|
|
5/11/2017 | 6,033 | 0 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
5/10/2018 | 4,203 | 0 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
5/02/2019 | 2,454 | 819 |
| 205.12 | 5/02/2026 |
|
|
|
|
|
4/30/2020 | 1,572 | 1,574 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 681 | 174,615 |
|
|
4/30/2020(4) |
|
|
|
|
|
|
|
| 2,205 | 565,384 |
5/06/2021(3) |
|
|
|
|
|
| 968 | 248,205 |
|
|
5/06/2021(5) |
|
|
|
|
|
|
|
| 4,354 | 1,116,409 |
5/05/2022(3) |
|
|
|
|
|
| 2,447 | 627,435 |
|
|
5/05/2022(6) |
|
|
|
|
|
|
|
| 3,670 | 941,025 |
| Zebra Technologies Corporation ❘ |
|
Name | Option/SAR Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/ SARs (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||
Joachim Heel(8) |
|
|
|
|
|
|
|
|
| |
9/15/2014 | 8,572 | 0 |
| 73.50 | 9/15/2024 |
|
|
|
|
|
5/15/2015 | 4,526 | 0 |
| 108.20 | 5/15/2025 |
|
|
|
|
|
5/12/2016 | 8,854 | 0 |
| 51.42 | 5/12/2026 |
|
|
|
|
|
5/11/2017 | 4,524 | 1,509 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
5/10/2018 | 2,101 | 2,102 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
5/10/2018(3) |
|
|
|
|
|
| 892 | 342,822 |
|
|
5/10/2018(4) |
|
|
|
|
|
|
|
| 4,815 | 1,850,549 |
5/2/2019 | 818 | 2,455 |
| 205.12 | 5/2/2026 |
|
|
|
|
|
5/2/2019(3) |
|
|
|
|
|
| 1,366 | 524,995 |
|
|
5/2/2019(5) |
|
|
|
|
|
|
|
| 2,949 | 1,133,389 |
4/30/2020 | 0 | 3,146 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 2,042 | 784,802 |
|
|
4/30/2020(6) |
|
|
|
|
|
|
|
| 2,042 | 784,802 |
Cristen Kogl(9) |
|
|
|
|
|
|
|
|
| |
3/19/2015 | 418 | 0 |
| 85.82 | 3/19/2025 |
|
|
|
|
|
5/15/2015 | 753 | 0 |
| 108.2 | 5/15/2025 |
|
|
|
|
|
5/12/2016 | 1,007 | 0 |
| 51.42 | 5/12/2026 |
|
|
|
|
|
5/11/2017 | 620 | 310 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
8/9/2017 | 479 | 240 |
| 103.84 | 8/09/2024 |
|
|
|
|
|
5/10/2018 | 430 | 432 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
9/1/2018 | 366 | 366 |
| 171.74 | 9/01/2025 | �� |
|
|
|
|
5/10/2018(3) |
|
|
|
|
|
| 183 | 70,332 |
|
|
5/10/2018(4) |
|
|
|
|
|
|
|
| 988 | 379,718 |
9/1/2018(3) |
|
|
|
|
|
| 156 | 59,955 |
|
|
9/1/2018(11) |
|
|
|
|
|
|
|
| 838 | 322,069 |
5/2/2019 | 565 | 1,695 |
| 205.12 | 5/2/2026 |
|
|
|
|
|
5/2/2019(3) |
|
|
|
|
|
| 943 | 362,423 |
|
|
5/2/2019(5) |
|
|
|
|
|
|
|
| 2,036 | 782,496 |
4/30/2020 | 0 | 2,454 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 1,592 | 611,853 |
|
|
4/30/2020(6) |
|
|
|
|
|
|
|
| 1,592 | 611,853 |
12/16/20(3) |
|
|
|
|
|
| 261 | 100,310 |
|
|
Name | Option/SAR Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/ SARs (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(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 ($)(1) | ||
Cristen Kogl(10) |
|
|
|
|
|
|
|
|
| |
5/11/2017 | 930 | 0 |
| 98.87 | 5/11/2024 |
|
|
|
|
|
8/09/2017 | 719 | 0 |
| 103.84 | 8/09/2024 |
|
|
|
|
|
5/10/2018 | 862 | 0 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
9/01/2018 | 732 | 0 |
| 171.74 | 9/01/2025 |
|
|
|
|
|
5/02/2019 | 1,695 | 565 |
| 205.12 | 5/02/2026 |
|
|
|
|
|
4/30/2020 | 1,226 | 1,228 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 531 | 136,154 |
|
|
4/30/2020(4) |
|
|
|
|
|
|
|
| 1,719 | 440,769 |
12/16/20(3) |
|
|
|
|
|
| 87 | 22,308 |
|
|
5/06/2021(3) |
|
|
|
|
|
| 885 | 226,923 |
|
|
5/06/2021(5) |
|
|
|
|
|
|
|
| 3,980 | 1,020,512 |
5/05/2022(3) |
|
|
|
|
|
| 2,175 | 557,692 |
|
|
5/05/2022(6) |
|
|
|
|
|
|
|
| 3,263 | 836,666 |
(1) The market value is based on the $256.41 closing price of our common stock on The Nasdaq Stock Market on December 31, 2022. (2) Mr. Gustafsson's final tranche of stock appreciation rights granted on May 2, 2019 will vest with respect to 5,845 rights on May 2, 2023; and the stock appreciation rights granted on April 30, 2020 will vest with respect to 5,034 rights on each of April 30, 2023 and 2024. (3) These restricted stock awards vest pro rata over three years after the grant date. (4) Represents the number of restricted shares that would vest on April 30, 2023, based upon achievement of a threshold target CAGR of 2022 net sales over 2019 net sales and a threshold target of 2022 adjusted EBITDA margin. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of 2022 net sales CAGR and a maximum target level of 2022 adjusted EBITDA margin is as follows: Mr. Gustafsson — 23,513 shares; Mr. Winters — 675 shares; Mr. Burns — 4,555 shares; Mr. Heel — 3,675 shares; and Ms. Kogl — 2,865 shares. (5) Represents the number of restricted shares that would vest on May 6, 2024, based upon achievement of a threshold target CAGR of 2023 net sales over 2020 net sales and a threshold target of 2023 adjusted EBITDA margin. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of 2023 net sales CAGR and a maximum target level of 2023 adjusted EBITDA margin is as follows: Mr. Gustafsson — 23,010 shares; Mr. Winters — 3,856 shares; Mr. Burns — 5,722 shares; Mr. Heel — 4,354 shares; and Ms. Kogl — 3,980 shares. (6) Represents the number of restricted shares that would vest on May 5, 2025, based upon achievement of a threshold target CAGR of 2024 net sales over 2021 net sales and a threshold target of 2024 adjusted EBITDA margin. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of 2024 net sales CAGR and a maximum target level of 2024 adjusted EBITDA margin is as follows: Mr. Gustafsson — 39,146 shares; Mr. Winters — 8,156 shares; Mr. Burns — 9,788 shares; Mr. Heel — 7,340 shares; and Ms. Kogl — 6,526 shares. See “Grants of Plan-Based Awards in 2022” table and footnote 2 to that table for a more detailed description of these awards. (7) Mr. Winters' final tranche of stock appreciation rights granted on May 2, 2019 will vest with respect to 105 rights on May 2, 2023; and the stock appreciation rights granted on April 30, 2020 will vest with respect to 145 rights on each of April 30, 2023 and 2024. (8) Mr. Burns' final tranche of stock appreciation rights granted on May 2, 2019 will vest with respect to 1,091 rights on May 2, 2023; and the stock appreciation rights granted on April 30, 2020 will vest with respect to 975 rights on April 30, 2023 and with respect to 976 rights on April 30, 2024. (9) Mr. Heel's final tranche of stock appreciation rights granted on May 2, 2019 will vest with respect to 819 rights on May 2, 2023; and the stock appreciation rights granted on April 30, 2020 will vest with respect to 787 rights on each of April 30, 2023 and 2024. (10) Ms. Kogl's final tranche of stock appreciation rights granted on May 2, 2019 will vest with respect to 565 rights on May 2, 2023; and the stock appreciation rights granted on April 30, 2020 will vest with respect to 614 rights on each of April 30, 2023 and 2024. |
| Zebra Technologies Corporation ❘ |
|
Name | Option/SAR Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/SARs (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||
Nathan Winters(10) |
|
|
|
|
|
|
|
|
| |
5/10/2018 | 0 | 1,104 |
| 149.57 | 5/10/2025 |
|
|
|
|
|
5/10/2018(3) |
|
|
|
|
|
| 469 | 180,251 |
|
|
5/10/2018(4) |
|
|
|
|
|
|
|
| 2,529 | 971,971 |
5/2/2019 | 0 | 315 |
| 205.12 | 5/2/2026 |
|
|
|
|
|
5/2/2019(3) |
|
|
|
|
|
| 176 | 67,642 |
|
|
5/2/2019(5) |
|
|
|
|
|
|
|
| 378 | 145,277 |
4/30/2020 | 0 | 578 |
| 244.97 | 4/30/2027 |
|
|
|
|
|
4/30/2020(3) |
|
|
|
|
|
| 375 | 144,124 |
|
|
4/30/2020(6) |
|
|
|
|
|
|
|
| 375 | 144,124 |
11/05/2020(3) |
|
|
|
|
|
| 456 | 175,254 |
|
|
(1) The market value is based on the $384.33 closing price of our common stock on The NASDAQ Stock Market on December 31, 2020. (2) The SAR granted on May 11, 2017 will vest with respect to 8,379 rights on May 11, 2021; the SAR granted on May 10, 2018 will vest with respect to 6,304 rights on each of May 10, 2021 and 2022; the SAR granted on May 2, 2019 will vest with respect to 5,845 rights on each of May 2, 2021, 2022 and 2023; and the SAR granted on April 30, 2020 will vest with respect to 5,033 rights on each of April 30, 2021 and 2022 and with respect to 5,034 rights on each of April 30, 2023 and 2024. (3) These restricted stock awards vest pro rata over three years after the grant date. (4) Represents the number of restricted shares that would vest on May 10, 2021, based upon achievement of a threshold target CAGR of 2020 net sales over 2017 net sales and a threshold target of 2020 adjusted EBITDA margin. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of net sales CAGR and a maximum target level of 2020 adjusted EBITDA margin is as follows Mr. Gustafsson – 28,882 shares; Mr. Burns – 6,258 shares; Mr. Heel – 4,815 shares; Ms. Kogl – 988 shares; and Mr. Winters – 2,529 shares. See Grants of Plan-Based Awards in 2020 table and footnote 2 to that table for a more detailed description of these awards. |
|
Options and Stock Appreciation Rights Exercised and Stock Vested in
2020
The table below sets forth information with respect to stock options and SARsstock appreciation rights exercised by the Named Executive Officers during 20202022 and awards of time-vested and performance-vested restricted stock that vested in 2020.2022.
Name | Options/SARS Awards |
| Stock Awards | ||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||
Anders Gustafsson | 57,289 | 14,617,530 | 66,865 | 15,724,297 | 0 | 0 |
| 38,112 | 14,328,503 |
Nathan Winters | 0 | 0 |
| 1,334 | 560,383 | ||||
William Burns | 6,836 | 1,583,975 | 15,097 | 3,551,763 | 0 | 0 |
| 7,306 | 2,741,256 |
Joachim Heel | 0 | 0 | 11,772 | 2,769,692 | 0 | 0 |
| 5,534 | 2,075,893 |
Cristen Kogl | 0 | 0 | 3,195 | 770,337 | 0 | 0 |
| 3,605 | 1,335,376 |
Olivier Leonetti | 3,671 | 448,904 | 16,474 | 3,876,447 | |||||
Nathan Winters | 656 | 58,201 | 555 | 133,309 | |||||
(1) Value calculated as the difference between the market price of the underlying securities on the date of exercise and the exercise or base price of the exercised stock options or SARs. | |||||||||
(1) Value calculated as the difference between the market price of the underlying securities on the date of exercise and the exercise or base price of the exercised stock options or stock appreciation rights. (2) Value calculated as the sum of the value of performance-vested restricted stock and time-vested restricted stock that vested in 2022. See “Restricted Stock that Vested in 2022” section for a more detailed description of these awards. | (1) Value calculated as the difference between the market price of the underlying securities on the date of exercise and the exercise or base price of the exercised stock options or stock appreciation rights. (2) Value calculated as the sum of the value of performance-vested restricted stock and time-vested restricted stock that vested in 2022. See “Restricted Stock that Vested in 2022” section for a more detailed description of these awards. |
Non-Qualified Deferred Compensation
Pursuant to Zebra’s non-qualified deferred compensation plan, a Named Executive Officer may defer, on a pre-tax basis, up to 50% of his or her base salary and annual incentive award. Deferred compensation balances are credited with gains or losses that mirror the performance of benchmark investment funds selected by the participant under the plan. All credited amounts are unfunded general obligations of Zebra, and participants have no greater rights to payment than any unsecured general creditor of Zebra.
The value of a participant’s account changes is based upon the performance of a participant’s selected benchmark investment funds. Account balances are paid either in a lump sum or in annual installments. Zebra’s non-qualified deferred compensation plan permits payment upon, among other things, a termination of employment or a change in control of Zebra. Zebra does not make contributions to the plan but pays the costs of administration.
| Zebra Technologies Corporation ❘ |
|
The table below shows the funds available under Zebra’s non-qualified deferred compensation plan and the 20202022 rates of return.
Fund Name |
|
American Funds New Perspective Fund Class R-6 (RNPGX) |
|
American Funds EuroPacific Growth Fund Class R-6 (RERGX) |
|
Vanguard Extended Market Index Fund Institutional Shares (VIEIX) |
|
Vanguard Federal Money Market Fund (VMFXX) |
|
Vanguard FTSE Social Index Fund (VFTAX) |
|
Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX) |
|
|
|
Vanguard Institutional Target Retirement 2020 Fund |
|
Vanguard Institutional Target Retirement 2025 Fund |
|
Vanguard Institutional Target Retirement 2030 Fund |
|
Vanguard Institutional Target Retirement 2035 Fund |
|
Vanguard Institutional Target Retirement 2040 Fund |
|
Vanguard Institutional Target Retirement 2045 Fund |
|
Vanguard Institutional Target Retirement 2050 Fund |
|
Vanguard Institutional Target Retirement 2055 Fund |
|
Vanguard Institutional Target Retirement 2060 Fund |
|
Vanguard Institutional Target Retirement 2065 Fund |
|
Vanguard Institutional Target Retirement |
|
Harbor Large Cap Value Fund Retirement Class (HNLVX) | -14.90 |
Retire Savings Trust III |
|
PIMCO Inflation Response Multi-Asset Fund Instl (PIRMX) |
|
PIMCO Total Return Instl (PTTRX) |
|
Royce Opportunity Fund Institutional Class (ROFIX) |
|
T. Rowe Price International Discovery (PRIDX) |
|
T. Rowe Price Small-Cap Stock (OTCFX) |
|
Vanguard Total International Stock Index Fund Institutional Shares (VTSNX) |
|
Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) |
|
T. Rowe Price Institutional Large Cap Growth Fund (TRLGX) |
|
| Zebra Technologies Corporation ❘ |
|
Non-Qualified Deferred Compensation for
2020
The table below sets forth information regarding the Named Executive Officers’ participation in the Zebra’s non-qualified deferred compensation plan in 2020.2022.
Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | Executive | Registrant | Aggregate Earnings | Aggregate | Aggregate Balance |
Anders Gustafsson | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Nathan Winters | 0 | 0 | 0 | 0 | ||||||
William Burns | 49,784 | 0 | 86,668 | 0 | 378,372 | 490,368 | 86,210 | (131,295) | 0 | 444,653 |
Joachim Heel | 83,228 | 0 | 151,434 | 0 | 698,831 | 915,164 | 168,042 | (205,892) | 0 | 877,314 |
Cristen Kogl | 0 | 0 | 3,526 | 0 | 28,530 | 138,244 | 335,025 | (42,904) | 0 | 430,365 |
Olivier Leonetti | 0 | 0 | 0 | 0 | 0 | |||||
Nathan Winters | 0 | 0 | 0 | 0 | 0 | |||||
(1) The amount(s) reported in this column are included in the Summary Compensation Table under the “Salary” and “Non-Equity Incentive Plan Compensation” columns. (2) The amount(s) reported in this column are not included in the Summary Compensation Table. | (1) The amount(s) reported in this column are included in the Summary Compensation Table under the “Salary” and “Non-Equity Incentive Plan Compensation” columns. (2) The amount(s) reported in this column are not included in the Summary Compensation Table. |
(1) The amount(s) reported in this column are included in the Summary Compensation Table under the “Salary” and “Non-Equity Incentive Plan Compensation” columns. (2) The amount(s) reported in this column are not included in the Summary Compensation Table. |
Potential Payments upon Termination of Employment or Change in Control
Our Named Executive Officers’ employment agreements, equity award agreements and Zebra’s compensation and benefit plans provide for compensation payments and benefits upon certain termination triggering events. The information below describes those instances in which our Named Executive Officers would be entitled to payments following a termination of employment and/or upon a change in control ofZebra. Since Mr. Winters was serving as the Acting Chief Financial Officer effective August 28, 2020, Mr. Gustafsson did not make recommendations regarding his compensation and the Compensation Committee did not approve his base salary or equity awards for 2020 or years prior.
Zebra has employment agreements with each of the Named Executive Officers. Mr. Gustafsson’s employment agreement is substantially the same as the agreements of Ms. Kogl and Messrs. Burns, Heel and Winters except where described below. Mr. Burns’ employment agreement for his role as Chief Executive Officer is substantially the same as his agreement prior to becoming Chief Executive Officer. Under their employment agreements each Named Executive Officer is bound by non-competition and non-solicitation provisions until one year following termination as well as confidentiality covenants during and after employment.
Zebra’s Annual Incentive Plan and Equity Award Agreements
Named Executive Officers are eligible to earn annual incentive awards under Zebra’s annual incentive plan, and are eligible to earn time-vested stock appreciation rights (“SAR”) awards, time-vested restricted stock awards and performance-vested restricted stock awards under their equity award agreements. Eligibility to receive incentive-based compensation is determined in the sole discretion of the Compensation Committee for Ms. Kogl and Messrs. Burns, Heel and Winters, and the Board for Mr. Gustafsson.Gustafsson and Mr. Burns (effective March 1, 2023). Mr. Gustafsson’s equity award agreements are substantially the same as the agreements of Ms. Kogl and Messrs. Burns, Heel and Winters, except where described below. Mr. Burns’ equity award agreements for awards granted while he is Chief Executive Officer are the same as the equity award agreements for other Executive Officers. All Named Executive Officers participated in the 20202022 Zebra Incentive Plan.
Under Zebra’s annual incentive plan and equity award agreements, each Named Executive Officer is bound by non-competition and non-solicitation provisions until two years (annual incentive plan) or one year (equity award agreements) following termination. Each Named Executive Officer has agreed to confidentiality covenants during and after employment. Pursuant to our Clawback Policy, which applies to all Section 16 Officers, the Company may recoup cash-based incentive compensation under Zebra’s annual incentive plan or equity-based incentive compensation awards where: (i) the Company is required to prepare an accounting restatement resulting from Executive misconduct, or (ii) an Executive’s misconduct results, or could result, in termination for Cause, including a willful violation of any material obligation under an employment, confidentiality, non-solicitation, non-competition or any similar type agreement.
| Zebra Technologies Corporation ❘ |
|
Payments Upon Retirement or Voluntary Resignation
Under Zebra’s annual incentive plan, a participant may be paid any earned incentive award amount in the event of termination by reason of retirement, but not voluntary resignation. Mr.Gustafsson wasand Mr. Heel were eligible for retirement under the 20202022 Zebra Incentive Plan.
Although none of the Named Executive Officers were age 65 as of December 31, 2020, their time vested SAR awards, time-vested restricted stock awards and performance-vested restricted stock awards granted in 2018 and 2019 provide for pro rata vesting for a termination of employment by reason of retirement on or after age 65, or prior to age 65 with the approval of the Officer responsible for human resources, or with the approval of the Board for Mr. Gustafsson. Mr. Gustafsson meetsand Mr. Heel meet the “Rule of 65” as it applies to stock awards granted in 2020.2020, 2021, and 2022. Time-vested SAR awards,stock appreciation rights granted in 2020, time-vested restricted stock awardsgranted in 2020 and performance-vested restricted stock awards granted in 2020, 2021, and 2022 provide for pro rata vesting for a termination of employment by reason of retirement meeting the Rule of 65. Time-vested restricted stock granted in 2021 and 2022 provide that upon termination of employment by reason of meeting the Rule of 65, whichtime-vested restricted stock will continue to vest for 12 months or, if earlier, the next anniversary of the grant date. The Rule of 65 means the sum of the Officer’s age (in years) and years of continuous service with the Company (including its predecessors) equals or exceeds 65, provided that the Officer must meet both a minimum age of 55 and a minimum of five years of continuous service. The performance-vested restricted stock awards would vest pro rata in accordance with the performancegoals.
Payments Upon Death or Disability
Under Zebra’s annual incentive plan, participants are entitled to any earned incentive award amount in the event of termination of employment by reason of death or disability.
Ms. Kogl and Messrs. Burns, Heel and Winters
Ms. KoglKogl’s and Messrs. Burns’, Heel’s and Winters’ SAR awards2019 and 2020 stock appreciation rights and 2020, 2021 and 2022 time-vested restricted stock awards accelerate vesting in full in the event of termination of employment by reason of death or disability. Thetarget number of shares acceleratesaccelerate for Ms. KoglKogl’s and Messrs. Burns’, Heel’s and Winters’ 2020, 2021 and 2022 performance-vested restricted stock awards.stock.
Mr. Gustafsson’s 2017 time-vested SAR awards vest pro rata based on the number of days from the grant date through and including the date of termination of employment. Mr. Gustafsson’s 2018, 2019 and 2020 time-vested SAR awardsstock appreciation rights and 2020, 2021 and 2022 time-vested restricted stock awards accelerate vesting in full in the event of termination of employment by reason of death or disability. Mr. Gustafsson’s 2018, 20192020, 2021 and 20202022 performance-vested restricted stock awards vest in full at target.
Payments Upon Involuntary Termination Without Cause or by Officer for Good Reason
Under our Named Executive Officers’ employment agreements, “Cause” includes the commission, indictment or conviction of a felony or misdemeanor involving fraud or dishonesty; a material breach of the employment agreement; willful or intentional misconduct, gross negligence, or dishonest, fraudulent or unethical behavior; failure to materially comply with a direction of the Board; or breach of fiduciary duty to Zebra. “Good Reason” includes a demotion to a lesser position or assignment of duties materially inconsistent with the Named Executive Officer’s position, status or responsibilities; a material breach by Zebra of the employment agreement; or a decrease in base salary (unless applied proportionally).
Under our Named Executive Officers’ award agreements, the time-vested SAR awardsstock appreciation rights granted in 2018, 2019 and 2020 to all Executives, and Mr. Gustafsson’s 2017, 2018, 2019 and 2020 time-vested SAR awards,Named Executive Officers vest pro rata based on the number of days from the grant date through and including the date of termination of employment. The time-vested restricted stock awards granted in 2018, 20192020, 2021 and 20202022 to all Named Executive Officers vest pro rata based on the number of days from the grant date through and including the date of termination of employment. In addition, performance-vested restricted stock awards granted in 2018, 20192020, 2021 and 20202022 to all Named Executive Officers accelerate vesting in accordance with the performance-based vesting goals on a pro rata basis.
The Named Executive Officers’ employment agreements are summarized below.
| Zebra Technologies Corporation ❘ |
|
Ms. Kogl and Messrs. Burns, Heel and Winters
If Ms. Kogl and Messrs. Burns, Heel or Winters terminates his or her employment for Good Reason, or Zebra terminates his or her employment without Cause and under circumstances other than death or disability, he or she will be entitled to (i) a severance payment equal to one-year continuation of base salary; (ii) a pro rata portion of his or her annual incentive for the year in which his or her employment terminates, if the incentive otherwise would have been earned; (iii) any unpaid previously earned annual incentive; (iv) a severance payment equal to 100% of the Executive’s target annual incentive for the year in which employment terminates; (v) outplacement services not to exceed $32,000; and (vi) the continuation of coverage under Zebra’s medical and dental insurance plans, with Zebra contributing to the cost of such coverage at the same rate Zebra pays for health insurance coverage for its active employees under its group health plan, until the earlier of (a) one year after the date of termination, or (b) the Executive becoming eligible for coverage under another group health plan that does not impose preexisting condition limitations.
Mr. Gustafsson’s employment agreement also provides (i) that any decrease in Mr. Gustafsson’s starting date salary permits him to terminate his employment for Good Reason, and (ii) if Mr. Gustafsson terminates employment for Good Reason, or Zebra terminates his employment without Cause and under circumstances other than death or disability, he will not receive outplacement services, the unvested portion of non-performance-based equity awards will vest immediately (unless otherwise expressly set forth in an award agreement, such as Mr. Gustafsson’s time-vested SARstock appreciation rights and restricted stock award agreements), the continuation of his salary will be for a period of two years, and, unless it is otherwise terminated, the continuation of healthcare coverage will be for a period of two years. Mr. Gustafsson’s employment agreement provides for a minimum base salary of $700,000, which was his starting date salary, a target annual incentive equal to 100% of salary and a maximum annual incentive equal to 200% of salary. Effective March 1, 2023, Mr. Gustafsson will only be eligible to receive a pro rata portion of his annual incentive from 2023 for the period of the year that he served as CEO.
Under our Executive Officers’ employment agreements, a “change in control” includes (i) an acquisition by a person or group of 35% or more of Zebra’s common stock; (ii) a change in a majority of the Board within a 24-month period; (iii) the approval by our stockholders of a complete liquidation or dissolution of Zebra; or (iv) the consummation of a reorganization, merger or consolidation of Zebra or sale or other disposition of all or substantially all of the assets of Zebra.
Ms. Kogl and Messrs. Burns, Heel and Winters
If the Executive Officer terminates employment for Good Reason, or Zebra terminates the Executive Officer’s employment without Cause, and the termination occurs within 120 days immediately preceding or one year following a “change in control,” then the Executive Officer will be entitled to all compensation and benefits set forth in the Involuntary Termination Without Cause or by Executive Officer for Good Reason column in the tables under Potential Payments upon Termination of Employment or Change in Control, except that Ms. Kogl and Messrs. Burns, Heel and Winters will receive a payment equal to two times his or her base salary in lieu of one-year salary continuation, plus two times his or her target annual incentive in lieu of one times, which payment would be payable within 60 days following the later of the change in control or termination of employment.
We have eliminated excise tax gross-ups for all Executives entering into employment agreements after January 1, 2011, and other than Mr. Gustafsson, none of our current Officers will have agreements with an excise tax-gross up clause. For Ms. Kogl and Messrs. Burns, Heel and Winters, who are not entitled to a gross-up payment, afterAfter a change in control and upon termination of their employment, if the parachute payments would exceed the 3X threshold, then the payments will be cut back to an amount that is one dollar less than the threshold. However, this cut back would not be made if Ms.Kogl and Messrs. Burns, Heel and Winters, as applicable, would have more “after excise tax” dollars if he or she paid the excise tax.
In connection with Mr. Gustafsson’s transition into the Executive Chair role, we amended his employment agreement to remove the excise tax gross up clause. However, Mr. Gustafsson’s employment agreement alsostill provides that he will be entitled to all compensation and benefits set forth in the Involuntary Termination Without Cause or by Executive for Good Reason column in the tables under Potential Payments upon Termination of Employment or Change in Control, except that he will receive two times his target annual incentive in lieu of one times, which payment would be payable within 60 days following the later of the change in control or termination of employment. If payments or benefits exceed the threshold under Section 4999 of the Internal Revenue Code andEffective March 1, 2023, Mr. Gustafsson will no longer be eligible for an excise tax becomes due, Mr. Gustafsson wouldgross up and will only be entitledeligible to receive a gross-up payment suchpro rata portion of his annual incentive from 2023 for the period of the year that after payment by him of all applicable taxes and excise taxes, he retains an amount equal to the amount he would have retained had no excise tax been imposed; provided, that if the threshold under Section 4999 is exceeded by 10% or less, the total payments he would be entitled to would be reduced so that no excise tax would be due.served as CEO.
| Zebra Technologies Corporation ❘ |
|
Potential Payments upon Termination of Employment or Change in Control
Described below are the potential payments and benefits to which the Named Executive Officers would be entitled from Zebra under their employment agreements, equity award agreements and Zebra’s compensation and benefit plans upon termination of employment if such termination had occurred as of December 31, 2020.2022. Amounts actually received would vary based on factors such as the date on which a Named Executive Officer’s employment terminates and the price of our common stock on such date. The tables exclude payments and benefits that are generally available to full-time salaried employees, such as accrued salary and vacation pay.
The Named Executive Officers are not entitled to any payments or benefits as a result of a termination of employment for Cause.
ANDERS GUSTAFSSON | ANDERS GUSTAFSSON | ANDERS GUSTAFSSON | ||||||
Executive’s Compensation and Benefits upon Termination | Retirement or Voluntary Resignation ($) | Death or Disability ($) | Involuntary Termination Without Cause or by Executive for Good Reason ($) | Involuntary Termination Without Cause or by Executive for Good Reason with a Change in Control(1) ($) | Retirement | Death or | Involuntary | Involuntary |
Compensation |
|
| ||||||
Salary Severance | 0 | 2,400,000 | 0 | 2,400,000 | ||||
Incentive Severance(2) | 0 | 1,500,000 | 3,000,000 | 0 | 1,620,000 | 3,240,000 | ||
Earned Incentive | 781,725 | 1,255,500 | ||||||
Accelerated SARs(3) | 476,890 | 10,438,812 | 3,667,143 | 11,300,045 | 357,379 | 414,968 | 239,154 | 414,968 |
Accelerated Restricted Stock(4) | 2,246,025 | 35,038,982 | 19,100,432 | 35,038,982 | 10,107,597 | 20,309,980 | 9,502,298 | 20,309,980 |
Benefits |
|
| ||||||
Healthcare and Dental Coverage | – | 24,983 | – | 32,742 | ||||
Outplacement Services | – | 0 | – | 0 | ||||
Excise Tax Gross Up (Cutback)(5) | – | – | ||||||
TOTAL(6) | 3,504,640 | 46,259,519 | 27,474,283 | 52,545,735 | 11,720,476 | 21,980,448 | 15,049,694 | 27,653,190 |
WILLIAM BURNS | ||||||||
NATHAN WINTERS | NATHAN WINTERS | |||||||
Executive’s Compensation and Benefits upon Termination | Retirement or Voluntary Resignation ($) | Death or Disability ($) | Involuntary Termination Without Cause or by Executive for Good Reason ($) | Involuntary Termination Without Cause or by Executive for Good Reason with a Change in Control(1) ($) | Retirement | Death or | Involuntary | Involuntary |
Compensation |
|
| ||||||
Salary Severance | 0 | 551,403 | 1,102,806 | 0 | 600,000 | 1,200,000 | ||
Incentive Severance(2) | 0 | 468,693 | 937,385 | 0 | 600,000 | 1,200,000 | ||
Earned Incentive | 0 | 249,981 | 0 | 457,548 | ||||
Accelerated SARs(3) | 0 | 2,321,929 | 430,371 | 2,321,929 | 0 | 8,703 | 5,919 | 8,703 |
Accelerated Restricted Stock(4) | 0 | 7,007,105 | 3,914,017 | 7,007,105 | 0 | 3,128,458 | 1,144,871 | 3,128,458 |
Benefits |
|
| ||||||
Healthcare and Dental Coverage | – | 17,930 | – | 23,774 | ||||
Outplacement Services | – | 32,000 | – | 32,000 | ||||
Excise Tax Gross Up (Cutback)(5) | – | – | ||||||
TOTAL(6) | 0 | 9,579,015 | 5,664,395 | 11,669,136 | 0 | 3,594,709 | 2,864,112 | 6,050,483 |
| Zebra Technologies Corporation ❘ |
|
JOACHIM HEEL | ||||||||
WILLIAM BURNS | WILLIAM BURNS | |||||||
Executive’s Compensation and Benefits upon Termination | Retirement or Voluntary Resignation ($) | Death or Disability ($) | Involuntary Termination Without Cause or by Executive for Good Reason ($) | Involuntary Termination Without Cause or by Executive for Good Reason with a Change in Control(1) ($) | Retirement | Death or | Involuntary | Involuntary |
Compensation |
|
| ||||||
Salary Severance | 0 | 508,914 | 1,017,828 | 0 | 667,197 | 1,334,394 | ||
Incentive Severance(2) | 0 | 381,686 | 763,371 | 0 | 667,197 | 1,334,394 | ||
Earned Incentive | 0 | 205,882 | 0 | 508,038 | ||||
Accelerated SARs(3) | 0 | 1,802,612 | 331,818 | 1,802,612 | 0 | 78,265 | 44,884 | 78,265 |
Accelerated Restricted Stock(4) | 0 | 5,421,359 | 3,005,461 | 5,421,359 | 0 | 4,802,046 | 2,146,408 | 4,802,046 |
Benefits |
|
| ||||||
Healthcare and Dental Coverage | – | 17,930 | – | 23,774 | ||||
Outplacement Services | – | 32,000 | – | 32,000 | ||||
Excise Tax Gross Up (Cutback)(5) | – | – | ||||||
TOTAL(6) | 0 | 7,429,853 | 4,483,691 | 9,260,982 | 0 | 5,388,349 | 4,089,498 | 8,112,911 |
CRISTEN KOGL | ||||||||
JOACHIM HEEL | JOACHIM HEEL | |||||||
Executive’s Compensation and Benefits upon Termination | Retirement or Voluntary Resignation ($) | Death or Disability ($) | Involuntary Termination Without Cause or by Executive for Good Reason ($) | Involuntary Termination Without Cause or by Executive for Good Reason with a Change in Control(1) ($) | Retirement | Death or | Involuntary | Involuntary |
Compensation |
|
| ||||||
Salary Severance | 0 | 476,112 | 952,224 | 0 | 600,000 | 1,200,000 | ||
Incentive Severance(2) | 0 | 357,084 | 714,168 | 0 | 600,000 | 1,200,000 | ||
Earned Incentive | 0 | 189,786 | 459,010 | |||||
Accelerated SARs(3) | 0 | 980,785 | 171,657 | 980,785 | 51,009 | 60,013 | 34,107 | 60,013 |
Accelerated Restricted Stock(4) | 0 | 3,301,010 | 1,478,902 | 3,301,010 | 1,708,630 | 3,673,073 | 2,397,690 | 3,673,073 |
Benefits |
|
| ||||||
Healthcare and Dental Coverage | – | 17,930 | – | 23,774 | ||||
Outplacement Services | – | 32,000 | – | 32,000 | ||||
Excise Tax Gross Up (Cutback)(5) | – | – | ||||||
TOTAL(6) | 0 | 4,471,581 | 2,723,471 | 6,187,903 | 2,218,649 | 4,192,096 | 4,146,581 | 6,647,870 |
| Zebra Technologies Corporation ❘ |
|
NATHAN WINTERS(7) | ||||||||
CRISTEN KOGL | CRISTEN KOGL | |||||||
Executive’s Compensation and Benefits upon Termination | Retirement or Voluntary Resignation ($) | Death or Disability ($) | Involuntary Termination Without Cause or by Executive for Good Reason ($) | Involuntary Termination Without Cause or by Executive for Good Reason with a Change in Control(1) ($) | Retirement | Death or | Involuntary | Involuntary |
Compensation |
|
| ||||||
Salary Severance | 0 | – | 181,910 | 0 | 580,381 | 1,160,762 | ||
Incentive Severance(2) | 0 | – | 0 | 464,305 | 928,610 | |||
Earned Incentive | 0 | 83,042 | 0 | 355,919 | ||||
Accelerated SARs(3) | 0 | 396,176 | 109,251 | 396,176 | 0 | 43,027 | 24,061 | 43,027 |
Accelerated Restricted Stock(4) | 0 | 1,828,642 | 1,148,378 | 1,828,642 | 0 | 3,234,099 | 1,427,434 | 3,324,099 |
Benefits |
|
| ||||||
Healthcare and Dental Coverage | – | 10,721 | – | 7,475 | ||||
Outplacement Services | – | – | 32,000 | |||||
Excise Tax Gross Up (Cutback)(5) | – | – | ||||||
TOTAL(6) | 0 | 2,307,860 | 1,533,302 | 2,500,491 | 0 | 3,633,045 | 2,891,575 | 5,851,892 |
(1) Under the 2015 Long-Term Incentive Plan and the 2018 Long-Term Incentive Plan (collectively the “LTIPs”), if pursuant to a change in control of Zebra effective December 31, 2020 stockholders receive consideration consisting solely of publicly traded common stock and outstanding equity awards are assumed, or provision is made for the continuation of these awards after the change in control, then such awards will continue in accordance with their terms. These awards, however, also provide that if the participant’s employment is terminated by the participant for Good Reason or by Zebra without Cause after the change in control, then vesting of the awards will accelerate. Because Securities and Exchange Commission rules require that we assume a termination of employment occurs concurrently with a change in control, the amounts set forth in the table include equity awards that under the LTIPs contain “double trigger” acceleration provisions. (2) The amounts assume termination of employment at year end and are based on actual performance. (3) The amounts reflect the difference between the exercise price of each SAR and the $384.33 closing price of our common stock on The NASDAQ Stock Market on December 31, 2020. (4) The amounts reflect the $384.33 closing price of our common stock on The NASDAQ Stock Market on December 31, 2020 for both the performance-vested restricted stock and time-vested restricted stock. Because no portion of the performance periods ending December 31, 2021 or December 31, 2022 have been completed as of December 31, 2020, the 2020 performance-vested restricted stock awards granted to Executives are reflected in the table on a pro-rata basis at target performance. (5) Represents estimated tax gross ups or estimated cutbacks on severance, accelerated options, SARs and restricted stock and healthcare and dental benefits. (6) Excludes the amount of previously earned and fully vested deferred compensation under Zebra’s deferred compensation plans that would become immediately payable. See “Non-Qualified Deferred Compensation” above for additional information. (7) Amounts do not reflect the provisions in Mr. Winters’ employment agreement signed on January 11, 2021. In addition, since Mr. Winters’ was subject to the Company’s Severance Policy as of December 31, 2020, he was entitled to a severance salary and healthcare and dental coverage under the Severance Policy. All employees without an employment agreement are subject to the Company’s Severance Policy. As of January 11, 2021, Mr. Winters was no longer subject to the Severance Policy. | ||||||||
(1) Under the 2018 Long-Term Incentive Plan, if pursuant to a change in control of Zebra effective December 31, 2022 stockholders receive consideration consisting solely of publicly traded common stock and outstanding equity awards are assumed, or provision is made for the continuation of these awards after the change in control, then such awards will continue in accordance with their terms. These awards, however, also provide that if the participant’s employment is terminated by the participant for Good Reason or by Zebra without Cause after the change in control, then vesting of the awards will accelerate. Because Securities and Exchange Commission rules require that we assume a termination of employment occurs concurrently with a change in control, the amounts set forth in the table include equity awards that, under the 2018 Long-Term Incentive Plan, contain “double trigger” acceleration provisions. (2) The amounts assume termination of employment at year end and are based on actual performance. (3) The amounts reflect the difference between the exercise price of each stock appreciation right and the $256.41 closing price of our common stock on The Nasdaq Stock Market on December 31, 2022. (4) The amounts reflect the $256.41 closing price of our common stock on The Nasdaq Stock Market on December 31, 2022 for both the performance-vested restricted stock and time-vested restricted stock. Because no portion of the performance periods ending December 31, 2023 or December 31, 2024 have been completed as of December 31, 2022, the 2021 and 2022 performance-vested restricted stock awards granted to Executives are reflected in the table on a pro-rata basis at target performance. (5) Represents estimated tax gross ups or estimated cutbacks on severance, accelerated options, stock appreciation rights and restricted stock and healthcare and dental benefits. (6) Excludes the amount of previously earned and fully vested deferred compensation under Zebra’s deferred compensation plans that would become immediately payable. See Non-Qualified Deferred Compensation on page 71 for additional information. |
(1) Under the 2018 Long-Term Incentive Plan, if pursuant to a change in control of Zebra effective December 31, 2022 stockholders receive consideration consisting solely of publicly traded common stock and outstanding equity awards are assumed, or provision is made for the continuation of these awards after the change in control, then such awards will continue in accordance with their terms. These awards, however, also provide that if the participant’s employment is terminated by the participant for Good Reason or by Zebra without Cause after the change in control, then vesting of the awards will accelerate. Because Securities and Exchange Commission rules require that we assume a termination of employment occurs concurrently with a change in control, the amounts set forth in the table include equity awards that, under the 2018 Long-Term Incentive Plan, contain “double trigger” acceleration provisions. (2) The amounts assume termination of employment at year end and are based on actual performance. (3) The amounts reflect the difference between the exercise price of each stock appreciation right and the $256.41 closing price of our common stock on The Nasdaq Stock Market on December 31, 2022. (4) The amounts reflect the $256.41 closing price of our common stock on The Nasdaq Stock Market on December 31, 2022 for both the performance-vested restricted stock and time-vested restricted stock. Because no portion of the performance periods ending December 31, 2023 or December 31, 2024 have been completed as of December 31, 2022, the 2021 and 2022 performance-vested restricted stock awards granted to Executives are reflected in the table on a pro-rata basis at target performance. (5) Represents estimated tax gross ups or estimated cutbacks on severance, accelerated options, stock appreciation rights and restricted stock and healthcare and dental benefits. (6) Excludes the amount of previously earned and fully vested deferred compensation under Zebra’s deferred compensation plans that would become immediately payable. See Non-Qualified Deferred Compensation on page 71 for additional information. |
Post-Resignation Payment for Mr. Leonetti
In connection with his voluntary resignation on August 28, 2020, Mr. Leonetti was not entitled to any severance compensation, award acceleration or any other benefits, including healthcare coverage or outplacement services. In accordance with the terms of his outstanding equity awards, Mr. Leonetti’s unvested SARs, time-vested restricted stock awards and performance-vested restricted stock awards were canceled. Further, Mr. Leonetti had until the earlier of 30 days from the date of his voluntary resignation and the expiration date of the SARs to exercise all vested but unexercised SARs.
| Zebra Technologies Corporation ❘ |
|
Identification of Median Employee
To identify the median employee, we used a valid statistical sampling method. We selected a median pool of employees from the overall population, including the identified median employee.
We compiled a list of all full-time, part-time, temporary and seasonal employees who were employed on November 1, 2020,2022, including employees working inside and outside the United States, but excluding Mr. Gustafsson, who served as Chief Executive Officer (“CEO”) for all of 2020.2022. As permitted according to the Securities and Exchange Commission’s guidance, we determined the median pool of employees based on a consistently applied compensation measure, which was target total cash compensation. We define target total cash compensation as base wages and annual incentives at target payable in cash during 2020.
2022.
On November 1, 20202022, Zebra had 8,43110,694 employees worldwide. Under the five percent de minimis exception established by the Securities and Exchange Commission, the countries and applicable number of employees that were excluded are as follows:
Country Name | Headcount |
| Country Name | Headcount | Headcount |
| Country Name | Headcount |
Argentina | 16 |
| New Zealand | 3 | 18 |
| New Zealand | 6 |
Austria | 12 |
| Norway | 3 | 13 |
| Norway | 5 |
Belgium | 9 |
| Philippines | 5 | 10 |
| Philippines | 6 |
Chile | 5 |
| Poland | 79 | ||||
Columbia | 56 |
| Portugal | 6 | ||||
Denmark | 5 |
| Portugal | 5 | 11 |
| Romania | 8 |
Finland | 3 |
| Romania | 6 | 4 |
| Saudi Arabia | 7 |
France | 85 |
| Saudi Arabia | 8 | ||||
Germany | 95 |
| Serbia | 5 | ||||
Greece | 2 |
| Spain | 35 | 3 |
| Serbia | 5 |
Hong Kong | 4 |
| Sweden | 19 | 3 |
| South Africa | 15 |
Hungary | 5 |
| Switzerland | 4 | 7 |
| Spain | 35 |
Indonesia | 8 |
| Thailand | 12 | 8 |
| Sweden | 21 |
Israel | 6 |
| United Arab Emirates | 14 | 7 |
| Switzerland | 6 |
Italy | 30 |
| Vietnam | 20 | 43 |
| Thailand | 10 |
Japan | 25 |
| Turkey | 20 | ||||
Korea, Republic of | 16 |
| United Arab Emirates | 18 | ||||
|
|
| Vietnam | 18 |
From the remaining 8,01210,200 employees, we determined the median individual based on estimated target total cash compensation and selected a medianable pool of 3,2064,077 employees (forty(approximately forty percent (40%)) of our total employee population). We excluded from our employee population data described above 597 employees who joined Zebra on September 1, 2020 as part of its acquisition of Reflexis Systems, Inc.
We then obtained actual total cash compensation recorded during 2020 via payroll data for the pool of medianable employees. We identified the median employee by referencingusing annual base salary. Once we identified the actual payroll data andmedian employee, we calculated such employee’s annual total compensation using the same methodology that we useused to determine the annual total compensation for the CEO, as reported above in the Summary Compensation Table.
For 2020,2022,
the total annual compensation of the employee identified at the median of all of our employees, other than Mr. Gustafsson, our CEO, was $64,887;$73,287; and
Mr. Gustafsson’s annual total compensation, as reported in the Summary Compensation Table, was $10,077,727.$14,658,743.
Based on this information, the ratio of the annual total compensation of Mr. Gustafsson to the median of the annual total compensation of all employees was estimated to be 155200 to 1.
Our methodology may differ materially from the methodology used by other companies to prepare their CEO pay ratios, which may contribute to a lack of comparability between our pay ratio and the pay ratio reported by other companies, including those within our industry or peer group.
| Zebra Technologies Corporation ❘ |
|
Year | CEO Pay |
| Other NEO Pay |
| Value of Initial Fixed |
| Other Performance | ||||||||||||
Summary | Compensation | Average | Average | Cumulative | Cumulative ($) | Net Income | Net Sales | ||||||||||||
2022 |
| 14,658,743 |
| (17,540,875) |
|
| 3,546,548 |
| (1,911,451) |
|
|
|
|
| 463 |
| 4,915 | ||
2021 |
| 13,589,616 |
| 37,632,608 |
|
| 3,261,693 |
| 6,936,499 |
|
|
|
|
| 837 |
| 4,845 | ||
2020 |
| 10,077,727 |
| 23,856,956 |
|
| 1,836,299 |
| 2,998,842 |
|
|
|
|
| 504 |
| 3,813 | ||
(1) The Cumulative Total Stockholder Return (“TSR”) reflects the value of $100 invested in Zebra common stock on December 31, 2019, assuming the reinvestment of dividends.
(2) The Cumulative Peer Group TSR is market-cap weighted and reflects the TSR for S&P Information Technology Index, which is the peer group that Zebra uses for its industry comparators/index in its Form 10-K. (3) To calculate Compensation Actually Paid (“CAP”), the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation: |
Year | Salary | Bonus and | Equity | Other | SCT Total | Deductions | Additions to / | Compensation | ||||||||
2022 |
| 1,200,000 |
| 1,255,500 |
| 12,000,000 |
| 203,243 |
| 14,658,743 |
| (12,000,000) |
| (20,199,618) |
| (17,540,875) |
2021 |
| 1,200,000 |
| 2,912,760 |
| 9,250,404 |
| 226,452 |
| 13,589,616 |
| (9,250,404) |
| 33,293,396 |
| 37,632,608 |
2020 |
| 1,093,846 |
| 781,725 |
| 8,000,100 |
| 202,056 |
| 10,077,727 |
| (8,000,100) |
| 21,779,329 |
| 23,856,956 |
(i) Reflects “all other compensation” reported in the SCT for each year shown. (ii) Represents the grant date fair value of equity-based awards granted each year. We did not report a change in pension value for any of the years reflected in this table; therefore, a deduction from SCT total related to pension value is not needed. (iii) Reflects the value of equity calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown. The equity component of Compensation Actually Paid for each fiscal year listed in the table is further detailed in the supplemental table below. |
Year | Salary | Bonus and | Equity | Other | SCT Total | Deductions | Additions to / | Compensation | ||||||||
2022 |
| 596,796 |
| 445,129 |
| 2,437,500 |
| 67,123 |
| 3,546,548 |
| (2,437,500) |
| (3,020,498) |
| (1,911,451) |
2021 |
| 543,632 |
| 862,629 |
| 1,800,441 |
| 54,991 |
| 3,261,693 |
| (1,800,441) |
| 5,475,248 |
| 6,936,499 |
2020 |
| 440,963 |
| 145,738 |
| 1,217,163 |
| 32,435 |
| 1,836,299 |
| (1,217,163) |
| 2,379,706 |
| 2,998,842 |
(i) Reflects “all other compensation” reported in the SCT for each year shown. (ii) Represents the grant date fair value of equity-based awards granted each year. We did not report a change in pension value for any of the years reflected in this table; therefore, a deduction from SCT total related to pension value is not needed. (iii) Reflects the value of equity calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown. The equity component of Compensation Actually Paid for each fiscal year listed in the table is further detailed in the supplemental table below. |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 78 |
Equity | CEO |
| Other NEOs | ||||||||||||||
Fair Value of | Change in | Change in | Equity Value | Fair Value of | Change in | Change in | Equity Value | ||||||||||
SAR |
| 0 |
| (4,749,403) |
| (3,927,669) |
| (8,677,071) |
|
| 0 |
| (567,776) |
| (488,103) |
| (1,055,879) |
RSU |
| 3,345,894 |
| (3,208,002) |
| (2,679,084) |
| (2,541,192) |
|
| 679,743 |
| (542,996) |
| (379,301) |
| (242,554) |
PSU |
| 5,018,713 |
| (8,323,393) |
| (5,676,675) |
| (8,981,355) |
|
| 1,019,551 |
| (2,115,266) |
| (626,351) |
| (1,722,066) |
Total |
| 8,364,607 |
| (16,280,798) |
| (12,283,428) |
| (20,199,618) |
|
| 1,699,294 |
| (3,226,037) |
| (1,493,755) |
| (3,020,498) |
1. Anders Gustafsson served as our principal executive officer for all of 2022. The Other NEOs columns represent the following individuals for 2022: William Burns, Joachim Heel, Cristen Kogl and Nathan Winters. |
Equity | CEO |
| Other NEO | ||||||||||||||
Fair Value of | Change in | Change in | Equity Value | Fair Value of | Change in | Change in | Equity Value | ||||||||||
SAR |
| 0 |
| 6,424,221 |
| 2,385,222 |
| 8,809,443 |
|
| 0 |
| 780,885 |
| 310,428 |
| 1,091,314 |
RSU |
| 4,565,184 |
| 2,864,669 |
| 1,487,720 |
| 8,917,573 |
|
| 890,568 |
| 368,707 |
| 212,330 |
| 1,471,604 |
PSU |
| 6,847,776 |
| 5,838,780 |
| 2,879,824 |
| 15,566,380 |
|
| 1,332,653 |
| 1,174,409 |
| 405,268 |
| 2,912,330 |
Total |
| 11,412,960 |
| 15,127,670 |
| 6,752,766 |
| 33,293,396 |
|
| 2,223,221 |
| 2,324,001 |
| 928,026 |
| 5,475,248 |
1. Anders Gustafsson served as our principal executive officer for all of 2021. The Other NEOs columns represent the following individuals for 2021: William Burns, Joachim Heel, Cristen Kogl and Nathan Winters. |
Equity | CEO |
|
| Other NEO | |||||||||||||
Fair Value of | Change in value | Change in | Equity Value | Fair Value of | Change in | Change in | Equity Value | ||||||||||
SAR |
| 3,560,497 |
| 4,382,827 |
| (748,856) |
| 7,194,468 |
|
| 356,474 |
| 421,051 |
| (92,071) |
| 685,454 |
RSU |
| 5,020,503 |
| 1,946,239 |
| (620,904) |
| 6,345,838 |
|
| 557,816 |
| 184,700 |
| (85,710) |
| 656,806 |
PSU |
| 5,020,503 |
| 3,953,314 |
| (734,794) |
| 8,239,023 |
|
| 502,704 |
| 637,309 |
| (102,566) |
| 1,037,447 |
Total |
| 13,601,503 |
| 10,282,380 |
| (2,104,554) |
| 21,779,329 |
|
| 1,416,994 |
| 1,243,060 |
| (280,348) |
| 2,379,706 |
1. Anders Gustafsson served as our principal executive officer for all of 2020. The Other NEOs columns represent the following individuals for 2020: William Burns, Joachim Heel, Cristen Kogl, Olivier Leonetti (former CFO) and Nathan Winters. |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 79 |
The five items listed below represent the most important metrics we used to link Compensation Actually Paid to Company performance for 2022 as further described in our Compensation Discussion and Analysis (CD&A) within the sections titled “Annual Cash Incentive Plan Performance Metrics” and “Performance-Vested Restricted Stock.” The measures in the table are not ranked.
Most Important Performance Measures | |
Net Sales | Net Sales Compound Annual Growth Rate (CAGR) |
Adjusted EBITDA | EBITDA Margin |
Enterprise Asset Intelligence Index |
As shown in the chart below, the Company’s 3-year cumulative TSR is less than the companies included in our industry index.
YEAR | INDEXED TSR | |||
Cumulative TSR ($) | Cumulative Peer Group TSR ($) | |||
2022 |
| 100.38 |
| 139.00 |
2021 |
| 233.01 |
| 193.58 |
2020 |
| 150.46 |
| 143.89 |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 80 |
The CEO and other NEO CAP amounts align with Zebra’s TSR over the 2020-2022 period. This reflects Zebra’s use of equity incentives for its Executive Officer compensation, which are tied directly to Zebra’s stock price and financial performance. Over the 2020-2022 period, equity incentives comprised on average over 75% of the CEO’s target compensation per year and over 55% of the other NEOs target compensation per year. Because Zebra’s CEO has such a high percentage of compensation tied to equity, the CEO would have a much larger increase in CAP than the other NEOs when the stock price is strong as in 2021, and a much larger decrease in CAP than the other NEOs when the stock price decreases as in 2022. This practice aligns the interests of our Executive Officers with those of our stockholders.
Zebra’s CEO and other NEO CAP amounts align with Zebra’s Net Income. The CAP amounts are sensitive to changes in Zebra’s stock price, which Net Income would affect. Zebra does not use Net Income to determine compensation levels or payouts under the annual cash incentive plan or the performance-based equity grants.
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 81 |
Zebra uses Net Sales as a metric for its annual cash incentive plan and Net Sales CAGR as a metric for performance equity awards. As indicated below, with a higher growth in Net Sales between 2020 and 2021, the CEO and Other NEO 2021 CAP amounts increased above the 2020 CAP amounts. As Net Sales growth slowed between 2021 and 2022, the CEO and Other NEO CAP amounts declined.
The following table provides information related to Zebra’s equity compensation plans as of December 31, 2020.2022.
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) |
| Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) |
| |
Equity Compensation Plans Approved by | 672,548 | (1) | $ | 106.76 | 4,819,326 | (2) |
Security Holders |
|
|
|
|
|
|
Equity Compensation Plans Not Approved by | 0 |
|
| 0 | 0 |
|
Security Holders |
|
|
|
|
|
|
TOTAL | 672,548 |
| $ | 106.76 | 4,819,326 |
|
(1) Reflects shares of Zebra common stock issuable pursuant to outstanding options and stock appreciation rights (“SARs”) under the 2011 Long-Term Incentive Plan, 2015 Long-Term Incentive Plan, 2016 Stock Incentive Plan of Reflexis Systems, Inc. and 2018 Long-Term Incentive Plan (“2018 LTIP”). (2) Reflects the number of shares available under the 2018 LTIP (3,339,322 shares) and 2020 Employee Stock Purchase Plan (1,480,004 shares). All of the shares under the 2018 LTIP are available for any award made under the 2018 LTIP, including options, SARs, restricted stock, restricted stock units, performance shares or performance units. |
Plan Category | Number of Securities |
| Weighted-Average | Number of Securities |
| |
Equity Compensation Plans Approved by Security Holders | 468,485 | (1) | $ | 119.59 | 4,201,260 | (2) |
Equity Compensation Plans Not Approved by Security Holders | 0 |
|
| 0 | 0 |
|
TOTAL | 468,485 |
| $ | 119.59 | 4,201,260 |
|
(1) Reflects shares of Zebra common stock issuable pursuant to outstanding options and stock appreciation rights under the 2011 Long-Term Incentive Plan, 2015 Long-Term Incentive Plan, 2016 Stock Incentive Plan of Reflexis Systems, Inc. and 2018 Long-Term Incentive Plan (“2018 LTIP”). (2) Reflects the number of shares available under the 2018 LTIP (2,791,708 shares) and 2020 Employee Stock Purchase Plan (1,409,552 shares). All of the shares under the 2018 LTIP are available for any award made under the 2018 LTIP, including options, stock appreciation rights, restricted stock, restricted stock units, performance shares or performance units. |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 82 |
During 2020,2022, the Compensation Committee was comprised of Richard L. Keyser (Chair), Chirantan “CJ” Desai, JaniceM.Roberts and Michael A. Smith. Only independent directors served on the Compensation Committee during 2020. None of the members2022. No member of the Compensation Committee (i) has ever been an Officer or other employee of Zebra, or (ii) has any relationship requiring disclosure under Item 404 of Regulation S-K. No Executive Officer of Zebra served in 20202022 on the compensation committee or similar body of any organization that determined compensation payable to any member of the Compensation Committee. In addition, no Executive Officer of Zebra has served as a member of the board of directors or compensation committee of any entity that had one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
| Zebra Technologies Corporation ❘ |
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Zebra is seeking your advisory vote to approve the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with Section 14A of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission. This is known as a “say-on-pay” proposal. At Zebra’s 20202022 Annual Meeting of stockholders,Stockholders, the proposal was approved by 95.17%90.29% of the votes cast for or against the proposal. At Zebra’s 2017 Annual Meeting, our stockholders indicated a preference offor holding an annual say-on-pay vote.
We ask our stockholders to approve the following resolution:
“Resolved, that the compensation of the Named Executive Officers of Zebra Technologies Corporation, as disclosed pursuant to Item 402 of Regulation S-K, as described in and including the Executive Summary –— Compensation Discussion and Analysis, Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this Proxy Statement, is approved by the stockholders of Zebra.”
As described in detail under “CompensationDiscussionandAnalysis,” our total rewards and executive compensation programs areprogram is designed to attract, retain, motivate, develop and reward our Named Executive Officers, who are critical to our success. Under these programs,this program, our Named Executive Officers are rewarded for the achievement of specific annual, long-term and strategic goals, corporate and individual goals, and the realization of increased stockholder value.
Our Compensation Committee regularly reviews the compensation programsprogram for our Named Executive Officers to ensure they achieveit achieves the desired goals of aligning our executive compensation structure with our stockholders’ interests and current market practices. Our Compensation Committee also regularly reviews its own processes to ensure alignment with its Charter and regulatory requirements. This review includes topics such topics as peer group and survey compensation review analysis, total compensation philosophy, Compensation Committee Charter review and a compensation risk assessment. The Compensation Committee also takes into account investor feedback regarding our compensation structure and its alignment with our strategy.
We are asking our stockholders to approve our Named Executive Officer compensation as described in this Proxy Statement. This proposal gives you the opportunity to express your view on the compensation of our Named Executive Officers. This stockholder vote is not intended to address any specific element of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this ProxyStatement. We ask you to vote “FOR” the approval of the resolution included above.
This vote is advisory, and therefore not binding on Zebra, our Compensation Committee or our Board of Directors. Our Board of Directors and Compensation Committee value the opinions of our stockholders and will consider the results of thevote, as appropriate, in making future decisions regardingthecompensation of our Named Executive Officers.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. |
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Advisory Vote to Approve the Frequency of Holding an Advisory Vote to Approve the Compensation of Named Executive Officers
Zebra is seeking your advisory vote on the frequency with which we should seek an advisory vote on the compensation of our named executive officers, such as proposal 2, in accordance with Section 14A of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission. When voting on this proposal, Stockholders may indicate whether they would prefer an advisory vote on the compensation of named executive officers once every one, two, or three years and may also choose to abstain fromvoting.
Our Board of Directors has determined that an annual advisory vote on the compensation of our named executive officers is the most appropriate alternative. Our Board of Directors recommends that you vote for a frequency of “one year” for advisory votes on the compensation of our named executiveofficers.
When making its determination, our Board of Directors considered Zebra’s obligation to disclose annually the compensation of our named executive officers, as well as our compensation philosophy, policies and practices. An annual advisory vote by stockholders on executive compensation provides a direct communication from our stockholders as a whole about the compensation disclosure contained in that year’s proxy materials and is most consistent with seeking timely input from our stockholders on executive compensation matters, including executive compensation philosophy, policies and practices. We understand that our stockholders may have different views as to what is the best approach for Zebra, and we look forward to hearing from you on this proposal.
The option that receives the highest number of votes cast by stockholders will be the frequency for the advisory vote on the compensation of our named executive officers. However, because this vote is advisory and not binding on the Board of Directors or Zebra, the Board may decide that it is in the best interests of our stockholders and Zebra to hold an advisory vote on executive compensation more or less frequently than the option approved by our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” A FREQUENCY OF “ONE YEAR” FOR ADVISORY VOTES BY STOCKHOLDERS ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 85 |
The Audit Committee of Zebra’s Board of Directors is comprised of four directors, all of whom are independent under applicable listing requirements of The NASDAQNasdaq Stock Market. The Audit Committee operates under a written Charter adopted by the Board of Directors. The members of the Audit Committee are: Mr. Manire, Chair, Ms.Mses. Connly and Messrs. ModrusonConnors, and Smith.Mr.Modruson.
The Audit Committee received reports from and met and held discussions with management, theour internal auditorsaudit team and the independent accountants. It reviewed and discussed Zebra’s audited financial statements with management, and management has represented to the Audit Committee that Zebra’s financial statements were prepared in accordance with accounting principles generally accepted in the United States and that such financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. The Audit Committee also discussed with the independent accountants the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. The Audit Committee received the written disclosures and letter from the independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants’ communications with the Audit Committee concerning independence, and discussed with the independent accountants the independent accountants’ independence.
The Audit Committee recommended that the Board of Directors include the audited financial statements of Zebra in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2020,2022, as filed with the Securities and Exchange Commission. This recommendation was based on the AuditCommittee’s review and discussions with management, internal auditorsaudit team and Zebra’s independent accountants, as well as the Audit Committee’s reliance on management’s representations described above.
Audit Committee
Ross W. Manire, Chair
Linda M. Connly
Nelda J. Connors
Frank B. ModrusonMichael A. Smith
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Ernst & Young LLP acted as the principal independent auditor for Zebra during 20202022 and 2019.2021. Ernst & Young also provided certain audit-related, tax and permitted non-audit services. The Audit Committee pre-approves all audit, audit-related, tax and permitted non-audit services performed for Zebra by its independent auditors. In 20202022 and 2019,2021, the Audit Committee approved in advance all engagements by Ernst & Young on a specific project-by-project basis, including audit, audit-related, tax and permitted non-audit services. No impermissible non-audit services were rendered by Ernst & Young to Zebra in 20202022 or 2019.2021.
Zebra paid Ernst & Young the following fees and expenses for services provided for the years ended December 31, 20202022 and 2019:2021:
Fees |
| 2020 |
| 2019 |
| 2022 |
| 2021 |
Audit Fees(1) | $ | 4,641,590 | $ | 4,625,855 | $ | 5,374,197 | $ | 4,962,790 |
Audit-Related Fees(2) |
| 776,289 |
| 842,986 |
| 1,128,000 |
| 1,154,900 |
Tax Fees(3) |
| 439,927 |
| 514,000 |
| 547,830 |
| 156,096 |
All Other Fees |
| – |
| – |
| 1,990,945 |
| 293,200 |
TOTAL | $ | 5,857,806 | $ | 5,982,841 | $ | 9,040,972 | $ | 6,566,986 |
(1) Consists of fees for the audit of Zebra’s annual financial statements and reviews of the financial statements included in the quarterly reports on Form 10-Q. Also includes fees for the 2020 and 2019 audits of internal control over financial reporting. (2) For 2020 and 2019, audit-related fees primarily consist of fees paid to Ernst & Young related to diligence for acquisitions. (3) For 2020 and 2019, tax-fees consist of fees paid to Ernst & Young related to tax consulting. | ||||||||
(1) Consists of fees for the audit of Zebra’s annual financial statements and reviews of the financial statements included in the quarterly reports on Form 10-Q. Also includes fees for the 2022 and 2021 audits of internal control over financial reporting. (2) For 2022 and 2021, audit-related fees primarily consist of fees paid to Ernst & Young related to diligence for acquisitions. (3) For 2022 and 2021, tax-fees consist of fees paid to Ernst & Young related to tax consulting. The increase in 2022 fees as compared to 2021 is primarily due to consultation services related to transfer pricing and rationalization of legal entities acquired in recent business acquisitions. (4) For 2022, all other fees primarily consist of permissible professional consultation services associated with business acquisitions. The increase in 2022 fees as compared to 2021 is due to consultation services related to the acquisition of Matrix Electronic Systems Ltd. | (1) Consists of fees for the audit of Zebra’s annual financial statements and reviews of the financial statements included in the quarterly reports on Form 10-Q. Also includes fees for the 2022 and 2021 audits of internal control over financial reporting. (2) For 2022 and 2021, audit-related fees primarily consist of fees paid to Ernst & Young related to diligence for acquisitions. (3) For 2022 and 2021, tax-fees consist of fees paid to Ernst & Young related to tax consulting. The increase in 2022 fees as compared to 2021 is primarily due to consultation services related to transfer pricing and rationalization of legal entities acquired in recent business acquisitions. (4) For 2022, all other fees primarily consist of permissible professional consultation services associated with business acquisitions. The increase in 2022 fees as compared to 2021 is due to consultation services related to the acquisition of Matrix Electronic Systems Ltd. |
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The Audit Committee appointed Ernst & Young LLP, independent certified public accountants, as auditors of Zebra’s financial statements for the year ending December 31, 2021.2023. Ernst & Young has served as Zebra’s independent certified public accountants since 2005.
The Board of Directors gives stockholders the opportunity to express their opinions on the matter of auditors for Zebra and, accordingly, is submitting a proposal to ratify the Audit Committee’s appointment of Ernst & Young. If this proposal does not receive the affirmative vote of a majority of the votes cast at the Annual Meeting, the Audit Committee may appoint another independent registered public accounting firm or may decide to maintain the appointment of Ernst & Young.
Zebra expects that representatives of Ernst & Young will be present at the Annual Meeting and available to respond to questions. These representatives will be given an opportunity to make a statement if they would like to do so.
THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST&YOUNG LLP AS AUDITORS FOR THE YEARENDING DECEMBER 31, |
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The following information identifies and gives other information about our Executive Officers, other than Anders Gustafsson,William Burns, our CEO, about whom information is given above under “Proposal 1-Proposal 1– Election of Directors.”
Chief Age: | Rob Armstrong was appointed Chief Marketing Officer in March of 2023. Mr. |
MichaelCho Chief Strategy Officer Age: | Mr. Cho joined Zebra in 2010 and has served as Zebra’s Chief Strategy Officer since February2013. Mr. Cho served as Vice President, Strategy from 2010 until 2011 and VicePresident, Corporate Development from 2011 until 2013. From 2008 to 2010 he served as Vice President, Business Development, of the Healthcare division of Amcor Limited, a global packaging company. Prior to that, Mr. Cho served from 2007 to 2008 as Vice President, Business Development of CommScope Inc., a global communications solutions company. From 2005 to 2007, Mr. Cho served as Vice President, Business Development of the Antenna & Cable Products Group at Andrew Corporation, which he joined in 2004 as Director, Corporate Development & Strategy. From 1999 to 2004 Mr. Cho was a consultant with McKinsey & Company. Mr. Cho received an MBA from Harvard Business School and a B.S. in Finance from the University of Illinois at Urbana-Champaign. |
TamaraFroese Chief Supply Chain Officer Age: 44 | Tamara Froese was appointed Chief Supply Chain Officer in August of 2022. Tami joined Zebra in 2020. She is a leader in cost management practices with extensive experiences cross-functionally in Procurement, Supply Chain, Manufacturing and Engineering during her 20-year career at General Motors. She believes in strong partnerships internally and with Zebra’s global supply base to further the growth for Zebra in the future. Tami holds a B.A. in Supply Chain Management from Michigan State University and an MBA from Oakland University. To further her leadership journey, she also achieved her Six Sigma Black Belt certification and graduated from leadership development programs with Harvard University and University of Michigan. |
JoachimHeel Chief Revenue Officer Age: | Mr. Heel joined Zebra in 2014 |
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 89 |
CristenL.Kogl Chief Legal Officer, General Counsel& Corporate Secretary Age: | Ms. Kogl joined Zebra in 2015 and currently serves as its Chief Legal Officer, GeneralCounsel& Corporate Secretary. Ms. Kogl has served as Zebra’s Chief Legal Officer, General Counsel & Corporate Secretary since September 2018. Prior to her current position, Ms. Kogl held a variety of progressive positions including Vice President, Corporate Counsel and Vice President, Assistant General Counsel and Assistant Corporate Secretary. Prior to joining Zebra, Ms. Kogl was the Executive Vice President and General Counsel at National Express LLC |
ColleenM.O’Sullivan SVP Chief Accounting Officer Age: | Ms. O’Sullivan joined Zebra in 2016 as Chief Accounting Officer. Ms. O’Sullivan most recently served as Senior Vice President and Chief Financial Officer at Career Education Corporation. In addition to that position at Career Education Corporation, she held the positions of Senior VicePresident, Controller and Chief Accounting Officer, and Vice President and Controller. Previously, she held various finance and accounting positions at Hewitt Associates and Sears Holdings Corporation. Earlier in her career, she held various roles in the audit practice at Arthur Andersen. Ms. O’Sullivan received a |
JeffreyF.Schmitz Chief Human Resources & MarketingOfficer Age: 57 | Mr. Schmitz joined Zebra in 2016 as Chief Marketing Officer and has served as its Chief Human Resources & Marketing Officer since 2020. Since 2009, Mr. Schmitz served in growing levels of responsibility for Spirent Communications, including General Manager of Networks & Applications, Chief Marketing Officer and, most recently, Executive Vice President. Prior to Spirent, Mr. Schmitz served as Senior Vice President of Sales and Marketing at Rivulet Communications, a medical imaging company, Vice President of Marketing & Product Management at Visual Networks, an enterprise software company, and Tellabs, where he held various executive positions. He holds a B.S. |
Chief Age: |
|
NathanA.Winters Chief Financial Officer Age: | Nathan Winters was appointed |
The Board of Directors approves the appointment of Zebra’s Executive Officers. There are no family relationships among any of our directors or Executive Officers.
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This table shows how many shares of our common stock certain individuals and entities beneficially owned on March 19, 2021,17, 2023, unless otherwise noted. These individuals and entities include: (1)owners of more than 5% of our outstanding common stock, (2) our directors, (3) the Named Executive Officers and (4) all directors and Executive Officers as a group. A person has beneficial ownership over shares if the person has sole or shared voting or investment power over the shares or the right to acquire that power within 60 days. Investment power means the power to direct the sale or other disposition of the shares. Each individual or entity included in the table below has sole voting and investment power over the shares, except as described below.
Name and Address | Number |
| % of Shares(1) | Number |
| % of Shares(1) |
More than 5% Stockholders |
|
|
|
|
|
|
The Vanguard Group, Inc. | 5,944,724 | (2) | 11.11 % | 5,910,264 | (2) | 11.5% |
BlackRock, Inc. | 3,943,088 | (3) | 7.37 % | 3,531,638 | (3) | 6.9% |
FMR LLC | 1,297,402 | (4) | 2.43 % | |||
Directors and Executive Officers |
|
|
|
|
|
|
Anders Gustafsson | 360,705 | (5) | * | 315,057 | (4) | * |
Linda M. Connly | 902 |
| * | 2,008 |
| * |
Nelda J. Connors | 821 |
| * | |||
Chirantan J. Desai | 4,879 |
| * | 5,985 |
| * |
Richard L. Keyser | 25,044 |
| * | 17,150 |
| * |
Ross W. Manire | 23,346 |
| * | 13,452 |
| * |
Frank B. Modruson | 14,998 |
| * | 12,004 |
| * |
Janice M. Roberts | 7,523 |
| * | 6,827 |
| * |
Michael A. Smith | 8,204 |
| * | 8,339 |
| * |
William Burns | 32,706 | (5) | * | |||
Nathan Winters | 7,240 | (4) | * | |||
William J. Burns | 32,963 | (4) | * | |||
Joachim Heel | 68,533 | (5) | * | 72,329 | (4) | * |
Cristen Kogl | 11,939 | (5) | * | 17,452 | (4) | * |
Nathan Winters | 6,104 | (5) | * | |||
All Executive Officers and Directors as a group (16 persons) | 592,706 | (5) | 1.11 % | |||
* Less than one percent. (1) Based on shares of common stock outstanding on March 19, 2021. (2) The Vanguard Group, Inc. is an investment advisor located at 100 Vanguard Blvd., Malvern, Pennsylvania, 19355. According to Amendment No. 10 to its Schedule 13G filed on February 10, 2021, as of December 31, 2020, Vanguard had sole voting power with respect to 0 shares, sole dispositive power with respect to 5,708,483 shares, and shared dispositive power with respect to 236,241 shares. (3) BlackRock, Inc. is a holding company located at 55 East 52nd Street, New York, New York 10055. According to Amendment No. 9 to its Schedule 13G filed on February 1, 2021, as of December 31, 2020, BlackRock had sole voting power with respect to 3,408,233 shares and dispositive power as to all shares listed in the table. (4) FMR LLC is a holding company located at 245 Summer Street, Boston, Massachusetts 02210. According to Amendment No. 1 to its Schedule 13G filed on February 8, 2021, as of December 31, 2020, FMR LLC had sole voting power with respect to 85,963 shares and dispositive power as to all shares listed in the table. (5) Includes shares of common stock that may be acquired by May 18, 2021 upon exercise of stock options and stock appreciation rights as follows: Mr. Gustafsson – 141,086 shares; Mr. Burns – 14,963 shares; Mr. Heel – 33,559 shares; Ms. Kogl – 6,342; Mr. Winters – 801 shares; and directors and Executive Officers as a group – 203,158. | ||||||
Tamara Froese |
|
|
| |||
Joseph White |
|
|
| |||
All Executive Officers and Directors as a group (17 persons) | 542,439 | (4) | * | |||
* Less than one percent. (1) Based on shares of common stock outstanding on March 17, 2023. (2) The Vanguard Group, Inc. is an investment advisor located at 100 Vanguard Blvd., Malvern, Pennsylvania, 19355. According to Amendment No. 12 to its Schedule 13G filed on February 9, 2023, as of December 31, 2021, Vanguard had sole voting power with respect to 0 shares, sole dispositive power with respect to 5,697,810 shares, and shared dispositive power with respect to 221,454 shares. (3) BlackRock, Inc. is a holding company located at 55 East 52nd Street, New York, New York 10055. According to Amendment No. 12 to its Schedule 13G filed on February 1, 2023, as of December 31, 2022, BlackRock had sole voting power with respect to 3,191,938 shares, sole dispositive power as to all shares listed in the table, and shared dispositive power with respect to 0 shares. (4) Includes shares of common stock that may be acquired by May 17, 2023 upon exercise of stock options and stock appreciation rights as follows: Mr. Gustafsson — 139,463 shares; Mr. Winters — 1,852 shares; Mr. Burns — 20,461 shares; Mr. Heel — 37,820 shares; Ms. Kogl — 17,452; and directors and Executive Officers as a group — 219,338 shares. | * Less than one percent. (1) Based on shares of common stock outstanding on March 17, 2023. (2) The Vanguard Group, Inc. is an investment advisor located at 100 Vanguard Blvd., Malvern, Pennsylvania, 19355. According to Amendment No. 12 to its Schedule 13G filed on February 9, 2023, as of December 31, 2021, Vanguard had sole voting power with respect to 0 shares, sole dispositive power with respect to 5,697,810 shares, and shared dispositive power with respect to 221,454 shares. (3) BlackRock, Inc. is a holding company located at 55 East 52nd Street, New York, New York 10055. According to Amendment No. 12 to its Schedule 13G filed on February 1, 2023, as of December 31, 2022, BlackRock had sole voting power with respect to 3,191,938 shares, sole dispositive power as to all shares listed in the table, and shared dispositive power with respect to 0 shares. (4) Includes shares of common stock that may be acquired by May 17, 2023 upon exercise of stock options and stock appreciation rights as follows: Mr. Gustafsson — 139,463 shares; Mr. Winters — 1,852 shares; Mr. Burns — 20,461 shares; Mr. Heel — 37,820 shares; Ms. Kogl — 17,452; and directors and Executive Officers as a group — 219,338 shares. |
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Delinquent Section 16(a)
Reports
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, Executive Officers and greater than ten percent stockholders to file reports of holdings and transactions in our common stock with the Securities and Exchange Commission. To our knowledge, all required reports were filed in a timely manner with the following exceptions. The Forms 4 reporting shares of common stock to cover tax liability on the vesting of time-vested restricted stock on May 2, 2020, which were filed late due to administrative error, for the following Section 16 Officers: Bill Burns, Michael Cho, Anders Gustafsson, Joachim Heel, Cristen Kogl, Olivier Leonetti, Colleen O’Sullivan, Jeffrey Schmitz, Michael Terzich and Stephen Williams. The Forms 4 reporting a grant of time-vested restricted stock on November 5, 2020, which were filed late due to administrative error, for the following Section 16 Officers: Colleen O’Sullivan, Stephen Williams and Nathan Winters.
manner.
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Stockholder
Proposals and Other Business
We expect the 20222024 Annual Meeting of Stockholders to be held on or about May 12, 2022.9, 2024. To be considered for inclusion in our proxy materials for the 20222024 Annual Meeting, a stockholder proposal must be received at our principal executive offices at Three Overlook Point, Lincolnshire, Illinois 60069 by December 2, 2021.1, 2023. In addition, our Amended and Restated By-Laws establish a proxy access procedure for nominating persons for election to the Board as well as an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of persons for election to the Board. A stockholder nomination intended to be brought before the 2024 Annual Meeting under our proxy access procedure must be delivered to our Chief Legal Officer, General Counsel & Corporate Secretary no earlier than November 1, 2023, and no later than December 1, 2023. A stockholder proposal or nomination intended to be brought before the 20222024 Annual Meeting under our advance notice procedure, must be delivered to the Chief Legal Officer, General Counsel & Corporate Secretary no earlier than January 1, 2022,2024, and no later than January 31, 2022. 2024. In addition to satisfying the requirements of our By-Laws, including the earlier notice deadlines set forth above, stockholders who intend to solicit proxies in support of director nominees other than Zebra’s nominees must also provide notice that sets forth the information required by Rule14a-19 of the Exchange Act of 1934, as amended. Stockholders are advised to review our Bylaws, which contain additional requirements for submitting stockholder proposals and director nominations. Our Bylaws are available on our website at www.investors.zebra.com under the “Governance” section of our investor relations page.
All proposals and nominations should be directed to ourto:
Chief Legal Officer, General Counsel & Corporate Secretary
Zebra Technologies Corporation
Three Overlook Point
Lincolnshire, Illinois 60069.60069
Email: zebralegal@zebra.com
The Board and our management have not received notice of and are not aware of any business to come before the 20212023 Annual Meeting other than the proposals we refer to in this Proxy Statement. If any other matter comes before the Annual Meeting, the proxies will use their judgment in voting theproxies.
We have made our 20202022 Annual Report to Stockholders available in connection with this proxy solicitation, which includes our Annual Report on Form 10-K. If you would like another copy of our Annual Report on Form 10-K, excluding certain exhibits, please contact the Chief Financial Officer at the following address: Zebra Technologies Corporation, ThreeOverlook Point, Lincolnshire, Illinois 60069.
Questions and Answers About the Annual Meeting and These Proxy Materials
HOW DO I PARTICIPATE AT THE ANNUAL MEETING?
The 20212023 Annual Meeting will be conducted solely by remote communication, in a virtual only format. Stockholders will not be able to attend the Annual Meeting in person. You may attend the virtual Annual Meeting at http://www.virtualshareholdermeeting.com/ZBRA2021.. Only stockholders of record as of the close of business on March 19, 202117, 2023 can participate at the Annual Meeting. Stockholders of record will need their 16-digit control number found on their proxy card, voting instruction form or notice to enter the Annual Meeting. Once admitted, stockholders of record may vote. Stockholders do not need to vote at the Annual Meeting if they have already voted by proxy.
Once admitted, stockholders of record may submit questions during the Annual Meeting by typing their question into the “Aska Question” field and clicking “Submit.” Only questions pertinent to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints. If any questions pertinent to Annual Meeting matters cannot be answered during the Annual Meeting due to time constraints, we will post and answer a representative set of these questions online at investors.zebra.com, under the Events section. Thequestions and answers will be available as soon as reasonably practicable after the Annual Meeting and will remain available until one week after posting.
Zebra Technologies Corporation ❘ 2023 Proxy Statement | 93 |
The following matters will be voted on at the Annual Meeting:
Proposal 1: To elect threefour Class IIII directors with terms to expire in 2024;2026;
Proposal 2: To hold an advisory vote to approve the compensation of our Named Executive Officers;
Proposal 3: To hold an advisory vote to approve the frequency of holding an advisory vote to approve the compensation of named executive officers;
Proposal 4: To ratify the appointment by our Audit Committee of Ernst & Young LLP as our independent auditors for 2021;2023; and
Such other business if properly presented or any adjournment or postponement of the Annual Meeting.
HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
Zebra’s Board recommends that you vote:
FOR the election of threefour Class IIII directors with terms to expire in 2024;2026;
FOR the approval, on an advisory basis, of the compensation of our Named Executive Officers;
FOR the approval, on an advisory basis, of an annual advisory vote on approving the compensation of named executive officers; and
FOR ratification of the appointment by our Audit Committee of Ernst & Young LLP as our independent auditors for 2021.2023.
WILL THERE BE ANY OTHER ITEMS OF BUSINESS ON THE AGENDA?
If any other items of business or other matters are properly brought before the Annual Meeting, your proxy gives discretionary authority to the persons named on the proxy card with respect to those items of business or other matters. Thepersons named on the proxy card intend to vote the proxy in accordance with their judgment. Because the deadlines for stockholder proposals and nominations have passed, we do not expect any items of business to be brought before the Annual Meeting other than the items described in this Proxy Statement.
Per the Rules for Conduct of Meeting, which will be available at the Annual Meeting, nominations made during the Annual Meeting for membership on the Board will not be accepted unless the stockholder has previously notified the Chief Legal Officer, General Counsel, & Corporate Secretary in writing of the intent to make the nomination (following all procedures set forth in the Company’s By-laws), and the person nominated has given written consent to such nomination and agreed to serve if elected.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
Holders of our Class A Common Stock at the close of business on March 19, 2021,17, 2023, the record date, may vote at the Annual Meeting. We refer to the holders of our Class A Common Stock as “stockholders” throughout this Proxy Statement. Each stockholder is entitled to one vote for each share of Class A Common Stock held as of the record date. A list of stockholders of record entitled to vote at the Annual Meeting will be available to stockholders during the Annual Meeting at http://www.virtualshareholdermeeting.com/ZBRA2021.. To access such list of stockholders beginning on May 4, 2021,1, 2023, and until the meeting,Annual Meeting, please send your request, along with proof of ownership, to Zebra Technologies Investor Relations at InvestorRelations@zebra.com.
WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND AS A BENEFICIAL OWNER?
You may own shares directly in your name as a stockholder of record, which includes shares for which you have certificates. If your shares are registered directly in your name, you are the holder of record of those shares and you have the right to give your voting proxy directly to us or to vote at the Annual Meeting. You may also own shares indirectly through a broker, bank or other holder of record. If you hold your shares indirectly, you hold the shares in “street name” and are a beneficial holder. As a beneficial holder, you have the right to direct your broker, bank or other holder of record how to vote by completing a voting instruction form.
DO I HAVE ELECTRONIC ACCESS TO THE PROXY MATERIALS AND ANNUAL REPORT?
For holdersofrecord, we are pleased to offer the opportunity to receive stockholder communications electronically. Bysigning up for electronic delivery of documents such as our Annual Report and Proxy Statement, you can access stockholder communications as soon as they are available without waiting for them to arrive in the mail. Holders of record can also reduce the number of documents in their personal files, eliminate duplicate mailings, conserve natural resources, and help reduce our printing and mailing costs. If you are a holder of record and would like to receive stockholder communications electronically in the future, please contact Computershare at 800-522-6645 or 201-680-6578. Enrollment is effective until canceled.
Beneficial holders should refer to the information provided by the broker, bank or other institution that is the holder of record for instructions on how to elect to receive proxy statements and annual reports via the Internet. Most stockholders who hold their stock through a broker, bank or other holder of record and who have electronic access will receive an e-mail message containing the Internet address to use to access our Proxy Statement and Annual Report.
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Pursuant to rules adopted by the Securities and Exchange Commission, we have made these proxy materials available via the Internet and have elected to use the SEC’sSecurities and Exchange Commission’s notice and access rules for soliciting proxies. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to all stockholders as of the record date. You may access these proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials. You may also request to receive a printed set of these proxy materials. Instructions on how to access these proxy materials via the Internet and how to request a printed copy can be found in the Notice of Internet Availability of Proxy Materials. Additionally, by following the instructions in the Notice of Internet Availability of Proxy Materials, you may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. As noted above, choosing to receive your future proxy materials by e-mail will save Zebra the cost of printing and mailing documents to you and will reduce the impact of our annual meetings on theenvironment.
In addition to furnishing proxy materials electronically, we take advantage of the Securities and Exchange Commission’s “householding” rules to reduce the delivery cost of materials. Under such rules, only one Notice of Internet Availability of Proxy Materials or, if you have requested paper copies, only one set of proxy materials is delivered to multiple stockholders sharing an address unless we have received contrary instructions from one or more of the stockholders. If you are a stockholder sharing an address and wish to receive a separate Notice of Internet Availability of Proxy Materials, you may do this by contacting Broadridge Financial Solutions by phone at 1-866-540-7095 or by mail at Broadridge Householding Department, 51 Mercedes Way, Edgewood, NJ, 11717. Aseparate copy will be promptly provided following receipt of your request, and you will receive separate materials in the future. If you currently share an address with another stockholder but are nonetheless receiving separate copies of the materials, you may request delivery of a single copy in the future by contacting Broadridge at the number or address shown above.
Your vote is important. We encourage you to vote promptly, which may save us the expense of a second mailing.
If you are a holder of record, you may vote your shares in any of the following ways:
by telephone –— You may vote your shares by calling the toll-free telephone number on the Notice of Internet Availability of Proxy Materials or your proxy card. You may vote by telephone 24 hours a day through 11:59 p.m., Eastern Time, on May 13, 2021.10, 2023. The telephone voting system has easy-to-follow instructions and allows you to confirm that the system has properly recorded your vote. If you vote by telephone, you do not need to mail a proxy card.
via the Internet –— You may vote your shares via the website http://www.proxyvote.com.www.proxyvote.com or by scanning the QR Barcode on the Notice of Internet Availability of Proxy Materials or your proxy card. You may vote via the Internet 24 hours a day through 11:59 p.m., Eastern Time, May 13, 2021.10, 2023. As with telephone voting, you may confirm that the system has properly recorded your vote. If you vote via the Internet, you do not need to mail a proxy card. You may incur costs such as telephone and Internet access charges if you vote via theInternet.
by mail –— If you received your proxy materials by mail, you may vote your shares by marking, dating and signing your proxy card and returning it by mail in the enclosed postage-paid envelope.
at the Annual Meeting –— If you choose not to vote by telephone, via the Internet or by mail, you may still attend the virtual Annual Meeting and vote. You will need your 16-digit control number found on the proxy card, voting instruction form or notice to vote at the Annual Meeting. If you vote prior to the Annual Meeting, you may still attend the virtual Annual Meeting and vote.
If you are a beneficial holder, the instructions that accompany your proxy materials will indicate whether you may vote by telephone, via the Internet or by mail. If your shares are held in street name and you desire to vote online during the Virtual Annual Meeting, you should follow the instructions provided by your bank, broker or other holder of record to be able to participate in the meeting.
CAN I REVOKE OR CHANGE MY VOTE AFTER I SUBMIT MY PROXY?
If you are the holder of record, you may revoke your proxy at any time before your shares are voted if you (1) submit a written revocation to our Chief Legal Officer, General Counsel & Corporate Secretary, (2) submit a later-dated proxy to our Chief Legal Officer, General Counsel & Corporate Secretary, (3)provide subsequent telephone or Internet voting instructions, or (4) vote at the Annual Meeting. Your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again electronically at the Annual Meeting. If you are a beneficial ownerof shares, you must contact the broker or other nominee holding your shares and follow their instructions for changing your vote.
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Our Board has appointed Michael Steele and Cristen Kogl to serve as the proxies for the Annual Meeting. Mr. Steele is Vice President, Investor Relations of Zebra. Ms. Kogl is Chief Legal Officer, General Counsel & Corporate Secretary of Zebra. Bygiving us your proxy, you are authorizing the proxies to vote, jointly or individually, your shares in the manner you indicate.
If you are a holder of recordand you submit a proxy, but you do not provide voting instructions, your shares will be voted:
FOR the election of threeeach of our four Class IIII directors with terms to expire in 20242026 (Proposal 1);
FOR the approval, on an advisory basis, of the compensation of our Named Executive Officers (Proposal 2);
FOR the approval, on an advisory basis, of an annual frequency of holding an advisory vote to approve the compensation of named executive officers (Proposal 3);
FOR ratification of the appointment by our Audit Committee of Ernst & Young LLP as our independent auditors for 20212023 (Proposal 3)4); and
In the discretion of the named proxies regarding any other matters properly presented for a vote at the Annual Meeting.
If you are a beneficial ownerand you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if he or she has the discretionary authority to vote on the particular matter. Under the NYSE’s rules, brokers and other nominees have the discretion to vote on routine matters such as Proposal 3,4, but do not have discretion to vote on non-routine matters such as Proposals 1, 2, and 2.3. If you do not provide voting instructions to your broker or other nominee, your broker or other nominee may only vote your shares on Proposal 34 and any other routine matters properly presented for a vote at the Annual Meeting.
WHAT CONSTITUTES A QUORUM, AND WHY IS A QUORUM REQUIRED?
A quorum is necessary to hold a valid meeting of stockholders. If stockholders holding a majority of the voting power of the stock issued and outstanding and entitled to vote at the virtual Annual Meeting are present or by proxy, a quorum will exist. Shares owned by Zebra are not voted and do not count for quorum purposes. On March 19, 2021,17, 2023, we had 53,499,26151,399,341 shares of Class A Common Stock outstanding, meaning that 26,749,63125,699,671 shares of Class A Common Stock must be present at the virtual Annual Meeting or represented by proxy to have a quorum. Your shares will be counted towards the quorum if you submit a proxy or vote at the Annual Meeting. Abstentions and broker non-votes will also count towards the quorum requirement. If there is not a quorum, a majority of the shares present at the Annual Meeting may adjourn the Annual Meeting to a later date.
To assure the presence of a quorum at the virtual Annual Meeting, and even if you plan to attend the Annual Meeting, please vote your shares by toll-free telephone or via the Internet or, if you received your proxy materials by mail, complete, sign and date your proxy card and return it promptly in the enclosed postage-paid envelope.
WHAT IS THE EFFECT OF A BROKER NON-VOTE?
Brokers or other nominees who hold shares of our Class A Common Stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A broker non-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the virtual Annual Meeting. Thus, a broker non-vote will not affect our ability to obtain a quorum. Broker non-votes will not have any effect on the outcome of any proposal to be voted on at the Annual Meeting.
WHAT IS THE VOTE REQUIRED FOR EACH PROPOSAL?
Nominees for director are elected by a plurality of the votes cast; however, each nominee who is elected by a plurality vote who does not receive a majority vote will have his or her resignation from the Board considered in accordance with Zebra’s Resignation Policy Relating to Majority Voting, which is included as Exhibit A to Zebra’s Corporate Governance Guidelines. A “majority vote” means that the number of votes cast in favor of a nominee must exceed the number of votes withheld with respect to that nominee. Zebra hasZebra’s Resignation Policy Relating to Majority Voting includes a resignation process with respect to uncontested elections of directors if a nominee does not receive a majority vote for election to the Board. Prior to making these proxy materials available, each nominee for director submits a binding but contingent letter of resignation. If a nominee is then elected by a plurality vote but does not receive a majority vote, the nominee will have his or her resignation considered by the Nominating and Governance Committee in light of the best interests of Zebra and its stockholders. The Nominating and Governance Committee will make a recommendation to the Board concerning the acceptance or rejection of the resignation(s).
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In anya contested election, nominees for director will continue to be elected by a plurality of the votes cast without a contingent resignation to be considered by the Board conditioned on receipt of a majority vote. A “contested election” means an election of directors (i) for which the Chief Legal Officer, General Counsel & Corporate Secretary of Zebra has received a notice that a stockholder has nominated a person for election to the Board in compliance with Zebra’s Amended and Restated By-Laws, and (ii) such nomination has not been withdrawn at least five days prior to the date Zebra first makes these proxy materials available to stockholders. Neither abstentions nor broker non-votes count as votes cast.
Proposal | Vote Required | Broker Discretionary Voting Allowed |
Proposal 1 | Plurality of votes cast with resignation process if majority vote not achieved | No |
Proposal 2 | Majority of the votes cast for or against | No |
Proposal 3 | Plurality of the votes cast | No |
Proposal 4 — Ratify the appointment by our Audit Committee of Ernst & Young LLP as our independent auditors for | Majority of the votes cast for or against | Yes |
With respect to Proposal 1, you may choose which four nominees you want to vote FOR all nominees, WITHHOLD your vote as to all nominees, or vote FOR all nominees except those specific nominees from whom you WITHHOLD your vote.. The threefour nominees receiving the most FOR votes will be elected. A properly executed proxy that is marked WITHHOLDAGAINST with respect to the election of one or more directors will not be voted with respect to the director or directors indicated. AGAINST votes may prevent a director from obtaining a majority of FOR votes, which would trigger the aforementioned resignation process under the Resignation Policy Relating to Majority Voting. Proxies may not be voted for more than three nominees for director and stockholders may not cumulate votes in the election of directors.
With respect to Proposals 2 and 4, you may vote FOR, AGAINST or ABSTAIN. With respect to Proposal 3, you may vote FOR, AGAINST Every Year, FOR Every Two Years, FOR Every Three Years, or ABSTAIN. If you ABSTAIN from voting on any of these proposals,Proposals 2, 3, or 4, your abstention will not affect the vote on the proposal since the proposal requires approval of a majority of the votes cast for or against.
WHAT HAPPENS IF THE ANNUAL MEETING IS ADJOURNED OR POSTPONED?
Your proxy will still be effective and will be voted at the rescheduled Annual Meeting. You will still be able to change or revoke your proxy until it is voted.
WHO IS PAYING FOR THE COSTS OF THIS PROXY SOLICITATION?
We will bear the expense of soliciting proxies. We have retained Alliance Advisors LLC to solicit proxies for a fee of $17,000$19,000 plus a reasonable amount to cover expenses. Proxies may also be solicited by telephone or electronically by Zebra personnel who will not receive additional compensation for such solicitation. Copies of proxy materials and the Annual Report will be supplied to brokers and other nominees for the purpose of soliciting proxies from beneficial owners, and we will reimburse such brokers or other nominees for their reasonable expenses.
HOW CAN I FIND THE RESULTS OF THE ANNUAL MEETING?
Preliminary results will be announced at the Annual Meeting. Results also will be published in a current report on Form 8-K to be filed with the Securities and Exchange Commission within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they becomeavailable.
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