UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the
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WEX Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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2 WEX Inc.
LETTER TO OUR STOCKHOLDERS
WEX INC.
1 Hancock Street
Portland, Maine 04101
Portland, Maine 04101
April 24, 2018
22, 2020
Dear Fellow Stockholders,
You are invited to attend the 20182020 annual meeting of stockholders of WEX Inc., or the Company. TheTo support the health and well-being of our stockholders, employees and directors in light of the recent coronavirus (COVID-19) outbreak, the meeting will be held via the Internet at a virtual audio web conference at the following website (https://web.lumiagm.com/289188153) on Friday,Thursday, May 11, 2018,14, 2020, at 8:00 a.m., Eastern Time, at the WEX Inc. Long Creek Campus located at 225 Gorham Road, South Portland, Maine, 04106.
Time.
At the meeting we will:
elect three directors for three-year terms,
conduct an advisory (non-binding) vote on the compensation of our named executive officers,
vote to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018,2020, and
consider any other business properly coming before the meeting.
On behalf of the Board of Directors and the employees of WEX Inc., we would like to express our appreciation for your continued interest in the Company.
 | Sincerely, |
 | |
Melissa Smith Chair and Chief Executive Officer | |
2020 Proxy Statement 1
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
  |  |  |
Date and Time Thursday, May 14, 2020 8:00 a.m., Eastern Time | ||
Virtual Audio Web Conference https://web.lumiagm.com/289188153 Password: wex2020 | Who Can Vote Stockholders who owned shares of our common stock at the close of business on March 17, 2020 are entitled to vote | |
| Agenda | Board Recommendation | For Further Details |
| Elect three directors for three-year terms | FOR each director nominee | Page 9 |
| Conduct an advisory (non-binding) vote on the compensation of our named executive officers | FOR | Page 33 |
| Vote to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020 | FOR | Page 64 |
also consider any other business properly coming before the annual meeting.
To support the health and well-being of our stockholders, employees and directors in light of the recent coronavirus (COVID-19) outbreak, our annual meeting will be a “virtual meeting” of stockholders, which will be conducted exclusively via the Internet at a virtual web conference. There will not be a physical meeting location, and stockholders will not be able to attend the annual meeting in person. This means that stockholders can attend the annual meeting online, vote their shares electronically during the online meeting and submit questions during the online meeting by visiting https://web.lumiagm.com/289188153. The password for the meeting is wex2020. In light of the public health and safety concerns related to COVID-19, we believe that hosting a “virtual meeting” will enable greater stockholder attendance and participation from any location around the world.
proxy materials on the website referred to in the Notice or may request to receive a printed set of our proxy materials, including this proxy statement, our 2019 Annual Report and a form or proxy card or voting instruction card. We have chosen to employ this distribution process in response to logistical challenges posed by the COVID-19 pandemic and to conserve natural resources and reduce the costs of printing and distributing our proxy materials.
Stockholders who owned shares of our common stock at the close of business on March 13, 201817, 2020 are entitled to attend the meeting online and vote at the meeting and any adjournment or postponement of the meeting. Stockholders that owned stock in “street name” as of such date must presentdemonstrate proof of beneficial ownership to virtually attend the meeting and must obtain a legal proxy from their bank, broker or other nominee to vote atelectronically during the meeting. A complete list of registered stockholders will be available to stockholders of record during the annual meeting for examination at least 10 dayshttps://web.lumiagm.com/289188153. Further information about how to register to attend the annual meeting, attend the annual meeting online, vote your shares electronically during the meeting and submit questions online during the meeting is included in the accompanying proxy statement.
By Order of the Board of Directors,
Hilary A. Rapkin
Chief Legal Officer
2 WEX Inc.
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 14, 2020:
The Notice of Annual Meeting, proxy statement and 2019 annual report to stockholders are available for viewing, printing and downloading at https://ir.wexinc.com/financials/proxy-statement. These documents are also available to any stockholder who wishes to receive a paper copy by calling 888-Proxy-NA (888-776-9962) or 718-921-8562 (for international callers), visiting https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials or emailing info@astfinancial.com.
The Notice of Annual Meeting, proxy statement and 2019 annual report to stockholders are available for viewing, printing and downloading at https://ir.wexinc.com/financials/proxy-statement. These documents are also available to any stockholder who wishes to receive a paper copy by calling 888-Proxy-NA (888-776-9962) or 718-921-8562 (for international callers), visiting https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials or emailing info@astfinancial.com.
How to Vote: If you are a stockholder of record, to vote prior to the annual meeting at our offices located at 225 Gorham Road, South Portland, Maine, 04106.
you may use the following voting methods:
 | ||
 | ||
Go to www.voteproxy.com. You will need the control number included on your Notice or proxy card. Your vote must be received by 11:59 p.m ET on May 13, 2020 to be counted. | ||
annual meeting. If you participatehold your stock in our WEX Inc. Employee Savings Plan, commonly referred“street name,” you must obtain a legal proxy from your bank, broker or other nominee in order to asvote during the "401(k) Plan," shares of our common stock equivalent to the value of the common stock interest credited to your account under the plan will be voted by the trustee in accordance with your instructions, if they are received before 8:00 AM Eastern Time on May 9, 2018. Otherwise, if you do not provide instruction by such date, the share equivalents credited to your account will not be voted by the trustee.
2020 Proxy Statement 3
PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement.
This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of WEX Inc. for use at our annual meeting of stockholders to be held on Thursday, May 14, 2020 via the Internet at a virtual web conference at https://web.lumiagm.com/289188153. On or about April 22, 2020, we are mailing a Notice of Internet Availability to our stockholders and making this Proxy Statement, our annual report to stockholders and our proxy card available to stockholders on the website set forth in the Notice of Internet Availability.
Company Overview
WEX Inc. is a leading financial technology service provider operating in three reportable segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. Our Fleet Solutions segment provides payment, transaction processing and information management services specifically designed for the needs of commercial and government fleets. Our Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs. Our Health and Employee Benefit Solutions segment provides a software-as-a-service, or “SaaS”, platform for consumer directed healthcare payments, as well as payroll related benefits to customers in Brazil. During 2019, Fleet Solutions revenue represented approximately 60% of our total revenue, Travel and Corporate Solutions revenue represented approximately 21% of our total revenue, and Health and Employee Benefit Solutions revenue represented approximately 19% of our total revenue.
2019 Performance Highlights
2019 was a strong year operationally for WEX. The Company’s 2019 revenue grew 15%, adjusted net income attributable to shareholders, a non-GAAP measure, grew nearly 12% and annualized total stockholder return (TSR) increased significantly to 49.6%, as compared to 2018’s flat -0.8%, as shown in the charts below. Our growth in the past several years has been supplemented by acquisitions in each of our three business segments.
Revenue $ millions | Adjusted Net-Income $ millions | Annualized Shareholder Return (at 12/31/19) |
 |  |  |
Please note that the reconciliations of the non-GAAP financial measures discussed in this proxy statement are located in Appendix A.
4 WEX Inc.
PROXY STATEMENT SUMMARY
| Proposal 1 | ||
Election of Directors The Board recommends a vote FOR each director nominee. See page 9. |  | |
Our Board of Directors
The following provides summary information about each director nominee and continuing director:
| Name and Primary Occupation | Age | Director Since | Committee Membership | |||||||
| AC | CC | CGC | FC | TC | ||||||
 |  | Susan Sobbott |  | 55 | 2018 | M | M | |||
| Former President of Global Commercial Services, American Express Company | ||||||||||
 | Stephen Smith | | 49 | 2019 | M | M | ||||
| President and Chief Executive Officer, L.L.Bean | ||||||||||
 | James Groch | | 58 | NN | PM | PM | ||||
Global Group President and Chief Investment Officer CBRE Group, Inc. | ||||||||||
 |  | Regina O. Sommer | | 62 | 2005 | C | M | M | ||
| Former Vice President and Chief Financial Officer, Netegrity, Inc. | ||||||||||
 | Jack VanWoerkom | , LD | 66 | 2005 | M | C | ||||
| Former General Counsel and Chief Compliance Officer, Porchlight Equity | ||||||||||
 | John E. Bachman | | 64 | 2016 | M | M | ||||
| Former Partner, PricewaterhouseCoopers LLP | ||||||||||
 |  | Daniel Callahan | | 63 | 2019 | C | M | |||
| Former Global Head of Operations and Technology, Citigroup | ||||||||||
 | Shikhar Ghosh | | 62 | 2005 | M | C | ||||
| Professor of Management Practice, Harvard Business School | ||||||||||
 | James Neary | | 55 | 2016 | M | C | ||||
| Managing Director, Warburg Pincus | ||||||||||
 | Melissa Smith | 51 | 2014 | |||||||
| Chair and Chief Executive Officer, WEX Inc. | ||||||||||
AC – Audit Committee | FC – Financial Committee | M – Member | PM– Prospective Member | |
CC – Compensation Committee | TC – Technology Committee |  | – Independent | LD– Lead Director |
CGC – Corporate Governance Committee | C – Chair | NN– New Nominee | ||
2020 Proxy Statement 5
PROXY STATEMENT SUMMARY
Projected Board Snapshot
| Independence | Tenure | Age | Diversity | ||||
| Independent |  | <3 years |  | <50 years |  | Female |  |
| Not Independent |  | 3-7 years |  | 50-60 years |  | Ethnically Diverse | |
| >7 years |  | 61-70 years |  | ||||
| >70 years | |||||||
| Skills and Experiences | |||||
 | Finance, Accounting, or Reporting Experience |  |  | Global or International Business Experience |  |
 | Legal or Regulatory Experience |  |  | Leadership Experience |  |
 | Business Development and M&A Experience |  |  | Technology Experience |  |
 | Marketing or Public Relations Experience |  |  | Industry Experience |  |
 | Risk Management |  | |||
The above Projected Board Snapshot includes our nominee for director, Mr. Groch, and describes the WEX Board characteristics assuming Mr. Groch is elected by our stockholders at the upcoming annual meeting.
6 WEX Inc.
PROXY STATEMENT SUMMARY
| Proposal 2 | ||
Advisory (Non-Binding) Vote on The Compensation of Our Named Executive Officers The Board recommends a vote FOR this proposal. See page 33. | | |
Our Approach to Compensation
Our compensation programs are designed and administered to balance the achievement of near-term operational results and long-term growth goals with the ultimate objective of increasing long-term stockholder value. The principal elements of an executive’s total compensation consist of: base salary, annual cash bonus and long-term incentives.
The majority of CEO compensation is variable (“at risk”). For 2019, 88% of target total direct compensation was variable for our CEO in her core compensation program. This directly ties pay to Company performance outcomes, including financial results, strategic initiatives, and stock price performance.
| 2019 CEO Target Total Compensation Mix | 2019 CEO Long-term Incentive Mix | |
 |  | |
The majority of the compensation for the remaining named executive officers is also variable and tied directly to Company performance outcomes, as described above.
| Proposal 3 | ||
Ratification of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm For Fiscal Year 2020 The Board recommends a vote FOR this proposal. See page 64. | | |
The Audit Committee has selected D&T as the Company’s independent registered public accountant for the 2020 fiscal year. D&T has served as the Company’s independent registered public accountant since our initial public offering.
2020 Proxy Statement 7
TABLE OF CONTENTS
New in this Proxy Statement • Enhanced graphical disclosure for ease of reference • Disclosure of ESG oversight moving to Corporate Governance Committee and launching of formal program • Information about globally accessible 2020 virtual-only annual meeting to address COVID-19 Pandemic | ||||
| 10 | ||||
| Certain statements in this proxy statement, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may appear throughout this report. When used in this proxy statement, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future opportunity,” “intend,” “may,” “plan,” “project,” “should,” “strategy,” “target,” “would,” “will likely result,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially, including: the susceptibility of our industry and the markets addressed by our, and our customers’, products and services to economic downturns, including as a result of widespread illness such as COVID-19; the scope and severity of COVID-19; and risks and uncertainties identified in Item 1A of our Annual Report for the year ended December 31, 2019, filed on Form 10-K with the Securities and Exchange Commission on February 28, 2020. In addition, descriptions of historic performance and performance targets may not be indicative of future performance in light of these risks and uncertainties. The proxy statement speaks only as to the date it has been made available to stockholders, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. | ||||
Auditor Selection and Fees | ||||
8 WEX Inc.
GOVERNANCE
Proposal 1 |
| Election of Directors |
At each annual meeting of stockholders, directors are elected for a term of three years to succeed those directors whose terms are expiring. Our nominees to serve as Class III directors this year are: • Susan Sobbott • Stephen Smith • James Groch Michael Dubyak, Rowland Moriarty, Susan Sobbott, and Stephen Smith currently serve as Class III directors. Susan Sobbott, who has served as a member of our Board since December 2018, and Stephen Smith, who has served as a member of our Board since September 2019, are standing for reelection at the 2020 annual meeting of stockholders. Michael Dubyak and Rowland Moriarty will retire at the end of their terms and will not be standing for reelection at the 2020 annual meeting of stockholders. James Groch is a nominee for election as a Class III director for his first term on the Board. Susan Sobbott, Stephen Smith and James Groch have consented to serve a three-year term expiring at the 2023 annual meeting of stockholders. The Corporate Governance Committee has recommended Susan Sobbott, Stephen Smith and James Groch. The Board has determined that the fourth Class III seat will remain vacant until such time as the Board fills the vacancy. The Board is actively searching for a candidate to fill the fourth Class III seat. |
We recommend a vote FOR these nominees. |
2020 Proxy Statement 9
GOVERNANCE
Selection of Directors
The Corporate Governance Committee of the Board of Directors of WEX Inc. is responsible for identifying individuals qualified to become Board members, consistent with criteria approved by the Board and recommending to the Board the persons to be nominated for election as directors at the annual meeting of stockholders in accordance with the Corporate Governance Guidelines, the policies and principles in the Corporate Governance Committee charter and the applicable criteria adopted by the Board. In 2018, there are three Class I directors up for election at the Annual Meeting. George L. McTavish, Jack VanWoerkom, John E. Bachman and Regina O. Sommer currently serve as Class I directors. However, Mr. McTavish will retire at the end of his term and is not standing for reelection at the Annual Meeting. Following the Annual Meeting, the size of theThe Board will be reduced to nine members.
adept Board. The Corporate Governance Committee seeks directors with the following types of experience:
  | — Directors with an understanding of finance and financial reporting processes are valued on our Board because of the importance we place on accurate financial reporting and robust financial controls and compliance. We also seek to have a number of directors who qualify as audit committee financial experts. |
 |  |
 | BUSINESS DEVELOPMENT AND M&A EXPERIENCE — Directors with a background in business development and in M&A provide insight into developing and implementing strategies for growing our business. Useful experience in this area includes skills in analyzing the “fit” of a proposed acquisition with a company’s strategy, the valuation of transactions, and assessing management’s plans for integration with existing operations. |
 | MARKETING OR PUBLIC RELATIONS EXPERIENCE — Directors who have had relevant experience in marketing, brand management, and public relations, especially on a global basis, provide important insights to our Board. |
 | RISK MANAGEMENT — Directors with experience overseeing the management of operational and financial risks, including those presented by new, strategic opportunities, provide valuable stewardship. |
 | GLOBAL OR INTERNATIONAL BUSINESS EXPERIENCE — Because our Company is a global organization, directors with broad international exposure provide useful business and cultural perspectives. We seek directors who have had relevant experience with multinational companies or in international markets. |
  |  — We believe that directors who have held significant leadership positions over an extended period, especially CEO positions, provide the Company with unique insights. These people generally possess extraordinary leadership qualities, and the ability to identify and develop those qualities in others. They demonstrate a practical understanding of organizations, processes, strategy and risk management, and know how to drive change and growth. |
  |  — As a technology company and leading innovator, we seek directors with backgrounds in technology because our success depends on developing, investing in and protecting new technologies and ideas. We also target directors who can help guide the Company in advancing our strategy into new payment industries. |
  |  — We seek directors with experience in the payments industry generally and fleet, travel and healthcare payments specifically. |
10 WEX Inc.
GOVERNANCE
Director Nominations and Recommendations
Class III Director Nominees (Term Expires in 2023)
 | |||||||||
SUSAN SOBBOTT Independent Former President of Global Commercial Services, American Express Company Age: 55 | Director Since: 2018 Board Committees: Audit, Compensation | |||||||||
| Key Experience: | |||||||||
 | Leadership |  | Industry |  | Business Development & M&A |  | Global or International Business |  | Marketing or Public Relations |
Ms. Sobbott served on the board of directors of The Children’s Place, the largest publicly-traded specialty retailer of children’s apparel in North America from June 2014 through May 2019. She also serves on the board of Red Ventures, a privately held digital marketing provider for many of the world’s biggest consumer brands. Prior to her retirement in February 2018, Ms. Sobbott was an officer at the American Express Company, a multinational financial services company. At the American Express Company, Ms. Sobbott served from December 2015 to February 2018 as the President of Global Commercial Services, a multibillion-dollar global division. From January 2014 to November 2015, she was President of Global Corporate Payments. From 2004 to January 2014, she was President and General Manager of American Express OPEN, a multibillion-dollar business unit within American Express Company serving small businesses. Ms. Sobbott served as an officer of the firm, as a member of the Business Operating Committee, a group of senior leaders at American Express Company working with the Chief Executive Officer to develop strategic direction, and as a member of the Enterprise Risk Management Committee. The Board concluded that Ms. Sobbott is well suited to serve as a director of the Company because of her industry experience garnered while serving as a key executive at American Express. This includes Ms. Sobbott’s leadership running large international business units at American Express. | |||||||||
GOVERNANCE
 | |||||||
STEPHEN SMITH Independent President and Chief Executive Officer, L.L.Bean Age: 49 | Director Since: 2019 Board Committees: Audit, Finance | |||||||
| Key Experience: | |||||||
| Leadership |  | Marketing or Public Relations | | Business Development & M&A | | Global or International Business |
Mr. Smith serves on the board of directors of L.L.Bean, a privately held retail company, and the Appalachian Mountain Club, a not-for-profit environmental conservation and recreation corporation. Since January 2016, Mr. Smith has served as the President and Chief Executive Officer of L.L.Bean. From July 2011 to November 2015, Mr. Smith held various positions at subsidiaries of Walmart, a multinational retail corporation. From April 2015 to November 2015, Mr. Smith oversaw marketing and merchandising for Shanghai-based Yihaodian, a Walmart e-commerce business. From May 2012 to January 2015, Mr. Smith was the Chief Customer Officer of Asda, a Walmart-owned food, fashion and general merchandise business in the United Kingdom. Prior to joining Walmart, from 2003 to 2011 Mr. Smith held various leadership positions at Delhaize Group subsidiaries, a Belgium-based food retailer. | |||||||
 | |||||||||
JAMES GROCH Independent Global Group President and Chief Investment Officer, CBRE Group Age: 58 | Director | |||||||||
| Key Experience: | |||||||||
| Leadership |  | Risk Management |  | Finance, Accounting, or Reporting | | Business Development & M&A |  |    |
Since 2009, Mr. Groch has served as a C-Suite Executive at CBRE Group, Inc., a Fortune 150 multinational commercial real estate services and investment management firm with over 100,000 employees and $100 billion of assets under investment management. In his roles as the Company’s Global Group President and Chief Investment officer (since May 2019), Chief Financial Officer and Chief Investment Officer (March 2014-May 2019), and EVP Strategy and Corporate Finance & Chief Investment Officer (January 2009-March 2014), he has been responsible for overseeing or directly executing the Company’s extensive balance sheet, M&A (over 90 acquisitions) and strategy activities, as well as investments via its Trammell Crow Company subsidiary. In addition to his Finance and Corporate Development activities, Mr. Groch has been active in technology, leading the development of two significant software platforms still core to CBRE today, and acquiring SaaS companies. Prior to CBRE, from 1991 to 2009, Mr. Groch held numerous senior executive roles at Trammell Crow Company, a NYSE company from 1997 until sold to CBRE in 2006. These roles included President of Funds and Investment Management, Head of Corporate Development, President of Development and Investments - Eastern U.S., and Managing Director of Trammell Crow Northeast. In 1988, Mr. Groch became a partner at Trammell Crow Company, three years after he joined the Company. He received his M.B.A. from the Darden School of Business at the University of Virginia in 1985. The Board concluded that Mr. Groch is well suited to serve as a director of the Company because of his leadership experience garnered while serving as an executive officer of CBRE, a publicly-traded real estate services and investment management company including Mr. Groch's finance, business development, technology, risk management, and leadership experience. | |||||||||
12 WEX Inc.
GOVERNANCE
Class I Directors (Term Expires in 2021)
 | ||||||||||
REGINA O. SOMMER Independent Former Vice President and Chief Financial Officer, Netegrity, Inc. Age: 62 | Director Since: 2005 Board Committees: Audit (Chair), Corporate Governance, Technology | ||||||||||
| Key Experience: | ||||||||||
| Business Development & M&A | | Leadership | | Finance, Accounting, or Reporting | | Risk Management |  | Technology | |
Since March 2005, Ms. Sommer has been a financial and business consultant. From January 2002 until March 2005, Ms. Sommer served as Vice President and Chief Financial Officer of Netegrity, Inc., a leading provider of security software solutions, which was acquired by Computer Associates International, Inc. in November 2004. From October 1999 to April 2001, Ms. Sommer was Vice President and Chief Financial Officer of Revenio, Inc., a privately-held customer relationship management software company. Ms. Sommer was Senior Vice President and Chief Financial Officer of Open Market, Inc., an Internet commerce and information publishing software firm, from 1997 to 1999 and Vice President and Chief Financial Officer from 1995 to 1997. From 1989 to 1994, Ms. Sommer was Vice President at The Olsten Corporation and Lifetime Corporation, providers of staffing and healthcare services. From 1980 to 1989, Ms. Sommer served in various positions from staff accountant to senior manager at PricewaterhouseCoopers. Ms. Sommer served on the Board of SoundBite Communications, Inc., a telecommunications service provider, from 2006 until May 2012, where she was the chair of the Audit Committee and a member of the Compensation Committee. In addition, she sat on the Board of Insulet Corporation from January 2008 to August 2017, a publicly held provider of an insulin infusion system for people with insulin dependent diabetes. She also served on Insulet’s Audit Committee and Nominating and Governance Committee. Ms. Sommer also sat on the Board of ING Direct, a banking and financial services company, from January 2008 until February 2012, and served as a member of the Audit, Risk Oversight and Investment and the Governance and Conduct Review Committees. The Board concluded that Ms. Sommer is well suited to serve as a director of the Company because of her past leadership experience as the Chief Financial Officer of two publicly-traded companies. In addition, she brings significant financial expertise across a broad range of industries relevant to the Company’s business, including banking, software development and auditing. She also adds value from her experience in business development. | ||||||||||
GOVERNANCE
 | |||||||||
JACK VANWOERKOM Independent Former General Counsel and Chief Compliance Officer, Porchlight Equity Age: 66 | Director Board Committees: Compensation, Corporate Governance (Chair) | |||||||||
| Key Experience: | |||||||||
| Business Development |     | Leadership |  | Legal or Regulatory | | Global or International Business | | Risk Management |
Mr. VanWoerkom has The Board concluded that, due to his experience as a general counsel and an executive officer of several companies, Mr. VanWoerkom is well suited to serve as a director of the Company. Specifically, his experience with legal, regulatory, corporate governance and corporate transactions, including mergers and acquisitions, provides a valuable point of view on the Board. Mr. VanWoerkom brings an international perspective to the Board owing to his experience with managing global suppliers and international operations. | |||||||||
 | |||||||||
JOHN E. BACHMAN Independent Former Partner, PricewaterhouseCoopers LLP Age: 64 | Director Since: 2016 Board Committees: Audit, Finance | |||||||||
| Key Experience: | |||||||||
| Global or International Business | | Business Development & M&A | | Leadership | | Finance, Accounting, or Reporting | | Risk Management |
 | |||||||||
Prior to his retirement, Mr. Bachman was a partner at the accounting firm of PricewaterhouseCoopers LLP, The Board concluded that Mr. Bachman is well suited to serve as a director of the Company because of his extensive background in auditing, as well as his strategy and operations experience with C-level executives, which will benefit WEX’s vision of global expansion now and in the future. | |||||||||
14 WEX Inc.
GOVERNANCE
Class II Directors (Term Expires in 2022)
 | |||||||
DANIEL CALLAHAN Independent Former Global Head of Operations and Technology, Citigroup Age: 63 | Director Since: 2019 Board Committees: Compensation (Chair), Technology | |||||||
| Key Experience: | |||||||
| Leadership | | Industry | | Global or International Business |  | Technology |
Prior to his retirement in December 2018, Mr. Callahan was an officer of Citigroup, an American multinational investment bank and financial services corporation. At Citigroup, Mr. Callahan served from October 2007 to December 2018 as the Global Head of Operations and Technology. From July 2005 to July 2007, Mr. Callahan was Managing Director at Credit Suisse, a financial services company. In addition, Mr. Callahan has served as the Executive Chair of Time, a news publication, since April 2019 and Executive Partner at Bridge Growth Partners, a technology investment firm, since October 2019. Mr. Callahan also currently serves as a director on the Columbia University's Teachers College charity board as well as on the boards of several private companies. The Board concluded that Mr. Callahan is well suited to serve as a director of the Company because of his industry experience as a key executive of Citigroup. Mr. Callahan’s qualifications to serve on the Board include his technology experience in a leadership position of a global financial services corporation. | |||||||
 | ||||||||||
SHIKHAR GHOSH Independent Professor of Management Practice, Harvard Business School Age: 62 | Director Since: 2005 Board Committees: Governance, Technology (Chair) | ||||||||||
| Key Experience: | ||||||||||
| Business Development & M&A | | Leadership |     | Technology | | Global or International Business | |||
Mr. Ghosh is a Professor of Management Practice at the Harvard Business School. He has been on the faculty since August The Board concluded that Mr. Ghosh is well suited to serve as a director of the Company because of his experience with various technology related ventures and record of founding companies that have operated in emerging technology markets. Mr. | ||||||||||
GOVERNANCE
 | |||||||
JAMES NEARY Independent Managing Director, Warburg Pincus Age: 55 | Director Since: 2016 Board Committees: Compensation, Finance (Chair) | |||||||
| Key Experience: | |||||||
| Technology | | Business Development & M&A |  | Leadership | | Industry |
Mr. Neary is a managing director of Warburg Pincus, a private equity firm, which he joined in 2000. Mr. Neary has served as co-head of the Industrial & Business Services team since June 2013 and is also a member of the firm’s executive management group. From 2010 to June 2013, Mr. Neary led the firm’s late-stage efforts in the technology and business services sectors in the U.S. Prior to that, from 2004 to 2010, he was co-head of the technology, media and telecommunications investment efforts in the U.S. From 2000 to 2004, Mr. Neary led the firm’s Capital Markets activities. Before joining Warburg Pincus, he was a managing director at Chase Securities, an investment advisory firm. Mr. Neary has been the Chairman of Endurance International Group, a web presence solutions company, since December 2011 and Hygiena, a manufacturer of food safety devices, since August 2016. He is also a director of several private companies and a trustee of The Mount Sinai Health Systems. Mr. Neary has previously served on the Boards of Fidelity National Information Services, Inc., a bank technology processing company, from October 2009 to October 2013, Coyote Logistics, a truck brokerage business now owned by UPS, from November 2007 to September 2015 and Interactive Data Corporation, a firm providing financial market data and analytics and now owned by Intercontinental Exchange, from July 2010 to December 2015. The Board concluded that Mr. Neary is qualified to serve as a director of the Company due to his extensive knowledge of the payments industry, strategy and business development and his wide-ranging experience as a director and as chairman of other | |||||||
 | ||||||||||||
MELISSA SMITH Chair and Age: 51 | Director Since: 2014 | ||||||||||||
| Key Experience: | ||||||||||||
| Business Development & M&A | | Leadership | | Finance, Accounting, or Reporting | | Industry |  | Technology | |||
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| | ||||||||||||
Ms. Smith has served as the Chair of the Board since September 2019. Ms. Smith assumed the role of Chief Executive Officer of WEX and a seat on the Board in January 2014. She has served as the Company’s President since May 2013. Previously, Ms. Smith served as President, The Americas, from April 2011 to April 2013 and as the Company’s Chief Financial Officer and Executive Vice President, Finance and Operations from November 2007 to April 2011. From September 2001 through November 2007, Ms. Smith served as Senior Vice President, Finance and Chief Financial Officer. From May 1997 to August 2001, Ms. Smith held various positions of increasing responsibility with the Company. Ms. Smith began her career at Ernst & Young. The Board concluded that Ms. Smith is well suited to serve as a | ||||||||||||
| Rowland Moriarty and Michael |    | |
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2020 annual meeting.
GOVERNANCE
Number of Directors and Terms
Our certificate of incorporation provides that our Board shall consist of such number of directors as is fixed by our By-Laws. Our By-Laws provide that our Board shall consist of such number of directors as from time to time is fixed exclusively by resolution of the Board. Currently, the Board has fixed the size of the Board at ten11 directors, who serve staggered terms as follows:
each director who is elected at an annual meeting of stockholders serves a three-year term and until such director’s successor is duly elected and qualified, subject to such director’s earlier death, resignation or removal,
the directors are divided into three classes,
the classes are as nearly equal in number as possible, and
the term of each class begins on a staggered schedule.
| Annual Fee Schedule | ||||||
| Beginning Q4 2017 | Effective Q1 - Q3 2017 | |||||
| Annual Chair Cash Retainer | $ | 120,000 | $ | 87,500 | ||
| Annual Lead Director Cash Retainer | $ | 85,000 | $ | 65,000 | ||
| Annual Director Cash Retainer (other than Chairman and Lead Director) | $ | 70,000 | $ | 50,000 | ||
| Audit Committee Chair Cash Retainer | $ | 30,000 | $ | 30,000 | ||
| Compensation Committee Chair Cash Retainer | $ | 20,000 | $ | 20,000 | ||
| Finance Committee Chair Cash Retainer | $ | 20,000 | $ | 20,000 | ||
| Corporate Governance Committee Chair Cash Retainer | $ | 15,000 | $ | 15,000 | ||
| Technology Committee Chair Cash Retainer | $ | 20,000 | $ | 20,000 | ||
| Audit Committee Member Cash Retainer (other than Committee Chair) | $ | 15,000 | $ | 15,000 | ||
| Compensation Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 | $ | 10,000 | ||
| Finance Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 | $ | 10,000 | ||
| Corporate Governance Committee Member Cash Retainer (other than Committee Chair) | $ | 7,500 | $ | 7,500 | ||
| Technology Committee Member Cash Retained (other than Committee Chair) | $ | 10,000 | $ | 10,000 | ||
| Name | Fees Earned or Paid in Cash ($) | Stock Awards (1) ($) | Total ($) | ||
| John E. Bachman | $67,813 | $159,848 | $227,661 | ||
| Michael E. Dubyak | $97,500 | $147,444 | $244,944 | ||
| Shikhar Ghosh | $80,000 | $109,933 | $189,933 | ||
| George L. McTavish | $85,000 | $109,933 | $194,933 | ||
| Rowland T. Moriarty | $80,000 | $124,937 | $204,937 | ||
| James Neary | $70,000 | $159,848 | $229,848 | ||
| Kirk P. Pond | $70,000 | $109,933 | $179,933 | ||
| Regina O. Sommer | $90,000 | $109,933 | $199,933 | ||
| Jack VanWoerkom | $77,500 | $109,933 | $187,433 | ||
Name and Address(1) | Common Stock Owned (2) | Right To Acquire(3) | Total Securities Beneficially Owned (3) | Percent of Outstanding Shares | |||||||
| Principal Stockholders: | |||||||||||
Wellington Management Group, LLP(4) | 4,117,015 | — | 4,117,015 | 9.6 | % | ||||||
| 280 Congress Street | |||||||||||
| Boston, MA 02210 | |||||||||||
Janus Henderson Group plc(5) | 4,037,771 | — | 4,037,771 | 9.4 | % | ||||||
| 151 Detroit Street | |||||||||||
| Denver, Colorado 80206 | |||||||||||
JP Morgan Chase & Co.(6) | 3,692,604 | 3,692,604 | 8.6 | % | |||||||
| 270 Park Avenue | |||||||||||
| New York, NY 10017 | |||||||||||
The Vanguard Group, Inc.(7) | 3,515,243 | — | 3,515,243 | 8.1 | % | ||||||
| 100 Vanguard Blvd | |||||||||||
| Malvern, PA 19355 | |||||||||||
BlackRock, Inc.(8) | 3,266,378 | — | 3,266,378 | 7.6 | % | ||||||
| 55 East 52nd Street | |||||||||||
| New York NY 10022 | |||||||||||
Eaton Vance Management(9) | 3,187,159 | 3,187,159 | 7.4 | % | |||||||
| 2 International Place | |||||||||||
| Boston, MA 02110 | |||||||||||
| Executive Officers and Directors: | |||||||||||
| Melissa D. Smith | 77,544 | — | 77,544 | * | |||||||
Roberto Simon(10) | 14,097 | — | 14,097 | * | |||||||
| Kenneth Janosick | 18,936 | — | 18,936 | * | |||||||
Scott Phillips(11) | 33,912 | — | 33,912 | * | |||||||
| Jeffrey Young | 6,762 | — | 6,762 | * | |||||||
| John E. Bachman | — | 1,598 | 1,598 | * | |||||||
Michael E. Dubyak(12) | 64,929 | 1,474 | 66,403 | * | |||||||
| Shikhar Ghosh | 3,712 | 1,099 | 4,811 | * | |||||||
| George L. McTavish | 11,284 | 1,099 | 12,383 | * | |||||||
Rowland T. Moriarty(13) | 60,643 | 1,249 | 61,892 | * | |||||||
| James Neary | — | 1,598 | 1,598 | * | |||||||
Kirk P. Pond(14) | 29,333 | 1,099 | 30,432 | * | |||||||
| Regina O. Sommer | 6,346 | 1,099 | 7,445 | * | |||||||
| Jack VanWoerkom | 4,376 | 1,099 | 5,475 | * | |||||||
Directors and Executive Officers as a Group (19 Persons) (15) | 362,184 | 11,414 | 1,970,000 | * | |||||||
The Corporate Governance Committee responsibilities include recommending candidates for nomination to the Board. The Corporate Governance Committee has recommended Messrs. Bachman and VanWoerkom and Ms. Sommer (with Messrs. Bachman and VanWoerkom abstaining from the vote regarding their own nominations) for re-election at the 2018 Annual Meeting. Mr. VanWoerkom and Ms. Sommer have served as members of our Board since February 2005 and Mr. Bachman has served as a member of the Board since September 2016. In identifying potential directors, the Corporate Governance Committee may: retain a search firm; consider their professional networks; evaluate highly-regardedhighly regarded leaders in industry and academia; or, entertain suggestions from stockholders or other business organizations, among other ways suitable for identifying potential directors.
The Corporate Governance Committee will consider candidates nominated or recommended by stockholders as potential director nominees in the same manner as candidates identified by the Corporate Governance Committee. If the Board determines to nominate a stockholder-recommended candidate and recommends his or her election, then that nominee’s name will be included in the proxy card for the next annual meeting. Our stockholders also have the right under our By-Laws to directly nominate director candidates and should follow the procedures outlined in the “Information About Voting Procedures” section of this proxy statement in the answer to the question entitled "How“How do I submit a stockholder proposal or director nominee for next year'syear’s annual meeting or suggest a candidate for nomination as a director to the Corporate Governance Committee?"”
To be timely, a stockholder'sstockholder’s notice to the Secretary of a director nominee for next year'syear’s annual meeting must be delivered to or mailed and received no earlier than January 11, 201914, 2021 nor later than February 10, 2019.13, 2021. However, in the event that the annual meeting is called for a date that is not within 25 days before or after May 11, 2019,14, 2021, notice by the stockholder must be received no earlier than 120 days prior to the annual meeting and no later than the later of the 90th day prior to the
annual meeting or the tenth day following the day on which notice of the date of the annual meeting is mailed or publicly disclosed.
In addition, to be considered timely, notice to the Secretary of a “proxy access” director nominee for next year’s annual meeting pursuant to our newly-adopted Bylaw provision must be received in writing by the Secretary no earlier than December 15, 2020 nor later than January 14, 2021. However, in the event that the date of the annual meeting is advanced by more than 30 days, or delayed (other than as a result of adjournment) by more than 60 days, from the first anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, notice must be received no earlier than the 150th day prior to such annual meeting and no later than the close of business on the later of (i) the 120th day prior to such annual meeting and (ii) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs.
Stockholder nominations, including pursuant to the proxy access provision, must be addressed to:
WEX Inc.
Attention: Corporate Secretary
97 Darling Avenue
South Portland, ME 04106
2020 Proxy Statement 17
GOVERNANCE
Director Qualifications
The qualifications for directors are described in our Corporate Governance Guidelines and the guidelines for evaluating director nominees are in the Corporate Governance Committee'sCommittee’s charter, each of which is available on our website. The Corporate Governance Committee believes that a nominee for the position of director must meet the following specific, minimum qualifications:
Nominees should have a reputation for integrity, honesty and adherence to high ethical standards;
Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the Company and should be willing and able to contribute positively to the decision-making process of the Company;
Nominees should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board and its committees;
Nominees should have the interest and ability to understand the sometimes conflicting interests of the various constituencies of the Company, which include stockholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all stockholders; and
Nominees should not have, nor appear to have, a conflict of interest that would impair the nominee'snominee’s ability to represent the interests of all the Company'sCompany’s stockholders and to fulfill the responsibilities of a director.
Our Corporate Governance Committee does not have a policy with respect to diversity, but believes that our Board, taken as a whole, should embody a diverse set of skills, experiences and backgrounds. Our Board currently is comprised of ten11 directors two(and will be comprised of whom10 directors if all director nominees are elected at the 2020 annual meeting), and embodies that principle of diversified composition and thought. As presently constituted, our Board includes three women and another of whom isa South Asian. The Corporate Governance Committee intends to be mindful of diversity, with respect to gender, race and national origin, in connection with future nominations of directors not presently serving on the Board. In addition, our Corporate Governance Committee’s charter provides that nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law.
Application of Criteria to Existing Directors
The re-nomination of existing directors is not viewed as automatic, but is based on continuing qualification under the criteria listed above. The Corporate Governance Committee uses its best judgment and discretion in applying the criteria to the existing directors keeping in mind the interest of the Company.
In addition, the Corporate Governance Committee considers the existing directors'directors’ performance on the Board and any committee, including consideration of the extent to which the directors undertook continuing director education.
The backgrounds and qualifications of the directors considered as a group provide a significant breadth of experience, knowledge and abilities in order to assist the Board in fulfilling its responsibilities. The rationale for the Company'sCompany’s determination that each director is well suited to serve on the Board is specified with his or her respective biographical entry under the "Members“Nominees for and Members of the Board of Directors"Directors” section of this proxy statement.
Board Tenure and Retirement Policy
The Board does not believe it should establish term limits. Term limits could result in the loss of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and an institutional memory that benefit the entire membership of the Board as well as management. As an alternative to term limits, any director who reaches the age of 72 is subject to mandatory retirement at the end of his or her then-current term and the Corporate Governance Committee reviews each director’s continuation on the Board prior to nomination for re-election. This allows each director the opportunity to confirm his or her desire to continue as a member of the Board and allows the Company to replace directors who are no longer interested or effective.
GOVERNANCE
The Board’s Role and Responsibilities
Overview
Our business is managed under the direction of our Board pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for our overall company performance. The Board keeps itself informed of company business through regular written reports and analyses and discussions with our CEO and our senior leadership; by reviewing materials provided to the Board and by outside advisors as appropriate; and by participating in Board and Board Committee meetings. For example, each year, the Board holds a two-day strategy session, which includes presentations from many senior executives across our lines of business. Additionally, at Board meetings, the Board routinely engages with senior management on critical business matters that tie to the Company’s overall strategy. The Board actively oversees our long-term business strategy and is actively engaged in ensuring that our culture reflects a commitment to integrity, compliance, and inclusion. In addition, our Board regularly meets with members of management who represent our next generation of leadership to ensure that our leadership pipeline remains robust, diverse and inclusive, and is linked to our long-term strategy.
Risk Oversight
Our Board oversees our risk management processes directly, and through a risk management program overseen by both: (i) the Company’s Chief Legal Officer, who reports directly to the Chief Executive Officer; and, (ii) our Vice President, Chief Ethics and Compliance Officer, who reports to the Company’s Chief Legal Officer. Risks are identified and prioritized by our management, and a report of those risks is presented to the full Board. In general, our Board oversees risk management activities relating to business strategy, operations and financial and legal risks. Our appointment of both: (i) a Chair and (ii) Vice Chairman and Lead Director of the Board allows for an efficient delegation of responsibilities for risk oversight amongst those two individuals. Oversight of particular risks are delegated to committees of the Board, as appropriate, based upon the nature of any particular risk, including as follows:
| AUDIT COMMITTEE | COMPENSATION COMMITTEE | TECHNOLOGY COMMITTEE | FINANCE COMMITTEE | |||
• Oversees the process by which various enterprise risks are managed and reported to the Board, as well as activities related to financial controls and legal and corporate compliance. | • Oversees risks related to our compensation programs for employees, officers and directors. | • Assists the Board and Audit Committee in their oversight of the Company’s management of risks regarding technology, data security, disaster recovery, and business continuity. • In connection with the oversight of cybersecurity risk, our Technology Committee receives regular reports from our Chief Information Security Officer, who presents a threat matrix and overall analysis of our cyber-health, as well as any recent threat activity. | • Responsibilities include advising the Board and the Company’s management with respect to risks associated with potential corporate transactions, including strategic investments, mergers, acquisitions and divestitures. • Oversees risk related to interest rates, fuel prices, and leverage. | |||
2020 Proxy Statement 19
GOVERNANCE
In addition to the above-referenced standing committees, and specifically in response to the COVID-19 pandemic, our Board convened an Ad Hoc Committee in March 2020. The Ad Hoc Committee's responsibilities include: advising and making recommendations to the Board and the Company’s management regarding its ongoing operations in light of COVID-19; addressing any matters as the Board may delegate from time-to-time to the Ad Hoc Committee; and, meeting and taking such action as it is authorized in emergent circumstances during those periods between regularly-convened Board meetings, except that the Committee shall be available to consult with management as often as necessary to guide management and assist the Board in discharging its fiduciary obligations. However, the Ad Hoc Committee shall not include any roles, responsibilities or obligations otherwise expressly reserved for any other committee of the Board. The Ad Hoc Committee shall remain empaneled for a minimum of six months, subject to further extension, as the circumstances relating to COVID-19 and the associated economic impacts shall dictate. The members of the Ad Hoc Committee are Mr. VanWoerkom and Ms. Sommer.
Cybersecurity Risk Management
In connection with the oversight of cybersecurity risk, our Technology Committee receives regular reports from our Chief Information Security Officer, who presents a threat matrix and overall analysis of our cyber-health, as well as any recent threat activity. Oversight of particular risks may also be delegated to other committees of the Board, such as the Finance Committee, as appropriate, based upon the nature of any particular risk.
Succession Planning
The Board, with support from its committees as needed, regularly reviews short and long-term succession plans for the Chief Executive Officer and for other senior management positions. In assessing possible CEO candidates, the independent directors identify the skills, experience and attributes they believe are required to be an effective CEO in light of the Company’s global business strategies, opportunities and challenges. The Board also ensures that directors have substantial opportunities over the course of the year to engage with possible succession candidates.
Environmental, Social and Governance Practices
For 2019, the Company began to formalize its approach to environmental, social and governance matters (“ESG”). While we view our approach as part of a continuous process of evaluating and improving our ESG practices, during 2019, we undertook or continued the following ESG practices:
Strong Commitment to Board Diversity: Female representation on the Board is nearly one-third of our Board. Taking into account Mr. Ghosh’s background as a South Asian, and Mss. Smith, Sobbott, and Sommer, our directors offer ethnic and gender diversity that provide varied insights into approaching governance, strategy and focus.
A Significant Part of our Business is Based on Reducing Fuel Consumption: For our Fleet segment, we provide the controls, business insights and data that allow our customers to optimize their fuel consumption. This access to data enables our customers to reduce fuel consumption and drive their cost and carbon footprint lower.
Environmental Commitment: In developing new locations and workplaces, we are taking our impact into account. Our new corporate headquarters was purpose-built to utilize natural light, reduce energy consumption and enhance the quality of the workplace environment, all with an aim of fostering a positive place within which to conduct business.
Commitment to Great Place to Work Measurements: In further advancement of our strategy to enhance the workplace experience and performance, we have continued our participation in the Great Place to Work program and have now been certified for each of the three years we have sought certification. Great Place to Work leverages 30 years of research to quantify the current state of workplace culture and provides an objective comparison to the best workplaces in the world.
Established employee resource groups (ERGs) with a Focus on Workplace Engagement: Recognizing the value of employee engagement and the positive impact on our culture, we have implemented employee resource groups (ERGs) that focus on: early career professionals (NexGen); veterans' interests (WEXVets); parenting support (Parents@WEX); the LGBTQ+ community(WEXPride); empowering women (Women@WEX); those with differing abilities (WEXcessibility for all); and,
20 WEX Inc.
GOVERNANCE
multicultural employee interests (WEXPats). We continue to encourage employees to form ERGs to serve as touchpoints for communities across WEX with shared interests, cultures, identities, and backgrounds.
WEX Cares Foundation: WEX believes that supporting our colleagues is one of the most important things we can do to enhance our communities. With that in mind, during 2018, we formed an employee- and board-funded non-profit foundation whose mission is to directly support our colleagues who are experiencing a qualifying, personal hardship. To initiate and fund the WEX Cares Foundation, 100% of our Board and executive leadership team committed to making a donation so that the WEX Cares Foundation is able to immediately execute on the mission of supporting WEX employees experiencing an event of need. We intend to utilize the WEX Cares Foundation to bolster our approach to addressing the impact of COVID-19 on our employee population.
Stockholder Outreach: Following our 2018 annual meeting, we contacted our top-25 stockholders and offered to discuss any concerns they have about our governance and compensation practices. Of the stockholders who requested opportunities to speak, we engaged in two-way discussions about their preferred topics. We have taken that feedback into account as we continue to evolve our approach to ESG matters. Building on that process, we have continued that engagement in 2019.
Full Board Engagement: In recognizing the importance of Board level insight into our ESG practices, the Corporate Governance Committee has assumed responsibility for Board oversight of our ESG programs.
Engaged Third Economy LLC, a sustainable investment research and advisory firm in partnership with Broadridge Financial Solutions, Inc. to advise on sustainability strategy and execution in accordance with SASB (Sustainability Accounting Standards Board) and other leading frameworks.
Board Structure
Board Leadership
Our Board is led by our Chair, Ms. Smith. As Chair she leads all meetings of the Board at which she is present, sets meeting schedules and agendas and manages information flow to the Board to ensure appropriate understanding and discussion regarding matters of interest or concern to the Board. The Chair also has such additional powers and performs such additional duties consistent with organizing and leading the actions of the Board as may be prescribed by the Board.
In addition to our Chair, the Board has appointed Mr. VanWoerkom as our Vice Chairman and Lead Director. Mr. VanWoerkom chairs meetings of the independent directors in executive session and chairs any meetings at which the Chair is not present. In addition, he facilitates communications between other members of the Board and the Chair as needed. The Lead Director is authorized to call meetings of the independent directors and is available to consult with any of the Company’s senior executives regarding any concerns an executive may have. Mr. VanWoerkom aids in the preparation of meeting agendas and is authorized to meet with stockholders as a representative of the independent directors. Our Board decided to merge the roles of the Chair and Chief Executive Officer because it believes that leadership structure presently offers the following benefits:
Our Board believes that having one person serve as Chair and Chief Executive Officer allows that individual to use her substantial knowledge gained from both roles to lead the Company most effectively, and to provide strong and consistent leadership, without risking overlap or conflict of roles.
Our chief executive officer is immersed with our business and strategy on a daily basis and is thus positioned to focus the Board’s agenda on the key issues facing the Company.
Our Board further believes that with the appointment of Mr. VanWoerkom as our Vice Chairman and Lead Director, the Board has in place a leadership structure that provides an independent view of governance and business-related matters for both stockholders and other parties.
2020 Proxy Statement 21
GOVERNANCE
While our Board presently believes that the above-described leadership structure is an appropriate approach to board governance, the Board continuously monitors its composition and the skills of its members in order to maintain a flexible approach to determining leadership roles.
Director Independence
We have considered the independence of each member of the Board. To assist us in our determination, we reviewed the New York Stock Exchange, or NYSE, independence requirements and our general guidelines for independence, which are part of our corporate governance guidelines.
To be considered independent: (1) a director must be independent as determined under Section 303A.02(b) of the NYSE Listed Company Manual and (2) in the Board’s judgment, the director must not have a material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company).
The Board has established guidelines to assist it in determining whether a director has a material relationship with the Company. Under these guidelines, a director will not be considered to have a material relationship with the Company if (1) he or she is independent as determined under Section 303A.02(b) of the NYSE Listed Company Manual and (2) he or she: (i) serves as an executive officer of another company which is indebted to the Company, or to which the Company is indebted, provided that the total amount of either company’s indebtedness to the other is less than one percent of the total consolidated assets of the company he or she serves as an executive officer; (ii) serves as an officer, director or trustee of a tax exempt organization, that receives contributions from the Company, provided that the Company’s discretionary contributions to such organization are less than the greater of $1 million or 2 percent of that organization’s consolidated gross revenues; or (iii) serves as a director of another company with which the Company engages in a business transaction or transactions, provided that the director owns less than 5 percent of the equity interests of such other company and recuses himself or herself from deliberations of the Board with respect to such transactions. In addition, ownership of a significant amount of the Company’s stock, by itself, does not constitute a material relationship. For relationships not covered by the guidelines set forth above, the determination of whether a material relationship exists shall be made by the other members of the Board of Directors who are independent as defined above.
Based on our guidelines and NYSE corporate governance standards, our Board has determined that the following directors are independent: John E. Bachman, Daniel Callahan, Shikhar Ghosh, Rowland T. Moriarty, James Neary, Susan Sobbott, Regina O. Sommer, Stephen Smith, and Jack VanWoerkom. In addition, our Board has determined that James Groch, a new director nominee who is not currently serving on our Board, is independent. Additionally, our board of directors also previously determined that Kirk Pond, a former director who served during part of the year ended December 31, 2019, was independent. In assessing the independence of Mr. VanWoerkom, the Board considered the former employment relationship of an immediate family member of Mr. VanWoerkom who is not an executive officer of the Company and received annual compensation of less than $120,000. In assessing the independence of Mr. Neary, the Board considered his relationship with Warburg Pincus, a former significant stockholder.
In addition, each of the members of the Corporate Governance Committee, Audit Committee and the Compensation Committee are independent, as determined by the Board in accordance with its guidelines and the listing standards of the NYSE. We have also determined that the members of the Audit Committee satisfy the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and that the members of the Compensation Committee satisfy the independence requirements contemplated by Rule 10C-1 under the Exchange Act.
Executive Sessions
The independent directors, as defined by the rules of the NYSE, shall meet in executive session at least semi-annually to discuss, among other matters, the performance of the Chief Executive Officer. The independent directors will meet in executive session at other times at the request of any independent director. Absent unusual circumstances, these sessions shall be held in conjunction with regular Board meetings. The director who presides at these meetings shall be the Lead Director if there is one, and if not, shall be chosen by the independent directors, and his or her name shall be disclosed in accordance with NYSE rules.
22 WEX Inc.
GOVERNANCE
Standing Committees of the Board
Our Board has created the following committees. The charters for each of the committees can be obtained at: http://ir.wexinc.com/phoenix.zhtml?c=186699&p=irol-govhighlights
Audit Committee
Current Members: Regina O. Sommer (Chair) John E. Bachman Susan Sobbott Stephen Smith No. of Meetings in 2019: 15 | The Audit Committee must be comprised of at least three independent directors appointed by a majority of the Board. The Audit Committee oversees our accounting and financial reporting processes, the audits of our financial statements and internal control over financial reporting and monitors the Company’s enterprise risk management. All members of the Audit Committee are independent under the applicable rules of the NYSE and the Securities and Exchange Commission, or the SEC. In addition, each member of the Audit Committee is required to have the ability to read and understand fundamental financial statements. Unless determined otherwise by the Board, the Audit Committee shall have at least one member who qualifies as an “audit committee financial expert” as defined by the rules of the SEC. Our Board has determined that Mr. Bachman and Ms. Sommer qualify as “audit committee financial experts.” |
Compensation Committee
Current Members: Daniel Callahan (Chair) James Neary Susan Sobbott Jack VanWoerkom No. of Meetings in 2019: 5 | The Compensation Committee must be comprised of at least two independent directors appointed by a majority of the Board. The Compensation Committee oversees the administration of our equity incentive plans and certain of our benefit plans, reviews and administers all compensation arrangements for executive officers and our Board and establishes and reviews general policies relating to the compensation and benefits of our officers and employees. All members of the Compensation Committee are independent under the applicable rules of the NYSE and the SEC. |
Corporate Governance Committee
Current Members: Jack VanWoerkom (Chair) Shikhar Ghosh Rowland T. Moriarty Regina O. Sommer No. of Meetings in 2019: 5 | The Corporate Governance Committee is comprised of such number of independent directors as our Board shall determine. The Corporate Governance Committee’s responsibilities include identifying and recommending to the Board appropriate director nominee candidates, overseeing succession planning for the CEO and other executive officers and providing oversight with respect to corporate governance matters. All members of the Corporate Governance Committee are independent under the applicable rules of the NYSE. |
Finance Committee
Current Members: James Neary (Chair) John E. Bachman Michael E. Dubyak Stephen Smith No. of Meetings in 2019: 12 | The Finance Committee is comprised of such number of directors as our Board shall determine. The Finance Committee’s responsibilities include advising the Board and the Company’s management regarding potential corporate transactions, including strategic investments, mergers, acquisitions and divestitures. The Finance Committee also oversees the Company’s debt or equity financings, credit arrangements, investments, capital structure and capital policies. |
2020 Proxy Statement 23
GOVERNANCE
Technology Committee
Current Members: Shikhar Ghosh (Chair) Daniel Callahan Michael E. Dubyak Regina O. Sommer No. of Meetings in 2019: 4 | The Technology Committee is comprised of such number of directors as our Board shall determine. The Technology Committee’s responsibilities include overseeing the Company’s management of risks regarding technology, data security, disaster recovery, and business continuity. In addition, the Technology Committee focuses on strategy relating to hardware, software, architecture, organizational structure, management, resource allocation, innovation, and research and development. |
Compensation Committee Interlocks and Insider Participation
The directors who served as members of our compensation committee at any point during 2019 were Daniel Callahan, Shikhar Ghosh, James Neary, Susan Sobbott, and Jack VanWoerkom. No member of our Compensation Committee serving during the last completed fiscal year is or was one of our or our subsidiaries’ former officers or employees. During 2019, there were no Compensation Committee interlocks as required to be disclosed under SEC rules.
Board Practices, Policies and Processes
Commitment to Good Governance Practices
WEX continually evaluates its governance practices and tailors its approach to the Company's individual circumstances. Below are the practices we observe to maintain our progressing approach to corporate governance:
ü Offered listening sessions with investors over the past two years ü Uses majority voting standard for uncontested director elections ü Strong, independent lead director ü Engages in 360' evaluation process of the Board, committees and individual directors ü Addition of proxy access bylaw provisions |
Board and Committee Meetings
The Board held 12 meetings in 2019. Each of our directors attended at least 75 percent of the aggregate number of meetings of the Board and meetings of the Board committees held during the period for which he or she was a director or served on such committees in 2019. Our independent directors meet in executive session at least semi-annually during regularly scheduled in-person Board meetings. As provided in our Corporate Governance Guidelines, we expect directors to attend the annual meeting of stockholders. In 2019, all of our directors attended the 2019 annual meeting of stockholders.
Board Performance Evaluations
The Corporate Governance Committee shall oversee an annual self-evaluation of the Board to determine whether the Board, the Board's committees and the individual directors are functioning effectively. The Corporate Governance Committee shall determine the nature of the evaluation and oversee the conduct of the evaluation and conduct an assessment of the Board’s performance, to be discussed with the Board. The purpose of this process is to improve the effectiveness of the Board, its committees and the individual directors. This evaluation process is led by a director and is executed through interviews with each director on the Board.
24 WEX Inc.
GOVERNANCE
Director Orientation and Continuing Education
The Board and the Company’s management shall conduct an orientation program for new directors. The orientation program is designed to familiarize new directors with the Company’s strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its code of business conduct and ethics, its principal officers, its internal and independent auditors and its General Counsel and outside legal advisors. In addition, the orientation program shall include a review of the Company’s expectations of its directors in terms of time and effort and a review of the directors’ fiduciary duties. All other directors are also invited to attend the orientation program and are encouraged to actively engage with the Company's management for a personally-tailored process that emphasizes those areas that will address each director's particular knowledge of the industries in which we operate.
Each director is expected, at his or her discretion, to be involved in continuing director education on an ongoing basis to enable him or her to perform his or her duties and to recognize and deal appropriately with issues that arise. The Company shall pay all reasonable expenses related to continuing director education.
Governance Disclosures on Our Website
Complete copies of our corporate governance guidelines, committee charters and code of conduct and ethics are available on the Corporate Governance section of our website, at www.wexinc.com. In accordance with NYSE rules, we may also make disclosure of the following on our website:
the identity of the Lead Director at meetings of independent directors;
the method for interested parties to communicate directly with the Lead Director or with the independent directors as a group;
the identity of any member of our Audit Committee who also serves on the audit committees of more than three public companies and a determination by our Board that such simultaneous service will not impair the ability of such member to effectively serve on our Audit Committee; and
contributions by us to a tax-exempt organization in which any independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues.
Certain Relationships and Related Transactions
Our Board has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which WEX is a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5 percent stockholders (or their immediate family members), each of whom we refer to as a “related person,” has a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” the related person must report the proposed related person transaction to our Chief Legal Officer. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our Board’s Corporate Governance Committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the Committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the chair of the Corporate Governance Committee to review and, if deemed appropriate, approve proposed related person transactions that arise between meetings, subject to ratification by the Corporate Governance Committee at its next meeting. Any related person transactions that are ongoing in nature are reviewed annually.
2020 Proxy Statement 25
GOVERNANCE
A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the Corporate Governance Committee after full disclosure of the related person’s interest in the transaction. The Corporate Governance Committee will review and consider such information regarding the related person transaction as it deems appropriate under the circumstances.
The Corporate Governance Committee may approve or ratify the transaction only if the Committee determines that, under all of the circumstances, the transaction is not inconsistent with the Company’s best interests. The Committee may impose any conditions on the related person transaction that it deems appropriate.
In addition to the transactions that are excluded by the instructions to the SEC’s related person transaction disclosure rule, the Board has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:
interests arising solely from the related person’s position as an executive officer of another entity (whether or not the person is also a director of such entity), that is a participant in the transaction, where (a) the related person and all other related persons own in the aggregate less than a 10 percent equity interest in such entity, (b) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction, (c) the amount involved in the transaction equals less than the greater of $750,000 or 1 percent of the annual consolidated gross revenues of the other entity that is a party to the transaction, and (d) the amount involved in the transaction equals less than 2 percent of the Company’s annual consolidated gross revenues; and
a transaction that is specifically contemplated by provisions of the Company’s charter or By-Laws.
There were no relationships or related person transactions since January 2019 which required review under the policy.
The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the Compensation Committee in the manner specified in its charter.
Communications with the Board of Directors
The Board believes that the Chief Executive Officer and Chair of the Board and her designees, as well as the Chairman of the Board and Vice Chairman and Lead Director, speak for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies who are involved with the Company. It is, however, expected that Board members would do so with the knowledge of and, absent unusual circumstances or as contemplated by the committee charters, only at the request of the Company’s senior executives or the Board.
The Board will give appropriate attention to written communications that are submitted by stockholders and other interested parties, and will respond if and as appropriate. Absent unusual circumstances or as contemplated by the committee charters, the Vice Chairman and Lead Director shall, subject to advice and assistance from the General Counsel, (1) be primarily responsible for monitoring communications from stockholders and other interested parties, and (2) provide copies or summaries of such communications to the other directors as he considers appropriate.
If you wish to communicate with the Board or the independent members of the Board, you may send your communication in writing to:
Independent Director Communication WEX Inc. Attention: Corporate Secretary 97 Darling Avenue South Portland, ME 04106 | ||
You should include your name and address in the written communication and indicate whether you are a stockholder.
GOVERNANCE
The Company’s Non-Employee Directors Compensation Plan is designed to achieve the following objectives:
Attract and engage a diverse group of qualified directors;
Compensate our directors for the investment of time they make to support the Company;
Align director compensation with stockholder interests; and
Have a compensation structure that is simple, transparent and easy for stockholders to understand.
Our Corporate Governance Guidelines note that the Company’s policy is to compensate directors competitively relative to comparable companies, and that the Compensation Committee will periodically review the compensation of the Company’s directors. In line with this, the Compensation Committee generally reviews our director compensation program against peer group market data every two years, with reference to the same peer companies used to benchmark executive compensation, as well as survey information analyzing director compensation across industries at U.S. public companies. The assessment of director compensation is conducted by the Compensation Committee with the assistance of Compensation Advisory Partners (CAP), the Compensation Committee’s independent compensation consultant.
The Compensation Committee reviewed the compensation of the Company’s non-employee directors in 2019, and made changes to the director compensation program, effective October 1, 2019, in order to maintain the competitiveness of our non-employee director compensation program with median payments at peer group companies. Changes were also made to simplify our non-employee director compensation program, which are described below.
Annual Cash Retainers
The Company pays each non-employee director the following annual cash retainer(s) based upon his or her service on the Board and/or a Board committee. Such payments are made in four equal quarterly amounts. Effective October 1, 2019, committee member retainers were eliminated to simplify the pay program, with such compensation re-allocated to annual Board cash and equity retainers.
| Annual Fee Schedule | ||||||
| Effective Q1 - Q3 2019 | Beginning Q4 2019 | |||||
| Annual Chair Cash Retainer | $ | 120,000 | N/A | |||
| Annual Lead Director Cash Retainer | $ | 85,000 | $ | 115,000 | ||
| Annual Director Cash Retainer (other than Chair and Lead Director) | $ | 70,000 | $ | 85,000 | ||
| Audit Committee Chair Cash Retainer | $ | 30,000 | $ | 30,000 | ||
| Compensation Committee Chair Cash Retainer | $ | 20,000 | $ | 20,000 | ||
| Finance Committee Chair Cash Retainer | $ | 20,000 | $ | 20,000 | ||
| Corporate Governance Committee Chair Cash Retainer | $ | 15,000 | $ | 15,000 | ||
| Technology Committee Chair Cash Retainer | $ | 20,000 | $ | 20,000 | ||
| Audit Committee Member Cash Retainer (other than Committee Chair) | $ | 15,000 | $ | — | ||
| Compensation Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 | $ | — | ||
| Finance Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 | $ | — | ||
| Corporate Governance Committee Member Cash Retainer (other than Committee Chair) | $ | 7,500 | $ | — | ||
| Technology Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 | $ | — | ||
2020 Proxy Statement 27
GOVERNANCE
To the extent a non-employee director is appointed at a time other than the annual stockholders’ meeting, any annual cash retainer is prorated. Employees who serve as directors are not separately compensated for their service on our Board. Effective September 12, 2019, our Board appointed Melissa Smith, president and CEO, to serve as Chair of the Board, succeeding Mr. Dubyak, who continued to serve as a member of the Board but will not stand for reelection at the 2020 annual meeting. As WEX employees receive no additional pay for serving as directors, the annual Chair Cash Retainer was discontinued commensurate with the change in board leadership.
Equity Retainers
In 2019, all non-employee directors were granted a number of restricted stock units, or RSUs, worth the equivalent of approximately $135,000 at the time of the annual stockholders’ meeting at the then current stock price. The then-serving Lead Director, Dr. Moriarty, was granted additional RSUs worth the equivalent of approximately $15,000 and the then-serving Chairman, Mr. Dubyak, was granted additional RSUs worth the equivalent of approximately $50,000 at the time of the annual stockholders’ meeting at the then current stock price. These RSUs will vest on the first anniversary of the date of grant. In 2020, all non-employee directors will be granted a number of RSUs worth the equivalent of approximately $155,000 at the time of the annual stockholders’ meeting, at the then current price.
Our directors are subject to anti-hedging and anti-pledging requirements. We maintain a policy that prohibits directors from purchasing any financial instrument, or entering into any transaction, that is designed to hedge or offset a decrease in the market value of the Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or exchange funds) or from pledging, hypothecating, or otherwise encumbering shares of the Company stock as collateral for indebtedness.
New Director Equity Grants
Effective as of October 1, 2019, new non-employee directors will be granted a number of RSUs worth the equivalent of approximately $100,000 at the then current stock price. Such RSUs will be granted at the next annual stockholders’ meeting after their appointment to the Board, and vest on the first anniversary of the date of grant. Prior to the adoption of the new director compensation policy in October 2019, all new non-employee directors were granted a number of RSUs worth the equivalent of approximately $50,000 at the then current stock price at the next annual stockholders' meeting after their appointment to the Board with vesting to occur on the first anniversary of the date of grant.
Given that Ms. Sobbott joined our Board in December 2018 and Mr. Callahan joined our Board in May 2019, near the adoption of the increase, the Compensation Committee determined that they would receive RSUs worth the equivalent of approximately $50,000, at the then current stock price, on both May 9, 2019 and December 12, 2019. The December 12th award was intended to increase their initial award from $50,000 to $100,000, in line with the approved program increase, as described above.
New director equity grants further support alignment of the interests of our new directors with our stockholders.
28 WEX Inc.
GOVERNANCE
2019 Director Compensation
Our non-employee directors received the aggregate amount of compensation in the year ended December 31, 2019:
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | ||||||
| John E. Bachman | $ | 92,500 | $ | 134,988 | $ | 227,488 | |||
Daniel Callahan(2) | $ | 62,047 | $ | 235,140 | $ | 297,187 | |||
| Michael E. Dubyak | $ | 126,250 | $ | 184,946 | $ | 311,196 | |||
| Shikhar Ghosh | $ | 101,250 | $ | 134,988 | $ | 236,238 | |||
| Rowland T. Moriarty | $ | 107,500 | $ | 150,078 | $ | 257,578 | |||
| James Neary | $ | 101,250 | $ | 134,988 | $ | 236,238 | |||
Kirk P. Pond(3) | $ | 23,750 | $ | — | $ | 23,750 | |||
Stephen Smith(4) | $ | 26,827 | $ | — | $ | 26,827 | |||
| Susan Sobbott | $ | 92,500 | $ | 235,140 | $ | 327,640 | |||
| Regina O. Sommer | $ | 116,875 | $ | 134,988 | $ | 251,863 | |||
| Jack VanWoerkom | $ | 106,875 | $ | 134,988 | $ | 241,863 | |||
(1) | This column is the aggregate fair value of stock awards granted on May 9, 2019, and with respect to Ms. Sobbott and Mr. Callahan only, December 12, 2019. The fair value of these awards is determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 based on the closing price of our common stock as reported by the NYSE on the day that the award was granted. The grant date fair value of the stock awards granted on May 9, 2019 to Mr. Callahan and Ms. Sobbott was $184,946 and the fair value of the stock awards granted on December 12, 2019 to Mr. Callahan and Ms. Sobbott was $50,193. The aggregate number of RSUs outstanding for each non-employee director as of December 31, 2019 is as follows: Mr. Bachman — 662; Mr. Callahan — 1,156; Mr. Dubyak — 907; Mr. Ghosh — 662; Dr. Moriarty — 735; Mr. Neary — 662; Mr. Smith — none; Ms. Sobbott — 1,156; Ms. Sommer — 662; and Mr. VanWoerkom — 662. |
(2) | Mr. Callahan’s term began in May 2019 upon election at the 2019 Annual Meeting. |
(3) | Mr. Pond did not stand for reelection at the 2019 Annual Meeting and as such did not have any stock awards outstanding as of December 31, 2019. |
(4) | Mr. Smith’s term began in September 2019 upon appointment by the Board. |
Fee Deferral
Directors may defer all or part of their cash fees and equity retainers into deferred stock units, which will be payable in Company shares to the Director 200 days following cessation of Board service.
2020 Proxy Statement 29
GOVERNANCE
Expense Reimbursement
Directors are reimbursed by the Company for their out-of-pocket travel and related expenses incurred in attending all Board and committee meetings.
Non-Employee Director Equity Ownership Guidelines
The Compensation Committee established equity ownership guidelines for all non-employee directors. “Equity” for the purpose of these guidelines is defined to include shares of the Company’s common stock, vested restricted stock units and deferred stock units.
Under the guidelines of the equity ownership program in effect prior to October 1, 2019, all non-employee directors were expected to own equity equal in value to at least three times each non-employee director’s annual Director Cash Retainer or Lead Director Cash Retainer. The directors’ compliance with these guidelines was assessed by the Compensation Committee, as of July 31 of each year, which is the “Determination Date” for purposes of these guidelines. New directors had three years following their initial Determination Date to achieve their expected level of ownership. Under the guidelines, Mr. Callahan, Mr. Smith (who was not a member of our Board as of July 31, 2019), and Ms. Sobbott, had three years from their initial Determination Date to attain the prescribed ownership threshold. As of July 31, 2019, all of our non-employee directors then serving were in compliance with their expected minimum ownership level.
The equity ownership guideline for all non-employee directors was revised effective October 1, 2019, considering competitive market practice and to further support alignment of director interests with those of our stockholders. Under the guidelines of the equity ownership program, all non-employee directors are now expected to own equity equal in value to at least five times the annual Director Cash Retainer. Each non-employee director, while serving as a director of WEX, is expected to attain the new, increased prescribed ownership threshold by the later of five years from their election to the Board or five years following October 1, 2019, the date at which the increased equity ownership guideline became effective.
30 WEX Inc.
EXECUTIVE OFFICERS
The following are the Non-Director Members of the Executive TeamTeam:
DAVID COOPER 53, Chief Technology Officer
| David Cooper joined WEX in December 2016 as our Senior Vice President and Chief Technology Officer. Prior to joining WEX, he held several senior technology positions, including head of global operations at GlobeOne, a financial services company, from June 2016 to December 2016, CTO at Advisor Software, an advisory and wealth management software company from November 2015 to June 2016, SVP of technology at Green Dot, a retail banking company, from March 2014 to November 2015, CTO and SVP of product development at both Fiserv, an information technology and services company, from September 2011 to February 2014 and CashEdge, a leading provider of Intelligent Money Movement from June 2005 to September 2011. JOEL (JAY) A. DEARBORN 41, President, Corporate Payments Joel Dearborn joined WEX in January 2016 as Vice President, Strategy. Mr. Dearborn served as Vice President, Strategy from January 2016 until December 2017. Since December 2017, Mr. Dearborn has served as WEX’s President for Corporate Payments, and is responsible for WEX’s virtual card and other payments solutions. Prior to joining WEX, he was a principal at McKinsey & Company, a management consulting firm, from January 2008 to January 2016, where he helped private and public organizations set their strategic direction, including technology deployment and process redesign to support long-term growth. KENNETH W. JANOSICK 58, Chief Portfolio Risk & Operations Officer Kenneth Janosick has served as the Chief Portfolio Risk and Operations Officer overseeing WEX Bank, fraud, credit risk and other areas of potential risk since December 2017. Prior to that he served as Senior Vice President and General Manager, Global Fleet Direct from January 2014 to December 2017. He also served as the Senior Vice President, Small Business Solutions from December 2010 to December 2013. He joined WEX as Vice President, Product and Marketing in January 2009 and served in that role until December 2010. Before that, Mr. Janosick was a First Vice President at JP Morgan Chase bank from November 2006 to November 2009 with responsibility for Relationship Banking and Investments and the Small Business Division. NICOLA S. MORRIS 54, Chief Corporate Development Officer Nicola Morris has served as the Chief Corporate Development Officer since December 2017. Prior to that she served as the Senior Vice President, Corporate Development from February 2014 to December 2017. She is responsible for managing corporate development and strategic planning, directing corporate marketing, and overseeing early stage product development. Prior to joining WEX, she worked for Verizon Communications, a global communications and technology company, from January 2006 through January 2014, where she served as the Vice President, Global Corporate Strategy from November 2011 to January 2014. Prior to that role, she held the positions of Vice President and Chief Marketing Officer from October 2010 to November 2011 and also that of Vice President, Strategy and Business Development, both with the Verizon Business unit from January 2006 to October 2010. Before Verizon, she held positions with MCI, Incorporated and Digex, Incorporated. SCOTT PHILLIPS 50, President, Global Fleet Scott Phillips has served as the President, Global Fleet, since December 2017. He joined the Company as Senior Vice President and General Manager, Electronic Funds Source (“EFS”) on July 1, 2016, when the Company acquired EFS to expand its large and mid-sized over-the-road (“OTR”) and corporate payments business. Mr. Phillips had been the President and CEO of EFS from September 2011 to | |
EXECUTIVE OFFICERS
HILARY A. RAPKIN 53, Chief Legal Officer
Hilary Rapkin has served as our Chief Legal Officer since December 2017. Prior to that she served as the Senior Vice President, General Counsel and Corporate Secretary from February 2005 to November 2017. She also served as the Head of Human Resources from February 2013 until February 2018. From January 1996 to February 2005, Ms. Rapkin held various positions of increasing responsibilities with the Company. Ms. Rapkin is a member of the American Bar Association, the Maine State Bar Association, the Association of Corporate Counsel, the Society of Corporate Secretaries and Governance Professionals and the New England Legal Foundation.
ROBERTO SIMON 45, Chief Financial Officer
Roberto Simon joined WEX as the Chief Financial Officer in February 2016. Previously, Mr. Simon served as the Executive Vice President and Chief Financial Officer of Revlon, Inc., a global cosmetics, personal and beauty care products company, from October 2014 until February 2016. Prior to that, he was the Revlon Senior Vice President, Global Finance from October 2013 to September 2014 and served as Revlon’s Global Business Process Owner, SAP, from February 2014 until September 2014. Prior to joining Revlon as a result of Revlon’s acquisition of The Colomer Group Participations, S.L. (“The Colomer Group”), a Spain-based salon and professional beauty business, Mr. Simon served in various senior finance positions of increasing responsibility at The Colomer Group since 2002, including most recently serving as The Colomer Group’s Chief Financial Officer from October 2011 to October 2014. Prior to that, he served as The Colomer Group’s Vice President of Finance for America and Africa from January 2008 until September 2011.
MELANIE J. TINTO 48, Chief Human Resources Officer
Melanie Tinto joined WEX as the Chief Human Resources Officer in February 2018. Previously, Ms. Tinto served as the Vice President, Talent Management and Chief Learning Officer at Medtronic, a global leader in medical technology, services and solutions, from April 2015 to February 2018. Prior to joining Medtronic, Ms. Tinto served as the Vice President, Executive Development and Organizational Development of Hewlett Packard, an information technology company, from April 2013 to March 2015.
ROBERT DESHAIES 54, President, Health
Robert Deshaies has served as our President, Health since September 2019. He is responsible for growth acceleration, increasing WEX’s Health division’s presence in the market and overseeing sales, marketing, business development, operations and product marketing. Prior to serving as our President, Health he served as a Senior Vice President, Health since July 2014 when WEX acquired Evolution1. Before joining Evolution1 in 2012, Robert served as global executive vice president and general manager at Sage, where he led multi-hundred million-dollar business units.
32 WEX Inc.
EXECUTIVE COMPENSATION
 | ||
| Advisory (Non-Binding) Vote on the Compensation of Our Named Executive Officers | ||
We are providing you with the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of the executive officers named in the Summary Compensation Table under "Executive“Executive Compensation,"” whom we refer to as our "named“named executive officers"officers” or "NEOs,"“NEOs,” as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, which is commonly referred to as "say-on-pay,"“say-on-pay,” is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 14A to the Securities Exchange Act of 1934, or Exchange Act.
Our executive compensation programs are designed to attract, motivate, and retain our executive officers,individuals who are critical to our success. The "Executive Compensation" section of this proxy statement, including the "Compensation Discussion and Analysis," describes in detail our executive compensation programs and the decisions made by the Compensation Committee with respect to the fiscal year ended December 31, 2017.
WEX’s “pay-for-performance” philosophy regarding executive compensation is straightforward: reward our executives for their contributions to the Company’s annual and long-term performance by tying a significant portion of their total compensation to key business drivers of increasedand stockholder value. Reflecting our pay-for-performance philosophy, a significant portion of executive compensation is performance-based, subject to increase when results exceed corporate targets,target, reduction when results fall below target and elimination if results do not achieve a threshold levelslevel of performance. Stockholders are urged to read the Compensation“Executive Compensation” section of this proxy statement, including the section entitled “Compensation Discussion and Analysis, section of this Proxy Statement,” which more thoroughly discusses howdescribes our compensation policies and procedures implement ourexecutive compensation philosophy and objectives.programs in greater detail, as well as compensation decisions made by the Compensation Committee with respect to the fiscal year ended December 31, 2019.
Our Board is asking stockholders to approve, on a non-binding advisory vote onbasis, the following resolution:
RESOLVED, that the compensation paid to WEX Inc.’s named executive officers, as disclosed in accordance with the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.
As an advisory vote, this proposal is not binding. The outcome of this advisory vote will not overrule any decision by the Company or the Board (or any committee of the Board), or create or imply any change or addition to the fiduciary duties of the Company or the Board (or any committee of the Board). However, our Compensation Committee and Board value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.
The Board has decided that the Company will hold an annual advisory vote on the compensation of our named executive officers.
We recommend a vote FOR approval of the compensation of our named executive officers. |
EXECUTIVE COMPENSATION
This Compensation Discussion and Analysis, or CD&A, describes our compensation objectives and programs for our "named“named executive officers"officers” or "NEOs."“NEOs.” This CD&A also describes the specific decisions, and the processes supporting those decisions, which were made with respect to 20172019 for the NEOs.
For 2017,2019, our NEOs were:
 |  |  |  |  |
Melissa Smith Chair and Chief Executive Officer (“CEO”) | Roberto Simon Chief Financial Officer (“CFO”) | Scott Phillips President, Global Fleet | Joel Dearborn President, Corporate Payments | Robert Deshaies President, Health |
To assist in finding important information, we call your attention to the following sections of our CD&A:
Executive Summary
Summary of WEX’s Business.
WEX Inc. is a leading multi-channelfinancial technology service provider of corporate payment solutions that operatesoperating in three businessreportable segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. Our Fleet Solutions segment provides payment, transaction processing and information management services specifically designed for the needs of commercial and government fleets. Our Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs. Our Health and Employee Benefit Solutions segment provides a software-as-a-service, or “SaaS”, platform for consumer directed healthcare payments, as well as payroll related benefits to customers in Brazil. During 2017,2019, Fleet Solutions revenue represented approximately 66%60% of our total revenue, Travel and Corporate Solutions revenue represented approximately 18%21% of our total revenue, and Health and Employee Benefit Solutions revenue represented approximately 16%19% of our total revenue. The Fleet Solutions segment provides customers with fleet vehicle payment processing services specifically designed for the needs of commercial and government fleets, through a closed-loop network that offers complete control of the transaction life cycle. Our Travel and Corporate Solutions segment is comprised of our virtual and prepaid products that we use to provide innovative corporate purchasing and payment capabilities that can be integrated with our customers’ internal systems to streamline their corporate payments, accounts payable and reconciliation processes. Our Health and Employee Benefit Solutions segment is comprised of our healthcare payment products and SaaS platforms that we use to provide simplified payment capabilities in a complex healthcare market. The Health and Employee Benefit Solutions segment also includes payroll related benefit products to customers in Brazil.
EXECUTIVE COMPENSATION
2019 was a strong year operationally for WEX. The Company's 2017Company’s 2019 revenue grew 23%15%, adjusted net income attributable to shareholders, a non-GAAP measure, grew 23%12% and annualized total stockholder return (TSR) was up 27%increased significantly to 49.6%, as compared to 2018’s flat -0.8%, as shown in the charts below. We have designed our performance-based annual and long-term incentive awards for executives to, among other things, align compensation with performance againstOur growth in the metrics discussed above and shown below.
| Revenue | Adjusted Net-Income | Annualized Shareholder Return |
| $ millions | $ millions | (at 12/31/19) |
 |  |  |
Please note that the reconciliations of the non-GAAP financial measures discussed in this proxy statement are located in Appendix A.
We aspire to be the leading financial technology service provider within our core verticals. As such, we have designed our performance-based annual and long-term incentive awards for executives to, among other things, align compensation with performance against pre-established goals for these metrics, in addition to stock price performance and other measures of operational success at the corporate, segment and individual levels.
The Company’s performance during the year ended December 31, 2019, was shaped by the following previously established strategic priorities:
Build the best-in-class growth engine. We seek to drive organic growth across our segments by maintaining a continual focus on go-to-market effectiveness. We achieve this through superior product capability, sales and marketing productivity, and disciplined revenue management practices. During 2019, we experienced significant revenue growth in each of our segments. Additionally, WEX was recognized by Fortune Magazine in its 2019 list of the 100 fastest growing publicly traded companies. Our organic growth is complemented by our acquisition strategy, which brings further scale and differentiation to our offerings. In January 2019, we closed the acquisition of Noventis, Inc., which expands our reach as a corporate payments supplier and provides more channels to billing aggregators and financial institutions. In February 2019, we acquired Pavestone Capital, a recourse factoring company that provides working capital to businesses. This acquisition complements our existing fleet factoring business.In March 2019, we closed the acquisition of Discovery Benefits, Inc., an employee benefits administrator that provides our partners and customers with a more comprehensive suite of products and services and opens go-to-market channels to include consulting firms and brokers. In July 2019, we closed the acquisition of Go Fuel Card, strengthening our position in the European fuel market.
EXECUTIVE COMPENSATION
Cement a reputation for flawless execution. We stand apart in our segments by reliably delivering the best solutions to our partners and customers. We are continually optimizing our customer service and cost structure, and capturing new revenue synergies across our lines of business. Gains in operational efficiency simplify our business, making us more nimble to meet customer needs and capture market opportunities as they arise.
Invest in our people. We prioritize our ability to attract, develop, and retain top-tier talent across all lines and support functions of our business. The Company was certified as a Great Place to Work® in the U.S. in 2019 for the third consecutive year and was named #4 on Vault.com’s “100 Best Internships of 2020” list. The Company has continued to expand its Employee Resource Groups across the globe, currently counting seven groups with over 250 active members and allies.
Lead through superior technology. As our markets evolve, our ability to deliver superior technological solutions continues to set us apart from our peers. We continue to develop innovative technological capabilities to accelerate our digital transformation and differentiate ourselves in the marketplace. The Company’s continued focus on building new capabilities in the cloud and transitioning existing platforms to cloud environments reflects our Cloud First development strategy and positions us well for future growth. During 2019, we successfully migrated our North American fleet technology platform to a secure private cloud. In addition, we continue to migrate our U.S. travel operations onto an internal cloud-based virtual card platform that we acquired as part of the AOC acquisition. We expect that these moves will allow us to improve performance, stability and scalability, increase the pace of product development and deliver cost savings. Investment in technological innovation with a focus on artificial intelligence and machine learning has yielded results through expanded reporting, analysis and fraud detection capabilities. We expect continued development of enterprise-wide data management tools and investment in artificial intelligence and machine learning to continue to drive innovation across the Company.
Say on Pay Support and Stockholder Engagement
We have adopted a policy of conducting an annual advisory vote on executive compensation. While this vote is not binding, our Board and the Compensation Committee, which we refer to as the Committee for purposes of the CD&A, value the opinions of our stockholders.
The Committee strives to ensure our executive compensation program aligns with the interests of our stockholders and adheres to our pay for performance philosophy. At our 2019 Annual Meeting of Stockholders, approximately 98% of votes cast supported WEX’s executive compensation program. Management and the Committee reviewed our stockholders’ affirmative 2019 Say on Pay vote and believe it to be a strong indication of support for WEX’s executive compensation program and practices. The Committee continued the philosophy, compensation objectives and governing principles it has used in recent years when making decisions or adopting policies regarding executive compensation for 2019 and subsequent years.
In addition to our annual advisory vote on executive compensation, we are committed to ongoing engagement with our stockholders. These engagement efforts take place throughout the year through meetings, telephone calls and correspondence involving our senior management and representatives of our stockholders.
36 WEX Inc.
EXECUTIVE COMPENSATION
Key Compensation Practices
Our executive compensation program is aligned to our business strategy and features many leading practices, which we believe promote alignment with the interests of our stockholders.
 |  | |
| What We Do | What We Don’t Do | |
• Directly link pay to performance outcomes, operational results and • Link incentive plan performance measures to short- and • Target total direct compensation (base/cash bonus/long-term incentives) within a competitive range of the • Maintain a cap on CEO and other NEO incentive compensation payouts for • Have stock ownership guidelines for • Provide double-trigger change-in-control severance benefits • Review share utilization annually • Devote time to management succession and • Use an independent compensation consultant • Anti-hedging policy • Anti-pledging policy • Clawback policy | • No payment of dividends or dividend equivalents on unearned RSUs or PSUs • No excise tax gross-ups upon a change-in-control • No re-pricing of underwater stock options without stockholder approval • No excessive severance or change-in-control benefits | |
2020 Proxy Statement 37
EXECUTIVE COMPENSATION
Summary of WEX’s 20172019 Executive Compensation Program.
A summary of our executive compensation program during 20172019 is provided below.
| Compensation Element | |
Base Salary - Fixed rate of pay | |
Short-Term Incentive Plan (“STIP”) Payout can range from 0-200% of target based on financial goals: 1. Compensation Adjusted Operating Income (60%) and2. For The funded payout may be adjusted for each NEO through an individual performance modifier, down to 75% or up to 125%, with no payout greater than 200% of target. The adjustment is made based on an assessment of performance versus pre-defined, often quantitative individual goals. The | STIP funding was |
Long-Term Incentive Plan (“LTIP”) Our target long-term incentive mix during 2019 for our CEO was 60% PSUs, 25% Stock Options, and 15% RSUs; target mix for our other NEOs, • Payout can range from 0-200% of target with cliff vesting on third anniversary of grant• 3-year performance period based on cumulative corporate financial goalsStock Options: • 3-year ratable vesting requirement• Reward long-term stockholder value creationRSUs: • 3-year ratable vesting requirement• Reward long-term stockholder value creation and encourage retention | goals. The |
EXECUTIVE COMPENSATION
Pay Mix.
The majority of CEO compensation is variable (“at risk”). For 2017, 85%2019, 88% of target total direct compensation was variable for our CEO in her core compensation program. This directly ties pay to Company performance outcomes, including financial results, strategic initiatives, and stock price performance.
| 2019 CEO Target Total Compensation Mix | 2019 CEO Long-term Incentive Mix | |
| | |
The majority of the compensation for the remaining NEOs is also variable and tied directly to Company performance outcomes, as described above.
Process for Determining Executive Compensation
Compensation Committee.
The Compensation Committee, composed solely of independent directors, and referred to in this CD&A as the Committee, is responsible for our executive officer compensation decisions.decisions, which includes our NEOs. The Committee works closely with its independent compensation consultant and management to examine pay and performance matters throughout the year. The Committee held 65 meetings over the course of 2017,2019, all of which included an executive session without management present. The Committee charter may be accessed through the “Governance” link found on our website at: http://ir.wexinc.com/phoenix.zhtml?phoenix. zhtml?c=186699&p=irol-govhighlights.
2020 Proxy Statement 39
EXECUTIVE COMPENSATION
In the first quarter of each fiscal year, the Chair of the Committee reviews the Board’s assessment of the CEO'sCEO’s performance with the CEO and reviews the Company's results for the prior year.CEO. In addition, the Committee approves the following, as explained below:
Agenda items for the second quarter vary each year but always include a review of Company performance and progress toward the achievement of incentive plan targets. Typically, this also includes a retrospective assessment of the senior executive pay versus performance relationship.
Agenda items for the third and fourth quarters also vary each year, but always include a review of Company performance and progress toward the achievement of incentive plan targets. The Committee generallyalso conducts its annual review of executive compensation, in the third or fourth quarter of each year. The Committee is providedconsidering a report from its independent compensation consultant comparing the compensation of Company executivesexecutive officers to a peer group of companies and survey data.
compensation for the next fiscal year.
The design of the STIP and LTIP is typically discussed over multiple meetings prior to the actual approval of the plans in the first quarter of each year. The discussions generally focus on the metrics to be utilized, the difficulty of the performance goals and the weightings for each metric. Other items that are addressed on an annual basis include a review of the Committee'sCommittee’s charter, director compensation, compliance with stock ownership guidelines and an update on market trends related to executive compensation.
Executive Management.
Our Chief Legal Officer, acting under the supervision of the CEO and worked with members of our Human Resources department, working with our Legal and Finance departments, was responsible for coordinating and overseeing the implementation of executive compensation, and discussing significant proposals or topics impacting executive compensation at WEX with the Committee. This included development of compensation recommendations, in accordance with the compensation philosophy and policies more fully described elsewhere in this CD&A. The following members of management arewere generally invited to and attendattended Committee meetings: the CEO; CFO; Chief Human Resources Officer; Chief Legal Officer; and, the VP, Corporate Securities Counsel. With the appointment of a dedicated Chief Human Resources Officer in February 2018, the responsibilities for overseeing the coordination of the executive compensation programs transitioned from the Chief Legal Officer to the Chief Human Resources Officer.
The Committee has authority for approvingto approve the compensation of the CEO and the other NEOs. The CEO meets with the Committee and the compensation consultant to discuss company and individual performance objectives and outcomes, and review compensation recommendations for executive officers directly reporting to her, including the other NEOs. Thereafter, the Committee meets privately with its independent compensation consultant to review and determine compensation of our CEO. In addition, each year the Committee sets the targets each year for compensation plan performance targets for our officers;executive officers and management provides input and recommendations with respect to such targets, as well as information and analyses, as requested by the Committee.
40 WEX Inc.
EXECUTIVE COMPENSATION
Independent Compensation Consultant.
The Committee has the authority to retain and terminate a compensation consultant, and to approve the consultant’s fees and all other terms of such engagement. During 2017,2019, the Committee continued to directly retain Compensation Advisory Partners LLC ("CAP"(“CAP”) as its independent compensation consultant. The scope of the work done by CAP for the Committee at its direction included:
Preparing analyses, recommendations, and recommendationsother support to inform the Committee’s decisions related to executive and director compensation;
Providing updates on market trends and the regulatory environment, as they relate to executive and director compensation;
Reviewing and commenting on management proposals presented to the Committee;
Providing a report comparing the compensation of Company executives to a peer group of companies and survey data; and
Working with the Committee to validate the pay-for-performance relationship, andin support of alignment with stockholders.
The Committee assessed the independence of CAP pursuant to SEC and NYSE rules, and concluded that no conflict of interest exists that would prevent CAP from providing independent advice to the Committee. CAP will not perform other services for WEX without the consent of the Chair of the Committee. CAP meets with the Committee Chair and the Committee outside the presence of management. In addition, CAP participatesparticipated in all of the Committee’s meetings during 2019 and, when requested by the Committee Chair, participates in preparatory meetings and executive sessions.
Total Compensation -— Objectives and Compensation Philosophy
Objectives
Compensation Philosophy.
Generally, we target total direct compensation (salary, annual bonus and long-term incentives) within a competitive range of the market median. Sustained performance may be recognized in individual pay components. Pay may vary above or below target based on actual performance outcomes. Variations in total direct compensation among the NEOs reflect differences in competitive pay for their respective positions as well as the size and complexity of the business units or functions they oversee, the performance of those business units or functions, key competencies and individual performance.
2020 Proxy Statement 41
EXECUTIVE COMPENSATION
2019 Total Direct Compensation
We structure NEO target total direct compensation so that the majority is delivered in the form of equity awards, in order to provide incentives to work towards long-term top and bottom-line growth that will enhance stockholder returns and to align our NEOs'NEOs’ compensation directly with our stockholders'stockholders’ interests. We also structure NEOs’ cash compensation so that a significant portion is at risk under the company’sCompany’s short-term incentive plan, payable primarily based on enterprise and business unit results, and to a lesser degree based on individual performance. We further detail each component of total direct compensation below.
Base Salary.
We review base salaries annually, but we do not necessarily award salary increases each year. In determining base salary levels for named executive officers, the Committee considers the following qualitative and quantitative factors: job level and responsibilities, relevant experience, individual performance, recent corporate and business unit performance, internal equity, and our objective of paying competitive total direct compensation if performance isexpectations are met. From time to time base salaries may be adjusted other than as a result of an annual review, for example, in order to address competitive pressures or in connection with a promotion. Year-end NEO salaries were as follows:
Name | NEOs Base Salary | Rationale for Increase | ||||
| 2016 | 2017 | % Increase (2016-2017) | ||||
Melissa Smith CEO & President | $700,000 | $700,000 | —% | n/a | ||
Roberto Simon CFO | $500,000 | $500,000 | —% | n/a | ||
Kenneth Janosick Chief Portfolio Risk and Operations Officer | $325,000 | $365,000 | 12% | Market-based adjustment | ||
Scott Phillips President, Global Fleet | $— | $475,000 | —% | Not a NEO in 2016 | ||
Jeffrey Young President, Health | $450,000 | $450,000 | —% | n/a | ||
| NEOs Base Salary | |||||||||
| Name | 2018 | 2019 | % Increase (2018-2019) | Rationale for Increase | |||||
Melissa Smith Chair, CEO and President | $ | 735,000 | $ | 770,000 | 5 | % | Market-based adjustment | ||
Roberto Simon CFO | $ | 500,000 | $ | 500,000 | 0 | % | n/a | ||
Scott Phillips President, Global Fleet | $ | 475,000 | $ | 475,000 | 0 | % | n/a | ||
Joel Dearborn President, Corporate Payments | $ | — | $ | 400,000 | —% | Not a NEO in 2018 | |||
Robert Deshaies President, Health | $ | — | $ | 425,000 | —% | Not a NEO in 2018 | |||
Short-Term Incentive Plan ("STIP").
Our Annual Incentive Plan, structured under the 2015 Section 162(m)our Performance Incentive Plan, ("PIP"), is designed to motivate our NEOs to drive profitable Company growth, while diversifying Company revenues, by measuring the NEOsNEO performance against our plans at the corporate and business unit level, with the potential for individual adjustment for NEOs as described below. The PIP was approved by our stockholders in 2015For NEOs leading a business unit, corporate goals are weighted 40% and was designed to give us flexibility to potentially maximizebusiness unit goals are weighted 60%. This framework holds the tax deductibility of certain incentives as performance-based awards under Section 162(m) ofNEO group accountable for the Internal Revenue Code of 1986, as amended (“Section 162(m)"), as further described below undersame corporate metrics and goals, while also emphasizing and holding business unit leaders accountable for the “Tax and Accounting Considerations” section, and prior to the amendments to Section 162(m) made by the Tax Cuts and Jobs Act, signed into law on December 22, 2017 (the “Tax Act”), which, among other things eliminated the performance-based compensation exception to 162(m) for tax years beginning on or after January 1, 2018.results they can most influence.
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We establish a cash bonus target for each executive officerNEO based upon their position within the Company, responsibility and competitive cash bonus opportunities for similar positions at other companies. Final actualSTIP payouts may range from 0% to 200% of the target bonus opportunity based on actual performance outcomes. The following tables describe 20172019 NEO performance goals, results for each component of the bonus,STIP, and the actual cash bonus award for each NEO.
Weighting Used in Determination of 2019 STIP Payout(1) | ||||||||||
| Corporate Goals | M. Smith | R. Simon | S. Phillips | J. Dearborn | R. Deshaies | |||||
| Compensation Adjusted Revenue | 40 | % | 40 | % | 16 | % | 16 | % | 16 | % |
| Compensation Adjusted Operating Income | 60 | % | 60 | % | 24 | % | 24 | % | 24 | % |
| Business Unit Financial Goals | ||||||||||
| Fleet Adjusted Revenue | — | — | 24 | % | — | — | ||||
| Fleet Adjusted Operating Income | — | — | 36 | % | — | — | ||||
| Corporate Payments Adjusted Revenue | — | — | — | 24 | % | — | ||||
| Corporate Payments Operating Income | — | — | — | 36 | % | — | ||||
| Healthcare Adjusted Revenue | — | — | — | — | 24 | % | ||||
| Healthcare Adjusted Operating Income | — | — | — | — | 36 | % | ||||
| STIP payout as a percentage of target based on 2019 corporate performance | 85.6 | % | 85.6 | % | 89.2 | % | 105.7 | % | 111.9 | % |
(1) | The percentages for each NEO represent the weight that the corporate goals are provided in determining 2019 actual STIP payout. |
| Performance Goals | 2019 Actual | ||||||||||||||||||
| Corporate Goals | Weight | Threshold (50% payout) | Target Performance Goal (100% payout) | Maximum (200% payout) | Actual Performance | Actual % Performance | Payout based on Actual 2019 Performance | ||||||||||||
Compensation Adjusted Revenue(1) | 40 | % | $ | 1,569,800,000 | $ | 1,643,800,000 | $ | 1,701,300,000 | $ | 1,640,800,000 | 98.0 | % | 39.2 | % | |||||
Compensation Adjusted Operating Income(2) | 60 | % | $ | 610,200,000 | $ | 642,300,000 | $ | 668,000,000 | $ | 627,700,000 | 77.3 | % | 46.4 | % | |||||
| Weighted Average Payout | 85.6 | % | |||||||||||||||||
(1) | Compensation Adjusted Revenue means 2019 revenue as reported in the Form 10-K filing reporting the Company’s results for the performance period adjusted for the difference between 2019 reported fuel prices and foreign exchange rates and Board-approved, budgeted 2019 fuel price and foreign exchange rate assumptions. The results were further adjusted for other items as shown in Appendix A. |
(2) | Compensation Adjusted Operating Income means 2019 operating income as reported in the Form 10-K filing reporting the Company’s results for the performance period adjusted for: foreign exchange rate impacts compared to the Board approved 2019 Budget, fuel price differences compared to the Board approved 2019 Budget, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, restructuring and other costs, and debt restructuring costs. The results were further adjusted for other items as shown in Appendix A. |
| Weighting by NEO | |||||||||
| Corporate Goals | M. Smith | R. Simon | K. Janosick | S. Phillips | J. Young | ||||
| Corporate Financial Goals | |||||||||
| Compensation Adjusted Revenue | 40% | 40% | 16% | 16% | 16% | ||||
| Compensation Operating Income | 60% | 60% | 24% | 24% | 24% | ||||
| Business Unit Financial Goals | |||||||||
| Fleet Adjusted Revenue | — | — | 24% | — | — | ||||
| Fleet Operating Income | — | — | 36% | — | — | ||||
| Healthcare Adjusted Net Revenue | — | — | — | — | 24% | ||||
| Healthcare Adjusted Operating Income | — | — | — | — | 36% | ||||
| OTR Adjusted Revenue | — | — | — | 24% | — | ||||
| OTR Operating Income | — | — | — | 36% | — | ||||
| STIP payout as a percentage of target based on 2017 performance | 139% | 139% | 92% | 118% | 153% | ||||
| Performance Goals | 2017 Actual | |||||||
| Corporate Goals | Strategic Objective Weight | Threshold (50% payout) | Target Performance Goal (100% payout) | Maximum (200% payout) | Actual Performance | Actual % Performance | Payout based on Actual 2017 Performance | |
Compensation Adjusted Revenue(1) | 40% | $1,124,800,000 | $1,184,000,000 | $1,225,400,000 | $1,228,400,000 | 200% | 80% | |
Compensation Operating Income(2) | 60% | $420,900,000 | $455,000,000 | $477,800,000 | $454,100,000 | 99% | 59% | |
| Weighted Average Payout | 139% | |||||||
EXECUTIVE COMPENSATION
The fundedinitial funding of the STIP payout, based on the financial metrics and pre-set goals described above, may be adjusted for each NEO through an individual performance modifier, down to 75% or up to 125% (of the initial funding of the STIP amount), with no payout greater than 200% of target.target under the STIP. The adjustment is made based on an assessment of performance versus pre-defined, often quantitative, individual goals. The modifier, across our executive team, is intended to generally function within the “pool” of STIP-funded dollars (0-200% of target) that is determined based on the financial metrics listed above. Our CEO may make individual modifier recommendations to ourthe Committee for all of the other NEOs, for consideration and approval by the Committee, and the Committee independently considers and approves the CEO individual modifier factor, if any. In
The Committee believes that our named executive officers’ performance goals should support and help achieve the Company’s strategic objectives. Individual performance goals for the CEO were established under the oversight of, and with the approval of, the Committee. Individual performance goals for the other NEOs were proposed by the CEO and reviewed and approved by the Committee. Across our NEO group, in addition to an evaluation of general leadership competencies, the results that were measured against pre-defined goals which are generally quantitative, used(generally quantitative) to determine individual modifiers, for the NEOs were based on the following criteria:
| Target Annual Incentive | |||||||||||||||||
| Name | Base Salary ($) | Eligible Award Salary | (% of 2017 Base Salary) | Award Amount At Target | Payout based on 2017 Corporate/ Unit Performance | Individual Performance Modifier | Actual 2017 STIP Award Earned(1) | ||||||||||
| M. Smith | $700,000 | $700,000 | 120% | $840,000 | 139.1 | % | — | % | 1,168,440 | ||||||||
| R. Simon | $500,000 | $500,000 | 75% | $375,000 | 139.1 | % | — | % | 521,625 | ||||||||
| K. Janosick | $365,000 | $358,846 | 70% | $251,192 | 91.9 | % | — | % | 230,846 | ||||||||
| S. Phillips | $475,000 | $405,769 | 55% | $223,173 | 118.4 | % | — | % | 264,237 | ||||||||
| J. Young | $450,000 | $450,000 | 67% | $301,500 | 152.5 | % | — | % | 459,788 | ||||||||
| M. Smith | Goal Results |
| FY2019 Performance Results | • Revenue and operating income results demonstrate strong execution across segments given outperformance relative to a number of peer companies • Organic revenue growth driven by new contract signings, including the addition of the Shell and Chevron portfolios • Achievement of performance goals against M&A acquisition deal models during 2019 that meet or exceed targets in aggregate • Effective progress and results with succession planning for senior management team • Creation affinity groups across the organization to promote diversity and inclusion • Progress in corporate goals related to long-term risk management • Progress in positioning the Company as a leader in financial technology within core verticals |
| R. Simon | Goal Results |
| FY2019 Performance Results | • Cash flow and leverage management • Reduction of financing and operating interest exposure; enhanced credit agreement terms Scaling systems and workforce planning • Risk management • Achievement of performance goals against M&A acquisition deal models during 2019 that meet or exceed targets in aggregate • Positive employee development and engagement results |
| S. Phillips | Goal Results |
| FY2019 Performance Results | • Success versus growth and innovation goals • M&A integration results and success versus deal model • Positive employee development and engagement results |
| J. Dearborn | Goal Results |
| FY2019 Performance Results | • Success building scalable operations function • M&A integration results and success versus deal model • Positive employee development and engagement results |
| R. Deshaies | Goal Results |
| FY2019 Performance Results | • Success versus growth and innovation goals • M&A integration results and success versus deal model • Positive employee development and engagement results |
44 WEX Inc.
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Given the Company's strong performance in 2019, which included outperformance on growth, margin, and TSR against compensation benchmarking peers, and based on each NEOs results measured against their individual goals, as discussed above, the Committee, in its discretion, determined the individual performance factor for each NEOs STIP award at the percentage displayed in the table below. The Committee considered the input of Ms. Smith regarding performance against the pre-established individual goals for each NEO in its decision-making process. When making its individual performance factor determinations, the Committee did not assign a specific weighting to any individual goal, but instead reviewed each NEOs results against his or her individual goals in the aggregate.
The payouts under our STIP are computed based on corporate and individual performance, as discussed above and outlined below. The fiscal year 2019 STIP payments are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for Fiscal Year 2019, and are set forth in the following table. The table also provides a supplemental breakdown of the components that make up the NEOs actual fiscal year 2019 STIP awards. The awards as a percentage of the target are displayed for each component.
Salary | x | Target Annual Incentive % | x | Corporate Performance Factor % (0%-200%) | Individual Performance Factor % (75%-125%) | = | Final STIP (0%-200%) | |||
| Target | Actual | |||||||||||||||||
| Executive | Annual Base Salary(1) (a) | Annual Incentive % (b) | Annual Cash Incentive $ (a) x (b) = (c) | Corporate Performance Factor % (d) | Individual Performance Factor (IPF) % (e) 2 | Final Award $ (c) x (d) x (e) | Final Award as a % of Target (d) x (e) | |||||||||||
| Melissa Smith | $ | 763,269 | 140 | % | $ | 1,068,577 | 85.6 | % | 110.0 | % | $ | 1,006,172 | 94.2 | % | ||||
| Roberto Simon | $ | 500,000 | 80 | % | $ | 400,000 | 85.6 | % | 114.0 | % | $ | 390,336 | 97.6 | % | ||||
| Scott Phillips | $ | 475,000 | 80 | % | $ | 380,000 | 89.2 | % | 109.1 | % | $ | 369,636 | 97.3 | % | ||||
| Joel Dearborn | $ | 380,769 | 75 | % | $ | 285,577 | 105.7 | % | 94.0 | % | $ | 283,744 | 99.4 | % | ||||
| Robert Deshaies | $ | 412,535 | 75 | % | $ | 309,401 | 111.9 | % | 105.0 | % | $ | 363,531 | 117.5 | % | ||||
(1) | Reflects base salary as paid during full year 2019. |
(2) | IPF rounded to nearest tenth. |
Long-Term Incentive Compensation.Compensation
The Company provides annual long-term equity-based incentives through the long-term incentive plan (“LTIP”).LTIP. Annual grants under the LTIP were provided through a mix of PSUs, which vest from 0% to 200% based on the achievement of multi-year performance goals, subject to further service basedservice-based vesting described below,
stock options, which have no value absent stock price appreciation and encourage stockholder value creation over a long-term (10 year) time horizon, and RSUs, which vest based on the passage of time and fluctuate in value based on changes in our stock price. PSUs, stock options and RSUs generally vest over a three yearthree-year period of employment.
2020 Proxy Statement 45
EXECUTIVE COMPENSATION
We aim to provide long-term awards such that together with cash compensation, target total direct compensation (salary plus target bonus and grant-date value of annual long-term incentive awards) is within a competitive range of the market median. Compensation is intended to vary based on companyCompany and individual performance outcomes. The Committee bases individual award levels on comparative market data for the executive’s position, award levels of comparably-situated executives, and an assessment of individual potential and performance. In making awards to any individual, the Committee does not alter its compensation philosophy based on his or her gains made,the individual’s value realized, or failure to achieve gains, on prior restricted stock,RSU, stock option or performance stock unitPSU awards.
Annual equity grants were 60% PSUs, 20% stock options and 20% RSUs for our non-CEO NEOs; theNEOs. The mix for our CEO was: 60% PSUs, 25% stock options and 15% RSUs. Our program balances mid-term (PSUs)(PSU) goals and long-term (stock options) goals and stockholder valuation creation, with key employee motivation and retention.
2019 LTIP
retrospectively, once the performance period is complete. If earned, awardsPSUs will cliff vest on the third anniversary of the grant date. The stock options and RSUs will vest according to the Company’s practice of having one-third of each award vest on each of the first three anniversaries of the grant date.
2017 LTIP Grant Payout
| Two Year Cumulative Performance Goals | |||||||
| Company Goals | Threshold (50% Payout) | Target Performance Goal (100% Payout) | Maximum (200% Payout) | Strategic Objective Weight | Actual Performance | Payout based on Actual 2017 Performance | |
Non-Fuel Price Sensitive Revenue(1) | $1,394,600,000 | $1,489,800,000 | $1,586,500,000 | 40% | $1,566,000,000 | 72% | |
Compensation ANI EPS(2)(3) | $8.43 | $9.21 | $9.98 | 60% | $10.22 | 120% | |
| Weighted Average Payout | 192% | ||||||
Company Goals(1) | Threshold (50% Payout) | Target Performance Goal (100% Payout) | Maximum (200% Payout) | Weighted | Actual Performance | Payout based on Actual 2017-2019 Performance | ||||||||||
Non Fuel Sensitive Revenue ($millions)(1) | $ | 2,437.1 | $ | 2,634.7 | $ | 2,898.1 | 40 | % | $ | 3,112.1 | 80 | % | ||||
Adjusted Net Income — Earnings Per Share(2) | $ | 15.93 | $ | 17.41 | $ | 18.72 | 60 | % | $ | 19.45 | 120 | % | ||||
| Weighted Average Payout | 200 | % | ||||||||||||||
(1) | Non Fuel Sensitive Revenue is defined as revenue as reported in the Form 10-K filing for the performance period for our Travel & Corporate Solutions and Health and Employee Benefits segments and all revenue lines in Fleet with the exception of payment processing revenue. The results were further adjusted for other items as shown in Appendix A. |
(2) | Adjusted Net Income - Earnings Per Share is defined as Adjusted Net Income - Earnings Per Share as reported in the Form 10-K filing for the performance period adjusted for PPG and other items as shown in Appendix A. |
EXECUTIVE COMPENSATION
Peer Group
We have created a target compensation structure that focuses on the median of our selected peer companies, but also allows total target compensation to vary to reflect other considerations, such as companyCompany performance, individual experience, job responsibilities and other individual performance factors.
A key element of this process is selecting a relevant peer group against which we compare our elements of pay.NEO pay elements. The Committee reviews and determines the composition of our peer group, considering input from its independent compensation consultant.consultant and management, among other factors, such as size, business, operating characteristics and competition for executive talent. For 2017,2019, our peer group consisted of the 10 companies shown below, whose aggregate profile was comparable to WEX in terms of size, industry and competition for executive talent.WEX.
| Global Payments Inc. | |
| Cardtronics plc | Green Dot Corporation |
| CSG Systems International, Inc. | |
Total System Services, | |
Worldpay, Inc.(2) | |
| FleetCor Technologies, Inc. | Virtusa Corporation |
(1) | ||||
(2) | Worldpay Inc. |
| WEX ($millions) | Peer Median ($millions) | |
| Market Capitalization (at 12/31/2017) | $6,060 | $6,736 |
| 2017 EBITDA Margin | 35% | 22% |
| 2017 Revenue | $1,251 | $2,060 |
| 3-Year Revenue Growth | 53% | 39% |
| Metrics | WEX ($millions) | Peer Median ($millions) | ||||
| Market Capitalization (at 12/31/2019) | $9,067 | $8,277 | ||||
| 2019 EBITDA Margin | 36 | % | 21 | % | ||
| 2019 Revenue | $1,724 | $1,299 | ||||
| 3-Year Revenue Growth | 70 | % | 38 | % | ||
For certain NEOs, data relating to the peer group is supplemented, for reference, with functional data from executive compensation surveys conducted by two pay-related data providers: Equilar Top 25 Survey and Radford Global Technology Survey - US.— U.S. With respect to these surveys, the identity of the individual companies comprising the survey data is not considered by the Committee in its evaluation process. Peer group data and other information provided to the Committee were considered in setting target compensation levels for our NEOs. For purposes of defining the market for each individual role, the Committee used the peer group data for the CEO and CFO; for the other NEOs, the Committee supplemented peer group data with the survey data described above.
During 2017,2019, on average, target total direct compensation of our NEOs was positioned within a competitive range of the market median. Adjustments are typically made when we believe that there is a market-based gap and/or as warranted by individual performance.
EXECUTIVE COMPENSATION
Other Compensation Program and Governance Features
The Committee considers the transition from PSUs granted in 2016 with a two-year performance period, where 50% of the earned PSUs vest after two years and 50% of the earned PSUs vest after 3 years,potential risk to PSUs granted in 2017 with a three-year performance period, where 100% of the earned PSUs vest only after three years, the Committee determined to make an award one-time RSU awards (“bridge grant”) that vest one year from the date of grant based on continued service with the Company to each NEO that had received a 2016 PSU award, which reflects all NEOs excluding Mr. Phillips The value of these awards ranged from $56,000 to approximately $571,000. This bridge grant is now fully vestedits compensation programs and the program is complete.
Committee’s independent compensation consultant. The analysis evaluated the levels of risk-taking that potentially could be encouraged by our compensation arrangements, taking into account the arrangements’ risk-mitigation features, to determine whether they are appropriate in the context of our strategic plan and annual budget, our overall compensation arrangements, our compensation objectives and the Company’s overall risk profile. We have concluded that WEX has an executive compensation program that balances competitive compensation with performance incentives and does not use compensation policies or practices -— across employee groups -— that could create risks that are reasonably likely to have a material adverse effect on the Company. Select identified risk-mitigation features with respect to our NEOs include the following:
A competitive base salary, which provides executives with ongoing incomeincome;
Independent oversight of incentive program design and payoutspayouts;
Different performance-measurement and time-based vesting requirements between our short-term and long-term incentive programsprograms;
Stock ownership guidelines, clawback, anti-hedging and anti-pledging policies; and
Committee approval for all Section 16 Executive Officer compensation.
Tax Deductibility of Compensation. Historically, IRC
Internal Revenue Code Section 162(m) generally limitedlimits the tax deductibility of compensation paid to our NEOs (excluding the CFO)certain executive officers (and, beginning for 2018, certain former executive officers) to $1 million duringin any fiscal year unless such compensationtaxable year. Historically, an exception was "performance-based." In general, we have sought to structure incentive compensation arrangements in a manner that complies with these tax rules. The Committee reserves the right to payavailable for compensation that may exceedqualified as “performance-based” within the limits on tax deductibility or not satisfymeaning of Section 162(m), but the performance-based award exception such as time-based restricted stock units, if it determines doing so is in our and our stockholders’ best interests.
Accounting Implications.
In designing our compensation and benefit programs, the Committee reviews and considers the accounting implications of its decisions, including the accounting treatment of amounts awarded or paid to our executives.
48 WEX Inc.
EXECUTIVE COMPENSATION
Executive Stock Ownership Guidelines. In order toGuidelines
To further alignsupport alignment of the interests of management and stockholders, we maintain stock ownership guidelines for our executives. The guidelines require that executives attain a specified level of ownership of shares of the company’sCompany’s common stock equal in value to a multiple of base salary within the later of five years of the executive’s appointment to their role or the applicability of these guidelines:
| Role | Multiple of Base Salary |
| Chief Executive Officer | 5.0x |
| Other NEOs | 3.0x |
Until the minimum level of ownership is achieved, executives must retain, net after tax, 50% of any earned PSUs upon vesting, any RSUs upon vesting, and/or any stock optionsreceived upon exercise.
exercise of options.
The Compensation Committee reviews the ownership level for covered executives each year. As of the 20172019 measurement of ownership, all NEOs were in compliance with the guidelines. "Equity,"“Equity,” for the purposes of executive ownership guidelines, includes shares of our common stock owned directly or indirectly and ownership interests in the WEX Common Stock Fund held in the Company'sCompany’s 401(k) Plan, as well as 50% percent of unvested time-based RSU awards. Stock options and unearned, unvested PSUs are not counted.
Anti-Hedging and Anti-Pledging Policies.Policies
We maintain a policy that prohibits directors and executive officers from purchasing any financial instrument, or entering into any transaction, that is designed to hedge or offset a decrease in the market value of Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or
exchange funds) or from pledging, hypothecating, or otherwise encumbering shares of Company stock as collateral for indebtedness.
Clawback Policy
Benefits and Perquisites.Perquisites
We provide competitive benefits to attract and retain high performing associates at all levels. This includes a health and welfare benefits package and a 401(k) plan. Beginning in 2020, the Company is considering providing reimbursement to our NEOs each year for executive physical exams and financial counseling, up to $4,000 and $12,000 per year, respectively. The decision to offer this component was authorized by the Committee to support the physical and financial well-being of our NEOs. The Company continues to evaluate those perquisites usefulness to our overall compensation program. There are no other perquisites provided to any of our NEOs.
2020 Proxy Statement 49
EXECUTIVE COMPENSATION
Incentive Compensation Related to Promotion
Concurrent with his promotion to President, WEX Health in September 2019, Mr. Deshaies was awarded a cash bonus amount of $50,000 that will be paid in four quarterly installments, beginning in 2020, and $600,000 in equity awards. The equity awards were provided 50% in the form of PSUs and 50% in the form of RSUs. The PSUs increased Mr. Deshaies’ participation in the 2019 to 2021 performance period, on a basis consistent with the value awarded to other members of the Company's executive team.
Nonqualified Deferred Compensation.Compensation
The Company administers the WEX Inc. 2005 Executive Deferred Compensation Plan, or 2005 EDCP, that provides each ofand the 2017 WEX Inc. Executive Deferred Compensation Plan, or 2017 EDCP. The 2005 EDCP was frozen to new contributions on December 31, 2017 and was replaced by the 2017 EDCP which has the same characteristics as the 2005 EDCP. Both the 2005 EDCP and the 2017 EDCP provide executive officers with the opportunity to defer up to 80 percent of base salary and/or up to 98 percent of short-term incentive compensation. The Company providesprovided a match of up to 6 percent of the participant’s applicable short-term incentive compensation deferred intoprogram award under the 2005 EDCP and now provides the same match for the 2017 EDCP. Investment income on contributions and Company match is accrued for participants to reflect performance of investment funds identified by each participant during their annual election period. The investment funds and their performance used to calculate earnings in the 2005 EDCP and 2017 EDCP generally mirror those used in the 401(k) Plan.
Each of the NEOs serving in his or her role at the time of election, with the exception of Messrs. Janosick and Young, who was eligible to participate in the 2017 EDCP during 2019, and all except Robert Deshaies chose to defer a portion of his or her 20172019 short term incentive compensation intounder the 2005 EDCP in 2018. The 2005 EDCP was frozen to new contributions following the 2017 plan year contributions. As of January 1, 2018, the Company adopted the 2018 WEX Inc. Executive Deferred Compensation Plan, or 2018 EDCP. The 2018 EDCP has the same characteristics as the 2005 EDCP.
plan.
Prior to our initial public offering, we offered the WEX Inc. Supplemental Investment and Savings Plan, or SERP, which allowed participants to defer compensation. The SERP was frozen to new contributions on December 31, 2004. Ms. Smith has a balance in this plan,the SERP, which continues to earn investment returns based on the funds she selects from an available menu. We believe these investment returns are market competitive for the type of funds offered; there is no preferential interest earned in either the 2005 EDCP or SERP accounts. No other current executive officers participated in the SERP when it was an active plan.
50 WEX Inc.
EXECUTIVE COMPENSATION COMMITTEE REPORT
Compensation Committee Report
The Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis ("CD&A") with management. Based on our review and discussions with management, wethe Committee recommended to the Board of Directors that the CD&A be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2017.
2019.
THE COMPENSATION COMMITTEE
Jack VanWoerkom (Chair)VanWoerkom*
Daniel Callahan*
Daniel Callahan*
Shikhar Ghosh (Former Member)
James Neary
Susan Sobbott
Susan Sobbott
* Mr. VanWoerkom served as the chair of the Compensation Committee and Mr. Callahan served as a member of the Compensation Committee when they participated in the review, discussions and recommendation with respect to the Compensation Discussion and Analysis. Mr. Callahan currently serves as the chair of the Compensation Committee and Mr. VanWoerkom currently serves as a member of the Compensation Committee.
EXECUTIVE COMPENSATION
2019 Summary Compensation Table
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(7) | Total ($) | |||||||||||||||||||||||||
| Melissa D. Smith | 2017 | $ | 700,000 | $ | — | $ | 3,046,384 | $ | 5,824,970 | $ | 1,168,440 | $ | 22,238 | $ | 85,574 | $ | 10,847,606 | |||||||||||||||||
| President and Chief Executive Officer | 2016 | $ | 674,039 | $ | — | $ | 1,895,106 | $ | 631,727 | $ | 965,791 | $ | 4,383 | $ | 39,961 | $ | 4,211,007 | |||||||||||||||||
| 2015 | $ | 578,317 | $ | — | $ | 1,331,217 | $ | 443,742 | $ | 451,745 | $ | 653 | $ | 48,315 | $ | 2,853,989 | ||||||||||||||||||
| Roberto Simon | 2017 | $ | 500,000 | $ | — | $ | 1,345,879 | $ | 2,779,971 | $ | 521,625 | $ | — | $ | 39,036 | $ | 5,186,511 | |||||||||||||||||
| Chief Financial Officer | 2016 | $ | 423,077 | $ | — | $ | 2,049,892 | $ | 199,989 | $ | 408,803 | $ | — | $ | 405,976 | (6) | $ | 3,487,737 | ||||||||||||||||
| 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
| Kenneth Janosick | 2017 | $ | 358,846 | $ | — | $ | 941,192 | $ | 2,199,967 | $ | 230,846 | $ | — | $ | 14,192 | $ | 3,745,043 | |||||||||||||||||
Chief Portfolio Risk & Operations Officer(8) | 2016 | $ | 322,115 | $ | — | $ | 499,947 | $ | 124,997 | $ | 333,649 | $ | — | $ | 14,058 | $ | 1,294,766 | |||||||||||||||||
| 2015 | $ | 320,000 | $ | — | $ | 280,021 | $ | 69,975 | $ | 123,172 | $ | — | $ | 13,984 | $ | 807,152 | ||||||||||||||||||
| Scott Phillips | 2017 | $ | 405,769 | $ | — | $ | 799,929 | $ | 2,199,967 | $ | 1,752,237 | $ | — | $ | 26,346 | $ | 5,184,248 | |||||||||||||||||
| President, Global Fleet | 2016 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
| 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
| Jeffrey Young | 2017 | $ | 450,000 | $ | — | $ | 456,323 | $ | 1,599,960 | $ | 459,788 | $ | — | $ | 13,500 | $ | 2,979,571 | |||||||||||||||||
| President, Health | 2016 | $ | 432,693 | $ | — | $ | 1,199,920 | $ | 49,978 | $ | 364,212 | $ | — | $ | 13,500 | $ | 2,060,303 | |||||||||||||||||
| 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | ||||||||||||||||
Melissa Smith Chair and CEO | 2019 | $ | 763,269 | $ | — | $ | 3,450,218 | $ | 1,150,020 | $ | 1,006,172 | $ | 35,545 | $ | 77,170 | $ | 6,482,394 | ||||||||
| 2018 | $ | 729,615 | $ | — | $ | 2,699,878 | $ | 899,992 | $ | 1,212,474 | $ | — | $ | 88,758 | $ | 5,630,717 | |||||||||
| 2017 | $ | 700,000 | $ | — | $ | 3,046,384 | $ | 5,824,970 | $ | 1,168,440 | $ | 22,238 | $ | 85,574 | $ | 10,847,606 | |||||||||
Roberto Simon Chief Financial Officer | 2019 | $ | 500,000 | $ | — | $ | 1,200,156 | $ | 300,020 | $ | 390,336 | $ | — | $ | 40,258 | $ | 2,430,770 | ||||||||
| 2018 | $ | 500,000 | $ | — | $ | 999,697 | $ | 249,978 | $ | 445,125 | $ | — | $ | 37,822 | $ | 2,232,622 | |||||||||
| 2017 | $ | 500,000 | $ | — | $ | 1,345,879 | $ | 2,779,971 | $ | 521,625 | $ | — | $ | 39,036 | $ | 5,186,511 | |||||||||
Scott Phillips President, Global Fleet | 2019 | $ | 475,000 | $ | — | $ | 1,120,318 | $ | 280,031 | $ | 369,636 | $ | — | $ | 38,978 | $ | 2,283,963 | ||||||||
| 2018 | $ | 475,000 | $ | — | $ | 999,697 | $ | 249,978 | $ | 359,100 | $ | — | $ | 35,580 | $ | 2,119,355 | |||||||||
| 2017 | $ | 405,769 | $ | — | $ | 799,929 | $ | 2,199,967 | $ | 1,752,237 | $ | — | $ | 26,346 | $ | 5,184,248 | |||||||||
Joel Dearborn President, Corporate Payments | 2019 | $ | 380,769 | $ | — | $ | 1,040,111 | $ | 260,041 | $ | 283,744 | $ | — | $ | 33,825 | $ | 1,998,490 | ||||||||
Robert Deshaies President, Health | 2019 | $ | 412,535 | $ | 50,000 | $ | 740,592 | $ | 35,026 | $ | 363,531 | $ | — | $ | 18,141 | $ | 1,619,825 | ||||||||
(1) | Includes amounts that may be contributed by each named executive officer on a pre-tax basis to the |
(2) | This was a one-time cash award associated with Mr. Deshaies' promotion to President, Health that will be paid in equal quarterly installments starting in 2020. |
(3) | The amounts shown in this column represent the aggregate grant date fair value of stock awards made during |
52 WEX Inc.
EXECUTIVE COMPENSATION
(4) | The amounts shown in this column represent the aggregate grant date fair value of option awards made during |
(5) | The amounts shown reflect the cash incentive awarded in March |
(6) | The amounts shown reflect |
(7) | The following table describes the elements that are represented in the |
ALL OTHER COMPENSATION
| Name | 401(k) or Other Retirement Plan Employer Match ($) | EDCP Employer Match ($)(1) | Other ($) | Total ($) | 401(k) or Other Retirement Plan Employer Match ($) | EDCP Employer Match ($)(1) | Other ($)(2) | Total ($) | ||||||||||||||||||||
| Melissa D. Smith | $ | 15,468 | $ | 70,106 | $ | — | $ | 85,574 | ||||||||||||||||||||
| Melissa Smith | $ | 16,800 | $ | 60,370 | $ | — | $ | 77,170 | ||||||||||||||||||||
| Roberto Simon | $ | 7,738 | $ | 31,297 | $ | — | $ | 39,035 | $ | 16,800 | $ | 23,420 | $ | 38 | $ | 40,258 | ||||||||||||
| Kenneth Janosick | $ | 14,192 | $ | — | $ | — | $ | 14,192 | ||||||||||||||||||||
| Scott Phillips | $ | 10,492 | $ | 15,854 | $ | — | $ | 26,346 | $ | 16,800 | $ | 22,178 | $ | — | $ | 38,978 | ||||||||||||
| Jeffrey Young | $ | 13,500 | $ | — | $ | — | $ | 13,500 | ||||||||||||||||||||
| Joel Dearborn | $ | 16,800 | $ | 17,025 | $ | — | $ | 33,825 | ||||||||||||||||||||
| Robert Deshaies | $ | 16,800 | $ | — | $ | 1,341 | $ | 18,141 | ||||||||||||||||||||
(1) | The amounts reflect the Company’s contributions to the executive officer under the 2017 EDCP which were earned in |
(2) The amounts reflect the value received as part of corporate events and/or promotions.
The following table represents all plan-based awards granted to the named executive officers in 2017:
2019:
| Name | Type of Award(1) | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(7) | |||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||
| Melissa D. Smith | STIP | — | $ | 420,000 | $ | 840,000 | $ | 1,680,000 | — | — | — | — | — | $ | — | $ | — | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (2) | $ | — | $ | — | $ | — | — | — | — | 4,716 | — | $ | — | $ | 494,944 | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (3) | $ | — | $ | — | $ | — | — | — | — | 5,445 | — | $ | — | $ | 571,453 | ||||||||||||||||||||||||||
| PSU | 3/20/2017 | (4) | $ | — | $ | — | $ | — | 9,433 | 18,866 | 37,732 | — | — | $ | — | $ | 1,979,987 | ||||||||||||||||||||||||||
| NQ | 3/20/2017 | (5) | $ | — | $ | — | $ | — | — | — | — | — | 23,187 | $ | 104.95 | $ | 824,970 | ||||||||||||||||||||||||||
| NQ | 5/10/2017 | (6) | $ | — | $ | — | $ | — | 87,136 | 174,272 | 174,272 | — | — | $ | 99.69 | $ | 5,000,000 | ||||||||||||||||||||||||||
| Roberto Simon | STIP | — | $ | 187,500 | $ | 375,000 | $ | 750,000 | — | — | — | — | — | $ | — | $ | — | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (2) | $ | — | $ | — | $ | — | — | — | — | 2,667 | — | $ | — | $ | 279,902 | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (3) | $ | — | $ | — | $ | — | — | — | — | 2,154 | — | $ | — | $ | 226,062 | ||||||||||||||||||||||||||
| PSU | 3/20/2017 | (4) | $ | — | $ | — | $ | — | 4,001 | 8,003 | 16,006 | — | — | $ | — | $ | 839,915 | ||||||||||||||||||||||||||
| NQ | 3/20/2017 | (5) | $ | — | $ | — | $ | — | — | — | — | — | 7,869 | $ | 104.95 | $ | 279,971 | ||||||||||||||||||||||||||
| NQ | 5/10/2017 | (6) | $ | — | $ | — | $ | — | 43,568 | 87,136 | 87,136 | — | — | $ | 99.69 | $ | 2,500,000 | ||||||||||||||||||||||||||
| Kenneth Janosick | STIP | — | $ | 125,596 | $ | 251,192 | $ | 502,385 | — | — | — | — | — | $ | — | $ | — | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (2) | $ | — | $ | — | $ | — | — | — | — | 1,905 | — | $ | — | $ | 199,930 | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (3) | $ | — | $ | — | $ | — | — | — | — | 1,346 | — | $ | — | $ | 141,263 | ||||||||||||||||||||||||||
| PSU | 3/20/2017 | (4) | $ | — | $ | — | $ | — | 2,858 | 5,717 | 11,434 | — | — | $ | — | $ | 599,999 | ||||||||||||||||||||||||||
| NQ | 3/20/2017 | (5) | $ | — | $ | — | $ | — | — | — | — | — | 5,621 | $ | 104.95 | $ | 199,990 | ||||||||||||||||||||||||||
| NQ | 5/10/2017 | (6) | $ | — | $ | — | $ | — | 34,854 | 69,708 | 69,708 | — | — | $ | 99.69 | $ | 1,999,977 | ||||||||||||||||||||||||||
| Scott Phillips | STIP | 3/20/2017 | $ | 111,587 | $ | 223,173 | $ | 446,346 | — | — | — | — | — | $ | — | $ | — | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (2) | $ | — | $ | — | $ | — | — | — | — | 1,905 | — | $ | — | $ | 199,930 | ||||||||||||||||||||||||||
| PSU | 3/20/2017 | (4) | $ | — | — | $ | — | — | $ | — | 6,476 | 2,858 | 5,717 | 11,434 | — | — | $ | — | $ | 599,999 | |||||||||||||||||||||||
| NQ | 3/20/2017 | (5) | $ | — | $ | — | $ | — | — | — | — | — | 5,621 | $ | 104.95 | $ | 199,990 | ||||||||||||||||||||||||||
| NQ | 5/10/2017 | (6) | $ | — | $ | — | $ | — | 34,854 | 69,708 | 69,708 | — | — | $ | 99.69 | $ | 1,999,977 | ||||||||||||||||||||||||||
| Jeffrey Young | STIP | — | $ | 150,750 | $ | 301,500 | $ | 603,000 | — | — | — | — | — | $ | — | $ | — | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (2) | $ | — | $ | — | $ | — | — | — | — | 952 | — | $ | — | $ | 99,912 | ||||||||||||||||||||||||||
| RSU | 3/20/2017 | (3) | $ | — | $ | — | $ | — | — | — | — | 538 | — | $ | — | $ | 56,463 | ||||||||||||||||||||||||||
| PSU | 3/20/2017 | (4) | $ | — | $ | — | $ | — | 1,429 | 2,858 | 5,716 | — | — | $ | — | $ | 299,947 | ||||||||||||||||||||||||||
| NQ | 3/20/2017 | (5) | $ | — | $ | — | $ | — | — | — | — | — | 2,810 | $ | 104.95 | $ | 99,977 | ||||||||||||||||||||||||||
| NQ | 5/10/2017 | (6) | $ | — | $ | — | $ | — | 26,140 | 52,281 | 52,281 | — | — | $ | 99.69 | $ | 1,499,983 | ||||||||||||||||||||||||||
| Date of Committee Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | |||||||||||||||||||||||
| Name | Type of Award(1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||
| Melissa Smith | STIP | $ | 534,288 | $ | 1,068,577 | $ | 2,137,154 | — | — | — | — | — | — | — | |||||||||||||||
RSU(2) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | 3,734 | — | — | $ | 690,081 | ||||||||||||||||
PSU(3) | 3/20/2019 | 3/1/2019 | — | — | — | 7,468 | 14,935 | 29,870 | — | — | — | $ | 2,760,137 | ||||||||||||||||
NQ(4) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | — | 19,733 | 184.81 | $ | 1,150,020 | ||||||||||||||||
| Roberto Simon | STIP | $ | 200,000 | $ | 400,000 | $ | 800,000 | — | — | — | — | — | — | — | |||||||||||||||
RSU(2) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | 1,624 | — | — | $ | 300,131 | ||||||||||||||||
PSU(3) | 3/20/2019 | 3/1/2019 | — | — | — | 2,435 | 4,870 | 9,740 | — | — | — | $ | 900,025 | ||||||||||||||||
NQ(4) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | — | 5,148 | $ | 184.81 | $ | 300,020 | |||||||||||||||
EXECUTIVE COMPENSATION
| Date of Committee Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | |||||||||||||||||||||||
| Name | Type of Award(1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||
| Scott Phillips | STIP | $ | 190,000 | $ | 380,000 | $ | 760,000 | — | — | — | — | — | — | — | |||||||||||||||
RSU(2) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | 1,516 | — | — | $ | 280,172 | ||||||||||||||||
PSU(3) | 3/20/2019 | 3/1/2019 | — | — | — | 2,273 | 4,546 | 9,092 | — | — | — | $ | 840,146 | ||||||||||||||||
NQ(4) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | — | 4,805 | $ | 184.81 | $ | 280,031 | |||||||||||||||
| Joel Dearborn | STIP | $ | 142,789 | $ | 285,577 | $ | 571,154 | — | — | — | — | — | — | — | |||||||||||||||
RSU(2) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | 1,407 | — | — | $ | 260,028 | ||||||||||||||||
PSU(3) | 3/20/2019 | 3/1/2019 | — | — | — | 2,111 | 4,221 | 8,442 | — | — | — | $ | 780,083 | ||||||||||||||||
NQ(4) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | — | 4,462 | $ | 184.81 | $ | 260,041 | |||||||||||||||
| Robert Deshaies | STIP | $ | 154,700 | $ | 309,401 | $ | 618,802 | — | — | — | — | — | — | $ | — | ||||||||||||||
RSU(2) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | 190 | — | — | $ | 35,114 | ||||||||||||||||
RSU(6) | 9/16/2019 | 8/26/2019 | — | — | — | — | — | — | 1,410 | — | — | $ | 300,161 | ||||||||||||||||
PSU(3) | 3/20/2019 | 3/1/2019 | — | — | — | 285 | 569 | 1,138 | — | — | — | $ | 105,157 | ||||||||||||||||
PSU(7) | 9/16/2019 | 8/26/2019 | — | — | — | 705 | 1,410 | 2,820 | — | — | — | $ | 300,161 | ||||||||||||||||
NQ(4) | 3/20/2019 | 3/1/2019 | — | — | — | — | — | — | — | 601 | $ | 184.81 | $ | 35,026 | |||||||||||||||
(1) | All March 20, 2019 equity awards are granted under |
(2) | RSUs granted on March 20, |
(3) | PSUs granted on March 20, |
(4) | Non-qualified stock options granted on March 20, |
(5) | Represents the aggregate grant date fair value of option awards and RSUs calculated in accordance with FASB ASC Topic 718. Represents the aggregate grant date fair value of PSUs calculated in accordance with FASB ASC Topic 718 based on the probable outcome of performance goals. |
(6) | RSUs granted to Mr. Deshaies on September 16, 2019 were |
(7) | PSUs granted to Mr. Deshaies on September 16, 2019 were related to his promotion to President, Health. The PSUs granted may convert to RSUs based on the |
EXECUTIVE COMPENSATION
The following table represents stock options and unvested stock units held by each of the named executive officers as of December 31, 2017.
2019.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Option Grant Date | Number of Securities Underlying Unexercised Options - (#) Exercisable | Number of Securities Underlying Unexercised Options - (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | |||||||||||||||||||||||||||||||||
| Melissa D. Smith | 8,658 | 4,342 | — | $ | 103.75 | 3/15/2025 | 54,478 | $ | 7,693,928 | 37,732 | $ | 5,328,890 | ||||||||||||||||||||||||||||||||||||||||
| 8,047 | 16,121 | — | $ | 77.20 | 3/15/2026 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | 23,187 | — | $ | 104.95 | 3/20/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | — | 174,272 | $ | 99.69 | 5/10/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Melissa Smith | 3/15/2015 | 13,000 | — | — | $ | 103.75 | 3/15/2025 | 7,586 | $ | 1,588,964 | 94,904 | $ | 19,878,592 | |||||||||||||||||||||||||||||||||||||||
| 3/15/2016 | 16,112 | — | — | $ | 77.20 | 3/15/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/20/2017 | 15,442 | 7,745 | — | $ | 104.95 | 3/20/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 5/10/2017 | — | — | 174,272 | $ | 99.69 | 5/10/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/15/2018 | 5,845 | 11,710 | — | $ | 158.23 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/20/2019 | — | 19,733 | — | $ | 184.81 | 3/20/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Roberto Simon | — | — | — | $ | — | — | 32,263 | $ | 4,556,503 | 16,006 | $ | 2,260,527 | 3/20/2017 | 5,240 | 2,629 | — | $ | 104.95 | 3/20/2027 | 3,569 | $ | 747,563 | 35,224 | $ | 7,378,019 | |||||||||||||||||||||||||||
| 2,547 | 5,104 | — | $ | 77.20 | 3/15/2026 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | 7,869 | — | $ | 104.95 | 3/20/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | — | 87,136 | $ | 99.69 | 5/10/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Kenneth Janosick | 1,365 | 685 | — | $ | 103.75 | 3/15/2025 | 14,370 | $ | 2,029,475 | 11,434 | $ | 1,614,824 | ||||||||||||||||||||||||||||||||||||||||
| 1,592 | 3,190 | — | $ | 77.20 | 3/15/2026 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | 5,621 | — | $ | 104.95 | 3/20/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | — | 69,708 | $ | 99.69 | 5/10/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Roberto Simon | 5/10/2017 | — | — | 87,136 | $ | 99.69 | 5/10/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/15/2018 | 1,623 | 3,253 | — | $ | 158.23 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/20/2019 | — | 5,148 | — | $ | 184.81 | 3/20/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| — | — | — | $ | — | — | 16,085 | $ | 2,271,685 | 11,434 | $ | 1,614,824 | 3/20/2017 | 3,743 | 1,878 | — | $ | 104.95 | 3/20/2027 | 3,207 | $ | 671,738 | 30,004 | $ | 6,284,638 | ||||||||||||||||||||||||||||
| — | 5,621 | — | $ | 104.95 | 3/20/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | — | 69,708 | $ | 99.69 | 5/10/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Jeffrey Young | — | — | — | $ | — | — | 5,650 | $ | 797,950 | 31,622 | $ | 4,465,975 | ||||||||||||||||||||||||||||||||||||||||
| 636 | 1,276 | — | $ | 77.20 | 3/15/2026 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | 2,810 | — | $ | 104.95 | 3/20/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| — | — | 52,281 | $ | 99.69 | 5/10/2027 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Scott Phillips | 5/10/2017 | — | — | 69,708 | $ | 99.69 | 5/10/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/15/2018 | 1,623 | 3,253 | — | $ | 158.23 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/20/2019 | — | 4,805 | — | $ | 184.81 | 3/20/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/20/2017 | 561 | 282 | — | $ | 104.95 | 3/20/2027 | 1,967 | $ | 412,008 | 14,326 | $ | 3,000,724 | ||||||||||||||||||||||||||||||||||||||||
| Joel Dearborn | 3/15/2018 | 714 | 1,431 | — | $ | 158.23 | 3/15/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/20/2019 | — | 4,462 | — | $ | 184.81 | 3/20/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/15/2016 | 1,032 | — | — | $ | 77.20 | 3/15/2026 | 1,823 | $ | 381,846 | 11,040 | $ | 2,312,438 | ||||||||||||||||||||||||||||||||||||||||
| Robert Deshaies | 3/20/2017 | 561 | 282 | — | $ | 104.95 | 3/20/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/15/2018 | 194 | 391 | — | $ | 158.23 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 3/20/2019 | — | 601 | — | $ | 184.81 | 3/20/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
(1) | Vests at a rate of one third of the total award per year beginning on the first anniversary of the grant date. |
(2) | Vests upon the attainment of specified stock price hurdles beginning on the third anniversary of the grant, being May 10, 2020, and ending on the fifth anniversary of the grant, being May 10, 2022. The stock price hurdles are as follows: (a) 50% of the total award vests if the closing stock price is at least $149.53 for 20 consecutive trading days during the two year period beginning May 10, 2020; (b) additional 25% of the total award vests if the closing stock price is at least $174.45 for 20 consecutive trading days during the two year period beginning May 10, 2020; and, (c) the final 25% of the total award vests if the closing stock price is at least $199.38 for 20 consecutive trading days during the two year period beginning May 10, 2020, in each instance so long |
2020 Proxy Statement 55
EXECUTIVE COMPENSATION
(3) | The following table shows the number of RSUs, |
| Name | Annual Grant RSUs and PSUs March 15, 2015 (#) | Annual Grant RSUs and PSUs March 15, 2016 (#) | Special Incentive PSU Grant September 15, 2016 (#) | Annual Grant RSUs March 20, 2017 (#) | Total (#) | Annual Grant RSUs March 20, 2017 (#) | Annual Grant RSUs March 15, 2018 (#) | Annual Grant RSUs March 20, 2019 (#) | Promotion Related RSUs September 16, 2019 (#) | Total (#) | |||||||||||
| Melissa D. Smith | 3,356 | 40,961 | — | 10,161 | 54,478 | ||||||||||||||||
| Melissa Smith | 1,576 | 2,276 | 3,734 | — | 7,586 | ||||||||||||||||
| Roberto Simon | — | 27,442 | — | 4,821 | 32,263 | 891 | 1,054 | 1,624 | — | 3,569 | |||||||||||
| Kenneth Janosick | 719 | 10,400 | — | 3,251 | 14,370 | ||||||||||||||||
| Scott Phillips | — | — | 14,180 | 1,905 | 16,085 | 637 | 1,054 | 1,516 | — | 3,207 | |||||||||||
| Jeffrey Young | — | 4,160 | — | 1,490 | 5,650 | ||||||||||||||||
| Joel Dearborn | 96 | 464 | 1407 | — | 1,967 | ||||||||||||||||
| Robert Deshaies | 96 | 127 | 190 | 1,410 | 1,823 | ||||||||||||||||
