UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Rule 14a-101)
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.__
(Amendment No. )
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| ¨ | | Preliminary Proxy Statement |
| ¨ | | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| þ | | Definitive Proxy Statement |
| ¨ | | Definitive Additional Materials |
| ¨ | | Soliciting Material Pursuant to Section 240.14a-12 |
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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LETTER TO OUR STOCKHOLDERS
WEX INC.
1 Hancock Street
Portland, Maine 04101
April 22, 202019, 2022
Dear Fellow Stockholders,
You are cordially invited to attend the 20202022 annual meeting of stockholders of WEX Inc. (the "Company"), or the Company. To support the health and well-being of our stockholders, employees and directors in light of the recent coronavirus (COVID-19) outbreak, the meetingwhich will be held via the Internet at a virtual audio web conference at the following website (https://web.lumiagm.com/289188153) on Thursday, May 14, 2020,12, 2022, at 8:00 a.m., Eastern Time.
At As was the meeting we will:
elect three directors for three-year terms,
conduct an advisory (non-binding) vote oncase with 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, 2020, and
consider any other business properly coming before the meeting.
As noted above, due to the COVID-19 outbreak, ourCompany's last two annual meetings, this year's annual meeting will be a “virtual meeting” of stockholders, which will be conducted exclusively via the Internet as a virtual audio web conference. Details for attending, and an overview of the matters expected to be acted upon at the meeting, are described in detail in the accompanying Notice of 2022 Annual Meeting of Stockholders and Proxy Statement.
The Proxy Statement also includes important information about the Company’s strong 2021 performance, governance practices, and executive compensation program. Our management team and Board of Directors are focused on delivering long-term stockholder value, and we appreciate you taking the time to review these materials.
Stockholder Engagement
Our management team and Board of Directors are committed to ongoing engagement with our stockholders. Over the course of 2021, WEX management reached out to holders of more than 87% of shares outstanding to discuss matters that interested them. Independent members of our Board participated in and led meetings with each investor that accepted our invitation. We listened carefully to our stockholders during these conversations and made several changes in response to the feedback we received.
Executive Compensation
We believe WEX’s executive compensation program is aligned with stockholder interests. WEX’s “pay-for-performance” philosophy regarding executive compensation is straightforward, and that hostingis to reward our executives for their contributions to the Company’s success by tying a “virtual meeting”significant portion of their total compensation to key business drivers and stockholder value.
Our executive compensation program has historically received strong stockholder support (including, for example, we received approximately 98% support during the 2019 and 2020 annual meetings of stockholders). Through the outreach mentioned above we sought to understand any stockholder concerns with respect to our executive compensation program and incorporated them into our actions, including: returning to our prior, standard executive pay program; incorporating new ESG-related objectives; and creating a performance benchmarking peer group to provide additional reference information relating to our pay program and financial performance.
Corporate Governance
We are committed to ensuring WEX maintains strong corporate governance practices that align with our stockholders' expectations. In line with this commitment, we have taken the following actions:
•Began declassification of the Board, with phase-in of one year terms commencing with the four directors up for election at this 2022 annual meeting of stockholders.
•Charged the Corporate Governance Committee of the Board with overseeing our ESG program to clarify and enhance the Board's oversight of ESG risks and opportunities.
•Refreshed the Board with seven new members since 2018, with a strong mix of skills, qualifications, backgrounds, and experiences.
•Implemented a robust director orientation program for the three directors newly elected to the Board in 2021, the program was also made available to and attended by existing Board members as desired.
LETTER TO OUR STOCKHOLDERS
Environmental, Social, and Governance (ESG)
With a purpose to "simplify the business of running a business." WEX is driven to help our customers succeed by enabling them to cut through an increasingly complex business environment. Our focus on environmental, social, and governance (ESG) considerations is integral to our culture and long-term strategy, and is underpinned by our core values: Integrity, Execution, Innovation, Relationships, and Community. Since the Company's 2021 annual meeting of stockholders, we have taken several important steps to advance our ESG strategy:
•Published our inaugural ESG Report and accompanying Sustainability Accounting Standards Board (SASB) index. Our report covered key topics like energy management, diversity, culture, talent development, social responsibility, ethical business practices, cybersecurity, and data privacy.
•Conducted our first ESG assessment to identify the ESG issues that matter to our long-term strategy and our stakeholders.
•Established an internal ESG Committee to lead the development and implementation of our ESG strategy and program.
•Enhanced our commitment to Diversity, Equity, and Inclusion (DEI) by creating the position of Chief Diversity and Inclusion Officer and releasing "Diversity Equity and Inclusion at WEX," a special report highlighting our current efforts in DEI.
Both our Board of Directors and Executive Leadership Team are actively engaged in WEX’s ESG strategy, and we believe that integrating relevant ESG considerations into our long-term business strategy is key to delivering on our commitments to our stakeholders. We will enable greatercontinue to engage with our investors and other stakeholders to understand their ESG priorities, and we welcome stockholder attendanceperspectives and participationfeedback on our ESG strategy.
Strategic Summary
Overall, we are incredibly proud of our continued strategic progress. Today, WEX is better positioned than ever before as a market leader in each of our businesses, with proven product differentiation, deep expertise, data driven insights, and a platform that is both reliable and scalable. We and our customers benefit from any location around the world.network effect generated by our growing customer base, allowing us to deploy customer driven innovation across our network.
Our commitment to our stockholders remains to deliver strong stockholder value by harnessing our leading technology, cultivating customer relationships and people, and continuing to help our customers “simplify the business of running a business.”
We encourage you to review the enclosed proxy materials and to participate in the stockholder voting process. It is important that your shares are represented and voted regardless of the size of your holdings. Please cast your vote as soon as possible, whether or not you plan on attending the virtual annual 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.
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| Sincerely, |
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Melissa Smith Chair and Chief Executive Officer |
2020 Proxy Statement 21 WEX Inc.
NOTICE OF 20202022 ANNUAL MEETING OF STOCKHOLDERS
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Date and Time Thursday, May 14, 202012, 2022
8:00 a.m., Eastern Time | Virtual Audio Web Conference https://web.lumiagm.com/289188153
Password: wex2020wex2022 | Who Can Vote Stockholders who owned shares of our common stock at the close
of business on March 17, 202031, 2022 are entitled to vote |
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| Agenda | Board Recommendation | For Further Details |
Elect threeTo elect four directors, each to serve for three-year termsa term of one year, until the 2023 annual meeting of stockholders and until his or her successor has been elected and qualified, or until his or her earlier death, resignation or removal | FOR each director nominee | |
ConductTo conduct an advisory (non-binding) vote on the compensation of our named executive officersNamed Executive Officers | FOR | |
Vote toTo ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 20202022 | FOR | |
Stockholders will also consider and transact any other business properly coming before the annual meeting.Annual Meeting.
ToIn light of the ongoing pandemic, to enable broad access to the 2022 Annual Meeting of Stockholders ("Annual Meeting") and to continue to support the health and well-being of our stockholders, employees and directors, in light of the recent coronavirus (COVID-19) outbreak, our annual meetingAnnual Meeting will be a “virtual meeting” of stockholders, which will be conducted exclusively via the Internet atas a virtual web conference.conference and will enable greater stockholder attendance and participation from any location around the world. There will not be a physical meeting location, and stockholders will not be able to attend the annual meetingAnnual Meeting in person. This means that stockholders can attend the annual meetingAnnual 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 fromwex2022. If you have any location around the world.
For the first time, instead of mailing a paper copy ofquestions, please contact D.F. King & Co., Inc., our proxy materials to all of our stockholders, this year we are providing access to our proxy materials oversolicitor assisting us in connection with the Internet under the U.S. SecuritiesAnnual Meeting. Stockholders may call them toll free at (800) 283-9185. Banks and Exchange Commission’s “notice and access” rules. As a result, we arebrokers may call them at (212) 269-5550.
We will begin mailing to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of this proxy statement and our annual report for the fiscal year ended December 31, 2019 (the “2019 Annual Report”). On or about April 22, 2020, we will begin mailing the Notice to stockholders2021 and will post our proxy materials on the website referenced in the Notice. As more fully described in the Notice, stockholders who receive a Notice may choose to access our 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.about April 19, 2022.
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS
Stockholders who owned shares of our common stock at the close of business on March 17, 202031, 2022 are entitled to attend the meetingAnnual Meeting online and vote at the meetingAnnual Meeting and any adjournment or postponement of the meeting.Annual Meeting. Stockholders that owned stock in “street name” as of such date must demonstrate proof of beneficial ownership to virtually attend the meetingAnnual Meeting and must obtain a legal proxy from their bank, broker or other nominee to vote electronically during the meeting.Annual Meeting. A complete list of registered stockholders will be available to stockholders of record during the annual meetingAnnual Meeting for examination at https://web.lumiagm.com/289188153. Further information about how to register to attend the annual meeting,Annual Meeting, attend the annual meetingAnnual 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
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:
12, 2022:
The Notice of Annual Meeting, proxy statement and 2019 annual report to stockholders2021 Annual Report, which includes the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, are available for viewing, printing and downloading, free of charge, 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 meetingAnnual Meeting you may use the following voting methods:
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Internet 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.mp.m. ET on May 13, 202011, 2022 to be counted. | Mail If you requested printed copies of proxy materials be sent to you by mail, either use Internet or Telephone voting, or complete,Complete, sign and date your enclosed proxy card and return it by mail in the enclosed prepaid and addressed envelope prior to the meeting.Annual Meeting.
| Telephone Dial 1-800-776-9437 in the United States or 1-718-921-8500 from foreign countries and follow the recorded instructions. You will need the control number on your Notice or proxy card. Your vote must be received by 11:59 p.mp.m. ET on May 13, 202011, 2022 to be counted.
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If you are a stockholder of record, you may also vote your shares electronically during the virtual annual meetingAnnual Meeting by visiting https://web.lumiagm.com/289188153. The password for the meetingAnnual Meeting is wex2020.wex2022.
If you hold your stock in “street name,” that is, stock held for y ouryour account by a bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee in order to vote prior to or during the annual meeting.Annual Meeting. If you hold your stock in “street name,” you must obtain a legal proxy from your bank, broker or other nominee in order to vote during the annual meeting.
Annual Meeting.
2020 Proxy Statement 43 WEX Inc.
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 isand enclosed proxy card are being furnished in connection with the solicitation of proxies by the Board of Directors of WEX Inc. for use at our annual meeting of stockholders to be held on Thursday, May 14, 202012, 2022 (the "Annual Meeting") via the Internet atas a virtual web conference at https://web.lumiagm.com/289188153. On or about April 22, 2020,19, 2022, we arewill begin mailing a Notice of Internet Availability to our stockholders and making thisour Proxy Statement, our annual reportAnnual Report to stockholdersStockholders and our proxy card available to stockholders on the website set forth in the Notice of Internet Availability.card.
Company Overview
WEX Inc. ("WEX", "our(s)", "we" or "the Company") is the global commerce platform that simplifies the business of running a leading financial technology service provider operatingbusiness. We have created a powerful ecosystem that offers seamlessly embedded, personalized solutions for our customers. Through our rich data and specialized expertise in simplifying benefits, reimagining mobility and paying and getting paid, we make it easy for companies to overcome complexity and reach their full potential. WEX was founded in 1983 and trades on the NYSE under the ticker WEX.
We currently operate in three reportable segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. Our Fleet Solutions segment provides payment processing, transaction processing, and information management services specifically designed for the needs of commercialfleets of all sizes from small businesses to federal and state government fleets.fleets and over-the-road carriers. Our Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-businessglobal B2B (business-to-business) payments, providingenabling customers with payment processingto utilize our payments solutions forto integrate into their corporate paymentown workflows and transaction monitoring needs.manage their accounts payable automation and spend management functions. Our Health and Employee Benefit Solutions segment provides a software-as-a-service,software-as-a service, or “SaaS”,"SaaS" platform for consumer directed healthcare payments,benefits and a full-service benefit enrollment solution, bringing together benefits administration, certain compliance services and consumer-directed and benefits accounts. Additionally, the Company serves as well as payroll related benefitsthe non-bank custodian to customers in Brazil.certain health saving account assets. During 2019,2021, Fleet SolutionsSolutions' revenue represented approximately 60% of ourthe Company's total revenue, Travel and Corporate SolutionsSolutions' revenue represented approximately 21%18% of ourthe Company's total revenue, and Health and Employee Benefit SolutionsSolutions' revenue represented approximately 19%22% of ourthe Company's total revenue.
20192021 Performance HighlightsSnapshot
2019With record revenue and many other accomplishments, 2021 was one of the best years in WEX's history. We continued to win new customers and expand our relationships with existing partners across the WEX ecosystem, a strong year operationally for WEX. Thetestament to our compelling solutions, which are underpinned by global scale and reliability, customer-focused innovation, and specialized focus with rich data. While we, along with the rest of the world, continued to navigate the unprecedented COVID-19 pandemic, the Company’s 20192021 revenue grew 15%,increased 19% from 2020, while 2021 GAAP net income attributable to shareholders per diluted share was breakeven and adjusted net income attributable to shareholders per diluted share, a non-GAAP measure grew nearly 12% and annualized total stockholder return (TSR)(1), increased significantly51% from 2020 to 49.6%, as compared to 2018’s flat -0.8%,$9.14 per share, as shown in the charts below. In fact, over the past five years, we have grown revenue at a compounded annual rate of 13% and adjusted net income attributable to shareholders per diluted share at a compounded annual rate of 19%.
(1)Non GAAP Adjusted Net Income Attributable to Shareholders per Diluted Share is not a financial measure prepared in accordance with generally accepted accounting principles ("GAAP"). For information on how we compute this non-GAAP financial measure and a reconciliation to the most directly comparable financial measure prepared in accordance with GAAP, please refer to "Appendix A — Reconciliation of Non-GAAP Financial Measure" in this proxy statement.
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Revenue $ million | Adjusted Net Income Attributable to Shareholders per Diluted Share(1) |
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(1)Non GAAP Adjusted Net Income Attributable to Shareholders per Diluted Share is not a financial measure prepared in accordance with generally accepted accounting principles ("GAAP"). For information on how we compute this non-GAAP financial measure and a reconciliation to the most directly comparable financial measure prepared in accordance with GAAP, please refer to "Appendix A — Reconciliation of Non-GAAP Financial Measure" in this proxy statement.
We attribute our success over time to these key differentiators:
•We are well-positioned in very large and growing addressable markets and we have a strong track record of growth.
•We are a market leader, at scale, with deep expertise that allows us to provide an ecosystem of seamlessly embedded, tailored solutions for customers both large and small.
•We have a highly recurring revenue model which allows us to invest in strategic growth opportunities.
•Each new customer and partner adds additional utility to our platform, enhancing the network effect.
•Our employees are highly focused on innovating to meet the needs of our customers and partners.
In 2021, we accomplished significant objectives that contributed to our 2021 financial results and positioned WEX for the future. We continued to expand our solutions, strengthening and diversifying our cloud-based commerce platform. Substantial progress was made on the integration of the eNett and Optal businesses that were acquired at the end of 2020 leading to more than $30 million in annualized cost synergies. We advanced our Electric Vehicle strategy, working closely with customers and expanding industry partners to support the needs of fleets managing the complexities of electrification. In the Health and Employee Benefits Solutions segment we acquired the benefitexpress business, which extends our business into the large and growing benefits administration marketplace. We also acquired the custodial or sub-custodial rights over certain health savings account assets, which allows us to better capture the economics from these assets. In addition, in April 2021 we amended our credit agreement to, among other things, extend the terms of, and increase the available loan amounts under, each component of the agreement. This amended credit facility will assist us in maintaining a strong liquidity position going forward as we continue to execute our strategy in an ever-changing business environment.
We also continued to expand and diversify our already strong leadership base. In June 2021, three new directors were elected to our Board of Directors, as part of our active Board refreshment process, and since 2018 we have added a total of seven new directors to our Board. This refreshment has strengthened the background, experiences, expertise, and diversity of our Board.
During the year, we also announced several changes to our Executive Leadership Team, effective in January 2022. We reorganized our Executive Leadership Team to better serve our customers and to enable better integration across our platform. As part of this reorganization, we created three new positions: Chief Operating Officer, Americas, to oversee the strategic growth of, and collaboration across, the Company’s fleet, health, travel and corporate payments businesses in the past several years has been supplementedAmericas; Chief Operating Officer, International, to lead the Company’s international growth; and our first Chief Digital Officer, to expand digital commerce and product development opportunities. These changes are designed to accelerate our business and unlock new growth opportunities by acquisitionsgiving our customers an experience that puts them at the center of everything we do. Our leadership team guided the Company through unprecedented times in each of our three business segments.2021, while continuing to position WEX for the future, and with these new leadership team additions, is poised to continue to do the same.
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Revenue
$ millions
| Adjusted Net-Income
$ millions
| Annualized Shareholder Return
(at 12/31/19)
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Please note that the reconciliations of the non-GAAP financial measures discussed in this proxy statement are located in Appendix A.
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| Proposal 1 | | |
Election of Directors The Board recommends a vote FOR each director nominee. See page 912. | | |
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Our Board of Directors
As a result of the adoption of an Amended and Restated Certificate of Incorporation, which was approved during the Company's 2021 annual meeting of stockholders, the Company is in the process of declassifying its Board of Directors, which is currently divided into three classes. The declassification of the Board of Directors is being phased-in, and commencing with this Annual Meeting, directors standing for election will be elected for new terms of one year.
At this Annual Meeting, the directors who belong to Class II of the Board are standing for re-election for a term of one year expiring at the 2023 annual meeting of stockholders and until their respective successors are elected and qualified.
The members of Class I and Class III are not up for re-election at this Annual Meeting. The members of Class II elected at this Annual Meeting will be up for re-election, if renominated, at the 2023 annual meeting of stockholders as will the current Class III directors, if nominated, all for a term of one year expiring at the 2024 annual meeting of stockholders and until their respective successors are elected and qualified. The current Class I directors will be up for re-election, if nominated, at the 2024 annual meeting of stockholders, along with all other directors, if renominated, all for a term of one year expiring at the 2025 annual meeting of stockholders and until their respective successors are elected and qualified. This will result in the classified Board being fully phased-out (and all Board members standing for annual nomination and election) commencing with the 2024 annual meeting of stockholders.
The following table provides summary information about each director nominee (current Class II directors) and each continuing director:director (current Class I and Class III directors), including their current committee assignments:
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| | 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. |
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| Name and Primary Occupation | Age | Director Since | Current Committee Membership |
| AC | LDCC | CGC | FC | TC |
| | Susan Sobbott | | 57 | 2018 | M | | M | | |
Former President of Global Commercial
Services, American Express Company |
| Stephen Smith | | 51 | 2019 | | M | | M | |
President and Chief Executive Officer,
L.L.Bean |
| James Groch | | 60 | 2020 | M | | | M | |
| Former Global Group President and Chief Investment Officer, CBRE Group, Inc. |
| Regina Sommer | | 64 | 2005 | C | | | | M |
| Former Vice President and Chief Financial Officer, Netegrity, Inc. |
| | Jack VanWoerkom | | 68 | 2005 | | M | C | | |
| Vice Chairman and Lead Director, Former General Counsel and Chief Compliance Officer, Porchlight Equity |
| Derrick Roman | | 58 | 2021 | M | | | M | |
| Former Partner, PricewaterhouseCoopers |
| Nancy Altobello | | 64 | 2021 | M | M | | | |
| Former Partner, Ernst & Young |
| Bhavana Bartholf | | 45 | 2021 | M | | | | M |
| Global Head of Digital and Sales Strategy, Partner General Manager, Microsoft Commercial Solution Areas |
| | Daniel Callahan | | 65 | 2019 | | C | | | M |
Former Global Head of Operations and
Technology, Citigroup |
| Shikhar Ghosh | | 64 | 2005 | | | M | | C |
Professor of Management Practice,
Harvard Business School |
| James Neary | | 57 | 2016 | | M | | C | |
| Managing Director, Co-head of US Private Equity, and a member of the Executive Management Group of Warburg Pincus |
| Melissa Smith | 53 | 2014 | | | | | |
| Chair and Chief Executive Officer, WEX Inc. |
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AC – Audit Committee | FC – FinancialFinance Committee | M – Member | PM– Prospective Member
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CCLDCC – Leadership Development and Compensation Committee
| TC – Technology Committee | | – Independent | LD– Lead Director
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CGC – Corporate Governance Committee | C – Chair | NN– New Nominee
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2020 Proxy Statement 85 WEX Inc.
Projected Board Snapshot
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| Independence | | Tenure | | Age | | Diversity | |
Independent | | <3 years | | <50 years |  | Female | |
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Not Independent |  | 3-750-60 years | | 50-60 years | | Ethnically Diverse | |
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| >7 years |  | 61-70 years | | | |
| | | | >70 years | | | |
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| | Skills and Experiences |
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| Susan Sobbott | | | | | | | | | | |
| Stephen Smith | | | | | | | | | | |
| James Groch | | | | | | | | | | |
| Regina Sommer | | | | | | | | | | |
| Jack VanWoerkom | | | | | | | | | | |
| Derrick Roman | | | | | | | | | | |
| Nancy Altobello | | | | | | | | | | |
| Bhavana Bartholf | | | | | | | | | | |
| Daniel Callahan | | | | | | | | | | |
| Shikhar Ghosh | | | | | | | | | | |
| James Neary | | | | | | | | | | |
| Melissa Smith | | | | | | | | | | |
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| Finance, Accounting or Reporting Experience | | Risk Management | | ESG (and HCM) |
| Legal | | Global or International Business Experience | | Cyber Security |
| Legal or Regulatory Experience | | | Leadership Experience | |
| Business Development and M&A Experience | | | Technology Experience | | |
| Marketing or Public Relations Experience | | | Industry Experience
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| 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.
62022 Proxy Statement WEX Inc.9
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| Proposal 2 | | |
Advisory (Non-Binding) Vote on Thethe Compensation of Our Named Executive Officers The Board recommends a vote FOR this proposal. See page 3345. | | |
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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 (which we call our short term incentive program, or, STIP), and long-term incentives.
The majority of CEO compensation is variable (“at risk”). For 2019, 88%2021, 90% 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.
performance, which directly aligns with the interests of our stockholders. |
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20192021 CEO Target Total Compensation Mix | | 20192021 CEO Long-term Incentive Mix |
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The majority of the compensation for the remaining named executive officersNamed Executive Officers is also variable and tied directly to Company performance outcomes, as described above. | | | | | | | | |
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| Proposal 3 | | |
Ratification of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm For Fiscal Year 20202022 The Board recommends a vote FOR this proposal. See page 6480. | | |
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The Audit Committee has selected D&TDeloitte & Touche LLP (D&T) as the Company’s independent registered public accountant for the 20202022 fiscal year. D&T has served as the Company’s independent registered public accountant since 2003. We are asking our initial public offering.
stockholders to ratify this selection.
2020 Proxy Statement 107 WEX Inc.
TABLE OF CONTENTS
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| 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
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| | | | 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;COVID-19 pandemic; the scope and severity of COVID-19;the COVID-19 pandemic; and risks and uncertainties identified in Item 1A of our Annual Report for the year ended December 31, 2019,2021, filed on Form 10-K with the Securities and Exchange Commission on February 28, 2020.March 1, 2022. 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,of mailing, 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. |
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82022 Proxy Statement WEX Inc.11
GOVERNANCE
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Proposal 1 |
| Election of Directors |
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As a result of the adoption of an Amended and Restated Certificate of Incorporation, which was approved during the Company’s 2021 annual meeting of stockholders, the Company is in the process of declassifying its Board of Directors, which is currently divided into three classes. The declassification of the Board of Directors is being phased-in, and commencing with this Annual Meeting, directors standing for election will be elected to new terms of one year. Therefore, at this Annual Meeting, the directors who belong to Class II of the Board are standing for re-election for a term of one year expiring at the 2023 annual meeting of stockholders and until their respective successors are elected and qualified.
The members of Class I and Class III are not up for re-election at this Annual Meeting. The members of Class II elected at this Annual Meeting will be up for re-election, if renominated, at the 2023 annual meeting of stockholders as will the current Class III directors, if nominated, all for a term of one year expiring at the 2024 annual meeting of stockholders and until their respective successors are elected and qualified. The current Class I directors will be up for re-election, if nominated, at the 2024 annual meeting of stockholders, along with all other directors, if renominated, all for a term of one year expiring at the 2025 annual meeting of stockholders and until their respective successors are elected and qualified. This will result in the classified Board being fully phased-out (and all Board members standing for annual nomination and election) commencing with the 2024 annual meeting of stockholders.
The following individuals are our director nominees for election to serve a one year term, until our 2023 annual meeting of stockholders and until their respective successors are elected and qualified:
•Shikhar Ghosh
•James Neary
•Melissa Smith
•Daniel Callahan
Mr. Ghosh, Mr. Neary, Ms. Smith, and Mr. Callahan are the current members of Class II and their current term as directors will expire at this Annual Meeting. Upon conclusion of this Annual Meeting, the current Class II directors shall no longer be considered part of a specific class of directors and they will be up for renomination and re-election annually.
As part of the Board's continual effort to maintain a breadth of skills, qualifications, backgrounds, and experience on the Board, after considering the recommendation of the Corporate Governance Committee, the Board determined to nominate Ms. Smith, Mr. Callahan, and Mr. Ghosh for re-election.
In addition, in accordance with a 2020 private placement of common stock and convertible notes (the "Private Placement Transaction") completed with an affiliate of Warburg Pincus, LLC, such affiliate has the right to designate one person for election to the Company's Board of Directors (the "Warburg Designee") for so long as the purchaser of the securities continues to own at least 50% of the aggregate amount of (i) shares of common stock and (ii) shares of common stock issuable upon conversion of the convertible notes, which were purchased in the Private Placement Transaction. The Warburg Designee is also entitled to be a member of the Leadership Development and Compensation Committee and the Finance Committee of the Board. The Warburg Designee is currently Mr. Neary. Pursuant to the terms of the Private Placement Transaction, the Warburg Designee must be qualified to serve as a Board member under applicable legal and regulatory requirements and must satisfy all director qualifications in effect from time to time that apply to all nominees for the Board. The Corporate Governance Committee and the Board determined that all required criteria were satisfied. In addition, Mr. Neary has served on the Company's Board of Directors since 2016 and therefore has extensive knowledge of the Company and adds a diverse set of skills, qualifications, background, and experience to the Board. Accordingly, after considering the recommendation of the Corporate Governance Committee and the terms of the Private Placement Transaction, the Board nominated Mr. Neary for re-election. For further information on the convertible senior notes transaction, please see "Board Practices, Policies, and Processes - Certain Relationships and Related Transactions - Warburg Pincus Private Placement Transaction." Ms. Smith, Mr. Callahan, Mr. Ghosh, and Mr. Neary have consented to be named in the proxy statement and to serve if elected.
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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.
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We recommendThe Board recommends a vote FORthese nominees.
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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 Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws ("By-Laws"), and Corporate Governance Guidelines. 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; by consulting with outside advisors as appropriate; and by participating in Board and 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.
Risk Oversight
Our Board recognizes the importance of effective risk oversight in running a successful business and fulfilling its fiduciary responsibilities to the Company and its stockholders. The Board is responsible for promoting an appropriate culture of risk management within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile, and monitoring how the Company addresses specific risks, such as strategic and competitive risks, human capital risks, financial risks, brand and reputation risks, cybersecurity and technology risks, legal and compliance risks, regulatory and operational risks, and risks related to our subsidiary WEX Bank. While all of our executive officers and other senior leaders are responsible for the day-to-day management of risk, the Company's Risk and Compliance Organization and Chief Risk and Compliance Officer (“CRCO”), who reports to the CEO but has direct access to the Board as needed, centralize all risk management and compliance functions.
As part of its mandate, the Risk and Compliance Organization identifies and prioritizes specific risks. Regularly, the CRCO will present those risks to the CEO and the full Board along with the steps that management has taken or will be taking to mitigate such risks. Oversight of particular risks are delegated to committees of the Board, as appropriate and as described below, based upon the nature of any particular risk. Throughout the year, the Board and each committee spend a portion of their time reviewing and discussing specific risk topics. In addition, each of the committees may meet in executive session with the CRCO and other members of senior management to discuss our risks and exposures. The Risk and Compliance Organization provides written reports as needed to the Board for their discussion regarding recent business, legal, regulatory, competitive, and other risks impacting the Company.
20202022 Proxy Statement 913
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| AUDIT 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. |
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| CORPORATE GOVERNANCE COMMITTEE | | •Responsibilities include advising the Board regarding appropriate corporate governance practices, including the Chair providing appropriate oversight over outside Board directorships and conflicts of interest. •Oversees risks related Board composition, the Company's ESG program, related party transactions, and political contributions. |
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| LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE | | •Oversees risks related to our compensation programs for employees, officers and directors. •Oversees strategies having significant human capital implications. |
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| TECHNOLOGY COMMITTEE | | •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 quarterly 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. |
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| FINANCE COMMITTEE | | •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. •Evaluates and oversees policies governing the Company's capital structure. |
Environmental, Social and Governance (ESG)
With a purpose to "simplify the business of running a business," WEX is driven to help our customers succeed by enabling them to cut through an increasingly complex business environment. Our focus on environmental, social and governance (ESG) considerations is integral to our culture and long-term strategy, and is underpinned by our core values: Integrity, Execution, Innovation, Relationships, and Community. Since the Company's 2021 annual meeting of stockholders, we have taken several important steps to advance our ESG strategy:
•Published our inaugural ESG Report and accompanying Sustainability Accounting Standards Board (SASB) index. Our report covered key topics like energy management, diversity, culture, talent development, social responsibility, ethical business practices, cybersecurity, and data privacy;
•Conducted our first ESG assessment to identify the ESG issues that matter to our long-term strategy and our stakeholders;
•Demonstrated progress toward diversity and inclusion aspirations by the addition of seven directors since 2018, including four persons of color or women, the reconstitution of our executive leadership team, which now consists of more than 50% women, and the maintenance of a continued focus on identifying diverse slates for external hiring;
•Established an internal ESG Committee to lead the development and implementation of our ESG strategy; and program; and
•Enhanced our commitment to Diversity, Equity, and Inclusion (DEI) by creating the position of Chief Diversity and Inclusion Officer and releasing "Diversity Equity and Inclusion at WEX," a special report highlighting our current efforts in DEI. Please visit our DEI website (https://www.wexinc.com/about/careers/diversity-and-inclusion/) to review our DEI special report.
Leadership & Oversight
Both our Board of Directors and Executive Leadership Team are actively engaged in WEX’s ESG strategy. The Corporate Governance Committee of the Board has been charged with overseeing our program to demonstrate the Company's commitment to the ESG. In addition, our Leadership Development and Compensation Committee oversees all talent-related initiatives, including those relating to compensation equality, as well as DEI and talent development.
In 2021, we formalized our internal ESG Committee. This committee consists of senior leaders across the organization representing key business areas, including strategy, human resources (which includes facilities), finance, legal, risk, and communications. The ESG Committee is responsible for developing and overseeing the implementation of WEX’s ESG strategy and related programs, and for providing regular updates to the Executive Leadership Team, the Corporate Governance Committee, and Board of Directors.
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Process and Priorities
We know that an authentic and enduring ESG strategy reflects the issues that are most relevant for the Company. In 2021, we conducted our first ESG assessment to identify the topics that are most impactful to our business and to our stakeholders. This process took into consideration the priorities of our key stakeholders – our employees, our customers, our investors, and our communities – and integrated key long-term business initiatives. Through this process, we identified four ESG priorities:
•People and Culture: We are committed to creating an inclusive environment where all of our people can succeed and thrive.
•Environmental Innovation: We are enabling our customers' sustainability efforts through fleet efficiency, better data, and electrification.
•Environmental Stewardship: We are driving operational and energy efficiency to minimize our own corporate environmental impact.
•Social Impact: We are committed to enhancing the health and well-being of our communities, customers, and employees.
We believe that integrating relevant ESG considerations into our long-term business strategy is key to delivering on our commitments to our stakeholders. We will continue to engage with our investors and other stakeholders to understand their ESG priorities, and we welcome stockholder perspectives and feedback on our ESG strategy.
For more information about our ESG strategy and priorities, please visit our ESG website (www.wexinc.com/about/wex-esg-report/) to view our inaugural ESG report, published in June 2021, and our most recent EEO-1 Report. We plan to publish our second ESG report, which reflects our ESG priorities, later in 2022. Furthermore, our ESG website will be periodically updated with our most up-to-date EEO-1 reports as they are filed with the relevant agencies.
Cyber Security Risk Management
The Company's Board of Directors is ultimately responsible for the oversight of the Company's cyber security risk. In addition, the Audit Committee engages in the governance of the Company's enterprise risk management program, which includes information technology risk at a high level. The Board, has created the Technology Committee, which, pursuant to its charter, is responsible for assisting the Board and the Audit Committee in the oversight of the Company's management of risks regarding technology, data security, disaster recovery and business continuity. To perform this function, the Technology Committee receives quarterly reports from the Company's Chief Information Security Officer (CISO), who presents a threat matrix and overall analysis of our cyber health, as well as any recent threat activity. The Technology Committee then, in turn, regularly reports out to the Board and/or the Audit Committee as necessary during succeeding meetings. In addition, members of senior management, including the Chief Technology Officer, the CISO, and the Chief Legal Officer, among others, correspond directly with, or present to, the Board, the Audit Committee, and/or the Technology Committee, regarding issues or risks relating to cybersecurity matters as the case may be.
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 internal succession candidates.
The Board of Directors
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 thean 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. The Board regularly evaluates the Board and its committees for the proper mix and breadth of skills, experience, and backgrounds to maintain a high-functioning and adept Board. Since 2018, we have refreshed the Board with seven new members, with a strong mix of skills, qualifications, backgrounds, and experiences. The Corporate Governance Committee seeks directorsindividuals with the following types of experience:
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| FINANCE, ACCOUNTING, OR REPORTING EXPERIENCE — DirectorsIndividuals with an understanding of finance and financial reporting processes are valued on our Board because of the importance we place on accurate and transparent financial reporting and robust financial controls and compliance. We also seek to have a number of directors who qualify as audit committee financial experts. |
| LEGAL OR REGULATORY EXPERIENCE — DirectorsIndividuals who have had legal or regulatory experience provide insights into addressing significant legal and public policy issues, particularly in areas related to our Company’s business and operations. Because our Company’s business requires compliance with a variety of regulatory requirements across a number of countries, our Board values directors with relevant legal or regulatory experience. |
| BUSINESS DEVELOPMENT AND M&A EXPERIENCE — DirectorsIndividuals 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 — DirectorsIndividuals 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 — DirectorsIndividuals 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, directorsindividuals 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. |
| LEADERSHIP EXPERIENCE — 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.
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| TECHNOLOGY EXPERIENCE — As a technology company and leading innovator, we seek directorsindividuals 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. |
| INDUSTRY EXPERIENCE — We seek directorsindividuals with experience in the financial technology payments industry generally and fleet, travel and healthcare payments specifically. |
| ESG (AND HCM) EXPERIENCE — We seek individuals with experience broadly across Environmental, Social, Governance matters, which includes Human Capital Management ("HCM") considerations given their importance to the Company. |
| CYBER SECURITY EXPERIENCE — We seek individuals with cyber security experience from both a technical and governance perspective to ensure that our Board and Company provide appropriate oversight over the Company's cyber security program. |
102022 Proxy Statement WEX Inc.17
Director Nominations and Recommendations
Class III Director Nominees (Term Expires in 2023)
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| Shikhar Ghosh Independent Professor of Management Practice, Harvard Business School Age: 64 | Director Since: 2005 Board Committees: Technology (Chair), Corporate Governance |
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International
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 The Board nominated Mr. Ghosh due to its conclusion that he 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. Ghosh’s qualifications to serve on the Board include his academic experience and executive management, business development, and leadership experience, gained as the Chairman and CEO of various companies. |
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SUSAN SOBBOTT | James Neary Independent Managing Director, Co-head of US Private Equity, and a member of the Executive Management Group of Warburg Pincus Age: 57 | Director Since: 2016 Board Committees: Finance (Chair), Leadership Development and Compensation |
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and M&A | | Technology | | Industry | | ESG (and HCM) | | Global or
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Mr. Neary is a managing director of Warburg Pincus, a private equity firm, which he joined in 2000. Mr. Neary is a Managing Director, Co-head of U.S. Private Equity (since December 2020) and a member of the Executive Management Group of Warburg Pincus. From 2013 to December 2020, Mr. Neary was head of the Industrials and Business Services team. 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. Prior to joining Warburg Pincus, he was a managing director at Chase Securities and prior to that, he was at Credit Suisse First Boston. Mr. Neary is a director of Sotera Health, a provider of sterilization solutions and lab testing and advisory services, a director of several private companies and a trustee of the Mount Sinai Health System. Mr. Neary has previously served on the boards of Endurance International Group, a web-presence solutions company; Fidelity National Information Services Inc., a bank technology processing company; Coyote Logistics, a truck brokerage business now owned by UPS; and Interactive Data Corporation, a firm providing financial market data and analytics, and now owned by Intercontinental Exchange. The Board nominated Mr. Neary as the Warburg Designee and due to its further conclusions that he 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 large, complex companies and his perspective as the representative of Warburg Pincus. |
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| Daniel Callahan Independent Former Global Head of Operations and Technology, Citigroup Age: 65 | Director Since: 2019 Board Committees: Leadership Development and Compensation (Chair), Technology |
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and M&A | | Risk Management | | Global or International Business | | Technology | | Industry | | ESG (and HCM) | | Cyber Security |
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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 served as the Executive Chair of TIME, a news publication, from April 2019 to December 2021, and has served as a Non-Executive chair of TIME since January 2022. Furthermore, Mr. Callahan has served on the Board of Scotia Bank, a Canadian multinational banking and financial services company, since June 2021 and Tata Consultancy Services, an Indian Multinational Technology Company listed on the National Stock Exchange of India, since January 2019. Mr. Callahan is also an Executive Partner at Bridge Growth Partners, a technology investment firm, since October 2019, a director on the Columbia University's Teachers College charity board, and has served on the boards of several private companies. The Board nominated Mr. Callahan due to its conclusion that he 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 and broad ESG experience given his time at TIME. |
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| Melissa Smith Chair, President, and Chief Executive Officer, WEX Inc. Age: 53 | Director Since: 2014 |
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| Finance, Accounting, or Reporting | | Business Development
and M&A | | Global or International Business | | Technology | | Industry |
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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. Ms. Smith has also served on the Board of Directors of Equifax Inc., a global data, analytics, and technology company, since November 2020. The Board nominated Ms. Smith due to its conclusion that she is well suited to serve as a director of the Company because of her experience with the Company in various positions with increasing responsibilities across all facets of the Company. The Board benefits from the leadership skills, financial expertise and business development expertise of Ms. Smith. Ms. Smith has almost 25 years of experience with the Company. |
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Class III Directors (Term Expires in 2023)
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| Susan Sobbott Independent Former President of Global Commercial Services, American Express Company Age: 5557 | Director Since: 2018 Board Committees: Audit, CompensationCorporate Governance |
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&and M&A | | Marketing or
Public Relations | | Risk Management | | Global or
International Business | | Marketing or
Public RelationsIndustry | | ESG (and HCM) |
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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 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 served on the board of Red Ventures, a privately held digital marketing provider for many of the world’s biggest consumer brands, from 2012 to 2020. She currently serves on the board of Ideas42, a nonprofit behavioral economic consultancy for social issues and is well suitedalso an advisor of One Love, a nonprofit focused on educating the youth on the development of healthy relationships.
Ms. Sobbott's qualifications to serve as a director of the Company because ofinclude 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.Express and experience in risk management, including participating in American Express's inaugural enterprise risk management committee. |
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2020 Proxy Statement 2211 WEX Inc.
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STEPHEN SMITH
Independent
President and Chief Executive Officer, L.L.Bean
Age: 49 | Director Since: 2019
Board Committees: Audit, Finance
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Public Relations | | Business Development
& M&A | | Global or
International Business |
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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.
The Board concluded that Mr. Smith is well suited to serve as a director of the Company because of his leadership experience garnered while serving as the CEO and President of L.L.Bean, including Mr. Smith’s marketing, business development, and international experience.
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JAMES GROCH
Independent
Global Group President and Chief Investment Officer, CBRE Group
Age: 58 | Director Nominee
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Key Experience: | | |
| Leadership | | Risk Management | | Finance, Accounting,
or Reporting | | Business Development & M&A | | Technology
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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.
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Class I Directors (Term Expires in 2021)
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REGINARegina O. SOMMERSommer
Independent Former Vice President and Chief Financial Officer, Netegrity, Inc. Age: 6264 | Director Since: 2005 Board Committees: Audit (Chair), Corporate Governance, Technology |
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| Key Experience: | | |
| Business Development
&and M&A | | Leadership | | Finance, Accounting,
or Reporting | | Risk Management | | Technology
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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 suitedSommer's qualifications to serve as a director of the Company because ofinclude 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.
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20202022 Proxy Statement 1323
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| Stephen Smith Independent President and Chief Executive Officer, L.L.Bean Age: 51 | Director Since: 2019 Board Committees: Finance, Leadership Development and Compensation |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Global or
International Business | | ESG (and HCM) |
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Since January 2016, Mr. Smith has served as the President and Chief Executive Officer of L.L.Bean, a privately held retail company. Mr. Smith also serves on L.L. Bean's board of directors. 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. Mr. Smith has also served on the board of directors of Appalachian Mountain Club, a not-for-profit environmental conservation and recreation corporation until January 2022. Currently, Mr. Smith serves on the Board of Trustees for Dickinson College, a private liberal arts college. Mr. Smith's qualifications to serve as a director of the Company include his leadership experience garnered while serving as the CEO and President of L.L.Bean, including Mr. Smith’s marketing, business development, and international experience. Furthermore, Mr. Smith brings unique ESG experience through his stakeholder philosophy leadership experience at L.L.Bean. |
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| James Groch Independent Former Global Group President and Chief Investment Officer, CBRE Group Age: 60 | Director Since: 2020 Board Committees: Audit, Finance |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development and M&A | | Global or International Business | | Risk Management | | Technology |
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JACK VANWOERKOMFrom 2009 to June 2020, Mr. Groch 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 (from May 2019 to June 2020), Chief Financial Officer and Chief Investment Officer (from March 2014 to May 2019), and EVP Strategy and Corporate Finance and Chief Investment Officer (from January 2009 to March 2014), he was 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.
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, and risk management experience. |
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Class I Directors (Term Expires in 2024)
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| Jack VanWoerkom Independent Vice Chairman and Lead Director. Former General Counsel and Chief Compliance Officer, Porchlight Equity Age: 6668 | Director Since: 2005 Board Committees: Compensation, Corporate Governance (Chair), Leadership Development and Compensation |
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| Key Experience: |
| Legal | | Business Development
&and M&A | | LeadershipRisk Management | | Legal or
Regulatory | | Global or
International
Business |
| Risk Management | | | | | | |
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Mr. VanWoerkom has served as Vice Chairman and Lead Director of the Board since September 2019. Mr. VanWoerkom served as the General Counsel and Chief Compliance Officer of Porchlight Equity (formerly Highland Consumer Fund), a private equity firm specializing in lower middle market companies, from January 2017 until his retirement in December 2018. Before serving as General Counsel and Chief Compliance Officer, Mr. VanWoerkom served as an Operating Partner at Porchlight Equity from June 2015 until January 2017. From June 2011 until June 2015, Mr. VanWoerkom was retired. From June 2007 until June 2011, Mr. VanWoerkom was employed by The Home Depot, Inc., a home improvement retailer, as Executive Vice President, General Counsel and Corporate Secretary. Mr. VanWoerkom served as Executive Vice President, General Counsel and Secretary of Staples, Inc., an office supply retailer, from March 2004 to June 2007. From March 1999 to March 2004, Mr. VanWoerkom was Senior Vice President, General Counsel and Secretary of Staples. The Board concluded that, dueMr. VanWoerkom's qualifications to serve as a director of the Company include 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.companies. 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.
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| Derrick Roman Independent Former Partner, PricewaterhouseCoopers LLP Age: 58 | Director Since: 2021 Board Committees: Audit, Finance |
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JOHN E. BACHMAN
Independent
Former Partner, PricewaterhouseCoopers LLP
Age: 64 | Director Since: 2016
Board Committees: Audit, Finance
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| Key Experience: |
| Global or
International
Business | | Business Development
& M&A | | Leadership | | Finance, Accounting, or
Reporting | | Business Development
and M&A | | Risk Management |
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Prior to his retirement, Mr. Bachman was a partner at the accounting firm of PricewaterhouseCoopers LLP, a firm that focuses on audit, assurance, tax and consulting services, from 1989 to 2015. At PwC, Mr. Bachman served as the Operations Leader of the firm’s U.S. Assurance Practice from July 2007 to November 2013, with full operational and financial responsibility for this $4 billion line of business, which included the firm’s audit and risk management practices. Prior to this operational role, Mr. Bachman served for three years as the firm’s Strategy Leader where he was responsible for strategic planning across business units, geographies and industries. Mr. Bachman also served as an audit partner for companies in the industrial manufacturing, financial services, publishing, healthcare and other industries. Mr. Bachman has served on the Board of The Children’s Place, Inc., a children’s specialty apparel retailer since March 2016 and has served on the Board of Grocery Outlet Holding Corp., a discount supermarket company, since November 2019. Mr. Bachman received an MBA from the Harvard University Graduate Business School and a bachelor’s degree from Bucknell University.
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.
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Class II Directors (Term Expires in 2022)
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DANIEL CALLAHAN
Independent
Former Global Head of Operations and Technology, Citigroup
Age: 63 | Director Since: 2019
Board Committees: Compensation (Chair), Technology
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Key Experience: |
| Leadership | | Industry | | Global or International Business | | Technology |
| ESG (and HCM) | | | | | | |
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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.
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| Cyber Security |
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SHIKHAR GHOSH
Independent
Professor of Management Practice, Harvard Business School
Age: 62 | Director Since: 2005
Board Committees: Governance, Technology (Chair)
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Key Experience: |
| Business Development
& M&A | | Leadership | | Technology | | Global or International Business |
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Mr. Ghosh is a Professor of Management Practice at the Harvard Business School. He has been on the faculty since August 2008 and is Co-Chairman of the Rock Center for Entrepreneurship at Harvard University. Mr. Ghosh is also currently on the Board of Evidence Action, a non-profit organization that provides health services to over 200 million children across multiple countries. From June 2006 until December 2007, Mr. Ghosh was the Chief Executive Officer of Risk Syndication for the Kessler Group, where he enabled bank clients and their endorsing partners to market credit cards. From June 1999 to June 2004, Mr. Ghosh was Chairman and Chief Executive Officer of Verilytics Technologies, LLC, an analytical software company focused on the financial services industry. In 1993, Mr. Ghosh founded Open Market, Inc., an Internet commerce and information publishing software firm. From 1988 to 1993, Mr. Ghosh was the Chief Executive Officer of Appex Corp., a technology company that was sold to Electronic Data Systems Corporation in 1990. From 1980 until 1988, Mr. Ghosh served in various positions with The Boston Consulting Group, a management consulting firm, and was elected as a worldwide partner and a director of the firm in 1988.
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. Ghosh’s qualifications to serve on the Board include his academic experience and executive management, business development and leadership experience, as the Chairman and CEO of various companies.
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JAMES NEARY
Independent
Managing Director, Warburg Pincus
Age: 55 | Director Since: 2016
Board Committees: Compensation, Finance (Chair)
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Key Experience: |
| Technology | | Business Development
& M&A | | Leadership | | Industry |
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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 large, complex companies.
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MELISSA SMITH
Chair and Chief Executive Officer, WEX Inc.
Age: 51 | Director Since: 2014
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Key Experience: |
| Business Development
& M&A | | Leadership | | Finance, Accounting, or Reporting | | Industry | | Technology |
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Ms. Smith hasFrom 1997 until his retirement in September 2020, Mr. Roman served as an audit, consulting and senior client relationship partner for the Chairinternational accounting and consulting firm PricewaterhouseCoopers LLP (“PwC”). As an external audit partner/practitioner, Mr. Roman led independent financial statement audits of publicly traded and privately held enterprises. He has extensive experience in financial accounting, SEC reporting, internal controls, mergers and acquisitions, debt and equity offerings, initial public and secondary offerings, asset-backed financings, and the implementation of accounting and auditing standards. As an advisory partner, Mr. Roman focused on evaluating and improving internal controls, enterprise risk management, internal auditing, and compliance programs for a diverse group of publicly traded companies. Mr. Roman led his PwC teams and clients through digital transformation, automation, and shared delivery center initiatives. He also held several significant governance, line of business, diversity and inclusion and corporate responsibility leadership roles at PwC, including serving on its CEO Nominating Committee and its Foundation board. Mr. Roman is a Certified Public Accountant and a member of the Board since September 2019. Ms. Smith assumedAmerican Institute of Certified Public Accountants, the roleInstitute of Chief Executive OfficerInternal Auditors and the National Association of WEX andBlack Accountants, Inc., where he is a seatmember of its Corporate Advisory Board. Mr. Roman currently serves 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 2013board of directors of CommScope Holding Company, Inc., a global provider of infrastructure solutions for communication 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.entertainment networks.
The Board concluded that Ms. Smith is well suitedMr. Roman's qualifications to serve as a director of the Company becauseinclude his extensive background in auditing, as well as his extensive leadership experience in governance, diversity and inclusion, corporate responsibility, technology, and cybersecurity.
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| Nancy Altobello Independent Former Partner, Ernst & Young Age: 64| Director Since: 2021 Board Committees: Audit, Leadership Development and Compensation |
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| Key Experience: |
| Finance, Accounting, or
Reporting | | Business Development
and M&A | | Risk Management | | Global or
International
Business | | ESG (and HCM) |
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Ms. Altobello was most recently the Global Vice Chair, Talent of her experience withErnst & Young (“EY”), where she was responsible for the firm’s global talent and people strategy from July 2014 to June 2018. Prior to that, she held a number of senior positions at EY, including the Americas Vice Chair, Talent, the Managing Partner, Northeast Region Audit and Advisory Practices, and the Managing Partner, North American Audit Practice. During this time, Ms. Altobello also served as an audit partner for a number of leading global organizations. Ms. Altobello is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. Ms. Altobello currently serves as a board member of MarketAxess, an international financial technology company, and Amphenol, a major producer of electronic and fiber optic connectors, cable, and interconnect systems such as coaxial cables. She was previously on the boards of CA Technologies before it was acquired by Broadcom in 2018, MTS Systems before it was acquired by Amphenol in April 2021, and Cornerstone on Demand before it was acquired by Clearlake Capital Group. Ms. Altobello's qualifications to serve as a director of the Company include her extensive background in various positions with increasing responsibilities across all facets of the Company. The Board benefits from theauditing, deep experience serving on other boards, and leadership skills, financial expertisein overseeing talent and business development expertise of Ms. Smith. Ms. Smith has over 20 years of experience with the Company.people strategy. |
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Rowland Moriarty and Michael Dubyak also currently serve as Class III directors. However, Dr. Moriarty and Mr. Dubyak will each retire at the end of their term and will not stand for reelection at the 2020 annual meeting. | | | | | |
| Bhavana Bartholf Independent Global Head of Digital and Sales Strategy, Partner General Manager, Microsoft Commercial Solution Areas Age: 45 | Director Since: 2021 Board Committees: Audit, Technology |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Global or
International
Business | | Technology |
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Ms. Bartholf has served as the Global Head of Digital and Sales Strategy and Partner General Manager for Microsoft Commercial Solutions Areas at Microsoft Corporation, an American multinational technology company, since April 2021. During her career at Microsoft, Ms. Bartholf has held positions of progressively increasing levels of seniority and importance. From April 2019 to April 2021, Ms. Bartholf was the US Chief Transformation Officer, from September 2017 to April 2019, Ms. Bartholf was a Customer Success Leader and from September 2016 to September 2017 she was an Americas Service Leader (Business Productivity and Modern Workplace) at Microsoft. From July 2014 to October 2016 she was an Americas Service Leader (Services and Sales), and from September 2000 to July 2014 she served in various other leadership roles with responsibility leading technical teams across Customer Success and Professional Services. She has served on the Board of Directors of Gift of Adoption since 2014. Ms. Bartholf's qualifications to serve as a director of the Company include her extensive leadership background, experience in digital transformation, and diversity of thought she brings to WEX’s board. |
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Board Refreshment/Succession Planning
NumberRisk Oversight
Our Board recognizes the importance of effective risk oversight in running a successful business and fulfilling its fiduciary responsibilities to the Company and its stockholders. The Board is responsible for promoting an appropriate culture of risk management within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile, and monitoring how the Company addresses specific risks, such as strategic and competitive risks, human capital risks, financial risks, brand and reputation risks, cybersecurity and technology risks, legal and compliance risks, regulatory and operational risks, and risks related to our subsidiary WEX Bank. While all of our executive officers and other senior leaders are responsible for the day-to-day management of risk, the Company's Risk and Compliance Organization and Chief Risk and Compliance Officer (“CRCO”), who reports to the CEO but has direct access to the Board as needed, centralize all risk management and compliance functions.
As part of its mandate, the Risk and Compliance Organization identifies and prioritizes specific risks. Regularly, the CRCO will present those risks to the CEO and the full Board along with the steps that management has taken or will be taking to mitigate such risks. Oversight of particular risks are delegated to committees of the Board, as appropriate and as described below, based upon the nature of any particular risk. Throughout the year, the Board and each committee spend a portion of their time reviewing and discussing specific risk topics. In addition, each of the committees may meet in executive session with the CRCO and other members of senior management to discuss our risks and exposures. The Risk and Compliance Organization provides written reports as needed to the Board for their discussion regarding recent business, legal, regulatory, competitive, and other risks impacting the Company.
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| AUDIT 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. |
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| CORPORATE GOVERNANCE COMMITTEE | | •Responsibilities include advising the Board regarding appropriate corporate governance practices, including the Chair providing appropriate oversight over outside Board directorships and conflicts of interest. •Oversees risks related Board composition, the Company's ESG program, related party transactions, and political contributions. |
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| LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE | | •Oversees risks related to our compensation programs for employees, officers and directors. •Oversees strategies having significant human capital implications. |
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| TECHNOLOGY COMMITTEE | | •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 quarterly 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. |
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| FINANCE COMMITTEE | | •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. •Evaluates and oversees policies governing the Company's capital structure. |
Environmental, Social and Governance (ESG)
With a purpose to "simplify the business of running a business," WEX is driven to help our customers succeed by enabling them to cut through an increasingly complex business environment. Our focus on environmental, social and governance (ESG) considerations is integral to our culture and long-term strategy, and is underpinned by our core values: Integrity, Execution, Innovation, Relationships, and Community. Since the Company's 2021 annual meeting of stockholders, we have taken several important steps to advance our ESG strategy:
•Published our inaugural ESG Report and accompanying Sustainability Accounting Standards Board (SASB) index. Our report covered key topics like energy management, diversity, culture, talent development, social responsibility, ethical business practices, cybersecurity, and data privacy;
•Conducted our first ESG assessment to identify the ESG issues that matter to our long-term strategy and our stakeholders;
•Demonstrated progress toward diversity and inclusion aspirations by the addition of seven directors since 2018, including four persons of color or women, the reconstitution of our executive leadership team, which now consists of more than 50% women, and the maintenance of a continued focus on identifying diverse slates for external hiring;
•Established an internal ESG Committee to lead the development and implementation of our ESG strategy; and program; and
•Enhanced our commitment to Diversity, Equity, and Inclusion (DEI) by creating the position of Chief Diversity and Inclusion Officer and releasing "Diversity Equity and Inclusion at WEX," a special report highlighting our current efforts in DEI. Please visit our DEI website (https://www.wexinc.com/about/careers/diversity-and-inclusion/) to review our DEI special report.
Leadership & Oversight
Both our Board of Directors and Terms
Our certificateExecutive Leadership Team are actively engaged in WEX’s ESG strategy. The Corporate Governance Committee 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 fixedbeen charged with overseeing our program to demonstrate the sizeCompany's commitment to the ESG. In addition, our Leadership Development and Compensation Committee oversees all talent-related initiatives, including those relating to compensation equality, as well as DEI and talent development.
In 2021, we formalized our internal ESG Committee. This committee consists of senior leaders across the organization representing key business areas, including strategy, human resources (which includes facilities), finance, legal, risk, and communications. The ESG Committee is responsible for developing and overseeing the implementation of WEX’s ESG strategy and related programs, and for providing regular updates to the Executive Leadership Team, the Corporate Governance Committee, and Board of Directors.
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| Board of Directors |
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Audit
Committee | | Finance
Committee | | Technology
Committee | | Leadership
Development and
Compensation | | Corporate
Governance |
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| Executive Leadership Team |
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| ESG Committee |
Process and Priorities
We know that an authentic and enduring ESG strategy reflects the issues that are most relevant for the Company. In 2021, we conducted our first ESG assessment to identify the topics that are most impactful to our business and to our stakeholders. This process took into consideration the priorities of our key stakeholders – our employees, our customers, our investors, and our communities – and integrated key long-term business initiatives. Through this process, we identified four ESG priorities:
•People and Culture: We are committed to creating an inclusive environment where all of our people can succeed and thrive.
•Environmental Innovation: We are enabling our customers' sustainability efforts through fleet efficiency, better data, and electrification.
•Environmental Stewardship: We are driving operational and energy efficiency to minimize our own corporate environmental impact.
•Social Impact: We are committed to enhancing the health and well-being of our communities, customers, and employees.
We believe that integrating relevant ESG considerations into our long-term business strategy is key to delivering on our commitments to our stakeholders. We will continue to engage with our investors and other stakeholders to understand their ESG priorities, and we welcome stockholder perspectives and feedback on our ESG strategy.
For more information about our ESG strategy and priorities, please visit our ESG website (www.wexinc.com/about/wex-esg-report/) to view our inaugural ESG report, published in June 2021, and our most recent EEO-1 Report. We plan to publish our second ESG report, which reflects our ESG priorities, later in 2022. Furthermore, our ESG website will be periodically updated with our most up-to-date EEO-1 reports as they are filed with the relevant agencies.
Cyber Security Risk Management
The Company's Board of Directors is ultimately responsible for the oversight of the Company's cyber security risk. In addition, the Audit Committee engages in the governance of the Company's enterprise risk management program, which includes information technology risk at a high level. The Board, has created the Technology Committee, which, pursuant to its charter, is responsible for assisting the Board and the Audit Committee in the oversight of the Company's management of risks regarding technology, data security, disaster recovery and business continuity. To perform this function, the Technology Committee receives quarterly reports from the Company's Chief Information Security Officer (CISO), who presents a threat matrix and overall analysis of our cyber health, as well as any recent threat activity. The Technology Committee then, in turn, regularly reports out to the Board and/or the Audit Committee as necessary during succeeding meetings. In addition, members of senior management, including the Chief Technology Officer, the CISO, and the Chief Legal Officer, among others, correspond directly with, or present to, the Board, the Audit Committee, and/or the Technology Committee, regarding issues or risks relating to cybersecurity matters as the case may be.
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 internal succession candidates.
The Board of Directors
Selection of Directors
The Corporate Governance Committee of the Board at 11of 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 who serve staggered terms as follows:
each director who is elected at an annual meeting of stockholders servesin accordance with the Corporate Governance Guidelines, the policies and principles in the Corporate Governance Committee charter and the applicable criteria adopted by the Board. The Board regularly evaluates the Board and its committees for the proper mix and breadth of skills, experience, and backgrounds to maintain a three-year termhigh-functioning and until such director’s successor is duly electedadept Board. Since 2018, we have refreshed the Board with seven new members, with a strong mix of skills, qualifications, backgrounds, and qualified, subject to such director’s earlier death, resignation or removal,experiences. The Corporate Governance Committee seeks individuals with the following types of experience:
the directors are divided into three classes, | | | | | |
| FINANCE, ACCOUNTING, OR REPORTING EXPERIENCE — Individuals with an understanding of finance and financial reporting processes are valued on our Board because of the importance we place on accurate and transparent financial reporting and robust financial controls and compliance. We also seek to have a number of directors who qualify as audit committee financial experts. |
| LEGAL EXPERIENCE — Individuals who have had legal or regulatory experience provide insights into addressing significant legal and public policy issues, particularly in areas related to our Company’s business and operations. Because our Company’s business requires compliance with a variety of regulatory requirements across a number of countries, our Board values directors with relevant legal or regulatory experience. |
| BUSINESS DEVELOPMENT AND M&A EXPERIENCE — Individuals 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 — Individuals 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 — Individuals 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, individuals 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. |
| TECHNOLOGY EXPERIENCE — As a technology company and leading innovator, we seek individuals 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. |
| INDUSTRY EXPERIENCE — We seek individuals with experience in the financial technology payments industry generally and fleet, travel and healthcare payments specifically. |
| ESG (AND HCM) EXPERIENCE — We seek individuals with experience broadly across Environmental, Social, Governance matters, which includes Human Capital Management ("HCM") considerations given their importance to the Company. |
| CYBER SECURITY EXPERIENCE — We seek individuals with cyber security experience from both a technical and governance perspective to ensure that our Board and Company provide appropriate oversight over the Company's cyber security program. |
the classes are as nearly equal in number as possible, and
the term of each class begins on a staggered schedule.GOVERNANCE
Director Nominations and Recommendations
The Corporate Governance Committee responsibilities include recommending candidates for nomination to the Board. In identifying potential directors, the Corporate Governance Committee may: retain a search firm; consider their professional networks; evaluate highly regarded leadersDirector Nominees (Term Expires in industry and academia; or, entertain suggestions from stockholders or other business organizations, among other ways suitable for identifying potential directors.2023)
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 do I submit a stockholder proposal or director nominee for next year’s annual meeting or suggest a candidate for nomination as a director to the Corporate Governance Committee?” | | | | | |
| Shikhar Ghosh Independent Professor of Management Practice, Harvard Business School Age: 64 | Director Since: 2005 Board Committees: Technology (Chair), Corporate Governance |
To be timely, a stockholder’s notice to the Secretary of a director nominee for next year’s annual meeting must be delivered to or mailed and received no earlier than January 14, 2021 nor later than February 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 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. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Key Experience: | | |
| Business Development
and M&A | | Global or
International
Business | | Technology | | Cyber Security | | Industry |
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Mr. Ghosh is a Professor of Management Practice at the Harvard Business School. He has been on the faculty since August 2008 and is Co-Chairman of the Rock Center for Entrepreneurship at Harvard University. Mr. Ghosh is also currently on the board of Evidence Action, Rescale Inc, and Flipside Crypto, Inc. Evidence Action is a non profit organization that provides health services to over 200 million children across multiple countries. Rescale is a provider of high performance cloud computing. Flipside Crypto is an analytics provider to the Blockchain. From 2010 to 2020 Mr. Ghosh was on the board of Decision Resource Group, a data and analytics company serving the healthcare industry. From June 2006 until December 2007, Mr. Ghosh was the Chief Executive Officer of Risk Syndication for the Kessler Group, where he enabled bank clients and their endorsing partners to market credit cards. From June 1999 to June 2004, Mr. Ghosh was Chairman and Chief Executive Officer of Verilytics Technologies, LLC, an analytical software company focused on the financial services industry. In 1993, Mr. Ghosh founded Open Market, Inc., an Internet commerce and information publishing software firm. From 1988 to 1993, Mr. Ghosh was the Chief Executive Officer of Appex Corp., a technology company that was sold to Electronic Data Systems Corporation in 1990. From 1980 until 1988, Mr. Ghosh served in various positions with The Boston Consulting Group, a management consulting firm, and was elected as a worldwide partner and a director of the firm in 1988. The Board nominated Mr. Ghosh due to its conclusion that he 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. Ghosh’s qualifications to serve on the Board include his academic experience and executive management, business development, and leadership experience, gained as the Chairman and CEO of various companies. |
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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:
18WEX Inc.
Attention: Corporate Secretary
97 Darling Avenue
South Portland, ME 04106
GOVERNANCE
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| James Neary Independent Managing Director, Co-head of US Private Equity, and a member of the Executive Management Group of Warburg Pincus Age: 57 | Director Since: 2016 Board Committees: Finance (Chair), Leadership Development and Compensation |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development
and M&A | | Technology | | Industry | | ESG (and HCM) | | Global or
International
Business |
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Mr. Neary is a managing director of Warburg Pincus, a private equity firm, which he joined in 2000. Mr. Neary is a Managing Director, Co-head of U.S. Private Equity (since December 2020) and a member of the Executive Management Group of Warburg Pincus. From 2013 to December 2020, Mr. Neary was head of the Industrials and Business Services team. 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. Prior to joining Warburg Pincus, he was a managing director at Chase Securities and prior to that, he was at Credit Suisse First Boston. Mr. Neary is a director of Sotera Health, a provider of sterilization solutions and lab testing and advisory services, a director of several private companies and a trustee of the Mount Sinai Health System. Mr. Neary has previously served on the boards of Endurance International Group, a web-presence solutions company; Fidelity National Information Services Inc., a bank technology processing company; Coyote Logistics, a truck brokerage business now owned by UPS; and Interactive Data Corporation, a firm providing financial market data and analytics, and now owned by Intercontinental Exchange. The Board nominated Mr. Neary as the Warburg Designee and due to its further conclusions that he 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 large, complex companies and his perspective as the representative of Warburg Pincus. |
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20202022 Proxy Statement 1719
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| Daniel Callahan Independent Former Global Head of Operations and Technology, Citigroup Age: 65 | Director Since: 2019 Board Committees: Leadership Development and Compensation (Chair), Technology |
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’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’s ability to represent the interests of all the Company’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 11 directors (and will be comprised of 10 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 a 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’ 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’s determination that each director is well suited to serve on the Board is specified with his or her respective biographical entry under the “Nominees for and Members of the Board of 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.
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| Key Experience: |
| Business Development
and M&A | | Risk Management | | Global or International Business | | Technology | | Industry | | ESG (and HCM) | | Cyber Security |
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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 served as the Executive Chair of TIME, a news publication, from April 2019 to December 2021, and has served as a Non-Executive chair of TIME since January 2022. Furthermore, Mr. Callahan has served on the Board of Scotia Bank, a Canadian multinational banking and financial services company, since June 2021 and Tata Consultancy Services, an Indian Multinational Technology Company listed on the National Stock Exchange of India, since January 2019. Mr. Callahan is also an Executive Partner at Bridge Growth Partners, a technology investment firm, since October 2019, a director on the Columbia University's Teachers College charity board, and has served on the boards of several private companies. The Board nominated Mr. Callahan due to its conclusion that he 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 and broad ESG experience given his time at TIME. |
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| Melissa Smith Chair, President, and Chief Executive Officer, WEX Inc. Age: 53 | Director Since: 2014 |
Any director who reaches the age of 72 while serving as a director will retire | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development
and M&A | | Global or International Business | | Technology | | Industry |
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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. Ms. Smith has also served on the Board of Directors of Equifax Inc., a global data, analytics, and technology company, since November 2020. The Board nominated Ms. Smith due to its conclusion that she is well suited to serve as a director of the Company because of her experience with the Company in various positions with increasing responsibilities across all facets of the Company. The Board benefits from the leadership skills, financial expertise and business development expertise of Ms. Smith. Ms. Smith has almost 25 years of experience with the Company. |
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Class III Directors (Term Expires in 2023)
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| Susan Sobbott Independent Former President of Global Commercial Services, American Express Company Age: 57 | Director Since: 2018 Board Committees: Audit, Corporate Governance |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Risk Management | | Global or
International Business | | Industry | | ESG (and HCM) |
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Prior to her retirement in February 2018, Ms. Sobbott was an officer at American Express Company, a multinational financial services company. At 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. 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 served on the board of Red Ventures, a privately held digital marketing provider for many of the world’s biggest consumer brands, from 2012 to 2020. She currently serves on the board of Ideas42, a nonprofit behavioral economic consultancy for social issues and is also an advisor of One Love, a nonprofit focused on educating the youth on the development of healthy relationships. Ms. Sobbott's qualifications to serve as a director of the Company include 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 and experience in risk management, including participating in American Express's inaugural enterprise risk management committee. |
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| Regina O. Sommer Independent Former Vice President and Chief Financial Officer, Netegrity, Inc. Age: 64 | Director Since: 2005 Board Committees: Audit (Chair), Technology |
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| | |
| Key Experience: | | |
| Business Development
and M&A | | Finance, Accounting, or Reporting | | Risk Management | | Technology |
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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. Ms. Sommer's qualifications to serve as a director of the Company include 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. |
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| Stephen Smith Independent President and Chief Executive Officer, L.L.Bean Age: 51 | Director Since: 2019 Board Committees: Finance, Leadership Development and Compensation |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Global or
International Business | | ESG (and HCM) |
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Since January 2016, Mr. Smith has served as the President and Chief Executive Officer of L.L.Bean, a privately held retail company. Mr. Smith also serves on L.L. Bean's board of directors. 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. Mr. Smith has also served on the board of directors of Appalachian Mountain Club, a not-for-profit environmental conservation and recreation corporation until January 2022. Currently, Mr. Smith serves on the Board of Trustees for Dickinson College, a private liberal arts college. Mr. Smith's qualifications to serve as a director of the Company include his leadership experience garnered while serving as the CEO and President of L.L.Bean, including Mr. Smith’s marketing, business development, and international experience. Furthermore, Mr. Smith brings unique ESG experience through his stakeholder philosophy leadership experience at L.L.Bean. |
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| James Groch Independent Former Global Group President and Chief Investment Officer, CBRE Group Age: 60 | Director Since: 2020 Board Committees: Audit, Finance |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development and M&A | | Global or International Business | | Risk Management | | Technology |
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From 2009 to June 2020, Mr. Groch 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 (from May 2019 to June 2020), Chief Financial Officer and Chief Investment Officer (from March 2014 to May 2019), and EVP Strategy and Corporate Finance and Chief Investment Officer (from January 2009 to March 2014), he was 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. 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, and risk management experience. |
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Class I Directors (Term Expires in 2024)
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| Jack VanWoerkom Independent Vice Chairman and Lead Director. Former General Counsel and Chief Compliance Officer, Porchlight Equity Age: 68 | Director Since: 2005 Board Committees: Corporate Governance (Chair), Leadership Development and Compensation |
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| Key Experience: |
| Legal | | Business Development
and M&A | | Risk Management | | Global or
International
Business |
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Mr. VanWoerkom has served as Vice Chairman and Lead Director of the Board since September 2019. Mr. VanWoerkom served as the General Counsel and Chief Compliance Officer of Porchlight Equity (formerly Highland Consumer Fund), a private equity firm specializing in lower middle market companies, from January 2017 until his retirement in December 2018. Before serving as General Counsel and Chief Compliance Officer, Mr. VanWoerkom served as an Operating Partner at Porchlight Equity from June 2015 until January 2017. From June 2011 until June 2015, Mr. VanWoerkom was retired. From June 2007 until June 2011, Mr. VanWoerkom was employed by The Home Depot, Inc., a home improvement retailer, as Executive Vice President, General Counsel and Corporate Secretary. Mr. VanWoerkom served as Executive Vice President, General Counsel and Secretary of Staples, Inc., an office supply retailer, from March 2004 to June 2007. From March 1999 to March 2004, Mr. VanWoerkom was Senior Vice President, General Counsel and Secretary of Staples. Mr. VanWoerkom's qualifications to serve as a director of the Company include his experience as a general counsel and an executive officer of several companies. 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. |
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| Derrick Roman Independent Former Partner, PricewaterhouseCoopers LLP Age: 58 | Director Since: 2021 Board Committees: Audit, Finance |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development
and M&A | | Risk Management | | Technology | | ESG (and HCM) | | Cyber Security |
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From 1997 until his retirement in September 2020, Mr. Roman served as an audit, consulting and senior client relationship partner for the international accounting and consulting firm PricewaterhouseCoopers LLP (“PwC”). As an external audit partner/practitioner, Mr. Roman led independent financial statement audits of publicly traded and privately held enterprises. He has extensive experience in financial accounting, SEC reporting, internal controls, mergers and acquisitions, debt and equity offerings, initial public and secondary offerings, asset-backed financings, and the implementation of accounting and auditing standards. As an advisory partner, Mr. Roman focused on evaluating and improving internal controls, enterprise risk management, internal auditing, and compliance programs for a diverse group of publicly traded companies. Mr. Roman led his PwC teams and clients through digital transformation, automation, and shared delivery center initiatives. He also held several significant governance, line of business, diversity and inclusion and corporate responsibility leadership roles at PwC, including serving on its CEO Nominating Committee and its Foundation board. Mr. Roman is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants, the Institute of Internal Auditors and the National Association of Black Accountants, Inc., where he is a member of its Corporate Advisory Board. Mr. Roman currently serves on the board of directors of CommScope Holding Company, Inc., a global provider of infrastructure solutions for communication and entertainment networks. Mr. Roman's qualifications to serve as a director of the Company include his extensive background in auditing, as well as his extensive leadership experience in governance, diversity and inclusion, corporate responsibility, technology, and cybersecurity. |
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| Nancy Altobello Independent Former Partner, Ernst & Young Age: 64| Director Since: 2021 Board Committees: Audit, Leadership Development and Compensation |
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| Key Experience: |
| Finance, Accounting, or
Reporting | | Business Development
and M&A | | Risk Management | | Global or
International
Business | | ESG (and HCM) |
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Ms. Altobello was most recently the Global Vice Chair, Talent of Ernst & Young (“EY”), where she was responsible for the firm’s global talent and people strategy from July 2014 to June 2018. Prior to that, she held a number of senior positions at EY, including the Americas Vice Chair, Talent, the Managing Partner, Northeast Region Audit and Advisory Practices, and the Managing Partner, North American Audit Practice. During this time, Ms. Altobello also served as an audit partner for a number of leading global organizations. Ms. Altobello is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. Ms. Altobello currently serves as a board member of MarketAxess, an international financial technology company, and Amphenol, a major producer of electronic and fiber optic connectors, cable, and interconnect systems such as coaxial cables. She was previously on the boards of CA Technologies before it was acquired by Broadcom in 2018, MTS Systems before it was acquired by Amphenol in April 2021, and Cornerstone on Demand before it was acquired by Clearlake Capital Group. Ms. Altobello's qualifications to serve as a director of the Company include her extensive background in auditing, deep experience serving on other boards, and leadership in overseeing talent and people strategy. |
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| Bhavana Bartholf Independent Global Head of Digital and Sales Strategy, Partner General Manager, Microsoft Commercial Solution Areas Age: 45 | Director Since: 2021 Board Committees: Audit, Technology |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Global or
International
Business | | Technology |
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Ms. Bartholf has served as the Global Head of Digital and Sales Strategy and Partner General Manager for Microsoft Commercial Solutions Areas at Microsoft Corporation, an American multinational technology company, since April 2021. During her career at Microsoft, Ms. Bartholf has held positions of progressively increasing levels of seniority and importance. From April 2019 to April 2021, Ms. Bartholf was the US Chief Transformation Officer, from September 2017 to April 2019, Ms. Bartholf was a Customer Success Leader and from September 2016 to September 2017 she was an Americas Service Leader (Business Productivity and Modern Workplace) at Microsoft. From July 2014 to October 2016 she was an Americas Service Leader (Services and Sales), and from September 2000 to July 2014 she served in various other leadership roles with responsibility leading technical teams across Customer Success and Professional Services. She has served on the Board of Directors of Gift of Adoption since 2014. Ms. Bartholf's qualifications to serve as a director of the Company include her extensive leadership background, experience in digital transformation, and diversity of thought she brings to WEX’s board. |
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Board effective at the end of his or her then current term.Refreshment/Succession Planning
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 ourrecognizes the importance of effective risk oversight in running a successful business and fulfilling its fiduciary responsibilities to the Company and its stockholders. The Board is responsible for promoting an appropriate culture of risk management processes directly,within the Company and through afor setting the right “tone at the top,” overseeing our aggregate risk profile, and monitoring how the Company addresses specific risks, such as strategic and competitive risks, human capital risks, financial risks, brand and reputation risks, cybersecurity and technology risks, legal and compliance risks, regulatory and operational risks, and risks related to our subsidiary WEX Bank. While all of our executive officers and other senior leaders are responsible for the day-to-day management program overseen by both: (i)of risk, the Company’s Chief Legal Officer, who reports directly to the Chief Executive Officer; and, (ii) our Vice President, Chief EthicsCompany's Risk and Compliance Organization and Chief Risk and Compliance Officer (“CRCO”), who reports to the Company’s Chief Legal Officer. Risks are identified and prioritized by ourCEO but has direct access to the Board as needed, centralize all risk management and a reportcompliance functions.
As part of its mandate, the Risk and Compliance Organization identifies and prioritizes specific risks. Regularly, the CRCO will present those risks is presented to the CEO and the full Board. In general, our Board oversees riskalong with the steps that management activities relatinghas taken or will be taking to business strategy, operations and financial and legalmitigate such 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 and as described below, based upon the nature of any particular risk. Throughout the year, the Board and each committee spend a portion of their time reviewing and discussing specific risk includingtopics. In addition, each of the committees may meet in executive session with the CRCO and other members of senior management to discuss our risks and exposures. The Risk and Compliance Organization provides written reports as follows:needed to the Board for their discussion regarding recent business, legal, regulatory, competitive, and other risks impacting the Company.
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| 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. |
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| CORPORATE GOVERNANCE COMMITTEE | |
•Responsibilities include advising the Board regarding appropriate corporate governance practices, including the Chair providing appropriate oversight over outside Board directorships and conflicts of interest.
•Oversees risks related Board composition, the Company's ESG program, related party transactions, and political contributions. |
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| LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE | | •Oversees risks related to our compensation programs for employees, officers and directors. •Oversees strategies having significant human capital implications. |
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| TECHNOLOGY COMMITTEE | | •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 regularquarterly 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.
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| FINANCE COMMITTEE | | •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.
•Evaluates and oversees policies governing the Company's capital structure.
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Environmental, Social and Governance (ESG)
With a purpose to "simplify the business of running a business," WEX is driven to help our customers succeed by enabling them to cut through an increasingly complex business environment. Our focus on environmental, social and governance (ESG) considerations is integral to our culture and long-term strategy, and is underpinned by our core values: Integrity, Execution, Innovation, Relationships, and Community. Since the Company's 2021 annual meeting of stockholders, we have taken several important steps to advance our ESG strategy:
•Published our inaugural ESG Report and accompanying Sustainability Accounting Standards Board (SASB) index. Our report covered key topics like energy management, diversity, culture, talent development, social responsibility, ethical business practices, cybersecurity, and data privacy;
•Conducted our first ESG assessment to identify the ESG issues that matter to our long-term strategy and our stakeholders;
•Demonstrated progress toward diversity and inclusion aspirations by the addition of seven directors since 2018, including four persons of color or women, the reconstitution of our executive leadership team, which now consists of more than 50% women, and the maintenance of a continued focus on identifying diverse slates for external hiring;
•Established an internal ESG Committee to lead the development and implementation of our ESG strategy; and program; and
•Enhanced our commitment to Diversity, Equity, and Inclusion (DEI) by creating the position of Chief Diversity and Inclusion Officer and releasing "Diversity Equity and Inclusion at WEX," a special report highlighting our current efforts in DEI. Please visit our DEI website (https://www.wexinc.com/about/careers/diversity-and-inclusion/) to review our DEI special report.
Leadership & Oversight
Both our Board of Directors and Executive Leadership Team are actively engaged in WEX’s ESG strategy. The Corporate Governance Committee of the Board has been charged with overseeing our program to demonstrate the Company's commitment to the ESG. In addition, our Leadership Development and Compensation Committee oversees all talent-related initiatives, including those relating to compensation equality, as well as DEI and talent development.
In 2021, we formalized our internal ESG Committee. This committee consists of senior leaders across the organization representing key business areas, including strategy, human resources (which includes facilities), finance, legal, risk, and communications. The ESG Committee is responsible for developing and overseeing the implementation of WEX’s ESG strategy and related programs, and for providing regular updates to the Executive Leadership Team, the Corporate Governance Committee, and Board of Directors.
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| Board of Directors |
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Audit
Committee | | Finance
Committee | | Technology
Committee | | Leadership
Development and
Compensation | | Corporate
Governance |
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| Executive Leadership Team |
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| ESG Committee |
Process and Priorities
We know that an authentic and enduring ESG strategy reflects the issues that are most relevant for the Company. In 2021, we conducted our first ESG assessment to identify the topics that are most impactful to our business and to our stakeholders. This process took into consideration the priorities of our key stakeholders – our employees, our customers, our investors, and our communities – and integrated key long-term business initiatives. Through this process, we identified four ESG priorities:
•People and Culture: We are committed to creating an inclusive environment where all of our people can succeed and thrive.
•Environmental Innovation: We are enabling our customers' sustainability efforts through fleet efficiency, better data, and electrification.
•Environmental Stewardship: We are driving operational and energy efficiency to minimize our own corporate environmental impact.
•Social Impact: We are committed to enhancing the health and well-being of our communities, customers, and employees.
We believe that integrating relevant ESG considerations into our long-term business strategy is key to delivering on our commitments to our stakeholders. We will continue to engage with our investors and other stakeholders to understand their ESG priorities, and we welcome stockholder perspectives and feedback on our ESG strategy.
For more information about our ESG strategy and priorities, please visit our ESG website (www.wexinc.com/about/wex-esg-report/) to view our inaugural ESG report, published in June 2021, and our most recent EEO-1 Report. We plan to publish our second ESG report, which reflects our ESG priorities, later in 2022. Furthermore, our ESG website will be periodically updated with our most up-to-date EEO-1 reports as they are filed with the relevant agencies.
2022 Proxy Statement 1915
Cyber Security Risk Management
The Company's Board of Directors is ultimately responsible for the oversight of the Company's cyber security risk. In addition, the Audit Committee engages in the governance of the Company's enterprise risk management program, which includes information technology risk at a high level. The Board, has created the Technology Committee, which, pursuant 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 toits charter, is responsible for assisting the Board and the Company’s management regarding its ongoing operationsAudit Committee 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, ourthe Company's management of risks regarding technology, data security, disaster recovery and business continuity. To perform this function, the Technology Committee receives regularquarterly reports from ourthe Company's Chief Information Security Officer (CISO), who presents a threat matrix and overall analysis of our cyber-health,cyber health, as well as any recent threat activity. Oversight of particular risks may also be delegatedThe Technology Committee then, in turn, regularly reports out to other committees of the Board suchand/or the Audit Committee as necessary during succeeding meetings. In addition, members of senior management, including the Chief Technology Officer, the CISO, and the Chief Legal Officer, among others, correspond directly with, or present to, the Board, the Audit Committee, and/or the Technology Committee, regarding issues or risks relating to cybersecurity matters as the Finance Committee, as appropriate, based upon the nature of any particular risk. case may be.
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 internal succession candidates.
The Board of Directors
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 an annual meeting of stockholders in accordance with the Corporate Governance PracticesGuidelines, the policies and principles in the Corporate Governance Committee charter and the applicable criteria adopted by the Board. The Board regularly evaluates the Board and its committees for the proper mix and breadth of skills, experience, and backgrounds to maintain a high-functioning and adept Board. Since 2018, we have refreshed the Board with seven new members, with a strong mix of skills, qualifications, backgrounds, and experiences. The Corporate Governance Committee seeks individuals with the following types of experience:
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| FINANCE, ACCOUNTING, OR REPORTING EXPERIENCE — Individuals with an understanding of finance and financial reporting processes are valued on our Board because of the importance we place on accurate and transparent financial reporting and robust financial controls and compliance. We also seek to have a number of directors who qualify as audit committee financial experts. |
| LEGAL EXPERIENCE — Individuals who have had legal or regulatory experience provide insights into addressing significant legal and public policy issues, particularly in areas related to our Company’s business and operations. Because our Company’s business requires compliance with a variety of regulatory requirements across a number of countries, our Board values directors with relevant legal or regulatory experience. |
| BUSINESS DEVELOPMENT AND M&A EXPERIENCE — Individuals 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 — Individuals 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 — Individuals 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, individuals 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. |
| TECHNOLOGY EXPERIENCE — As a technology company and leading innovator, we seek individuals 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. |
| INDUSTRY EXPERIENCE — We seek individuals with experience in the financial technology payments industry generally and fleet, travel and healthcare payments specifically. |
| ESG (AND HCM) EXPERIENCE — We seek individuals with experience broadly across Environmental, Social, Governance matters, which includes Human Capital Management ("HCM") considerations given their importance to the Company. |
| CYBER SECURITY EXPERIENCE — We seek individuals with cyber security experience from both a technical and governance perspective to ensure that our Board and Company provide appropriate oversight over the Company's cyber security program. |
Director Nominations and Recommendations
Director Nominees (Term Expires in 2023)
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| Shikhar Ghosh Independent Professor of Management Practice, Harvard Business School Age: 64 | Director Since: 2005 Board Committees: Technology (Chair), Corporate Governance |
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| Key Experience: | | |
| Business Development
and M&A | | Global or
International
Business | | Technology | | Cyber Security | | Industry |
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Mr. Ghosh is a Professor of Management Practice at the Harvard Business School. He has been on the faculty since August 2008 and is Co-Chairman of the Rock Center for Entrepreneurship at Harvard University. Mr. Ghosh is also currently on the board of Evidence Action, Rescale Inc, and Flipside Crypto, Inc. Evidence Action is a non profit organization that provides health services to over 200 million children across multiple countries. Rescale is a provider of high performance cloud computing. Flipside Crypto is an analytics provider to the Blockchain. From 2010 to 2020 Mr. Ghosh was on the board of Decision Resource Group, a data and analytics company serving the healthcare industry. From June 2006 until December 2007, Mr. Ghosh was the Chief Executive Officer of Risk Syndication for the Kessler Group, where he enabled bank clients and their endorsing partners to market credit cards. From June 1999 to June 2004, Mr. Ghosh was Chairman and Chief Executive Officer of Verilytics Technologies, LLC, an analytical software company focused on the financial services industry. In 1993, Mr. Ghosh founded Open Market, Inc., an Internet commerce and information publishing software firm. From 1988 to 1993, Mr. Ghosh was the Chief Executive Officer of Appex Corp., a technology company that was sold to Electronic Data Systems Corporation in 1990. From 1980 until 1988, Mr. Ghosh served in various positions with The Boston Consulting Group, a management consulting firm, and was elected as a worldwide partner and a director of the firm in 1988. The Board nominated Mr. Ghosh due to its conclusion that he 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. Ghosh’s qualifications to serve on the Board include his academic experience and executive management, business development, and leadership experience, gained as the Chairman and CEO of various companies. |
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| James Neary Independent Managing Director, Co-head of US Private Equity, and a member of the Executive Management Group of Warburg Pincus Age: 57 | Director Since: 2016 Board Committees: Finance (Chair), Leadership Development and Compensation |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development
and M&A | | Technology | | Industry | | ESG (and HCM) | | Global or
International
Business |
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Mr. Neary is a managing director of Warburg Pincus, a private equity firm, which he joined in 2000. Mr. Neary is a Managing Director, Co-head of U.S. Private Equity (since December 2020) and a member of the Executive Management Group of Warburg Pincus. From 2013 to December 2020, Mr. Neary was head of the Industrials and Business Services team. 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. Prior to joining Warburg Pincus, he was a managing director at Chase Securities and prior to that, he was at Credit Suisse First Boston. Mr. Neary is a director of Sotera Health, a provider of sterilization solutions and lab testing and advisory services, a director of several private companies and a trustee of the Mount Sinai Health System. Mr. Neary has previously served on the boards of Endurance International Group, a web-presence solutions company; Fidelity National Information Services Inc., a bank technology processing company; Coyote Logistics, a truck brokerage business now owned by UPS; and Interactive Data Corporation, a firm providing financial market data and analytics, and now owned by Intercontinental Exchange. The Board nominated Mr. Neary as the Warburg Designee and due to its further conclusions that he 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 large, complex companies and his perspective as the representative of Warburg Pincus. |
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| Daniel Callahan Independent Former Global Head of Operations and Technology, Citigroup Age: 65 | Director Since: 2019 Board Committees: Leadership Development and Compensation (Chair), Technology |
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| Key Experience: |
| Business Development
and M&A | | Risk Management | | Global or International Business | | Technology | | Industry | | ESG (and HCM) | | Cyber Security |
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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 served as the Executive Chair of TIME, a news publication, from April 2019 to December 2021, and has served as a Non-Executive chair of TIME since January 2022. Furthermore, Mr. Callahan has served on the Board of Scotia Bank, a Canadian multinational banking and financial services company, since June 2021 and Tata Consultancy Services, an Indian Multinational Technology Company listed on the National Stock Exchange of India, since January 2019. Mr. Callahan is also an Executive Partner at Bridge Growth Partners, a technology investment firm, since October 2019, a director on the Columbia University's Teachers College charity board, and has served on the boards of several private companies. The Board nominated Mr. Callahan due to its conclusion that he 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 and broad ESG experience given his time at TIME. |
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| Melissa Smith Chair, President, and Chief Executive Officer, WEX Inc. Age: 53 | Director Since: 2014 |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development
and M&A | | Global or International Business | | Technology | | Industry |
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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. Ms. Smith has also served on the Board of Directors of Equifax Inc., a global data, analytics, and technology company, since November 2020. The Board nominated Ms. Smith due to its conclusion that she is well suited to serve as a director of the Company because of her experience with the Company in various positions with increasing responsibilities across all facets of the Company. The Board benefits from the leadership skills, financial expertise and business development expertise of Ms. Smith. Ms. Smith has almost 25 years of experience with the Company. |
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Class III Directors (Term Expires in 2023)
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| Susan Sobbott Independent Former President of Global Commercial Services, American Express Company Age: 57 | Director Since: 2018 Board Committees: Audit, Corporate Governance |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Risk Management | | Global or
International Business | | Industry | | ESG (and HCM) |
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Prior to her retirement in February 2018, Ms. Sobbott was an officer at American Express Company, a multinational financial services company. At 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. 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 served on the board of Red Ventures, a privately held digital marketing provider for many of the world’s biggest consumer brands, from 2012 to 2020. She currently serves on the board of Ideas42, a nonprofit behavioral economic consultancy for social issues and is also an advisor of One Love, a nonprofit focused on educating the youth on the development of healthy relationships. Ms. Sobbott's qualifications to serve as a director of the Company include 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 and experience in risk management, including participating in American Express's inaugural enterprise risk management committee. |
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| Regina O. Sommer Independent Former Vice President and Chief Financial Officer, Netegrity, Inc. Age: 64 | Director Since: 2005 Board Committees: Audit (Chair), Technology |
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| Key Experience: | | |
| Business Development
and M&A | | Finance, Accounting, or Reporting | | Risk Management | | Technology |
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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. Ms. Sommer's qualifications to serve as a director of the Company include 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. |
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| Stephen Smith Independent President and Chief Executive Officer, L.L.Bean Age: 51 | Director Since: 2019 Board Committees: Finance, Leadership Development and Compensation |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Global or
International Business | | ESG (and HCM) |
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Since January 2016, Mr. Smith has served as the President and Chief Executive Officer of L.L.Bean, a privately held retail company. Mr. Smith also serves on L.L. Bean's board of directors. 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. Mr. Smith has also served on the board of directors of Appalachian Mountain Club, a not-for-profit environmental conservation and recreation corporation until January 2022. Currently, Mr. Smith serves on the Board of Trustees for Dickinson College, a private liberal arts college. Mr. Smith's qualifications to serve as a director of the Company include his leadership experience garnered while serving as the CEO and President of L.L.Bean, including Mr. Smith’s marketing, business development, and international experience. Furthermore, Mr. Smith brings unique ESG experience through his stakeholder philosophy leadership experience at L.L.Bean. |
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| James Groch Independent Former Global Group President and Chief Investment Officer, CBRE Group Age: 60 | Director Since: 2020 Board Committees: Audit, Finance |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development and M&A | | Global or International Business | | Risk Management | | Technology |
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From 2009 to June 2020, Mr. Groch 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 (from May 2019 to June 2020), Chief Financial Officer and Chief Investment Officer (from March 2014 to May 2019), and EVP Strategy and Corporate Finance and Chief Investment Officer (from January 2009 to March 2014), he was 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. 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, and risk management experience. |
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Class I Directors (Term Expires in 2024)
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| Jack VanWoerkom Independent Vice Chairman and Lead Director. Former General Counsel and Chief Compliance Officer, Porchlight Equity Age: 68 | Director Since: 2005 Board Committees: Corporate Governance (Chair), Leadership Development and Compensation |
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| Key Experience: |
| Legal | | Business Development
and M&A | | Risk Management | | Global or
International
Business |
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Mr. VanWoerkom has served as Vice Chairman and Lead Director of the Board since September 2019. Mr. VanWoerkom served as the General Counsel and Chief Compliance Officer of Porchlight Equity (formerly Highland Consumer Fund), a private equity firm specializing in lower middle market companies, from January 2017 until his retirement in December 2018. Before serving as General Counsel and Chief Compliance Officer, Mr. VanWoerkom served as an Operating Partner at Porchlight Equity from June 2015 until January 2017. From June 2011 until June 2015, Mr. VanWoerkom was retired. From June 2007 until June 2011, Mr. VanWoerkom was employed by The Home Depot, Inc., a home improvement retailer, as Executive Vice President, General Counsel and Corporate Secretary. Mr. VanWoerkom served as Executive Vice President, General Counsel and Secretary of Staples, Inc., an office supply retailer, from March 2004 to June 2007. From March 1999 to March 2004, Mr. VanWoerkom was Senior Vice President, General Counsel and Secretary of Staples. Mr. VanWoerkom's qualifications to serve as a director of the Company include his experience as a general counsel and an executive officer of several companies. 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. |
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| Derrick Roman Independent Former Partner, PricewaterhouseCoopers LLP Age: 58 | Director Since: 2021 Board Committees: Audit, Finance |
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| Key Experience: |
| Finance, Accounting, or Reporting | | Business Development
and M&A | | Risk Management | | Technology | | ESG (and HCM) | | Cyber Security |
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From 1997 until his retirement in September 2020, Mr. Roman served as an audit, consulting and senior client relationship partner for the international accounting and consulting firm PricewaterhouseCoopers LLP (“PwC”). As an external audit partner/practitioner, Mr. Roman led independent financial statement audits of publicly traded and privately held enterprises. He has extensive experience in financial accounting, SEC reporting, internal controls, mergers and acquisitions, debt and equity offerings, initial public and secondary offerings, asset-backed financings, and the implementation of accounting and auditing standards. As an advisory partner, Mr. Roman focused on evaluating and improving internal controls, enterprise risk management, internal auditing, and compliance programs for a diverse group of publicly traded companies. Mr. Roman led his PwC teams and clients through digital transformation, automation, and shared delivery center initiatives. He also held several significant governance, line of business, diversity and inclusion and corporate responsibility leadership roles at PwC, including serving on its CEO Nominating Committee and its Foundation board. Mr. Roman is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants, the Institute of Internal Auditors and the National Association of Black Accountants, Inc., where he is a member of its Corporate Advisory Board. Mr. Roman currently serves on the board of directors of CommScope Holding Company, Inc., a global provider of infrastructure solutions for communication and entertainment networks. Mr. Roman's qualifications to serve as a director of the Company include his extensive background in auditing, as well as his extensive leadership experience in governance, diversity and inclusion, corporate responsibility, technology, and cybersecurity. |
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| Nancy Altobello Independent Former Partner, Ernst & Young Age: 64| Director Since: 2021 Board Committees: Audit, Leadership Development and Compensation |
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| Key Experience: |
| Finance, Accounting, or
Reporting | | Business Development
and M&A | | Risk Management | | Global or
International
Business | | ESG (and HCM) |
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Ms. Altobello was most recently the Global Vice Chair, Talent of Ernst & Young (“EY”), where she was responsible for the firm’s global talent and people strategy from July 2014 to June 2018. Prior to that, she held a number of senior positions at EY, including the Americas Vice Chair, Talent, the Managing Partner, Northeast Region Audit and Advisory Practices, and the Managing Partner, North American Audit Practice. During this time, Ms. Altobello also served as an audit partner for a number of leading global organizations. Ms. Altobello is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. Ms. Altobello currently serves as a board member of MarketAxess, an international financial technology company, and Amphenol, a major producer of electronic and fiber optic connectors, cable, and interconnect systems such as coaxial cables. She was previously on the boards of CA Technologies before it was acquired by Broadcom in 2018, MTS Systems before it was acquired by Amphenol in April 2021, and Cornerstone on Demand before it was acquired by Clearlake Capital Group. Ms. Altobello's qualifications to serve as a director of the Company include her extensive background in auditing, deep experience serving on other boards, and leadership in overseeing talent and people strategy. |
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| Bhavana Bartholf Independent Global Head of Digital and Sales Strategy, Partner General Manager, Microsoft Commercial Solution Areas Age: 45 | Director Since: 2021 Board Committees: Audit, Technology |
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| Key Experience: |
| Business Development
and M&A | | Marketing or
Public Relations | | Global or
International
Business | | Technology |
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Ms. Bartholf has served as the Global Head of Digital and Sales Strategy and Partner General Manager for Microsoft Commercial Solutions Areas at Microsoft Corporation, an American multinational technology company, since April 2021. During her career at Microsoft, Ms. Bartholf has held positions of progressively increasing levels of seniority and importance. From April 2019 to April 2021, Ms. Bartholf was the US Chief Transformation Officer, from September 2017 to April 2019, Ms. Bartholf was a Customer Success Leader and from September 2016 to September 2017 she was an Americas Service Leader (Business Productivity and Modern Workplace) at Microsoft. From July 2014 to October 2016 she was an Americas Service Leader (Services and Sales), and from September 2000 to July 2014 she served in various other leadership roles with responsibility leading technical teams across Customer Success and Professional Services. She has served on the Board of Directors of Gift of Adoption since 2014. Ms. Bartholf's qualifications to serve as a director of the Company include her extensive leadership background, experience in digital transformation, and diversity of thought she brings to WEX’s board. |
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Board Refreshment/Succession Planning
Number of Directors and Terms
Our Amended and Restated Certificate of Incorporation currently 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 12 seats. The Board is divided into three classes of four seats each. As a result of the adoption of the Amended and Restated Certificate of Incorporation, which was approved during the Company's 2021 annual meeting of stockholders, the Company beganis in the process of declassifying its Board of Directors. The declassification of the Board of Directors is being phased-in commencing with this Annual Meeting, in that only the directors who belong to formalize its approachClass II of the Board are standing for re-election for a term of one year expiring at the 2023 annual meeting of stockholders and until their respective successors are elected and qualified. The members of Class I and III are not up for re-election at this Annual Meeting. The current members of Class II will be up for re-election, if renominated, at the 2023 annual meeting of stockholders as will the current Class III directors, if nominated, all for a term of one year and until their respective successors are elected and qualified. The current Class I directors will be up for re-election, if nominated, at the 2024 annual meeting of stockholders, along with all other directors, if renominated, all for a one year term and until their respective successors are elected and qualified. This will result in the classified Board being fully phased-out (and all Board members standing for annual nomination and election) commencing with the 2024 annual meeting of stockholders.
Director Nominations and Recommendations
The Corporate Governance Committee's responsibilities include recommending candidates for nomination to environmental, socialthe Board. In identifying potential nominees, the Corporate Governance Committee may: retain a search firm; consider their professional networks; evaluate highly regarded leaders in industry and governance matters (“ESG”)academia; or, entertain suggestions from stockholders or other business organizations, among other ways suitable for identifying potential nominees. The Corporate Governance Committee will also consider candidates pursuant to any contractual obligations, including Mr. Neary, who is the Warburg Designee. See "Governance - Proposal 1 - Election of Directors". While we view
The Corporate Governance Committee will also consider candidates nominated or recommended by stockholders as potential director nominees in the same manner as candidates identified by the Corporate Governance Committee. Our stockholders also have the right under our approachBy-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 do I submit a stockholder proposal or director nominee for next year’s annual meeting or suggest a candidate for nomination as parta director to the Corporate Governance Committee?”
To be timely, a stockholder’s notice to the WEX Inc. Corporate Secretary of a continuousdirector nominee for the 2023 annual meeting of stockholders must be delivered to or mailed and received no earlier than January 12, 2023 nor later than February 11, 2023. However, in the event that the annual meeting is called for a date that is not within 25 days before or after May 12, 2023, 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 Corporate Secretary of a “proxy access” director nominee for the 2023 annual meeting pursuant to our By-Laws provision must be received in writing by the Corporate Secretary no earlier than December 13, 2022 nor later than January 12, 2023. 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
Director Qualifications, Diversity and Board Refreshment
The qualifications for directors are described in our Corporate Governance Guidelines and the guidelines for evaluating director nominees are in the Corporate Governance Committee’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 evaluatingthe Company;
•Nominees should have a commitment to understand the Company and improvingits 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’s ability to represent the interests of all the Company’s stockholders and to fulfill the responsibilities of a director.
Since 2018 we have added seven directors to the Board, with a strong and diverse mix of skills, qualifications, backgrounds, and experience. Although the Corporate Governance Committee does not have a policy with respect to diversity, it believes that our ESG practices, during 2019, weBoard, taken as a whole, should embody a diverse set of skills, experiences and backgrounds. Our active Board refreshment process has resulted in a strong mix of diversity and independence on our Board, which contributes to effective oversight of management and the Company. Our Board currently is comprised of 12 directors and embodies the principles set forth above.
In addition, as presently constituted, 58 percent of our Board are women or from underrepresented ethnic groups. We believe that the diversity of our Board is representative of a broad-range of diverse viewpoints, experiences, and expertise. The Corporate Governance Committee intends to continue to be mindful of diversity with respect to gender, race, national origin, and age, in connection with future nominations of directors not presently serving on the Board. 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 renomination 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’ 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’s determination that each director is well suited or continued the following ESG practices:
Strong Commitmentqualified to Board Diversity: Female representationserve on the Board is nearly one-thirdspecified with his or her respective biographical entry under the “Director Nominations and Recommendations” section of our Board. Takingthis 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 account Mr. Ghosh’s background as a South Asian,the Company and Mss. Smith, Sobbott,its operations and Sommer, our directors offer ethnic and gender diversityan institutional memory 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 providebenefit 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 qualityentire membership of the workplace environment, all withBoard as well as management. As an aimalternative to term limits, any director who reaches the age of fostering a positive place within which72 is subject to conduct business.
Commitment to Great Place to Work Measurements: In further advancementmandatory retirement at the end of our strategy to enhance the workplace experiencehis or her then-current term 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,
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 responsibilityreviews 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 oversightand allows the Company to replace directors who are no longer interested or effective.
Any director who reaches the age of our ESG programs.72 while serving as a director will retire from the Board effective at the end of his or her then current term.
Engaged Third Economy LLC, a sustainable investment research and advisory firm in partnership with Broadridge Financial Solutions,30 WEX 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 mergemerged 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 his or 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 officerChief 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.
While our Board presently believes that the above-described leadership structure is an appropriatethe right approach to our 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,Nancy Altobello, Bhavana Bartholf, Daniel Callahan, Shikhar Ghosh, Rowland T. Moriarty,James Groch, James Neary, Derrick Roman, 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,John E. Bachman, a former director who served during part of the year ended December 31, 2019,2021, 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 withthat Mr. Neary is a managing director of Warburg Pincus LLC, and that an affiliate of funds managed by Warburg Pincus LLC is a former significant stockholder.current holder of the Company's common stock and convertible senior notes. For further information on the convertible senior notes transaction, please see "Board Practices, Policies, and Processes - Certain Relationships and Related Transactions - Warburg Pincus Private Placement Transaction". Mr. Neary has recused, and will continue to recuse, himself from any Board or relevant committee decisions or decision making processes directly involving or affecting the interests of Warburg Pincus LLC in the convertible senior notes and other situations where such a recusal would otherwise be appropriate. Ms. Smith is not an independent director under these rules because she is our chief executive officer.
In addition, each of the members of the Corporate Governance Committee, Audit Committee, and theLeadership Development and 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 current 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 current members of the Leadership Development and Compensation Committee satisfy the independence requirements contemplated by Rule 10C-1 under the Exchange Act.See "Compensation Discussion & Analysis - Process for Determining Executive Compensation - Leadership Development and Compensation Committee".
Executive Sessions
TheOur independent directors, as defined by the rules of the NYSE, shall meet in executive session at least semi-annually in regularly scheduled executive sessions, without members of management present and without Ms. Smith present to discuss, among other matters, the performance of the Chief Executive Officer. The independent directors willalso meet in executive session at other times at the request of any independent director. Absent unusual circumstances, these executive sessions shall beare held in conjunction with regular Board meetings. The director who presides at these meetings shall beis typically the Lead Director, if thereunless he is one, and if not, shallotherwise unable to attend, in which case the presiding director would be chosen by the remaining independent directors, and his or her name shallwill be disclosed in accordance with NYSE rules.
Standing Committees of the Board
Committee Composition
Our Board has created the following committees. The composition of each committee is set forth below as of the date of the mailing of these proxy materials. The charters for each of the committees can be obtained at: http:https://ir.wexinc.com/phoenix.zhtml?c=186699&p=irol-govhighlightsgovernance/governance-documents/default.aspx
Audit Committee
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Current Members: Regina O. Sommer (Chair)
John E. Bachman
Nancy Altobello Bhavana Bartholf James Groch Derrick Roman Susan Sobbott Stephen Smith
No. of Meetings in 2019:2021: 1514
| 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. AllThe Board has determined that 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. BachmanRoman, Mr. Groch, Ms. Altobello and Ms. Sommer qualify as “audit committee financial experts.” |
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Leadership Development and Compensation Committee
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Current Members: Daniel Callahan (Chair)
Nancy Altobello James Neary
Susan Sobbott Stephen Smith Jack VanWoerkom No. of Meetings in 2019:2021: 58
| The Leadership Development and Compensation Committee must be comprised of at least two independent directors appointed by a majority of the Board. The Leadership Development and Compensation Committee, which was titled the Compensation Committee until early 2021, focuses its efforts on the Company's most important asset, its human capital. As such, it 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. The Leadership Development and Compensation Committee also provides direction and perspective to management on strategies with significant human capital implications, including review of key diversity initiatives and human capital policies and practices, such as those related to organizational engagement and effectiveness and employee development programs. All members of the Leadership Development and Compensation Committee are independent under the applicable rules of the NYSE and the SEC.See "Compensation Discussion & Analysis - Process for Determining Executive Compensation - Leadership Development and Compensation Committee". |
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Corporate Governance Committee
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Current Members: Jack VanWoerkom (Chair)
Shikhar Ghosh Rowland T. Moriarty
Regina O. SommerSusan Sobbott No. of Meetings in 2019:2021: 56
| ThePursuant to its charter, the Corporate Governance Committee is comprised of such number of independent directors as our Board shall determine. At present, there are three members, each of whom is independent under the applicable rules of the NYSE. 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, approving the Company's policies and procedures for reviewing and approving related person transactions and providing advance approval for such proposed transactions, and providing oversight with respect to corporate governance matters. All members ofmatters and the Corporate Governance Committee are independent under the applicable rules of the NYSE. |
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Finance Committee
Finance Committee
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Current Members: James Neary (Chair)
John E. BachmanJames Groch Derrick Roman
Michael E. Dubyak Stephen Smith
No. of Meetings in 2019:2021: 128
| ThePursuant to its charter, the Finance Committee is comprised of such number of independent directors as our Board shall determine. At present, there are four members, each of whom is independent. 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.divestitures and the integration of completed transactions. The Finance Committee also overseesadvises the Company’sBoard and the Company's management with respect to debt or equity financings, credit arrangements, investments, capital structure, and capital policies. |
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Technology Committee
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Current Members: Shikhar Ghosh (Chair) Bhavana Bartholf
Daniel Callahan Michael E. Dubyak
Regina O. Sommer No. of Meetings in 2019:2021: 48
| ThePursuant to its charter, the Technology Committee is comprised of such number of independent directors as our Board shall determine. At present, there are four members, each of whom is independent. The Technology Committee’s responsibilities include overseeingassisting the Company’sBoard and the Audit Committee in the oversight of 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. |
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Compensation Committee Interlocks and Insider Participation
The directors who served as members of our compensation committeeLeadership Development and Compensation Committee (which until early 2021 was titled the Compensation Committee) at any point during 20192021 were Daniel Callahan, Shikhar Ghosh,Nancy Altobello, James Neary, Stephen Smith, Susan Sobbott, and Jack VanWoerkom. No member of our Leadership Development and Compensation Committee serving during the last completed fiscal year is or was one of our or our subsidiaries’ former officers or employees. During 2019,2021, there were no Compensation Committee interlocks as required to be disclosed under SEC rules. For a discussion of related persons transactions involving Mr. Neary and Warburg Pincus, of which Mr. Neary is a Managing Director, please see "Board Practices, Policies, and Processes - Certain Relationships and Related Transactions - Warburg Pincus Private Placement Transactions."
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 some of the practices we observe to maintain our progressing approach to corporate governance:
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ü Offered listening sessionsBegan declassification of the Board, with investors overphase-in of one year terms commencing with the past two yearsfour directors up for election at this Annual Meeting. üThe Corporate Governance Committee of the Board is charged with overseeing our ESG program to demonstrate the Company's commitment to ESG. ü Robust stockholder engagement program under which we engaged with stockholders representing approximately 59% of our shares outstanding in 2021. ü Implemented robust orientation program for the three directors newly elected to the Board in 2021, which programs were also made available to and attended by existing Board members as desired. ü Uses majority voting standard for uncontested director electionselections. ü Strong, independent leadProxy access bylaw (3%/3 years) which allows large, long-term stockholders (or a group of stockholders) to nominate director candidates on the Company’s proxy card. ü Engages in 360' evaluation process ofStrong, independent Lead Director. ü Since 2018, we have refreshed the Board committeeswith seven new members, each with a strong mix of skills, qualifications, backgrounds, and individual directors ü Addition of proxy access bylaw provisionsexperiences.
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Board and Committee Meetings
The Board held 1210 meetings in 2019.2021. 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 2019.2021. 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 2019,2021, all of our directors, then in office, attended the 2019 annual meeting of stockholders.stockholders virtually.
Board Performance Evaluations
The Corporate Governance Committee shall overseeoversees 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 determinedetermines the nature of the evaluation and overseeoversees the conduct of the evaluation and conductconducts an assessment of the Board’s performance, which is 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.
In conducting the self-evaluation process, the Board annually identifies areas for additional focus and seeks to learn what the Board, its committees, and individual directors can do to improve strategic and operational execution. The responsibility for conducting these interviews is rotated amongst directors so as to increase transparency and provide a varying perspective from year-to-year.
242022 Proxy Statement WEX Inc.35
Director Orientation and Continuing Education
The Board and the Company’s management shall conduct ana robust 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,matters, its compliance programs, its code of business conduct and ethics, its principal officers, its internal and independent auditors, and its General CounselChief Legal Officer and outside legal advisors. In addition, the orientation program shall includeincludes 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-tailoredpersonally tailored process that emphasizes those areas that will address each director's particular knowledge of the industriesareas in which we operate. In 2021, with the addition of three new directors, the Company continued to enhance its program to fit the constantly changing environment in which business is conducted today and provide relevant and thorough information to the new and existing Board members.
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 paypays 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 independentnon-management 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.
The information contained on our website, or any information that may be accessed by links on our website, is not incorporated by reference into this Proxy Statement.
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 was or is to be a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees, or 5 percent stockholders (or theirany immediate family members)members of the aforementioned groups), each of whom we refer to as a “related person,” hashad or will have a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship,interest, which we refer to as a “related"related person transaction,” thetransaction".
A related person transaction proposed to be entered into by WEX must report the proposed related person transactionbe reported to our Chief Legal Officer. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approvedprior to effectiveness or consummation of the transaction by our Board’s Corporate Governance Committee. Whenever practicable,If the reporting, review and approval will occur prior to entry intoChief Legal Officer becomes aware of a related person transaction that was not previously reviewed under the transaction. If advance review and approval is not practicable,policy, the Corporate Governance Committee willshall review and, in its discretion, may ratify the related personsuch 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.annually to evaluate whether or not such transaction should be permitted to continue. The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the Leadership Development and Compensation Committee in the manner specified in its charter.
2020 Proxy Statement 3625 WEX Inc.
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 in, or is not inconsistent, with the Company’s best interests.interests of the Company and its stockholders. As required by applicable NYSE rules, the Corporate Governance Committee will prohibit any related person transaction that is determines to be inconsistent with the interests of WEX and it shareholders. The Corporate Governance Committee may impose any conditions onWEX or related person that it deems appropriate in connection with the approval or ratification of the related person transaction.
No member of the Corporate Governance Committee is allowed to participate in any review or approval or ratification of any related person transaction that it deems appropriate.in which such member is the related person, any immediate family member of such member is the related person, or any significant stockholder with which such member is an affiliated is the related person.
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$1,000,000 or 12 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.
ThereOther than as set forth below, there were no relationships or related person transactions since January 20192021 which required review under the policy.
Warburg Pincus Private Placement Transaction
In July 2020, the Company completed a private placement transaction with an affiliate of funds managed by Warburg Pincus. James Neary, who served as a member of the Board at the time of the transaction and is a director nominee standing for re-election at the Annual Meeting, is a managing director at Warburg Pincus. The private placement was intended to strengthen WEX’s financial profile and enabled the Company to remain focused on its strategic initiatives as it navigated the global COVID-19 pandemic. The private placement transaction was approved pursuant to the Company’s related person transaction policy by the Corporate Governance Committee of the Board, after it had reviewed and considered all relevant facts and circumstances, including, but not limited to, whether the transaction was entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party and the indirect interest of Mr. Neary in the transaction, which was estimated to have a value of approximately $414,000. Following approval by the Corporate Governance Committee of the Board, the private placement transaction was approved by the disinterested members of the Board.
Purchase Agreement
On June 29, 2020, the Company entered into a purchase agreement with an affiliate of Warburg Pincus providing for the issuance and sale of (i) $310,000,000 aggregate original principal amount of 6.50% Convertible Senior Notes due 2027 and (ii) 577,254 shares of the Company’s common stock. The aggregate purchase price for the convertible notes and shares was $389,150,000, of which $299,150,000 constituted the purchase price for the convertible notes and $90,000,000 constituted the purchase price for the shares. The closing of the sale occurred on July 1, 2020.
The purchase agreement contains certain customary representations, warranties and covenants with respect to each of the Company and purchaser, including preemptive rights allowing the purchaser to maintain its proportionate equity interest on an as-converted basis, subject to certain exceptions. The purchase agreement further provided that the purchaser was restricted from transferring the convertible notes or shares until July 1, 2021, subject to certain exceptions, including transfers pursuant to pledge arrangements that may be entered into by the purchaser in connection with certain financing arrangements. Subsequent to July 1, 2021, transfers generally are not restricted, subject to certain limitations on
transfers to certain categories of transferees. The purchase agreement also provides that transactions involving compensationfor restrictions on certain hedging activities by the purchaser.
Additionally, pursuant to the terms of executive officers shallthe purchase agreement, for so long as the purchaser continues to own at least 50% of the aggregate amount of the shares and the shares of common stock issuable upon conversion of the convertible notes, the purchaser is entitled to nominate an individual to the Board, which nominee is entitled to be a member of the Leadership Development and Compensation Committee and the Finance Committee of the Board. The designee is currently Mr. Neary, who is a director nominee standing for re-election at the Annual Meeting. The purchaser is also subject to customary standstill restrictions until 90 days after the first day on which the purchaser no longer has a designee on the Board and no longer has a right to such a designee.
Indenture
The convertible notes were issued pursuant to an indenture, dated as of July 1, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. The convertible notes bear interest at a rate of 6.50% per annum and will mature on July 15, 2027, unless earlier redeemed, repurchased or converted. Interest on the convertible notes is calculated at a fixed rate of 6.5% per annum, payable semi-annually in arrears on January 15 and July 15 of each year. At the Company’s option, interest is payable in cash, through accretion to the principal amount of the convertible notes, or a combination of cash and accretion. As of March 31, 2022, the Company has made all interest payments on the convertible notes in cash, totaling $31,008,611, and has made no payments of principal. The principal amount outstanding under the convertible notes continues to be $310 million as of March 31, 2022.
The convertible notes may be converted at the option of the holders at any time prior to maturity, or earlier redemption or repurchase of the convertible notes, based upon an initial conversion price of $200 per share of common stock. The Company may settle conversions of convertible notes, at its election, in cash, shares of the Company’s common stock, or a combination thereof. The initial conversion price is subject to adjustments customary for convertible debt securities and a weighted average adjustment in the event of issuances of equity and equity linked securities by the Company at prices below the then applicable conversion price for the convertible notes or the then market price of the Company’s common stock, subject to certain exceptions.
Registration Rights Agreement
In connection with the private placement transaction, the Company entered into a registration rights agreement with the purchaser. Pursuant to the registration rights agreement, and subject to the terms and conditions thereof, the Company is required upon a demand by the purchaser, or certain permitted transferees of securities issued in connection with the private placement, to file and cause to be declared effective a shelf registration statement registering the public resale of the convertible notes, the shares and the shares of common stock issuable upon conversion of the convertible notes. In addition, the registration rights agreement provides holders of the convertible notes with customary demand underwriting and piggyback registration rights.
Agreement with Affiliate of Wellington Management Group, LLP
In October 2021, WEX Bank and Wellington Management Company LLP ("WMC") entered into an Investment Management Agreement (the "Management Agreement"), whereby WMC was appointed as the investment manager to manage, supervise and direct WEX Bank's investment accounts. These accounts consist primarily of custodial cash assets from health savings accounts, of which WEX Inc. is the custodian or sub-custodian. Under the Management Agreement, WEX Bank pays WMC a fee based on a percentage of the assets under management. The term of the Management Agreement continues until terminated upon 30 days' prior written notice by WEX Bank, 60 days' prior written notice by WMC or upon withdrawal of all managed assets by WEX Bank. As of December 31, 2021, the depository assets totaled $956.5 million. WMC is affiliated with Wellington Management Group, LLP (“Wellington”). Wellington beneficially owned approximately 8.8 percent of the Company’s outstanding common stock as of December 31, 2021 based on information reported on a Schedule 13G/A filed by Wellington with the SEC on February 4, 2022. From January 1, 2021 through April 19, 2022, the Company has paid $145,024 in investment management fees to Wellington.
The Company's Corporate Governance Committee reviewed and approved by the CompensationManagement Agreement prior to execution pursuant to the Company’s related person transaction policy because Wellington beneficially owned greater than 5% of the Company's outstanding common stock at that time. In approving the Management Agreement, the Corporate Governance Committee inreviewed and considered all relevant facts and circumstances, including, but not limited to, whether the manner specified in its charter.transaction was entered into on market and arm's length terms no less favorable to the Company than terms that could have been reached with an unrelated third party, as well as the fact that WEX Bank engaged an independent consultant to source and perform diligence on prospective investment managers and recommended WMC.
Communications with the Board of Directors
The Board believes that the Chief Executive Officer and Chair of the Board and his or her designees, as well as the 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,Chief Legal Officer, (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:
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| Independent Director Communication
WEX Inc.
Attention: Corporate Secretary
97 Darling Avenue
South Portland, ME 04106
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You should include your name and address in the written communication and indicate whether you are a stockholder.
262022 Proxy Statement WEX Inc.39
Director Compensation
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 Leadership Development and Compensation Committee will periodically review the compensation of the Company’s directors. In line with this, the Leadership Development and 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 Leadership Development and Compensation Committee with the assistance of Compensation Advisory Partners (CAP), the Leadership Development and Compensation Committee’s independent compensation consultant.
The Leadership Development and Compensation Committee last reviewed the compensation of the Company’s non-employee directors in 2019, and2021, where total pay for our non-employee directors was shown to be positioned below the median of our peer companies. There were no changes 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.that time.
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.
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| | Annual Fee Schedule |
| | Effective
Q1 - Q3 2019 | Beginning Q4 2019 |
| Annual Chair Cash Retainer | $ | 120,000 |
| N/A |
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| Annual Lead Director Cash Retainer | $ | 85,000 |
| $ | 115,000 |
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| Annual Director Cash Retainer (other than Chair and Lead Director) | $ | 70,000 |
| $ | 85,000 |
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| Audit Committee Chair Cash Retainer | $ | 30,000 |
| $ | 30,000 |
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| Compensation Committee Chair Cash Retainer | $ | 20,000 |
| $ | 20,000 |
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| Finance Committee Chair Cash Retainer | $ | 20,000 |
| $ | 20,000 |
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| Corporate Governance Committee Chair Cash Retainer | $ | 15,000 |
| $ | 15,000 |
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| Technology Committee Chair Cash Retainer | $ | 20,000 |
| $ | 20,000 |
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| Audit Committee Member Cash Retainer (other than Committee Chair) | $ | 15,000 |
| $ | — |
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| Compensation Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 |
| $ | — |
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| Finance Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 |
| $ | — |
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| Corporate Governance Committee Member Cash Retainer (other than Committee Chair) | $ | 7,500 |
| $ | — |
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| Technology Committee Member Cash Retainer (other than Committee Chair) | $ | 10,000 |
| $ | — |
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| | Annual Fee
Schedule |
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| Annual Lead Director Cash Retainer | | $ | 115,000 | |
| Annual Non-Employee Director Cash Retainer (other than the Lead Director) | | $ | 85,000 |
| Audit Committee Chair Cash Retainer | | $ | 30,000 |
| Leadership Development and Compensation Committee Chair Cash Retainer | | $ | 20,000 |
| Finance Committee Chair Cash Retainer | | $ | 20,000 |
| Corporate Governance Committee Chair Cash Retainer | | $ | 15,000 |
| Technology Committee Chair Cash Retainer | | $ | 20,000 |
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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.
Annual Equity Retainers
Effective September 12, 2019, our Board appointed Melissa Smith, president and CEO, to serve as Chairimmediately upon the conclusion 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 changestockholders' meeting in board leadership.
Equity Retainers
In 2019,2021, all then-serving non-employee directors were granted a number of restricted stock units, or RSUs, worth the equivalent of approximately $135,000 at$155,000 based on the timeclosing price of our common stock as reported by the annual stockholders’ meeting atNYSE on the then current stock price. The then-serving Lead Director, Dr. Moriarty,day that the award 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.granted. These RSUs will vest on the first anniversary of the date of grant. In 2020,Effective immediately upon the conclusion of the Annual Meeting, all non-employee directors will be granted a number of RSUs worth the equivalent ofhaving a value equal to approximately $155,000 atbased on the timeclosing price of the annual stockholders’ meeting, at the then current price.our common stock on that date.
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, newNew non-employee directors will be- those directors appointed or elected for the first time to our Board - are granted a number of RSUs worth the equivalent of approximately $100,000 atbased on the then currentclosing price of our common stock price.as reported by the NYSE on the day that the award is granted. Such RSUs will beare granted either (i) at the next annual stockholders’ meeting after theira new non-employee director's appointment by the Board or (ii) upon initial election to the Board by our stockholders, whichever comes first, and vest on the first anniversary of the date of grant. Prior to the adoptionEach of the new director compensation policy in October 2019, all new non-employee directorsMs. Altobello, Ms. Bartholf, and Mr. Roman 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 occursuch RSU awards on the first anniversary ofJune 4, 2021, the date of grant.the 2021 annual meeting of stockholders.
GivenThe Board believes 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.
Newnew director equity grants further support alignment of the interests of our new directors with our stockholders.
20192021 Director Compensation
Our non-employee directors received the following aggregate amountamounts of compensation in the year ended December 31, 2019:2021:
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| Name | Fees Earned or
Paid in Cash | Stock Awards(1) | Total |
John E. Bachman(2) | $ | 36,195 | $ | — | | $ | 36,195 | |
Bhavana Bartholf(3) | $ | 48,805 | $ | 255,013 | | $ | 303,818 | |
Derrick Roman(3) | $ | 48,805 | $ | 255,013 | | $ | 303,818 | |
Nancy Altobello(3) | $ | 48,805 | $ | 255,013 | | $ | 303,818 | |
| Daniel Callahan | $ | 105,000 | $ | 155,048 | | $ | 260,048 | |
| Shikhar Ghosh | $ | 105,000 | $ | 155,048 | | $ | 260,048 | |
| James Neary | $ | 105,000 | $ | 155,048 | | $ | 260,048 | |
| James Groch | $ | 85,000 | $ | 155,048 | | $ | 240,048 | |
| Stephen Smith | $ | 85,000 | $ | 155,048 | | $ | 240,048 | |
| Susan Sobbott | $ | 85,000 | $ | 155,048 | | $ | 240,048 | |
| Regina O. Sommer | $ | 115,000 | $ | 155,048 | | $ | 270,048 | |
| Jack VanWoerkom | $ | 130,000 | $ | 155,048 | | $ | 285,048 | |
(1)This column is the aggregate grant date fair value of stock awards granted on June 4, 2021, the date of the Company's 2021 annual meeting of stockholders. 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. With respect to Ms. Altobello, Ms. Bartholf, and Mr. Roman, the grant date fair value of the annual equity retainer granted on June 4, 2021 was $155,048 and the grant date fair value of the new director equity grant made on June 4, 2021 was $99,965. The aggregate number of unvested RSUs outstanding for each non-employee director as of December 31, 2021 was as follows: Ms. Bartholf — 1,250; Mr. Roman — 1,250; Ms. Altobello — 1,250; Mr. Callahan — 760; Mr. Ghosh — 760; Mr. Neary — 760; Mr. Groch — 760; Mr. Smith — 760; Ms. Sobbott — 760; Ms. Sommer — 760; and Mr. VanWoerkom — 760. These RSUs vest on the first anniversary of the 2021 annual meeting of stockholders. Mr. Bachman did not stand for re-election at the 2021 annual meeting of stockholders and as such did not have any stock awards outstanding as of December 31, 2021.
(2)Mr. Bachman's term as a director ended on June 4, 2021 at the 2021 annual meeting of stockholders.
(3)Ms. Bartholf's, Mr. Roman's, and Ms. Altobello's terms as directors began on June 4, 2021 upon their election at the 2021 annual meeting of stockholders.
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| Name | Fees Earned or
Paid in Cash
($) | Stock
Awards(1)
($) | Total
($) |
| John E. Bachman | $ | 92,500 |
| $ | 134,988 |
| $ | 227,488 |
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Daniel Callahan(2) | $ | 62,047 |
| $ | 235,140 |
| $ | 297,187 |
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| Michael E. Dubyak | $ | 126,250 |
| $ | 184,946 |
| $ | 311,196 |
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| Shikhar Ghosh | $ | 101,250 |
| $ | 134,988 |
| $ | 236,238 |
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| Rowland T. Moriarty | $ | 107,500 |
| $ | 150,078 |
| $ | 257,578 |
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| James Neary | $ | 101,250 |
| $ | 134,988 |
| $ | 236,238 |
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Kirk P. Pond(3) | $ | 23,750 |
| $ | — |
| $ | 23,750 |
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Stephen Smith(4) | $ | 26,827 |
| $ | — |
| $ | 26,827 |
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| Susan Sobbott | $ | 92,500 |
| $ | 235,140 |
| $ | 327,640 |
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| Regina O. Sommer | $ | 116,875 |
| $ | 134,988 |
| $ | 251,863 |
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| Jack VanWoerkom | $ | 106,875 |
| $ | 134,988 |
| $ | 241,863 |
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| 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. |
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(2)
| Mr. Callahan’s term began in May 2019 upon election at the 2019 Annual Meeting. |
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(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. |
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(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 Directordirector 200 days following cessation of Board service.
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 Leadership Development and Compensation Committee establishedmaintains 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, 50% of the value of unvested 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.non-employee 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 (i) five years from their initial appointment or election to the Board or (ii) five years following October 1, 2019, the date aton which the increasedcurrent equity ownership guideline became effective.
The non-employee directors’ compliance with these guidelines was assessed during 2021 by the Leadership Development and Compensation Committee, as of July 31, which is the “Determination Date” for purposes of these guidelines. As of July 31, 2021, all of our non-employee directors (which in this instance also includes Mr. Neary) then serving were in compliance with the equity ownership guidelines as described above.
EXECUTIVE OFFICERS
The following are the Non-Director Memberscurrent non-director members of the executive team who have been designated Executive Team:Officers in accordance with Rule 3b-7 of the Securities Exchange Act of 1934 (the "Executive Officers"):
CARLOS CARRIEDO 47, Chief Operating Officer, International
Carlos Carriedo joined WEX in January 2022 as our Chief Operating Officer, International. In this role, Mr. Carriedo oversees WEX's Fleet, Travel and Corporate Payments businesses outside of the Americas. Prior to joining WEX, Mr. Carriedo held several senior management positions at American Express, a multinational corporation specialized in payment card services, including General Manager and Senior Vice President, for Commercial Services, Europe from April 2018 to December 2021, General Manager Commercial Services Canada and Latin America from September 2016 to April 2018, General Manager Commercial Services Latin America from February 2015 to September 2016, Head of SME Segment Commercial Services Mexico from January 2012 to February 2015, and Business Intelligence and Business Development Director from August 2010 to January 2012.
DAVID COOPER 53,55, 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, CTOChief Technology Officer 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, CTOChief Technology Officer 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 41,43, 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 ROBERT DESHAIES58, 56, Chief PortfolioOperating Officer, Americas
Robert Deshaies has served as our Chief Operating Officer, Americas since January 2022. In this role, Mr. Deshaies oversees WEX’s Fleet, Benefits, Corporate Payments, and Travel businesses in the Americas, as well as the company’s Global Marketing organization. Prior to serving as our Chief Operating Officer, Americas he served as our President, Health from September 2019 to December 2021 and Senior Vice President, Health from July 2014 to September 2019, 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.
ANN (ANNIE) DREW 51, Chief Risk & Operationsand Compliance Officer
Kenneth JanosickAnn Drew 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 DevelopmentCompliance Officer since December 2017.2020. Ms. Drew also currently serves as the Chair and Chief Executive Officer of WEX Bank. Prior to that she served as the Senior Vice President, Chief Ethics and Compliance Officer from August 2020 to December 2020, the Chief Ethics and Compliance Officer from December 2019 to August 2020, the Vice President, Compliance and Enterprise Risk Management, from December 2016 to December 2019, and the Director, Corporate DevelopmentCompliance and Enterprise Risk Management from FebruaryDecember 2014 to December 2017. She is responsible for managing corporate development and strategic planning, directing corporate marketing, and overseeing early stage product development.2016. Prior to joining WEX, she worked for Verizon Communications, a global communications and technology company, from January 2006 through January 2014, where sheMs. Drew served as the Vice President, Global Corporate Strategy from November 2011 to January 2014. Prior to that role, she held the positions of Vice PresidentAssociate General Counsel and Chief MarketingCompliance Officer of SIG Sauer, Inc., a designer and manufacturer of firearms, from October 20102013 to November 20112014, and also that of Vice President, Strategy and Business Development, both with the Verizon Business unit from January 2006 to October 2010. Before Verizon,2013 she held positions with MCI, Incorporatedserved in various legal leadership roles at IDEXX Laboratories, Inc., a global leader in veterinary diagnostics, software, and Digex, Incorporated.water microbiology testing.
SCOTT PHILLIPSJENNIFER KIMBALL 50, President, Global Fleet47, Interim Chief Financial Officer and Chief Accounting Officer
Scott PhillipsJennifer Kimball has served as theour Interim Chief Financial Officer since January 2022. Ms. Kimball has served in numerous leadership positions for WEX Inc., including Chief Accounting Officer since August 2020, and Vice President Global Fleet, since December 2017. He joined the Companyof Finance from April 2019 until August 2020. Prior to joining WEX, Ms. Kimball served as Senior Vice President and General Manager, Electronic Funds SourceChief Accounting Officer for Syneos Health Inc., a global biopharmaceutical solutions organization from August 2017 until March 2019. Prior to the merger of inVentiv Health, a professional services organization (“EFS”inVentiv”) on July 1,, and INC Research, which resulted in the formation of Syneos Health, Ms. Kimball served as the Chief Accounting Officer of inVentiv from November 2016 whento August 2017 and as the Company acquired EFS to expand its large and mid-sized over-the-road (“OTR”) and corporate payments business. Mr. Phillips had been theVice President, and CEOAccounting of EFSinVentiv from SeptemberJuly 2011 to June 2016, responsible for OTR fleet activities along withNovember 2016. From 2007 to 2011, Ms. Kimball served as the EFSDirector of Corporate Payments business. PriorReporting at The Timberland Company, a manufacturer and retailer of outdoor wear. From 2005 to joining EFS, he was Executive Vice President2007, Ms. Kimball served as the Treasury Controller and GeneralDirector of Technical Accounting at Thermo Fisher Scientific, a supplier of scientific instrumentation, reagents and consumables, and software services. From 1997 to 2005, Ms. Kimball served in various positions from Staff Accountant to Senior Manager of the Corporate Payments Divisions at Comdata Corporation, a payment processor and issuer of fleet fuel cards.
PricewaterhouseCoopers LLP.
HILARY A. RAPKIN 53,55, Chief Legal Officer
Hilary Rapkin has served as our Chief Legal Officer and Corporate Secretary 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 SIMONKAREN STROUP 45,46, Chief FinancialDigital Officer
Roberto SimonKaren Stroup joined WEX in January 2022 as theour Chief FinancialDigital Officer. Prior to joining WEX, Ms. Stroup held numerous leadership positions, including as Chief Digital Officer for Thomson Reuters, a media company, from November 2019 until December 2021, and as Chief Digital Officer for Treehouse, Inc., a home upgrade company specializing in February 2016. Previously, Mr. Simonhome renovations and energy-saving performance projects, from June 2018 until January 2019. From August 2016 until June 2018, Ms. Stroup served as the ExecutiveSenior Vice President of Product and ChiefInnovation for Capital One Financial Officer of Revlon, Inc.,Corporation, a global cosmetics, personal and beauty care products company, from October 2014 until February 2016.bank holding company. Prior to that, he was the Revlon SeniorMs. Stroup served as Vice President, Global FinanceProduct Management for Intuit, a financial software company, from OctoberAugust 2013 to September 2014until August 2016 and served as Revlon’s Global Business Process Owner, SAP,various other positions from February 2014July 2008 until September 2014. Prior to joining Revlon as a result of Revlon’s acquisition of The Colomer Group Participations, S.L. (“The Colomer Group”)July 2013. Currently, Ms. Stroup also serves on the board and Audit Committee for Driven Brands Holdings, Inc., a Spain-based salonpublicly traded automotive services company in North America, providing a range of consumer and professional beauty business, Mr. Simon served in various senior finance positions of increasing responsibility at The Colomer Group since 2002,commercial automotive needs, 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 Americapaint, collision, glass, vehicle repair, oil change, maintenance and Africa from January 2008 until September 2011.car wash services.
MELANIE J. TINTO 48,50, 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 DESHAIES44 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.
EXECUTIVE COMPENSATION
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| Proposal 2 | | |
| Advisory (Non-Binding) Vote on the Compensation of Our Named Executive Officers | |
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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 Compensation,” whom we refer to as our “named executive officers”“Named Executive Officers”, or “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,” 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 individuals who are critical to our success.
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 and stockholder value. Reflecting our pay-for-performance philosophy, a significant portion of executive compensation is subject to increase when results exceed target, reduction when results fall below target, and elimination if results do not achieve a threshold level of performance. Stockholders are urged to read the “Executive Compensation” section of this proxy statement, including the section entitled “Compensation Discussion and& Analysis,” which describes our executive compensation philosophy and programs in greater detail, as well as compensation decisions made by the Leadership Development and Compensation Committee with respect to the fiscal year ended December 31, 2019.2021.
Our Board is asking stockholders to approve, on a non-binding advisory basis, the following resolution:
RESOLVED, that the compensation paid to WEX Inc.’s named executive officers,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 ornon-binding on the Board (or any committee of the Board), orand does not 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 Leadership Development and 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.Named Executive Officers. For additional detail on the related process and actions during the past year, please see the "Compensation Discussion & Analysis - Say on Pay Support and Stockholder Engagement" section below.
The Board has decided that the Company will hold an annual advisory vote on the compensation of our named executive officers.Named Executive Officers. After our 2020 annual meeting,this Annual Meeting, the next advisory vote on the compensation of our named executive officersNamed Executive Officers will be at our 2021 annual meeting.
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We recommendThe Board recommends a vote FOR approval of the compensation of our named executive officers.Named Executive Officers.
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20202022 Proxy Statement 3345
Compensation Discussion & Analysis
This Compensation Discussion and& Analysis, or CD&A, describes our compensation objectives and programs for our “named executive officers”“Named Executive Officers” or “NEOs.” This CD&A also describes the specific decisions, and the processes supporting those decisions and recommendations, which were made by the Leadership Development and Compensation Committee with respect to 20192021 for the NEOs.
For 2019,2021, our NEOs were:
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Melissa Smith Chair and Chief Executive Officer (“CEO”) | Roberto Simon Chief Financial Officer (“CFO” ("CFO")1 | Scott Phillips President, Global Fleet | Joel Dearborn
President, Corporate Payments2
| Robert Deshaies President, Health3 | David Cooper Chief Technology Officer
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To assist in finding important information, we call your attention to the following sections of our CD&A:
(1)Mr. Simon served as the Company's CFO during the entirety of 2021. He resigned as the Company’s CFO effective at the end of the day on December 31, 2021. Following his resignation, he remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022. (2)Mr. Phillips served as the Company's President, Global Fleet, during the entirety of 2021 until January 1, 2022, at which point he resigned such position. He then remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022.
(3)Mr. Deshaies served as the Company's President, Health during the entirety of 2021. However, he was promoted to the Company's Chief Operating Officer, Americas as of January 1, 2022.
Executive Summary
Summary of WEX’s Business
WEX Inc. ("WEX", "our(s)", "we" or "the Company") is the global commerce platform that simplifies the business of running a leading financial technology service provider operatingbusiness. We have created a powerful ecosystem that offers seamlessly embedded, personalized solutions for our customers. Through our rich data and specialized expertise in simplifying benefits, reimagining mobility and paying and getting paid, we make it easy for companies to overcome complexity and reach their full potential. WEX was founded in 1983 and trades on the NYSE under the ticker WEX.
We currently operate in three reportable segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. Our Fleet Solutions segment provides payment processing, transaction processing, and information management services specifically designed for the needs of commercialfleets of all sizes from small businesses to federal and state government fleets.fleets and over-the-road carriers. Our Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-businessglobal B2B (business-to-business) payments, providingenabling customers with payment processingto utilize our payments solutions forto integrate into their corporate paymentown workflows and transaction monitoring needs.manage their accounts payable automation and spend management functions. Our Health and Employee Benefit Solutions segment provides a software-as-a-service,software-as-a service, or “SaaS”,"SaaS" platform for consumer directed healthcare payments,benefits and a full-service benefit enrollment solution, bringing together benefits administration, certain compliance services and consumer-directed and benefits accounts. Additionally, the Company serves as well as payroll related benefitsthe non-bank custodian to customers in Brazil.certain health saving account assets. During 2019,2021, Fleet SolutionsSolutions' revenue represented approximately 60% of ourthe Company's total revenue, Travel and Corporate SolutionsSolutions' revenue represented approximately 21%18% of ourthe Company's total revenue, and Health and Employee Benefit SolutionsSolutions' revenue represented approximately 19%22% of ourthe Company's total revenue.
20192021 Company Performance HighlightsSnapshot
2019With record revenue and many other accomplishments, 2021 was one of the best years in WEX's history. We continued to win new customers and expand our relationships with existing partners across the WEX ecosystem, a strong year operationally for WEX. Thetestament to our compelling solutions, which are underpinned by global scale and reliability, customer-focused innovation, and specialized focus with rich data. While we, along with the rest of the world, continued to navigate the unprecedented COVID-19 pandemic, the Company’s 20192021 revenue grew 15%,increased 19% from 2020, while 2021 GAAP net income attributable to shareholders per diluted share was breakeven and adjusted net income attributable to shareholders per diluted share, a non-GAAP measure grew 12% and annualized total stockholder return (TSR)(1), increased significantly51% from 2020 to 49.6%, as compared to 2018’s flat -0.8%,$9.14 per share, as shown in the charts below. Our growth inIn fact, over the past severalfive years, has been supplemented by acquisitions in eachwe have grown revenue at a compounded annual rate of our three business segments.
13% and adjusted net income attributable to shareholders per diluted share at a compounded annual rate of 19%. |
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Revenue $ million | Adjusted Net-Income | Annualized Shareholder Return |
$ millions | $ millions | (at 12/31/19)Net Income Attributable to Shareholders per Diluted Share(1) |
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Please note that the reconciliations of the(1)Non GAAP Adjusted Net Income Attributable to Shareholders per Diluted Share is not a financial measure prepared in accordance with generally accepted accounting principles ("GAAP"). For information on how we compute this non-GAAP financial measures discussedmeasure and a reconciliation to the most directly comparable financial measure prepared in accordance with GAAP, please refer to "Appendix A — Reconciliation of Non-GAAP Financial Measure" in this proxy statement are locatedstatement.
In 2021, we accomplished significant objectives that contributed to our 2021 financial results and positioned WEX for the future. We continued to expand our solutions, strengthening and diversifying our cloud-based commerce platform. Substantial progress was made on the integration of the eNett and Optal businesses that were acquired at the end of 2020 leading to more than $30 million in Appendix A.annualized cost synergies. We advanced our Electric Vehicle strategy, working closely with customers and expanding industry partners to support the needs of fleets managing the complexities of electrification. In the Health and Employee Benefit Solutions segment we acquired the benefitexpress business, which extends our business into the large and growing benefits administration marketplace. We also acquired the custodial or sub-custodial rights over certain health savings account assets, which allows us to better capture the economics from these assets. In addition, in April 2021 we amended our credit agreement to, among other things, extend the terms of, and increase the available loan amounts under, each component of the agreement. This amended credit facility will assist us in maintaining a strong liquidity position going forward as we continue to execute our strategy in an ever-changing business environment.
We aspirealso continued to beexpand and diversify our already strong leadership base. In June 2021, three new directors were elected to our Board of Directors, as part of our active Board refreshment process, and since 2018 we have added a total of seven new directors to our Board. This refreshment has strengthened the leadingbackground, experiences, expertise, and diversity of our Board.
During the year, we also announced several changes to our Executive Leadership Team, effective in January 2022. We reorganized our Executive Leadership team to better serve our customers and to enable better integration across our platform. As part of this reorganization, we created three new positions: Chief Operating Officer, Americas, to oversee the strategic growth of, and collaboration across the Company’s fleet, health, travel and corporate payments businesses in the Americas; Chief Operating Officer, International, to lead the Company’s international growth; and our first Chief Digital Officer, to expand digital commerce and product development opportunities. These changes are designed to accelerate our business and unlock new growth opportunities by giving our customers an experience that puts them at the center of everything we do. Our leadership team guided the Company through unprecedented times in 2021, while continuing to position WEX for the future, and with these new leadership team additions, is poised to continue to do the same.
As shown and described below, actual pay outcomes for our NEOs were aligned with the financial technology service provider within our core verticals. As such, weperformance results noted above, as well as with stock price performance. 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’sfollowing metrics provide additional context to our overall operational performance during the year ended December 31, 2019, was shaped by the following previously established strategic priorities:in 2021:
Build the best-in-class growth engine. •We seek to drive organic growthRevenue grew 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 recognizedthe three segments year-over-year, with Fleet up 21%, Travel and Corporate Payments up 17%, and Health and Employee Benefit Solutions up 14%;
•Total purchase volume processed grew 59% year-over-year to $88 billion;
•Fleet segment payment processing transactions increased approximately 11% year-over-year; and
•Our Health and Employee Benefit Solutions increased the average number of SaaS accounts by Fortune Magazine in its 2019 list of12.4% over 2020.
The following additional events and accomplishments, which position 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.
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 2019well for the third consecutive year and was named #4 on Vault.com’s “100 Best Internshipsfuture, occurred during 2021:
•Cloud migration continued, with 80% 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 ourselvesvolume 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 allowall new products are fully digitally-native.
•Signed a new agreement with Mastercard which allows us to improve performance, stabilityadd their open network to our proprietary closed-loop fleet cards, enabling our customers to purchase a broader set of products through WEX, but still in a highly controlled manner.
•Moved nearly $1 billion in health savings account custodial deposits to WEX Bank, which were invested and scalability, increase the paceare expected to drive incremental revenue in 2022.
•Increased use of product development and deliver cost savings. Investment in technological innovation with a focus on artificial intelligence, or AI, including the deployment of a new AI-powered virtual agent in our call centers, driving efficiency through increased automation.
•Expanded our relationship with ChargePoint to strengthen our electric vehicle 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.mixed-fleet offerings.
Say on Pay Support and Stockholder Engagement
Say on Pay Vote Results. We have adopted a policy of conducting an annual advisory vote on executive compensation. While this vote is not binding, our Board and the Leadership Development and Compensation Committee, which we refer to as the Committee"Committee" for purposes of thethis 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 executive compensation program has historically received strong stockholder support (including, for example, approximately 98% support during the 2019 and 2020 annual meetings of stockholders). Despite the fact that the decisions behind our 2019 Annual Meeting2020 executive compensation program were largely made with the uncertainty of Stockholders,the then novel pandemic as a backdrop, at our 2021 annual meeting of stockholders approximately 98%47% of votes cast supported WEX’s executive compensation program. ManagementWe were disappointed by this unusually low level of support. As a result, we undertook a significant institutional outreach effort to understand stockholder concerns about our compensation program, and we have taken actions in line with stockholder feedback for our 2022 executive compensation program.
Stockholder Engagement and the Board's Response. WEX respects its stockholders and takes their feedback seriously. During the spring of 2021, at the direction of the Committee Chair, WEX management reached out to our top 41 stockholders, representing more than 87% of shares outstanding, to discuss our executive compensation program. Thirteen investors representing approximately 39% of our shares outstanding accepted our invitation to share feedback and we engaged at length with them.
In addition, during the fall of 2021, WEX management again contacted our then top 15 stockholders, representing more than 71% of our shares outstanding, to discuss any concerns or feedback they had related to compensation matters, as well as any environmental, social or governance issues they wished to discuss. Thirteen investors representing approximately 59% of our shares outstanding accepted our invitation to share feedback, with the remaining two investors either not responding or declining our invitation.
Independent members of our Board participated in and led each of these meetings. Each meeting included some combination of the Committee Chair, the Vice Chairman and Lead Director, members of other committees, and another member of the Board. They were joined in these meetings by the Company’s Chief Legal Officer and Senior Vice President of Global Investor Relations.
Throughout 2021, and during 2022, the Committee, the Committee’s independent compensation consultant, and senior management analyzed and discussed what we learned during this comprehensive outreach process. In general, we learned that our stockholders were not seeking changes to the growth-oriented executive compensation program that was in place prior to the beginning of the pandemic in 2020, and that the decline in support for our Say on Pay resolution in 2021 was primarily related to the special, broad-based, COVID-related pay actions and awards we made during 2020 as were described in our definitive proxy statement filed in April 2021. No such pay actions or awards were made to our NEOs in 2021 or have been made as of the date of this CD&A in 2022. Many investors expressed support for our overall compensation philosophy and cautioned us against making major changes to the structure of our compensation program. As a result, the executive compensation programs implemented in 2021, which are described in greater detail on the following pages, largely mirror previous compensation programs of prior years that received high levels of support from our stockholders.
That said, we listened carefully to our stockholders during our conversations, and the Committee reviewedmade several changes to our stockholders’ affirmative 2019 Say on Pay votecompensation programs in line with the feedback we received. The table below outlines the major items of feedback we received during our 2021 investor outreach 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 usedactions we have taken in recent years when making decisions or adopting policies regarding executive compensation for 2019 and subsequent years.response:
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| Modification of Awards and One-Time Awards: | Certain stockholders did not support some of our special, COVID-related, 2020 pay actions (including, the mid-year changes to STIP and PRSU metrics and goals, and the special equity award of PRSUs and RSUs granted to a broad-based group of key employees, which we called the additional Business Continuity and Outperformance Grant) Stockholders broadly supported our prior, standard executive compensation program, in terms of design and performance metrics | •No one-time awards for NEOs approved since 2020. The Committee will continue to carefully consider any one-time awards, taking into account feedback received from stockholders along with the input of its independent compensation consultant and the needs of the Company •Returned to our prior, standard executive pay program, given stockholder support and that we are a growth-focused company: STIP program with 1-year adjusted revenue and adjusted operating income goals, with a limited potential individual performance modifier; and PRSU awards with 3-year adjusted net income earnings per share and adjusted net revenue goals |
| Integration of ESG Metrics: | Certain stockholders asked for additional ESG-related information (specifically requesting the disclosure of the Company's EEO-1 data) and noted the importance they place on certain ESG-related metrics and objectives | •Incorporated multiple new ESG-related objectives to the pre-established individual NEO performance goals for our 2022 STIP, in addition to otherwise increasing and enhancing our ESG-related disclosures, which includes the disclosure of our EEO-1 Report as referenced in the ESG section of this Proxy Statement |
| Performance Benchmarking: | Certain stockholders wanted confirmation that the relative performance comparisons included a broader group of industry related companies (in addition to our compensation benchmarking peers) | •Created a performance benchmarking peer group to provide additional reference information relating to pay program practices and financial performance, which was reviewed and considered by the Committee during 2021 •Considered input from investors when determining the composition of our performance benchmarking peer group |
Ongoing Stockholder Dialogue. 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.
362022 Proxy Statement WEX Inc.49
Chief Executive Officer Realizable Pay
The Leadership Development and Compensation Committee has designed a compensation program to align the pay of the Company's executives and the interests of its stockholders, for which we have used pay for the Company's CEO and the stock price performance of the Company over the past 3 years to demonstrate. The graphs below show the average target and realizable pay of our CEO during the three-year period ended December 31, 2021. For each of these 3 years, the target mix for the annual long-term incentive (LTI) award for our CEO was 60% PRSUs (denominated in stock units and can payout 0% to 200% of target stock units based on actual performance results against pre-defined goals), 25% stock options, and 15% RSUs. There was an additional LTI award for our CEO in 2020, with a target mix of 75% PRSUs and 25% RSUs. In addition to PRSUs having a payout factor that can be above or below target based on actual results measured against pre-defined goals, the value ultimately realized from PRSU awards (which represent a majority of our CEO’s LTI) is also sensitive to changes in stock price during the performance period given the awards are denominated in stock units (versus dollars).
For the 1- and 3-year periods ended December 31, 2021, WEX's Total Shareholder Return (TSR or change in stock price plus dividends) was -31.0% and +0.1%, respectively. As shown below, during the three-year period ended December 31, 2021, realizable pay for our CEO was 40% below target, and realizable LTI pay for our CEO was 53% below target. Accordingly,we believe that the comparison shown below demonstrates meaningful alignment of realizable CEO pay with TSR (i.e., with stockholder interests and outcomes). The below graph shows the estimated value realizable as of a specific date in time - December 31, 2021. Future performance will impact the value ultimately realized from this compensation by the CEO. For example, our stock price closed at $178.45 per share on March 31, 2022, which compares to a price of $140.39 per share at closing on December 31, 2021. If March 31, 2022 were the date upon which the performance measurement period ended, it would affect the graphs below but would still show meaningful alignment.
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| CEO - Average Target Pay vs. Average Realizable Pay (2019 - 2021) | CEO - Average Target LTI vs. Average Realizable LTI (2019 - 2021) |
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•“Target Pay” reflects the average of salary actually paid, target short-term incentive, and grant date fair value of LTI, as reported in the Grants of Plan-Based Awards table in the proxy statements filed in 2022, 2021, and 2020.
•“Target LTI” reflects the average grant date fair values of LTI, as reported in the Grants of Plan-Based Awards table in the proxy statements filed in 2022, 2021, and 2020.
•“Realizable Pay” captures the impact of actual results on STIP payouts and PRSU payouts, as well as the impact of changes in the Company’s share price on long-term incentive awards granted during the three-year period, by valuing equity awards based on the most recent fiscal year-end stock price. Realizable Pay reflects the average of salary actually paid, actual cash bonus, and Realizable LTI (defined below), which assumes target performance results versus financial metrics for PRSU awards. Stock options, RSUs, and PRSUs are valued at $140.39 per share, the closing price of WEX’s common stock on December 31, 2021.
•“Realizable LTI” captures the value of LTI awards that were granted during the 3-year period, at the end of the 3-year period shown, valued based on the stock price on December 31, 2021. This includes the intrinsic value of stock options, the market value of RSUs, and the market value of PRSUs awarded in the three-year period ending December 31, 2021. For PRSUs granted in 2019, the actual earned number of PRSUs (106.8% of target) was used. For PRSUs granted in 2020 and 2021, the number of PRSUs used in the chart above was adjusted using the relative TSR performance scale for each award based on the using stub-period relative TSR performance, for WEX and comparator companies, for each award from grant date through December 31, 2021 (or 20% of target stock units for the 2020 annual award, 50% of target stock units for the 2020 business continuity award, and 85% of target stock units for the 2021 annual award, in each case the assumed point in time adjustment for relative TSR).
•For more information on total compensation as calculated under SEC rules for the years 2019, 2020, and 2021, see the notes accompanying the Summary Compensation Table on page 68. The amount reported here as realizable compensation differs substantially from the amounts reported as total compensation in the Summary Compensation Table and is not a substitute for those numbers. Key Compensation Practices
Our executive compensation program is alignedtargeted to align with our business strategy and features many leading practices, which we believe promote alignment with the interests of our stockholders.
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| What We Do | | What We Don’t Do |
•Directly link pay to performance outcomes, operational resultsgoals and stockholder returns •Link incentive plan performance measures to short- and mid-term operating objectives and delivery of long-term value to stockholders •Target total direct compensation (base/cash bonus/long-term incentives) within a competitive range of the market median •Maintain a cap on CEO and other NEO incentive compensation payouts for short-term incentive plan (STIP) and PSUPRSU awards (200%(customarily 200% of target) •Have stock ownership guidelines for NEOs, including a retention requirement until stock ownership guidelines are achieved •Provide double-trigger change-in-control severance benefits •Review share utilization at least annually •Devote time to management succession and leadership development efforts •Use an independent compensation consultant • Anti-hedgingMaintain an anti-hedging policy • Anti-pledgingMaintain an anti-pledging policy • ClawbackMaintain a clawback policy •Majority of compensation is variable •Multi-year vesting period for long-term awards | | •No payment of dividends or dividend equivalents on unearned RSUs or PSUsPRSUs •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 |
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20202022 Proxy Statement 3751
Summary of WEX’s 20192021 Executive Compensation Program
A summary of our executive compensation program during 20192021 is provided below.below:
•Generally, we target total direct compensation (salary/cash bonus/long-term incentives) within a competitive range of the market median.
•Pay will vary above or below target based primarily on corporate and business unit and quantitative performance outcomes, and to a lesser degree, individual quantitative performance outcomes.
outcomes, which are often quantitative. |
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| Compensation Element | 2019 Element |
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| 2021 Outcome |
Base Salary- Fixed rate of pay | Increase reflects market-based adjustment |
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| Increases for three of five NEOs |
Short-Term Incentive Plan (“STIP”) Payout can range from 0-200% of target based on financial goals: 1. Compensation Adjusted Operating Income (60%) and 2. Compensation Adjusted Revenue (40%) For NEOs leading a business unit, corporate goals are weighted 40% and business unit goals are weighted 60%. 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,pre- defined, often quantitative individual goals.goals as reviewed by the CEO (other than in the case of the CEO's compensation) and recommended to the Committee. The Committee has further discretion to eliminate any funded bonus payout at its discretion, should circumstancecircumstances warrant. | STIP funding was 85.6%182.1% of target, on an overall corporate basis, based on objective performance against predefined enterprise-wide quantitative goals. Individual modifiers (±) wereAn individual modifier of +9.9% was applied to one NEO STIP paymentspayment for 2019, ranging from 95% to 114%, or -5% to +14%,2021 based on success versus pre-defined individual goals. For the NEO group, this increased net STIP funding to 98.8% of target.
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Long-Term Incentive Plan (“LTIP”) Our target long-term incentive mix during 20192021 for our CEO was 60% PSUs,PRSUs, 25% Stock Options,stock options, and 15% RSUs; target long-term incentive mix for our other NEOs was 60% PSUs,PRSUs, 20% stock options, and 20% RSUs. PSUs:PRSUs:
•Payout can range from 0-200% of target with cliff vesting on third anniversary of grant • 3-year2-year performance period based on cumulative corporate financial goals Compensationgoals: Adjusted Net Income EarningsIncome-Earnings Per Share (60%), and CompensationAdjusted Revenue (40%) Stock Options:
•a. 3-year ratable vesting requirement
• Reward long-term stockholder value creation
RSUs:
• 3-year ratable vesting requirement
•Reward long-term stockholder value creation and encourage retention
| PSUs granted in 2017 with a performance period of 2017-2019 paid out at 200% of target, based on objective performance against predefined enterprise-wide quantitative goals.
b.The CompensationAdjusted Revenue metric recognizes the importance of revenue diversification for our business, given the impact that volatile fuel prices may have on our business results.results •3-year (+/- 15%) relative TSR modifier Stock Options: •3-year ratable vesting requirement •Reward long-term stockholder value creation RSUs: •3-year ratable vesting requirement •Reward long-term stockholder value creation and encourage retention |
| PRSUs granted in 2019 (and modified in 2020) with a performance period of 2019 to 2021 paid out at 106.8% of target, based on a corporate financial performance result of 125.7% and a -15% relative TSR modifier. |
Pay Mix
The majority of CEO compensation is variable (“at risk”). For 2019, 88%2021, 90% 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.
performance which directly aligns with the interests of our stockholders. |
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20192021 CEO Target Total Compensation Mix | | 20192021 CEO Long-term Incentive Mix |
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The majority of the compensation for the remaining NEOs is also variable and tied directly to Company performance outcomes, as described above.
Please note that the decisions and resulting payments described in this CD&A were made in the normal course in early 2020, prior to the full extent of the COVID-19 pandemic becoming known. The Committee will consider the business and financial impact of the COVID-19 outbreak on the Company, our stockholders and our employees in evaluating 2020 performance. In addition, The Compensation Committee established 2020 and 2020 to 2022 performance targets prior to the full extent of the COVID-19 pandemic being known. The Board has the authority to make adjustments to performance awards, including equitable adjustments to performance targets in recognition of unusual or non-recurring events affecting the Company or the financial statements of the Company, in response to changes in applicable laws or regulations or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles.
Process for Determining Executive Compensation
Leadership Development and Compensation Committee
The Committee, composed solely of independent directors, is responsible for our executive officer compensation, decisions, which includes the compensation of 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 58 meetings over the course of 2019,2021, all of which included an executive session without management present. During 2021 the charter and name of this committee was modified from Compensation Committee to Leadership Development and Compensation Committee to reflect the broader human capital focus of the Committee, as well as to emphasize the degree of importance the Board places on such broader human capital matters as they relate to organizational success. The CommitteeCommittee's charter may be accessed under "Governance Documents" through the “Governance” linksection found on our website at: http:https://ir.wexinc.com/phoenix. zhtml?c=186699&p=irol-govhighlights.
governance/governance-documents/default.aspx
In the first quarter of each fiscal year, either of the Chair of the Committee, or, the Vice Chairman and Lead Director, reviews the Board’s assessment of the CEO’s performance with the CEO. In addition, the Committee approves the following, as explained below:
•changes to executive officer base salaries and incentive targets, if any, for the current year;
•STIP payout, if any, for the previous fiscal year;
•STIP design and targets for the current fiscal year;
•determination of performance-scoring payout of PSUsPRSUs granted under the LTIP, if any, for previous years; and
•LTIP metrics, targets and grants for the current fiscal year.
Agenda items for the second quarter vary each year but always include a review of Companythe Company's 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 Companythe Company's performance and progress toward the achievement of incentive plan targets. The Committee also conducts its annual review of executive compensation, considering a report from its independent compensation consultant comparing the compensation of Company executive officers to a peer group of companies and survey data. Management also discusses with the Committee recommended executive compensation changes for each element of 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’s charter, director compensation, compliance with stock ownership guidelines and, an update on market trends related to executive compensation. Director compensation is addressed on a biennial basis.
The Leadership Development and Compensation Committee has delegated to a subcommittee its responsibility under the Company's Amended and Restated 2019 Equity and Incentive Plan with respect to the approval of acquisitions and dispositions of Company securities by officers and directors of the Company for purposes of Section 16(b) of the Exchange Act. The members of the subcommittee are Mr. Callahan, Mr. VanWoerkom, Ms. Altobello and Mr. Smith, each of whom satisfies the requirements of a “non-employee director” for purposes of Section 16 of the Exchange Act.
Executive Management
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 executive management were generally invited to and attended Committee meetings: the CEO; CFO; Chief Human Resources Officer; and Chief Legal Officer; and, the VP, Corporate Securities Counsel.Officer.
The Committee has authority to approve the compensation of the CEO and the other NEOs. The CEO meets with the Committee and the independent compensation consultant to discuss companyCompany 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 compensation plan performance targets for our executive officers and management provides input and recommendations with respect to such targets, as well as information and analyses, as requested by the Committee.
Independent Compensation Consultant
The Committee has the authority to retain and terminate aan independent compensation consultant, and to approve the consultant’s fees and all other terms of such engagement. During 2019,In determining 2021 compensation, the Committee continued to directly retain Compensation Advisory Partners LLC (“CAP”) as its independent compensation consultant. The scope of the work done by CAP for the Committee included:
•Preparing analyses, recommendations, and other 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;
•Reviewing the Committee charter and providing recommendations and other support to inform the Committee’s related discussions and decisions; and
•Working with the Committee to validate the pay-for-performance relationship, in 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 participated in all of the Committee’s meetings during 2019determining 2021 compensation and, when requested by the Committee Chair, participates in preparatory meetings and executive sessions.
Total Compensation — Objectives and Compensation Philosophy
Objectives
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.value and retaining talent viewed as critical to our ongoing growth and success. The principal elements of an executive’s total compensation consist of: base salary, annual cash bonusthe STIP payment, and long-term incentives.
Compensation Philosophy
Generally, we target total direct compensation (salary, annual bonusincentive and long-term incentives) within a competitive range of the market median. 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.
20192021 Total Direct Compensation
We structure NEO target total direct compensation so that the majority of such compensation is delivered in the form of equity awards. Equity awards in order to provide incentives for NEOs to work towards long-term top and bottom-line growth that will enhance stockholder returns and to align our NEOs’ compensation directly with our stockholders’ interests. We also structure our NEOs’ cash compensation so that a significant portion is at risk under the Company’s short-term incentive plan, payable primarily based on enterprise and business unit results, and to a lesser degree payable 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,NEOs, the Committee considers the following qualitative and quantitative factors: job level and responsibilities, including any increase in responsibilities, relevant experience, individual performance, recent corporate and business unit performance, internal equity, and our objective of paying competitive total direct compensation if performance expectations 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-endAnnual NEO salaries were as follows:
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| NEOs Base Salary | |
| Name | 2020 | 2021 | % Increase (2020-2021) | Rationale for Increase |
Melissa Smith Chair, CEO and President | $ | 770,000 | | $ | 800,000 | | 4 | % | Market-based adjustment |
Roberto Simon (1) CFO | $ | 550,000 | | $ | 550,000 | | — | % | n/a |
Scott Phillips (2) President, Global Fleet | $ | 475,000 | | $ | 500,000 | | 5 | % | Market-based adjustment |
Robert Deshaies (3) President, Health | $ | 425,000 | | $ | 550,000 | | 29 | % | Market-based adjustment, internal pay equity, and increased responsibilities |
David Cooper Chief Technology Officer | $ | 400,000 | | $ | 400,000 | | — | % | n/a |
(1)Mr. Simon served as the Company's CFO during the entirety of 2021. He resigned as the Company’s CFO effective at the end of the day on December 31, 2021. Following his resignation, he remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022.
(2)Mr. Phillips served as the Company's President, Global Fleet, during the entirety of 2021 until January 1, 2022, at which point he resigned such position. He then remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1,.2022.
(3)Mr. Deshaies served as the Company's President, Health during the entirety of 2021. However, he was promoted to the Company's Chief Operating Officer, Americas as of January 1, 2022.
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| | 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 |
EXECUTIVE COMPENSATION
Short-Term Incentive Plan
Our AnnualShort-Term Incentive Plan structured under our Performance Incentive Plan,(STIP) is designed to motivate our NEOs to drive profitable Company growth, while diversifying Company revenues, by measuring NEO performance against our plans at the corporate and business unit level, with the potential for individual adjustment as described below. For NEOs leading a business unit, corporate goals are typically weighted 40% and business unit goals are typically weighted 60%. This framework holds the NEO group accountable for the same corporate metrics and goals, while also emphasizing and holding business unit leaders accountable for the results they can most influence.
We establish a cash bonusincentive payment target for each NEO based upon their position within the Company, responsibility and competitive cash bonusincentive payment opportunities for similar positions at other companies. Final STIP payouts may range from 0% to 200% of the target bonus opportunity based on actual performance outcomes.
The following tables describe 20192021 NEO performance goals, results for each component of the 2021 STIP, and the actual cash bonus awardSTIP payout for each NEO.
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| Weighting Used in Determination of 2021 STIP Payout(1) |
| Corporate Goals | M. Smith | R. Simon | S. Phillips | R. Deshaies | D. Cooper |
| Adjusted Revenue | 40 | % | 40 | % | 16 | % | 16 | % | 16 | % |
| Adjusted Operating Income | 60 | % | 60 | % | 24 | % | 24 | % | 24 | % |
| Business Unit Financial Goals | | | | | |
| Fleet Adjusted Revenue | — | % | — | % | 24 | % | — | % | 8 | % |
| Fleet Adjusted Operating Income | — | % | — | % | 36 | % | — | % | 12 | % |
| Health Adjusted Revenue | — | % | — | % | — | % | 24 | % | 8 | % |
| Health Adjusted Operating Income | — | % | — | % | — | % | 36 | % | 12 | % |
| Global Travel Adjusted Revenue | — | % | — | % | — | % | — | % | 4 | % |
| Global Travel Adjusted Operating Income | — | % | — | % | — | % | — | % | 6 | % |
| Corporate Payments Adjusted Revenue | — | % | — | % | — | % | — | % | 4 | % |
| Corporate Payments Adjusted Operating Income | — | % | — | % | — | % | — | % | 6 | % |
| STIP payout as a percentage of target based on 2021 corporate performance | 182.1% | 182.1% | 174.3% | 128.8% | 152.2% |
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| | 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 | % | — |
| — |
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| Corporate Payments Adjusted Revenue | — |
| — |
| — |
| 24 | % | — |
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| Corporate Payments Operating Income | — |
| — |
| — |
| 36 | % | — |
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| 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 | % |
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(1)(1)The percentages for each NEO (other than the percentages in the final row) represent the weight that the corporate goals are provided in determining the actual 2021 STIP payout.
| The percentages for each NEO represent the weight that the corporate goals are provided in determining 2019 actual STIP payout. |
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| | | 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 | % |
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(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. |
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(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. |
2020 Proxy Statement 5643 WEX Inc.
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| | Performance Goals ($000s) | | 2021 Actual |
| Corporate Goals | Weight (%) | Threshold (50% payout) | Target Performance Goal(1) (100% payout) | Maximum (200% payout) | | Actual Performance | Actual % Performance | Payout based on Actual 2021 Performance |
Adjusted Revenue(2) | 40 | % | $ | 1,604.7 | | $ | 1,671.5 | | $ | 1,771.8 | | | $ | 1,742.0 | | 155.4 | % | 62.1 | % |
Adjusted Operating Income(3) | 60 | % | $ | 520.3 | | $ | 544.8 | | $ | 580.2 | | | $ | 590.2 | | 200.0 | % | 120.0 | % |
| Weighted Average Payout | | | | | | | | 182.1 | % |
(1)Due to the continued COVID-related uncertainty related to goal setting, bands were established around the target performance goal where payment for performance within that range would reflect 100% of target payout; adjusted revenue band was +/-2% (i.e., $1,638.1 to $1,705.0) and adjusted operating income band was +/-3% ($528.4 to $561.1) around target.
(2)Adjusted Revenue means 2021 revenue as reported in the Form 10-K filing reporting the Company’s results for the performance period adjusted for the difference between 2021 reported fuel prices and foreign exchange rates and Board-approved, budgeted 2021 fuel price and foreign exchange rate assumptions. The results were further adjusted for other items as shown in Appendix A.
(3)Adjusted Operating Income means 2021 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 2021 Budget, fuel price differences compared to the Board approved 2021 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.
As noted previously, the Company’s 2021 revenue increased 19% from 2020 and other financial results increased substantially year over year as well. As shown above, actual 2021 STIP pay outcomes for our NEOs were aligned with these financial results. We have a history of setting appropriately rigorous STIP performance goals, and with our STIP payouts varying from year-to-year based on results. For example, during the past 5 years the corporate goals payout factor for our STIP payouts has ranged from 86% of target to 182% of target, as shown in the table below:
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| Year | 2021 | 2020 | 2019 | 2018 | 2017 |
| Corporate Payout Factor | 182 | % | 108 | % | 86 | % | 119 | % | 139 | % |
The initial 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% (ofof the initial funding of the STIP amount),amount, with no payout greater than 200% of target under the STIP.STIP for 2021. The adjustment is made based on anthe Committee's assessment of performance versus pre-defined, often quantitative, individual goals. Our CEO may make individual modifier recommendations to the Committee for the other NEOs, for consideration and approval by the Committee, and the Committee independently considers and approves the CEO individual modifier factor, if any.
The Committee believes that our named executive officers’NEO's 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 proposedprepared by the CEO and reviewed and approved bywith the Committee. Across our NEO group, in addition to an evaluation of general leadership competencies, the results that were measured against pre-defined goals (generally(often quantitative) to determine individual modifiers, are discussed below:
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| M. Smith | Goal Results |
FY2019FY2021 Performance Results | •RevenueContinued progress made against key technology transformation initiatives, with emphasis on cloud migration, platform consolidation and operating income results demonstrate strong execution across segments given outperformance relative to a number of peer companiesenhanced platform capabilities •OrganicStrong execution of M&A strategy including the continued integration of five acquisitions •Successful execution of Executive Leadership Team reorganization, including the creation of the Chief Digital Officer role and the Chief Operating Officer roles •Delivery of organic revenue growth driven bythrough new contractcustomer signings including the addition of the Shell and Chevron portfoliosstrong retention across all segments •Achievement of performance goalsDemonstrated progress against M&A acquisition deal models during 2019 that meet or exceed targets in aggregatediversity and inclusion aspirations, including a focus on identifying diverse slates for external hiring •Effective progressSuccess expanding strategic partnerships, including a new agreement with Mastercard and resultsacceleration of Electric Vehicle strategy with succession planning for senior management teamChargePoint •Creation affinity groups across the organization to promote diversityEffective communication and inclusionpartnership between Leadership Team and Board • Progress in corporate goals related to long-term risk management
• Progress in positioning the Company as a leader in financial technology within core verticals
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| R. Simon | Goal Results |
FY2019FY2021 Performance Results | •Cash flow and leverage managementSuccess amending Company credit agreements •Reduction of financingSuccessful balance sheet management, including demonstrated focus and operating interest exposure; enhanced credit agreement terms Scaling systems and workforce planningleadership on capital expenditures
•Risk managementStrong execution of M&A strategy including the continued integration of five acquisitions •AchievementSupported execution of performance goals against M&A acquisition deal models during 2019 that meet or exceed targets in aggregatetechnology and data roadmap with a focus on system automation to increase operational effectiveness •Positive employee developmentIdentified critical roles and engagement resultsestablished succession plans that included diverse candidates •Successfully identified and took action to mitigate potential business risks |
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| S. Phillips | Goal Results |
FY2019FY2021 Performance Results | •Success versus growthwinning, expanding and innovation goalsmaintaining key customer relationships • M&A integration results and success versus deal modelAdvanced Electric Vehicle strategy, including new partnership with ChargePoint • Positive employee developmentSuccessful integration of WEX European Services into consolidated European Fleet business •Supported execution of technology and engagement resultsdata roadmap with a focus on consolidating and integrating platforms •Identified critical roles and established succession plans that included diverse candidates •Successfully identified and took action to mitigate potential business risks |
| |
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 |
FY2019FY2021 Performance Results | •Success versus growthwinning, expanding and innovation goalsmaintaining key customer relationships • M&A integration results and success versus deal modelEffectively prepared for newly created role of Chief Operating Officer, Americas • Positive employee developmentSuccessful integration of benefitexpress acquisition and engagement resultsthe Healthcare Bank acquisition
•Supported execution of technology and data roadmap with a focus on consolidating and integrating platforms
•Identified critical roles and established succession plans that included diverse candidates •Successfully identified and took action to mitigate potential business risks |
| |
| D. Cooper | Goal Results |
| FY2021 Performance Results | •Created and maintained stable systems ensuring customer relationships could be maintained and expanded •Identified and rolled out new technologies and executed data roadmap to enhance customer and partner experiences, including new AI capabilities •Successfully identified and took action to mitigate potential business risks, including an increased focus on information security •Identified critical roles and established succession plans that included diverse candidates |
Given the Company's strong performance in 2019, which included outperformance on growth, margin, and TSR against compensation benchmarking peers, and based on each NEOsNEO's results measured against their individual goals, as discussed above, the Committee, in its discretion, determined the individual performance factor for each NEOsNEO's 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 (other than for Ms. Smith) 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 NEOsNEO's 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 20192021 STIP payments are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for Fiscal Year 2019,2021, and are set forth in the following table. The table also provides a supplemental breakdown of the components that make up the NEOsNEOs' actual fiscal year 20192021 STIP awards. The awards as a percentage of the target are displayed for each component.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annual Base
Salary | x | Target
Annual
Incentive % | x | | Corporate
Performance Factor %
(0%-200%) | x | Individual
Performance
Factor %
(75%-125%) | | = | Final STIP Award
(0%-200%) |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Target | | Actual |
| Executive | Annual Salary (a)(1) | Annual
Incentive %
(b) | Annual Cash
Incentive $
(a) x (b) = (c) | | Corporate Performance Factor %
(d) | Individual
Performance Factor %
(e) | Final
Award $
(c) x (d) x (e) | Final Award as a %
of Target
(d) x (e) |
| Melissa Smith | $ | 791,923 | | 150 | % | $ | 1,187,885 | | | 182.1 | % | 100.0 | % | $ | 2,163,138 | | 182.1 | % |
| Roberto Simon | $ | 550,000 | | 100 | % | $ | 550,000 | | | 182.1 | % | 109.9 | % | $ | 1,100,000 | | 200.0 | % |
| Scott Phillips | $ | 493,269 | | 100 | % | $ | 493,269 | | | 174.3 | % | 100.0 | % | $ | 859,768 | | 174.3 | % |
| Robert Deshaies | $ | 456,731 | | 100 | % | $ | 456,731 | | | 128.8 | % | 100.0 | % | $ | 588,269 | | 128.8 | % |
| David Cooper | $ | 400,000 | | 75 | % | $ | 300,000 | | | 152.2 | % | 100.0 | % | $ | 456,600 | | 152.2 | % |
|
| | | | | | | | | | | | | | | | | | |
| | | 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)(1)Reflects eligible earnings for STIP purposes; i.e., salary actually paid during 2021.
| Reflects base salary as paid during full year 2019. |
| |
(2)
| IPF rounded to nearest tenth. |
Long-Term Incentive Compensation
The Company provides annual long-term equity-based incentives through the LTIP. Annual grants under the LTIP were provided through a mix of PSUs,(i) PRSUs, which vest from 0% to 200% based on the achievement of multi-year performance goals and subject to further service-based vesting, described below, (ii) stock options, which have no value absent stock price appreciation and encourage stockholder value creation over a long-term (10 year) time horizon, and (iii) RSUs, which vest based on the passage of time and fluctuate in value based on changes in our stock price. PSUs,PRSUs, stock options, and RSUs generally vest over a three-year period of employment.
We aim to provide long-term awards such that together with cash compensation, target total direct compensation (salary plus target bonus andSTIP payments, plus 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 Company 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 annual equity awards to any individual, the Committee does not alter its compensation philosophy based on the individual’s value realized, or failure to achieve gains, on prior RSU, stock option or PSUPRSU awards.
Annual equity grants were 60% PSUs,PRSUs, 20% stock options and 20% RSUs for our non-CEO NEOs. The mix for our CEO was: 60% PSUs,PRSUs, 25% stock options and 15% RSUs. Our program balances mid-term (PSU)(PRSU) goals and results and long-term (stock options)options and RSUs) stockholder valuation creation, with key employee motivation and retention.
2021 LTIP
The 20192021 LTIP was designed to support our multi-year strategic plan and reward each of the NEOs for their contribution to the achievement of plan goals during the three-yeartwo-year performance period from January 1, 20192021 to December 31, 2021.2022. There arewere two primary performance metrics Compensationfor the PRSU awards: Adjusted Net Income Earnings Per Share, weighted 60%, and CompensationAdjusted Net Revenue, weighted 40%. In furtherance ofThe final payout may also be further modified by a relative TSR modifier measured over a 3-year period through December 31, 2023. If relative TSR performance is in the alignment oftop or bottom quartile (75th-100th percentile or 0th-25th percentile, respectively), the LTIP program withpayout will be adjusted by ±15% (uncapped) and if relative TSR performance is in the Company’s strategic plan of diversification ofsecond or third quartiles (greater than 25th percentile - less than 75th percentile), no adjustment is made. Relative TSR will be measured against the Company’s revenue base away from fuel price sensitivity, the Compensation Revenue metric focuses on the importance of revenue thatS&P 400, which WEX is not impacted by volatility in fuel prices.a constituent of. As the performance period is incomplete, payout is not yet known. Payout and targets for the PSUsPRSUs will be disclosed in the 20222024 proxy statement, retrospectively, once the performance period is complete. If earned, PSUsPRSUs 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.
20172019 LTIP Grant Payout
PSUsPRSUs granted on March 20, 2019 with a three-year performance period ended December 31, 2019 were previously reported in our proxy statement for the 20182020 annual meeting at fair value at the time of grant. These PSU grants were subjectThe 2019 PRSU award was designed to support our multi-year strategic plan and reward each of the officers for their contribution to the achievement of plan goals during the performance period. There are two performance metrics: Adjusted Net Income Earnings Per Share, weighted 60%, and Adjusted Revenue, weighted 40%. Three-year performance goals for these metrics were established and approved by the Committee on March 1, 2019.
Effective June 23, 2020, considering a number of factors, including the impact of the COVID-19 pandemic on the global economy and our business planning, and our newly updated corporate strategy, the Committee determined to shorten the performance period for the Adjusted Net Income Earnings Per Share and Adjusted Revenue metrics from the three years ending December 31, 2021 to the two years ending December 31, 2020. Despite the fact that the performance period for the financial performance metrics was reduced from three years to two years, the cliff vesting for such potential PRSU award payout remained three years from the grant date (i.e., in March 2022), and the final payout was determined with reference to the TSR modifier discussed below, which was measured through the end of the original three-year non-fuel price sensitive revenueperformance period of December 31, 2021. The performance and adjusted net income earnings per share goals. payout scale for the relative TSR modifier is shown below, which reduced the final payout factor by 15%:
| | | | | | | | |
Relative TSR Performance | Payout | WEX Final Performance |
75th-100th Percentile | +15% | |
| Straight Line Interpolation | |
50th Percentile | No adjustment | |
| Straight Line Interpolation | |
0th-25th Percentile | -15% | ü |
The modifications to the awards implemented in 2020 impacted the approximately 235 WEX employees that received the March 2019 PRSU grant.
| | |
|
| The annual growth rates embedded in the original 2019 PRSU award three-year goals were maintained, as shown in the table below. |
|
Based on the performance results that reflect outperformance versus financial goals, 200%an initial payout factor of 125.7% of the target stock units granted in 20172019 resulted from our performance versus the pre-established multi-year goals.
| | | | | | | | | | | | | | | | | | | | | | | |
| Company Goals | CAGR to Achieve Threshold (50% Payout)(3) | CAGR to Achieve Target (100% Payout)(4) | CAGR to Achieve Maximum (200% Payout)(5) | Weighted | 2020
Metric Final Results ($) | Final CAGR between 12/31/18 and 12/31/20 | Payout based
on Final
Growth
Performance
from 2018
through 2020 |
Adjusted Revenue ($millions)(1) | 8.5% | 12.0% | 16.0% | 40% | $1,950.7 | 14.3% | 63.2% |
Adjusted Net Income — Earnings Per Share(2) | 8.0% | 15.0% | 20.0% | 60% | $10.99 | 15.2% | 62.5% |
| Initial Weighted Average Payout Factor | | | | | | | 125.7% |
| Final Weighted Average Payout Factor After Relative TSR Modifier (-15%) | | | | | | | 106.8% |
(1)Adjusted Revenue is defined as revenue as reported in the Form 10-K filing for the performance period for our Travel and Corporate Solutions and Health segments and all revenue lines in Fleet with the exception of payment processing revenue. The results were further adjusted for other items 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 the price per gallon of fuel and other items as shown in Appendix A.
(3)The threshold growth rates included in the table above correspond to 2020 Compensation Revenue of $1,757.2 million and 2020 Adjusted Net Income – Earnings Per Share of $9.66, which represent the amounts needed to achieve a 50% payout.
(4)The target growth rates included in the table above correspond to 2020 Compensation Revenue of $1,872.4 million and 2020 Adjusted Net Income – Earnings Per Share of $10.95, which represent the amounts needed to achieve a 100% payout.
(5)The maximum growth rates included in the table above correspond to 2020 Compensation Revenue of $2,008.5 million and 2020 Adjusted Net Income – Earnings Per Share of $11.92, which represent the amounts needed to achieve a 200% payout.
2018 WEX Health Growth Grant Payout. A performance-based RSU award was granted to Robert Deshaies, on December 17, 2018, prior his to becoming a NEO, that converted from PRSUs to RSUs based on the achievement of pre-determined, multi-year healthcare segment-specific Net Revenue (50%) and Adjusted Operating Income (50%) performance goals for cumulative 2019 to 2021 results. The award also had a service-based vesting requirement. Upon conversion to RSUs, the award vested on March 15, 2022. The award had a target value of $300,000, and payout could have ranged from 0% to 200% of the target units based on the achievement of the multi-year performance period goals. The three year performance goals and actual results are shown below. Based on actual performance results and the pre-defined goals, 72.7% of the target PRSUs were earned.
| | | | | | | | | | | | | | | | | | | | | |
| Healthcare Segment Goals | Threshold (50% Payout) | Target Performance Goal (100% Payout) | Maximum (200% Payout) | Weighted | Actual Performance | Payout based on Actual Performance | |
Net Revenue(1) | $ | 756.6 | | $ | 779.7 | | $ | 822.2 | | 50 | % | $ | 753.4 | | — | % | |
Adjusted Operating Income(1) | $ | 193.0 | | $ | 201.0 | | $ | 210.9 | | 50 | % | $ | 205.5 | | 145 | % | |
| Weighted Average Payout | 72.7% | |
(1)Net Revenue and Adjusted Operating Income for the segment is as reported in the Company’s Form 10-K filing reporting the Corporation’s consolidated results. Net Revenue is adjusted for M&A-related variance and exchange rate variance versus plan. Adjusted Operating Income is as reported in the Company’s Form 10-K filing reporting the Corporation’s consolidated results, which means adjusted for acquisition-related intangible amortization and other M&A-related variance versus plan, for exchange rate variance versus plan, stock-based compensation and other one-time non-recurring expense items.
|
| | | | | | | | | | | | | | | | |
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)2022 Proxy Statement 61
| 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. |
Peer Group
We have created a target compensation structure that focuses on the median of our selected compensation benchmarking peer companies, but also allows total target compensation to vary to reflect other considerations, such as Company 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 NEO pay elements. The Committee determines the composition of our compensation benchmarking peer group, considering input from its independent compensation consultant and management, among other factors, such as size, business, operating characteristics and competition for executive talent. For 2019,2021, our compensation benchmarking peer group consisted of the 1012 companies shown below, whose aggregate profile was comparable to WEX.
|
| | | | |
20192021 Compensation Benchmarking Peer Group |
| Black Knight, Inc. | EVERTEC, Inc. |
| Block, Inc. | FLEETCOR Technologies, Inc. |
| Broadridge Financial Solutions, Inc. | Global PaymentsJack Henry & Associates, Inc. |
Cardtronics, plcInc.(1) | Green Dot CorporationPaychex, Inc. |
| CSG Systems International, Inc. | Total System Services,Paycom Software, Inc.(1)
|
EVERTEC,Euronet Worldwide, Inc. | Worldpay, Inc.Virtusa Corporation(2)
|
FleetCor Technologies, Inc. | Virtusa Corporation |
| |
(1)
| Global Payments Inc. merged with Total System Services in September(1)Cardtronics, Inc. was acquired and taken private in the first quarter of 2021. Once the transaction was completed, Cardtronics, Inc. was no longer part of 2019. As such, Total System Services, Inc. was excluded from Peer Median calculations, shown below (with the exception of market capitalization, which reflects last available data) and in the Executive Summary above, which take into account full year fiscal 2019 results. |
| |
(2)
| Worldpay Inc. was acquired by Fidelity National Information Services in July of 2019. As such, Worldpay. Inc. was excluded from Peer Median calculations, shown below (with the exception of market capitalization, which reflects last available data) and above in the Executive Summary, which take into account full year fiscal 2019 results. |
|
| | | | | | |
| 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 |
|
| $1,299 |
|
| 3-Year Revenue Growth | 70 | % | 38 | % |
For certain NEOs, data relating to the peer groupgroup. As such, Cardtronics, Inc. is supplemented, for reference, with functional dataexcluded from executive compensation surveys conducted by two pay-related data providers: Equilar Top 25 SurveyPeer Median calculations shown below.
(2)Virtusa Corporation was acquired and Radford Global Technology Survey — U.S. With respect to these surveys,taken private in the identityfirst quarter of 2021. Once the transaction was complete, Virtusa Corporation was no longer part of the individual companies comprising the survey datapeer group. As such, Virtusa Corporation is not considered by the Committee in its evaluation process. excluded from Peer Median calculations shown below.
| | | | | | | | |
| Metrics | WEX ($millions) | Peer Median ($millions) |
| Market Capitalization (at 12/31/2021) | $6,292 | $15,473 |
| 2021 Revenue | $1,851 | $2,296 |
| 3-Year Revenue Growth | 24 | % | 20 | % |
Source – S&P Capital IQ financial database
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 theall NEOs, including our CEO, CFO and CFO; for the other NEOs the Committee supplemented peer group data with the survey data described above.who each lead a business unit.
During 2019,2021, 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.
For 2022, we updated the composition of our compensation benchmarking peer group, which resulted in WEX revenue approximating (being positioned just above) peer median. The go-forward compensation benchmarking peer group includes:
| | | | | |
| 2022 Compensation Benchmarking Peer Group |
| Black Knight, Inc. | FLEETCOR Technologies, Inc. |
| Block, Inc. | HealthEquity, Inc. |
| Broadridge Financial Solutions, Inc. | Jack Henry & Associates, Inc. |
| Ceridian HCM Holding Inc. | Paychex, Inc. |
| CSG Systems International, Inc. | Paycom Software, Inc. |
| Euronet Worldwide, Inc. | TransUnion |
| EVERTEC, Inc. | |
*Bolded companies reflect additions
The Committee also regularly reviews the Company's TSR relative to compensation benchmarking peers. In addition to – and separate from – our compensation benchmarking peer group, we have also created a performance benchmarking peer group to provide our Committee and management team with additional reference information relating to compensation program practices and financial performance. The Committee determined the composition of our performance benchmarking peer group considering input from its independent compensation consultant and management, as well as from the Company's investors, among other factors, such as business, growth rate and operating characteristics. For 2021, our performance benchmarking peer group consisted of the 12 companies shown below.
| | | | | |
| 2021 Performance Benchmarking Peer Group |
| Equifax Inc. | HealthEquity, Inc. |
| EVO Payments, Inc. | Intuit Inc. |
| Fidelity National Information Services, Inc. | Jack Henry & Associates, Inc. |
| Fiserv, Inc. | Mastercard Incorporated |
| FLEETCOR Technologies, Inc. | TransUnion |
| Global Payments Inc. | Visa Inc. |
20202022 Proxy Statement 4763
Other Compensation Program and Governance Features
Compensation Risk Assessment
The Committee considers the potential risk to the Company from its compensation programs and policies. The Committee also periodically reviews a risk assessmentassessments of our compensation policies, practices and programs covering employee groups, which was most recently conducted by representatives from Human Resources working with the Committee’s independent compensation consultant. The analysis evaluatedevaluates 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 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 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 income;
•Budget and goal settinggoal-setting processes that involve multiple levels of review;
•Independent oversight of incentive program design and payouts;
•Different performance-measurement and time-based vesting requirements between our short-term and long-term incentive programs;
•Stock ownership guidelines, clawback, anti-hedging and anti-pledging policies; and
•Committee approval for all Section 16 Executive Officer compensation.
Tax Deductibility of Compensation
While the Committee generally considers the tax implications to us of its executive compensation decisions, such consequences were not a material consideration in the compensation awarded to our Named Executive Officers in 2021. Internal Revenue Code Section 162(m) generally limitsdisallows a tax deduction to public companies for compensation in excess of $1 million paid in any one year to each of certain of the tax deductibility of compensation paid to certain executive officers (and, beginning for 2018, certainCompany’s current and former executive officers) to $1 million in any taxable year. officers.
Historically, an exception was available for compensation that qualified as “performance-based” within the meaning ofunder Section 162(m), but as performance-based compensation was exempt from the exception has now been repealed, effective for taxable years beginning after December 31, 2017,deduction limitation. However, subject to certain transition rules. It has been our historical policy (prior to 2018) to structure certainrules, tax legislation signed into law in December 2017 eliminated the performance-based compensation arrangements with our executive officers in a manner intended to qualify as performance-based so as to potentially maximize the tax deductibility of that compensation for U.S. federal income tax purposes; however, there have been cases where the benefit of such tax deductibility was outweighed by other objectives. Furthermore, incentive compensation opportunities provided in 2018 and in future years can no longer qualify for the previously-available performance-based exception due to 2017 tax reform legislation (i.e., the Tax Cuts and Jobs Act).exception. As a result, for taxable years beginning after December 31, 2017, all compensation in excess of $1 million paid in any one year to each of the specified executivesofficers that is not covered by the transition rules will not be deductible subject to certain grandfathering rules. The Committee has and will continue to review on a periodic basis the effect of Section 162(m) and may use its judgment to authorize compensation payments that are in excess of the deduction limit when it believes such payments are appropriate.by us.
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.
Executive Stock Ownership Guidelines
To further support 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’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:
|
| | | | |
20192021 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 shares of our common stock earned PSUs upon vesting anyof PRSUs or RSUs upon vesting, and/or any stock receivedpurchased upon exercise of options.
The Committee reviews the ownership level for covered executives each year. As of the 20192021 measurement of ownership, all NEOs were in compliance with the minimum required level of ownership prescribed by the guidelines. “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’s 401(k) Plan, as well as 50% of unvested time-based RSU awards. Stock options and unearned, unvested PSUsPRSUs are not counted.
Anti-Hedging and Anti-Pledging 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.
Continuous Equity Vesting Based Upon Age and Years of Service
On March 10, 2022, the Committee approved the continuous vesting of equity awards when any employee, including a Named Executive Officer, terminates employment with the Company in certain circumstances. This new provision takes effect beginning with the equity awards made by the Committee under the 2022 LTIP, and do not impact or modify any equity awards granted prior to the Committee's adoption of the qualifying retirement benefit.
Under this new provision, in the event that a Named Executive Officer (i) is employed for at least six months following the date of grant; (ii) either (A) has attained the age of 55 and has completed 10 full continuous years of service with WEX, (B) has attained the age of 60 and has completed 5 full continuous years of service with WEX, or (C) has attained the age of 65 and has completed 2 full continuous years of service with WEX; and (iii) terminates employment with WEX other than for cause (as defined in the WEX Inc. Amended and Restated 2019 Equity Incentive Plan) upon at least six months of prior written notice, then the equity awards will continue to vest (or, for the PRSUs, will continue to be eligible to vest based on the level of achievement of the performance metrics) and, in the case of the RSUs and PRSUs, settle according to their original terms and, in the case of stock options, become exercisable in accordance with their original terms. Such continued vesting (or eligibility to vest) is subject to the Named Executive Officer’s (x) continued compliance with restrictive covenants as set forth in the award, (y) execution and non-revocation of a separation agreement and release of claims, and (z) successful completion of transition duties applicable to such executive.
Clawback Policy
We maintain a policy regarding the recoupment of incentive compensation from executive officers in specified situations. In the event of a restatement of the financial results of the Company due to material noncompliance of the Company with any financial reporting requirement under the U.S. federal securities laws or other misconduct on behalf of a current or former executive officer, the result of which is that any performance-based compensation paid to a current or former executive officer of the Company would have been a lower amount, the Committee will review such performance-based compensation to determine the appropriateness of seeking to recover any excess compensation. Such review would include a determination as to whether any executive officer engaged in misconduct, fraud or intentional illegal conduct, which materially contributed to the need for such restatement. The LTIP awards bind the Named Executive Officer to the clawback policy and to any clawback policy WEX may adopt in the future, to the fullest extent permitted by applicable law.
Benefits and Perquisites
We provide competitive benefits to attract and retain associates at all levels. This includes a health and welfare benefits package and a 401(k) plan. Beginning in 2020, the Company is considering providingbegan offering reimbursement to our NEOs each year for executive physical exams and financial counseling, up to $4,000 and $12,000 per year, respectively.respectively, as part of our Financial Wellness Program. The decision to offer this componentsuch potential reimbursement was authorized by the Committee to support the physical and financial well-being of our NEOs. The Company continues to evaluate thosethe usefulness of perquisites usefulness to our overall compensation program. There are no other perquisites provided to any of our NEOs.
20202022 Proxy Statement 4965
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
The Company administers the WEX Inc. 2005 Executive Deferred Compensation Plan or ("2005 EDCP,EDCP") and the 2017 WEX Inc. Executive Deferred Compensation Plan or ("2017 EDCP.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 provided a match of up to 6 percent of the participant’s applicable short-term incentive compensation program 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 was eligible to participate in the 2017 EDCP during 2019,2021, and all except Robert Deshaies chose to defer a portion of his or her 20192021 short term incentive compensation under the plan.EDCP.
Prior to our initial public offering, we offered the WEX Inc. Supplemental Investment and Savings Plan or SERP,("SERP"), which allowed participants to defer compensation. The SERP was frozen to new contributions on December 31, 2004. Ms. Smith has a balance in 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, 2017 EDCP or SERP accounts. No other current executive officers participated in the SERP when it was an active plan.
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, the 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, 2019.2021.
THE LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE
Jack VanWoerkom*
Daniel Callahan*Callahan (Chair)
Shikhar Ghosh (Former Member)Nancy Altobello*
James Neary
Susan Sobbott
Stephen Smith*
Jack VanWoerkom
* Mr. VanWoerkom served as the chair of the Compensation CommitteeMs. Altobello and Mr. Callahan served as a memberSmith joined the Committee effective June 4, 2021.
Executive Compensation Tables
2021 Summary Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and
Principal
Position | Year | Salary
($)(2) | Bonus
($)(3) | Stock
Awards
($)(4)(5) | | Option
Awards
($)(6) | Non-Equity
Incentive Plan
Compensation
($)(7) | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(8) | All Other
Compensation
($)(12) | Total
($) |
Melissa Smith Chair and CEO | 2021 | $ | 791,923 | | $ | — | | $ | 4,901,691 | | | $ | 1,562,532 | | $ | 2,163,138 | | $ | 34,584 | | $ | 159,049 | | $ | 9,612,917 | |
| 2020 | $ | 725,577 | | $ | — | | $ | 16,523,075 | | (1) | $ | 1,499,996 | | $ | 1,242,780 | | $ | 25,825 | | $ | 93,400 | | $ | 20,110,653 | |
| 2019 | $ | 763,269 | | $ | — | | $ | 3,450,218 | | | $ | 1,150,020 | | $ | 1,006,172 | | $ | 35,545 | | $ | 77,170 | | $ | 6,482,394 | |
Roberto Simon Chief Financial
Officer(9) | 2021 | $ | 550,000 | | $ | — | | $ | 2,419,638 | | | $ | 580,032 | | $ | 1,100,000 | | $ | — | | $ | 95,100 | | $ | 4,744,770 | |
| 2020 | $ | 491,539 | | $ | — | | $ | 5,827,425 | | (1) | $ | 400,013 | | $ | 612,466 | | $ | — | | $ | 68,293 | | $ | 7,399,736 | |
| 2019 | $ | 500,000 | | $ | — | | $ | 1,200,156 | | | $ | 300,020 | | $ | 390,336 | | $ | — | | $ | 40,258 | | $ | 2,430,770 | |
Scott Phillips President,
Global Fleet(10) | 2021 | $ | 493,269 | | $ | — | | $ | 2,002,465 | | | $ | 480,065 | | $ | 859,768 | | $ | — | | $ | 80,522 | | $ | 3,916,089 | |
| 2020 | $ | 461,298 | | $ | — | | $ | 4,959,480 | | (1) | $ | 340,007 | | $ | 465,975 | | $ | — | | $ | 57,059 | | $ | 6,283,819 | |
| 2019 | $ | 475,000 | | $ | — | | $ | 1,120,318 | | | $ | 280,031 | | $ | 369,636 | | $ | — | | $ | 38,978 | | $ | 2,283,963 | |
Robert Deshaies President, Health(11) | 2021 | $ | 456,731 | | $ | — | | $ | 1,308,101 | | | $ | 313,546 | | $ | 588,269 | | | $ | 29,100 | | $ | 2,695,747 | |
| 2020 | $ | 412,740 | | $ | — | | $ | 3,482,563 | | (1) | $ | 240,022 | | $ | 346,800 | | $ | — | | $ | 29,100 | | $ | 4,511,225 | |
| 2019 | $ | 412,535 | | $ | 50,000 | | $ | 740,592 | | | $ | 35,026 | | $ | 363,531 | | $ | — | | $ | 18,141 | | $ | 1,619,825 | |
David Cooper Chief Technology Officer | 2021 | $ | 400,000 | | $ | — | | $ | 1,084,901 | | | $ | 260,082 | | $ | 456,600 | | $ | — | | $ | 56,496 | | $ | 2,258,079 | |
| | | | | | | | | |
(1)This 2021 Summary Compensation Table reflects the compensation of the Compensation Committee when they participatedour NEOs in the review, discussions and recommendationaccordance with SEC reporting rules, which with respect to the disclosure for 2020, require the incremental fair value of an equity award modification to be included in the Summary Compensation Discussion and Analysis. Mr. Callahan currently servesTable for the year in which the modification occurs. As a result, 2020 Stock Awards for our NEOs in the Summary Compensation Table above include the incremental fair value associated with modification of their 2020 annual PRSUs, which occurred in 2020, as well as the chairoriginal grant date value for their 2020 annual PRSUs. As previously disclosed, the Committee modified the 2020 PRSUs to change the performance goals to 3-year relative TSR (see footnote (4) to this Summary Compensation Table). Also as a result, 2020 Stock Awards for our NEOs in the Summary Compensation Table above include the incremental fair value associated with the modifications of their 2019 annual PRSU awards, which occurred in 2020, while the full original grant date value for their 2019 annual PRSUs remains reflected in the 2019 Stock Awards for our NEOs in the Summary Compensation Table below. As previously disclosed, the Committee modified the 2019 PRSUs by shortening the performance period for the corporate financial performance metrics from three years ending December 31, 2021 to two years ending December 31, 2020 and by adding a relative TSR modifier.
(2)This column shows the actual amount of base salary earned by the NEOs, which amounts for 2020 include the temporary salary reductions instituted during 2020 as a result of COVID-19. The amounts shown in this column include any amounts that may be contributed by each Named Executive Officer on a pre-tax basis to the Company’s 401(k) plan and 2017 EDCP.
(3)This was a one-time cash award associated with Mr. Deshaies' promotion to President, Health that was earned in 2019 but paid in 2020.
(4)The amounts shown in this column represent the (i) aggregate grant date fair value of PRSUs and RSUs granted during 2021, 2020 and 2019, respectively, calculated in accordance with FASB ASC Topic 718 and (ii) for 2020 only, the aggregate incremental fair value related to the modifications made on June 23, 2020 to the PRSUs granted on March 20, 2019, September 16, 2019 (Mr. Deshaies' promotion related PRSU is more fully described under 2021 Total Direct Compensation - 2019 LTIP Grant Payout) and March 16, 2020. The aggregate incremental fair value, which is summarized below, was calculated as of the Compensation Committeemodification date in accordance with FASB ASC Topic 718 and Mr. VanWoerkom currently serves as a member of the Compensation Committee.
does not represent additional PRSU awards to our NEOs.
2020 Proxy Statement 6851 WEX Inc.
| | | | | | | | | | | | |
Aggregate Incremental Fair Value for PRSU Modifications Included in 2020 Stock Awards (does not represent additional PRSU awards) |
| Melissa Smith | Roberto Simon | Scott Phillips | Robert Deshaies | |
| $3,763,231 | $1,252,779 | $1,071,033 | $737,487 | |
Executive Compensation Tables
2019A portion of the amounts shown in this column represents the value of PRSUs and RSUs granted in June 2020, referred to collectively as the Business Continuity and Outperformance Grant. The value reported in this column for the Business Continuity and Outperformance Grant for each NEO reflects the grant date fair value reported in accordance with FASB ASC Topic 718, which is significantly greater than the corresponding target grant values approved by the Committee, as shown in the table below, which is not a substitute for this Summary Compensation Table or any other compensation disclosure required by the SEC. The Committee approved a methodology where the target grant values were to be divided by the grant date closing stock price to determine the number of shares subject to the applicable PRSU at target performance.
| | | | | | | | | | | | | | | |
June 2020 Business Continuity and Outperformance Grant Incremental Fair Value for Equity Grant Included in 2020 Stock Awards vs. Target Grant Value Approved by the Committee |
| Melissa Smith | Roberto Simon | Scott Phillips | Robert Deshaies | |
Difference (Reported vs. Target) | $2,259,727 | $974,597 | $828,334 | $585,002 | |
The significantly higher reported value required to be included in the Summary Compensation Table for the Business Continuity and Outperformance Grant for each NEO is primarily the result of our use of a market-based performance metric (i.e., relative TSR) and the related requirements for the grant date fair value calculation for PRSU awards with such a performance metric under FASB ASC Topic 718. The Committee was aware that the Summary Compensation Table would require the Company to report a higher value, but did not believe it was appropriate to change the Committee’s standard PRSU award denomination approach, as used in prior years, solely due to the reporting requirements of the Summary Compensation Table.
Assumptions used in the calculation of the amounts in this column are included in the Company’s audited financial statements for the fiscal years ended December 31, 2021, 2020 and 2019 included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on March 1, 2022, March 1, 2021 and February 28, 2020, respectively.
(5)For PRSUs reported in this column, the amounts in the table reflect the grant date fair value of such awards based upon the probable outcome of the performance conditions at the grant date calculated in accordance with FASB ASC Topic 718, excluding, if applicable, the effect of estimated forfeitures and expected relative TSR attainment, if applicable, or the incremental fair value of modifications at the time of modification in 2020, also calculated in accordance with FASB ASC Topic 718. Assuming the highest level of financial performance conditions were achieved, the value for PRSUs granted in 2021 included in the “Stock Awards” column would be $7,928,321 for Ms. Smith; $3,678,890 for Mr. Simon; $3,044,796 for Mr. Phillips; $1,988,770 for Mr. Deshaies; and $1,649,504 for Mr. Cooper. The corresponding amounts for fiscal years 2020 and 2019 are described in the similar sections of our fiscal year 2020 and 2019 proxy statements.
(6)The amounts shown in this column represent the aggregate grant date fair value of option awards made during 2021, 2020 and 2019, respectively, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the Company’s audited financial statements for the fiscal years ended December 31, 2021, 2020 and 2019, included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on March 1, 2022, March 1, 2021 and February 28, 2020, respectively.
(7)The amounts shown in this column reflect the cash incentive award made in March 2022 for 2021 STIP results, March 2021 for 2020 STIP results, and March 2020 for 2019 STIP results, respectively, and include amounts contributed by each Named Executive Officer on a pre-tax basis to the Company’s 2017 EDCP (for 2021, 2020 and 2019 STIP results).
(8)The amounts shown reflect SERP above-market earnings.
(9)Mr. Simon served as the Company's CFO during the entirety of 2021. He resigned as the Company’s CFO effective at the end of the day on December 31, 2021. Following his resignation, he remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022.
(10)Mr. Phillips served as the Company's President, Global Fleet, during the entirety of 2021 until January 1, 2022, at which point he resigned such position. He then remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022.
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Name and
Principal
Position | Year | Salary
($)(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)2022 Proxy Statement 69
| Includes amounts that may be contributed by each named executive officer on a pre-tax basis to the Company’s 401(k) plan, 2017 EDCP (for 2018 and 2019) and 2005 EDCP (for 2017). |
| |
(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 2019, 2018, and 2017, respectively, calculated in accordance with FASB ASC Topic 718, assuming performance at target. Assumptions used in the calculation of these amounts are included in the Company’s audited financial statements for the fiscal years ended December 31, 2019, 2018, and 2017 included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on February 28, 2020, March 18, 2019, and March 1, 2018, respectively. For PSUs, the amounts in the table reflect the grant date fair value of such awards based upon the probable outcome at the time of grant. The value of the 2019 PSU awards at the grant date assuming that the highest level of performance conditions were achieved would be $5,520,275, $1,800,049, $1,680,293, $1,560,166, and $810,635 for Ms. Smith, Mr. Simon, Mr. Phillips, Mr. Dearborn, and Mr. Deshaies, respectively. The value of the 2018 PSU awards at the grant date assuming that the highest level of performance conditions were achieved would be $4,319,995, $1,499,704, and $1,499,704 for Ms. Smith, Mr. Simon, and Mr. Phillips, respectively. The value of the 2017 PSU awards at the grant date assuming that the highest level of performance conditions were achieved would be $3,959,973, $1,679,830, and $1,199,998 for Ms. Smith, Mr. Simon, and Mr. Phillips, respectively. |
(11)Mr. Deshaies served as the Company's President, Health during the entirety of 2021. However, he was promoted to the Company's Chief Operating Officer, Americas as of January 1, 2022.
| |
(4)(12)The following table describes the elements that are represented in the “All Other Compensation” column above: | The amounts shown in this column represent the aggregate grant date fair value of option awards made during 2019, 2018, and 2017, respectively, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the Company’s audited financial statements for the fiscal years ended December 31, 2019, 2018, and 2017, included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on February 28, 2020, March 18, 2019, and March 1, 2018, respectively. |
| |
(5)
| The amounts shown reflect the cash incentive awarded in March 2020 for 2019 STIP results, March 2019 for 2018 STIP results, and March 2018 for 2017 STIP results, respectively, and include amounts contributed by each named executive officer on a pre-tax basis to the Company’s 2017 EDCP (for 2019 and 2018 STIP results) and 2005 EDCP (for 2017 STIP results). For Mr. Phillips, the amount shown in 2017 also reflects a payment of $1,488,000, relating to the EFS performance incentive plan. |
| |
(6)
| The amounts shown reflect SERP above-market earnings. |
| |
(7)
| The following table describes the elements that are represented in the “All Other Compensation” column for the 2019 Summary Compensation Table: |
ALL OTHER COMPENSATION
| | | | | | | | | | | | | | |
| Name | 401(k) or
Other Retirement
Plan Employer
Match
($) | 2017 EDCP
Employer
Match
($)(1) | Other
($)(2) | Total
($) |
| Melissa Smith | $ | 17,100 | | $ | 129,788 | | $ | 12,161 | | $ | 159,049 | |
| Roberto Simon | $ | 17,100 | | $ | 66,000 | | $ | 12,000 | | $ | 95,100 | |
| Scott Phillips | $ | 17,100 | | $ | 51,586 | | $ | 11,836 | | $ | 80,522 | |
| Robert Deshaies | $ | 17,100 | | $ | — | | $ | 12,000 | | $ | 29,100 | |
| David Cooper | $ | 17,100 | | $ | 27,396 | | $ | 12,000 | | $ | 56,496 | |
|
| | | | | | | | | | | | |
| Name | 401(k) or
Other Retirement
Plan Employer
Match
($) | EDCP
Employer
Match
($)(1) | Other
($)(2) | Total
($) |
| Melissa Smith | $ | 16,800 |
| $ | 60,370 |
| $ | — |
| $ | 77,170 |
|
| Roberto Simon | $ | 16,800 |
| $ | 23,420 |
| $ | 38 |
| $ | 40,258 |
|
| Scott Phillips | $ | 16,800 |
| $ | 22,178 |
| $ | — |
| $ | 38,978 |
|
| Joel Dearborn | $ | 16,800 |
| $ | 17,025 |
| $ | — |
| $ | 33,825 |
|
| Robert Deshaies | $ | 16,800 |
| $ | — |
| $ | 1,341 |
| $ | 18,141 |
|
| |
(1)(1)The amounts reflect the Company’s contributions to the executive officer under the 2017 EDCP which were earned in 2021 and made in 2022.
| The amounts reflect the Company’s contributions to the executive officer under the 2017 EDCP which were earned in 2019 and made in 2020. |
(2)The amounts reflect the value received as part of corporate events and/or promotions.our Financial Wellness Program, including (i) for Ms. Smith reimbursement of $11,540 for external financial advising services and $621 for physical exams, (ii) for Mr. Simon, Mr. Deshaies, and Mr. Cooper reimbursement of $12,000 for external financial advising services, and (iii) for Mr. Phillips reimbursement of $11,836 for external financial advising services.
2021 Grants of Plan-Based Awards Table
The following table represents all plan-based awards granted to the named executive officersNamed Executive Officers in 2019:2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Date of
Committee
Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) | All Other
Option
Awards:
Number of
Securities
Underlying
Options (#) | Exercise
or Base
Price of
Option
Awards
($/Sh) | Grant Date
Fair Value of Stock
and Option
Awards
($)(3) |
| Name | Type of Award(1) | Grant
Date | Threshold
($) | Target
($) | Maximum
($) | | Threshold
(#) | Target
(#) | Maximum
(#) |
Melissa
Smith | STIP | | | $ | 593,943 | | $ | 1,187,885 | | $ | 2,375,770 | | | — | | — | | — | | — | | — | | — | | — | |
RSU(4) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | 4,148 | | — | | — | | $ | 937,531 | |
PRSU(5) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | 7,052 | | 16,592 | | 38,162 | | — | | — | | — | | $ | 3,964,161 | |
NQ(6) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | — | | 16,834 | | $ | 226.02 | | $ | 1,562,532 | |
| Roberto Simon | STIP | | | $ | 275,000 | | $ | 550,000 | | $ | 1,100,000 | | | — | | — | | — | | — | | | — | | — | |
RSU(4) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | 2,567 | | — | | — | | $ | 580,193 | |
PRSU(5) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | 3,272 | | 7,699 | | 17,708 | | — | | — | | — | | $ | 1,839,445 | |
NQ(6) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | — | | 6,249 | | $ | 226.02 | | $ | 580,032 | |
| Scott Phillips | STIP | | | $ | 246,635 | | $ | 493,269 | | $ | 986,538 | | | — | | — | | — | | — | | — | | — | | — | |
RSU(4) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | 2,124 | | — | | — | | $ | 480,066 | |
PRSU(5) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | 2,708 | | 6,372 | | 14,656 | | — | | — | | — | | $ | 1,522,398 | |
NQ(6) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | — | | 5,172 | | $ | 226.02 | | $ | 480,065 | |
| Robert Deshaies | STIP | | | $ | 228,366 | | $ | 456,731 | | $ | 913,462 | | | — | | — | | — | | — | | — | | — | | — | |
RSU(4) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | 1,388 | | — | | — | | $ | 313,716 | |
PRSU(5) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | 1,769 | | 4,162 | | 9,573 | | — | | — | | — | | $ | 994,385 | |
NQ(6) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | — | | 3,378 | | $ | 226.02 | | $ | 313,546 | |
| David Cooper | STIP | | | $ | 150,000 | | $ | 300,000 | | $ | 600,000 | | | — | | — | | — | | — | | — | | — | | — | |
RSU(4) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | 1,151 | | — | | — | | $ | 260,149 | |
PRSU(5) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | 1,467 | | 3,452 | | 7,940 | | — | | — | | — | | $ | 824,752 | |
NQ(6) | 3/15/2021 | 3/5/2021 | — | | — | | — | | | — | | — | | — | | — | | 2,802 | | $ | 226.02 | | $ | 260,082 | |
(1)All equity awards are granted under the Amended and Restated 2019 Equity and Incentive Plan.
(2)These columns reflect the threshold, target and maximum cash awards payable to our NEOs under the 2021 STIP. The final award is determined using pre-defined goals, as determined by the Leadership Development and Compensation Committee. If performance falls below the pre-established thresholds, the payout is $0. The actual STIP payout for fiscal year 2021, for each NEO, is reported in the Summary Compensation Table. For further details, please see the CD&A section titled Short-Term Incentive Plan.
(3)Represents the grant date fair value of RSU, PRSU and stock option awards determined in accordance with FASB ASC Topic 718.
(4)RSUs granted on March 15, 2021 vest over 3 years at a rate of one third of the total award per year beginning on the first anniversary of the grant date. The number of RSUs received by each Named Executive Officer was determined by dividing the total award amount granted by the grant date fair value per share, which is calculated using the closing price of WEX common stock on the date of grant on the New York Stock Exchange.
(5)PRSUs granted on March 15, 2021 may convert to RSUs based on the achievement of predetermined performance goals for the Company's Adjusted Revenue and Adjusted Net Income - Earnings Per Share over 2021 and 2022, as modified by a three-year relative TSR performance measured through December 31, 2023. Once earned and converted to RSUs, these vest in full on the third anniversary of the grant date. The grant date fair value was determined on the date of grant using a Monte-Carlo simulation model used to simulate a distribution of future stock price paths based on historical volatility levels. The grant date fair value shown for the PRSUs reflects the target outcome of the performance conditions, based on the probable outcome of performance goals at grant, excluding the effect of estimated forfeitures and expected relative TSR attainment.
(6)Non-qualified stock options granted to NEOs on March 15, 2021 vest over 3 years at a rate of one third of the total award per year beginning on the first anniversary of the grant date. The number of such stock options received by each NEO, and the grant date fair value, was calculated using the Black-Scholes value as of the grant date, calculated in accordance with FASB ASC Topic 718. The weighted average assumptions used in calculating the grant date fair value of these awards are described in a footnote to the Summary Compensation Table.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 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 |
|
20202022 Proxy Statement 5371
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 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 the 2010 Equity and Incentive Plan. All other awards are granted under the 2019 Equity and Incentive Plan. |
| |
(2)
| RSUs granted on March 20, 2019 vest over 3 years at a rate of one third of the total award per year beginning on the first anniversary of the grant date. The number of RSUs received by each named executive officer was determined by dividing the total award amount granted by the fair market value of our common stock on the date of grant. |
| |
(3)
| PSUs granted on March 20, 2019 under the 2019 LTIP may convert to RSUs based on the achievement of predetermined performance goals for the Company’s Compensation Adjusted Net Income Earnings Per Share and Compensation Revenue over 2019, 2020 and 2021. Once converted to RSUs, these vest in full on the third anniversary of the grant date. |
| |
(4)
| Non-qualified stock options granted on March 20, 2019 vest over 3 years at a rate of one third of the total award per year beginning on the first anniversary of the grant date. The number of non-qualified stock options received by each named executive officer was determined by dividing the total award amount granted by the Black-Scholes calculated value on the date of grant. |
| |
(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 related to his promotion to President, Health. The RSUs vest in full on the third anniversary of the grant date. The number of RSUs was determined by dividing the total award amount granted by the fair market value of our common stock on the date of grant. |
| |
(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 achievement of predetermined performance goals for the Company’s Compensation Adjusted Net Income Earnings Per Share and Compensation Revenue over 2019, 2020 and 2021. Once converted to RSUs, these vest in full on March 20, 2022. |
Outstanding Equity Awards at 20192021 Fiscal Year-End
The following table represents stock options and unvested stock units held by each of the named executive officersNamed Executive Officers as of December 31, 2019.2021. | | | | | Option Awards | | Stock Awards | | Option Awards | | Stock Awards |
| Name | 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
($)(6) | Name | Option
Grant Date | Number of
Securities
Underlying
Unexercised
Options - (#)
Exercisable | Number of
Securities
Underlying
Unexercised
Options - (#)
Unexercisable(1) | Option
Exercise
Price
($) | Option
Expiration
Date | | Number
of Shares
or Units
of Stock
That Have
Not
Vested
(#)(2) | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3) | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(4) | Equity
Incentive
Plan Awards
Market or
Payout
Value of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(5) |
| Melissa Smith | | Melissa Smith | 3/15/2015 | 13,000 | | — | | 103.75 | 3/15/2025 | | 36,196 | | 5,081,556 | | 99,092 | | 13,911,470 |
| 3/15/2015 | 13,000 |
| — |
| — |
| $ | 103.75 |
| 3/15/2025 | | 7,586 |
| $ | 1,588,964 |
| 94,904 |
| $ | 19,878,592 |
| 3/20/2017 | 23,187 | | — | | 104.95 | 3/20/2027 | | — | | — | | — | | — | |
| 3/15/2016 | 16,112 |
| — |
| — |
| $ | 77.20 |
| 3/15/2026 | | — |
| — |
| — |
| — |
| 5/10/2017 | 87,136 | | — | | 99.69 | 5/10/2027 | | — | | — | | — | | — | |
| 3/20/2017 | 15,442 |
| 7,745 |
| — |
| $ | 104.95 |
| 3/20/2027 | | — |
| — |
| — |
| — |
| 3/15/2018 | 17,555 | | — | | 158.23 | 3/15/2028 | | — | | — | | — | | — | |
| 5/10/2017 | — |
| — |
| 174,272 |
| $ | 99.69 |
| 5/10/2027 | | — |
| — |
| — |
| — |
| 3/20/2019 | 13,142 | | 6,591 | | 184.81 | 3/20/2029 | | — | | — | | — | | — | |
| 3/15/2018 | 5,845 |
| 11,710 |
| — |
| $ | 158.23 |
| 3/15/2028 | | — |
| — |
| — |
| — |
| 3/16/2020 | 14,217 | | 28,479 | | 109.66 | 3/16/2030 | | — | | — | | — | | — | |
| 3/20/2019 | — |
| 19,733 |
| — |
| $ | 184.81 |
| 3/20/2029 | | — |
| — |
| — |
| — |
| 3/15/2021 | — | | 16,834 | | 226.02 | 3/15/2031 | | — | | — | | — | | — | |
| Roberto Simon | 3/20/2017 | 5,240 |
| 2,629 |
| — |
| $ | 104.95 |
| 3/20/2027 | | 3,569 |
| $ | 747,563 |
| 35,224 |
| $ | 7,378,019 |
| Roberto Simon | 3/15/2018 | 4,876 | | — | | 158.23 | 3/15/2028 | | 13,871 | | 1,947,350 | | 38,018 | | 5,337,305 | |
| 5/10/2017 | — |
| — |
| 87,136 |
| $ | 99.69 |
| 5/10/2027 | | — |
| — |
| — |
| — |
| 3/20/2019 | 3,428 | | 1,720 | | 184.81 | 3/20/2029 | | — | | — | | — | | — | |
| 3/15/2018 | 1,623 |
| 3,253 |
| — |
| $ | 158.23 |
| 3/15/2028 | | — |
| — |
| — |
| — |
| 3/16/2020 | — | | 7,595 | | 109.66 | 3/16/2030 | | — | | — | | — | | — | |
| 3/20/2019 | — |
| 5,148 |
| — |
| $ | 184.81 |
| 3/20/2029 | | — |
| — |
| — |
| — |
| 3/15/2021 | — | | 6,249 | | 226.02 | 3/15/2031 | | — | | — | | — | | — | |
| Scott Phillips | 3/20/2017 | 3,743 |
| 1,878 |
| — |
| $ | 104.95 |
| 3/20/2027 | | 3,207 |
| $ | 671,738 |
| 30,004 |
| $ | 6,284,638 |
| Scott Phillips | 3/15/2018 | 4,876 | | — | | 158.23 | 3/15/2028 | | 12,211 | | 1,714,302 | | 31,920 | | 4,481,193 | |
| 5/10/2017 | — |
| — |
| 69,708 |
| $ | 99.69 |
| 5/10/2027 | | — |
| — |
| — |
| — |
| 3/20/2019 | 3,200 | | 1,605 | | 184.81 | 3/20/2029 | | — | | — | | — | | — | |
| 3/15/2018 | 1,623 |
| 3,253 |
| — |
| $ | 158.23 |
| 3/15/2028 | | — |
| — |
| — |
| — |
| 3/16/2020 | — | | 6,456 | | 109.66 | 3/16/2030 | | — | | — | | — | | — | |
| 3/20/2019 | — |
| 4,805 |
| — |
| $ | 184.81 |
| 3/20/2029 | | — |
| — |
| — |
| — |
| 3/15/2021 | — | | 5,172 | | 226.02 | 3/15/2031 | | — | | — | | — | | — | |
| Joel Dearborn | 3/20/2017 | 561 |
| 282 |
| — |
| $ | 104.95 |
| 3/20/2027 | | 1,967 |
| $ | 412,008 |
| 14,326 |
| $ | 3,000,724 |
| |
| 3/15/2018 | 714 |
| 1,431 |
| — |
| $ | 158.23 |
| 3/15/2028 | | — |
| — |
| — |
| — |
| |
| 3/20/2019 | — |
| 4,462 |
| — |
| $ | 184.81 |
| 3/20/2029 | | — |
| — |
| — |
| — |
| |
| Robert Deshaies | 3/15/2016 | 1,032 |
| — |
| — |
| $ | 77.20 |
| 3/15/2026 | | 1,823 |
| $ | 381,846 |
| 11,040 |
| $ | 2,312,438 |
| Robert Deshaies | 3/15/2016 | 1,032 | | — | | 77.20 | 3/15/2026 | | 9,850 | | 1,382,842 | | 21,760 | | 3,054,830 |
| 3/20/2017 | 561 |
| 282 |
| — |
| $ | 104.95 |
| 3/20/2027 | | — |
| — |
| — |
| — |
| 3/20/2017 | 843 | | — | | 104.95 | 3/20/2027 | | — | | — | | — | | — | |
| 3/15/2018 | 194 |
| 391 |
| — |
| $ | 158.23 |
| 3/15/2028 | | — |
| — |
| — |
| — |
| 3/15/2018 | 585 | | — | | 158.23 | 3/15/2028 | | — | | — | | — | | — | |
| 3/20/2019 | — |
| 601 |
| — |
| $ | 184.81 |
| 3/20/2029 | | — |
| — |
| — |
| — |
| 3/20/2019 | 400 | | 201 | | 184.81 | 3/20/2029 | | — | | — | | — | | — | |
| Robert Deshaies | | 3/16/2020 | 2,275 | | 4,557 | | 109.66 | 3/16/2030 | | — | | — | | — | | — | |
| 3/15/2021 | — | | 3,378 | | 226.02 | 3/15/2031 | | — | | — | | — | | — | |
| David Cooper | 3/20/2017 | 704 | | — | | 104.95 | 3/20/2027 | | 6,622 | | 929,663 | | 17,275 | | 2,425,181 |
| 5/10/2017 | 8,713 | | — | | 99.69 | 5/10/2027 | | — | | — | | — | | — | |
| 3/15/2018 | 1,561 | | — | | 158.23 | 3/15/2028 | | — | | — | | — | | — | |
| 3/20/2019 | 1,714 | | 860 | | 184.81 | 3/20/2029 | | — | | — | | — | | — | |
| David Cooper | | 3/16/2020 | 1,611 | | 3,228 | | 109.66 | 3/16/2030 | | — | | — | | — | | — | |
| 3/15/2021 | — | | 2,802 | | 226.02 | 3/15/2031 | | — | | — | | — | | — | |
| |
(1)(1)Vests at a rate of one third of the total award on each of the first, second and third anniversary of the grant date. (2)The following table shows the number of RSUs and PRSUs for which achievement of the performance conditions have been satisfied, by grant date, which had not yet time-based vested as of December 31, 2021: | 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 as the recipient remains employed with the Company. |
2020 Proxy Statement 7255 WEX Inc.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Special
Incentive
PRSU Grant
December 17,
2018 (#) | Annual
Grant PRSUs
March 20,
2019, as
modified on
June 23, 2020 (#) | Annual Grant RSUs March 20,
2019 (#) | Promotion
Related RSUs
and PRSUs
September 16,
2019, as modified on June 23,
2020 (#) | Annual Grant RSUs March 16, 2020 (#) | RSU portion
of Business
Continuity and
Outperformance
Grant June 24,
2020 (#) | Annual Grant RSU March 15, 2021 (#) | Total
(#) |
| Melissa Smith | — | | 15,958 | | 1,248 | — | | 5,475 | | 9,367 | | 4,148 | 36,196 |
| Roberto Simon | — | | 5,204 | | 543 | — | | 2,434 | | 3,123 | | 2,567 | 13,871 |
| Scott Phillips | — | | 4,857 | | 507 | — | | 2,069 | | 2,654 | | 2,124 | 12,211 |
| Robert Deshaies | 1,538 | | 608 | | 64 | 2,917 | 1,461 | 1,874 | 1,388 | 9,850 |
| David Cooper | — | | 2,602 | | 272 | — | | 1,035 | | 1,562 | | 1,151 | 6,622 |
| |
(3)
| The following table shows the number of RSUs, by grant date, which have not yet vested as of December 31, 2019: |
|
| | | | | | |
| Name | 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 Smith | 1,576 | 2,276 | 3,734 | — |
| 7,586 |
| Roberto Simon | 891 | 1,054 | 1,624 | — |
| 3,569 |
| Scott Phillips | 637 | 1,054 | 1,516 | — |
| 3,207 |
| Joel Dearborn | 96 | 464 | 1407 | — |
| 1,967 |
| Robert Deshaies | 96 | 127 | 190 | 1,410 |
| 1,823 |
|
| |
| Grant Date | Stock Award Vesting Schedule |
| |
| December 17, 2018 | Vested in full on March 20, 2017 | Annual Grant RSUs vests at a rate of one third of the total award per year beginning on the first anniversary of the grant date.15, 2022. |
March 15, 201820, 2019, as modified on June 23, 2020 | Annual Grant RSUs vests at a rate of one third of the total award per year beginningVests in full on the firstthird anniversary of the grant date. |
| March 20, 2019 | Annual Grant RSUs vestsvest at a rate of one third of the total award per year beginning on the first anniversary of the grant date. |
| September 16, 2019 | Mr. DeshaiesDeshaies' promotion related RSUs vest in full on the third anniversary of the grant date and his PRSUs vested in full on March 20, 2022. |
| March 16, 2020 | Annual Grant RSUs vest at a rate of one third of the total award per year beginning on the first anniversary of the grant date. |
| June 24, 2020 | The Business Continuity and Outperformance Grant vests 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date. |
| March 15, 2021 | Annual Grant RSUs vest at a rate of one third of the total award per year beginning on the first anniversary of the grant date. |
(3)Reflects the value as calculated based on the closing price of the Company’s common stock ($140.39) on December 31, 2021.
(4)In accordance with SEC rules, in the table above, the number of PRSUs reported reflect an assumed level of achievement of target or maximum performance goals, as indicated in the below table, based on the Company's performance as of December 31, 2021. The actual number of shares of common stock, if any, that we will issue in respect of these PRSU awards is not yet determinable and will depend on the Company's actual performance through the end of the applicable performance period. The following table shows assumed level of achievement of the PRSUs by grant date, where achievement of the performance conditions have not yet been determined as of December 31, 2021:
| | | | | | | | | | | | | | | | | | | |
| Name | | | | | | Annual Grant
PRSUs March 16,
2020, as
modified on
June 23, 2020
(shown at target)
(#) | PRSU portion of
Business
Continuity and
Outperformance
Grant
June 24, 2020 (shown at target)
(#) | Annual Grant PRSUs March 15, 2021 (shown at maximum)
(#) | Total
(#) |
| Melissa Smith | | | | | | 32,829 | 28,101 | 38,162 | 99,092 |
| Roberto Simon | | | | | | 10,943 | 9,367 | 17,708 | 38,018 |
| Scott Phillips | | | | | | 9,302 | 7,962 | 14,656 | 31,920 |
| Robert Deshaies | | | | | | 6,566 | 5,621 | 9,573 | 21,760 |
| David Cooper | | | | | | 4,651 | 4,684 | 7,940 | 17,275 |
| |
(4)
| Reflects the value as calculated based on the closing price of the Company’s common stock ($209.46) on December 31, 2019. |
| |
(5)
| These amounts represent the number of PSUs granted assuming maximum performance conditions are met. The following table shows the PSUs, by grant date, where achievement of the performance conditions have not yet been determined as of December 31, 2019: |
|
| | | | | | | | |
| Name | Annual
Grant PSUs
March 20, 2017
(#) | Annual
Grant PSUs
March 15, 2018
(#) | Special Incentive
PSU Grant
December 17, 2018
(#) | Annual
Grant PSUs
March 20, 2019
(#) | Promotion Related
PSUs
September 16, 2019
(#) | Total
(#) |
| Melissa Smith | 37,732 | 27,302 | — |
| 29,870 | — |
| 94,904 |
| Roberto Simon | 16,006 | 9,478 | — |
| 9,740 | — |
| 35,224 |
| Scott Phillips | 11,434 | 9,478 | — |
| 9,092 | — |
| 30,004 |
| Joel Dearborn | 1,714 | 4,170 | — |
| 8,442 | — |
| 14,326 |
| Robert Deshaies | 1,714 | 1,136 | 4,232 |
| 1,138 | 2,820 |
| 11,040 |
|
| |
| Grant Date | Stock Award Vesting Schedule (Assuming Performance Conditions are Met and PSUs have converted to RSUs)Met) |
| |
| |
| |
| |
| |
March 20, 201716, 2020 | Vests in full on the third anniversary of the grant date.March 16, 2023 |
March 15, 2018June 24, 2020 | Vests in full on the third anniversary of the grant date.June 23, 2023 |
December 17, 2018March 15, 2021 | Vests in full on March 15, 2022. |
March 20, 2019 | Vests in full on the third anniversary of the grant date. |
September 16, 2019 | Vests in full on March 20, 2022.2024 |
(6) (5)Value as calculated based on the closing price of the Company’s common stock ($209.46)140.39) on December 31, 2019 assuming maximum performance conditions are met.2021.
562022 Proxy Statement WEX Inc.73
20192021 Option Exercises and Stock Vested
The following table represents stock options exercised and shares of our common stock vestedreceived upon vesting of RSUs and PRSUs in 20192021 by each of the named executive officers.Named Executive Officers.
| | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name | Number of Shares
Acquired on
Exercise
(#) | Value
Realized Upon
Exercise
($) | | Number of Shares
Acquired on
Vesting
(#) | Value
Realized
on Vesting
($) |
| Melissa Smith | 87,136 | | 10,919,012 | | 32,418 | | 7,173,226 |
| Roberto Simon | 55,228 | | 6,256,944 | | 11,761 | | 2,602,965 |
| Scott Phillips | 78,551 | | 8,695,875 | | 11,543 | | 2,554,080 |
| Robert Deshaies | — | | — | | 1,991 | | 443,399 |
| David Cooper | — | | — | | 17,774 | | 3,930,451 |
|
| | | | | | | | | | |
| | Option Awards | | Stock Awards |
| Name | Number of Shares
Acquired on
Exercise
(#) | Value
Realized Upon
Exercise
($) | | Number of Shares
Acquired on
Vesting
(#) | Value
Realized
on Vesting
($) |
| Melissa Smith | 8,056 |
| $ | 1,069,756 |
| | 23,191 | $ | 4,185,411 |
|
| Roberto Simon | 7,651 |
| $ | 939,783 |
| | 15,145 | $ | 2,732,461 |
|
| Scott Phillips | — |
| — |
| | 1,159 | $ | 212,582 |
|
| Joel Dearborn | — |
| — |
| | 963 | $ | 190,155 |
|
| Robert Deshaies | — |
| — |
| | 3,997 | $ | 720,283 |
|
20192021 Non-Qualified Deferred Compensation
The following table represents the amounts deferred by each of the named executive officersNamed Executive Officers in the: 2005 EDCP; 2017 EDCP; and the SERP. The SERP, which was frozen to new contributions on December 31, 2004, the 2005 EDCP, which was frozen to new contributions on December 31, 2017, and the 2017 EDCP are described in the Nonqualified Deferred Compensation section of the CD&A.
| | | | | | | | | | | | | | | | | | | | |
| Name | Plan | Executive
Contributions
in Last FY
($)(1) | Registrant
Contributions
in Last FY
($)(2) | Aggregate
Earnings
in Last FY
($)(3) | Aggregate
Withdrawals/
Distributions
($) | Aggregate
Balance
at Last FYE
($)(5) |
| Melissa Smith | SERP | — | | — | | 34,584 | — | | 206,906(4) |
| 2005 EDCP | — | | — | | 141,659 | — | | 1,008,473 |
| 2017 EDCP | 432,628 | 129,788 | 116,761 | — | | 1,487,521 |
| Roberto Simon | 2005 EDCP | — | | — | | -2,826 | — | | 427,215 |
| 2017 EDCP | 275,000 | 66,000 | -1,227 | — | | 784,264 |
| Scott Phillips | 2005 EDCP | — | | — | | -3,860 | — | | 79,059 |
| 2017 EDCP | 171,954 | 51,586 | 22,703 | — | | 504,157 |
| Robert Deshaies | 2005 EDCP | — | | — | | — | | — | | — | |
| 2017 EDCP | — | | — | | 9,344 | — | | 64,614 |
| David Cooper | 2005 EDCP | — | | — | | — | | — | | — | |
| 2017 EDCP | 45,660 | 27,396 | 9,403 | — | | 149,539 |
|
| | | | | | | | | | | |
| Name | Plan | Executive
Contributions
in Last FY
($)(1) | Registrant
Contributions
in Last FY
($)(2) | Aggregate
Earnings
in Last FY
($)(3) | Aggregate
Withdrawals/
Distributions
($) | Aggregate
Balance
at Last FYE
($)(5) |
| Melissa Smith | SERP | — |
| — |
| 35,545 |
| — |
| 146,497(4) |
|
| 2005 EDCP | — |
| — |
| 151,289 |
| 24,194 |
| 722,752 |
|
| 2017 EDCP | 150,926 |
| 60,370 |
| 28,273 |
| — |
| 467,330 |
|
| Roberto Simon | 2005 EDCP | — |
| — |
| 47,297 |
| — |
| 447,343 |
|
| 2017 EDCP | 97,584 |
| 23,420 |
| 4,207 |
| — |
| 263,200 |
|
| Scott Phillips | 2005 EDCP | — |
| — |
| 14,474 |
| — |
| 51,020 |
|
| 2017 EDCP | 36,964 |
| 22,178 |
| 2,913 |
| — |
| 119,511 |
|
| Joel Dearborn | 2005 EDCP | — |
| — |
| — |
| — |
| — |
|
| 2017 EDCP | 17,025 |
| 17,025 |
| 3,884 |
| — |
| 81,832 |
|
| Robert Deshaies | 2005 EDCP | — |
| — |
| — |
| — |
| — |
|
| 2017 EDCP | — |
| — |
| 6,282 |
| — |
| 51,338 |
|
| |
(1)(1)The amounts shown in this column have been reported in Salary and/or Non-Equity Incentive Plan Compensation of the Summary Compensation Table for 2021.
| The amounts shown in this column have been reported in Salary and/or Non-Equity Incentive Plan Compensation of the Summary Compensation Table for 2019. |
| |
(2)
| Participant contributions to the 2017 EDCP are matched on annual short term incentive program payments only. WEX matches the executives’ short-term incentive deferral up to a maximum of 6% of their total short term incentive program award. The amounts shown in this column have been reported in the All Other Compensation column of the Summary Compensation Table for 2019. |
(2)Participant contributions to the 2017 EDCP are matched on annual short term incentive program payments only. WEX matches the executives’ short-term incentive deferral up to a maximum of 6% of their total short term incentive program award. The amounts shown in this column have been reported in the All Other Compensation column of the Summary Compensation Table for 2021.
2020 Proxy Statement (3)57Earnings on the SERP are included in the Summary Compensation Table. The Company does not pay above-market interest rates on the 2005 EDCP and 2017 EDCP, and thus earnings on the 2005 EDCP and 2017 EDCP are not included in the Summary Compensation Table.
(4)Includes the earnings and balance on December 31, 2021 of the SERP, which is explained in the Nonqualified Deferred Compensation Section of the CD&A.
EXECUTIVE COMPENSATION
| |
(3)
| Earnings on the SERP are included in the Summary Compensation Table. The Company does not pay above-market interest rates on the 2005 EDCP and 2017 EDCP, and thus earnings on the 2005 EDCP and 2017 EDCP are not included in the Summary Compensation Table. |
| |
(4)
| Includes the earnings and balance on December 31, 2019 of the SERP, which is explained in the Nonqualified Deferred Compensation Section of the CD&A. |
(5)Portions of the amounts shown in this column have been reported in the Salary, Non-Equity Incentive Plan Compensation and All Other Compensation columns of the Summary Compensation Table in previous years, to the extent these officers were NEOs in previous years, as follows:
| | | Name | Salary | Non-Equity
Incentive Plan
Compensation | All Other
Compensation | Total | Name | Salary | Non-Equity
Incentive Plan
Compensation | All Other
Compensation | Total |
| Melissa Smith | $ | 36,481 |
| $ | 652,167 |
| $ | 427,742 |
| $ | 1,116,390 |
| Melissa Smith | $ | 36,481 | | $ | 1,209,073 | | $ | 632,097 | | $ | 1,877,651 | |
| Roberto Simon | $ | — |
| $ | 569,754 |
| $ | 105,682 |
| $ | 675,436 |
| Roberto Simon | $ | — | | $ | 997,871 | | $ | 208,430 | | $ | 1,206,301 | |
| Scott Phillips | $ | — |
| $ | 99,298 |
| $ | 59,578 |
| $ | 158,876 |
| Scott Phillips | $ | — | | $ | 341,148 | | $ | 139,123 | | $ | 480,271 | |
| Joel Dearborn | $ | — |
| $ | — |
| $ | — |
| $ | — |
| |
| Robert Deshaies | $ | — |
| $ | — |
| $ | — |
| $ | — |
| Robert Deshaies | $ | — | | $ | 28,160 | | $ | 16,896 | | $ | 45,056 | |
During the year ended December 31, 2019,2021, participants were given the opportunity to select among various funds in the SERP, 2005 EDCP and 2017 EDCP. The table below shows the funds available to participants and their annual rate of return for the year ended December 31, 2019.2021. The investment alternatives in the 2005 and 2017 EDCPs are the same as those available under our 401(k) plan with the exception of the iShares S&P 500 Index Fund, Vanguard Extended Market Index Fund and Retirement Services Money Fund. The comparable funds used in the 401(k) are the Northern Trust S&P 500, Northern Trust Extended Equity Market Index Fund and Wells Fargo Stable Return Fund, respectively.
|
| | | | |
| SERP | 20192021 Rate of Return |
|
| Fidelity VIP Government Money Market | 1.59 | % |
General Fixed 5 Year | 3.00-1.70 | % |
| Principal Global Investors Core Plus Bond | 9.35-0.87 | % |
Principal Global Investors Diversified Balanced | 17.93% |
|
Principal Global Investors Diversified International | 22.179.29 | % |
| Principal Global Investors MidCap | 42.5025.00 | % |
Principal Government & High Quality Bond | 6.01% |
|
| Principal Global Investors Equity Income Account | 28.55%21.95 |
% |
| T. Rowe Price LargeCap Growth | 34.35%21.38 |
% |
| 2005 EDCP and 2017 EDCP | |
The Oakmark Equity & IncomeMFS Mid Cap Value Fund R6 | 19.3131.00 | % |
Deutsche Real Estate Securities Fund (A)CL R6 | 29.6643.12 | % |
American EuroPacific Growth Fund (R-4)R6 | 27.402.84 | % |
iShares S&PFidelity 500 Index Fund | 31.3428.69 | % |
| MFS Value Fund CL R4 | 30.0825.42 | % |
|
| | |
OppenheimerInvesco Developing Markets Fund (A)R6 | 24.53-7.13 | % |
| PRIMECAP Odyssey Stock Fund | 27.1425.11 | % |
| Principal High Yield Fund CL R6 | 13.885.73 | % |
| MainStay Winslow Large Cap Growth Fund R6 | 33.8724.85 | % |
AllianceBernsteinAllspring Discovery Value Fund R6 | 20.17-4.66 | % |
VanguardFidelity Total International Index Fund | 8.47 | % |
| Fidelity Extended Market Index Fund | 28.03 | % |
Wells Fargo Discovery Fund | 39.7412.41 | % |
| Metropolitan West Total Return Bond Fund | 9.23-1.11 | % |
| T. Rowe Price Retirement Balance Inv | 15.468.54 | % |
| T. Rowe Price 2005 Retirement | 14.698.18 | % |
| T. Rowe Price 2010 Retirement | 16.318.97 | % |
| T. Rowe Price 2015 Retirement | 17.559.74 | % |
| T. Rowe Price 2020 Retirement | 19.4510.60 | % |
| T. Rowe Price 2025 Retirement | 21.1512.04 | % |
| T. Rowe Price 2030 Retirement | 22.6813.75 | % |
| T. Rowe Price 2035 Retirement | 23.9015.28 | % |
| T. Rowe Price 2040 Retirement | 24.8916.58 | % |
| T. Rowe Price 2045 Retirement | 25.5217.43 | % |
| T. Rowe Price 2050 Retirement | 25.5717.54 | % |
| T. Rowe Price 2055 Retirement | 25.5217.57 | % |
| T. Rowe Price 2060 Retirement | 25.4817.55 | % |
Retirement ReservesFidelity US Bond Index Fund | -1.79 | % |
Vanguard Federal Money FundMkt Inv | 1.290.01 | % |
20202022 Proxy Statement 5975
Employment Agreements, Severance and Change in Control Benefits
The Company provides employment agreements, severance benefits and change of control benefits to attract and retain key executive officers. In the event, or threat, of a change in control transaction, these agreements and the WEX Inc. Executive Severance Pay and Change in Control Plan are intended to reduce uncertainty and provide compensation for the significant levels of executive engagement and support required during an ownership transition that results in the termination of theira key executive officer's employment. These provisions represent competitive severance and change in control benefits based upon the review by the Committee.
The Committee reviews these agreements and the WEX Inc. Executive Severance Pay and Change in Control Plan periodically to assess whether the total value to an executive remains at the level needed to attract and retain executives without being considered excessive in the opinion of the Committee.
The following provisions are in effect as of December 31, 2019:
|
| | | | | | | | | | | | | | | | | | | |
| | Ms.Melissa Smith | Mr.Roberto Simon | Mr. DearbornDavid Cooper | Mr.Robert Deshaies | Mr.Scott Phillips |
Basic SeveranceBenefit(1) | Severance Payment | 1.5x base salary plus 1x target bonus each paid in a lump sum or over 12 months at the Company’s election | 1.5x base salary paid over an 18-month period plus pro rata portion of bonus in a lump sum | 1.5x base salary paid over an 18-month period | 1.5x base salary paid over an 18-month period plus pro rata portion of bonus payable in a lump sum |
| Accelerated Vesting of Equity | 1 year | None |
| Health Benefit Continuation | One-time lump-sum cash payment equal to 12 x the value of the Company’s monthly share of the cost of coverage (i.e., premiums) for participant’s group health coverage benefits. | Payment of 100 percent100% of the premium, including any additional administration fee, until the shorter of 12 months following termination date or the day COBRA eligibility ends. |
Change in Control(CiC)(2) SeveranceBenefit Double Trigger:(requires (requires CiC andloss of comparableposition) | Severance Payment | 2x base salary and 2x target bonus paid over a 24 month period | |
| Accelerated Vesting of Equity | 100 percent (other than performance options which vest only if CiC price exceeds performance thresholds) | 100 percent100%(3)
|
| Health Benefit Continuation | One-time lump-sum cash payment equal to 24 times the value of the Company’s monthly share of the cost of coverage (i.e., premiums) for Participant’s group health coverage benefits. |
OtherAgreements(4) | Non-Compete(5) | 2 years for without cause termination and constructive discharge with CiC; 1 year otherwise | 1 year | 2 years |
Non-Solicitation(6) |
Non-Disparagement(7) |
Non-Disclosure(8) | Indefinitely |
| |
(1)
| Basic severance benefit is payable in the case of the executive officer resigning for “good reason” or if the executive officer is terminated “without cause,” each as defined in the WEX Inc. Executive Severance Pay and Change in Control Plan. |
(1)Basic severance benefit is payable in the case of the executive officer resigning for “good reason” or if the executive officer is terminated “without cause,” (neither in connection with a "Change in Control"), each as defined in the WEX Inc. Executive Severance Pay and Change in Control Plan.
| |
(2)(2)“Change in Control” means, in summary: (i) an acquisition of 50 percent or more of either the then-outstanding shares of common stock or the combined voting power of the then-outstanding voting securities of the Company excluding certain specified acquisitions; (ii) a change in the composition of the Board such that the individuals who constitute the Board at that point in time cease to constitute a majority of the Board; (iii) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of shares or assets of another company excluding certain specified transactions; or (iv) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. If an executive terminates and receives benefits under the 2010 Equity and Incentive Plan or the Amended and Restated 2019 Equity and Incentive Plan, and then is rehired, subsequent benefits may not be paid and/or reimbursement of a portion of benefits already paid can be required. The change in control period is defined as the period commencing ninety (90) days prior to the date of the Change in Control and ending on the first anniversary of the Change in Control. (3)Upon a “Change in Control” of the Company, if the surviving entity does not agree to assume the obligations set forth in the equity award agreement, then the equity award shall become immediately and fully vested, subject to any terms and conditions set forth in the 2010 Equity and Incentive Plan or the Amended and Restated 2019 Equity and Incentive Plan or imposed by the Committee. (4)In connection with any separation of employment by an executive officer, the officer shall execute and not timely revoke a separation agreement and release, in a form acceptable to the Company, in order to receive the basic severance and/or change in control severance benefits described. Each separation agreement shall include terms relating to non-competition, non-solicitation, non-disparagement and non-disclosure, as well as a release of claims. To the extent there is a violation of the restrictions or obligations in the separation agreement, the Company may cease future payments, obtain injunctive or other equitable relief or seek reimbursement of previously paid amounts, as well as any other remedies available to the Company under the WEX Inc. Executive Severance Pay and Change in Control Plan or applicable law. (5)Each of the executive officers has agreed to provisions which restrict the executive officer from performing any acts which advance the interests of any existing or prospective competitors of WEX during the period specified above. (6)Each of the executive officers has agreed to provisions which restrict the executive officer from soliciting customers or employees to terminate their relationship with the Company. (7)Each of the executive officers has agreed to provisions which restrict the executive officer from making any statements or performing any acts intended or reasonably calculated to advance the interest of any existing or prospective competitor or in any way to injure the interests of or disparage the Company. (8)Each of the executive officers has agreed to provisions which restrict the executive from disclosing confidential information as defined in the agreement. | “Change in Control” means, in summary: (i) an acquisition of 50 percent or more of either the then-outstanding shares of common stock or the combined voting power of the then-outstanding voting securities of the Company excluding certain specified acquisitions; (ii) a change in the composition of the Board such that the individuals who constitute the Board at that point in time cease to constitute a majority of the Board; (iii) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of shares or assets of another company excluding certain specified transactions; or (iv) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. If an executive terminates and receives benefits under the 2010 Equity and Incentive Plan and 2019 Equity and Incentive Plan, and then is rehired, subsequent benefits may not be paid and/or reimbursement of a portion of benefits already paid can be required. |
| |
(3)
| Upon a “Change in Control” of the Company, if the surviving entity does not agree to assume the obligations set forth in the equity award agreement, then the equity award shall become immediately and fully vested, subject to any terms and conditions set forth in the 2010 Equity and Incentive Plan and 2019 Equity and Incentive Plan or imposed by the Committee. |
| |
(4)
| In connection with any separation of employment by an executive officer, the officer shall execute and not timely revoke a separation agreement and release, in a form acceptable to the Company, in order to receive the basic severance and/or change in control severance benefits described. Each separation agreement shall include terms relating to non-competition, non-solicitation, non-disparagement and non-disclosure, as well as a release of claims. To the extent there is a violation of the restrictions or obligations in the separation agreement, the Company may cease future payments, obtain injunctive or other equitable relief or seek reimbursement of previously paid amounts, as well as any other remedies available to the Company under the WEX Inc. Executive Severance Pay and Change in Control Plan or applicable law. |
| |
(5)
| Each of the executive officers has agreed to provisions which restrict the executive officer from performing any acts which advance the interests of any existing or prospective competitors of WEX during the period specified above. |
| |
(6)
| Each of the executive officers has agreed to provisions which restrict the executive officer from soliciting customers or employees to terminate their relationship with the Company. |
| |
(7)
| Each of the executive officers has agreed to provisions which restrict the executive officer from making any statements or performing any acts intended or reasonably calculated to advance the interest of any existing or prospective competitor or in any way to injure the interests of or disparage the Company. |
| |
(8)
| Each of the executive officers has agreed to provisions which restrict the executive from disclosing confidential information as defined in the agreement. |
20202022 Proxy Statement 6177
Potential Payments upon Termination of Employment
The following chart shows the payments to each named executive officerNamed Executive Officer which would be made as a result of possible termination scenarios assuming each had occurred on December 31, 2019.2021.
| | | | | | | | | | | | | | | | | |
| Named Executive Officer | Voluntary
Termination
or Involuntary
Termination
For Cause
($) | Involuntary
Termination
Without Cause or
Resignation
for Good Reason
($) | Change in
Control With
Termination
($) | Disability ($)(1) | Death
($)(1) |
| Melissa Smith | | | | | |
Acceleration of Equity Awards(2) | — | $4,086,498 | | $16,839,047 | | — | $16,839,047 | |
| Salary and Benefits Continuation | — | $1,217,150 | | $1,634,299 | | — | — |
| Short Term Incentive Program | — | $1,200,000 | | $2,400,000 | | $1,200,000 | | $1,200,000 | |
Non-Qualified Plan Payout(3) | $2,702,900 | | $2,702,900 | | $2,702,900 | | $2,702,900 | | $2,702,900 | |
| Total | $2,702,900 | | $9,206,548 | | $23,576,246 | | $3,902,900 | | $20,741,947 | |
| Roberto Simon | | | | | |
Acceleration of Equity Awards(2) | — | — | $6,112,647 | | — | $6,112,647 | |
| Salary and Benefits Continuation | — | $842,150 | | $1,134,299 | | — | — |
| Short Term Incentive Program | — | $550,000 | | $1,100,000 | | $550,000 | | $550,000 | |
Non-Qualified Plan Payout(3) | $1,211,478 | | $1,211,478 | | $1,211,478 | | $1,211,478 | | $1,211,478 | |
| Total | $1,211,478 | | $2,603,628 | | $9,558,424 | | $1,761,478 | | $7,874,125 | |
| Scott Phillips | | | | | |
Acceleration of Equity Awards(2) | — | — | $5,230,813 | | — | $5,230,813 | |
| Salary and Benefits Continuation | — | $776,073 | | $1,052,146 | | — | — |
| Short Term Incentive Program | — | $500,000 | | $1,000,000 | | $500,000 | | $500,000 | |
Non-Qualified Plan Payout(3) | $583,216 | | $583,216 | | $583,216 | | $583,216 | | $583,216 | |
| Total | $583,216 | | $1,859,289 | | $7,866,175 | | $1,083,216 | | $6,314,029 | |
| Robert Deshaies | | | | | |
Acceleration of Equity Awards(2) | — | — | $3,818,114 | | — | $3,818,114 | |
| Salary and Benefits Continuation | — | $841,524 | | $1,133,049 | | — | — |
| Short Term Incentive Program | — | — | $1,100,000 | | $550,000 | | $550,000 | |
Non-Qualified Plan Payout(3) | $64,614 | | $64,614 | | $64,614 | | $64,614 | | $64,614 | |
| Total | $64,614 | | $906,138 | | $6,115,777 | | $614,614 | | $4,432,728 | |
| David Cooper | | | | | |
Acceleration of Equity Awards(2) | — | — | $2,823,886 | | — | $2,823,886 | |
| Salary and Benefits Continuation | — | $616,524 | | $833,049 | | — | — |
| Short Term Incentive Program | — | — | $600,000 | | $300,000 | | $300,000 | |
Non-Qualified Plan Payout(3) | $149,539 | | $149,539 | | $149,539 | | $149,539 | | $149,539 | |
| Total | $149,539 | | $766,063 | | $4,406,474 | | $449,539 | | $3,273,425 | |
(1)The Company's STIP provides for a pro-rated lump sum payment at target in the event of death or disability and the Company's LTIP provides for 100% acceleration of unvested equity in the event of death.
(2)For purposes of these calculations, the stock price used to calculate potential payments was the closing price of the Company's common stock on December 31, 2021, which was $140.39. The officers identified above hold unvested employee stock options that feature an exercise price of $184.81, $109.66 and $226.02.
(3)As used in this table, Non-Qualified Plan Payout consists solely of the participants’ balances in their 2005 EDCP, 2017 EDCP and SERP accounts, as applicable.
|
| | | | | | | | | | | | | | | |
| Named Executive Officer | Voluntary
Termination
or Involuntary
Termination
For Cause
($) | Involuntary
Termination
Without Cause or
Resignation
for Good Reason
($) | Change in
Control With
Termination
($) | Disability
($) | Death
($)(1) |
| Melissa Smith | | | | | |
Acceleration of Equity Awards(2) | — |
|
| $6,050,982 |
|
| $13,424,011 |
| — |
|
| $13,424,011 |
|
| Salary and Benefits Continuation | — |
|
| $1,175,168 |
|
| $1,580,336 |
| — |
| — |
|
| Short Term Incentive Program | — |
|
| $1,078,000 |
|
| $2,156,000 |
|
| $1,078,000 |
|
| $1,078,000 |
|
Non-Qualified Plan Payout(3) |
| $1,336,578 |
|
| $1,336,578 |
|
| $1,336,578 |
|
| $1,336,578 |
|
| $1,336,578 |
|
| Total |
| $1,336,578 |
|
| $9,640,728 |
|
| $18,496,925 |
|
| $2,414,578 |
|
| $15,838,589 |
|
| Roberto Simon | | | | | |
Acceleration of Equity Awards(2) | — |
| — |
|
| $5,004,878 |
| — |
|
| $5,004,878 |
|
| Salary and Benefits Continuation | — |
|
| $772,963 |
|
| $1,045,925 |
| — |
| — |
|
| Short Term Incentive Program | — |
|
| $400,000 |
|
| $800,000 |
|
| $400,000 |
|
| $400,000 |
|
Non-Qualified Plan Payout(3) |
| $710,543 |
|
| $710,543 |
|
| $710,543 |
|
| $710,543 |
|
| $710,543 |
|
| Total |
| $710,543 |
|
| $1,883,506 |
|
| $7,561,346 |
|
| $1,110,543 |
|
| $6,115,421 |
|
| Scott Phillips | | | | | |
Acceleration of Equity Awards(2) | — |
| — |
|
| $4,295,421 |
| — |
|
| $4,295,421 |
|
| Salary and Benefits Continuation | — |
|
| $738,163 |
|
| $1,001,325 |
| — |
| — |
|
| Short Term Incentive Program | — |
|
| $380,000 |
|
| $760,000 |
|
| $380,000 |
|
| $380,000 |
|
Non-Qualified Plan Payout(3) |
| $170,532 |
|
| $170,532 |
|
| $170,532 |
|
| $170,532 |
|
| $170,532 |
|
| Total |
| $170,532 |
|
| $1,288,695 |
|
| $6,227,278 |
|
| $550,532 |
|
| $4,845,953 |
|
| Joel Dearborn | | | | | |
Acceleration of Equity Awards(2) | — |
| — |
|
| $2,125,140 |
| — |
|
| $2,125,140 |
|
| Salary and Benefits Continuation | — |
|
| $620,168 |
|
| $840,336 |
| — |
| — |
|
| Short Term Incentive Program | — |
| — |
|
| $600,000 |
|
| $300,000 |
|
| $300,000 |
|
Non-Qualified Plan Payout(3) |
| $81,832 |
|
| $81,832 |
|
| $81,832 |
|
| $81,832 |
|
| $81,832 |
|
| Total |
| $81,832 |
|
| $702,000 |
|
| $3,647,308 |
|
| $381,832 |
|
| $2,506,972 |
|
| Robert Deshaies | | | | | |
Acceleration of Equity Awards(2) | — |
| — |
|
| $1,602,382 |
| — |
|
| $1,602,382 |
|
| Salary and Benefits Continuation | — |
|
| $232,788 |
|
| $890,577 |
| — |
| — |
|
| Short Term Incentive Program | — |
| — |
|
| $637,500 |
|
| $318,750 |
|
| $318,750 |
|
Non-Qualified Plan Payout(3) |
| $51,338 |
|
| $51,338 |
|
| $51,338 |
|
| $51,338 |
|
| $51,338 |
|
| Total |
| $51,338 |
|
| $284,126 |
|
| $3,181,797 |
|
| $370,088 |
|
| $1,972,470 |
|
| |
(1)
| The Company's Short Term Incentive Program provides for a pro-rated lump sum payment at target in the event of death or disability. |
| |
(2)
| For purposes of these calculations, the stock price used to calculate potential payments was the closing price on December 31, 2019, being $209.46. The officers identified above hold employee stock options that feature an exercise price of $104.95, $158.23 and $184.81. |
| |
(3)
| As used in this table, Non-Qualified Plan Payout consists solely of the participants’ balances in their EDCP and SERP accounts. |
Pay Ratio Disclosure
In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. For 2019, our last completed fiscal year,2021, the median annual total compensation of all employees, excluding our CEO, was $63,763$75,734 and the annual total compensation of our CEO was $6,482,394. Accordingly, the$9,612,917. The ratio of the CEO’s annual total compensation to the total annual compensation of the median employee was 102:these amounts is 127:1.
We are required to identify the median employee once every three years unless re-calculationThis calculation of the median employee is necessary or appropriate in light of a change to our employee population or compensation arrangements that would significantly impact the pay ratio disclosure. In 2019, we acquired Noventis, Inc. and Pavestone Capital. As a result of these acquisitions, we increased our employee population by 2%. Given the increase in our employee population as a result of these acquisitions and organic growth in our employee base, we re-calculated our median employee.
Thisemployee reflects analysis of our global workforce of 4,1615,533 employees as of October 1, 2019.2021. We used salary compensation to determine the median employee. Our estimate of salary for our full 20192021 fiscal year included: (i) annual base salary and (ii) hourly salary rate times annual standard hours. For the 2019 calculation, our employee population data described above does not include 30 employees of Go Fuel Card which we acquired in July 2019 and 852 employees of Discovery Benefits, Inc. which we acquired in March 2019.
Our estimates were based on an analysis of the pay components and payrolls in each of the countries in which we operate. Cash compensation rates of employees paid in foreign currencies were converted into US dollars using foreign exchange conversion rates in effect on October 1, 2019 for determination of the median.2021.
Once the median employee was identified, actual total compensation was determined in accordance with Item 402(c) (2)(x) of Regulation S-K.
The information disclosed in this section was developed and is provided solely to comply with specific legal requirements. We do not use this information in managing our company. We do not believe this information provides stockholders with a useful mechanism for evaluating our management’s effectiveness, operating results, or business prospects, nor for comparing our company with any other company in any meaningful respect.
20202022 Proxy Statement 6379
AUDIT MATTERS
|
| |
|
Proposal 3 |
Ratification of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm for Fiscal Year 20202022 |
|
In accordance with its Board-approved charter, the Audit Committee of the Board is directly responsible for the appointment, compensation, retention and oversight of the independent external audit firm retained to audit the Company’s consolidated financial statements. The Audit Committee has selected Deloitte & Touche LLP, or “D&T,” as the independent registered public accounting firm for the Company’s fiscal year 2020.2022. D&T has audited the Company’s consolidated financial statements since 2003. The Audit Committee oversees and is ultimately responsible for the audit fee negotiations associated with our retention of D&T. To assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent external audit firm. Further, in conjunction with the mandated rotation of the external audit firm’s lead engagement partner, the Audit Committee, through the Audit Committee Chair as its representative, iswas directly involved in the selectionprocess of evaluating D&T’s new lead engagement partner.
Stockholder ratification of the appointment is not required under the laws of the State of Delaware, but the Audit Committee has decided to request that the stockholders ratify the appointment. A representative of D&T will virtually attend the meeting to answer appropriate questions from stockholders and will have the opportunity to make a statement on behalf of the firm, if he or she so desires.
The Audit Committee and the Board believe that the continued retention of D&T to serve as our independent external audit firm is in our best interests and those of our stockholders. If this proposal is not approved by our stockholders at the 2020 annual meeting,Annual Meeting, the Audit Committee will reconsider its selection of D&T. Even if the selection is ratified, the Audit Committee may, in its discretion, select a different independent registered public accounting firm at any point during the year if it determines that making a change would be in the best interests of the Company and our stockholders.
| | |
|
|
We recommendOur Board of Directors recommends a vote FOR the ratification of Deloitte & Touche LLP as our independent
registered public accounting firm for fiscal year 2020.2022.
|
|
Auditor Selection and Fees
Audit Selection
The Audit Committee has selected D&T as the Company’s independent registered public accountant for the 20202022 fiscal year. D&T has served as the Company’s independent registered public accountant since our initial public offering.
Audit Fees
The following is a description of the fees billed to the Company by D&T for the years ended December 31, 20192021 and 2018:2020:
| | | | | | | | |
| December 31, |
| 2021 | 2020 |
Audit Fees(1) | $ | 6,573,067 | | $ | 5,908,892 | |
Audit-Related Fees(2) | 347,251 | 112,005 |
Tax Fees(3) | 138,549 | 67,669 |
All Other Fees (4) | 1,895 | 1,895 |
| Total | $ | 7,060,762 | | $ | 6,090,461 | |
|
| | | | | | |
| | December 31, |
| | 2019 | 2018 |
Audit Fees(1) | $ | 6,551,817 |
| $ | 5,921,187 |
|
Audit-Related Fees(2) | 134,752 |
| 62,661 |
|
Tax Fees(3) | 575,245 |
| 449,379 |
|
All Other Fees (4) | 4,990 |
| — |
|
| Total | $ | 7,266,804 |
| $ | 6,433,227 |
|
| |
(1)(1)For professional services performed in connection with the annual audit of the consolidated financial statements included in the annual report on Form 10-K, quarterly reviews of the condensed consolidated financial statements included in quarterly reports on Forms 10-Q, the annual audit of our internal control over financial reporting, as well as fees associated with the statutory audits of certain of our domestic and foreign entities and services performed in connection with comfort letters, consents and procedures related to documents filed with the SEC .
| For professional services performed in connection with the annual audit of the consolidated financial statements included in the annual report on Form 10-K, quarterly reviews of the condensed consolidated financial statements included in quarterly reports on Forms 10-Q, annual audit of our internal control over financial reporting, as well as fees associated with the statutory audits of certain of our domestic and foreign entities. |
| |
(2)
| For professional services performed in connection with the annual audit of the WEX Inc. Employee Savings Plan and certain agreed-upon procedures. |
| |
(3)
| For tax compliance, tax advice and tax planning services performed in connection with domestic tax matters. |
| |
(4)
| For accounting research tools. |
(2)For professional services performed that are reasonably related to the performance of the audit or review of the consolidated financial statements and are not included within Audit Fees, including the annual audit of the WEX Inc. Employee Savings Plan, information system audits, and certain agreed-upon procedures. (3)For tax compliance, tax advice and tax planning services performed in connection with domestic and international tax matters.
(4)For accounting research tools.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy regarding pre-approval of audit and non-audit services performed by D&T. According to the policy, the Audit Committee shall pre-approve all audit services to be provided to the Company, whether provided by the principal independent registered public accountant or other firms, and all other permitted services (review, attest and non-audit) to be provided to the Company by the independent registered public accountant; provided, however, that de minimis permitted non-audit services may instead be approved in accordance with applicable NYSE and SEC rules. The independent registered public accountant is not authorized to provide any prohibited non-audit services (as defined in Rule 2-01(c) (4) of Regulation S-X). The Chair of the Audit Committee has the authority to pre-approve any permitted services on behalf of the Audit Committee and shall notify the full committee of such approval at its next meeting.
Since our initial public offering on February 16, 2005, the Audit Committee has pre-approved all of the services performed by D&T.
20202022 Proxy Statement 6581
Audit Committee Report
The Board of Directors appointed us as an audit committee to monitor the integrity of WEX’s consolidated financial statements, its system of internal controls and the independence and performance of its internal audit department and independent registered public accounting firm. As an audit committee, we select the independent registered public accounting firm.
We are governed by a written charter adopted by the Board, which is available through the investor’s page of the Company’s website at www.wexinc.com.
Our committee consisted of foursix non-employee directors at the time that the actions of the committee described in this report were undertaken. Each member of the audit committee is “independent” within the meaning of the New York Stock Exchange rules and Rule 10A-3 under the Securities Exchange Act of 1934. WEX’s management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. WEX’s independent registered public accounting firm is responsible for auditing those financial statements. Our responsibility is to monitor and review these processes. However, we are not professionally engaged in the practice of accounting or auditing. We have relied, without independent verification, on the information provided to us and on the representations made by WEX’s management and independent registered public accounting firm.
In fulfilling our oversight responsibilities, we discussed with representatives of D&T, the Company’s independent registered public accounting firm for fiscal year 2019,2021, the overall scope and plans for their audit of the consolidated financial statements for fiscal year 2019.2021. We met with them, with and without WEX management present, to discuss the results of their examinations, their evaluations of the Company’s internal control over financial reporting and the overall quality of WEX’s financial reporting. We reviewed and discussed the audited consolidated financial statements for fiscal year 20192021 with management and the independent registered public accounting firm.
We also reviewed the report of management contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2019,2021, filed with the SEC, as well as the Report of Independent Registered Public Accounting Firm included in the annual report on Form 10-K related to their audit of (i) the consolidated financial statements and (ii) the effectiveness of internal control over financial reporting. We continue to oversee the Company’s efforts related to its internal control over financial reporting and management’s preparations for the evaluation in fiscal year 2020.2022.
We discussed with the independent registered public accounting firm the matters required to be discussed by applicable requirements of the Public Company Accounting and Oversight Board and the SEC.
In addition, we received from the independent registered public accounting firm the letter and the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed the disclosures with our independent registered public accounting firm, as well as other matters relevant to their independence from management and WEX. In evaluating the independence of our independent registered public accounting firm, we considered whether the services they provided beyond their audit and review of the consolidated financial statements were compatible with maintaining their independence. We also considered the amount of fees they received for audit and non-audit services.
Based on our review and these meetings, discussions and reports, we recommended to the Board of Directors that the audited consolidated financial statements for fiscal year 20192021 be included in the Annual Report on Form 10-K.10-K for the fiscal year ended December 31, 2021.
THE AUDIT COMMITTEE
Regina O. Sommer (Chair)
John Bachman
Nancy Altobello *
Bhavana Bartholf *
James Groch *
Derrick Roman
Susan Sobbott
* Ms. Altobello, Ms. Bartholf, and Mr. Roman joined the Committee effective June 4, 2021.
INFORMATION ABOUT STOCK OWNERSHIP
Principal Stockholders
This table shows common stock that is beneficially owned by our directors, our named executive officers,director nominees, our Named Executive Officers, our current directors and executive officers as a group and all persons known to us to own 5 percent or more of the Company’s outstanding common stock, as of March 17, 2020.April 5, 2022. The percent of outstanding shares reported below is based on 43,355,663 shares44,983,068 shares outstanding on March 17, 2020.April 5, 2022.
Amount and Nature of Shares Beneficially Owned
|
| | | | | | | | |
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)
280 Congress Street
Boston, MA 02210 | 3,943,657 |
| — |
| 3,943,657 |
| 9.1 | % |
Janus Henderson Group plc(5)
201 Bishopsgate
London EC2M 3AE, United Kingdom | 3,569,875 |
| — |
| 3,569,875 |
| 8.2 | % |
The Vanguard Group, Inc.(6)
100 Vanguard Blvd
Malvern, PA 19355 | 4,048,312 |
| — |
| 4,048,312 |
| 9.3 | % |
BlackRock, Inc.(7)
55 East 52nd Street
New York NY 10055 | 3,906,948 |
| — |
| 3,906,948 |
| 9.0 | % |
Eaton Vance Management(8) 2 International Place Boston, MA 02110 | 2,221,492 |
| — |
| 2,221,492 |
| 5.1 | % |
| Named Executive Officers and Directors: | | | | |
| Melissa Smith | 48,915 |
| 40,551 |
| 89,466 |
| * |
|
Roberto Simon(9) | 9,622 |
| 17,437 |
| 27,059 |
| * |
|
| Scott Phillips | 10,247 |
| 12,575 |
| 22,822 |
| * |
|
| Joel Dearborn | 3,782 |
| 2,278 |
| 6,060 |
| * |
|
| Robert Deshaies | 5,997 |
| 1,873 |
| 7,870 |
| * |
|
| John E. Bachman | 2,363 |
| 662 |
| 3,025 |
| * |
|
| Daniel Callahan | — |
| 1,156 |
| 1,156 |
| * |
|
| Michael E. Dubyak | 32,134 |
| 907 |
| 33,041 |
| * |
|
| Shikhar Ghosh | 3,712 |
| 662 |
| 4,374 |
| * |
|
| | | | | | | | | | | | | | |
Name and Address(1) | Common
Stock
Owned(2) | Right To
Acquire(3) | Total Securities
Beneficially
Owned(3) | Percent of
Outstanding
Shares |
| Principal Stockholders: | | | | |
The Vanguard Group, Inc.(5)
100 Vanguard Blvd
Malvern, PA 19355 | 4,064,575 | — | | 4,064,575 | 9.0 | % |
BlackRock, Inc.(6)
55 East 52nd Street
New York NY 10055 | 4,057,826 | — | | 4,057,826 | 9.0 | % |
Wellington Management Group, LLP(4)
280 Congress Street
Boston, MA 02210 | 3,969,599 | — | | 3,969,599 | 8.8 | % |
Janus Henderson Group plc(7)
201 Bishopsgate
London EC2M 3AE, United Kingdom | 3,385,731 | — | | 3,385,731 | 7.5 | % |
Morgan Stanley (9) 1585 Broadway New York, New York 10036 | 2,433,798 | | — | | 2,433,798 | | 5.4 | % |
JPMorgan Chase & Co. (8) 383 Madison Avenue New York, NY 10179 | 2,370,358 | — | | 2,370,358 | 5.3 | % |
| Named Executive Officers, and Directors: | | | | |
Melissa Smith(10) | 89,124 | | 194,651 | | 283,775 | | * |
Roberto Simon(11) (12) | 5,630 | | 15,896 | | 21,526 | | * |
Scott Phillips (13) | 5,357 | | 14,626 | | 19,983 | | * |
| David Cooper | 9,885 | | 8,994 | | 18,879 | | * |
| Robert Deshaies | 10,555 | | 8,735 | | 19,290 | | * |
| Daniel Callahan** | — | | 760 | | 760 | | * |
| Shikhar Ghosh** | 3,661 | | 760 | | 4,421 | | * |
| James Groch** | 3,000 | | 760 | | 3,760 | | * |
| James Neary | 4,286 | 760 | | 5,046 | * |
| Stephen Smith | 2,074 | 760 | | 2,834 | * |
| Susan Sobbott | 2,417 | 760 | | 3,177 | * |
| Regina O. Sommer** | 8,209 | 760 | | 8,969 | * |
| Jack VanWoerkom** | 1,923 | 760 | | 2,683 | * |
| Nancy Altobello | — | | 1,250 | | 1,250 | * |
| Bhavana Bartholf | — | | 1,250 | | 1,250 | * |
20202022 Proxy Statement 6783
INFORMATION ABOUT STOCK OWNERSHIP
| | | | | | | | | | | | | | |
Name and Address(1) | Common
Stock
Owned(2) | Right To
Acquire(3) | Total Securities
Beneficially
Owned(3) | Percent of
Outstanding
Shares |
| Derrick Roman | — | | 1,250 | | 1,250 | * |
Directors and Executive Officers as a Group (21 Persons)(14) | 173,319 | | 254,196 | | 427,515 | | 1.0% |
* Less than 1%
** Please refer to footnote (2) to see the deferred stock units in WEX Inc. held by Mr. Callahan, Mr. Ghosh, Mr. Groch, Ms. Sommer, and Mr. VanWoerkom
(1)Unless otherwise noted, the business address for the individual is care of WEX Inc., 97 Darling Avenue, South Portland, ME 04106.
(2)Unless otherwise noted, includes shares for which the named person or entity has sole voting and investment power or has shared voting and investment power, including with his or her spouse. Excludes shares that may be acquired through stock option exercises or through the vesting of restricted stock units, which are accounted for in the column "Right To Acquire". This table does not include deferred stock units (which are listed as of the date of this filing), which will convert into the following number of shares that will be acquired by our non-employee directors 200 days after their separation from our Board: 42,169 shares by Mr. Ghosh; 6,564 shares by Ms. Sommer; 6,606 shares by Mr. VanWoerkom; 3,002 shares by Mr. Groch; and, 4,120 shares by Mr. Callahan. Please note, the 760 shares that Mr. Callahan and Mr. Groch have included in the right to acquire column and the 1,250 shares that Ms. Altobello and Mr. Roman have included in the right to acquire column will be acquired as deferred stock units, which will vest as common stock 200 days after their separation from the Board.
(3)Includes shares that can be acquired through stock option exercises or the vesting of restricted stock units through June 4, 2022. Excludes shares that may not be acquired until on or after June 5, 2022.
(4)This information was reported on a Schedule 13G/A filed with the SEC on February 4, 2022. Each of Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP has shared voting power with respect to 3,446,057 shares and shared dispositive power with respect to 3,969,573 shares. Wellington Management Company LLP has shared voting power with respect to 3,345,256 shares and shared dispositive power with respect to 3,771,665 shares. The securities reported are owned of record by clients of one or more investment advisors directly or indirectly owned by Wellington Management Group LLP (the “Investment Advisors”), including: Wellington Management Company LLP, Wellington Management Canada LLC, Wellington Management Singapore Pte Ltd, Wellington Management Hong Kong Ltd, Wellington Management International Ltd, Wellington Management Japan Pte Ltd and Wellington Management Australia Pty Ltd. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Investment Advisors. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. The percentage reported in the table above is based on the assumption that Wellington Management Group LLP has beneficial ownership of 3,969,599 shares of common stock on April 5, 2022.
(5)This information was reported on a Schedule 13G/A filed by The Vanguard Group, Inc. (“Vanguard”) with the SEC on February 10, 2022. The Schedule 13G/A reported that Vanguard has shared voting power over 24,848 shares, sole dispositive power over 4,000,211 shares and shared dispositive power over 64,364 shares. The percentage reported is based on the assumption that Vanguard has beneficial ownership of 4,064,575 shares of common stock on April 5, 2022.
(6)This information was reported on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 3, 2022. The Schedule 13G/A reported that BlackRock has sole voting power over 3,916,459 shares and has sole dispositive power over 4,057,826 shares. The percentage reported is based on the assumption that BlackRock had beneficial ownership of 4,057,826 shares of common stock on April 5, 2022.
(7)This information was reported on a Schedule 13G/A filed by Janus Henderson Group plc (“Janus Henderson”) with the SEC on February 11, 2022. The Schedule 13G/A reported that Janus Henderson has shared voting power and shared dispositive power over 3,385,731 shares. The percentage reported is based on the assumption that Janus Henderson has beneficial ownership of 3,385,731 shares of common stock on April 5, 2022.
(8)This information was reported on a Schedule 13G/A filed by JPMorgan Chase & Co. (“JPMorgan Chase”) with the SEC on January 18, 2022. The Schedule 13G/A reported that JPMorgan Chase has sole voting power over 2,282,759 shares, shared voting power over 180 shares, sole dispositive power over 2,318,963 shares, and shared dispositive power over 46,016 shares. The percentage reported is based on the assumption that JPMorgan Chase has beneficial ownership of 2,370,358 shares of common stock on April 5, 2022.
(9)This information was reported on a Schedule 13G/A filed by Morgan Stanley, Inc. (“Morgan Stanley”) with the SEC on February 11, 2022. The Schedule 13G/A reported that Morgan Stanley has shared voting power over 2,385,968 shares and shared dispositive power over 2,433,798 shares. The percentage reported is based on the assumption that Morgan Stanley has beneficial ownership of 2,433,798 shares of common stock on April 5, 2022.
(10)Includes 15,185 shares held indirectly through a trust for the benefit of Ms. Smith's children through a Grantor Retained Annuity Trust (“GRAT”). Ms. Smith disclaims beneficial ownership of these shares except to the extent of her pecuniary interest in them.
(11)Includes 104 shares held indirectly in the WEX Inc. 401(k) Plan. Mr. Simon disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them.
(12)Mr. Simon resigned as our Chief Financial Officer effective as of the end of the day on December 31, 2021. Following his resignation, he remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022.
(13)Mr. Phillips served as the Company's President, Global Fleet, during the entirety of 2021 until January 1, 2022, at which point he resigned such position. He then remained employed by the Company in a non-executive officer role as Strategic Advisor through April 1, 2022.
(14)In addition to the Named Executive Officers and directors included in this table, seven other executive officers were members of this group as of March 31, 2022.
|
| | | | | | | | |
Name and Address(1) | Common
Stock
Owned(2) | Right To
Acquire(3) | Total Securities
Beneficially
Owned(3) | Percent of
Outstanding
Shares |
Rowland T. Moriarty(10) | 49,428 |
| 736 |
| 50,164 |
| * |
|
| James Neary | 2,363 |
| 662 |
| 3,025 |
| * |
|
| Stephen Smith | — |
| — |
| — |
| * |
|
| Susan Sobbott | — |
| 1,156 |
| 1,156 |
| * |
|
| Regina O. Sommer | 6,286 |
| 662 |
| 6,948 |
| * |
|
| Jack VanWoerkom | — |
| 662 |
| 662 |
| * |
|
Directors and Executive Officers as a Group (20 Persons)(11) | 210,577 |
| 119,813 |
| 330,390 |
| * |
|
| |
(1)
| Unless otherwise noted, the business address for the individual is care of WEX Inc., 97 Darling Avenue, South Portland, ME 04106. |
| |
(2)
| Unless otherwise noted, includes shares for which the named person or entity has sole voting and investment power or has shared voting and investment power, including with his or her spouse. Excludes shares that may be acquired through stock option exercises or through the vesting of restricted stock units. This table does not include the following number of shares that will be acquired by our non-employee directors 200 days after their separation from our Board: 40,195 shares by Mr. Ghosh; 11,999 shares by Dr. Moriarty; 6,564 shares by Ms. Sommer; 6,606 shares by Mr. VanWoerkom; and 299 shares by Mr. Callahan. |
| |
(3)
| Includes shares that can be acquired through stock option exercises or the vesting of restricted stock units through May 16, 2020. Excludes shares that may not be acquired until on or after May 17, 2020. |
| |
(4)
| This information was reported on a Schedule 13G/A filed with the SEC on January 28, 2020. Each of Wellington Management Group, LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP has shared voting power with respect to 3,454,252 shares and shared dispositive power with respect to 3,943,657 shares. Wellington Management Company LLP has shared voting power with respect to shares 3,321,191 and shared dispositive power with respect to 3,731,281 shares. The securities reported are owned of record by clients of one or more investment advisors directly or indirectly owned by Wellington Management Group LLP (the “Investment Advisors”), including: Wellington Management Company LLP , Wellington Management Canada LLC, Wellington Management Singapore Pte Ltd, Wellington Management Hong Kong Ltd, Wellington Management International Ltd, Wellington Management Japan Pte Ltd and Wellington Management Australia Pty Ltd. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Investment Advisors. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. The percentage reported in the table above is based on the assumption that Wellington Management Group LLP has beneficial ownership of 3,943,657 shares of common stock on March 17, 2020. |
| |
(5)
| This information was reported on a Schedule 13G/A filed by Janus Henderson Group plc (“Janus Henderson”) with the SEC on February 14, 2020. The Schedule 13G/A reported that Janus Henderson has shared voting power and shared dispositive power over 3,569,875 shares. The percentage reported is based on the assumption that Janus Henderson has beneficial ownership of 3,569,875 shares of common stock on March 17, 2020. |
| |
(6)
| This information was reported on a Schedule 13G/A filed by The Vanguard Group, Inc. (“Vanguard”) with the SEC on February 12, 2020. The Schedule 13G/A reported that Vanguard has sole voting power over 24,877 shares, shared voting power over 8,473 shares, sole dispositive power over 4,020,516 shares and shared dispositive power over 27,796 shares. The percentage reported is based on the assumption that Vanguard has beneficial ownership of 4,048,312 shares of common stock on March 17, 2020. |
| |
(7)
| This information was reported on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 6, 2020. The Schedule 13G/A reported that BlackRock has sole voting power over 3,745,152 shares and has sole dispositive power over 3,906,948 shares. The percentage reported is based on the assumption that BlackRock had beneficial ownership of 3,906,948 shares of common stock on March 17, 2020. |
| |
(8)
| This information was reported on a Schedule 13G/A filed by Eaton Vance Management (“Eaton Vance”) with the SEC on February 13, 2020. The Schedule 13G/A reported that Eaton Vance has sole voting power over and sole dispositive power over 2,221,492 shares. The percentage reported is based on the assumption that Eaton Vance has beneficial ownership of 2,221,492 shares of common stock on March 17, 2020. |
| |
(9)
| Includes 80 shares held indirectly in the WEX Inc. 401(k) Plan. Mr. Simon disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them. |
| |
(10)
| Includes 34,978 shares held indirectly through Rubex, LLC and 13,600 shares held indirectly through the Moriarty Family Charitable Trust. Dr. Moriarty is the Chief Investment Officer of Rubex, LLC and disclaims beneficial ownership of the shares held by Rubex, LLC except to the extent of his pecuniary interest in them. Dr. Moriarty disclaims beneficial ownership of the shares of Moriarty Family Charitable Trust except to the extent of his pecuniary interest in them. |
| |
(11)
| In addition to the named executive officers and directors included in this table, five other executive officers were members of this group as of March 17, 2020. |
INFORMATION ABOUT STOCK OWNERSHIP
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information about shares of common stock that may be issued under the Company’s equity compensation plans as of December 31, 2019.2021. The Company’s equity plans include the 2010 Equity and Incentive Plan and the Amended and Restated 2019 Equity and Incentive Plan, each of which were approved by our stockholders
|
| | | | | | | | | | |
| Plan Category | Number of
Securities to
be Issued
Upon Exercise
of Outstanding
Options, Warrants
and Rights
(#) | Weighted-Average
Exercise Price of
Outstanding
Options, Warrants and
Rights (Excludes
Restricted and
Deferred Stock
Units and Performance
Stock Units)Rights
($) | Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding
Securities Reflected
in First Column)
(#) |
| Equity compensation plans approved by Company stockholders | 2,091,7572,512,207(1)
| 115.82141.42(2)
| 3,636,5444,368,771(3)
|
| |
(1)(1)Includes 892,039 shares of common stock subject to PRSUs, determined using the applicable fungible share ratios, under the Company's Amended and Restated 2019 Equity and Incentive Plan and the 2010 Equity and Incentive Plan (the "Prior Plan"). Assumes that the target level of performance conditions were achieved for any PRSU awards for which the performance period was not concluded as of December 31, 2021 and includes the actual number of shares to be issued upon settlement of PRSUs granted where the performance period has concluded as of December 31, 2021, but settlement occurred in 2022. If the highest level of performance condition attainments were assumed for such PRSUs, the total number of shares of common stock to be issued upon settlement of such awards as of December 31, 2021 would increase by 927,075 shares of common stock. (2)Weighted average exercise price does not take into account shares of common stock subject to outstanding RSUs, PRSUs and deferred stock units as such shares of common stock will be issued at the time they vest, without any cash consideration payable for those shares of common stock. (3)Represents shares remaining available for future issuance under the Amended and Restated 2019 Equity and Incentive Plan as of December 31, 2021. The Amended and Restated 2019 Equity and Incentive Plan permits the award of incentive stock options and nonstatutory stock options, stock appreciation rights, restricted stock awards, RSUs, director awards, other stock-based and cash-based awards and performance awards. The Amended and Restated 2019 Equity and Incentive Plan authorizes for issuance (i) 4,500,000 shares of common stock for awards granted after June 4, 2021, (ii) 1,235,669 shares of common stock for awards granted on or prior to March 21, 2021, and (iii) such additional number of shares of common stock (up to 776,777 shares) as is equal to the number of shares of common stock subject to awards granted under the Company's Prior Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. To the extent a share that is subject to an award granted under the Prior Plan that counted as 1.53 shares against such Prior Plan’s share reserve is made available for the award of future grants under the Amended and Restated 2019 Equity and Incentive Plan, the share reserve will be credited with 1.53 shares. Otherwise, each share of common stock subject to an award under the Prior Plan that becomes available for grant under the Amended and Restated 2019 Equity and Incentive Plan will increase the plan’s share reserve by one share. Under the Amended and Restated 2019 Equity and Incentive Plan, any award of restricted stock, RSU, or other stock-based award with a per share purchase price lower than 100% of the fair market value per share of common stock on the date of grant shall be counted against share limits as 1.7 shares for each one share of applicable award. The Board may not make new awards under the Prior Plan. | Includes 687,796 shares of common stock under the 2010 and 2019 Equity and Incentive Plans subject to PSUs assuming that the target level of performance conditions were achieved. If the highest level of performance conditions were assumed for such PSUs, the total number of shares of common stock to be issued upon settlement of such awards as of December 31, 2019 would be 1,373,750. |
| |
(2)
| Weighted average exercise price does not take into account the 414,875 shares of common stock subject to outstanding RSUs, the 96,884 shares of common stock subject to outstanding DSUs or the 687,796 shares of common stock subject to outstanding PSUs. Such shares of common stock will be issued at the time such awards vest, without any cash consideration payable for those shares. |
| |
(3)
| The 2019 Equity and Incentive Plan permits the award of incentive stock options and nonstatutory stock options, stock appreciation rights, restricted stock awards, RSUs, director awards, other stock-based and cash-based awards and performance awards. The 2019 Equity and Incentive Plan authorizes a number of shares for issuance equal to the sum of (i) 3,700,000 shares of common stock and (ii) such additional number of shares of common stock (up to 1,501,676) as is equal to (a) the number of shares of the common stock reserved for issuance under the 2010 Equity and Incentive Plan that remained available for grant under that plan immediately prior to May 9, 2019 and (b) the number of shares of common stock subject to awards granted under the Company’s 2010 Equity and Incentive Plan, which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. To the extent a share that is subject to an award granted under the 2010 Equity and Incentive Plan that counted as 1.53 shares against such plan’s share reserve is made available for the award of future grants under the 2019 Equity and Incentive Plan, the share reserve of the 2019 Plan will be credited with 1.53 shares. Otherwise, each share of common stock subject to an award under the Prior Plan that becomes available for grant under the 2019 Plan will increase the 2019 Plan’s share reserve by one share. Under the 2019 Equity and Incentive Plan, any award of restricted stock, RSU, or other stock-based award with a per share price or per unit purchase price lower than 100% of the fair market value per share of common stock on the date of grant shall be counted against share limits as 1.7 shares for each one share of applicable award. The Board may not make new awards under the 2010 Equity and Incentive Plan. |
20202022 Proxy Statement 6985
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
This proxy statement and enclosed proxy card 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, 202012, 2022 via the Internet atas a virtual web conference at https://web.lumiagm.com/289188153. The password for the meeting is wex2020.wex2022. The proxy statement describes the proposals on which you may vote as a stockholder and contains important information to consider when voting.
We are makingmailing this proxy statement, our annual report to stockholders and our proxy card available to our stockholders on or about April 22, 2020.19, 2022.
Your vote is important. Please submit your vote as soon as possible even if you plan to virtually attend the annual meeting online.
Why is the 20202022 annual meeting of stockholders a virtual, online meeting?
ToIn light of the ongoing pandemic, to enable broad access to our 2022 annual meeting of stockholders and to continue to support the health and well-being of our stockholders and employees, in light of the recent coronavirus (COVID-19) outbreak, our 20202022 annual meeting of stockholders will be a virtual meeting of stockholders where stockholders will participate by accessing a website using the Internet. There will not be a physical meeting location. In light of the public health and safety concerns related to COVID-19, weWe believe that hosting a virtual meeting will facilitate stockholder attendance and participation at our 20202022 annual meeting of stockholders by enabling stockholders to participate remotely from any location around the world.world, while still acknowledging the potential impacts stemming from the pandemic. We have designed the virtual annual meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform.
How do I virtually attend the annual meeting?
We will host the annual meeting live online via at a virtual web conference at https://web.lumiagm.com/289188153. You may attend the annual meeting by visiting https://web.lumiagm.com/289188153.that website. The password for the meeting is wex2020.wex2022. The audio webcast will start at 8:00 a.m., ET, on Thursday, May 14, 2020.12, 2022. You will need the digit control number included on your proxy card or Notice of Internet Availability of Proxy Materials in order to be able to enter the annual meeting online and vote. Instructions on how to attend and participate online are posted at https://go.lumiglobal.com/faq.
Online check in will begin at 7:00 a.m., ET on Thursday, May 14, 2020,12, 2022, and you should allow ample time for the online check-in proceedings. Please refer to https://go.lumiglobal.com/faq or e-mail support@lumiglobal.com if you require any assistance attending the virtual web conference.
Who can attend and participate in the annual meeting?
Stockholders who owned the Company’s common stock at the close of business on March 17, 2020,31, 2022, the record date, may attend the annual meeting online and vote at the annual meeting of stockholders. Each share is entitled to one vote. There were 43,355,66344,981,748 shares of common stock outstanding on the record date.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
In accordance with the rules of the Securities and Exchange Commission, or SEC, we have elected to provide access to our proxy materials, including this proxy statement and our annual report, over the Internet. Accordingly, we have sent a Notice Regarding the Availability of Proxy Materials, referred to in this proxy statement as the Notice, to our stockholders entitled to vote at the annual meeting with instructions for accessing the proxy materials and voting over the Internet. We mailed the Notice on or about April 22, 2020 to all stockholders entitled to vote at the annual meeting.
All stockholders entitled to vote at the annual meeting will have the ability to access the proxy materials by visiting the website referred to in the Notice, https://ir.wexinc.com/financials/proxy-statement. The Notice also contains instructions on how to request to receive a printed set of the proxy materials. You may request the printed proxy materials over the Internet at https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials, by emailing info@astfinancial.com or by calling 888-776-9962 (domestic) or 718-921-8562 (international).
Can I vote my shares by filling out and returning the Notice?
No. The Notice identifies the items to be voted on at the annual meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote over the Internet or by telephone prior to the annual meeting, by requesting and returning a printed proxy card prior to the annual meeting or by voting online during the annual meeting.
May I see a list of stockholders entitled to vote as of the record date?
A list of registered stockholders as of the close of business on the record date will be available upon request for examination by the stockholders through https://web.lumiagm.com/289188153 during the whole time of the annual meeting.
How do I vote?
If the shares are registered directly in your name, you may vote in the following ways:
•Vote over the Internet prior to the Annual Meeting: To vote over the Internet, please go to the following website: www.voteproxy.com and follow the instructions at that site for submitting your proxy electronically. You must submit your internetInternet proxy before 11:59 p.m., Eastern Time, on Wednesday, May 13, 2020,11, 2022, the day before the annual meeting , for your vote to count.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
•Vote by Telephone prior to the Annual Meeting: To vote by telephone, please call 1-800-776-9437 (domestic) or 1-718-921-8500 (international) and follow the recorded instructions. You must submit your telephonic vote before 11:59 p.m., Eastern Time, on Wednesday, May 13, 2020,11, 2022, the day before the annual meeting, for your vote to count.
•Vote by Mail prior to the Annual Meeting: If you have requested and received a printed copy of the proxy materials, youYou may vote by mail by completing, signing and dating your proxy card and mailing it in the enclosed prepaid and addressed envelope. Your proxy card must be received and tabulated no later than the closing of the polls for your proxy card to be valid and your vote to count.
•Vote Online while Virtually Attending the Annual Meeting: If you attend the annual meeting, you may vote your shares online while virtually attending the annual meeting by visiting https://web.lumiagm.com/289188153. theThe password for the meeting is wex2020.wex2022. You will need your control number included on your proxy card or Notice in order to be able to vote during the annual meeting.
If you hold your shares in “street name,” you should follow the instructions provided by your bank, broker or other nominee, which may include instructions regarding your ability to vote by mail, by telephone or through the Internet. Holding shares in street name means you hold them through a bank, broker or other nominee, and as a result, the shares are not held in your individual name but through someone else. To vote in person at the virtual Annual Meeting,annual meeting, you must first obtain a valid legal proxy from your broker, bank or other agent and then register in advance to attend the Annual Meeting.annual meeting. Please follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form.
After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Annual Meeting,annual meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests for registration can be mailed to:
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
American Stock Transfer & Trust Company LLC
Attn: Proxy Tabulation Department
6201 15th Avenue
Brooklyn, NY 11219
Requests for registration must be labeled as “Legal Proxy” and be received no later than 11:59 p.m., ET on May 7, 20205, 2022. You will receive a confirmation of your registration by email after we receive your registration materials. Follow the instructions provided to vote. We encourage you to access the meeting prior to the start time leaving ample time for the check in.
| | |
|
| Given the impact of the COVID-19 pandemic, we strongly encourage you to vote Over the Internet or by Telephone as described above in advance of the meeting. |
|
How do I vote my shares held in the WEX Inc. Employee Savings Plan?
If you participate in our WEX Inc. Employee Savings Plan, commonly referred to as 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 11:59 PM ET on May 11, 2020.9, 2022. Otherwise, if you do not provide instructioninstructions by such date, the share equivalents credited to your account will not be voted by the trustee. The shares held in the 401(k) Plan cannot be voted electronically during the annual meeting. Please refer to the “Information about Voting Procedures” section.
How do I submit a question at the annual meeting?
If you wish to submit a question, on the day of the annual meeting, beginning at 8:00 a.m., ET, you may log into the virtual meeting platform at https://web.lumiagm.com/289188153, type your question into the “Ask a Question” field, and click “Submit.” We will try to answer as many germane stockholder-submitted questions as time permits. However, we reserve the right to exclude questions that are irrelevant to the business of the Company or of the Annual Meeting,annual meeting, related to material, nonpublic information, derogatory in nature, related to personal matters or personal grievances, or otherwise out-of-order or not otherwise suitable for the conduct of the Annual Meeting.annual meeting. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized and answered together. Germane questions received from stockholders during the virtual annual meeting, and their related responses, will be posted on the Company’s investor relations website at https://ir.wexinc.com/financials/proxy-statement as soon as practicable following the annual meeting.
722022 Proxy Statement WEX Inc.87
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
Information about Voting Procedures
How is my vote counted?
You may vote “for” or “against” or “abstain” from voting for each director nominee. If you abstain from voting on the nomination of any director nominee, it will not count as a vote “for” or “against” the nominee. Broker non-votes will not count as a vote “for” or “against” the nominee.
You may vote “for” or “against” or “abstain” from voting on the proposals regarding the advisory vote on executive compensation, and ratification of the independent registered public accounting firm. If you abstain from voting on either of these proposals, it will have the same effect as a vote “against” the proposal.
If you provide your voting instructions on your proxy, your shares will be voted:
•as you instruct, and
•according to the best judgment of the persons named in the proxy if a proposal comes up for a vote at the meeting that is not on the proxy.
If you do not indicate a specific choice on the proxy you sign and submit, your shares will be voted:
•for the threefour named nominees for director for three-year terms,a one-year term,
•for the approval of an advisory (non-binding) vote on the compensation of our named executive officers,Named Executive Officers,
•for the ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020,2022, and
•according to the best judgment of the persons named in the proxy if a proposal comes up for a vote at the meeting that is not on the proxy.
How many votes are required for the election of directors?
Under our By-Laws, in an uncontested election, a nominee will be elected to the Board of Directors if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee’s election, with abstentions and “broker non-votes” not counting as votes “for” or “against.” If an uncontested incumbent director nominee receives a majority of votes “against” his or her election, the director must tender a resignation from the Board of Directors. The Board of Directors will then decide whether to accept the resignation within 90 days following certification of the stockholder vote (based on the recommendation of a committee of independent directors). We will publicly disclose the Board of Directors’ decision and its reasoning with regard to the offered resignation.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
How many votes are needed to approve the advisory (non-binding) vote on the compensation of our named executive officersNamed Executive Officers and to ratify the selection of the independent registered public accounting firm?
The affirmative vote of the holders of a majority of the shares present at the meeting in person, or by proxy, and entitled to vote on the proposal is required for the approval of the advisory (non-binding) vote on the compensation of the named executive officers, and the approval of the ratification of the selection of the independent registered public accounting firm. An abstention will be included in the denominator for purposes of determining the number of affirmative votes required for approval. A broker non-vote will be treated as not being entitled to vote on the proposal and will not be counted for purposes of determining whether the proposal has been approved.
What is the difference between a “stockholder of record” and a “beneficial owner”?
These terms describe the manner in which your shares are held. If your shares are registered directly in your name through American Stock Transfer & Trust Company, LLC, our transfer agent, you are a “stockholder of record” or registered stockholder. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the “beneficial owner” of shares held in “street name.”
What is a Broker Non-Vote?
A broker is entitled to vote shares held for a stockholder on “discretionary” matters without instructions from the beneficial owner of those shares. However, if a beneficial owner does not provide timely instructions, the broker does not have the authority to vote on any “non-discretionary” proposals at the Annual Meetingannual meeting and a “broker non-vote” would occur. The only matter at the 20202022 annual meeting that is “discretionary” is the ratification of our independent registered public accounting firm. The other matters are “non-discretionary.” Please instruct your broker on how to vote your shares using the voting instruction form provided by your broker or following any instructions provided by your broker regarding your ability to vote by telephone or through the Internet.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
What if I do not vote?
The effect of not voting will depend on how your share ownership is registered. If you own shares as a “stockholder of record” or registered holder and you do not vote, then your unvoted shares will not be represented at the meeting and will not count toward the quorum requirement. If a quorum is obtained, then your unvoted shares will not affect whether a proposal is approved or rejected.
If you are a stockholder whose shares are not registered in your name and you do not vote, then your bank, broker or other nominee, who is the holder of record, may still represent your shares at the meeting for purposes of obtaining a quorum. In the absence of your voting instructions, under stock exchange rules, if applicable, your bank, broker or other nominee will be able to vote your shares in its discretion regarding the ratification of the Company’sour independent auditors.registered public accounting firm. However, under stock exchange rules, if applicable, your bank, broker or other nominee will not be able to vote your shares in its discretion in the election of directors or the advisory (non-binding) vote on the compensation of our named executive officers.Named Executive Officers. Therefore, you must vote your shares if you want them to be counted for purposes of these votes.
What if I change my mind after I submit my proxy?
If your stock is registered directly in your name, you may revoke your proxy and change your vote by:
•voting over the Internet or by telephone prior to the annual meeting as instructed above under “How do I vote?” Only your last Internet or telephone vote submitted prior to the annual meeting is counted. You may not change your vote over the Internet or by telephone after 11:59 p.m., ET, on Wednesday, May 13, 2020,11, 2022, the day before the annual meeting,
•casting another vote with a later date and returning it before the polls close at the meeting as instructed above under “How do I vote?”. Only the last dated, valid proxy will be counted, or
•voting online while virtually attending the annual meeting as instructed above under “How do I vote?”.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
If you hold your stock in “street name” and have instructed your bank, broker or nominee to vote the shares, you should follow the instructions provided by your bank, broker or other nominee to revoke your proxy and change your vote. You may also revoke your proxy and change your vote by participating in the meeting online and voting your shares electronically during the meeting, if you have a legal proxy from your bank, broker or other nominee and have followed the instructions above.
Any change to your voting instructions provided to the trustee with respect to voting the shares held in the WEX Inc. Employee Savings Plan must be provided to the trustee by 11:59 PM ET on May 11, 2020.6, 2022.
Your virtual attendance at the meeting alone, without voting electronically, will not automatically revoke your proxy.
What happens if a director nominee is unable to stand for election?
The Board may reduce the number of directors or select a substitute nominee. In the latter case, if you have submitted your proxy, the persons named in the proxy can vote your shares for a substitute nominee. The person you authorize to vote on your behalf cannot vote for more than threefour nominees.
What constitutes a quorum?
In order for business to be conducted at the meeting, a quorum must be present. A quorum consists of the holders of one-third of the shares of common stock issued and outstanding on the record date and entitled to vote.
Shares of common stock represented in person or by proxy (including shares that abstain or do not vote with respect to one or more of the matters to be voted upon) will be counted for purposes of determining whether a quorum exists. Shares of common stock that are present virtually during the annual meeting constitute shares of common stock represented “in person”. If a quorum is not present, the meeting will be adjourned until a quorum is obtained.
What is the effect of not submitting my proxy if my shares are held in the WEX Inc. Employee Savings Plan?
The trustee for the WEX Inc. Employee Savings Plan, which is often referred to as the 401(k) plan, will not vote the shares of participants who do not give specific instructions as to how those shares should be voted. As a result, your unvoted shares will not be represented at the meeting and will not count toward the quorum requirement. If a quorum is obtained, then your unvoted shares will not affect whether a proposal is approved or rejected.
What does it mean if I receive more than one proxy card or Notice?card?
It means that you hold your shares in multiple accounts. Please follow the voting instructions on the proxy cards and Notices to be sure that all of your shares are voted.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
Where do I find voting results of the meeting?
We will announce preliminary voting results during the annual meeting. We will also publish the preliminary or, if available, the final results in a current report on Form 8-K within four business days of the end of the meeting. You may access a copy of the current report on Form 8-K electronically on our website or through the SEC’s website at www.sec.gov. Voting results will be tabulated and certified by our transfer agent, American Stock Transfer & Trust Company.
Who pays the cost for proxy solicitation?
The Company pays for distributing and soliciting proxies. As a part of this process, the Company reimburses brokers, nominees, fiduciaries and other custodians for reasonable fees and expenses in forwarding proxy materials to stockholders. Should theThe Company decide to engagehas engaged a proxy solicitor, D.F. King & Co., Inc., to assist in connection with soliciting votes for the annual meeting at a cost of approximately $20,000. The Company will bear the entire cost. Althoughcost of the Company does not presently intend to use aproxy solicitor. The proxy solicitor towill solicit votes, employeesproxies through mail, telephone, the Internet or other means. Employees of the Company or its subsidiaries may solicit proxies through mail, telephone, the Internet or other means. To the extent the Company deems it advisable, it will use a proxy solicitor to solicit votes. Employees do not receive additional compensation for soliciting proxies.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
How do I submit a stockholder proposal or director nominee for next year’s annual meeting or suggest a candidate for nomination as a director to the Corporate Governance Committee?
Any proposal that a stockholder wishes to be considered for inclusion in our proxy statement and proxy card for the 20212023 annual meeting of stockholders must comply with the requirements of Rule 14a-8 under the Exchange Act and must be submitted to the Corporate Secretary, 97 Darling Avenue, South Portland, ME 04106, no later than December 23, 2020.20, 2022. However, in the event that the annual meeting is called for a date that is not within thirty days before or after May 14, 2021,12, 2023, notice by the stockholder must be received a reasonable time before we begin to print and mail our proxy materials for the 20212023 annual meeting of stockholders.
If a stockholder wishes to present a proposal before the 20212023 annual meeting but does not wish to have a proposal considered for inclusion in our proxy statement and proxy in accordance with Rule 14a-8 or to nominate someone for election as a director, the stockholder must give written notice to our Corporate Secretary at the address noted above. To be timely, a stockholder’s notice to the Corporate Secretary must be delivered to or mailed and received no earlier than January 14, 2021,12, 2023, nor later than February 13, 2021.11, 2023. However, in the event that the annual meeting is called for a date that is not within twenty-five days before or after May 14, 2021,12, 2023, 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 first mailed or publicly disclosed.
Alternatively, under our recently-adopted “proxy"proxy access” provision in our Bylaws,By-Laws, a stockholder, or group of no more than 20 stockholders, owning at least 3% of the Company’s outstanding shares of capital stock continuously for at least three years, may nominate and include in our proxy materials for an annual meeting director nominees constituting up to two individuals or 20% of the Board, whichever is greater, provided the stockholder(s) and nominee(s) satisfy the requirements in our Bylaws.By-Laws. For a proxy access nomination to be considered timely for the 20212023 annual meeting, it must be received in writing by the Secretary no earlier than December 15, 202013, 2023 nor later than January 14, 2021.12, 2023. 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.
The Company’s By-Laws contain specific procedural requirements regarding a stockholder’s ability to nominate a director or submit a proposal to be considered at a meeting of stockholders. The By-Laws are available on our website at www.wexinc.com, under the Corporate Governance tab.
What is “householding”?
“Householding” means that we deliver a single set of proxy materials and annual report or Notice, as applicable, to households with multiple stockholders, provided such stockholders give their consent and certain other conditions are met.
Some households with multiple stockholders already may have provided the Company with their consent to householding. We will provide only one set of proxy materials or Notice, as applicable, to each such household, unless we receive contrary instructions.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
We will promptly deliver separate copies of our proxy statement and annual report, or Notice, if applicable, or deliver multiple copies in the future, at the request of any stockholder who is in a household that participates in the householding of the Company’s proxy materials. You may call our Investor Relations department at (866) 230-1633668-6550 or send your request to:
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| | | | |
| WEX Inc. Attention: Investor Relations — Annual Meeting 97 Darling Avenue South Portland, ME 04106 Email: investors@wexinc.com |
If you currently receive multiple copies of the Company’s proxy materials or Notice, as applicable, and would like to participate in householding, please contact the Investor Relations department at the above phone number or address.
What is meant by “incorporation by reference”?
“Incorporation by reference” means that we refer to information that previously has been filed with the SEC, so the information should be considered as part of the filing you are reading. Information on the websites referred to in this proxy statement, including our website, is not incorporated into this proxy statement. Based on SEC rules, the sections entitled “Audit Committee Report” and the “Compensation Committee Report,” of this proxy statement and the information regarding the Audit Committee Charter and the independence of the Audit Committee members specifically are not incorporated by reference into any other filings with the SEC.
You receive this proxy statement as part of the proxy materials for the annual meeting of stockholders. You may not consider this proxy statement as material for soliciting the purchase or sale of our Company’s common stock.
How do I request future copies of your proxy materials?
The Notice contains instructions on how to request to receive a printed set of the proxy materials. You may request the printed proxy materials over the Internet at https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials, by emailing info@astfinancial.com or by calling 888-776-9962 (domestic) or 718-921-8562 (international). If you require additional copies of these or any future proxy materials, please refer to the Investor Relations page of our website at www.wexinc.com or contact our Investor Relations office.office at the above e-mail address, phone number or mailing address.
How do I request a copy of your annual report on Form 10-K?
We will provide you with a copy, without charge, of our Form 10-K, including the financial statements, for our most recently ended fiscal year, upon request to our Investor Relations department at the above e-mail address, phone number or mailing address.
20202022 Proxy Statement 7791
OTHER BUSINESS
We know of no other business to be considered at the meeting, and the deadline for stockholders to submit proposals or nominations has passed. However, if:
•other matters are properly presented at the meeting, or at any adjournment or postponement of the meeting, and
•you have properly submitted your proxy, then, Melissa Smith or Roberto SimonHilary Rapkin will vote your shares on those matters according to her or his best judgment.
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| | | | |
| By Order of the Board of Directors, |
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Hilary A. Rapkin CHIEF LEGAL OFFICERChief Legal Officer
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April 22, 202019, 2022
PORTLAND, MAINE
Portland, Maine
APPENDIX A
The following pages in this Appendix A contain descriptions of the performance measures used for executive incentive compensation under our Short-Term Incentive Plan ("STIP") and our Long-Term Incentive Plan ("LTIP"). They were developed uniquely for incentive compensation purposes, are non-GAAP measures, and are not reported in our financial statements. The Leadership Development and Compensation Committee (the "Committee") has approved use of non-GAAP measures when appropriate to drive executive focus on particular strategic, operational, or financial factors, or to exclude factors over which our executives have little influence or control.
STIP
Reconciliation of performance measures to reported results for the 2021 STIP LTIPmetric is shown in the table below:
| | | | | | | | |
| (In thousands) | 2021 Total Company Revenue | 2021 Total Company Operating Income |
| 2021 Actual reported per 10-K (GAAP) | $ | 1,850,542 | | $ | 342,000 | |
| Adjustments for Non-GAAP items including: acquisition-related intangible amortization, other acquisition and divestiture related items, debt restructuring costs, stock based compensation, and other costs | — | | ü |
| 2021 Actual reported per 10-K (with adjustments) | $ | 1,850,542 | | $ | 670,133 | |
| Adjustment for Fuel Prices | ü | ü |
| Adjustment for Foreign Exchange Rates | ü | ü |
| Adjustment for Accounting change* | ü | — | |
| Adjustment for Acquisition ** | ü | ü |
| 2021 Actual reported per 10-K, adjusted for PPG, FX, Accounting change, and Acquisition | $ | 1,741,982 | | $ | 590,184 | |
* Accounting presentation for a customer changed in the fourth quarter of 2021 from gross revenue recognition to net, with a corresponding change in sales and Adjusted Net Income are located below.marketing costs.
** Adjustment for Acquisition includes all revenue and costs in fiscal year 2021 that were not included in the approved budget.
|
| | | | | | |
| (In thousands) | 2019 STIP
Compensation
Adjusted
Operating Income
Reconciliation | 2019 STIP
Adjusted Revenue
Reconciliation |
| 2019 results as reported on a US GAAP Basis | $ | 385,841 |
| $ | 1,723,691 |
|
| Acquisition-related intangible amortization | $ | 159,431 |
| |
| Other acquisition and divestiture related items | $ | 37,675 |
| |
| Debt restructuring | $ | 11,062 |
| |
| Stock-based compensation | $ | 47,511 |
| |
| Restructuring and other costs | $ | 25,106 |
| |
| Impairment charges and asset write-offs | $ | — |
| |
| 2019 results per adjusted reporting basis; total Company adjusted | $ | 666,626 |
| $ | 1,723,691 |
|
| Adjustment to 2019 actual for 2019 budget fuel prices | $ | (21,760 | ) | $ | (25,916 | ) |
| Adjustment to 2019 actual for 2019 foreign exchange rates | $ | 4,977 |
| $ | 13,084 |
|
Adjustments to normalize acquisition close dates to budget as well as certain other
non-recurring costs | $ | (22,094 | ) | $ | (70,059 | ) |
| 2019 results adjusted for compensation attainment purposes | $ | 627,749 |
| $ | 1,640,800 |
|
792022 Proxy Statement WEX Inc.93
LTIP
The following table provides an explanation as to how actual performance results were calculated on a non-GAAP basis, including the existence of adjustments, for LTIP payout determination for PRSU awards where the full performance period was completed as of December 31, 2021, and was used to calculate and determine the final payout factor for such PRSU awards.
| | | | | | | | | | | | | | | | | | | | | | | | | |
(in thousands - other
than earnings per share) | | LTIP Adjusted Net Income -
Earnings Per Share
Reconciliation | | | 2019 LTIP
Revenue Reconciliation (000s) |
| 2019 | 2020 | Total | | | 2019 | 2020 | Total |
| Results as reported on a US GAAP Basis | | $ | 2.26 | | $ | (5.56) | | $ | (3.30) | | | | $ | 1,723,691 | | $ | 1,559,869 | | $ | 3,283,560 | |
| Unrealized (gains) losses on financial instruments | | $ | 0.79 | | $ | 0.62 | | $ | 1.41 | | | | | | |
| Net foreign currency remeasurement loss | | $ | 0.02 | | $ | 0.59 | | $ | 0.61 | | | | | | |
| Acquisition-related intangible amortization | | $ | 3.64 | | $ | 3.90 | | $ | 7.54 | | | | | | |
| Other acquisition and divestiture related items | | $ | 0.86 | | $ | 1.32 | | $ | 2.18 | | | | | | |
| Legal settlement | | $ | — | | $ | 3.71 | | $ | 3.71 | | | | | | |
Debt restructuring and debt issuance cost
amortization | | $ | 0.48 | | $ | 0.91 | | $ | 1.39 | | | | | | |
| Stock-based compensation | | $ | 1.09 | | $ | 1.50 | | $ | 2.59 | | | | | | |
| Other costs | | $ | 0.56 | | $ | 0.30 | | $ | 0.86 | | | | | | |
| Loss on sale of subsidiary | | $ | — | | $ | 1.06 | | $ | 1.06 | | | | | | |
| Impairment charges | | $ | — | | $ | 1.22 | | $ | 1.22 | | | | | | |
| | | | | | | | | |
ANI adjustments attributable to non-
controlling interests | | $ | 1.21 | | $ | (0.98) | | $ | 0.23 | | | | | | |
| Tax related items | | $ | (1.71) | | $ | (2.47) | | $ | (4.18) | | | | | | |
| Dilutive impact of stock awards | | $ | — | | $ | (0.06) | | $ | (0.06) | | | | | | |
| Results per adjusted reporting basis; total Company adjusted | | $ | 9.20 | | $ | 6.06 | | $ | 15.26 | | | | $ | 1,723,691 | | $ | 1,559,869 | | $ | 3,283,560 | |
| Adjustment for fuel prices | | ü | ü | ü | | | ü | ü | ü |
| Adjustments for foreign exchange rates | | ü | ü | ü | | | ü | ü | ü |
| Adjustments due to the impact of certain items related to COVID-19 on specific lines of business | | — | | ü | ü | | | — | | ü | ü |
| Adjustments due to the impact of certain items related to COVID-19 that did not have an impact on specific lines of businesses only (Cost Containment, Credit Loss, PIPE, LIBOR, PPG) | | — | | ü | ü | | | — | | — | | — | |
Results adjusted for compensation attainment purposes | | $ | 9.62 | | $ | 10.99 | | $ | 20.61 | | | | $ | 1,758,668 | | $ | 1,950,679 | | $ | 3,709,347 | |
|
| | | | | | | | | | | | | | | | | |
| | LTIP Compensation ANI EPS
Reconciliation | | LTIP Non Fuel Sensitive Revenue |
| (In thousands) | 2017 | 2018 | 2019 | Total | | 2017 | 2018 | 2019 | Total |
| 2019 results as reported on a US GAAP Basis | 3.71 |
| 3.86 |
| 2.26 |
| 9.83 |
| | 1,248,577 |
| 1,492,639 |
| 1,723,691 |
| 4,464,907 |
|
Unrealized (gains) losses on
financial instruments | (0.030) |
| (0.060) |
| 0.79 |
| 0.70 |
| | | | | |
| Net foreign currency remeasurement (gain) loss | (0.730) |
| 0.89 |
| 0.02 |
| 0.18 |
| | | | | |
| Acquisition-related intangible amortization | 3.57 |
| 3.17 |
| 3.64 |
| 10.38 |
| | | | | |
| Other acquisition and divestiture related items | 0.12 |
| 0.10 |
| 0.86 |
| 1.08 |
| | | | | |
Debt restructuring and debt issuance cost
amortization | 0.24 |
| 0.32 |
| 0.48 |
| 1.04 |
| | | | | |
| Stock-based compensation | 0.71 |
| 0.81 |
| 1.09 |
| 2.61 |
| | | | | |
| Restructuring and other costs | 0.26 |
| 0.31 |
| 0.57 |
| 1.14 |
| | | | | |
| Gain on divestiture | (0.49) |
| — |
| — |
| (0.49) |
| | | | | |
| Impairment charges | 1.02 |
| 0.13 |
| — |
| 1.15 |
| | | | | |
Non-cash adjustments related to tax receivable
agreement | (0.35) |
| 0.02 |
| (0.02) |
| (0.35) |
| | | | | |
ANI adjustments attributable to non-
controlling interests | (0.04) |
| (0.03) |
| 1.21 |
| 1.14 |
| | | | | |
| Tax related items | (2.67) |
| (1.24) |
| (1.71) |
| (5.62) |
| | | | | |
2019 results per adjusted reporting basis;
total Company adjusted | 5.32 |
| 8.28 |
| 9.20 |
| 22.80 |
| | 1,248,577 |
| 1,492,639 |
| 1,723,691 |
| 4,464,907 |
|
| Adjustment for fuel prices (adjust for PPG impact to late fees which are not remove in the Fuel Sensitive Revenue adjustment below) and foreign exchange rates | — |
| (0.38) |
| (0.34) |
| (0.73) |
| | (8,773 | ) | (23,122 | ) | (9,431 | ) | (41,326 | ) |
| Adjustment for 2017 tax reform | — |
| (1.24) |
| (1.38) |
| (2.62) |
| | — |
| — |
| — |
| — |
|
| Adjustments for certain non-recurring items, including revenue recognition | — |
| — |
| — |
| — |
| | — |
| (15,441 | ) | (23,016 | ) | (38,457 | ) |
| Adjustments for Fuel Sensitive Revenue | — |
| — |
| — |
| — |
| | (360,157 | ) | (455,637 | ) | (457,244 | ) | (1,273,038 | ) |
2019 results adjusted for compensation
attainment purposes | 5.32 |
| 6.66 |
| 7.48 |
| 19.45 |
| | 879,647 |
| 998,439 |
| 1,234,000 |
| 3,112,086 |
|
Reconciliation of Non-GAAP Financial Measure
The following table reflects the reconciliation of the non-GAAP financial performance metric presented in the "2021 Performance Snapshot" section within the Proxy Statement Summary and within the Compensation Discussion & Analysis included herein.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of Adjusted Net Income to GAAP Net Income | | FY Ended December 31,
2021 | | FY Ended December 31,
2020 | | FY Ended December 31,
2019 | | FY Ended December 31,
2018 | | FY Ended December 31,
2017 | | FY Ended December 31,
2016 |
| | per diluted share | | per diluted share | | per diluted share | | per diluted share | | per diluted share | | per diluted share |
| Net (loss) income attributable to shareholders | | $ | — | | $ | (5.56) | | $ | 2.26 | | $ | 3.86 | | $ | 3.71 | | $ | 0.57 |
| Unrealized losses (gains) on financial instruments | | (0.86) | | 0.62 | | 0.79 | | (0.06) | | (0.03) | | (0.19) |
| Net foreign currency loss (gain) | | 0.27 | | 0.59 | | 0.02 | | 0.89 | | (0.73) | | 0.23 |
| Change in fair value of contingent consideration | | 0.88 | | — | | — | | — | | — | | — |
| Acquisition-related intangible amortization | | 4.01 | | 3.90 | | 3.64 | | 3.17 | | 3.57 | | 2.39 |
| Other acquisition and divestiture related items | | 0.81 | | 1.32 | | 0.86 | | 0.10 | | 0.12 | | 1.24 |
| Legal settlement | | — | | 3.71 | | — | | — | | — | | — |
| Stock-based compensation | | 1.70 | | 1.50 | | 1.09 | | 0.81 | | 0.71 | | 0.48 |
| Restructuring and other costs | | 0.52 | | 0.30 | | 0.57 | | 0.31 | | 0.26 | | 0.34 |
| Vendor settlement | | — | | — | | — | | — | | — | | 0.38 |
| Loss (gain) on sale of subsidiary | | — | | 1.06 | | — | | — | | (0.49) | | — |
| Impairment charges and asset write-offs | | — | | 1.22 | | — | | 0.13 | | 1.02 | | — |
| Debt restructuring and debt issuance cost amortization | | 0.48 | | 0.91 | | 0.48 | | 0.32 | | 0.24 | | 0.31 |
| | | | | | | | | | | | |
| Non-cash adjustments related to tax receivable agreement | | — | | — | | (0.02) | | 0.02 | | (0.35) | | 0.01 |
| ANI adjustments attributable to non-controlling interests | | 2.91 | | (0.98) | | 1.21 | | (0.03) | | (0.04) | | (0.06) |
| Tax related items | | (1.58) | | (2.47) | | (1.71) | | (1.24) | | (2.67) | | (1.93) |
| Dilutive impact of stock awards | | — | | (0.06) | | — | | — | | — | | — |
| Adjusted net income attributable to shareholders | | $ | 9.14 | | $ | 6.06 | | $ | 9.20 | | $ | 8.28 | | $ | 5.32 | | $ | 3.78 |
|
| | | | | | | | | |
| (in thousands) | 2019 | 2018 | 2017 |
| Net income attributable to stockholders |
| $99,006 |
|
| $168,295 |
|
| $160,062 |
|
| Unrealized loss (gain) on financial instruments | 34,654 |
| (2,579) |
| (1,314) |
|
| Net foreign currency remeasurement loss (gain) | 926 |
| 38,800 |
| (31,487) |
|
| Acquisition-related intangible amortization | 159,431 |
| 138,186 |
| 153,810 |
|
| Other acquisition and divestiture related items | 37,675 |
| 4,143 |
| 5,000 |
|
| Gain on divestiture | — |
| — |
| (20,958) |
|
| Stock-based compensation | 47,511 |
| 35,103 |
| 30,487 |
|
| Restructuring and other costs | 25,106 |
| 13,717 |
| 11,129 |
|
| Impairment charges | — |
| 5,649 |
| 44,171 |
|
| Debt restructuring and debt issuance cost amortization | 21,004 |
| 14,101 |
| 10,519 |
|
| Non-cash adjustments related to tax receivable agreement | (932 | ) | 775 |
| (15,259) |
|
| ANI adjustments attributable to non-controlling interests | 53,035 |
| (1,370) |
| (1,563) |
|
| Tax related items | (74,743 | ) | (53,918) |
| (115,278) |
|
| Adjusted net income attributable to shareholders |
| $402,673 |
|
| $360,902 |
|
| $229,319 |
|
20202022 Proxy Statement 8195
