Management and the independent compensation consultant review the Company’s compensation programs, including the broad-based employee programs and the programs tied to the performance of individual business units. The team maps the level of “enterprise” risk for each business area, as established through the Company’s enterprise risk management oversight process, with the level of compensation risk for the associated incentive programs. In developing the risk assessment, the team reviews the compensation programs within each business area for: | • | •The mix of fixed versus variable pay;
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| • | •The performance metrics to which pay is tied;
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| • | •Whether the pay opportunity is capped;
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| • | •Whether “clawback” adjustments are permitted;
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| • | •The use of equity awards; and
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| • | •Whether stock ownership guidelines apply.
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Annual incentive awards and long-term incentive awards granted to executives are tied primarily to corporate performance goals, including revenue and operating margin growth, and strategic performance objectives. The Compensation Committee believes that these metrics encourage performance that supports the business as a whole. The executive annual incentive awards include a maximum payout opportunity equal to 175% of target, subject to a +/-25% individual performance-based modifier for NEOs other than Mr. McGranahan. Our executives are also expected to meet share ownership guidelines in order to align the executives’ interests with those of our stockholders. Further, the Company’s clawback policy permits the Company to recover incentive compensation paid to designated executives (including our officers who are subject to Section 16 of the Exchange Act as well as the Company’s CCO) in the event of an accounting restatement or if the executive engaged in detrimental conduct, as defined in the clawback policy. This policy helps to discourage inappropriate risks, as executives will be held accountable for misconduct which is harmful to the Company’s financial and reputational health. In addition, the Company’s clawback policy and specific clawback provisions in its annual and long-term incentive award agreements allow the Company to “claw back” executive pay if the executive engages in conduct that is determined to have contributed to material compliance failures, subject to applicable law. 66 64| The Western Union Company
Table of Contents
EXECUTIVE COMPENSATION
Annual incentive awards and long-term incentive awards granted to executives are tied primarily to corporate performance goals, including revenue and operating margin growth, and strategic performance objectives. The Compensation Committee believes that these metrics encourage performance that supports the business as a whole. The executive annual incentive awards include a maximum payout opportunity equal to 175% of target, subject to a +/-25% individual performance-based modifier for NEOs other than Mr. Ersek. Our executives are also expected to meet share ownership guidelines in order to align the executives’ interests with those of our stockholders. Further, the Company’s clawback policy permits the Company to recover incentive compensation paid to
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designated executives (including our officers who are subject to Section 16 of the Exchange Act as well as the Company’s CCO) in the event of an accounting restatement or if the executive engaged in detrimental conduct, as defined in the clawback policy. This policy helps to discourage inappropriate risks, as executives will be held accountable for misconduct which is harmful to the Company’s financial and reputational health. In addition, the Company’s clawback policy and specific clawback provisions in its annual and long-term incentive award agreements allow the Company to “claw back” executive pay if the executive engages in conduct that is determined to have contributed to material compliance failures, subject to applicable law.
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2022 Proxy Statement | 67
Table of Contents
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Ersek,McGranahan, our former CEO. Under the SEC pay ratio rules, in the case of a CEO transition during the year, the Company is permitted to calculate the CEO pay ratio based on the annualized compensation of the CEO serving on the median employee identification date. Because Mr. Ersek was serving as our CEO on November 1, 2021, the pay ratio is calculated based on his compensation. The total compensation used for purposes of the pay ratio calculation is the same compensation amount reported in the 2021 Summary Compensation Table as there was no impact on Mr. Ersek’s compensation with respect to the annualization of his compensation since he continues to serve as an advisor to the Company with the same base salary level and his annual incentive compensation and equity awards were not adjusted to reflect his transition to the role of senior advisor. To understand this disclosure, we think it is important to give context to our operations. As noted above, The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. As a global organization, approximately 84%86% of our employees are located outside of the United States, with our employees located in a total of 52more than 50 countries. We strive to create a competitive global compensation program in terms of both the position and the geographic location in which the employee is located. As a result, our compensation program varies amongst each local market, in order to allow us to provide a competitive total rewards packagepackage. Given the leverage of our executive compensation program towards performance-based elements, we expect that our pay ratio disclosure will fluctuate year-to-year based on the Company’s performance against the pre-established performance goals. Ratio For 2021,2022, • The median of the annual total compensation of all of our employees, other than Mr. Ersek, was $36,393.
| • | The median of the annual total compensation of all of our employees, other than Mr. McGranahan, was $36,144. |
| • | Mr. McGranahan’s annual total compensation, as reported in the Total column of the 2022 Summary Compensation Table, was $7,241.7 thousand. |
| • | Based on this information, the ratio of the annual total compensation of Mr. McGranahan to the median of the annual total compensation of all employees is estimated to be 200 to 1. |
• Mr. Ersek’s annual total compensation, as reported in the Total column of the 2021 Summary Compensation Table, was $10,834.6 thousand.
• Based on this information, the ratio of the annual total compensation of Mr. Ersek to the median of the annual total compensation of all employees is estimated to be 298 to 1.
Identification of Median Employee We selected November 1, 20212022 as the date on which to determine our median employee. As of that date, we had approximately 10,6508,900 employees. For purposes of identifying the median employee, we considered the aggregate of the following compensation elements for each of our employees, as compiled from the Company’s payroll records: • Base Salary
• Target Annual Bonus
• Actual Equity Awards
• Target Commissions
We selected the above compensation elements as they represent the Company’s principal broad-based compensation elements. In addition, we measured compensation for purposes of determining the median employee using the 12-month period ending December 31, 2021.2022. Using this methodology, we determined that our median employee was a full-time, salaried employee working in Europe. For purposes of this disclosure, we converted such employee’s compensation from the employee’s local currency to U.S. dollars using an exchange rate as of December 31, 2021.2022. In determining the annual total compensation of the 20212022 median employee, we calculated such employee’s 20212022 compensation in accordance with Item 402(c)(2)(x) of Regulation S-K as required pursuant to SEC executive compensation disclosure rules. This calculation is the same calculation used to determine total compensation for purposes of the 20212022 Summary Compensation Table with respect to each of the NEOs. 2023 Proxy Statement |65 PAY VERSUS PERFORMANCE | | | | | | | | | | | | | | | | | | | | | | | PAY VERSUS PERFORMANCE | | YEAR(1) | | SUMMARY
COMPENSATION
TABLE TOTAL
FOR
MCGRANAHAN
($000)(2) | | SUMMARY
COMPENSATION
TABLE TOTAL
FOR ERSEK
($000)(2) | | COMPENSATION
ACTUALLY
PAID TO
MCGRANAHAN
($000)(3) | | COMPENSATION
ACTUALLY
PAID TO
ERSEK ($000)(3) | | AVERAGE
SUMMARY
COMPENSATION
TABLE TOTAL
FOR
NON-PEO NEOS
($000)(2) | | AVERAGE
COMPENSATION
ACTUALLY
PAID TO
NON-PEO NEOS
($000)(3) | | VALUE OF INITIAL
FIXED $100 INVESTMENT
BASED ON:(4) | | NET
INCOME
($000,000) | | ADJUSTED
REVENUE
($000,000)(6) | | | | | | | | | TOTAL SHAREHOLDER RETURN
($) | | PEER GROUP
TOTAL SHAREHOLDER
RETURN
($)(5) | | | | 2022 | | 7,241.7 | | N/A | | 782.4 | | N/A | | 1,975.9 | | 1,109.0 | | 59.44 | | 118.77 | | 910.6 | | 4,512 | | 2021 | | 14,117.4 | | 10,834.6 | | 9,871.5 | | 639.4 | | 3,277.1 | | 1,402.5 | | 72.40 | | 132.75 | | 805.8 | | 5,012 | | 2020 | | N/A | | 10,336.4 | | N/A | | (7,515.9) | | 3,566.7 | | 1,069.0 | | 85.33 | | 98.31 | | 744.3 | | 4,918 |
| (1) | The Principal Executive Officer (“PEO”) and NEOs for the applicable years were as follows: |
| - | 2022: Devin McGranahan served as the Company’s Chief Executive Officer for the entirety of 2022 and the Company’s other NEOs were: Matt Cagwin; Jean Claude Farah; Gabriella Fitzgerald; Benjamin Adams; and Raj Agrawal. |
| - | 2021: Devin McGranahan assumed the role of the Company’s Chief Executive Officer on December 27, 2021 and Hikmet Ersek served as Chief Executive Officer during 2021 through his December 27, 2021 retirement. The Company’s other NEOs for 2021 were: Raj Agrawal; Michelle Swanback; Jean Claude Farah; and Gabriella Fitzgerald. |
| - | 2020: Hikmet Ersek served as the Company’s Chief Executive Officer for the entirety of 2020 and the Company’s other NEOs for 2021 were: Raj Agrawal; Michelle Swanback; Jean Claude Farah; and Khalid Fellahi. |
| (2) | Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Messrs. McGranahan and Ersek and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s NEOs for the applicable year other than the PEOs for such years. |
| (3) | To calculate compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Messrs. McGranahan and Ersek and for the average of the other NEOs is set forth following the footnotes to this table. |
| (4) | Pursuant to rules of the SEC, the comparison assumes $100 was invested on December 31, 2019. Historic stock price performance is not necessarily indicative of future stock price performance. |
| (5) | The TSR Peer Group consists of the Standard & Poor’s Composite – 500 Financials Index (the “S&P 500 Financials Index”), an independently prepared index that includes companies in the financial services industry. |
| (6) | As noted in the “Compensation Discussion and Analysis,” for 2022, the Compensation Committee determined that adjusted revenue continues to be viewed as a core driver of the Company’s performance and stockholder value creation and, accordingly, was utilized as a component in both the Annual Incentive Plan and long-term incentive program. Total adjusted revenue represents revenue adjusted to exclude Argentina inflation and the effect of currency fluctuations. In 2022, adjusted revenue also excluded the impact of Business Solutions revenues in light of the pending agreement to sell the business, and the impact of Russia/Belarus revenues as a result of the conflict in Ukraine. |
| 66 | The Western Union Company |
EXECUTIVE COMPENSATION | CAP ADJUSTMENTS | | YEAR | | SUMMARY
COMPENSATION
TABLE TOTAL
($000)(a) | | MINUS
GRANT DATE
FAIR
VALUE OF STOCK
OPTION AND
STOCK AWARDS
GRANTED IN
FISCAL YEAR
($000)(b) | | PLUS
FAIR VALUE
AT FISCAL
YEAR-END OF OUTSTANDING
AND UNVESTED
STOCK OPTION
AND STOCK
AWARDS GRANTED
IN FISCAL YEAR
($000)(c) | | PLUS/(MINUS)
CHANGE IN
FAIR VALUE OF
OUTSTANDING AND
UNVESTED STOCK
OPTION AND STOCK
AWARDS GRANTED
IN PRIOR FISCAL YEARS
($000)(d) | | PLUS
FAIR VALUE
AT VESTING
OF STOCK
OPTION
AND STOCK AWARDS
GRANTED IN FISCAL
YEAR THAT VESTED
DURING FISCAL YEAR
($000)(e) | | PLUS/(MINUS)
CHANGE IN
FAIR VALUE AS
OF VESTING
DATE
OF STOCK
OPTION
AND STOCK
AWARDS
GRANTED IN
PRIOR
YEARS FOR
WHICH
APPLICABLE
VESTING
CONDITIONS
WERE
SATISFIED
DURING
FISCAL YEAR
($000)(f) | | MINUS
FAIR VALUE
AS
OF PRIOR FISCAL
YEAR-END OF STOCK
OPTION AND STOCK AWARDS
GRANTED IN PRIOR FISCAL
YEARS THAT FAILED
TO MEET APPLICABLE
VESTING CONDITIONS
DURING FISCAL YEAR
($000)(g) | | PLUS
DOLLAR VALUE OF
DIVIDENDS OR
OTHER EARNINGS
PAID ON STOCK
AWARDS IN FISCAL
YEAR AND PRIOR TO
VESTING DATE
($000)(h) | | EQUALS
COMPENSATION
ACTUALLY PAID
($000) | | Devin McGranahan | | 2022 | | 7,241.7 | | (5,007.1) | | 1,723.5 | | (2,527.5) | | — | | (648.2) | | — | | — | | 782.4 | | 2021 | | 14,117.4 | | (13,100.0) | | 8,854.1 | | — | | — | | — | | — | | — | | 9,871.5 | | Hikmet Ersek | | 2021 | | 10,834.6 | | (8,200.0) | | 3,064.3 | | (5,871.4) | | — | | 811.9 | | — | | — | | 639.4 | | 2020 | | 10,336.4 | | (8,200.0) | | 4,865.4 | | (13,777.1) | | — | | (740.6) | | — | | — | | (7,515.9) |
| Other NEOs (Average)(i) | | 2022 | | 1,975.9 | | (1,297.4) | | 572.5 | | (164.7) | | — | | 22.7 | | — | | — | | 1,109.0 | | 2021 | | 3,277.1 | | (2,200.0) | | 1,115.4 | | (854.6) | | — | | 64.6 | | — | | — | | 1,402.5 | | 2020 | | 3,566.7 | | (2,412.5) | | 1,670.1 | | (1,693.2) | | — | | (62.1) | | — | | — | | 1,069.0 |
| (a) | Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the Other NEOs, amounts shown represent averages. |
| (b) | Represents the grant date fair value of the stock option and stock awards granted during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
| (c) | Represents the fair value as of the indicated fiscal year-end of the outstanding and unvested option awards and stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
| (d) | Represents the change in fair value during the indicated fiscal year of the outstanding and unvested option awards and stock awards held by the applicable NEO as of the last day of the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year. |
| (e) | Represents the fair value at vesting of the option awards and stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
| (f) | Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each option award and stock award that was granted in a prior fiscal year and which vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
| (g) | Represents the fair value as of the last day of the prior fiscal year of the option award and stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. |
| (h) | Represents the dollar value of any dividends or other earnings paid on stock awards in the indicated fiscal year and prior to the vesting date that are not otherwise included in the total compensation for the indicated fiscal year. The Company does not pay dividends or other earnings on unvested stock awards. |
| (i) | See footnote 1 above for the NEOs included in the average for each year. |
EXECUTIVE COMPENSATION Relationship Between Pay and Performance We believe the “Compensation Actually Paid” in each of the years reported above and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance” as the “Compensation Actually Paid” fluctuated year-over-year, primarily due to the result of our varying levels of achievement against pre-established performance goals under our Annual Incentive Plan and our Long-Term Incentive Plan, including our adjusted revenue performance, and our stock performance. TSR: Company versus Peer Group and CAP As shown in the chart below, the Company’s three-year cumulative TSR for the period of 2020-2022 is less than the three-year cumulative TSR for companies included in our peer group TSR. While the average CAP for the other NEOs is relatively aligned with the Company’s TSR, the CAP for the PEO position was impacted by the new hire grants received by Mr. McGranahan in 2021 in connection with the commencement of his employment and the CAP for Mr. Ersek in 2020 was impacted by the decline in the Company’s stock price from December 31, 2019 through December 31, 2020. COMPENSATION ACTUALLY PAID (CAP) VS WESTERN UNION
AND PEER GROUP TSR 
| 68 | The Western Union Company |
EXECUTIVE COMPENSATION CAP Versus Adjusted Revenue (Company Selected Measure) | The chart below demonstrates the relationship between CAP amounts for our PEO and each of our NEOs and our adjusted revenue for the applicable fiscal year. Variations in the CAP amounts for our PEO and other NEOs are due in large part to the significant emphasis the Company places on long-term incentives, the value of which fluctuates most significantly based on the vesting level of our PSU awards and changes in stock price over time. As noted in the “Compensation Discussion and Analysis,” the Compensation Committee | | determined that adjusted revenue continues to be viewed as a core driver of the Company’s performance and stockholder value creation and, accordingly, was utilized as a component in both the Annual Incentive Plan and long-term incentive program. While the average CAP for the other NEOs is relatively aligned with the Company’s adjusted revenue performance, the CAP for the PEO position was impacted by the new hire grants received by Mr. McGranahan in 2021 in connection with the commencement of his employment and the CAP for Mr. Ersek in 2020 was impacted by the decline in the Company’s stock price from December 31, 2019 through December 31, 2020. |
COMPENSATION ACTUALLY PAID (CAP) VS ADJUSTED REVENUE 
EXECUTIVE COMPENSATION CAP Versus Net Income | The chart below demonstrates the relationship between CAP amounts for our PEO and our other NEOs and our net income. Net income is not a component of our executive compensation program. Variations in the CAP amounts for | | our PEO and other NEOs are due in large part to the significant emphasis the Company places on long-term incentives, the value of which fluctuates most significantly based on the vesting level of our PSU awards and changes in stock price over time. |
COMPENSATION ACTUALLY PAID (CAP) VS NET INCOME 
Performance Measures Used to Link Company
Performance and CAP to the NEOs Below is a list of financial performance measures, which in the Company’s assessment represent the most important financial performance measures used by the Company to link CAP to the NEOs for 2022 to Company performance. As noted in the “Compensation Discussion and Analysis,” the Company used both financial and non-financial performance measures in order to link compensation paid to NEOs to Company performance in 2022. To measure individual performance against key objectives for the Company as well as the executive’s success in fulfilling the executive’s responsibilities, the total payout under the Annual Incentive Plan for the participating NEOs other than Mr. McGranahan in 2022 was subject to a +/- 25% modifier based on the Compensation Committee’s assessment versus non-financial performance metrics relating to leadership, compliance and ESG (as well as an individual performance goal tailored to each participating NEO’s functional area). These goals were included in the Annual Incentive Plan design to reinforce these objectives as priorities throughout the organization. Please see the “Compensation Discussion and Analysis” for further information regarding how each of these goals is calculated as well as the Company’s use of strategic and non-financial goals in its executive compensation program.| • | Adjusted Revenue | | • | Adjusted Profit Margin | | • | Adjusted Earnings Per Share | | • | Consumer-to-Consumer westernunion.com Money Transfer Revenue | | • | Total Shareholder Return | | • | Company Stock Price |
PROPOSALPROPOSAL 2
ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
The Company is providing stockholders an advisory vote to approve executive compensation as required by Section 14A of the Exchange Act. Section 14A was added to the Exchange Act by Section 951 of the Dodd-Frank Act. The advisory vote to approve executive compensation is a nonbinding vote on the compensation of the Company’s NEOs, as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure set forth in this Proxy Statement. The advisory vote to approve executive compensation is not a vote on the Company’s general compensation policies or the compensation of the Company’s Board of Directors. The Dodd-Frank Act requires the Company to hold the advisory vote to approve executive compensation at least once every three years. At the 2017 Annual Meeting of Stockholders, the Company asked stockholders to indicate if it should hold an advisory vote to approve the compensation of named executive officers every one, two or three years, with the Board recommending an annual advisory vote. Our stockholders approved this recommendation. Accordingly, the Company is again asking stockholders to approve the compensation of NEOs as disclosed in this Proxy Statement. At the 20212022 Annual Meeting of Stockholders, the Company provided stockholders with the opportunity to cast an advisory vote to approve the compensation of the Company’s NEOs as disclosed in the Proxy Statement for the 2022 Annual the 2021 Annual Meeting of Stockholders, and the Company’s stockholders overwhelmingly approved the proposal, with approval by approximately 94%88% of the votes cast for the proposal at the 20212022 Annual Meeting of Stockholders.
The Company believes that its compensation policies and procedures, which are outlined in the “Compensation Discussion and Analysis” section of this Proxy Statement, support the goals of: •
Aligning our executives’ goals with our stockholders’ interests; •
Attracting, retaining, and motivating outstanding executive talent; and • Pay-for-performance”
Pay-for-performance - Holding our executives accountable and rewarding their achievement of financial, strategic and operating goals. The Compensation Committee of the Board continually reviews the Company’s executive compensation and benefits program to evaluate whether it supports these goals and serves the interests of the Company’s stockholders. The Company’s executive compensation practices include the following, as discussed in more detail in the “Compensation Discussion and Analysis” section of this Proxy Statement: WHAT WE DO | | WHAT WE DON’T DO | 
 “Clawback”ü“Clawback” policy.
 “Doubleü“Double trigger” severance benefits in the event of a change-in-control.
|
| 
 ups for individuals promoted or hired after April 2009.ups.
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20222023 Proxy Statement |6971
Table of Contents
PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION We believe that our executive compensation practices, in combination with a competitive market review, limited executive perquisites, and reasonable severance pay multiples contribute to an executive compensation program that is competitive yet strongly aligned with stockholder interests. The Board recommends that you vote in favor of the following “say-on-pay” resolution: RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, each as set forth in the Company’s Proxy Statement for its 20222023 Annual Meeting of Stockholders. The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter is required to approve this Proposal 2. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee may take into account the outcome of the vote when considering future executive compensation arrangements. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 2. |
70 72| The Western Union Company
PROPOSAL 3
ADVISORY VOTE ON THE FREQUENCY OF THE VOTE ON EXECUTIVE COMPENSATION In accordance with the requirements of ContentsSection 14A of the Exchange Act and the related rules of the SEC, we are providing the Company’s stockholders with the opportunity to cast a non-binding vote on whether a non-binding stockholder vote to approve the compensation of our named executive officers (such as a vote similar to Proposal 2) should occur every one, two or three years. The Board has determined that an advisory vote on executive compensation every one year continues to be the best approach for the Company based on a number of considerations, including the vote frequency which the Board believes the majority of our investors prefer. Stockholders are not voting to approve or disapprove of the Board’s recommendation. Instead, the proxy card provides stockholders with four choices with respect to this proposal: (1) one year; (2) two years; (3) three years or (4) abstaining from voting on the proposal. We are asking our stockholders to indicate their support for the non-binding advisory vote on executive compensation to be held every one year. The option receiving the greatest number of votes will be considered the frequency recommended by the Company’s stockholders. Even though this vote will neither be binding on the Company or the Board, the Board of Directors will take into account the result of the vote when determining the frequency of future say-on-pay votes. PROPOSAL 3The option receiving the greatest number of votes will be considered the frequency recommended by the Company’s stockholders.
Because your vote is advisory, it will not be binding on the Board of Directors. | THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE ONE YEAR WITH RESPECT TO PROPOSAL 3. |
2023 Proxy Statement |73 PROPOSAL 4
RATIFICATION OF SELECTION OF AUDITORS The Board of Directors and the Audit Committee believe it is in the best interest of the Company and its stockholders to recommend to the stockholders the ratification of the selection of Ernst & Young LLP, independent registered public accounting firm, to audit the accounts of the Company and its subsidiaries for 2022.2023. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since the Company became a public company in 2006. Consistent with the regulations adopted pursuant to the Sarbanes-Oxley Act of 2002, the lead audit partner having primary responsibility for the audit and the concurring audit partner are rotated every five years. A representative of Ernst & Young LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions. SUMMARY OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES FOR 20212022 AND 2020 2021 |
Fees for professional services provided by our independent auditors, Ernst & Young LLP, for fiscal years 20212022 and 2020,2021, respectively, included the following (in millions): | | | | | | | 2021 | | 2020 | Audit Fees(1) | | $7.5 | | $6.1 | Audit-Related Fees(2) | | $1.1 | | $1.0 | Tax Fees(3) | | $0.8 | | $0.6 | All Other Fees(4) | | $0.1 | | $— |
| | | 2022 | | 2021 | | Audit Fees(1) | | $6.0 | | $7.5 | | Audit-Related Fees(2) | | $1.5 | | $1.1 | | Tax Fees(3) | | $0.8 | | $0.8 | | All Other Fees(4) | | $— | | $0.1 |
(1) | “Audit Fees” primarily include fees related to (i) the integrated audit of the Company’s annual consolidated financial statements and internal controls over financial reporting; (ii) the review of its quarterly consolidated financial statements; (iii) statutory audits required domestically and internationally; (iv) comfort letters, consents and assistance with and review of documents filed with the SEC; and (v) other accounting and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the PCAOB (United States). |
(2) | “Audit-Related Fees” primarily include fees, not included in “Audit Fees” above, related to (i) service auditor examinations; (ii) attest services that are not required by statute or regulation; and (iii) consultation concerning financial accounting and reporting standards that are not classified as “Audit Fees.” |
(3) | “Tax Fees,” which incorporate both tax advice and tax planning services, primarily include fees related to (i) consultations, analysis and assistance with domestic and foreign tax matters, including value-added and goods and services taxes; (ii) local tax authority audits; and (iii) other miscellaneous tax consultations, including tax services requested as part of the Company’s procedures for commercial agreements, the acquisition of new entities, and other potential business transactions. |
(4) | “All Other Fees” consist of fees for professional services other than the services reported above. |
During 20212022 and 2020,2021, all audit and non-audit services provided by the independent registered public accounting firm were pre-approved, consistent with the pre-approval policy of the Audit Committee. The pre-approval policy requires that all services provided by the independent registered public accounting firm be pre-approved by the Audit Committee or one or more members of the Audit Committee designated by the Audit Committee. 74| The Western Union Company 2022 Proxy Statement | 71
Table of Contents
PROPOSAL 34 RATIFICATION OF SELECTION OF AUDITORS The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter is required to approve this Proposal 3.4. In the event the stockholders fail to ratify the selection of Ernst & Young LLP, the Audit Committee of the Board of Directors will consider it a direction to select another independent registered public accounting firm for the subsequent year. Even if the selection is ratified, the Audit Committee, in its discretion, may select a new independent registered public accounting firm at any time during the year, if it feels that such a change would be in the best interest of the Company and its stockholders. THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND THAT YOU VOTE FOR PROPOSAL 3. 4. |
2023 Proxy Statement |75 72 PROPOSAL 5
APPROVAL OF AMENDMENT TO THE
AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO LIMIT LIABILITY OF
CERTAIN OFFICERS
After careful consideration, and for the following reasons, the Board recommends that stockholders vote “FOR” the proposal to amend our Charter to provide for the exculpation of officers as permitted by Delaware law. The Delaware Corporation Law (the “DGCL”) was recently amended to permit Delaware companies to exculpate their officers for personal liability in certain actions. Previously, exculpation was only available for directors. After careful consideration, the Board approved an amendment to our Charter to include the exculpation of officers pursuant to these recent amendments to the DGCL. The Charter currently provides only for the exculpation of directors in Article Sixth, Section A. As amended, the DGCL only permits, and our proposed amendment would only permit, exculpation of officers for claims that do not involve breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violations of law, or any transaction in which the officer derived an improper personal benefit. In addition, the exculpation of officers would not apply to claims brought by or in the right of the corporation, such as derivative claims. If the proposed amendment is adopted, the types of claims that would be barred against certain senior officers are a subset of those claims that are already barred against directors under our Charter, as permitted by the DGCL. Officers, like directors, are exposed to a substantial risk of lawsuits or proceedings seeking to impose personal monetary liability. Officer exculpation is intended to enable our officers to exercise their business judgment in furtherance of the interests of our stockholders while minimizing the potential for distraction posed by frivolous lawsuits and costs which are often borne by the Company either directly, through indemnification, or indirectly through higher insurance premiums. Without officer exculpation, the potential for such frivolous claims may impede our ability to attract and retain quality executives to work on our behalf, present barriers to our ability to accomplish our business objectives due to the diversion of management attention and result in a waste of corporate resources. The Board believes that eliminating personal monetary liability for officers under the circumstances permitted by the DGCL is reasonable and appropriate. This limitation provides the proper balance between stockholders’ interest in accountability and their interest in limiting the assertion of potentially frivolous claims for negligence. We expect that many of our peers incorporated in Delaware, with whom we compete for executive talent, will adopt exculpation clauses that limit the personal liability of officers in their Certificates of Incorporation. Although the amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any officer, we believe a failure to adopt the proposed amendment could impact our recruitment and retention of exceptional officer candidates who may conclude that, without the protection of exculpation, the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company. Taking into account the limits on the type of claims for which officers’ liability would be exculpated, and the benefits the Board believes would accrue to the Company and its stockholders, the Board determined that it is in the best interests of the Company and our stockholders to amend the Charter as described herein. This description of the proposed amendment to the Charter is qualified by the full text of the amendment to Article Sixth, Section A, of the Charter, which is attached to this Proxy Statement as Annex B. In Annex B, additions of text to our Charter are indicated by underlining. 76| The Western Union Company
PROPOSAL 5 APPROVAL OF AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION The proposed amendment to our Charter requires the affirmative vote of Contentsa majority of the outstanding shares of common stock entitled to vote on the subject matter. If this proposal to amend our Charter is approved by our stockholders, the resulting Amended and Restated Certificate of Incorporation for the Company will be filed with the Secretary of State of the State of Delaware shortly after the Annual Meeting. If this proposal to amend our Charter is not adopted and approved, the current Charter will remain unchanged. | THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 5. |
2023 Proxy Statement |77 PROPOSAL 6
STOCKHOLDER PROPOSAL REGARDING
MODIFICATION TO STOCKHOLDER RIGHT TO CALL A SPECIAL MEETINGACT BY WRITTEN
CONSENT John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, owner of more than $2,000 worth of shares of the Company’s Common Stock, has notified the Company that he intends to present a proposal for consideration at the Annual Meeting. As required by the Exchange Act, the text of the stockholder proposal and supporting statement appear as submitted to the Company by the proponent. The Board and the Company accept no responsibility for the contents of the proposal or the supporting statement. PROPOSAL 46 - SPECIAL SHAREHOLDER MEETING IMPROVEMENTRIGHT TO ACT BY WRITTEN CONSENT  
| Shareholders askrequest that our board toof directors take the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to amendauthorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. This includes shareholder ability to initiate any appropriate topic for written consent. This proposal topic won impressive 51% Western Union shareholder support at the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder2017 WU annual meeting. One of the main purposes of thisThis proposal is to give shareholdersall the right to formally participate in calling for a special shareholder meeting regardless of their length of stock ownership to the fullest extent possible.
It ismore important to adopt this proposal because of the hidden fact that allat Western Union shares not held for one continuous year are now 100% disqualified form formally participating in the call for a special shareholder meeting. Under this secretive and ill-conceived Western Union rule management discriminates against shareholders who bought WU stock during the past 12 months.
Such shareholders are now second-class shareholders as far as having inputdue to management. And shareholders who recently made the investment decision to buy Western Union stock or increase their holdings can be the most informed shareholders.
It currently takes 10% of shares that are owned for more than one continuous year to call a special shareholder meeting. The owners of 10% of shares held for more than a continuous year could determine that they own 20% of our stock when length of stock ownership is factored out.
| | And this 20% figure equals 24% of the shares that vote at the annual meeting. It would be hopeless to think that the shares, that do not have the time to vote, would go out of their way to take the special procedural stepsrestricted right to call for a special shareholder meeting. ThusThe only WU shares that can formally participate in calling for practical purposes we may be left with a 24%special shareholder meeting are the shares that are held for at least one continuous year.
Requiring one continuous year of stock ownership threshold to callcan serve as a special shareholder meeting. It is also important to adopt this proposal to make uppoison pill. No company has ever cited in it annual meeting proxy a single example of shareholders ever successfully calling for our complete lack of a shareholder right to act by written consent. Many companies provide for a shareholder right to call a special shareholder meeting andat a company that excludes all shares not held for one continuous full year. This is evidence of a poison pill attached to an important shareholder right to actright.
| Action by written consent. Western Unionconsent and calling for a special shareholder meeting are hardly ever used by shareholders gave 51%-supportbut the main point of these rights is that it gives shareholders at least significant standing to engage effectively with management. Management will have an incentive to genuinely engage with shareholders if shareholders have a realistic option of acting by written consent or calling a special shareholder meeting. Management likes to claim that shareholders have multiple means to communicate with management but in most cases these are low impact means that are as effective as mailing a post card to the CEO. A right to act by written consent at a previous is an important step for effective shareholder engagement with management. Western Union annual meeting. But Western Union isshareholders need the poster company on abusing shareholder engagement. WU used its so-called shareholder engagement to flip shareholder votes. For example, WU management said that when shareholders gave majority 'support for a shareholder right to act by written consent to help make up for the poison pill attached to our right to call for a special shareholder meeting. Improving corporate governance at WU could eventfully help the price of our poor performing WU stock that the WU shareholder engagement supposedly showed that shareholders did not care about written consent. WU shareholder engagement instead claimed that shareholders wanted a tweak to something other than written consenthas dropped from $26 in spite of their majority vote for written consent.2020.
| Please vote yes:
Special Shareholder Meeting ImprovementRight to Act by Written Consent -- Proposal 4
6 |
78| The Western Union Company 2022 Proxy Statement | 73
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PROPOSAL 46 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT BOARD’S STATEMENT OPPOSING THE PROPOSAL | After careful consideration, and for the following reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders, and the Board recommends voting “AGAINST” this proposal. Our specialStockholder engagement efforts and prior voting suggest limited stockholder support for the proposal. After a proposal to establish the right of stockholders to act by written consent received approximately 51% approval at the 2017 annual meeting right is already alignedof stockholders, the Board engaged with best practices and balances the interestsCompany’s top 25 stockholders to solicit input regarding the most appropriate response to the approval of our broader stockholder base against potential abusethe proposal. The stockholders in this group who agreed to speak with the Company are believed by stockholders with narrow short-term interests.
Under our current Charter and By-Laws, one or more stockholders of record that togetherthe Company to have continuously held for their own account or on behalf of others, beneficial ownership of at least a 10% aggregate “net long position”approximately 49% of the Company’s outstanding capital stock as of December 31, 2017.
- A significant majority of these stockholders (representing approximately 31% of the Company’s outstanding stock as of December 31, 2017) indicated that a reduction in the ownership threshold required under the Company’s existing special meeting right was preferable to implementing a right for at least one year priorstockholders to act by written consent. - In response, the date such request is delivered can requireBoard reduced the Companyownership threshold for stockholders to call a special meeting of its stockholders. Stock ownership is determined under a “net long position” standard to provide assurance that stockholders seeking to call a special meeting possess both (i) full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares. The ownership requirement to exercise the special meeting right was lowered from 20% to 10% after stockholders approved the corresponding, subject to stockholder approval.
- Stockholders voted on an amendment to ourthe Company’s Charter to approve the reduced special meeting ownership threshold at the 2018 annual meeting of stockholders. This lower threshold was recommended by the Board after careful consideration and engagement with our stockholders. In discussions with and outreach to stockholders, the one-year holding requirement to call a special meeting has not been identified as a concern. In its consideration of this proposal the Board evaluated a number of factors, including the interests of our stockholders, the resources required to convene a special meeting, the existing opportunities for stockholders to engagepassed with the Boardfavorable vote of approximately 83% of all outstanding shares.
-The proponent presented a similar stockholder proposal at the 2021 annual meeting of stockholders that received 32.5% of votes cast in favor. The Company believes that permitting stockholder action by written consent could lead to substantial confusion and management between annual meetings, and the characteristics and composition of our stockholder base. The Board also considered that our special meeting provision is more permissive than those adopted by a majority of S&P 500 companies that provide stockholders with the right to call special meetings. Specifically, of the 324 S&P 500 companies that provide stockholders with the right to call special meetings, approximately 82.4% of those companies have a higher ownership threshold than our 10% threshold. Approximately 16.7% of those S&P 500 companies have adopted a 10% threshold. | | disruption for stockholders.The Board believes that permitting stockholder action by written consent is not an appropriate corporate governance model for a widely-held public company like Western Union. Consider the current specialfollowing: - Currently, any matter that Western Union or its stockholders wish to present for a stockholder vote must be presented at a meeting right, includingof the one-year holding periodstockholders, thus allowing all stockholders to consider, discuss and vote on the pending matter. - In contrast, the written consent proposal at issue would permit a group of stockholders with no fiduciary duties to other procedural requirements, is consistent with best market practices while also protectingstockholders to initiate action without prior notice, either to the other stockholders or to the Company, | and its broader stockholder base against risks that a small minority ofwithout giving all stockholders will use special meetingsan opportunity to advance short-term initiativesparticipate and special interests, which may not be in the long-term interestsconsider arguments, including those of the Company, or itsfor and against the action. - Stockholder action by written consent would allow for the solicitation of multiple, even conflicting, written consents by multiple stockholder groups, potentially creating substantial confusion and disruption for stockholders. The one-year holding requirement to call a special meeting protects the Company and its stockholders from the significant time, financial, and administrative burdens of excessive special meetings.
The Board recognizes the right for its stockholders to call special meetings in appropriate circumstances. Given the size of the Company and its large stockholder base, a special meeting of stockholders is a significant undertaking that requires substantial time, financial, and administrative commitments. For every special meeting, the Company is required to provide each stockholder a notice of meeting and proxy materials, which results in significant legal, printing, and mailing and administrative expenses, as well as other costs normally associated with holding a stockholder meeting. Additionally, preparing for stockholder meetings requires significant attention of the Company’s directors, officers, and employees, diverting their attention away from performing their primary function, which is to operate the Company’s business in the best interests of the stockholders. If the one-year holding period requirement is eliminated from the special meeting ownership threshold, the Company could be subject to regular disruptions by special-interest stockholder groups with agendas that are not in the best interests of the Company or its stockholders. The Board believes that the one-year holding period requirement is part of a reasonable balance between enhancing stockholder rights and protecting against the risk that a small minority of stockholders, including stockholders with short-term special interests, could call one or more special meetings that could result in unnecessary financial expense and disruption to our business.
The BoardDirectors is already highly accountable to stockholders.
The proposal suggests that the written consent right is necessary to keep the Board accountable to stockholders. Our current governance structure and policies, however, implement the goal of accountability without the governance risk to stockholders without the risks outlined above toand the Company and its stockholders associated with removingaction by written consent as contemplated by the one-year holding period required for stockholders to meet the 10% ownership threshold necessary to call a special meeting. | |
74 | The Western Union Company
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PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT
proposal. The Company has implemented a comprehensive package of corporate governance practices and policies that enable stockholders to hold the Board accountable and, where necessary, take quick action to support their interests. Elements of this comprehensive package include: | | | 
| No supermajority- the Board of Directors is declassified, with majority voting provisions. Our Charterfor uncontested Director elections;
- the Company was among the first U.S. Companies to adopt the “proxy access” right for its stockholders; - a stockholder or group of stockholders holding 10% or more of our outstanding shares may call a special meeting; - our Amended and Restated Certificate of Incorporation and By-Laws have no supermajority voting provisions.provisions; and | | 
| No “poison pill.” Our Company does not have a stockholder rights plan, known as a “poison pill.”
| 
| Engagement with stockholders. The- the Company regularly seeks to engage with its stockholders to better understand their perspectives.
| | 
| Annual election of directors. The Board of Directors is declassified.
| We believe that this comprehensive package ofhas repeatedly responded to stockholder concerns and the Company’s existing corporate governance practices and policies including our existing special meeting right, provides strong stockholder protections without needinggive stockholders sufficient means to remove the one-year holding period requirementtake actions which might otherwise be taken by written consent. There is, accordingly, no need for stockholders to meetbe provided with the ownership threshold necessaryright to call a special meeting, as requestedact by the proposal.written consent.
Required Vote; Recommendation Only The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is required to approve this Proposal.proposal. Stockholders should be aware that this stockholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may not result in the requested action being taken by the Board, and therefore, its approval would not effectuate the actions requested by the proposal. | |
| 
| Majority vote standard in uncontested elections. In an uncontested election, each director must be elected by a majority of votes cast, rather than by a plurality.
|
The following table sets forth the beneficial ownership of Common Stock by each person or group that is known by us to be the beneficial owner of more than 5% of our Common Stock, all directors and nominees, each of the executive officers named in the 20212022 Summary Compensation Table contained in this Proxy Statement, and all directors and executive officers as a group. Except as otherwise noted, (i) the information is as of March 23, 2022,15, 2023, (ii) each person has sole voting and investment power of the shares, and (iii) the business address of each person shown below is 7001 East Belleview Avenue, Denver, Colorado 80237.
* * *
This Proxy Statement is provided to you at the direction of the Board of Directors.
Darren Dragovich,
Interim Secretary
| | |
ANNEX A
2022 Proxy Statement | 79
Table of Contents
ANNEX A
RECONCILIATION OF NON-GAAP MEASURES
(in millions, unless indicated otherwise)
Western Union’s management believes the non-GAAP financial measures presented provide meaningful supplemental information regarding our operating results to assist management, investors, analysts, and others in understanding our financial results and to better analyze trends in our underlying business, because they provide consistency and comparability to prior periods.
A non-GAAP financial measure should not be considered in isolation or as a substitute for the most comparable GAAP financial measure. A non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliation to the corresponding GAAP financial measure, provides a more complete understanding of our business. Users of the financial statements are encouraged to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included below. All adjusted year-over-year changes were calculated using prior year amounts.
| REVENUES | |
| | | 2021 | | 2022 | |
| Revenues (GAAP) | | $ | 5,070.8 | | $ | 4,475.5 | |
| Foreign currency translation impact(a) | | (18.3) | | 185.5 | |
| Less Business Solutions revenues, constant currency (non-GAAP)(a)(b) | | (405.9) | | (216.4) | |
| Adjusted revenues (non-GAAP) | | $ | 4,646.6 | | $ | 4,444.6 | |
| Revenues (GAAP) - YoY % change | | 5% | | (12)% | |
| Adjusted revenues (non-GAAP) - YoY % change | | 4% | | (4)% | |
| OPERATING INCOME | |
| | | 2021 | | 2022 | |
| Operating income (GAAP) | | $ | 1,123.1 | | $ | 884.9 | |
| Acquisition and divestiture costs(c) | | 15.7 | | 6.2 | |
| Russia/Belarus exit costs(d) | | N/A | | 10.0 | |
| Business Solutions exit costs(d) | | N/A | | 7.7 | |
| Operating expense redeployment program costs(e) | | N/A | | 21.8 | |
| Less Business Solutions operating income(b) | | N/A | | (56.6) | |
| Adjusted operating income (non-GAAP) | | $ | 1,138.8 | | $ | 874.0 | |
| Operating margin (GAAP) | | 22.1% | | 19.8% | |
| Adjusted operating margin (non-GAAP) | | 22.5% | | N/A | |
| Adjusted operating margin, excluding Business Solutions operating income (non-GAAP) | | N/A | | 20.4% | |
2023 Proxy Statement |A-1
| | |
REVENUES
| | |
| | 2021
|
Revenues, as reported (GAAP)
| | $5,070.8
|
Foreign currency translation impact(a)
| | (18.3)
|
Revenues, constant currency adjusted
| | $5,052.5
|
| | 2020
|
Revenues, as reported (GAAP)
| | $4,835.0
|
Revenue change, as reported (GAAP)
| | 5%
|
Revenue change, constant currency adjusted
| | 4%
|
| | |
| | |
OPERATING INCOME
| | |
| | 2021
|
Operating income, as reported (GAAP)
| | $1,123.1
|
Foreign currency translation impact(a)
| | (30.5)
|
Acquisition and divestiture costs(c)
| | 15.7
|
Operating income, constant currency adjusted, excluding acquisition and divestiture costs
| | $1,108.3
|
Operating margin, as reported (GAAP)
| | 22.1%
|
Operating margin, excluding acquisition and divestiture costs
| | 22.5%
|
| | 2020
|
Operating income, as reported (GAAP)
| | $967.3
|
Restructuring-related expenses(b)
| | 36.8
|
Acquisition and divestiture costs(c)
| | 2.5
|
Operating income, adjusted, excluding restructuring-related expenses acquisition and divestiture costs
| | $1,006.6
|
Operating margin, as reported (GAAP)
| | 20.0%
|
Operating margin, adjusted, excluding restructuring-related expenses and acquisition and divestiture costs
| | 20.8%
|
| EARNINGS PER SHARE | |
| | | 2021 | | 2022 | |
| Diluted earnings per share (GAAP) ($- dollars) | | $ | 1.97 | | $ | 2.34 | |
| Pretax impacts from the following: | | | | | | | |
| Acquisition and divestiture costs(c) | | 0.03 | | 0.01 | |
| Gain on investment sale(f) | | (0.12) | | N/A | |
| Debt extinguishment costs(g) | | 0.04 | | N/A | |
| Pension settlement charge(h) | | 0.27 | | N/A | |
| Business Solutions gain(b) | | N/A | | (0.64) | |
| Business Solutions exit costs(d) | | N/A | | 0.02 | |
| Russia/Belarus exit costs(d) | | N/A | | 0.03 | |
| Operating expense redeployment program costs(e) | | N/A | | 0.06 | |
| Income tax expense/(benefit) impacts from the following: | | | | | | | |
| Change in permanent reinvestment assertion related to the sale of Business Solutions(i) | | 0.04 | | N/A | |
| Reversal of significant uncertain tax positions(j) | | N/A | | (0.21) | |
| Other adjustments(b)(c)(d)(e)(f)(g)(h) | | (0.04) | | 0.15 | |
| Adjusted diluted earnings per share (non-GAAP) ($- dollars) | | $ | 2.19 | | $ | 1.76 | |
(a)
| (a) | Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States dollar, net of foreign currency hedges, which would not have occurred if there had been a constant exchange rate. We believe that this measure provides management and investors with information about operatingrevenue results and trends that eliminates currency volatility and provides greater clarity regarding, and increaseswhile increasing the comparability of ourthe Company’s underlying results and trends. |
(b)
| (b) | During 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, the “Buyer”) and received cash consideration of $887.2 million, net of cash divested, subject to the remaining close and regulatory capital adjustments. The sale will be completed in three closings, the first of which occurred on March 1, 2022 with the entirety of the cash consideration collected at that time and allocated to the closings on a relative fair value basis. The first closing excluded the operations in the European Union and the United Kingdom and resulted in a gain of $151.4 million. The second closing, which includes the United Kingdom operations, occurred on December 31, 2022 and resulted in a gain of $96.9 million. The third closing, which includes the European Union operations, is currently expected in the second quarter of 2023, pending regulatory approvals. Revenues have been adjusted to exclude the carved out financial information for the Business Solutions business to compare the year-over-year changes and trends in the Company’s continuing businesses, excluding the effects of this divestiture. While the sale of the Company’s Business Solutions business does not qualify for or represent discontinued operations, the Company has also adjusted operating income, beginning in the first quarter of 2022 and concurrent with the sale, to exclude the carved out direct profit of the Business Solutions business. The operations of the Business Solutions business to be sold in the third closing will continue to be included in Revenues and Operating income after the second closing. However, between the first and third closings, the Company is required to pay the Buyer a measure of the profits from these operations, while owned by the Company, adjusted for other charges, and this expense is recognized in Other income/(expense), net. Therefore, the Company believes that providing this information enhances investors’ understanding of the profitability of the Company’s remaining businesses. The Company has also excluded the gain on the sale, net of related taxes from its results, as management believes that excluding the impact from the gain on sale of the Business Solutions business will provide investors with a clearer and more meaningful comparison of results. These financial measures are non-GAAP measures and should not be considered a substitute for the GAAP measures. |
| (c) | Represents the impact from expenses incurred in connection with an overall restructuring plan, approved by the Board of Directors on August 1, 2019, to improve our business processes and cost structure by reducing headcount and consolidating various facilities. While these expenses are specific to this initiative, the types of expenses related to this initiative are similar to expenses that we have previously incurred and can reasonably be expected to incur in the future. We believe that, by excluding the effect of these charges associated with restructuring-related activities that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results. |
(c)
| Represents the impact from expenses incurred in connection with ourCompany’s acquisition and divestiture activity, including for the review and closing of these transactions. We believeThe Company believes that, by excluding the effecteffects of these charges that can impact operating trends, management and investors are provided with a measure that increases the comparability of ourthe Company’s underlying operating results.
|
| (d) | Represents the exit costs incurred in connection with the divestiture of the Business Solutions business and the suspension of operations in Russia and Belarus, primarily related to severance and non-cash impairments of property and equipment, an operating lease right-of-use asset, and other intangible assets. While certain of the expenses are identifiable to the Company’s segments, the expenses are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker for purposes of performance assessment and resource allocation. These expenses are therefore excluded from the Company’s segment operating income results. These expenses have been excluded from operating income and diluted earnings per share, net of related taxes. The Company believes that, by excluding the effects of these charges that can impact operating trends, management and investors are provided with a measure that increases the comparability of the Company’s underlying operating results. |
| (e) | Represents severance, non-cash impairments of operating lease right-of-use assets and property and equipment, and other expenses associated with the Company’s program to redeploy expenses in its cost base through optimizations in vendor management, real estate, marketing, and people costs. The expenses are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker for purposes of performance assessment and resource allocation. The Company believes excluding the impact of these expenses will provide investors with a more meaningful comparison of operating results. |
2022 Proxy Statement A-2|A-1
Table of Contents
WesternUnion\\WU Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 Address Change? Mark box, sign, and indicate changes below: TO VOTE BY INTERNET OR TELEPHONE, SEE REVERSE SIDE OF THIS PROXY CARD. FPO TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW, SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD. The Board of Directors Recommends a Vote FOR Items 1, 2 and 3. Election of directors: FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN 1a. Martin I. Cole ■ ■ ■ 1g. Timothy P. Murphy ■ ■ ■ 1b. Richard A. Goodman ■ ■ ■ 1h. Joyce A. Phillips ■ ■ ■ 1c. Betsy D. Holden ■ ■ ■ 1i. Jan Siegmund ■ ■ ■ 1d. Jeffrey A. Joerres ■ ■ ■ 1j. Angela A. Sun ■ ■ ■ 1e. Devin B. McGranahan ■ ■ ■ 1k. Solomon D. Trujillo ■ ■ ■ 1f. Michael A. Miles, Jr. ■ ■ ■ Other Matters: 2. Advisory Vote to Approve Executive Compensation ■ For ■ Against ■ Abstain 3. Ratification of Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for 2022 ■ For ■ Against ■ Abstain The Board of Directors Recommends a Vote AGAINST Item 4. 4. Stockholder Proposal Regarding Modification to Stockholder Right to Call a Special Meeting ■ For ■ Against ■ Abstain THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1, 2 AND 3, AND AGAINST ITEM 4. For shares held in The Western Union Company Incentive Savings Plan (the Plan), the Plan’s Trustee will vote the shares as directed. If no direction is given on how to vote the shares to the Trustee by mail on or before May 16, 2022 or by Internet or phone by 11:59 p.m. (EDT) on May 16, 2022, the Plan’s Trustee will vote your shares held in the Plan in the same proportion as the shares for which it receives instructions from all other participants in the Plan. Please fold here – Do not separate Date Signature(s) in Box Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
| (f) | On April 12, 2021, the Company sold a substantial majority of the noncontrolling interest it held in a private company for cash proceeds of $50.9 million. As a result, the Company recorded a pre-tax gain in the second quarter of 2021. The gain on the sale and the income taxes on the gain have been removed from adjusted results. The Company believes excluding the impact of this gain will provide investors with a more meaningful comparison of results with the historical periods presented. |
| (g) | On April 1, 2021, the Company repaid $500 million of aggregate principal amount of 3.6% unsecured notes due in 2022 and incurred approximately $14.8 million of costs, excluding accrued interest, in connection with the repayment. The cost associated with the repayment was recorded to Other income/(expense), net, in the second quarter of 2021. The costs associated with the payment and related tax benefit have been removed from adjusted results. The Company believes excluding the impact of this charge will provide investors with a more meaningful comparison of results with the historical periods presented. |
| (h) | Represents the settlement charges for the Company’s defined benefit pension plan incurred in the fourth quarter of 2021. On July 22, 2021, the Company’s Board of Directors approved a plan to terminate and settle this frozen defined benefit plan, and during the fourth quarter of 2021, the Company settled its obligations under the plan and transferred the corresponding amount of plan assets to the insurer. The expenses associated with the pension settlement were recorded to Pension settlement charges within Total other income/(expense), net. The Company believes excluding the impact of this charge will provide investors with a more meaningful comparison of results with the historical periods presented. |
| (i) | Represents the tax impact from changes to certain of the Company’s permanent reinvestment assertions related to its decision to classify its Business Solutions business as held for sale in 2021. The Company believes excluding the impact of this charge will provide investors with a more meaningful comparison of results with the historical periods presented. |
| (j) | Represents non-cash reversals of significant uncertain tax positions. While the Company continues to reverse its uncertain tax positions upon settlements with taxing authorities, the lapse of the applicable statute of limitations, and other events, the Company has excluded certain reversals of uncertain tax positions in the third and fourth quarter of 2022 because of the significance of these reversals on its reported results. The Company believes excluding these reversals provides a more meaningful comparison of results to the historical periods presented. |
2023 Proxy Statement |A-3
ANNEX B
PROPOSED AMENDMENT TO ARTICLE SIXTH, SECTION A OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE WESTERN UNION COMPANY ANNUAL MEETINGTO LIMIT THE LIABILITY OF STOCKHOLDERS May 19, 2022 8:00 a.m. (MDT)CERTAIN OFFICERS
A. A director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director ortoofficer to the fullest extent permitted by Delaware law. For purposes of this Article SIXTH, Section A, “officer” shall have the meaning provided in Section 102(b)(7) of the GCL, as it presently exists or may hereafter be amended from time to time.
B-1| The Western Union Company Corporate Headquarters 7001 East Belleview Avenue Denver, Colorado 80237 The Western Union Company 7001 East Belleview Avenue Denver, Colorado 80237 proxy This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 19, 2022. The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted “FOR” Items 1, 2 and 3, and “AGAINST” Item 4. By signing the proxy, you revoke all prior proxies and appoint Devin McGranahan and Darren Dragovich and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments and postponements thereof. Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. : ( * INTERNET PHONE MAIL www.proxypush.com/wu 1-866-883-3382 Mark, sign and date your proxy Use the Internet to vote your proxy Use a touch-tone telephone to card and return it in the until 11:59 p.m. (EDT) on May 18, 2022. vote your proxy until 11:59 p.m. postage-paid envelope provided in time Scan the QR code on front for mobile voting. (EDT) on May 18, 2022. to be received by May 18, 2022. If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.
By Tablet or Smartphone—If you are a Beneficial Holder, you may vote your shares online with your tablet or smartphone by scanning the QR code above. If you are a Registered Holder, you may vote your shares online with your tablet or smartphone by scanning the QR code on your Proxy Card. The ability to vote in this way by tablet or smartphone will expire at 11:59 p.m., Eastern Time, on May 
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Emerging Markets
Global Operational
CEO Experience
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Financial Literacy
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CEO Experience
Financial Literacy
Global Operational
Regulated Industry/
Emerging Markets
CEO Experience
Regulated Industry/
Financial Literacy
Global Operational
Financial Literacy
Global Operational
CEO Experience
CFO Experience
Financial Literacy
Regulated Industry/
CEO Experience
Financial Literacy
Regulated Industry/
Emerging Markets
Global Operational
CFO Experience
Financial Literacy
Eligible for Audit
Global Operational
Financial Literacy
Regulated Industry/
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
