UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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| Filed by a Party other than the Registrant | |
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| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to Section 240.14a-12 |
| JOHN WILEY & SONS, INC. |
| (Name of Registrant as Specified in its Charter) |
| (Name of Person(s) Filing Proxy Statement if other than the Registrant) |
| Payment of Filing Fee (Check the appropriate box): | ||
| ☒ | No fee required. | |
| ☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
| 1) | Title of each class of securities to which transaction applies: | |
| 2) | Aggregate number of securities to which transaction applies: | |
| 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |
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| ☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
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| 4) | Date Filed: | |
| Matthew S. Kissner |
Peter Booth Wiley
T +1 201 748 6000F +1 201 748 5800oOur Shareholders:
August 17, 2015
To our Shareholders:
We cordially invite you to attend the 20152016 Annual Meeting of Shareholders of John Wiley & Sons, Inc., to be held on Thursday, October 1, 2015,September 22, 2016, at 9:8:00 A.M., EDT. This year, we are hosting our Annual Meeting online to make it easier for our shareholders to attend. The Annual Meeting will be simulcast online at www.virtualshareholdermeeting.com/JWA2016. Details of access to the webcast are provided in the Notice of Meeting. For shareholders who wish to attend the meeting in person, accommodations will be available at the Company’s headquarters, 111 River Street, Hoboken, New Jersey. The official Notice of Meeting, Proxy Statement, and separate forms of proxy for Class A and Class B shareholders are enclosed with this letter. The matters listed in the Notice of Meeting are described in the Proxy Statement.
The Board of Directors welcomes and appreciates the interest of all our shareholders in the Company’s affairs, and encourages those entitled to vote at this Annual Meeting to take the time to do so. We hope you will attend the meeting, but whether or not you expect to be personally present, please vote your shares, either by signing, dating, and promptly returning the proxy card (or, if you own two classes of shares, both proxy cards) in the accompanying postage-paid envelope, by telephone using the toll-free telephone number printed on the proxy card, or via the Internet using the instructions printed on the proxy card. This will ensure that your shares are represented at the meeting. Even if you execute this proxy, vote by telephone, or vote via the Internet, you may revoke your proxy at any time before it is exercised by giving written notice of revocation to the Corporate Secretary of the Company, by executing and delivering a later-dated proxy (either in writing, by telephone, or via the Internet), or by voting in person or online at the Annual Meeting. If you attend the meeting, you will be able to vote in person if you wish to do so, even if you previously returned your proxy card, voted by telephone, or voted via the Internet.Internet prior to the Annual Meeting.
Your vote is important to us, and we appreciate your prompt attention to this matter.
| Sincerely, | |
  | |
| Chairman of the Board | |
111 River Street, Hoboken, NJ 07030-5774, U.S.
T + 1 201 748 6000
F + 1 201 748 5800
www.wiley.com
| Joanna Jia | |
| Corporate Secretary | |
| T 6020 | |
| F |
Edward J. May
Corporate Secretary
T +1 201 748 5704
F +1 201 748 5800
NoticeNotice of Annual Meeting Annual Meeting of Shareholders
Shareholders
to be held October 1, 2015 September 22, 2016
To our Shareholders:
TheToOur Shareholders:
This year, the Annual Meeting of Shareholders of John Wiley & Sons, Inc. will be held online at www.virtualshareholdermeeting.com/JWA2016. For shareholders who wish to attend the meeting in person, accommodations will be available at the Company’s headquarters, 111 River Street, Hoboken, New Jersey,Jersey. The Annual Meeting will be held on Thursday, October 1, 2015September 22, 2016 at 9: 8:00 A.M., EDT, for the following purposes:
1. To elect a board of eleven (11) directors, of whom four (4) are to be elected by the holders of Class A Common Stock voting as a class and seven (7) are to be elected by the holders of Class B Common Stock voting as a class;
2. To ratify the appointment by the Board of Directors of the Company’s independent public accountants for the fiscal year ending April 30, 2016;2017;
3. To hold an advisory vote on executive compensation; and
4. To transact such other business as may properly come before the meeting or any adjournments thereof.
Shareholders of record at the close of business on August 4, 2015July 29, 2016 are entitled to notice of and to vote at the Annual Meeting or any adjournments thereof.
Please vote by proxy in one of these ways:
| · | Use the toll-free telephone number shown on your proxy card or voting instructions form (if you receive proxy materials from a broker or bank); |
| · | Visit the Internet website at www.proxyvote.com; or |
| · | Sign, date and promptly return your proxy card in the postage-prepaid envelope provided. |
By Order of the | ||
JoannaJia | ||
| Corporate Secretary |
August 17, 2015
Your vote is important to us. Whether or not you plan to be present at the Annual Meeting, please vote your proxy either via the Internet, by telephone, or by mail. Signing and returning the proxy card, voting via the Internet or by telephone does not affect your right to vote in person or online, if you attend the Annual Meeting.
111 River Street, Hoboken, NJ 07030-5774, U.S. |
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of John Wiley & Sons, Inc. (the “Company” or “Wiley”) of proxies to be used at the Annual Meeting of Shareholders to be held on October 1, 2015September 22, 2016 at the time and place set forth in the accompanying Notice of Meeting and at any and all adjournments thereof. This Proxy Statement and accompanying forms of proxy relating to each class of Common Stock, together with the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 20152016 (“Fiscal 2015”2016”), are first being sent or given to shareholders on August 17, 2015.12, 2016.
The executive offices of the Company are at 111 River Street, Hoboken, New Jersey 07030-5774.
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Shareholders to be held on October 1, 2015September 22, 2016
This year we are again using the “Notice and Access” system adopted by the U.S. Securities and Exchange Commission (the “SEC”) relating to the delivery of proxy materials over the Internet. As a result, we mailed you a notice about the Internet availability of the proxy materials instead of paper copies. Shareholders will have the ability to access the proxy materials over the Internet and to request a paper copy of the materials by mail, by e-mail or by telephone. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found on the Notice.Notice of Meeting. We believe that the Notice and Access rules will allow us to use Internet technology that many shareholders prefer, assure more prompt delivery of the proxy materials, lower our cost of printing and delivering the proxy materials, and minimize the environmental impact of printing paper copies.
The Proxy Statement and the Annual Report on Form 10-K are available at www.proxyvote.com.
Table ofContents
Table of Contents
VOTING SECURITIES, RECORD DATE, PRINCIPAL HOLDERS
At the close of business on August 4, 2015,July 29, 2016, there were 49,168,27948,424,638 shares of Class A Common Stock, par value $1.00 per share (the “Class A Stock”), and 9,418,7389,197,827 shares of Class B Common Stock, par value $1.00 per share (the “Class B Stock”), issued and outstanding and entitled to vote. Only shareholders of record at the close of business on August 4, 2015July 29, 2016 are entitled to vote at the Annual Meeting of Shareholders on the matters that come before the Annual Meeting.
The holders of Class A Stock, voting as a class, are entitled to elect four (4) directors, and the holders of Class B Stock, voting as a class, are entitled to elect seven (7) directors. Each outstanding share of Class A Stock and Class B Stock is entitled to one vote for each Class A or Class B director, respectively. The presence in person or by proxy of a majority of the outstanding shares of Class A Stock or Class B Stock entitled to vote for directors designated as Class A or Class B directors, as the case may be, will constitute a quorum for the purpose of voting to elect that class of directors. All elections shall be determined by a plurality of the class of shares voting thereon. Only shares that are voted in favor of a particular nominee will be counted toward such nominee’s achievement of a plurality. Shares present at the meeting that are not voted for a particular nominee or shares present by proxy where the shareholder properly withheld authority to vote for such nominee will not be counted toward such nominee’s achievement of a plurality.
The holders of the Class A Stock and Class B Stock vote together as a single class on all other business that properly comes before the Annual Meeting, with each outstanding share of Class A Stock entitled to one-tenth (1/10) of one vote and each outstanding share of Class B Stock entitled to one vote.
Proposals 2 and 3 require approval by a majority of votes cast at the Annual Meeting. Abstentions and broker non-votes are not counted in determining the votes cast for “non-routine” proposals, but do have the effect of reducing the number of affirmative votes required to achieve a majority for such matters by reducing the total number of shares from which the majority is calculated.
If you are a beneficial shareholder and your broker holds your shares in its name, the broker is permitted to vote your shares on proposal 2 even if the broker does not receive voting instructions from you.you as the proposal is considered a “routine.”
The following table and footnotes set forth, at the close of business on August 4, 2015,July 29, 2016, information concerning each person of record, or known to the Company to own beneficially, or who might be deemed to own, 5% or more of its outstanding shares of Class A Stock or Class B Stock. The percentage of ownership is calculated based on 48,424,638 outstanding shares of Class A Stock and 9,197,827 outstanding shares of Class B Stock on July 29, 2016. The table below was prepared from the records of the Company and from information furnished to it. The percent of total voting power reflected below represents the voting power on all matters other than the election of directors, as described above.
| Name and Address | Class of Stock | Common Stock Owned Beneficially | Percent of Class | Percent of Total Voting Power | ||||||||
| E.P. Hamilton Trusts, LLC(1) | A | 462,338 | 1 | % | .03 | % | ||||||
| 965 Mission Street | B | 8,125,536 | 86 | % | 56 | % | ||||||
| San Francisco, CA | ||||||||||||
| Deborah E. Wiley(2)(3)(4)(6) | A | 1,253,976 | 2.6 | % | 1 | % | ||||||
| 111 River Street | B | 60,260 | 0.6 | % | .4 | % | ||||||
| Hoboken, NJ | ||||||||||||
| Peter Booth Wiley(2)(3)(4)(6) | A | 1,227,738 | 2.5 | % | .09 | % | ||||||
| 111 River Street | B | 18,642 | 0.2 | % | .1 | % | ||||||
| Hoboken, NJ | ||||||||||||
| Bradford Wiley II(2)(3)(4)(6) | A | 1,046,952 | 2.1 | % | .07 | % | ||||||
| 111 River Street | B | 105,643 | 1.1 | % | 0.7 | % | ||||||
| Hoboken, NJ | ||||||||||||
Security Ownership of Certain Beneficial Owners
| ||||
| Name and Address | Title Of Class | Amount And Nature Of Beneficial Ownership | Percent Of Class | Percentage Of Voting Power |
| E.P. Hamilton Trusts, LLC(1) | A | 462,338 | 0.95% | 0.33% |
| 965 Mission Street | B | 8,125,536 | 88.34% | 57.87% |
| San Francisco, CA | ||||
| Deborah E. Wiley(2)(3)(4)(5) | A | 1,253,976 | 2.59% | 0.89% |
| 111 River Street | B | 60,260 | 0.66% | 0.43% |
| Hoboken, NJ | ||||
| Peter Booth Wiley(2)(3)(4)(5) | A | 1,227,738 | 2.54% | 0.87% |
| 111 River Street | B | 18,642 | 0.20% | 0.13% |
| Hoboken, NJ | ||||
| Name and Address | Title Of Class | Amount And Nature Of Beneficial Ownership | Percent Of Class | Percentage Of Voting Power |
| Bradford Wiley II(2)(3)(4)(5) | A | 948,692 | 1.96% | 0.68% |
| 111 River Street | ||||
| Hoboken, NJ | ||||
| Franklin Advisory Services LLC(6) | A | 4,986,078 | 10.30% | 3.55% |
| 55 Challenger Road 5th floor | ||||
| Ridgefield Park, NJ 07660-2107 | ||||
| The Vanguard Group, Inc.(6) | A | 3,844,326 | 7.94% | 2.74% |
| 100 Vanguard Boulevard V 26 | ||||
| Malvern, PA 19355-2331 | ||||
| SSgA Funds Management, Inc.(6) | A | 3,075,210 | 6.35% | 2.19% |
| State Street Financial Center | ||||
| 1 Lincoln Street | ||||
| Boston, MA 02111-2901 | ||||
| BlackRock Fund Advisors(6) | A | 3,011,031 | 6.22% | 2.14% |
| 400 Howard Street | ||||
| San Francisco, CA 94105-2618 |
| Name and Address | Class of Stock | Common Stock Owned Beneficially | Percent of Class | Percent of Total Voting Power | ||||||||
| Pioneer Investment Management, Inc.(5) | A | 3,423,936 | 6.95 | % | .24 | % | ||||||
| 60 State Street | ||||||||||||
| Boston, MA | ||||||||||||
| Investment Manager | ||||||||||||
| Franklin Advisory(6) | A | 4,724,758 | 9.60 | % | .33 | % | ||||||
| One Parker Plaza | ||||||||||||
| Fort Lee, NJ 07024 | ||||||||||||
| Capital Research and Management Co.(5) | A | 2,531,930 | 5.14 | % | .18 | % | ||||||
| 333 South Hope Street | ||||||||||||
| 55th Floor | ||||||||||||
| Los Angeles, CA 90071 | ||||||||||||
| The Vanguard Group, Inc.(5) | A | 3,191,100 | 6.48 | % | .22 | % | ||||||
| 455 Devon Park Drive | ||||||||||||
| Wayne, PA 19087-1815 | ||||||||||||
| BlackRock Fund Advisors(5) | A | 2,712,201 | 5.51 | % | .19 | % | ||||||
| 40 East 52nd Street, 2nd Floor | ||||||||||||
| New York, NY, USA 10022 | ||||||||||||
| (1) | Bradford Wiley II, Deborah E. Wiley and Peter Booth Wiley, as members of the E.P. Hamilton Trusts, LLC established for the purpose of investing in, owning and managing securities of John Wiley & Sons, Inc., share investment and voting power. Bradford Wiley II, Deborah E. Wiley and Peter Booth Wiley as members of the E.P. Hamilton Trusts LLC, share voting and investment power with respect to 462,338 shares of Class A Stock and 8,125,536 shares of Class B Stock. |
| (2) | Bradford Wiley II, Deborah E. Wiley and Peter Booth Wiley, as co-trustees, share voting and investment power with respect to 55,072 shares of Class A Stock and 36,720 shares of Class B Stock under the Trust of Esther B. Wiley. For purposes of this table, each is shown as the owner of one-third of such shares. |
| (3) | Includes 540 shares of Class A Stock and 8,160 shares of Class B Stock of which Deborah E. Wiley is custodian for minor children. |
| (4) | Includes 400,000 shares of indirectly owned Class A Common Stock representing a membership interest in WG6 LLC. |
| (5) |
| Bradford Wiley II, Deborah E. Wiley and Peter Booth Wiley, as general partners of a limited partnership, share voting and investment power with respect to 301,645 shares of Class A Stock. For |
| (6) | Based on filings with the Securities and Exchange Commission, including filings as March 30, 2016 pursuant to Rule 13f-1 of the Securities Exchange Act of 1934, and other information deemed reliable by the Company. |
PROPOSALS ON WHICH YOU MAY VOTE
Proposal 1. Election of Directors’ Nominees for the Board of Directors
Process for Identifying and Evaluating Nominees for Director
The Board annually recommends the slate of director nominees for election by the shareholders at the Annual Meeting and is responsible for filling vacancies on the Board at any time during the year. The Governance Committee has a process to identify and review qualified individuals to stand for election, regardless of whether the current directors, a search firm or shareholders recommend the potential nominee. The Governance Committee has the authority to independently engage the services of a third-party search firm or other consultant to assist in
identifying and screening potential director nominees, and has engaged a third-party search firm to do so. The full Board reviews and has final approval on all potential director nominees being recommended to the shareholders for election to the Board.
The Board and the Governance Committee consider, at a minimum, the following factors in recommending potential new Board members or the continued service of existing members:
(1) The Board seeks qualified individuals who, taken together, represent the required diversity of skills, backgrounds and experience for the Board taken as a whole; (2) A director should have the required expertise and experience, should have a proven record of professional success and leadership and should be able to offer advice and guidance to the CEO;Company; (3) A director should possess the highest personal and professional ethics, integrity and values; must be inquisitive and objective and have the ability to exercise practical and sound business judgment; (4) A director should have the ability to work effectively with others; (5) Assuming that a potential director nominee possesses the required skills, background and experience, the Board also considers ethnic and gender diversity (it should be noted that of the eleven director nominees standing for election, twothree are female and one is a person of color)two are minorities); (6) A majority of directors should be independent; and (7) A director retires from the Board at the annual meeting following his or her 70th birthday, unless an exception is approved by the Board.
The Company’s Board has identified the following skill sets that are most important to the successful implementation of the Company’s long-range strategic plan: industry experience; strategic planning/business development/managerial experience; financial literacy or expertise; marketing experience; general operations/manufacturing experience; international experience; information technology experience; government relations/regulatory agency experience; and management development and compensation experience. Information about each director nominee’s specific experience, qualifications and skills can be found in the biographical information below.
There are eleven (11) nominees for election this year. Detailed information on each nominee is provided on pages 6 to 8.9. Except when the Board fills a vacancy occurring during the year preceding the next Annual Meeting of Shareholders, all directors are elected annually and serve a one-year term until the next Annual Meeting.
Eleven (11) directors are to be elected to hold office until the next Annual Meeting of Shareholders, or until their successors are elected and qualified. Unless contrary instructions are indicated or the proxy is previously revoked, it is the intention of management to vote proxies received for the election of the persons named below as directors. Directors of each class are elected by a plurality of votes cast by that class. If you do not wish your shares to be voted for particular nominees, please so indicate in the space provided on the proxy card, or follow the directions given by the telephone voting service or the Internet voting site.The Holdersholders of Class A Stock are entitled to elect 30% of the entire board.Board and if 30% of the authorized number of directors is not a whole number, the holders of Class A Stock are entitled to elect the nearest higher whole number of directors that is at least 30% of such membership. As a consequence, four (4) Directorsdirectors will be elected by the holders of Class A Stock. The holders of Class B Stock are entitled to elect seven (7) Directors.directors.
All of the nominees are currently directors of the Company and were elected to their present terms of office at the Annual Meeting of Shareholders held in September 2014,October 2015, except Mark AllinLaurie A. Leshin who was elected to the Board effective June 1,November 16, 2015 to fill the vacancy created by the resignation of Stephen M. Smith as President, Chief Executive OfficerJean-Lou Chameau and Director.William Pence who was elected to the Board effective May 1, 2016 to fill the vacancy created by the resignation of Linda Katehi. Except as otherwise indicated below, all of the nominees have been engaged in their present principal occupations or in executive capacities with the same employers for more than the past five years. The Company’s By-Laws provide for mandatory retirement of directors at age 70, but allowgives the Board discretion to nominate for election a candidate who, by reason of having attained age 70, would otherwise not be qualified to serve. It wasserve if the Board’s judgmentBoard deems that special circumstances justify such action. Messrs. Peter Booth Wiley who has provided the Board with invaluable service, be proposed as a Class B director, notwithstanding his having attained age 72, this year. Similarly,and Eduardo Menascé attainedreached age 70 this year,73 and 71, respectively as of the Board decided that Eduardo Menascé’s continued services would be beneficial2016 Annual Meeting of Shareholders and each have tendered their resignations to the Board and company management.
Peter Booth Wiley, Mark Allin and Gary M. Rinck have agreed to represent shareholders submitting proper proxies by mail, viawill not be standing for reelection at the Internet, or by telephone, and to vote for the election of the nominees listed herein, unless otherwise directed by the authority granted or withheld on the proxy cards, by telephone or via the Internet. Although the Board has no reason to believe that any of the persons named below as nominees will be unable or decline to serve, if any such person is unable or declines to serve, the persons named above may vote for another person at their discretion.Annual Meeting.
 | William Pence, joined the Wiley board on May 1, 2016 and is Global Chief Technology Officer at AOL. In this role he leads all aspects of AOL’s global technology strategy, platform development and external technology partnerships, as well as plays a key leadership role in the overall strategy and direction of AOL. He also leads the newly established Area 51, focused on synchronizing innovation efforts across AOL’s venture investments, incubators, university relations, and internal R&D. He is an accomplished leader in the digital technology industry with over Before joining AOL, Mr. Pence served as Executive Vice President and Chief Technology Officer of WebMD from 2007 to 2014 as well as Chief Operating Officer of WebMD from 2012 to 2014. At WebMD, he led many cross-company initiatives that drove innovative new products, improved operational efficiencies and user experiences for consumers and advertiser partners. He also drove technology and corporate operations improvement through automation, cloud technology and data management systems. Mr. Pence was instrumental in mobile product efforts across WebMD’s properties as well as the company’s global expansion. Prior to WebMD, Mr. Pence served as Chief Technology Officer and Senior Vice President at Napster from 2003 to 2007. From 2001 to 2003, he served as Senior Vice President and Chief Technology Officer of Pressplay, a Universal Music Group/Sony Music Entertainment joint venture, and from 2000 to 2001 he served as Senior Vice President and Chief Technology Officer of Universal Music Group. Previously, Mr. Pence spent more than a decade at IBM. Age 53. Mr. Pence’s qualifications for service on the Company’s board include: (i) 25 years of experience |
 | ||
 | Kalpana Raina, a director since 2009, is Managing Partner of 252 Solutions, LLC, an advisory firm, since 2007. Previously, Ms. Raina was a senior executive with The Bank of New York Mellon Corp. She joined the bank in 1988 and held a variety of leadership positions including Executive Vice President and Head of European Country Management and Corporate Banking. Prior to that, she served in Mumbai, India, as Executive Vice President, International. During her eighteen-year career at Bank of New York she had responsibility for clients in the media, telecommunications, healthcare, retailing, hotels and leisure and financial services industries in Asia, Europe, and the United States. Ms. Raina is a member of Women Corporate Directors, The National Association of Corporate Directors, a director of Information Services Group, Inc., a director of Yellow Media Group, a Canadian public company, since December 2012, and was a director of Real Networks and The World Policy Institute until December 2013. Ms. Raina is also a past member of The US-India Business Council. Age 61. |
| Directors to be Elected by Class B Shareholders and Their Qualifications |
  | Mark J. Allinwas appointed the Company’s 12th President and Chief Executive Officer on June 1, 2015 and was simultaneously appointed to the Board. Mr. Allin joined Wiley with the acquisition of Capstone Publishing in 2000 (which he co-founded), after holding numerous senior positions at Blackwell Publishing, Simon & Schuster, and Pearson. In 2003, he became Vice President and Managing Director, Wiley Asia, before being promoted to Executive Vice President, Professional Development, in 2010 and then Chief Operating Officer in 2015. Mr. Allin’s publishing career has spanned three decades and began after studying at Anglia Ruskin University in the United Kingdom and working as a teacher in Zimbabwe. Age | |
  | Matthew S. Kissner was elected Chairman of the Board of Directors of John Wiley & Sons, Inc., in October 2015, having served as a director of the company since Mr. Kissner’s extensive leadership experience includes several senior positions with Pitney Bowes, where he led a number of businesses, as well as leadership roles with Bankers Trust, Citibank, and Morgan Stanley. He has also been a private equity operating partner focusing on business, financial, and healthcare services. Mr. Kissner is an alumnus of New York University, where he obtained an MBA and a BS in Education, both with honors. | |
 | Mari J. Baker, a director since 2011, has held a number of executive officer positions in public and private companies primarily in technology fields, including roles as CEO of PlayFirst, Inc. and Navigenics, Inc., COO of Velti, plc (NASDAQ:VELT), President of BabyCenter, Inc., a Johnson and Johnson company (NYSE: JNJ), and SVP/General Manager at Intuit, Inc. (NASDAQ: INTU). She has been involved in the venture capital community, including serving as executive-in-residence at Kleiner Perkins Caulfield and Byers; in the higher education community, as a Trustee of Stanford University as well as an Advisor to the Clayman Institute at Stanford; and in the executive leadership community, through her service as an officer in Young Presidents Organization. Age 51. Ms. Baker’s qualifications for service on the Company’s board include: (i) service on the boards of Velti, PlayFirst, Navigenics and Cozi Group, Inc. and on the Board of Trustees of Stanford University; and (ii) being a proven business leader, experienced general manager and internet marketing veteran. | |
 | Raymond W. McDaniel, Jr., a director since 2005, has been Chief Executive Officer of Moody’s Corporation since April 2005. From 2005 – April 2012 he also served as Chairman of Moody’s Corporation. In April 2012 he was named President of Moody’s Corporation in addition to Chief Executive Officer. He previously served as Chief Operating Officer of Moody’s Corporation from January 2004; President of Moody’s Corporation from October 2004; and President of Moody’s Investors Service since 2001. In prior assignments with Moody’s, he served as Senior Managing Director for Global Ratings & Research; Managing Director for International; and Director of Moody’s Europe, based in London. He has been a member of Moody’s Corporation Board of Directors since 2003. In 2015 Mr. McDaniel was named as a member of the Board of Trustees of Muhlenberg College. Age 58. Mr. McDaniel’s qualifications for service on the Company’s Board include: (i) |
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  | William J. Pesce, a director since 1998,served as the Company’s 10th President and Chief Executive Officer for 13 years from May 1998 to April 2011, when he retired after nearly 22 years at the Company. Mr. Pesce is a member of the Board of Overseers of the Stern School of Business at New York University; the Board of Trustees of William Paterson University, where he serves as a member of the Executive Committee, Chair of the Educational Policy and Student Development Committee and member of the Nominations and Governance Committee. Mr. Pesce serves as a guest lecturer, speaking with students about leadership, ethics and integrity. He recently launched Pesce Family Ventures, LLC to invest in early stage companies. Age Mr. Pesce’s qualifications for service on the Company’s Board of Directors include: (i) over three decades of experience in publishing; (ii) 13 years as President and Chief Executive Officer, a period in which the Company recorded double-digit compound annual growth in revenue, EPS and the Company’s stock price, while being named to several “best companies” lists; and | |
  | William B. Plummer, a director since 2003, has been Executive Vice President and Chief Financial Officer of United Rentals, Inc. since December 2008. Previously he was Executive Vice President and Chief Financial Officer of Dow Jones & Company, Inc. from September 2006 to December 2007. Prior to that he was Vice President & Treasurer of Alcoa, Inc. since 2000. Before joining Alcoa, he was with Mead Corporation as President, Gilbert Paper Division during 2000; Vice President, Corporate Strategy and Planning from 1998 to 2000; and Treasurer from 1997 to 1998. Prior to joining Mead, he held a number of increasingly responsible positions with the General Electric Company, most recently as Vice President, Equity Capital Group, General Electric Capital Corporation from 1995 to 1997. Mr. Plummer Mr. Plummer’s qualifications for service on the Company’s Board include: (i) over ten years of service as the Chief Financial Officer or Treasurer of publicly-traded companies, including operating experience as President of an operating division of Mead Corporation; (ii) audit committee experience; and (iii) experience in acquisitions and divestitures. | |
  | Jesse Wiley, a director since 2012, has been an employee of the Company since 2003. Mr. Wiley works on Wiley’s corporate planning and development team, Mr. Wiley’s qualifications for service on the Company’s Board include experience in many functions of the Company’s businesses, including marketing and editorial and working at the forefront of digital publishing and learning, developing new products and business | |
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The Board recommends a vote “FOR” the election of its nominees.
Proposal 2. Ratification of KPMG as Independent Accounting Firm
The Audit Committee is responsible for the appointment, compensation and oversight of the independent auditor. On June 15, 2015,23, 2016, the Audit Committee appointed KPMG LLP
(“KPMG”) as the Company’s independent auditors for fiscal year 2016.2017. Although the Company is not required to do so, we are submitting the selection of KPMG for ratification by the shareholders because we believe it is a matter of good corporate practice.
The Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change is in the best interests of the Company and its shareholders. Representatives of KPMG are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and such representatives are expected to be available to respond to appropriate questions.
Unless contrary instructions are noted thereon, the proxies will be voted in favor of the following resolution, which will be submitted at the Annual Meeting:
“Resolved,RESOLVED, that the appointment by the Audit Committee of KPMG LLP as independent public accountants for the Company for the fiscal year ending April 30, 20162017 be, and it hereby is, ratified.”
In the event that the foregoing proposal is defeated, the adverse vote will be considered by the Audit Committee in its selection of auditors for the following year. However, because of the difficulty and expense of making any substitution of auditors so long after the beginning of the current fiscal year, it is contemplated that the appointment for the fiscal year ending April 30, 20162017 will be permitted to stand unless the Audit Committee finds other good reason for making a change. If the proposal is adopted, the Audit Committee, in its discretion, may still direct the appointment of new independent auditors at any time during the fiscal year if it believes that such a change would be in the best interests of the Company and its shareholders.
The Board of Directors recommends that you vote “FOR” the ratification of the appointment of independent public accountants.
Proposal 3. Advisory Vote on Executive Compensation
We are requesting that shareholders indicate their approval of our Named Executive Officers’ compensation, as described in the compensation tables and Compensation Discussion and Analysis set forth in this Proxy Statement. This proposal, known as a “say-on-pay” proposal, allows shareholders the opportunity to express their views on these matters. The “say on pay” vote is an advisory vote, which is therefore not binding on the Company, the Compensation Committee or the Board of Directors. However, the views of our shareholders are important to the Company, and will be given careful consideration by the Company, the Compensation Committee and the Board of Directors.
Compensation for our Named Executive Officers in Fiscal 2015,2016 was consistent with the principles of our compensation philosophy and reflects our financial performance, the cumulative return to shareholders in Fiscal 20152016 and the overall stability and achievements of the executive team. Our compensation philosophy is designed to (i) align the Company’s goals with shareholder interests; (ii) attract and retain world-class talent; (iii) pay competitively compared with our peer group and the marketplace; and (iv) reward superior performance and limit rewards for performance below targets. Our Fiscal 20152016 compensation packages reflect these guiding principles.
The discussion set forth in the Compensation Discussion and Analysis on pages 2324 to 5254 of this Proxy Statement provides a complete discussion of our compensation programs and policies, including design, implementation, oversight, administration, ongoing review and risk assessment of our programs and policies. Our Compensation Committee and Board of Directors believe that our compensation programs and policies are designed and carried out to allow us to achieve our business goals and reflect the guiding principles of our compensation philosophy.
A vote “FOR” approval will be a vote in favor of the following resolution:
“RESOLVED, that the shareholders of John Wiley & Sons, Inc. hereby approve on an advisory basis the compensation of the Company’s Named Executive Officers, as
described in the compensation tables, narrative discussion and Compensation Discussion and Analysis, set forth in this Proxy Statement.”
The Board Of Directors Recommends A Vote “For” Approval, On An Advisory Basis, Of The Compensation Of John Wiley & Sons, Inc.’s Named Executive Officers As Disclosed In This Proxy Statement.
GOVERNANCE OF THE COMPANY AND BOARD STRUCTURE
The Company’s Board of Directors is elected annually by the shareholders to provide oversight so that the long-term interests of the shareholders are served. The Company’s business is conducted by its employees under the direction of the CEO and with the oversight of the Board.
Board of Directors and Corporate Governance
Director Independence
The Board is currently composed of eleventhirteen (13) members. Messrs. Peter Booth Wiley and Eduardo Menascé have each tendered their resignations to the Board and will not be standing for reelection at the Annual Meeting. Jesse Wiley is a member of the son of Peter Booth Wiley.Wiley family. The Board has affirmatively determined that all of our directors, except Mark Allin Jesse Wiley and Peter BoothJesse Wiley meet the independence guidelines the Board sets forth in its Corporate Governance Principles which are published on our web site at http://www.wiley.com/WileyCDA/Section/id-301708.html.
Board Leadership Structure
The Board of Directors is currently led by Peter Booth Wiley,Matthew S. Kissner, our non-executiveindependent Non-Executive Chairman. Mark Allin, our President and Chief Executive Officer is also a member of the Board of Directors. During Fiscal 2015 Mr. Wiley announced to the Board that he will step down as its Chairman effective October 1, 2015. Subject to his election to the Board of Directors at the 2015 Annual Meeting of Shareholders it is expected that the Board will elect Matthew S. Kissner as its new Chairman at its first meeting immediately following the 2015 Annual Meeting of Shareholders.
Meetings of the Board of Directors are called to order and led by the Chairman. All members of the Board are elected annually.
The Board of Directors believes separating the roles of Chairman and Chief Executive Officer allows our Chief Executive Officer to focus on developing and implementing the Company’s strategic business plans and managing the Company’s day-to-day business operations and allows our Chairman to lead the Board of Directors in its oversight and advisory roles. Because of the many responsibilities of the Board of Directors and the significant amount of time and effort required by each of the Chairman and Chief Executive Officer to perform their respective duties, the Company believes that having separate persons in these roles enhances the ability of each to discharge those duties effectively and, as a corollary, enhances the Company’s prospects for success. The Board of Directors also believes that having separate positions provides a clear delineation of responsibilities for each position and fosters greater accountability.
For the foregoing reasons, the Board of Directors has determined that its leadership structure is appropriate and in the best interests of the Company’s shareholders.
Other Governance Practices
Non-Management Executive Sessions:The Board has regularly scheduled non-management executive sessions of non-management directors following each Board meeting.
Orientation and Continuing Education:Education: The Company’s new directors are required to attend orientation sessions. The Company also conducts ongoing training or continuing director education for its Board members and is supportive of, and reimburses its directors for, attending director education programs.
Annual Meeting:The Company does not have a policy that requires the attendance of all directors at the Annual Meetings, but it has been a long-standing practice for directors to attend. In September 2014,October 2015, all directors standing for election attended the Annual Meeting.
Annual Evaluation:The boardBoard annually conducts a self-evaluation to determine whetherof the board as a wholeBoard and its individualitsindividual members, including the Chairman areof the Board.
During Fiscal 2016, the Board engaged a third party facilitator to help administer the annual Board Evaluation. The objective of the annual evaluation is to ensure that the Board is functioning at a high level and is providing the best value and performance for the Company’s stakeholders, management and employees. The Board’s Governance Committee is responsible for the design and administration of the annual Board evaluation process and uses a variety of methods to produce an evaluation of the full Board, Board committees and individual directors. The information obtained from the annual evaluations is used to direct future Board agendas, ensure good communication with management and to review future board candidate qualifications.
Code of Ethics. The Company has adopted a Business Conduct and Ethics Policy (the “Code of Ethics”) that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer, controller, and any persons performing effectively.similar functions, as well as all directors, officers and employees of the Company. The Company also maintains a Code of Ethics policy for its Senior Financial Officers. The Code of Ethics is posted on the Company’s website at www.wiley.com/WileyCDA/Section/id-301715.html. The Company intends to satisfy the disclosure requirements regarding any amendments to, or waivers from, a provision of the Code of Ethics for the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on its website.
Committees of the Board of Directors and Certain Other Information Concerning the Board
Committee Structure
The Board has established four standing committees: the Audit Committee, the Executive Compensation & Development Committee, the Governance Committee, and the Executive Committee. During 2016, the Board formed the Technology Committee and appointed Jesse Wiley as Committee Chairman. Each Committee conducts an annual self-evaluation of performance and reviews compliance with the current charter of the committee. The Board reviews and approves the committee charters annually. Copies of the committee charters can be found on our website atwww.wiley.com. www.wiley.com.
The following table indicates Fiscal 2015Board membership and total meetings of the Board and its standing committees:committees in Fiscal 2016:
| Name | Board | Audit | Compensation | Executive | Governance | ||||||||||
| Mari Jean Baker | X | X | X | X | * | ||||||||||
| George Bell | X | X | |||||||||||||
| Matthew S. Kissner | X | X | * | ||||||||||||
| Raymond W. McDaniel, Jr. | X | X | * | X | |||||||||||
| Eduardo Menascé | X | X | X | * | X | * | |||||||||
| William J. Pesce | X | X | X | ||||||||||||
| William B. Plummer | X | X | X | X | |||||||||||
| Kalpana Raina | X | X | * | ||||||||||||
| Stephen M. Smith | X | X | |||||||||||||
| Jesse Wiley | X | X | |||||||||||||
| Peter Booth Wiley | X | * | |||||||||||||
| Linda P.B. Katehi** | X | X | |||||||||||||
| Fiscal 2015 Meetings | 10 | 8 | 9 | 11 | 7 | ||||||||||
| Name | Board | Audit | Compensation | Executive | Governance | Technology |
| Mark J. Allin | X | X | ||||
| Mari Jean Baker | X | C* | X | |||
| George Bell | X | X | C* | |||
| Matthew S. Kissner | C* | |||||
| Raymond W. McDaniel, Jr. | X | X | X | |||
| Eduardo Menascé** | X | X | ||||
| Laurie A. Leshin | X | X | ||||
| William Pence | X | X | ||||
| William J. Pesce | X | C* | X | |||
| William B. Plummer | X | X | X | |||
| Kalpana Raina | X | C* | ||||
| Jesse Wiley | X | X | C* | |||
| Peter Booth Wiley ** | X | X | ||||
| Fiscal 2016 Meetings | 11 | 6 | 6 | 7 | 6 | 2 |
| * | Committee |
Note: From May
| Note: Mr. Pesce was appointed Chair of the Executive Committee on October 1, |
| ** |
During Fiscal 2015,2016, all of the Directors with the exception of Mr. Smith, who for health reasons was unable to attend several of the meetings, attended at least 75% of the meetings of the Board of Directors and the respective committees of the Board of Directors of which they were a member.
Executive Committee.Committee. The Executive Committee exercises the powers of the Board as appropriate in any case where immediate action is required and the matter is such that an emergency meeting of the full Board is not deemed necessary or possible. As a result of Mr. Smith’s health problems announced in February 2015,In Fiscal 2016, the Executive Committee held frequent meetings in Fiscal 2015was delegated the additional role of holding quarterly reviews with the CEO and the Chairman to discuss Mr. Smith’s recovery as well asreview their performance versus objectives and to report findings to the appointmentExecutive Compensation and Development Committee and the Governance Committee regarding the performance of an interim,the CEO and eventually, permanent successor for the President and CEO role.Chairman, respectively.
Audit Committee.The Audit Committee assists the Board in fulfilling its fiduciary responsibilities relating to the Company’s financial statements filed with the Securities and Exchange Commission,SEC, accounting policies, and the adequacy of disclosures, internal controls and reporting practices of the Company and its subsidiaries; reviews Company policies with respect to risk management and risk assessment; evaluates, retains, compensates and, if appropriate, terminates the services of the independent public accounting firm which is to be engaged to audit the Company’s financial statements, including reviewing and discussing with such firm their independence and whether providing any permitted non-audit services is compatible with their independence; maintains financial oversight of the Company’s employees’ retirement and other benefit plans and makes recommendations to the Board with respect to such matters; oversight of the Company’s Enterprise Resources Platform (ERP); and reviews and approves related partyperson transactions. The Committee holds discussions with management prior to the release of quarterly earnings, and also reviews quarterly results prior to filings.
During 2016, oversight of the ERP was delegated to the newly formed Technology Committee, as described below.
The Board has determined that all members of the Committee are Audit Committee “financial“audit committee financial experts,” as defined under the rules of the Securities and Exchange Commission.SEC rules. All members of the Committee are independent under the rules of the New York Stock Exchange currently applicable to(the “NYSE”) and are financially literate under the Company.NYSE rules.
The Audit Committee Charter is available on the Company’s website at: http://www.wiley.com/WileyCDA/Section/id-301711.html.
Executive Compensation and Development Committee.The Executive Compensation and Development Committee (“ECDC” or the “Compensation Committee”) evaluates the performance of the CEO and reports its decisions to the Board; reviews and approves the principles, policies and policiesprograms for compensation and benefit programs company-wide, and monitors the implementation and administration of such programs; oversees compliance with governmental regulations and accounting standards with respect to employee compensation and benefit programs; monitors executive development practices in order to insure succession alternatives for the organization; and grants options and makes awards under the 2014 Key Employee Stock Plan. All members of the Committee are outside directors as defined by Treasury Regulation Section 1.162-27(e)(3) under Section 162 (M)(m) of the Internal Revenue Code.
For Fiscal 2016, the performance reviews of the Chief Executive Officer were delegated to the Executive Committee. Such delegation will be reviewed annually and will be continued, altered or rescinded as necessary. The Compensation Committee, based on an evaluation of the CEO’s performance by the Executive Committee, determined the CEO’s compensation, and discussed its recommendation with the Board in executive session.
The Compensation Committee Charter is available on the Company’s website at:http://www.wiley.com/WileyCDA/Section/id-301712.html.
Governance Committee.The Governance Committee assists the Board in the selection of Board members by identifying appropriate general qualifications and criteria for directors as well as qualified candidates for election to the Board; assists the Chairman of the Board in proposing committee assignments; assists the Board in evaluating, maintaining and improving its own effectiveness; evaluates the Chairman of the Board’s performance; evaluates director compensation and benefits; and makes recommendations to the Board regarding corporate governance policies.
Shareholders who wish to recommend a director candidate to the Governance Committee should follow the procedures set forth under “Deadline for Submission of Shareholder Proposals” on page 5557 of this proxy statement. The recommendation should include the candidate’s name, biographical data, and a description of his or her qualifications.
The Governance Committee Charter is available on the Company’s website at:http://www.wiley.com/WileyCDA/Section/id-301714.html.
Technology Committee. The Technology Committee assists the Board in fulfilling oversight responsibilities by reviewing, giving guidance and making recommendations to management and the Board related to the Company’s technology strategy, initiatives and investments in support
of overall Company strategy and performance. The role of this Committee will be reviewed annually and revised as deemed necessary.
The Technology Committee Charter is available on the Company’s website at:http://www.wiley.com/WileyCDA/Section/id-828130.html.
Board and Committee Oversight of Risk
Management of risk is the direct responsibility of the Company’s President & CEO and the seniorexecutive leadership team. The Board has oversight responsibility, focusing on the adequacy of the Company’s risk management and risk mitigation processes.
The Company’s Board of Directors administers its risk oversight function directly and through its Audit Committee, and Executive Compensation & Development Committee and Technology Committee. The Board receives regular reports from these committees, which include reports on those areas over which they have risk oversight responsibility, as appropriate.
Audit Committee:The Audit Committee has oversight responsibility for Enterprise Risk Management (ERM), and specifically, oversight of major financial risk exposures, including litigation and compliance risk and the steps management has taken to monitor and mitigate such exposures. The Committee also receives regular updates from management, including the General Counsel, on litigation risk.
Executive Compensation & Development Committee:The Executive Compensation & Development Committee has oversight responsibility for the management of risk relating to the Company’s annual and long-term compensation program. The Committee ensures that the Company’s annual and long-term incentive plans do not incentivize or encourage excessive or unnecessary risk-taking.
Technology Committee: The Technology Committee has oversight responsibility of risks related the Company’s management and development of technology, primarily those relevant to customer facing products and services, and internal IT systems. The Committee receives regular updates from management on risks in these areas, including data and enterprise security.
How Do We Address Risk in Our Compensation Program?
The Company’s compensation program is designed to attract, retain, motivate and reward talented executives and colleagues whose efforts will enable the Company to produce superior results and maximize return to shareholders. Our pay-for-performance philosophy focuses colleagues’ efforts on delivering short-term and long-term financial success for our shareholders without encouraging excessive risk taking. The Executive Compensation & Development Committee, (“Compensation Committee”), which consists entirely of independent Board members, oversees the executive compensation program for the named executive officers, as well as other senior officers of the Company.
The following is a description of both Compensation Committee and management processes related to the compensation risk assessment process, as well as a description of the Company’s compensation risk mitigation techniques.
The Compensation Committee reviews and approves the annual and long-term plan performance measures and goals annually. This includes setting appropriate threshold and outstanding performance levels for each performance metric. As a part of this process, the Compensation Committee focuses on what behavior it is attempting to incentivize and the potential associated risks. The Compensation Committee periodically receives financial information from the Chief Financial Officer, and information on accounting matters that may have an impact on the performance goals, including any material changes in accounting methodology and information about extraordinary/special items excluded in the evaluation of performance, as permitted by the 2009 and 2014 Executive Annual Incentive Plan and the 2014 Key Employee Stock Plan (i.e. the shareholder plans), so that the Compensation Committee members may understand how the exercise of management judgment in accounting and financial decisions affects plan payouts. Members of the Compensation Committee approve the final incentive compensation awards after reviewing executive, corporate and business performance, and may utilize negative discretion if they believe the level of compensation is not commensurate with performance.
The following compensation policies and practices serve to reduce the likelihood of excessive risk taking:
| · | An appropriate compensation mix that is designed to balance the emphasis on short- term and long-term performance. |
| · | The majority of incentive compensation for top level executives is associated with the long term performance of the Company. This discourages short-term risk taking. |
| · | The focus on performance share units in our executive long-term plan ensures a correlation between executive rewards and shareholder return. |
| · | Financial performance measures used for incentive plans covering colleagues at all levels of the Company include a mix of financial metrics that are in line with operating and strategic plans. |
| · | Financial performance measures used for our annual incentive plan are different than the performance measures used in our long-term incentive plan. |
| · | A significant portion of annual and long-term incentive payments are based on Company and business profitability, ensuring a correlation between pay and performance. |
| · | Financial targets are appropriately set, and if not achieved, result in a large percentage loss of compensation. |
| · | Executive and broad-based incentive plans cap the maximum award payable to any individual. Annual and long-term incentive plans have a maximum payout of 1.5 times the target amount. |
| · | Recoupment or “clawback” provisions for top executives and key finance executives in the event that an executive’s conduct leads to a restatement of the Company’s financial results. |
| · | Stock ownership guidelines and stock retention requirements for our named executive officers, other senior officers and directors discourage excessive risk taking. |
We are confident that our compensation program rewards for performance, is aligned with the interests of our shareholders and does not involve risks that are reasonably likely to have a material adverse effect on the company.Company. A more detailed discussion of the Company’s executive compensation program can be found in the Compensation Discussion and Analysis beginning on page 23.24.
Transactions with Related Persons
We are required to disclose material transactions with the Company in which “related persons” have a direct or indirect material interest. Related persons include any Director, nominee for Director, executive officer of the Company, beneficial owner of more than 5% of any class of the Company’s voting securities, and any immediate family members of such persons. The term “transaction” is broadly defined under Securities and Exchange Commission rules to include any financial transaction, arrangement or relationship, including any indebtedness transaction or guarantee of indebtedness.indebtedness or any series of similar transactions, arrangements or relationships.
The Company’s Board of Directors has adopted a written policy that requires the Audit CommitteeChief Executive Officer to review and approve any related party transactions. Management is expectedtransactions with respect to provideexecutive officers, and the Audit Committee with specific informationto review and approve related person transactions with respect to any such transaction expected todirectors, director nominees, and the Chief Executive Officer. Such transactions will only be enteredapproved after taking into or continued during the current fiscal year. After reviewing this information, the Audit Committee will approve such transactions only if the following two conditions are met: (1)consideration whether the transaction must be inis fair and reasonable and is consistent with the best interests of the Company. Factors to be taken into account in making the determination may include the business purpose of the transaction, whether the transaction is entered into on an arms-length basis on terms fair to the Company, and its shareholders; and (2)whether the transaction must be entered into bywould violate the Company on terms that are comparable to those that would be obtained in an arm’s length transaction with an unrelated third party.provisions of the Company’s Business Conduct and Ethics Policy.
Based on information available to us and provided to us by our Directors and executive officers, we do not believe that there were any such material transactions in effect during Fiscal 2015,2016, or that any such material transactions are proposed to be entered into during fiscal 2016.Fiscal 2017.
Corporate Governance Principles
To promote the best corporate governance practices, the Company adheres to the Corporate Governance Principles set forth below, many of which have been in effect for more than a decade. The Board of Directors and management believe that these Principles, which are consistent with the requirements of the Securities and Exchange Commission and the New York Stock Exchange, are in the best interests of the Company, its shareholders and other stakeholders, including employees, authors, customers and suppliers. The Board is responsible for ensuring that the Company has a management team capable of representing these interests and of achieving superior business performance.
Pursuant to the New York Stock Exchange’s Corporate Governance regulations,NYSE rules, the Company is considered a “controlled company,” defined as a company where more than 50 percent of the voting power is held by an individual, a group, or another company. As such, the Company would be exempt from certain corporate governance standards. However, the Board believes it is in the best interest of the Company and its shareholders to abide by all of the regulations,NYSE listing rules, except for the requirement that the Governance Committee be comprised of independent directors only. The Board has chosen to take an exemption to this requirement because it believes that a Wiley family member’s participation on this Committee will result in a collaborative process to promote the highest standards in the recruitment of new directors and in governance generally.
| I. | Primary Duties |
I. Primary Duties
The Board, which is elected annually by the shareholders, exercises oversight and has final authority and responsibility with respect to the Company’s affairs, except with respect to those matters reserved to shareholders. All major decisions are considered by the Board as a whole.
The Board electsappoints the Chief Executive Officer (“CEO”) and other corporate officers, acts as an advisor to and resource for management, and monitors management’s performance.
The Board plans for the succession of the CEO. The ExecutiveIn Fiscal 2016, decisions regarding the CEO’s compensation were determined by the Compensation and Development Committee, annually evaluatesbased on an evaluation of the CEO’s performance approvesby the Executive Committee. The Compensation Committee, based on an evaluation of the CEO’s performance by the Executive Committee, determines the CEO’s compensation, and informsdiscusses its recommendation with the Board of its decisions.in executive session.. The Board also oversees the succession process for certain other management positions, and the CEO reviews with the Board annually his assessment of key management incumbents and their professional growth and development plans. The Board also:
| a) | reviews the Company’s business and strategic plans and actual operating performance; |
| b) | reviews and approves the Company’s financial objectives, investment plans and programs; and |
| c) | provides oversight of internal and external audit processes and financial reporting. |
II.
| II. | Director Independence |
The Board has long held that it is in the best interests of the Company for the Board to consist of a substantial majority of independent Directors. The Board annually determines that a Director is independent if he or she has no material relationship, either directly or indirectly, withpursuant to its Company’s independence guidelines set forth in the Company, defined as follows:
Company’s Governance Principles. When determining the independence of a Director, the ownership of, or beneficial interest in, a significant amount of stock, by itself, is not considered a factor.
| III. |
III.
Under the Company’s By-Laws, the Board has the authority to determine the appropriate number of directors to be elected so as to enable it to function effectively and efficiently. The Governance Committee makes recommendations to the Board concerning the appropriate size of the Board, as well as selection criteria for candidates. Each candidate is selected based on background, experience, expertise, and other relevant criteria, including other public and private company boards on which the candidate serves. In addition to the individual candidate’s
background, experience and expertise, the manner in which each board member’s qualities complement those of others and contributes to the functioning of the Board as a whole are also taken into account. The Governance Committee nominates a candidate, and the Board votes on his or her candidacy. The shareholders vote annually for the entire slate of Directors.
Any nominee Director who receives a greater number of “withheld” votes from his or her election than “for” votes shall tender his or her resignation for consideration by the Governance Committee. The Governance Committee shall recommend to the Board the action to be taken with respect to such resignation.
IV.
| IV. | Director Eligibility |
Directors shall limit the number of other board memberships in order to insure adequate attention to Company business. Prior to joining the board of another organization, including a public or private company, as well as a not-for profit organization, directors are required to advise the Chairman of the Board, the Chair of the Governance Committee and the President and Chief Executive Officer so that a review can be performed to ensure that there are no conflicts of interest or other issues. While the Board of Directors does not believe it appropriate to establish an arbitrary limit on the number of outside boards upon which a Director may serve, the Board (based on the review and recommendation of the Governance Committee), has the responsibility to evaluate each situation and approve membership.
Whenever there is a substantial change in the Director’s principal occupation, a Director shall tender his or her resignation and shall immediately inform the Board of any potential conflict of interest. The Governance Committee will recommend to the Board the action, if any, to be taken with respect to the resignation or the potential conflict of interest.
The Board has established a retirement age of 70 for its Directors. The Board may, in its discretion, nominate for election a person who has attained age 70 or over if it believes that under the circumstances it is in the Company’s best interests.
V.
| V. | Board and Management Communication |
The Board has access to all members of management and external advisors. As appropriate, the Board may retain independent advisors.
The CEO shall establish and maintain effective communications with the Company’s shareholder groups. The Board schedules regular executive sessions at the end of each meeting. Non-management directors meet at regularly scheduled sessions without management. The Chairman of the Board presides at these sessions. In addition, the independent directors meet at least once each year in an executive session presided over by the Chairman of the Governance Committee.
Employees and other interested parties may contact the non-management directors via email at: non-managementdirectors@wiley.com, or by mail addressed to Non-Management Directors, John Wiley & Sons, Inc., Mail Stop 9-12, 111 River Street, Hoboken, NJ 07030-5774.
VI.
The Company has also established a Whistleblower hotline for the reporting of known or suspicious activities that could adversely affect the Company by shareholders, employees and customers.
| VI. | Board Orientation and Evaluation |
The Board annually conducts a self-evaluation to determine whether the Board as a whole and its individual members, including the Chairman, are performing effectively.
The Board sponsors an orientation process for new Directors, which includes background materials on governance, law, board principles, financial and business history and meetings
with members of management. The Board also encourages all of its Directors to take advantage of educational programs to improve their effectiveness.
VII.
| VII. | Director Compensation |
The Governance Committee periodically reviews and recommends to the Board its members’ annual retainer, which is composed of cash and stock grants for all non-employee Directors. In determining the appropriate amount and form of director compensation, the Board regularly
evaluates current trends and compensation surveys, as well as the amount of time devoted to Board and committee meetings. As a long-standing Board principle, non-employee Directors receive no compensation from the Company other than for their service as Board members and reimbursement for expenses incurred in connection with attendance at meetings.
Share ownership by each Director is encouraged. To this end, each Director is expected to own shares of Wiley common stock valued at not less than five times that Director’s annual cash compensation to which the Director is entitled for Board service.
VIII.
| VIII. | Board Practices and Procedures |
The Chairman of the Board and the CEO jointly set the agenda for each Board meeting. Agenda items that fall within the scope and responsibilities of Board committees are reviewed with the chairs of the committees. Any Board member may request that an item be added to the agenda.
Board materials are provided to Board members sufficiently in advance of meetings to allow Directors to prepare for discussion at the meeting.
Various managers regularly attend portions of Board and committee meetings in order to participate in and contribute to relevant discussions.
Beneficial Ownership of Directors and Management
The table below shows the number of shares of the Company’s Class A and Class B Stock beneficially owned by the current directors, and the executive officers named in the Summary Compensation Table on page 3940 and all directors and executive officers of the Company as a group as of August 4, 2015.July 29, 2016. The percent of total voting power reflected below represents the voting power on all matters other than the election of directors, as described on page 3.
| SHARES BENEFICIALLY OWNED BY OFFICERS AND DIRECTORS(1) | |||||||
| Insider Name | Title of Class | Amount and Nature of Beneficial Ownership | Additional Shares Beneficially Owned(2) | Total Shares Beneficially Owned | Percent of Class | Percentage of Total Voting Power(3) | Shares and Share Equivalents Under Deferred Plan(4) |
| Mark Allin(5) | A | 14,843 | 91,775 | 106,618 | * | * | — |
| B | — | — | — | — | — | — | |
| Mari J. Baker | A | — | — | — | — | — | 8,362 |
| B | — | — | — | — | — | ||
| George Bell | A | — | — | — | — | — | 3,832 |
| B | — | — | — | — | — | — | |
| Matthew S. Kissner | A | — | — | — | — | — | 26,754 |
| B | — | — | — | — | — | — | |
| John A. Kritzmacher(5) | A | 10,070 | 5,415 | 15,485 | * | * | — |
| B | — | — | — | — | — | — | |
| Laurie Leshin | A | — | — | — | — | — | 1,673 |
| B | — | — | — | — | — | — | |
| Raymond McDaniel | A | 500 | — | 500 | * | * | 23,639 |
| B | — | — | — | — | — | — | |
| Eduardo Menasce | A | — | — | — | — | — | 13,888 |
| B | — | — | — | — | — | — | |
| William Pence | A | 732 | — | 732 | * | * | — |
| B | — | — | — | — | — | — | |
| William J. Pesce | A | 64,970 | — | 64,970 | * | * | — |
| B | — | — | — | — | — | — | |
| William B. Plummer | A | — | — | — | — | — | 39,244 |
| B | — | — | — | — | — | — | |
| Kalpana Raina | A | — | — | — | — | — | 11,734 |
| B | — | — | — | — | — | ||
Section 16(a) Beneficial Ownership Reporting Compliance
| Shares of Class A and Class B Stock Beneficially Owned(1) | Additional Shares Beneficially Owned(2) | Totals | Percent of Class(1) | Percent of Total Voting Power | Deferred Stock Units(3) | ||||||||||||||||
| Mark Allin(4) | A | 7,618 | 2,951 | 10,569 | .02 | % | — | — | |||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Mari Jean Baker | A | — | — | — | — | — | 6,170 | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| George Bell | A | — | — | — | — | 1,759 | |||||||||||||||
| B | — | — | — | — | — | ||||||||||||||||
| Joseph S. Heider(7) | A | 15,529 | 2,622 | 18,151 | .04 | % | — | — | |||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Matthew S. Kissner | A | — | — | — | — | — | 22,790 | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| John Kritzmacher(4) | A | 12,500 | 12,500 | 25,000 | .05 | % | — | — | |||||||||||||
| B | — | — | — | — | — | ||||||||||||||||
| Raymond W. McDaniel, Jr. | A | 500 | — | 500 | — | — | 20,995 | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Eduardo Menascé | A | — | — | — | — | — | 11,530 | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Steven J. Miron(4)(7) | A | 13,946 | 15,921 | 29,867 | .06 | % | — | — | |||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Shares of Class A and Class B Stock Beneficially Owned(1) | Additional Shares Beneficially Owned(2) | Totals | Percent of Class(1) | Percent of Total Voting Power | Deferred Stock Units(3) | ||||||||||||||||
| William J. Pesce | A | 63,008 | — | 63,008 | .13 | % | — | — | |||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| William B. Plummer | A | — | — | — | — | — | 34,175 | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| John W. Semel(4) | A | 10,997 | 5,000 | 15,997 | .03 | % | — | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Stephen M. Smith(4)(7) | A | 93,137 | 33,110 | 126,247 | .26 | % | — | — | |||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Kalpana Raina | A | — | — | — | — | — | 9,440 | ||||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Gary Rinck(4) | A | 40,886 | 3,933 | 44,819 | .09 | % | — | — | |||||||||||||
| B | — | — | — | — | — | — | |||||||||||||||
| Jesse Caleb Wiley | A | — | — | — | — | — | — | ||||||||||||||
| B | 800 | — | 800 | — | — | — | |||||||||||||||
| Peter Booth Wiley(5)(6) | A | 1,381,850 | — | 1,381,850 | 2.8 | % | .1 | % | — | ||||||||||||
| B | 2,727,154 | — | 2,727,154 | 29 | % | 19 | % | — | |||||||||||||
| All directors and executive officers as a group | A | 1,681,558 | 71,091 | 1,752,649 | 3.56 | % | .12 | % | — | ||||||||||||
| (24 persons) | B | 2,727,954 | — | 2,727,954 | 29 | % | 19 | % | — | ||||||||||||
| Insider Name | Title of Class | Amount and Nature of Beneficial Ownership | Additional Shares Beneficially Owned(2) | Total Shares Beneficially Owned | Percent of Class | Percentage of Total Voting Power(3) | Shares and Share Equivalents Under Deferred Plan(4) |
| Gary M. Rinck | A | 39,831 | 125,060 | 164,891 | * | * | — |
| B | — | — | — | — | — | — | |
| John W. Semel(5) | A | 10,489 | 9,487 | 19,976 | * | * | — |
| B | — | — | — | — | — | — | |
| Jeffrey Sugerman | A | 237 | 1,305 | 1,542 | * | * | — |
| B | — | — | — | — | — | — | |
| Jesse Caleb Wiley | A | 24,565 | — | 24,565 | * | * | — |
| B | 800 | — | 800 | * | * | — | |
| Peter Booth Wiley(6)(7) | A | 1,381,850 | — | 1,381,850 | 2.85% | * | — |
| B | 2,727,154 | — | 2,727,154 | 29.65% | 19.42% | — | |
| All directors and | A | 1,576,998 | — | 1,576,998 | 3.26% | * | |
| executive officers as a | |||||||
| group (24 persons) | B | 2,727,954 | — | 2,727,954 | 29.66% | 19.43% |
| * | Less than 1%. |
| (1) | This table is based on the information provided by the individual directors or |
| (2) | Shares issuable pursuant to options exercisable under the Company’s stock option plans on or before |
| (3) | Each share of Class A Common Stock is entitled to one-tenth (1/10) of one vote and each share of Class B Common Stock is entitled to one vote. |
| (4) | This amount represents the number of |
| Includes Class A shares of restricted stock, subject to forfeiture, as awarded under the |
| Peter Booth Wiley, as |
| Peter Booth Wiley, as co-trustee with Bradford Wiley II and Deborah E. Wiley, share voting and investment power with respect to 55,072 shares of Class A Stock and 36,720 shares of Class B Stock under the Trust of Esther B. Wiley. For purposes of this table, |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’sand related regulations require our directors, executive officers, and directors, and persons who ownbeneficial owners holding more than ten percent10% of a registered classour common stock to report their initial ownership of the Company’s equity securities, to file reports of ownershipour common stock and any changes in that ownership with the Securities and
Exchange Commission and the New York Stock Exchange.SEC. Officers, directors and greater than ten percent10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
Based on We assist our review we believe that during Fiscal 2015, our directors, executive officers, and greater than ten percent beneficial owners met all filing10% shareholders complying with these requirements. Based solely upon a review of the copies of these reports furnished to us and written representations from
such NEOs, directors and stockholders, with respect to the Fiscal 2016 period, we are not aware of any required Section 16(a) reports that were not filed on a timely basis, except that, due to administrative oversights, required Form 4 reports were not filed on a timely basis on behalf of the following persons relating the forfeiture of shares for the payment of tax liability incidental to the April 30, 2016 vesting of Restricted Stock Units: Mark J. Allin, Phillip Carpenter, Reed Elfenbein, John A. Kritzmacher, Vincent Marzano, Edward J. Melando, M.J. O’Leary, Gary M. Rinck, John Semel, Clay Stobaugh and Jeffrey Sugerman.
The following is the report of the Audit Committee of the Company with respect to the Company’s audited financial statements for the fiscal year ended April 30, 2015.2016.
Audit Fees
Total aggregate fees billed by KPMG LLP (“KPMG”) for professional services in connection with the audit and review of the Company’s Consolidated Financial Statements, and statutory audits of the Company’s international subsidiaries were $2,484,000$2,939,000 and $2,379,000$2,484,000 in fiscal years 2016 and 2015, and 2014, respectively.
Audit Related Fees
The aggregate fees billed for audit related services, including due diligence related to acquisitions, employee benefit plan audits and consultation on acquisitions were $106,000$108,400 and $106,900$106,000 in fiscal years 2016 and 2015, and 2014, respectively.
Tax Fees
The aggregate fees billed for services rendered by KPMG tax personnel, except those services specifically related to the audit of the financial statements, were $241,000$277,000 and $307,000$241,000 in fiscal years 20152016 and 2014,2015, respectively. Such services include tax planning, tax return reviews, advice related to acquisitions, tax compliance and compliance services for expatriate employees.
Other Non-Audit Fees
The aggregate non-audit fees were $0 and $0 in fiscal years 2016 and 2015, and 2014, respectively.
The Audit Committee has advised the Company that in its opinion the services rendered by KPMG LLP are compatible with maintaining their independence.
The Audit Committee is responsible for oversight of the Company’s accounting, auditing and financial reporting process on behalf of the Board of Directors. The Committee consists of three members who, in the judgment of the Board of Directors, are independent and financially literate, as those terms are defined by the Securities and Exchange Commission (the “SEC”)SEC and the listing standards of the New York Stock Exchange (the “NYSE”).NYSE. The Board of Directors has determined that all the members of the Committee satisfy the financial expertise requirements and have the requisite experience to be designated “audit committee financial experts” as that term is defined by the rules of the SEC and the NYSE.
Management has the primary responsibility for the preparation, presentation and integrity of the financial statements of the Company; for maintaining appropriate accounting and financial reporting policies and practices; and for internal controls and procedures designed to assure compliance with generally accepted US accounting standards and applicable laws and regulations. The Committee is responsible for the oversight of these processes. In this fiduciary capacity, the Committee has held discussions with management and the independent auditors regarding the fair and complete presentation of the Company’s results for the fiscal year ended April 30, 2015.2016. Management has represented to the Committee that the Company’s financial statements were prepared in accordance with generally accepted US accounting principles. The Committee has discussed with the independent auditors significant accounting principles and judgments applied by management in preparing the financial statements as well as alternative
treatments. The Committee discussed with the independent auditors the matters required to be discussed by Statement onpursuant to Public Company Accounting Oversight Board Auditing StandardsStandard No. 61 (Communication16 (Communications with Audit Committees).
The Audit Committee has had discussions with, and received regular status reports from, the independent auditors and the Vice President of Internal Audit regarding the overall scope and plans for their audits of the Company, including their scope and plans over management’s assessment of the effectiveness of internal control over financial reporting. The independent auditors provided the Audit Committee with written disclosures and the letter required by applicable professional and regulatory standards relating to KPMG’s independence from the Company, including the Public Company Accounting Oversight Board pertaining to the independent accountant’s communication with the Audit Committee concerning independence, and the Audit Committee discussed with the independent auditors their independence.
The Committee also considers whether providing non-audit services is compatible with maintaining the auditor’s independence. The Audit Committee has adopted a policy of pre-approving all audit and non-audit services performed by the independent auditors. The Audit Committee may delegate authority to one or more of its members to grant pre-approvals of non-auditnon- audit services, provided that the pre-approvals are presented to the Audit Committee for ratification at its next scheduled meeting.
Persons with complaints or concerns about accounting, internal controls or auditing matters may contact the Audit Committee by addressing a letter to: ChairmanChair of the Audit Committee, John Wiley & Sons, Inc., P. O. Box 1569, Hoboken, NJ 07030-5774.07030- 5774 or may contact the Audit Committee at tellthedirectors@wiley.com.
Based upon the review and discussions referred to above, the Committee recommended to the Company’s Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2015,2016, as filed with the Securities and Exchange Commission.
Audit Committee
Mari Jean Baker, Chair, Raymond W. McDaniel, Jr., Chairman, Mari Jean Baker and Eduardo MenasceMenascé
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed with Company management the Compensation Discussion and Analysis found on pages 23 through 52 of this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and this Proxy Statement.
Executive Compensation and Development Committee
Kalpana Raina, Chair, George Bell and William B. Plummer
Compensation Committee Interlocks
No member of the Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the Compensation Committee of any other company that has an executive officer serving as a member of our Board of Directors. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Board’s Compensation Committee.
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | ||||||||||||||
| John Wiley & Sons, Inc. Class A | $ | 100.00 | $ | 122.26 | $ | 110.35 | $ | 95.32 | $ | 146.43 | $ | 147.82 | |||||||
| Russell 1000 | 100.00 | 115.78 | 118.08 | 135.39 | 160.32 | 177.70 | |||||||||||||
| Dow Jones Publishing Index | 100.00 | 118.16 | 119.01 | 127.68 | 166.02 | 181.29 | |||||||||||||
| S&P 400 Midcap | 100.00 | 123.35 | 120.44 | 140.94 | 164.75 | 182.27 |
The above graph provides an indicator of the cumulative total return to shareholders of the Company’s Class A Common Stock as compared with the cumulative total return on the Russell 1000, the Dow Jones Publishing Index and the S&P 400 Midcap, for the period from April 30, 2010 to April 30, 2015. The Company has elected to use the Russell 1000 Index and the S&P 400 Midcap index as its broad equity market indices because it is currently included in these indices. Cumulative total return assumes $100 invested on April 30, 2010 and reinvestment of dividends throughout the period.
| Report of the Compensation Committee |
| The Compensation Committee has reviewed and discussed with Company management the Compensation Discussion and Analysis found on pages 24 through 54 of this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and this Proxy Statement. |
| Executive Compensation and Development Committee |
| Kalpana Raina, Chair, George Bell, Laurie A. Leshin, and William B. Plummer |
| Compensation Committee Interlocks and Insider Participation |
| No member of the Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the Compensation Committee of any other company that has an executive officer serving as a member of our Board of Directors. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Board’s Compensation Committee. |
| Performance Graph | ||
 |
| John Wiley & Sons, Inc. Class A | Russell 1000 | Dow Pub | S&P 400 | |||||
| 2011 | $ 100.00 | $ 100.00 | $ 100.00 | $ 100.00 | ||||
| 2012 | 90.85 | 102.42 | 100.71 | 98.44 | ||||
| 2013 | 77.97 | 116.93 | 108.05 | 114.26 | ||||
| 2014 | 119.76 | 138.47 | 140.50 | 133.56 | ||||
| 2015 | 120.90 | 153.47 | 153.42 | 147.76 | ||||
| 2016 | 108.02 | 150.80 | 142.22 | 143.97 |
| The above graph provides an indicator of the cumulative total return to shareholders of the Company’s Class A Common Stock as compared with the cumulative total return on the Russell 1000, the Dow Jones Publishing Index and the S&P 400 Midcap, for the period from April 30, 2011 to April 30, 2016. The Company has elected to use the Russell 1000 Index and the S&P 400 Midcap index as its broad equity market indices because it is currently included in these indices. Cumulative total return assumes $100 invested on April 30, 2011 and reinvestment of dividends throughout the period. |
Fiscal 2015 Compensation Discussion & Analysis
| Introduction |
Introduction
This Compensation Discussion and Analysis, or “CD&A,” describes the Fiscal 2015
| This Compensation Discussion and Analysis, or “CD&A,” describes the Fiscal 2016 compensation program for Wiley’s executive officers. The overarching goals that guide the design and administration of our executive compensation program consist of the ability to: |
| · | Recruit and retain the highest caliber of executive talent by offering a competitive compensation program; |
| · | Motivate and reward executives for achieving strategic and financial objectives, which drive shareholder value, through the use of annual cash incentives; and |
| · | Align executives’ and shareholders’ interests through awards of equity that are dependent upon the performance of the Company and encourage the acquisition of a significant ownership stake in the Company. |
This CD&A describes how the Compensation Committee of the Board of Directors considered our business strategy, our compensation philosophy, and the overarching goals that guide our executive compensation program to arrive at Fiscal 2015 compensation decisions for our executives, including our named executive officers (“NEOs”), whose compensation is set forth in the 2015 Summary Compensation Table and other compensation tables contained in this proxy statement.
Our Fiscal 2015
| This CD&A describes how the Compensation Committee of the Board of Directors considered our business strategy, our compensation philosophy, and the overarching goals that guide our executive compensation program to arrive at Fiscal 2016 compensation decisions for our executives, including our named executive officers (“NEOs”), whose compensation is set forth in the 2016 Summary Compensation Table and other compensation tables contained in this proxy statement. Our Fiscal 2016 NEOs are: |
| · | Stephen M. Smith, |
| · | Mark J. Allin, |
| · | John A. Kritzmacher, |
| · | Gary Rinck, |
| · |
| John W. Semel, |
| · |
All references to President and Chief Executive Officer or CEO in the remainder of this CD&A apply to Mr. Smith.
Executive Summary
Fiscal Year Highlights
The Company delivered on its revenue and earnings guidance for the year. Revenue grew 4% on a constant currency basis and adjusted EPS rose 10%, to $3.26. Our largest and most profitable business, Research journals (‘Research Communication’), delivered 4% revenue growth for the year on a constant currency basis. Our digital solutions businesses also contributed to our revenue growth. Digital products and services made up 60% of total Wiley revenues for the year, up from 55% in Fiscal 2014. Revenue growth, the continued shift to digital, and additional savings from restructuring all contributed to 9% adjusted operating income growth for the year. During Fiscal 2015, we repurchased 1.1 million shares for $62 million, an average cost of $57.26, and in June 2014, we increased the quarterly dividend by 16% to $0.29.
| All references to President and Chief Executive Officer, or “CEO,” in the remainder of this CD&A apply to Mr. Allin. |
| Executive Summary |
We continued to expand Wiley’s depth and breadth as a provider of knowledge-enabled solutions, acquiring two companies in calendar year 2014 – CrossKnowledge, a learning solutions provider focused on leadership and managerial skills development; and Profiles International, a pre-hire assessment and talent management provider. Both position Wiley to become a solutions leader in professional learning and development. Through organic investment and targeted acquisitions, and by integrating content, technology, and services, we have accelerated the execution of our strategy to provide professionals, students, and researchers with valued solutions that serve their needs from education through employment.
Fiscal Year Highlights | Revenue and adjusted EPS were flat to prior year excluding the transitional (non-cash) impact of shifting to time-based journal subscriptions, foreign exchange, and certain charges and credits. |
Some noteworthy business highlights during Fiscal 2015 include:
| Our largest and most profitable business, Research journals, delivered steady operational performance for the year on a constant currency basis. While our solutions businesses achieved double-digit revenue growth, our book publishing revenue declined. Digital products and services made up 63% of total Wiley revenue for the year, up from 60% in Fiscal 2015. Cash from operations was essentially flat as expected. The year was also marked by continued investment in our Solutions businesses and Enterprise Resource Planning (“ERP”) and related systems deployment. During Fiscal 2016, we repurchased 1.4 million shares for $70 million, an average cost of $48.86, and in June 2016, we increased the quarterly dividend by 3.3% to $0.31, the 23rd consecutive annual increase. |
| · | Revenue of |
| · | Excludes adverse non-cash impact of shift to time-based journal subscriptions ($37M in revenue) and foreign exchange |
| · | Steady |
| · | Share of revenue from digital and solutions now at |
| · | Adjusted Earnings Per Share (“EPS”) of |
| · | Excludes adverse non-cash impact of shift to time-based journal subscriptions ($0.42 per share), foreign exchange, and certain charges and credits |
| · | Includes significant investment in ERP and related systems development, and investment in Solutions businesses |
| · | Free cash flow (“FCF”) of |
| We urge stockholders to |
| Executive Compensation Program | The Company’s executive compensation programs are designed to foster and maintain anexperienced, motivated and aligned executive team with the ability to manage the business during challenging times and to evolve the Company’s practices as changes in the market warrant. The compensation program emphasizes variable, performance-based compensation that promotes the achievement of short-term and long-term business objectives aligned with the Company’s business strategy, and rewards performance when those objectives are met. Strong performance by our executive officers is essential to achieving our goal of increasing shareholder value. Accordingly, approximately 80% of our CEO’s target total direct compensation for Fiscal 2016 was at risk, and on average approximately 70% of our other NEOs’ target total direct compensation for Fiscal 2016 was at risk. The targeted annual incentive compensation was payable based on achievement of performance-based financial measures and strategic objectives, and performance-based equity comprised 50% of the targeted long-term incentive compensation. The charts below illustrate the mix of target total direct compensation for Fiscal 2016 for our CEO and, on average, for our other NEOs. |
 |  |
| The following chart provides a brief summary of the principal elements of the Company’s executive compensation program for Fiscal 2016, which are described in more detail later in this CD&A. |
We urge stockholders to read our Annual Report for the fiscal year ended April 30, 2015, filed with the SEC on June 26, 2015, which describes our businesses and 2015 financial results in greater detail.
Executive Compensation Program
The Company’s executive compensation programs are designed to foster and maintain an experienced, motivated and aligned executive team with the ability to manage the business during challenging times and to evolve the Company’s practices as changes in the market warrant. The compensation program emphasizes variable, performance-based compensation that promotes the achievement of short-term and long-term business objectives aligned with the Company’s business strategy and rewards performance when those objectives are met. The Fiscal 2015 annual and long-term incentive programs were structured so that actual realized compensation was aligned with Company performance based on key metrics such as corporate and business revenue, EPS, business contribution to profit (“CTP”), FCF, Company stock price, and strategic objectives that benefited the Company in Fiscal 2015 and will benefit the Company in the future. We believe these metrics are aligned with driving long-term shareholder value and provide appropriate line-of-sight.
Superior performance by our executive officers is essential to achieving our goal of increasing shareholder value. The charts below illustrate the mix of target total direct compensation for Fiscal 2015 for our President and Chief Executive Officer (“CEO”) and, on average, for our other NEOs.
To ensure alignment between executive and shareholder rewards, approximately 80% of our CEO’s target total direct compensation for Fiscal 2015 was at risk, and on average 66% of our other NEOs target total direct compensation for Fiscal 2015 was at risk. The targeted annual incentive compensation was payable based on achievement of performance-based financial measures and strategic objectives, and performance-based equity comprised 50% of the targeted long-term incentive compensation.
The following chart provides a brief summary of the principal elements of the Company’s executive compensation program for Fiscal 2015, which are described in more detail later in this CD&A.
| Compensation Element | Form | Compensation Objective | Relation to | 2016 Actions / Results | ||||
Base Salary (Discussed in greater | Fixed annual cash, paid on a semi-monthly | Fixed compensation that is externally competitive with median market rates, and allows us to attract and retain executive talent. | Increases in base salary reflect market positioning, economic conditions, and the Compensation Committee’s assessment of Company and individual performance over the prior year. | The Company’s budget for US salary increases was a total of Three of the NEOs (including the CEO) were new to their position in Fiscal 2016, reflecting our leadership transition, and received base salary increases between 14% and 25%, commensurate with their significantly expanded roles. Salary increases for the other NEOs ranged from | ||||
Annual Incentives (Discussed in greater | Variable, performance-based cash bonus, paid on an annual | Motivate the executive to contribute to the Company’s success in achieving annual corporate and business financial goals and strategic objectives. | 75% of the target annual incentive is based on financial goals, including corporate and business revenue, EPS and business Payout can range from 0% to 150% of target. | Target incentives for the NEOs range from Actual short-term incentives earned by the NEOs ranged from |
| Compensation Element | Form | Compensation Objective | Relation to Performance | 2016 Actions / Results | |||||
Long-Term (Discussed in greater | Performance share units are granted each year | Motivates the executive to contribute to the Company’s success in achieving long-term corporate financial goals that drive shareholder value. |
Payout can range from 0% to 150% of target. | NEOs received For the Fiscal Beginning with the Fiscal 2017-19 cycle, 60% of long-term stock-based incentives will be in the form of performance share units. | |||||
| Non-qualified stock options granted each year, with vesting 50% on April 30th of the fourth and fifth years after | Ensures alignment of executive and shareholder interests and rewards increases in stock price. | Exercise price of non-qualified stock options is fair market value on date of grant. Accordingly, the increase in value of non-qualified stock options is directly dependent on improvements in stock price. | June Beginning in Fiscal 2017, stock options will not be used as a long-term stock-based incentive. | ||||||
| Restricted share units granted each year, payable as equivalent Class A shares upon vesting | Promotes retention objective and facilitates stock ownership, expediting achievement of the stock ownership multiple. | The value of restricted share units is directly correlated with improvements in stock price. | June
Beginning in Fiscal 2017, 40% of long-term stock-based incentives will be in the form of restricted share units. |
The Company also provides the following health and retirement benefits to our senior executives, as described in more detail later in this CD&A:
| In addition to the principal compensation elements noted above, one-time supplemental long-term incentives are periodically used in situations where specific focus on a multi-year initiative is required. The one-time supplemental long-term incentives granted in Fiscal 2016 are more fully discussed on page 37. |
| The Company also provides the following health and retirement benefits to our senior executives, as described in more detail later in this CD&A: |
| Benefit | Form | Purpose | |||
Health and Welfare Benefits (Discussed in greater detail on page | Flexible benefits program provided to all US employees, where “flex dollars” are provided to help | Health and welfare benefits are market competitive and are provided primarily for the safety and well-being of the executive and his/her family. | |||
Retirement Plans (Discussed in greater detail on page | Qualified Defined Contribution Savings Plan (401(k)), provided to all US employees | Qualified savings plan benefits, including company basic, matching and discretionary contributions, are market competitive and provide post-retirement income for the executive. Company contributions to the US-based 401(k) were enhanced following the cessation of accruals and freeze of participation in the US defined benefit retirement plans, effective July 1, 2013. | |||
| Qualified Defined Benefit Retirement Plan, provided to US employeeshired before July 2012 | Qualified retirement plan benefits provide additional post-retirement income for executives hired before July 2012. The Company ceased accruals and froze participation in the US Retirement Plan, effective June 30, 2013. | ||||
| Non-qualified Supplemental Benefit Plan (the “Excess Plan”), provided to US employees hired before July 2012 with pay in excess of IRC section 401(a)(17) limit on eligible compensation | Restores benefits lost under the qualified Retirement Plan due to limitations imposed by Internal Revenue Code regulations to the same level as other colleagues who are not restricted by Internal Revenue Code limitations. The Company ceased accruals and froze participation in the Excess Plan, effective June 30, 2013. | ||||
| Non-qualified Supplemental Executive Retirement Plan (the “SERP”) | Provides executives who entered the SERP prior to June 2013 with enhanced retirement income due to tax rules governing qualified retirement plans that place significant limitations on the benefits which can be paid to executives. The Company ceased accruals and froze participation in the SERP, effective June 30, 2013. |
| Non-qualified Deferred Compensation Plan (“DCP”) | Enables US executives to prepare for future financial security by allowing the deferral of otherwise taxable income on a pre-tax basis, with various investment options and flexible payment options. Provides for Company contributions mirroring those made under the qualified Savings Plan. Company contributions to the DCP were enhanced following the cessation of accruals and freeze of participation in the US defined benefit retirement plans, effective July 1, 2013. |
| Benefit | Form | Purpose | ||
Retirement Plans (continued) (Discussed in greater detail on page38.) | The John Wiley & Sons Limited Retirement Benefits Scheme (“UK Qualified Plan”) | Approved (qualified) retirement plan benefits are market competitive and provide retirement income for UK employees on a defined benefit basis in addition to providing an incentive for a long-term career with the Company. This scheme is closed to new entrants and accruals based on service froze as of April 30, 2015. | ||
| The Unapproved Supplemental UK Plan (the “UK Non-Qualified Plan”) | Restores benefits “lost” under the UK Qualified Plan due to limitations imposed by the UK Revenue authorities to the same level as other colleagues in the UK Qualified Plan who are not affected by those restrictions. This UK Non-Qualified Plan was closed to new entrants and accruals based on service froze as of April 30, 2015. | |||
Perquisites (Discussed in greater detail on page | Financial planning, tax preparation, | Limited perquisites are provided primarily for the financial security and productivity of the executive. |
The table below highlights our current compensation practices – those we have implemented because we believe they drive performance and are aligned with sound governance standards – and those we have not implemented because we do not believe they would serve our shareholders’ long-term interests.
| The table below highlights our current compensation practices – those we have implemented because we believe they drive performance and are aligned with sound governance standards – and those we have not implemented because we do not believe they would serve our shareholders’ long-term interests. |
| Executive Compensation Practices We Have Implemented | Executive Compensation Practices We HaveNot Implemented (What We Don’t Do) | ||||
| We ensure a correlation between pay and performance by having a significant portion of compensation that is performance-based and at-risk. Payment of the performance-based compensation is based on achievement of corporate and business financial goals and individual performance against pre-set strategic objectives. Different financial metrics are used in our annual and long-term incentive plans. | X | We prohibit the repricing of stock options and stock appreciation rights without shareholder approval. We also do not allow cash buyouts for underwater stock options or stock appreciation rights without shareholder approval. | |||
| We review | X | We do not pay dividends on unearned performance-based equity awards. | |||
We mitigate risk by:
| X | We do not maintain compensation programs that we believe create risks reasonably likely to have a material adverse effect on the Company. | |||
| · | placing substantial emphasis on long-term equity-based incentives; | ||||
| · | setting performance levels that correspond to a range of payments for performance-based compensation; | ||||
| · | capping payouts of annual and long-term performance-based compensation; | ||||
| · | including clawback provisions in our annual and long-term incentive plans; | ||||
| · | strictly prohibiting hedging activities in our Insider Trading Policy; and | ||||
| · | requiring retention of 50% of the net shares upon exercise or vesting until the stock ownership multiple is met. | ||||
| We have competitive post-employment and change in control provisions that apply to all executive officers. | X | We do not provide significant additional health and retirement benefits to executive officers that differ from those provided to all other employees. | |||
| Executive Compensation Practices We Have Implemented (What We Do) | Executive Compensation Practices We HaveNot Implemented (What We Don’t Do) | ||||
| ü | We have double-trigger vesting of equity awards following a change in control when the acquiring company is a publicly traded company and outstanding equity is assumed or replaced. | X | We do not provide excise tax gross-ups upon a change of control. | ||
| We generally provide limited perquisites that we believe are beneficial to the Company. | X | We do not provide tax gross-ups on perquisites. | |||
| The Compensation Committee, currently composed of | X | The Compensation Committee’s independent compensation consulting firm does not provide any other services to the Company. | |||
The following changes to our executive compensation program were implemented during Fiscal 2015:
| The following changes to our executive compensation program were implemented during Fiscal 2016: |
| · |
| · |
| CEO Realizable Pay | To demonstrate the linkage between CEO pay and Company performance / changes in shareholder value, a comparison of realizable pay to reported pay and Total Shareholder Return (“TSR”) is presented below. While not intended to replace the Summary Compensation Table (“SCT”) on page 40, which includes targeted equity grants based on |
 | |||||||||||||
| Realizable Compensation Analysis ($000s) | |||||||||||||
| Compensation Element | Fiscal 2014 (Smith) | Fiscal 2015 (Smith) | Fiscal 2016 (Allin) | ||||||||||
| Cash Compensation | |||||||||||||
| Base Salary | $869 | $913 | $738 | ||||||||||
| Annual Incentive Earned | 1,435 | 1,137 | 875 | ||||||||||
| Total Cash Compensation | $2,304 | $2,050 | $1,613 | ||||||||||
| Long-Term Incentives | |||||||||||||
| Value of Realized Awards at Exercise/Vesting | $1,307 | $1,757 | $226 | ||||||||||
| Change in Value of Outstanding Awards at FYE | 8,790 | -1,197 | -7,913 | ||||||||||
| Total | $10,097 | $559 | -$7,687 | ||||||||||
| Total Realizable Compensation | $12,401 | $2,609 | -$6,075 | ||||||||||
| Summary Compensation Table Values ($000s) | |||||||||||||
| Compensation Element | Fiscal 2014 (Smith) | Fiscal 2015 (Smith) | Fiscal 2016 (Allin) | ||||||||||
| Base Salary | $869 | $913 | $738 | ||||||||||
| Annual Incentive | 1,435 | 1,137 | 875 | ||||||||||
| Stock Awards | 1,403 | 1,493 | 2,284 | ||||||||||
| Stock Options | 608 | 641 | 499 | ||||||||||
| Total | $4,315 | $4,183 | $4,395 | ||||||||||
CEO Realizable Pay
To demonstrate the linkage between CEO pay and Company performance / changes in shareholder value, a comparison of realizable pay to reported pay and Total Shareholder Return (“TSR”) is presented below. While not intended to replace the Summary Compensation Table (“SCT”) on page 39, which includes targeted equity grants based on accounting values, this information includes the value realized from stock option exercises and the vesting of full-value awards during the fiscal year, and the change in the intrinsic value of outstanding equity awards as of the end of the fiscal year. SCT data is included in the chart and the accompanying table below for comparison purposes.
Realizable Compensation Analysis ($000s)
| Compensation Element | Fiscal 2013 | Fiscal 2014 | Fiscal 2015 | ||||
| Cash Compensation | |||||||
| Base Salary | $833 | $869 | $913 | ||||
| Annual Incentive Earned | $753 | $1,435 | $1,137 | ||||
| Total Cash Compensation | $1,586 | $2,304 | $2,050 | ||||
| Long-Term Incentives | |||||||
| Value of Realized Awards at Exercise/Vesting | $347 | $1,307 | $1,757 | ||||
| Change in Value of Outstanding Awards at FYE | -$1,306 | $8,790 | -$1,197 | ||||
| Total | -$958 | $10,097 | $559 | ||||
| Total Realizable Compensation | $627 | $12,401 | $2,609 | ||||
| Summary Compensation Table Values ($000s) | |||||||
| Compensation Element | Fiscal 2013 | Fiscal 2014 | Fiscal 2015 | ||||
| Base Salary | $833 | $869 | $913 | ||||
| Annual Incentive | 753 | 1,435 | 1,137 | ||||
| Stock Awards | 961 | 1,403 | 1,493 | ||||
| Stock Options | 1,229 | 608 | 641 | ||||
| Total | $3,776 | $4,315 | $4,183 | ||||
2014 “Say-on-Pay” Advisory Vote on Executive Compensation
The Company provides shareholders with an annual “say-on-pay” advisory vote to approve its executive compensation, in accordance with Section 14A of the Exchange Act. At the 2014 Annual Meeting of Shareholders, our shareholders expressed substantial support for the compensation of our NEOs, with approximately 99.5% of the votes cast for approval of our executive compensation program. The Compensation Committee evaluated the results of the 2014 advisory vote and believes the strong shareholder support signals approval of the current pay-for-performance executive compensation program and the sound governance practices in place at Wiley. As noted above in the Executive Summary, the Company has adopted governance practices that it believes best serve our shareholders, while also incorporating best practices that allow us to meet the overarching goals of our executive compensation program. In furtherance of that goal, the Compensation Committee determined to make certain changes to the executive compensation program, noted on page 28, in a continuing effort to reflect sound governance and market practices.
Compensation Principles and Practices
Principles of Wiley’s Executive Compensation Program
The following principles and practices shaped the design and implementation of the Company’s compensation program for Fiscal 2015:
| The Company provides shareholders with an annual “say-on-pay” advisory vote to approve its executive compensation, in accordance with Section 14A of the Exchange Act. At the 2015 Annual Meeting of Shareholders, our shareholders expressed substantial support for the compensation of our NEOs, with 99% of the votes cast for approval of our executive compensation program. The Compensation Committee evaluated the results of the 2015 advisory vote and believes the strong shareholder support signals approval of the current pay-for-performance executive compensation program and the sound governance practices in place at Wiley. As noted above in the Executive Summary, the Company has adopted governance practices that it believes best serve our shareholders, while also incorporating best practices that allow us to meet the overarching goals of our executive compensation program. In furtherance of that goal, the Compensation Committee determined to make certain changes to the executive compensation program, noted on page 30, in a continuing effort to reflect sound governance and market practices. |
| Compensation Principles and Practices | |||
| Principles of Wiley’s Executive Compensation Program | The following principles and practices shaped the design and implementation of the Company’s compensation program for Fiscal 2016: | ||
| ·The compensation mix is designed to | |||
| · | |||
| Senior executives, including the NEOs, have a significant, ongoing ownership stake in the Company to strengthen the alignment of our executives’ interests with those of our shareholders. |
| ·The program is competitive with the total compensation | |||
| Role of Compensation Consultant | The Compensation Committee, currently composed of four independent directors, has engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant, to advise the Compensation Committee | ||
Role of Compensation Consultant
The Compensation Committee, currently composed of three independent directors, has engaged Frederic W. Cook & Co., Inc. (“Cook”) as its independent compensation consultant, to advise the Compensation Committee on matters related to executive compensation. The executive compensation consultant reports directly to the Compensation Committee, and works collaboratively with management with regard to the administration and any required analysis in support of the executive compensation program. In addition, Cook provides competitive benchmarking for non-employee director pay to the Governance Committee. Cook does not offer or provide any other services to the Company, and the Compensation Committee determined that the retention of Cook has not raised any conflict of interest.
Following are the services provided to the Compensation Committee by Cook during Fiscal 2015:
| Following are the services provided to the Compensation Committee by FW Cook during Fiscal 2016: | |||
| · Provided market and custom peer-group analysis and a competitive range of target compensation based on the Company’s compensation philosophy for executive officers, | |||
| · Presented the market analysis report with respect to Fiscal 2016 target compensation at the March 2015 Compensation Committee meeting. Attended any other meetings as requested by the Compensation Committee, and conferred with the Compensation Committee and management, as needed. | |||
| · | |||
| · Reviewed the Company’s executive compensation philosophy and competitive positioning for reasonableness and | |||
| · Advised the Compensation Committee on management proposals, as requested. | |||
| · Reviewed the Compensation Discussion and Analysis, compensation tables and other compensation-related disclosures included in the Company’s proxy statement. | |||
| ·Proactively | |||
| ·Proactively | |||
Roles of the CompensationCommittee and Management in Recommending Compensation
As described in greater detail below, individual base salaries, annual cash incentive awards and long-term incentive grant amounts are determined within the framework of the executive’s position and responsibilities, individual and Company / business performance, as well as with regard to time in position and compensation relative to the external marketplace. The CEO presents compensation recommendations for the other executive officers to the Compensation Committee for its review and approval. The Compensation Committee evaluates the performance of the CEO, determines his
| Roles of the Compensation Committee and Management in Recommending Compensation | As described in greater detail below, individual base salaries, annual cash incentive awards and long-term incentive grant amounts are determined based on the executive’s position and responsibilities and impact on the Company, individual and Company / business performance, tenure in current role as well as and compensation relative to the external marketplace. The CEO presents compensation recommendations for the other executive officers to the Compensation Committee for review and approval. The Compensation Committee, based on an evaluation of the CEO’s performance by the Executive Committee, determines the CEO’s compensation, and discusses its recommendation with the Board of Directors in executive session.
For the Fiscal
Following are the Fiscal
The NEOs’ target performance shares for the Fiscal
Equity award grants are made using a ten-day trailing average stock price from the date five business days after the release of the Company’s year-end earnings.
In Fiscal 2016, Messrs. Kritzmacher and Sugerman were granted one-time supplemental long-term incentives, payable in cash based on performance at the end of Fiscal 2017. Both awards
Messrs. For all equity grants awarded during and after June 2011, there is a stock retention requirement for our executive officers, including the NEOs, that requires retention of 50% of the net shares acquired upon the exercise of stock options or the vesting of performance share units and restricted shares/share units until the executive satisfies the stock ownership salary multiple.
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As noted above, the Company ceased accruals and froze participation in the US defined benefit retirement plans, including the US Retirement Plan, the Excess Plan, and the SERP, effective June 30, 2013. At the same time, the Company enhanced its Defined Contribution Savings Plan (401(k)) and the DCP. Service-related accruals under the UK Qualified Plan and the UK Non-Qualified Plan were frozen as of April 30, 2015, and colleagues previously accruing benefits under the UK Qualified Plan became covered by the UK Group Personal Pension Plan (GPPP), a UK tax-qualified defined contribution arrangement.
The Company provides limited perquisites and other personal benefits to the NEOs, of which the incremental cost to the Company in the aggregate is generally in the range of $10,000 to $18,000 annually. These taxable benefits are provided primarily for the financial security and productivity of executives, which allows greater focus on Wiley business activities. These limited perquisites primarily consist of financial planning and tax preparation, an allowance for business and health club memberships, parking in the headquarters building (where appropriate). During Fiscal Mr. Smith was inactive due to disability for the last quarter of Fiscal 2015 before his June 1, 2015 retirement. In addition to the retirement benefits noted in the Pension Benefits Table, the distribution noted in the Non-Qualified Deferred Compensation Table, and the equity award treatment noted in the Payments Upon Termination Table, the Compensation Committee approved the following benefits upon Mr. Smith’s disability and subsequent retirement: The rules and regulations promulgated under Code Section 162(m) are complex and subject to change from time to time, sometimes with retroactive effect. There can be no guarantee, therefore, that amounts potentially subject to the Code Section 162(m) limitations will be treated by the Internal Revenue Service as “qualified performance-based compensation” under Code Section 162(m) and/or deductible by the Company. Closing Statement The executive compensation program discussed herein is based on our beliefs that: We believe that the Company’s executive compensation program meets the goals and objectives discussed above. Mr. Smith retired as CEO on June 1, 2015, following a period of disability. Mr. Allin became CEO on June 1, 2015.Health and Welfare Benefits The Company provides or makes available a number of health and welfare benefits, such as medical, dental, vision, life, accident and long-term disability insurance to all US-based employees, including the NEOs. These benefits are competitive with those provided by other companies in the publishing / media and general industries andbenefits are provided primarily for the well-being of Wiley employees, and at the same time enhance Wiley’s attractiveness as an employer of choice.Perquisites and Other Benefits In2012, we eliminated tax “gross-ups” for perquisites provided to our executive officers. Any taxes on perquisites are now paid by the executives.2016, Mr. Allin whose previous position had required spendingreceived a significant amounttaxable allowance of time$20,000 per month for relocation, dual living expenses and family travel, as his family remained in the UK. In addition, since Mr. Allin continues to travel extensively and has tax obligations in both the UK and US, had been allowed the useCompany provides tax consultation and preparation assistance from PricewaterhouseCoopers. During Fiscal 2016, these charges amounted to $145,359. During Fiscal 2016, Mr. Sugerman received a taxable allowance of a Company-leased apartment in the US. This accommodation was provided in lieu of hotel expenses while conducting Company business. The apartment was available to other Company employees throughout the year.$12,500 per month for relocation, dual housing and living expenses.Post-Employment Benefits Depending on the circumstances of their termination, the NEOs are eligible to receive severance benefits in the form of base salary as a lump-sum payment, annual incentive, healthcare benefits and accelerated vesting of equity as determined by the provisions in their employment agreements, which are discussed in detail starting on page 51.52. Under a dismissal without cause or constructive discharge following a change of control, the Company provides these severance benefits because it serves the best interest of the Company and its shareholders to have executives focus on the business merits of mergers and acquisitions without undue concern for their personal financial outcome. In the case of a without cause termination or constructive discharge absent a change in control, the Company believes it is appropriate to provide severance for a limited period to bridge executives to new employment, particularly in view of our non-compete agreements which require that for twelve months following termination the executive will not compete with the Company or solicit customers or employees.As part of his separation from service, Mr. Miron received severance equal to twenty-four months’ base salary, payable in a lump-sum; benefits coverage for a two-year period; prorated incentive payment under the Fiscal 2015 annual incentive plan, based on actual financial performance;· Accelerated vesting of all earned but unvested performance shares; continued vestingthe second half (18,850) of Mr. Smith’s June 2014 stock options, which would have otherwise been cancelled.· An allowance for relocation of household items, furniture and restricted share unitspersonal effects from New York City to the UK.· An allowance for three years following his separation date; continued prorated participation in all active long-term performance cycles, with payment in shares following the end of the cycles; and financial planning and tax preparation services for six months.and consultation services.Tax Deductibility of Compensation Ordinarily it is in the best interest of the Company to retain flexibility in its compensation programs to enable it to appropriately reward, retain and attract executive talent necessary to further the Company’s success. To the extent such goals can be met with compensation that is designed to be deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), such as the 20092014 Key Employee Stock Plan and the Executive Annual Incentive Plan, each approved by the shareholders in September 2009, and the successor Plans, approved by shareholders in September 2014, such compensation plans will be used. However, the Compensation Committee recognizes that in appropriate circumstances, compensation that is not deductible under the Code may be paid at the Compensation Committee’s discretion.38· The quality of our leadership is among the most important determinants of the Company’s success; · Our ability to attract and retain industry leaders who will ensure our success requires a competitive, performance-based compensation program; · Our shareholders are best served by providing our executive officers with appropriate financial rewards directly linked to the long-term success of the Company; and · Our executive officers must share in the risks as well as the rewards of achieving the Company’s challenging performance goals.We believe that the Company’s challenging performance goals.Summary
Compensation Table:Name
[a] Year
[b] Salary
($)
[c] Bonus
($)
[d] Stock
Awards
($)
[e] Option
Awards
($)
[f] Non-Equity
Incentive Plan
Compensation
($)
[g] Change in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
[h] All Other
Compen-
sation
($)
[i] Total
($)
[j] Stephen M. Smith 2016 71,263 647,335 124,988 843,585 2015 912,500 1,492,500 640,900 1,137,304 498,877 164,882 4,846,963 2014 869,167 1,403,315 607,800 1,434,956 714,201 138,721 5,168,159 Mark J. Allin 2016 737,500 2,283,832 498,845 875,119 108,462 202,305 4,706,063 2015 472,870 334,320 167,620 309,836 332,866 140,450 1,757,962 2014 421,623 320,193 132,703 388,137 (106,894) 95,232 1,250,994 John A. Kritzmacher 2016 645,000 745,787 319,485 701,326 1,074 79,970 2,492,641 2015 616,667 728,340 311,100 593,712 1,312 78,447 2,329,577 2014 525,000 913,425 607,800 667,710 100 36,150 2,750,185 Gary Rinck 2016 543,333 352,737 151,040 423,363 199,047 54,549 1,724,069 2015 531,667 352,230 149,600 359,319 503,614 51,300 1,947,730 2014 512,500 347,864 144,859 477,598 320,715 38,149 1,841,685 John W. Semel 2016 450,000 307,945 132,013 396,175 24,522 34,147 1,344,802 2015 394,625 167,160 71,400 281,204 38,682 36,040 989,111 Jeffrey Sugerman 2016 375,000 179,728 76,995 288,914 (1,839) 181,831 1,100,629 (c): The 2014 base salary reported in this column for Mr. Allin has been converted to US dollars using the goalsFiscal 2014 average exchange rate of £1=US$1.6011. The 2015 base salary reported in this column for Mr. Allin has been converted to US dollars using the Fiscal 2015 average exchange rate of £1=US$1.5997.
