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
the Securities Exchange Act of 1934 (Amendment
(Amendment No.)
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Preliminary Proxy Statement |
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| ☐ | Definitive Additional Materials |
Soliciting Material under §240.14a-12 |
ExlService Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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| ☐ | Fee paid previously with preliminary materials |
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| 320 Park Avenue, 29th Floor New York, NY 10022 (212) 277-7100 |
Dear Stockholder,
At EXL, 2021 was a year marked by creativity, adaptation and evolution. As businesses around the world, including our clients, continued to grapple with rapidly changing market conditions and consumer behaviors in response to COVID-19, we are proud that EXL’s responsiveness and agility helped our clients not only navigate, but capitalize, on those changing dynamics through the use of our solutions and our emphasis on data-led value creation. EXL has evolved over the last few years having systematically invested in data and digital assets with a clear vision for the future—we are now a fully integrated data analytics and digital operations and solutions business with exceptional talent. The transformation of our business is reflected in our new mission statement: “we make sense of data to move your business forward.”
We believe that our financial results in 2021 evidence the market’s reception to EXL’s evolution. We generated revenues of $1.12 billion, representing a 17.1% increase from 2020. We were able to grow revenues sequentially every quarter, despite the impacts of the Delta COVID-19 variant on our workforce, and we closed the year with continuing strong revenue momentum. EXL achieved record profitability with diluted EPS of $3.35, up from $2.59 in 2020.
Our successes last year are attributable to the agility and resilience of our team, along with the proactive and systematic adaptation of our business model to address rapidly evolving market needs. Reflecting on the last several years, our increased focus and investments in developing data, cloud, artificial intelligence, machine learning and digital capabilities was ahead of the curve. That strategic foresight, empowered by EXL’s strong foundation in advanced analytics and deep domain operational expertise, enabled us to provide increasingly integrated solutions to our clients in 2021, which brought growth opportunities, both in deepening relationships with existing clients and developing new ones. It also left us well positioned to leverage the existing opportunity-rich demand environment, and for the future—better able to tackle bigger projects faster, with scalable solutions designed to support complex, enterprise-wide digital transformation initiatives across industries and businesses. Our December 2021 acquisition of Clairvoyant, a worldwide data, AI and cloud services provider, broadens our data engineering and cloud computing capabilities and will further help us succeed in our mission to be an indispensable partner for data-driven enterprises.
Critical to our continued growth and evolution and our ongoing success is our hardworking global workforce that spans six continents. Each of our more than 39,000 employees is an essential part of what we call “ONE EXL” which reflects the essence of our corporate culture, built on our five core values of collaboration, innovation, excellence, integrity and respect. In 2021, our employees showed their tenacity and willingness to evolve with our business strategy, spending nearly 571,000 hours on trainings, including reskilling for critical digital capabilities, and applied their experience and ingenuity to pursuing our company goals. In 2021, we continued to prioritize the use of digital tools for communication with our employees, including via digital surveys, as approximately 93% of our employees worked remotely. We thank all of the members of the ONE EXL team for their dedication and tremendous efforts over 2021. Together with the support of our stockholders, clients and partners, we look forward to continued evolution, growth and success in 2022.
This year’s Proxy Statement continues to highlight our environmental, social and governance (ESG) - related efforts, which we view as integral to our long-term success, durability and resiliency as an organization. In December 2021, we published our second annual Sustainability Report according to the Sustainability Accounting Standards Board, the Global Reporting Initiative standards
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| EXL 2022 Proxy Statement | ||||||||
320 Park Avenue, 29th FloorNew York, NY 10022(212) 277-7100
April 24, 2020
Dear Stockholder:
As we all confront the unprecedented challenges stemming from the COVID-19 pandemic, it can be difficult to keep focused on the path ahead. EXL is bringing to bear the full strength of our people around the globe to do just that. Our first priority is to ensure the health and safety of our employees, their families and the communities in which they work. We are also taking every action practical to helpUN Sustainability Development Goals. The report outlines our clients with their needs and to assist with their business continuity during this time, including through remote working and enabling virtual work environments. We intend to provide critical support in resolving the challenges faced by our clients during the COVID-19 pandemic.
As we look back on 2019, we thank you for your continued support. We have a strong sense of pride and achievement. We crossed the $1 billion revenue mark on an annualized basis in 2019 – with revenue growth of over 12%. Not only have we reached this landmark revenue run rate in only 20 years of our existence, but we are well positioned to keep up our growth momentum in the future. Our strategy of continuously adding value for our clients – the world’s leading companies – by incorporating advanced digital technologies, machine learning and analytics capabilities in all of our offerings – positions each of our business lines for market leadership and ongoing strong growth. We are now participating in new markets, new verticals and in larger, more complex deals.
Our focus on looking deeper and adapting to technology changes has enabled us to deliver superior returns and create tremendous value for our stockholders since our IPO in 2006. Today, we are a trusted Strategic Digital Transformation partner for our clients. We employ our industry domain expertise and technology to help our clients generate value by enabling them to apply digital technologies and analytics to transform their business models, better understand and use their data assets, and efficiently run their operations. Our emphasis on analytics has been key to our growth in the last four years, comprising 36% of revenue, up from 19% in 2015.
As a global company, we have always felt that it is our obligation to our stockholders, employees and the communities in which we operate to emphasize corporate social responsibility in our business. We are committed to maintaining a diverse group of directors with a strong mix of qualifications to best enable our board to guide our business, manage our risks and oversee our growth and development as a Company.
Our people are our primary assets. Our achievements over the past 20 years are, and going forward will continue to be, a result of the imagination, dedication and effort that each of our employees bring every day to EXL. One of EXL’s defining characteristics is our active learning culture, which is realized through our capability learning academies that
enhance our employees’ domain expertise and digital skills. In 2019, 99+% of our employees were trained in “Digital Intelligence” and EXL’s proprietary “Digital EXLerator” framework for delivering digital transformation to our clients. We emphasize the importance of talent and leadership development within our ranks by training our future team leaders. We believe that embracing diversity of thought best allows us to deliver exceptional results for our clients and aim to foster, both through policies and practice, an inclusive work environment. We are committed to hiring a diverse workforce and to improving diversity in our senior leadership, and include diversity and inclusion among the guiding principles in our talent acquisition, training and retention practices.
We and our employees are also committed to volunteerism, giving and social change – in 2019 we took part in a number of initiatives focused on education and assisting our community members in market-relevant skill development. And we have doubled down on our commitment to sustainability and workplace safety, undertaking a Company-wide review of emissions and water and paper usage so that we can make sure that we meet key reduction objectives, continuing to provide trainings to all of employees on health and safety, and to receive industry certifications and other recognitions for these efforts. In order to increase our transparency to our stockholders on our efforts relating to sustainability,environmental, human capital management, and corporate social responsibility this year’s Proxy Statement includes dedicated sectionsefforts and goals, among others. In our Sustainability Report, we announced our commitment to these topics,taking steps toward near-term and we plan to improvelong-term emissions reductions. We also became a participant in the UN Global Compact in 2021 and were recently included on Newsweek’s list of America’s Most Responsible Companies, and Barron’s 2022 list of 100 Most Sustainable Companies. You can read more about our disclosure on these effortsrecent accomplishments in ESG on our website, throughoutand in the year.“Sustainability” section of this Proxy Statement.
AsWe also continue to improve upon our strong corporate governance practices. In 2021, we look toward the future, we planexpanded our board committees’ involvement in ESG matters, distributing ESG-related responsibilities across our committees in order to continue respondingensure effective and appropriate oversight. We also expanded our formal stockholder engagement program, through which management and members of our board participated in meetings with our stockholders on topics relating to strategy, performance and governance, engaging with stockholders holding a total of 43% of shares outstanding. These conversations inform our governance practices. Please refer to the market’s increased focus on digital“Corporate governance” section of this Proxy Statement to learn more about governance practices and data by increasingphilosophy, including board committee responsibilities and stockholder engagement.
Finally, we wish to thank Garen Staglin, who will be departing from our investments in those areasboard of directors following our 2022 Annual Meeting of Stockholders, for his 17 years of service to create next generation revenue and profit streams.
EXL including eight years as Chairman of the Board.
On behalf of the board of directors of ExlService Holdings, Inc., we are pleased to invite you to the 20202022 Annual Meeting of Stockholders, which will be held on June 15, 2020.21, 2022. We look forward to sharing more about our Company at the Annual Meeting. Due to concerns regarding the current public health crisis related to the COVID-19 pandemic and the health and wellbeing of our stockholders, employees and directors, weWe will hold our Annual Meeting in virtual format only via live audio webcast instead of holding the meeting in New York or at any physical location. We encourage you to read carefully the attached 20202022 Annual Meeting of Stockholders and Proxy Statement, which contain important information about the matters to be voted upon and instructions on how you can vote your shares.
Your vote is important to us. Please vote as soon as possible whether or not you plan to participate in the Annual Meeting.
The board of directors and management look forward to seeing youyour attendance at the Annual Meeting.
Sincerely,
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| Vikram Pandit Chairman | Rohit Kapoor Vice Chairman and CEO |
| EXL 2022 Proxy Statement | / | 3 |
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
Notice of 2022 Annual Meeting of Stockholders
Dear Stockholder:
You are cordially invited to the 20202022 Annual Meeting of Stockholders of ExlService Holdings, Inc., a Delaware corporation (the “Company”). The Annual Meeting will be held in virtual format only via live audio webcast at the websitewww.virtualshareholdermeeting.com/EXLS2020(rather than at any physical location) on June 15, 2020 at 8:30 AM, Eastern Time,, for the purposes of voting on the following matters:
1. the election of six
| 1. | the election of eight members of the board of directors of the Company; |
2. the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for fiscal year 2020;
| 2. | the approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan; |
3. the approval, on a non-binding advisory basis, of the compensation of the named executive officers of the Company; and
| 3. | the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for fiscal year 2022; |
4. the transaction of such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
| 4. | the approval, on a non-binding advisory basis, of the compensation of the named executive officers of the Company; and |
| 5. | the transaction of such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Due to concerns regarding the current public health crisis related to the novel coronavirus, or COVID-19, and the health and wellbeing of our stockholders, employees and directors, weWe will hold our Annual Meeting in virtual format only, via live audio webcast (the “Virtual Annual Meeting”)(rather than at any physical location) on June 21, 2022 at 8:30 AM, Eastern Time, instead of holding the meeting in New York or at any physical location. However, our virtual meeting platform will allow for full participation as if you were attending physically. You or your proxyholder may participate, vote, and examine our stockholder list at the Virtual Annual Meeting by visitingwww.virtualshareholdermeeting.com/EXLS2020EXLS2022 and using your 16-digit control number.
If you are a stockholder of record at the close of business on April 17, 2020,22, 2022, the record date for the Annual Meeting, you are entitled to vote at the Annual Meeting. A list of stockholders as of the record date will be available for examination for any purpose germane to the Annual Meeting, during ordinary business hours, at the Company’s executive offices at 320 Park Avenue, 29thFloor, New York, New York 10022, for a period of 10 days prior to the date of the Annual Meeting and at the Annual Meeting itself.If due to COVID-19, our corporate headquarters are closed during the ten10 days prior to the Annual Meeting, you may send a written request to the Corporate Secretary at our corporate headquarters, and we will arrange a method for you to inspect the list. The list of stockholders will also be available during the Annual Meeting atwww.virtualshareholdermeeting.com/EXLS2020.EXLS2022.
Please note the technical requirements for virtual attendance at the Annual Meeting, as described in the enclosed Proxy Statement beginning on page 11123 under the heading "Annual“Annual Meeting Q&A."
”
Pursuant to rules promulgated by the Securities and Exchange Commission, we are providing access to our proxy materials over the Internet. On or about April 24, 2020,28, 2022, we will mail a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) to each of our stockholders of record and beneficial owners at the close of business on the record date. On the date of mailing of the Internet Notice, all stockholders and beneficial owners will have the ability to access all of the proxy materials on a website referred to in the Internet Notice. These proxy materials will be available free of charge.
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Whether or not you expect to attend the Annual Meeting, the Company encourages you to promptly vote and submit your proxy by (i) Internet (by following the instructions provided in the Internet Notice), (ii) by phone (by following the instructions provided in the Internet Notice) or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Voting by proxy will not deprive you of the right to attend the Annual Meeting or to vote your shares. You can revoke a proxy at any time before it is exercised by voting electronically at the Annual Meeting, by delivering a subsequent proxy or by notifying the inspector of elections in writing of such revocation prior to the Annual Meeting. YOUR SHARES CANNOT BE VOTED UNLESS YOU EITHER (I) VOTE BY USING THE INTERNET, (II) VOTE BY PHONE, (III) REQUEST PROXY MATERIALS BE SENT TO YOU BY MAIL AND THEN USE THE PROXY CARD PROVIDED BY MAIL TO CAST YOUR VOTE BY COMPLETING, SIGNING AND RETURNING THE PROXY CARD BY MAIL OR (IV) ATTEND THE ANNUAL MEETING AND VOTE ELECTRONICALLY.VOTE.
By Order of the Board of Directors
Ajay Ayyappan
Senior Vice President,
General Counsel and Corporate Secretary
New York, New York
April 24, 2020
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2022 Proxy Statement
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2022 Proxy Statement summary
Summary Below is a summary of select components of this Proxy Statement, including information regarding this year’s stockholder meeting, nominees for our board of directors, summary of our business, performance highlights and selective executive compensation information. This summary does not contain all of the information that you should consider prior to submitting your proxy, and you should review the entire Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”). We refer to the fiscal year ended December 31, 2021 as “fiscal year 2021,” “fiscal 2021,” and “2021.” Meeting agenda, voting matters and recommendations* |
| Voting proposal item | Board vote recommendation | |||
1. Election of directors |  | FORthe election of each nominee | ||
Required vote: Affirmative vote of a majority of votes cast | ||||
2. Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan | | FOR(pg. 110) | ||
Required vote: Affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote | ||||
3. Ratification of appointment of independent registered public accounting firm | | FOR(pg. 117) | ||
Required vote: Affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote | ||||
4. Advisory (non-binding) vote on executive compensation | | FOR(pg. 119) | ||
Required vote: Affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote | ||||
* Virtual attendance at our Annual Meeting will constitute presence in person for purposes of quorum and voting at the Annual Meeting. | ||||
Annual meeting information | ||||
| Time and date: | |||
| 8:30 AM (Eastern Time) June 21, 2022 | ||||
| Record date: | |||
| April 22, 2022 | ||||
| Place: | |||
| Virtual format only via live audio webcast | ||||
| Voting: | |||
| Stockholders as of the Record Date are entitled to vote | ||||
Voting methods
| Internet (pre-meeting): | |||
| www.proxyvote.com | ||||
| Mail: | |||
Follow instructions on the Internet notice | ||||
| Phone: | |||
| Call the number listed on the Internet notice | ||||
| Electronically: | |||
and | ||||
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Summary
Below is a summary of selected key components of this proxy statement, including information regarding this year’s stockholder meeting, nominees for our board of directors, summary of our business, performance highlights and selective executive compensation information. This summary does not contain all of the information that you should consider prior to submitting your proxy, and you should review the entire proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 Form 10-K”). We refer to the fiscal year ended December 31, 2019 as “fiscal year 2019,” “fiscal 2019,” and “2019.”
Annual Meeting Information
Time and Date:8:30 AM (Eastern Time)June 15, 2020
Record Date:April 17, 2020
Place:Virtual format only via live audio webcastwww.virtualshareholdermeeting.com/EXLS2020
Voting:Stockholders as of the Record Date are entitled to vote
Voting Methods
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If you are the beneficial owner of shares held in the name of a brokerage, bank, trust or other nominee as a custodian (also referred to as shares held in “street name”), your broker, bank, trustee or nominee will provide you with materials and instructions for voting your shares. See page 11124 for additional details.
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Meeting Agenda, Voting Matters and Recommendations
*Virtual attendance at our Annual Meeting constitutes presence in person for purposes of quorum and voting at the Annual Meeting. 2022 Proxy Statement summary
Our Businessbusiness
We are a leading operations management and analytics company that helps our clients build and grow sustainable businesses. By orchestrating our domain expertise,global data analytics and digital technology, we look deeper to designoperations and manage agile, client-centric operating modelssolutions company that partners with clients to improve globalbusiness outcomes and unlock growth. Bringing together deep domain expertise with robust data, powerful analytics, cloud, artificial intelligence (“AI”) and machine learning (“ML”), we create agile, scalable solutions and execute complex operations drive profitability, enhance client satisfaction, increase data-driven insights, and manage risk and compliance. We serve clientsfor the world’s leading corporations in multiple industries including insurance, healthcare, banking and financial services, utilities, travel, transportation and logistics, media, and retail, among others. Focused on driving faster decision-making and transforming operating models, EXL was founded on the core values of innovation, collaboration, excellence, integrity and respect. Headquartered in New York, as of March 31, 2020 we hadour team is over 39,000 strong, with more than32,700 professionals in locations throughout the United States, the United Kingdom, Europe, India, the Philippines, Colombia, Australia and South Africa. 50 offices spanning six continents.
Company 3 Year Performance Revenue and Segment Information ($ in millions) | |||||||
| Revenue (Year-over-year growth %) | |||||||
| 2017 YOY% | 2018 YOY% | 2019 YOY% | |||||
| Insurance Segment | $234.8 | 13.8% | $258.1 | 9.9% | $294.2 | 14.0% | |
| Healthcare Segment | 77.0 | 12.2% | 84.4 | 9.6% | 90.6 | 7.3% | |
| Travel, Transportation and Logistics Segment | 71.0 | 2.3% | 70.2 | -1.0% | 68.0 | -3.2% | |
| Finance and Accounting Segment | 86.5 | 9.0% | 97.9 | 13.2% | 106.6 | 8.8% | |
| All Other | 83.1 | -13.9% | 87.2 | 4.8% | 74.6 | -14.3% | |
| Analytics Segment | 209.9 | 26.7% | 285.3 | 35.9% | 357.3 | 25.3% | |
| Consolidated | $762.3 | 11.1% | $883.1 | 15.8% | $991.3 | 12.3% | |
| Company 3 year performance | ||||||||||||||||||||||||
| Revenue (Year-over-year growth %) | ||||||||||||||||||||||||
| Revenue by segment information ($ in millions) | 2019 YOY% | 2020 YOY% | 2021 YOY% | |||||||||||||||||||||
Insurance | $346.4 | 11.3% | $341.8 | -1.3% | $382.0 | 11.8% | ||||||||||||||||||
Healthcare | 97.5 | 8.5% | 101.2 | 4.0% | 112.4 | 10.9% | ||||||||||||||||||
Emerging Business | 190.1 | -3.4% | 152.7 | -19.7% | 167.2 | 9.5% | ||||||||||||||||||
Analytics | 357.3 | 25.3% | 362.7 | 1.5% | 460.7 | 27.0% | ||||||||||||||||||
Consolidated | $991.3 | 12.3% | $958.4 | -3.3% | $1,112.3 | 17.1% | ||||||||||||||||||
Income Statement highlights (fiscal year 2021)
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We improved ourOur annual revenues increased 17.1% from $883.1$958.4 million in fiscal year 20182020 to $991.3 million$1.12 billion in fiscal year 2019,2021. Analytics revenue increased 27.0% and digital operations and solutions revenue increased 11.1%. Analytics revenue represents 41% of total revenue up from 38% in 2020. Revenue growth was broad-based across our businesses with our Top 10 clients’ revenue growing by 22.0%.
Profitability improved with our operating income margin increasing by 240 basis points from 11.5% in 2020 to 13.9% in 2021. We managed our expenses effectively with increased utilization of our people and facilities partially offset by higher sales and marketing expenses.
We improved our net income attributable to stockholders by 19%28.3% to $67.7$114.8 million.
Diluted EPS increased from $2.59 to $3.35, an increase of 29.3%.
Balance Sheet highlights (as of December 31, 2021)
Our balance sheet remains strong. Our cash and short-term investments at December 31, 2021 was $314 million and our debt was $260 million, for a net cash position of $54 million. We also achieved numerous other successes, including substantial completiongenerated cash flow from operations in 2021 of $184 million.
During the wind down of the operationsyear, we settled our Senior Convertible Notes due 2024 and returned capital to stockholders by repurchasing $115.6 million of our Health Integrated business. For more information regarding theseshares in 2021, up from $77.8 million in 2020.
Other highlights for 2021
We purchased Clairvoyant, a global data, AI and othercloud services firm for $80 million and continued to invest in our business highlights, please see pages 43for future growth with capital expenditures of $37 million.
We added approximately 5,000 employees to 44 below and the 2019 Form 10-K.our global work force, mainly in our delivery centers.
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2022 Proxy Statement summary
Total stockholder return
The graphs below compare our 1-year, 3-year and 5-year cumulative total stockholder return (“TSR”) as of December 31, 2021 with that of the median TSR for companies comprising Nasdaq, S&P 500600 and our peer group.
1-Year TSR
| 3-Year TSR
| 5-Year TSR
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(1) Cumulative growth rate as of December 31, 2019.
(2) Peer group TSR data excludes Convergys Corporation, which was acquired in October 2018,Our purpose and DST Systems, which was acquired in April 2018.core values
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Our Purpose and Core Values
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Corporate Governance Highlights
Based on current board profile and practices
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2022 Proxy Statement summary
Corporate governance highlights Based on current board profile and practices (including our eight director nominees, and one of our directors who currently serves on our board, but will not be standing for reelection) Board of |  | |||
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• Majority voting standard for uncontested elections
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• Regular executive sessions
• Active stockholder engagement program addressing strategy, performance and governance |
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Board tenure
Gender diversity
Racial and ethnic diversity
Age distribution
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2022 Proxy Statement summary
Director qualifications
Our board of directors reflects an effective and diverse mix of skills, background and experience appropriate for our Company and industry. Our directors have the following attributes:
• Board experience • Finance and accounting expertise • Client and industry expertise • Global experience • Risk oversight/management expertise • Human capital management expertise • Diverse backgrounds • Experience in environmental, social and governance matters • Strategic insight • Commitment to accountability, excellence and continuous improvement • Commitment to driving our growth and success | Board independence
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Board refreshment | ||||||
Additions | Exits | |||||
2021 Kristy Pipes |
David Kelso Deborah Kerr | |||||
Garen Staglin
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Board diversity matrix
Total number of directors: | 9 | |||||||||||||||||||
| Female | Male | Non-binary | Did not disclose gender | |||||||||||||||||
| Part I: Gender identity | ||||||||||||||||||||
Directors | 3 | 6 | — | — | ||||||||||||||||
| Part II: Demographic background | ||||||||||||||||||||
African American or Black | — | — | — | — | ||||||||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||||||||
Asian | — | 4 | — | — | ||||||||||||||||
Hispanic or Latinx | — | — | — | — | ||||||||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||||||||
White (other than Middle Eastern) | 3 | 2 | — | — | ||||||||||||||||
Middle Eastern | — | — | — | — | ||||||||||||||||
Two or more races or ethnicities | — | — | — | — | ||||||||||||||||
LGBTQ+ | — | — | — | — | ||||||||||||||||
Did not disclose demographic background | — | — | — | — | ||||||||||||||||
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2022 Proxy Statement summary
Skills matrix
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and accounting | Executive leadership | Public company governance | Analytics | Human capital management | Digital operations and solutions | Marketing | Global | Risk oversight and management | Information and cyber security | ESG | Mergers acquisitions
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Vikram Pandit | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
| ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
Anne Minto | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
Som Mittal | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
Clyde Ostler | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
Kristy Pipes | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
Nitin Sahney | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||
Garen Staglin | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
Jaynie Studenmund | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
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2022 Proxy Statement summary
Nominees for election as directors
| Name | Director since | Business Experience* | Committee membership | |||
Vikram Pandit Chairman | October 2018 | Chairman and Chief Executive Officer of Orogen Group; former Chairman of TGG Group and former Chief Executive Officer of Citigroup Inc. | Audit Committee; Nominating and Governance Committee | |||
Rohit Kapoor Vice Chairman | November 2002 | Co-founded the Company in | None | |||
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| Anne Minto | March 2013 | Former Global Human Resources Director for Centrica plc, | Compensation Committee; Nominating and Governance Committee
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| Som Mittal | December 2013 | Former Chairman and President of NASSCOM; | Compensation Committee; Nominating and Governance Committee | |||
| Clyde Ostler | December 2007 | Former executive for Wells Fargo, whose roles included Group Executive Vice President, Chief Financial Officer and Chief | Audit Committee; Compensation Committee | |||
| Kristy Pipes | January 2021 | Former Chief Financial Officer of Deloitte Consulting; various leadership roles in the financial services industry, including at Transamerica Life Companies and First Interstate Bank of California | Audit Committee (Chair); Compensation Committee | |||
| Nitin Sahney | January 2016 | Founder and Chief Executive Officer of Pharmacord, LLC; former President and CEO of Omnicare Inc. | Nominating and Governance Committee (Chair); Audit Committee | |||
| Jaynie Studenmund | September 2018 | Former Chief Operating Officer of Overture Services, Inc.; | Compensation Committee (Chair); Audit | |||
*A complete list of each nominee’s business experience and directorships is listed below beginning on page 20. | ||||||
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*A complete list of each nominee’s business experience and directorships is listed below beginning on page 18
2022 Proxy Statement summary
Sustainability
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Corporate Social Responsibility, SustainabilityAt EXL, we believe that there is always a better way; we look deeper, find it, and Human Capital Management
Ourmake it happen. This purpose informs our corporate culture, which, in turn, is rooted in our five core values. In line with our purpose, values and culture, we are committed to corporate social responsibility,finding a better way through sustainability and human capital management initiatives that are key to our long-term strategy and benefit our communities,stockholders, clients, employees and stockholders.communities. See “Sustainability” beginning on page 45 below for more details on our recent accomplishments in sustainability.
2019 Compensation Highlights
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2022 Proxy Statement summary
2021 Compensation highlights
Named Executive Officers
| Name | Title | |
Rohit Kapoor | Vice Chairman and CEO | |
Maurizio Nicolelli | Executive Vice President and CFO | |
Vikas Bhalla | Executive Vice President and Business Head, Insurance | |
Vivek Jetley | Executive Vice President and Business Head, Analytics | |
Samuel Meckey | Executive Vice President and Business Head, Healthcare | |
2021 Standard annual compensation
| Compensation component | Rohit Kapoor | Maurizio Nicolelli | Vikas Bhalla(3) | Vivek Jetley | Samuel Meckey | |||||||||||||||
Salary | $742,603 | $475,000 | $276,716 | $415,068 | $437,808 | |||||||||||||||
| Non-equity incentive plan compensation | 2,050,000 | 640,498 | 444,718 | 586,146 | 577,214 | |||||||||||||||
Equity awards (1) | 7,209,918 | 2,220,441 | 2,711,454 | 2,429,371 | 2,321,257 | |||||||||||||||
Other compensation (2) | 31,068 | 109,204 | 35,899 | 9,204 | 9,204 | |||||||||||||||
Total | $10,033,589 | $3,445,143 | $3,468,787 | $3,439,789 | $3,345,483 | |||||||||||||||
(1) Equity award values reflect equity grants in 2021 with time-based restricted stock units valued based on grant date fair market value and TSR linked performance-based restricted stock units valued using Monte Carlo fair market valuation.
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| 2019 Standard Annual Compensation | ||||||
| Compensation Component | Rohit Kapoor | Vishal Chhibbar(2) | Pavan Bagai | Nalin Miglani | Vikas Bhalla | Samuel Meckey |
| Salary | $720,000 | $427,808 | $311,554 | $450,000 | $263,809 | $425,000 |
| Non-Equity Incentive Plan Compensation | 1,304,453 | 0 | 323,814 | 411,735 | 285,636 | 364,320 |
| Equity Awards | 4,121,410 | 1,010,024 | 1,557,454 | 880,294 | 973,685 | 765,547 |
| Other Compensation(1) | 49,354 | 11,289 | 54,023 | 9,444 | 45,554 | 9,444 |
| Total | $6,195,217 | $1,449,121 | $2,246,845 | $1,751,473 | $1,568,683 | $1,564,311 |
(1)(2) For each named executive officer, this category includes, if applicable, his perquisites and personal benefits, hiring bonus, changes in pension value, Company-paid life insurance premiums and Company contributions to our 401(k) plan. A detailed discussion of the compensation components for each named executive officer for fiscal year 20192021 is provided in the “Summary Compensation Tablecompensation table for Fiscal Year 2019”fiscal year 2021” beginning on page [62].83.
(2)(3) Mr. Chhibbar’s last working dayBhalla is based in Delhi, India. Certain of his compensation components, as described herein, are paid in Indian rupees (INR), and are converted for comparison purposes at 74.33 INR to 1 USD, which was the Company wasexchange rate on December 13, 2019.
31, 2021.
On an annual basis, we submit to our stockholders a vote to approve, on a non-binding advisory basis, the compensation of our named executive officers as described in this proxy statement.Proxy Statement. We refer to this vote as “say-on-pay”“say-on-pay”. Please refer to our Compensation Discussion and Analysis, beginning on page 4260 for a complete description of our 20182021 compensation program.
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Below are a few highlights of our executive compensation:
Compensation philosophy: Our executive compensation philosophy is focused on pay-for-performance and is designed to reflect appropriate governance practices aligned with the needs of our business, and includes, among others, the following features: clawback policy; robust stock ownership guidelines for executives (and non-employee directors); limited perquisites; no tax gross-ups; and an anti-hedging and anti-pledging policy. See “Executive compensation program, practices and policies” beginning on page 66 below.
| EXL 2022 Proxy Statement | / |
2022 Proxy Statement summary
99% Say-on-Pay approval of 2020 compensation: At our 2021 Annual Meeting of Stockholders, our stockholders approved, on a non-binding advisory basis, the compensation paid to our named executive officers for fiscal year 2020. Over 99% of the votes present in person or by proxy (excluding broker non-votes) voted in favor of fiscal year 2020 compensation.
Annual bonus program based upon financial performance criteria: Our Compensation Committee approved the continued use of our annual bonus program, which was based upon the following performance criteria for 2021:
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Long-term equity incentive program: We also continued our equity incentive program, which includes granting a balanced mix of time-vested restricted stock units and performance-based restricted stock units. The performance-based restricted stock units were comprised of relative total stockholder return-linked restricted stock units. In addition, in September 2021, we made additional equity grants to certain executive officers (other than our CEO) of restricted stock units that are subject to time-based vesting as well as a post-settlement holding period to encourage stock ownership by our executives and promote retention. See “Long-term equity incentives” beginning on page 76 below for more details.
2021 performance: We delivered the following revenue, Adjusted EPS, and AOPM (as described below) performance:
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| No adjustments were made to the 2019 performance-based restricted stock units or the associated performance targets to account for the impact of the |
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Compensation Mix
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*Base Salary also includes 1% of other compensation
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Who Is Providing this Proxy Statement?
This Proxy Statement is being furnished to youpandemic in connection with the solicitation by the board of directors of ExlService Holdings, Inc., a Delaware corporation (“us,” “we,” “our” or the “Company”), of proxies to be used at our 2020 Annual Meeting of Stockholders (the “Annual Meeting”) to be held in virtual format only via live audio webcast at the websitewww.virtualshareholdermeeting.com/EXLS2020, at 8:30 AM, Eastern Time, and any adjournments or postponements thereof.
How Are the Proxy Materials Being Made Available?
In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each stockholder of record, the Company furnishes proxy materials via the Internet. If you received a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) by mail, you will not receive a printed copy of our proxy materials other than as described herein. Instead, the Internet Notice will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Internet Notice also instructs you as to how you may submit your proxy over the Internet or by phone. If you received an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting proxy materials included in the Internet Notice.
Our Notice of Annual Meeting, proxy statement and form of proxy card are each available atwww.proxyvote.com. You may access these materials and provide your proxy by following the instructions provided in the Internet Notice.
When Will the Internet Notice Be Sent?
We anticipate the Internet Notice will be sent to stockholders on or about April 24, 2020. This proxy statement and the form of proxy relating to the Annual Meeting will be made available via the Internet to stockholders on or prior to the date that the Internet Notice is first sent.
Who Can Vote?
Only stockholders who own shares of our common stock at the close of business on April 17, 2020, the record date for the Annual Meeting, can vote at the Annual Meeting. As of the close of business on April 17, 2020, the record date, we had 34,316,121 shares of common stock outstanding and entitled to vote. Each holder of common stock is entitled to one vote for each share held as of the record date for the Annual Meeting.
Is Cumulative Voting Applicable in the Election of Directors?
There is no cumulative voting in the election of directors.
How Do I Vote My Shares?
If your shares are registered directly in your name with Computershare Trust Company, N.A., our transfer agent (which means you are a “stockholder of record”), you can vote your proxy by (i) Internet, (ii) by phone or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Please refer to the specific instructions set forth in the Internet Notice.
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If you are the beneficial owner of shares held in the name of a brokerage, bank, trust or other nominee as a custodian (also referred to as shares held in “street name”), your broker, bank, trustee or nominee will provide you with materials and instructions for voting your shares. In addition to voting by mail, a number of banks and brokerage firms participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that offers telephone and Internet voting options. Votes submitted by telephone or by using the Internet through Broadridge’s program must be received by 11:59 p.m. Eastern Time, on June 14, 2020.
You also have the right to vote electronically at the Annual Meeting if you decide to attend. Our board of directors recommends that you vote by Internet, phone or mail as it is not practical for most stockholders to attend the Annual Meeting. If you are a “stockholder of record,” you may vote your shares electronically at the Annual Meeting. If you hold your shares in “street name,” you must obtain a proxy from your broker, bank, trustee or nominee giving you the right to vote the shares electronically at the Annual Meeting or your vote at the Annual Meeting will not be counted.
You will not be able to vote your shares unless you use one of the methods described above to designate a proxy or you vote electronically at the Annual Meeting.
Can I Revoke My Proxy?
You can revoke your proxy at any time before it is exercised in any of the following ways:
| 16 | / | EXL 2022 Proxy Statement |
2022 Proxy Statement summary
Compensation mix
Vice Chairman & CEO compensation mix | NEO compensation mix (Excluding Vice Chairman & CEO) | |
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* Base salary also includes other compensation
| EXL 2022 Proxy Statement | / | 17 |
How Is a Quorum Established at the Annual Meeting?Our board of directors
A quorum, which is a majority of the issued and outstanding shares of our common stock as of the record date of April 17, 2020, must be present, in person or by proxy, to conduct business at the Annual Meeting. A quorum is calculated based on the number of shares represented by the stockholders attending the Annual Meeting in person and by their proxy holders. If you indicate an abstention as your voting preference for all matters to be acted upon at the Annual Meeting, your shares will be counted toward a quorum but they will not be voted on any matter.Virtual attendance at our Annual Meeting constitutes presence in person for purposes of quorum at the Annual Meeting.
What Is a “Broker Non-Vote”?
If you are the beneficial owner of shares held in “street name” by a broker, then your broker, as the record holder of the shares, must vote those shares in accordance with your instructions. If you fail to provide instructions to your broker, under the New York Stock Exchange rules (which apply to brokers even though our shares are listed on the NASDAQ Stock Market), your broker will not be authorized to vote your shares on “non-routine” proposals, which include, at the Annual Meeting, the election of directors and approval on an advisory (non-binding) basis of the compensation of our named executive officers. As a result, a “broker non-vote” occurs. However, without your instructions, your broker has discretionary authority to vote your shares with respect to “routine” proposals only, which include, at the Annual Meeting, the ratification of the appointment of our independent registered public accounting firm.
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How Many Votes Are Needed to Approve Each Proposal and What Is the Effect of Abstentions and/or Broker Non-Votes?
Proposal 1: Election of Directors
Under our Fifth Amended and Restated By-Laws (our “by-laws”), directors who are standing for election at the Annual Meeting will be elected by the affirmative vote of a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) by stockholders in person or represented by proxy and entitled to vote at the Annual Meeting. If any incumbent nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, our by-laws provide that such person will tender to theOur board of directors his or her resignation as a director. You may cast your vote in favor of electing all of the nominees as directors, against one or more nominees, or abstain from voting your shares. For purposes of the vote on Proposal 1, abstentions and broker non-votes will have no effect on the results of the vote.Virtual attendance at our Annual Meeting constitutes presence in person for purposes of voting at the Annual Meeting.
Other Proposals
The ratification of the appointment of our independent registered public accounting firm, the advisory (non-binding) approval of the compensation of our named executive officers and each other item to be acted upon at the Annual Meeting will require the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. You may cast your vote in favor of or against these proposals or you may abstain from voting your shares. For purposes of the vote on Proposal 2 (ratification of the appointment of our independent registered public accounting firm), Proposal 3 (advisory (non-binding) vote on executive compensation), and such other items properly presented and to be acted upon at the Annual Meeting, abstentions will have the effect of a vote against these proposals. Broker non-votes will have the effect of a vote against Proposal 3, but because Proposal 2 is a “routine” proposal where brokers have discretionary authority to vote in the absence of instruction, there will be no broker non-votes.
If you submit your proxy, but do not mark your voting preference, the proxy holders will vote your shares (i) FOR the election of all six nominees for director, (ii) FOR the ratification of the appointment of our independent registered public accounting firm, (iii) FOR the approval on an advisory (non-binding) basis of the compensation of our named executive officers, and (iv) as described below, in the judgment of the proxy holder on any other matters properly presented at the Annual Meeting.
Are There Other Matters to Be Acted Upon at the Meeting?
Our board of directors presently is not awarecurrently consists of any matters, other than those specifically stated in the Noticenine directors (including our eight director nominees, and one of Annual Meeting, which are to be presented for action at the Annual Meeting. If any matter other than those described in this proxy statement is presented at the Annual Meeting on which a vote may properly be taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting those shares.
What About Adjournments and Postponements?
Any actionour directors who currently serves on the items of business described above may be considered at the Annual Meeting at the timeboard, but will not stand for reelection) with diverse experience, including in analytics, digital operations and on the date specified above or at any timesolutions, client industries, information and date to which the Annual Meeting is properly adjourned or postponed.
Who Pays For Solicitation of Proxies?
We will pay the cost of printingcybersecurity, human capital management, ESG, and mailing proxy materialsfinance and posting them on the Internet. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of sharesaccounting, among others. The following tables include a summary of our common stock.board composition by age, gender, tenure and independence.
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/How Can I Attend the Annual Meeting and why is the Company holding the Annual Meeting in a Virtual-Only Format?18 EXL 2022 Proxy Statement
We have monitored the coronavirus/COVID-19 situation closely and have determined that holding an in-person annual meeting could pose a risk to the health and safety of our stockholders, employees, and directors, and will instead hold a Virtual Annual Meeting rather than a meeting in New York or at any physical location.
To attend and participate in the Virtual Annual Meeting, stockholders will need to access the live audio webcast of the meeting. To do so, stockholders of record will need to visitwww.virtualshareholdermeeting.com/EXLS2020and use their 16-digit Control Number provided in the Internet Notice to log in to this website, and beneficial owners of shares held in street name will need to follow the instructions provided by the broker, bank or other nominee that holds their shares. We encourage stockholders to log in to this website and access the webcast before the Virtual Annual Meeting’s start time. Further instructions on how to attend, participate in and vote at the Virtual Annual Meeting, including how to demonstrate your ownership of our stock as of the record date, are available atwww.virtualshareholdermeeting.com/EXLS2020. Please note you will only be able to attend, participate and vote in the meeting using this website.
How Do I Submit Questions at the Annual Meeting?
We are committed to ensuring that our stockholders will be afforded the same rights and opportunities to participate in our Virtual Annual Meeting as they would at a meeting held at a physical location. You will be able to submit questions during the Annual Meeting by visitingwww.virtualshareholdermeeting.com/EXLS2020. We will try to answer as many stockholder-submitted questions as time permits that comply with the meeting rules of conduct as determined by the chairman of the meeting. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.
Will the Annual Meeting be Recorded?
A recording of the Annual Meeting will be available online athttp://ir.exlservice.com for approximately 12 months following the meeting date.
What if I Have Technical Difficulties or Trouble Accessing the Annual Meeting?
We will have technicians ready to assist you with any technical difficulties you may have accessing the live webcast of the Annual Meeting. A technical support phone number will be posted onwww.virtualshareholdermeeting.com/EXLS2020 that you may call if you experience technical difficulties during the check-in process or during the Annual Meeting.
What If I Have Further Questions?
If you have any further questions about voting your shares or attending the Annual Meeting, please call our Investor Relations Department at (212) 624-5913.
Important
Please promptly vote and submit your proxy by (i) Internet (by following the instructions provided in the Internet Notice), (ii) by phone (by following the instructions provided in the Internet Notice) or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. This will not limit your right to attend or vote at the Annual Meeting.
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Our board of directors which currently consists of ten directors, historically was divided into three classes. Beginning at the annual meeting of stockholders held in 2019, each director is elected to serve a one-year term at each year’s annual meeting of stockholders.* The current composition of our board of directors is as follows:
Director Nominees
Former Class I and Class II — Term expires 2020
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* As approved by the Company’s stockholders at the 2019 Annual Meeting of Stockholders, the board of directors began to be declassified over a three-year phase-out period. All director nominees whose terms expire at the Annual Meeting, including the former Class I directors elected at the 2019 Annual Meeting of Stockholders and the former Class II directors, will be, if elected by our stockholders, elected to hold office for a term of one year, or until their
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successors are duly elected and qualified in accordance with our by-laws. At the 2021 Annual Meeting of Stockholders, all director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, and the classification of the Board of Directors will terminate in its entirety.
**Mr. Pandit was appointed to the board as a Class III director under the terms of an Investment Agreement as described on page 85 below.
2020 Director Nominees
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Upon the recommendation of our Nominating and Governance Committee, we are pleased to propose sixeight of our existing directors, who were formerly our Class I and Class II directors as nominees for election as directors at the Annual Meeting. As previously disclosed, one of our current directors, Mr. Staglin, will not be standing for re-election at the Annual Meeting; the remaining eight directors are our director nominees at the Annual Meeting. Our nominees for re-election as directors at the Annual Meeting are as follows:
Director nominees
| Vikram Pandit Chairman and Independent Director |
| Rohit Kapoor | |||
| Anne Minto Independent Director |
| Som Mittal Independent Director | |||
| Clyde Ostler Independent Director |
| Kristy Pipes Independent Directorand Chair of the Audit Committee | |||
| Nitin Sahney Independent Director and Chair of the Nominating and Governance Committee |
| Jaynie Studenmund Independent Director and Chair of the Compensation Committee | |||
We believe that our director nominees and continuing directors, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to maintain an effective board to serve the best interests of the Company and its stockholders.
Director Qualifications
The board of directors considers it paramount to achieving excellence in corporate governance to assemble a board of directors that, taken together, has the skills, qualifications, experience and attributes appropriate for functioning as the board of directors of our Company and working productively with management. The Nominating and Governance Committee of the Board is responsible for recommending nominees that are qualified and that bring a diverse set of skills and qualifications to oversee the Company effectively.
The Nominating and Governance Committee has not formally established any minimum qualifications for director candidates. However, in light of our business, the primary areas of experience, qualifications and attributes typically sought by the Nominating and Governance Committee in director candidates include, but are not limited to, the following:
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stockholders described below under “Director qualifications” (see pages 32-33).
In addition to satisfying these general qualifications considered by the Nominating and Governance Committee in connection with a director nomination, Vikram S. Pandit was appointed to the Board on October 4, 2018 as a Class III director pursuant to the terms of an Investment Agreement, dated as of October 1, 2018 (the “Investment Agreement”), between the Company and Orogen Echo LLC (the “Purchaser”), an affiliate of The Orogen Group LLC (the “Purchaser”(“The Orogen Group”). The Investment Agreement wasOn August 27, 2021, we entered into in connectiona Payoff and Termination Agreement with our issuance to the Purchaser, of $150,000,000 in aggregate principal amount of 3.50% Convertible Senior Notes due October 1, 2024 (the “notes”). For so long as the Purchaser has the rightpursuant to nominate a director to the Board underwhich the Investment Agreement, we have, subject toincluding the terms of the Investment Agreement, agreed to include such person in our list of nominees for election to ourPurchaser’s board of directors at each of our annual meetings of stockholders at which directors are to be elected, and to use our reasonable best efforts to cause the election of such person to our board of directors. The Purchaser’sappointment right, to nominate a director will terminate if Purchaser and its affiliates beneficially own less than 50% of the number of shares of our common stock deemed beneficially owned by the Purchaser and its affiliates immediately following the issuance of the notes (which, for purposes of the Investment Agreement, includes shares of our common stock issuable upon conversion of the notes).was terminated.
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Our board of directors
Board of Directors
directors
The names, ages and principal occupations (which have continued for at least the past five years unless otherwise indicated) and other information, including the specific experience, qualifications, attributes or skills that led to the conclusion that such person should serve as a director of the Company, with respect to each of the nominees and continuing directors are set forth below. There are no family relationships among any of our directors or executive officers.
Nominees for Electionelection at the Annual Meeting
Vikram S. Pandit Director since October 2018 | Chairman of the Board since 2022 | Independent |
| Age: 65 — is Chairman and Chief Executive Officer of The Orogen Group, which makes significant long- term strategic investments in financial services companies and related businesses. Mr. Pandit’s business experience and directorships are detailed below. The Company has concluded, based in part on Mr. Pandit’s more than 30 years of experience in the financial services industry, including his experience as Chief Executive Officer, and a member of the board of directors, of Citigroup Inc. (NYSE: C), that Mr. Pandit should serve as a director. Committees: • Audit*; Nominating and Governance Business experience • Chairman and Chief Executive Officer, The Orogen Group LLC (July 2016 - present) • Chairman, TGG Group (February 2014 - June 2016) • Chief Executive Officer, Citigroup Inc. (December 2007 - October 2012) Public directorships during past five years • Director and member of the nominating and governance and finance committees, Virtusa Corporation (NASDAQ: VRTU) (2017 - 2021) • Lead Independent Director, chair of the human resources and compensation committee and member of the corporate governance and nominating committee, former member of the audit committee, Bombardier Inc. (TSX: BBD) (2014 - 2021) Other relevant experience • Director, Citigroup Inc. (December 2007 - October 2012) • Director, Fair Square Financial Holdings (2017 - 2021) • Director, Westcor Land Title Insurance Company (2020 - present) • Chairman, JM Financial Credit Solutions Ltd. (2014 - present) • Member of the Board of Overseers of Columbia Business School • Member of the Board of Visitors of Columbia School of Engineering and Applied Science | |||||
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| Digital operations and solutions | |||||
| Global experience | |||||
| Mergers and acquisitions | |||||
* Audit committee financial expert under applicable SEC rules and regulations
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Our board of directors
Rohit Kapoor
Director since November 2002 |
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Business
Other business experience
Public
Other
• Member, Board of Directors, Pratham (Tristate Chapter) | ||||||
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| Executive leadership (within the last 5 years) | |||||
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| EXL 2022 Proxy Statement | / | 21 |
Our board of directors
Anne E. Minto Director since March 2013 | Independent
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*Audit committee financial expert under applicable SEC rules and regulations.
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Public directorships during past five years
Other relevant experience
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| Executive leadership | |||
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| Global experience | |||
| Risk oversight and management | |||
| ESG | |||
| Mergers and acquisitions | |||
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Our board of directors
Som Mittal Director since December 2013 | Independent
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Committees:
Business experience
Public • Director and member of clinical quality and innovation committee, Apollo Hospitals Enterprise Limited (NSE: APOLLOHOSP), a healthcare services provider (2021 - present)
•Director and member of audit and risk management committee, Cyient Ltd. (NSE: CYIENT), an engineering design services company
Other directorships
Other relevant experience
• Member of the governing body of Axis Bank Foundation, a non-profit organization, and member of board of governors of academic institutions | |||||
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| Information and cybersecurity | |||
| ESG | |||
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Our board of directors
Clyde W. Ostler
Director since December 2007 |
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Public directorships during past five years
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*Audit committee financial expert under applicable SEC rules and regulations.
| 24 | / | EXL 2022 Proxy Statement |
Our board of directors
Director since January 2021 | Independent |
In light of our business, the primary areas of experience, qualifications and attributes typically sought and put forward by the Nominating and Governance Committee in director candidates include, but are not limited to, the following:
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| Executive leadership Experience holding significant leadership positions, including as a CEO or head of a significant business, to help us drive business strategy, growth and performance. | |||
| Finance and accounting Experience with finance, accounting or financial reporting processes, to help drive financial performance. | |||
| Global companies Experience working outside of the United States or with multinational companies, to help facilitate our global expansion. |
| 32 | / | EXL 2022 Proxy Statement |
Majority Voting in Director ElectionsCorporate governance
| Board experience Understanding of public company board of director and fiduciary duties, to help provide perspective on corporate governance best practices and related matters. | |||
| Digital operations and solutions Experience with digital operations and solutions, artificial intelligence and machine learning, and other key technologies that are central to our business. | |||
| Client and industry knowledge Experience with our key client industries, including insurance, healthcare, banking and financial services, finance/accounting, and our other capabilities, to help deepen our knowledge of our key industry verticals and markets in which we do business. | |||
| Risk oversight/management Experience assessing and overseeing the overall risk profile of multinational public companies. | |||
| Human capital management Experience in management and development of human capital, including management of a large workforce, diversity and inclusion, talent development, workplace health and safety, compensation and other human capital issues. | |||
| Diverse backgrounds We seek directors with diverse professional and personal backgrounds and perspectives to promote the values of diversity and inclusion from the top and to provide perspective from varying viewpoints. | |||
| Experience in ESG matters Experience in managing ESG matters, incorporating them into business and strategy and associated risks. | |||
| Information and cybersecurity Experience in information and cybersecurity matters, best practices and associated risks. | |||
| Mergers and acquisitions Experience in mergers and acquisitions as a component of business development and strategy. | |||
| Marketing Experience in marketing and branding of multinational companies. |
| EXL 2022 Proxy Statement | / | 33 |
Corporate governance
UnderRefreshment
Our Nominating and Governance Committee regularly considers the size and composition of our board (and its committees) on a continual basis with an aim toward creating a balanced board with extensive experience and institutional knowledge, and fresh perspective and insight. Considerations include whether the composition of the board of directors (and its committees) includes sufficient diversity and independent skill sets and background as appropriate for our immediate and long-term strategic needs. These considerations are also informed by discussions with our investors through stockholder engagement. In terms of diversity, our board is 33% diverse in terms of gender and 44% diverse in terms of ethnic/racial diversity. In considering board composition, our Nominating and Governance Committee also considers the length of tenure of the directors as a whole. Following the Annual Meeting, we will have the following balance of tenures: | Board refreshment | |||||
ADDITIONS | EXITS | |||||
2021 Kristy Pipes |
2021 David Kelso Deborah Kerr | |||||
2022 Garen Staglin | ||||||
While the Company does not maintain term limits, our by-laws,Corporate Governance Guidelines provide that the expectations for new directors who are standing for election in an uncontested election are elected by the affirmative voteis a maximum term of a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) in person or represented by proxyten years. The board actively manages board refreshment and entitled to votesuccession planning at the meeting. If any incumbent nomineeboard and committee level. For example, the board generally expects that each member serve on two committees, and that each committee chair serve for director in an uncontested election receives a greater numbermaximum of votes “against” his or her election than votes “for” such election, our by-laws providefive years. The board expects that such person must tenderover the next few years, the committee and board composition will continue to change due to rotation and retirement. The Nominating and Governance Committee will identify successors based on the goal of maintaining the board’s overall balance of experience and perspective. A recommendation regarding board (and committee) composition is shared with the full board of directors his or her resignationon an annual basis.
| 34 | / | EXL 2022 Proxy Statement |
Corporate governance
Board refreshment process
| EXL 2022 Proxy Statement | / | 35 |
Corporate governance
Board evaluations
We consider the continued effectiveness of the board and its committees as a director. (In contested elections,critical to our long-term success and stockholder value. The board evaluates its performance and the performance of it committees and each director on an annual basis through the following process:
Succession planning
Our board of directors will be elected byis responsible for developing and annually reassessing succession plans for our CEO and other key executive officers of the affirmative voteCompany, and preparing contingency plans for interim CEO succession in the event of a plurality of votes cast in person or represented by proxy and entitled to vote at the Annual Meeting.) An uncontested election means an election in which the number of nomineesunexpected occurrence for director is not greater than the number to be elected.board review.
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Corporate governance
Committees
Our board of directors currently has three standing committees: the Audit Committee, the Nominating and Governance Committee and the Compensation Committee. As discussed above, our board of directors has determined that each member of the Audit, Nominating and Governance and Compensation Committees meets the independence and experience requirements of the Nasdaq Stock Market and federal securities laws. Copies of our committee charters can be found on the Investor Relations page of our website at: https://ir.exlservice.com/corporate-governance. Information on our website referred to in this proxy statementProxy Statement does not constitute a part of this proxy statement.
Proxy Statement.
The following table sets forth the current chairs and members of each standing committee of the board of directors. As an executive director, Mr. Kapoor does not serve on any board committee.
Financial expert | Audit | Compensation | Nominating | |||||
Vikram Pandit |  |  | | |||||
Anne Minto | | | ||||||
Som Mittal | | | ||||||
Clyde Ostler | | | | |||||
Kristy Pipes | |  | | |||||
Nitin Sahney | | | ||||||
Garen Staglin* | | | ||||||
Jaynie M. Studenmund |
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* Not standing for reelection.
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Committee CompositionCorporate governance
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Audit Committee
Our Audit Committee oversees and assists our board of directors in fulfilling its oversight responsibilities with respect to our accounting and financial reporting processes, including the integrity of the financial statements and other financial information provided by us to our stockholders, the public, stock exchanges and others; our compliance with legal and regulatory requirements; our independent registered public accounting firm’s qualifications and independence; the audit of our financial statements; the performance of our internal audit function and independent registered public accounting firm; and the Company’s cyber security program and cyber strategy-related risks.risks; business continuity and disaster recovery planning; and ESG-related disclosure, processes and controls. Our Audit Committee’s risk oversight is discussed below on beginning on page 32.41. Our Audit Committee charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable requirement of federal securities laws as well as independence requirements of the Nasdaq Stock Market.
Our Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent registered public accounting firm, and our independent registered public accounting firm reports directly to our Audit Committee. Our Audit Committee also reviews and approves specified related-party transactions as required by the rules of the Nasdaq Stock Market, and oversees the Company’s cyber security program and cyber strategy-related risks. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). Our Audit Committee annually reviews and assesses the adequacy of the Audit Committee charter and its own performance.
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The members of our Audit Committee are appointed by our board of directors. All members of our Audit Committee must also be recommended by our Nominating and Governance Committee.
Audit Committee profile | ||
Kristy Pipes, Chair* Clyde Ostler* Vikram Pandit* Nitin Sahney Jaynie Studenmund* |
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• Accounting and financial reporting processes • Our independent registered public accounting firm’s appointment and independence • The audit of our financial statements and internal audit function • Other key areas including cybersecurity, ESG, litigation, business continuity and disaster recovery, compliance and regulatory enforcement matters | ||
*Audit committee financial expert under applicable SEC rules and regulations | ||
6 committee meetings in 2021 | ||
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Corporate governance
Nominating and Governance Committee
Our Nominating and Governance Committee is responsible for: (i) identifying and recommending candidates for election to our board of directors using selection criteria approved by our board of directors, reviewing composition of the board and committee membership and overseeing board refreshment and director compensation and benefits matters, (ii) developing and recommending to our board of directors Corporate Governance Guidelines, that are applicableincluding independence standards, and other board procedures or corporate governance policies, as well as any changes to us, andsuch guidelines, procedures or policies or to any of our organizational documents; (iii) overseeing our board of director and management evaluations.
evaluations and our director education program, and (iv) overseeing our ESG goals, policies and practices. Our Nominating and Governance Committee has a policy, reflected in its charter,Charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of considering director candidates recommended by our stockholders. Candidate recommendations should be sent to our Nominating and Governance Committee, c/o ExlService Holdings, Inc., 320 Park Avenue, 29th Floor, New York, New York 10022, Attention: Corporate Secretary. Our Nominating and Governance Committee evaluates all candidates indirectors who satisfy the same manner regardlessapplicable independence requirements of the source of the recommendation. Our Nominating and Governance Committee, in making its selection of director candidates, considers the appropriate skills and personal characteristics required in the light of the then-current makeup of our board of directors and in the context of our perceived needs at the time. The Nominating and Governance Committee considers a number of factors in selecting director candidates, including, among others:
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ethical standards and integrity; independence; diversity of professional and personal backgrounds; skills andexperience; other public company directorships; and financial literacy and expertise; communication skills; and ability and willingness to comply with Company policies and procedures.
Nasdaq Stock Market.
Our Nominating and Governance Committee reviews written and oral information provided by and about candidates and considers any additional criteria it feels is appropriate to ensure that all director nominees possess appropriate skills and experience to serve as a member of our board of directors.
Although our Nominating and Governance Committee does not have a formal policy with regard to diversity of board members, pursuant to our Corporate Governance Guidelines, our board of directors seeks members from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. This assessment includes an individual’s independence, as well as consideration of diversity, age, skills and experience in the context of the needs of the board of directors. Our Nominating and Governance Committee reviews and makes recommendations regarding the composition of our board of directors in order to ensure that the board has an appropriate breadth of expertise and its membership consists of persons with sufficiently diverse and independent skill sets and backgrounds.
Nominating and Governance Committee profile
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Anne Minto
Som Mittal Vikram Pandit Garen Staglin |
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• Overseeing our ESG goals, policies and
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TheAside from its role in assessing the board, its committees and individual director effectiveness described above, our Nominating and Governance Committee, is responsible for developingtogether with the Compensation Committee, provides annual reports on our CEO’s performance in respect of certain goals and annually reassessing succession plans for our CEO and other key executive officers ofobjectives set by the Company. The Nominating and Governance Committee also prepares contingency plans for interim CEO succession inand the event of an unexpected occurrence.
board.
The Nominating and Governance Committee also oversees our director onboarding and training program, which provides new directors with training regarding the Company’s policies and procedures and specific requirements that may be needed based on the director’s committee memberships.
In addition, the Nominating and Governance Committee oversees and reviews the Company’s corporate social responsibilityESG goals, policies and programs twice annually and the Company’s corporate governance policies and practices regularly. Our Nominating and Governance Committee is responsible for reviewing and assessing the adequacy of our organizational documents, and recommending any changes, as well as annually reviewsreviewing and assessesassessing the adequacy of the Nominating and Governance Committee charter and its own performance. The members of our Nominating and Governance Committee are appointed by our board of directors.
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Corporate governance
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Compensation Committee
Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our directors, officers and employees and is responsible for approving the compensation of our Vice Chairman and CEO and other executive officers.officers, as well as our employee benefit policies, programs and administration. Our Compensation Committee also reviews, evaluates and makes recommendations to our board of directors with respect to our incentive compensation plans and equity-based plans and administers the issuance of awards under our equity incentive plans. Our Compensation Committee charteralso provides oversight with respect to human capital management matters, including diversity, equity and inclusion, and talent and leadership engagement, development, and training. Our Compensation Committee Charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Nasdaq Stock Market. Any such subcommittee must have a published committee charter.
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Our Compensation Committee charter also permits the committee to retain advisors, consultants or other professionals to assist the Compensation Committee to evaluate director, Vice Chairman and CEO or other senior executive compensation and to carry out its duties. For 2019,2021, our Compensation Committee retained the services of Frederick W. Cook & Co., Inc.Farient Advisors LLC (“FW Cook”Farient”), a qualified and independent compensation consultant, to aid the Compensation Committee in performing its review of executive compensation including executive compensation benchmarking and peer group analysis. Our Compensation Committee annually reviews and assesses the adequacy of the Compensation Committee charterCharter and its own performance. Additional information regarding our Compensation Committee’s processes and procedures for considering executive compensation are addressed in the Compensation Discussion and Analysis below.
The members of our Compensation Committee are appointed by our board of directors. All new members of our Compensation Committee must be recommended by our Nominating and Governance Committee.
Board Self-Assessment
Our Nominating and Governance Committee provides annual reports to
During 2021, none of our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our board of directors on the directors’ self-assessment of the performance of our board of directors, and on our CEO’s performance in respect of certain goals and objectives set by our Nominating and Governanceor Compensation Committee. In 2019, we engaged the National Association of Corporate Directors (the “NACD”) to assist in this process by providing a third party assessment of our board of directors and our committees.
Compensation Committee profile | ||
Jaynie Studenmund, Chair Anne Minto Som Mittal Clyde Ostler Kristy Pipes Garen Staglin |  | |
• Overall compensation risk management, including recommending incentive compensation plans • Retention of advisors or other compensation consultants • Oversight of human capital management matters, including diversity, equity and inclusion • No interlocks or insider participation | ||
| 7 committee meetings in 2021 | ||
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Risk OversightCorporate governance
Our board of directors provides risk oversight. Our management assists the board in identifying strategicBoard and operating risks that could affect the achievement of our business goals and objectives, assessing the likelihood and potential impact of these risks and proposing courses of action to mitigate and/or respond to these risks. These risks are reviewed and discussed periodically with the full board of directors as part of the business and operating review.
Our management is responsible for management of our day-to-day risks, and, because we are exposed to financial risks in multiple areas of our business, day-to-day risk management activities and processes are performed by multiple
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members of our senior and other management. Our board of directors primarily relies on the Audit Committee forcommittee oversight of our risk management and cyber security risk. The Audit Committee regularly reviews and discusses with management our major financial risk and cyber security exposures and the steps management has taken to monitor, control and manage such exposures, including our risk assessment and risk management guidelines and policies. In addition, our management maintains, as part of our disclosure controls and procedures, a separate disclosure committee that, as part of its review of our quarterly and annual reports, helps facilitate understanding by the AuditCommittee and our full board of directors of new or changing risks affecting us.
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| Full board oversight | ||||||||||||||
| Our board of directors is ultimately responsible for overseeing EXL’s risk management activities as a | ||||||||||||||
Our management is responsible for development of our risk management framework and methodological guidelines. Management is responsible for our day-to-day risks, and, because we are exposed to financial risks in multiple areas of our business, day-to-day risk management activities and processes are performed by multiple members of our senior and other management. | Our management assists the |
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Audit Committee Responsible for primary oversight of our risk management, financial and cyber security risk, risk relating to environmental, social and governance controls and reporting internal and external audit controls and regulatory requirements. Reviews and discusses with management our major financial risk and cyber security exposures and the management has taken to monitor, control and manage such exposures, including our risk assessment and risk management guidelines and policies. Reviews and discusses with other board committees our environmental, social and governance programs and related matters. | Nominating and Governance Responsible for risk relating to environmental, social and governance matters, conflicts of interest, and oversight of corporate governance policies and practices as a risk- steps management-related measure. | Compensation Committee Responsible for executive and employee compensation and retention-related risk, as well as other human capital management-related risk. | ||||||||||||
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Our management maintains, as part of our disclosure controls and procedures, a separate disclosure committee that, as part of its review of our quarterly and annual reports, helps facilitate understanding by the Audit Committee and our full board of directors of new or changing risks affecting us. | ||||||||||||||
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Corporate governance
Cybersecurity risk management
Given the nature of our business, EXL is highly focused on maintaining a robust and comprehensive program that identifies and manages a broad range of cybersecurity risks on behalf of our clients and their customers, as well as our employees, contractors and any relevant third parties. Our Audit Committee has primary oversight and receives regular briefings throughout the year on all identified and possible cybersecurity-related risks, vulnerabilities and strategic policies and practices frommanagement. At least once a year,our board receives a report from management on the Company’s readiness and capability to reduce the risk of, detect and respond to a cyber-attack. Our cybersecurity team consists of privacy attorneys, qualified technical cybersecurity professionals and business continuity specialists. We also periodically engage third party experts to review and assess our cybersecurity governance and management.
We have invested in our information security posture and protocols to support compliance with our contractual obligations and the laws and regulations governing our activities, as well as best practices for organizational resiliency. These investments include people, processes and technology intended to protect information throughout its life cycle. Each of our employees receives knowledge and awareness training on risk mitigation and management and controls and procedures relating to information security, cybersecurity and data privacy on a regular basis. Our cybersecurity team participates in an annual risk-based audit program, and we also undergo more than 70 external, internal and client audits annually, in part to enable our compliance with the ISO27001, PCI DSS 3.2, HITRUST and SOX 404 standards, among others. We carry out test runs of audits and simulated attacks regularly.
EXL focuses on implementing and maintaining cybersecurity capabilities to identify, protect, detect, respond and recover from cyber threats, incidents and attacks; reduce vulnerabilities and minimize the impact of cyber incidents. We emphasize compliance and institutional governance built upon and supported by policies and processes, tools and technologies, and knowledge and awareness training. EXL takes into account guidance from relevant regulatory and governance bodies, including, among others, the Cyber Security Framework of the National Institute of Standards and Technology and local supervisory authorities in the US, UK and Europe. We are also focusing on recent and proposed regulations in India and recent regulations in South Africa. For more details on our cybersecurity program, see “Sustainability – Cybersecurity at EXL” on page 54.
Environmental, social and governance (“ESG”) risk management
Our board reviews and receives regular reports on ESG and sustainability risks, including those relating to employee safety, environmental-related efforts, human capital management matters, and corporate governance trends and best practices.
Each of our board Committees is involved in oversight over ESG-related risks as relate to matters within their purview. The Nominating and Governance Committee is responsible for overseeing ESG matters generally, including as relates to polices and goals and targets and metrics. The Compensation Committee deals with human capital management matters relating to talent and leadership engagement, development and training, employee compensation and benefits, and diversity, equity and inclusion, among others, and the Audit Committee oversees risks relating to ESG-related disclosure, processes and controls. The full board is regularly briefed on the matters overseen by each Committee.
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| EXL 2022 Proxy Statement |
Corporate governance
In 2021, we established a new management-level ESG steering committee, which is responsible for setting our sustainability/ESG strategy and risk management, keeping our management and board up-to-date on ESG-related developments, overseeing our internal and external disclosure on ESG matters, and providing implementation support across our Company. The ESG steering committee works in close coordination with the board, and provides the board with advice and assistance in its oversight of ESG risks and other matters. For more details on our ESG and sustainability-related efforts, see “Sustainability” on page 45.
Stockholder engagement
In late 2021, we continued to expand our formal governance-focused stockholder outreach program by offering to meet with stockholders representing approximately 80% of shares outstanding for discussions focusing on governance topics, and |
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Topics discussed included:
During 2019, none ofBoard composition and structure
Executive compensation
Risk oversight
Human capital management and company culture
Diversity, equity and inclusion efforts
Environmental, social and governance efforts
EXL also regularly interacts and shares information with our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve onstockholders through our board of directors or Compensation Committee.
Other Directorships
Our board of directors maintains a practice whereby our directors disclose any offers to be a director of any other organization, which are then evaluated by the board of directors for potential businessquarterly earnings calls, investor meetings, SEC filings and other conflicts. Our directors are subject to a simultaneous service limits that apply to other public company directorships, and, for members of our Audit Committee, service on other public company audit committees. See our Corporate Governance Guidelinespublications on our website, at https://ir.exlservice.com/corporate-governance for more information.among others.
Code of ConductThe feedback received from our stockholders is shared with and Ethics; Corporate Governance Guidelines
We believe thatreviewed by our core values,board, which translate into high ethical standardsis used to inform and strong corporate governance, are essentialfocus our decisions relating to our long-term success, continued growthgovernance and building the trust ofsustainability practices and to improve our employees, clients, communities and investors. We have adopted a Code of Conduct and Ethics and a set of Corporate Governance Guidelines, which can each be found on our website at https://ir.exlservice.com/corporate-governance.disclosure.
Our Code of Conduct and Ethics is applicable to our directors, officers and employees and details how they should conduct themselves when dealing with fellow employees, clients, suppliers, competitors and the general public. Our Code of Conduct and Ethics is reviewed annually by the Audit Committee. We encourage our employees to speak up
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Corporate governance
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and raise concerns promptly about any situation that they believe may violate our Code of Conduct and Ethics or the law and we are committed to responding promptly to any concerns.
Our Corporate Governance Guidelines assist our board of directors in the exercise of its responsibilities and reflect the commitment of our board of directors to monitor the effectiveness of policy and decision-making, both at the board and senior management levels, and to enhance stockholder value over the long term.
Communications with the Board
board
Stockholders interested in contacting our board of directors, our Chairman or any individual director are invited to do so by writing to:
Board of Directors of ExlService Holdings, Inc.
c/o Corporate Secretary
ExlService Holdings, Inc.
320 Park Avenue, 29th29th Floor
New York, New York 10022
All other stockholder communications addressed to our board of directors will be referred to our Chairman and tracked by our Corporate Secretary. Stockholder communications specifically addressed to a particular director will be referred to that director.
Complaints and concerns relating to our accounting, internal accounting controls or auditing matters should be communicated to our Audit Committee, which consists solely of non-employee directors. Any such communication may be anonymous and may be reported to our Audit Committee through our General Counsel by writing to:
Audit Committee of the Board of Directors
ExlService Holdings, Inc.
320 Park Avenue, 29th29th Floor
New York, New York 10022
Attn: General Counsel
All such concerns will be reviewed under Audit Committee direction and oversight by our General Counsel, our Head of Internal Audit or such other persons as our Audit Committee determines to be appropriate. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of our Audit Committee. We prepare periodic summary reports of all such communications for our Audit Committee.
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Sustainability
CORPORATE SOCIAL RESPONSIBILITYSustainability
In line with our mission of looking deeper to find a better way for our clients, at EXL we are committed to doing our part as a global citizen to build a better future for us all by operating in a responsible and sustainable manner. We believe that by integrating sustainable practices into our business model, working toward positive social change, and providing transparent reporting on those practices and our progress, we will best able to deliver long-term value to our stockholders while promoting and developing our business, people, communities and the world around us. We refer to these activities as “sustainability” and “environmental, social and governance” or “ESG” throughout this Proxy Statement.
Recent activities
In 2021 and continuing into 2022, we have taken a number of steps to continue improving our sustainability program. These recent activities include:
| 1 | Forming a cross-functional management level ESG (Environmental, Social and Governance) steering committee that is responsible for setting our sustainability/ESG strategy and risk management, keeping our management and board up-to-date on ESG-related developments, overseeing our internal and external disclosure on ESG matters, and providing implementation support across our Company. | |||||||||
| 2 | Increasing our ESG engagement, including by: • Becoming a participant in the United Nations Global Compact, a voluntary initiative of more than 13,000 companies whose CEOs have committed to implementing universal sustainability principles and to take steps toward meeting the United Nations Sustainable Development Goals. • Becoming a member of The Conference Board and joining its ESG Center. | |||||||||
| 3 | Demonstrating our commitment to providing transparency and meaningful disclosure on ESG-related information, including through: • Publishing on our website a Sustainability landing page, which highlights all of our relevant sustainability-related policies, reports, certifications and awards, targets and activities, and is updated on a regular basis, available at www.exlservice.com/about/sustainability. • Publishing our second Annual Sustainability Report developed in accordance with the Global Reporting Initiative (GRI) Standards: Core Option and aligned to the Sustainability Accounting Standards Board (SASB) Software and IT Services Standard (2018), available on the Sustainability page of our website. • Publishing a comprehensive Human Capital Report, including detailed disclosure on our recruitment, training, retention and promotion, diversity, equity and inclusion efforts and community engagement and giving efforts. | |||||||||
| 4 | Launching a new community engagement focus in 2022 that aims to bring science and technology skills, with a particular emphasis on coding, to women and girls in the communities in which we operate in partnership with various non-profit organizations, in addition to our existing education and skill building initiatives. | |||||||||
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Sustainability
We seek to find meaningful ways to help the communities in which we operate. We are committed to positive social change through volunteerism, giving and active engagement at the institutional- and individual employee-levels to help promote these goals.Community Engagement
EXL is focused on assisting the members of the communities in which we live and work to develop market-relevant skills. We provide programming on skills development for adults and children within our communities: | ||||||||||||||||
Skills to Win Initiative | Education as a Foundation Initiative | |||||||||||||||
| This initiative focuses on equipping people in our communities with the skills that the market demands. We provide training on employability skills for back-office roles, finance and accounting, and data and analytics and digital capabilities, all coupled with life and workplace skills. In 2021, we moved to a virtual format, and by virtue of our new online delivery, were able to scale the Skills to Win Initiative to have an even broader reach. Skills to Win is opening new doors for employment and earnings for participants in the United States, the Philippines, India, United Kingdom and South Africa. Over the past five years, we have continued to evolve this initiative to reflect new and emerging skills and strengthen the portfolio of courses offered. | This initiative provides school-aged children with a foundation in data and analytics skills, as well as extracurricular activities such as art, music, fitness, and languages, all of which will enable them to position themselves as future leaders. In 2021, we adapted our Education as a Foundation Initiative’s programming to account for new challenges arising from the COVID-19 pandemic. In particular, we transitioned to a blend of online and offline learning platforms, expanded the role of our students’ parents as co-educators, and added a new focus in our content on the physical and mental wellbeing of our students and their families. Like our Skills to Win Initiative, in 2021, we were able to scale this program to reach even more students than we had in the in-person only format. | |||||||||||||||
In 2021, we brought this program to nearly 1,100 people in our communities across the globe. | In 2021, we brought this program to more than 2,700 students worldwide. | |||||||||||||||
Charitable and Community Initiatives
EXL is focused on education and assisting community members to develop market-relevant skills.
Highlights of these initiatives include:
volunteering. We also support our employees’ charitable efforts by enabling payroll giving with company matching and recognizing social impact through individual, geography and business unit awards, organizing social responsibility eventsawards. Our shift to virtual volunteering in each region in which we operate and creating “volunteer weeks” thatresponse to COVID-19 has made volunteering even easier for our employees, can use for volunteerand has enabled us to reach more people through our programming.
As in all aspects of our business, the COVID-19 pandemic had an immediate impact on our approach to community engagement. As we learned more about how COVID-19 was impacting our communities, we reassessed the needs and recalibrated our programs to meet them. For example, in 2020 and 2021, we temporarily routed a portion of our community engagement funding toward COVID-19-related relief efforts, including working with partner organizations to provide access to food and supporting frontline healthcare workers and vulnerable members of society. This initiative reached approximately 131,000 beneficiaries in India in 2021.
Looking forward to 2022, we have added a new area of focus to our Skills to Win Initiative, which is focused on bringing STEM skills- and in particular, coding skills – to women and non-binary people in our communities. As of the date hereof, we have partnered with GirlCode in South Africa, Code First Girls in the United Kingdom, and Women Who Code in the United States.
We partner with non-profits and our clients to support corporate social responsibility initiatives, in education and skills, global health and disaster relief
Our Engagement Levels
Awards
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Sustainability and workplace health and safety
We are committed to responsible corporate citizenship through sustainable business activities and robust health and safety initiatives for our employees, contractors, clients, visitors and the communities in which we operate.
Objectives
Our leadership is dedicated to continuous improvement of our systems and our approach to sustainability and health and safety.
We have established objectives for our Company and individual worksites, which are integrated into our Environment, Health and Safety Management System and engage third party experts toassess our direct and indirect emissions and paper and water consumption.
We regularly assess our progress.
Certifications and Awards
All of our delivery centers in India and the Philippines areISO 14001:2015 certified, meeting international standards for effective environmental management systems.
31 of our delivery centers worldwide areOSHAS 18001:2007 certified, meeting international standards for effective occupational health and safety management systems.
Five of our delivery centers in India areISO 50001:2011 certified, meeting international standards for systemic approaches aimed at energy management and performance.
In 2019, we won the following awards and recognitions for our commitment to sustainability and workplace health and safety:
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Sustainability
Protecting our planet At EXL, we prioritize environmental stewardship and endeavor to minimize the environmental impact of We provide information relating to greenhouse gas emissions and climate impact in our Sustainability Report. We have participated in the CDP’s Climate Change disclosure program since 2018 and are working to reduce our emissions. Given that our energy consumption is primarily from our office facilities, we have taken measures to improve energy efficiency including, for example, an enterprise-level retrofit program to transform existing delivery centers into highly efficient buildings with smart automation, using technology such as modular power supplies to conserve energy and optimizing our use of real estate in light of the shift to working from home. Additionally, we have adopted a hybrid in-person For more information on efforts toward protecting our planet, please refer to our Sustainability Report, available on our website at www.exlservice.com/about/sustainability. We expect to report our 2021 progress in our 2021 Annual Sustainability Report to be published during 2022. Human rights and sustainable supply chain
Our Human Rights Policy details our commitment to human rights and our zero tolerance policy with respect to workplace harassment and discrimination and preventing forced labor and trafficking and other abuses.
In order to ensure that our suppliers’ business conduct aligns with our expectations, we conduct background investigations of new suppliers to collect information on their policies and performance relating to economic and environmental matters, and human rights, data privacy, product safety and working conditions. In 2021 we began the process of rolling out Supplier Standards of Conduct to suppliers, which sets out |  |
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Sustainability
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commitments relating to creating a more sustainable and responsible world through addressing human rights, labor rights and environmental issues, and ask suppliers to attest to their compliance. We maintain the right to review our suppliers’ practices in the future.
We seek to procure our materials from local suppliers, to the extent feasible.
Human Capital ManagementOur supplier diversity programs encourage the engagement of supplier of diverse backgrounds, including, without limitation, suppliers owned by people belonging to minority groups, women, the gay, lesbian, bisexual and transgender community, and veterans, specially-abled people, and small business enterprises.
Supporting and developing our people
Our people are our primary assets. The world we work and live in is full of diversity and powered by innovation. We believe success in such a world will come through an environment that embraces diversity of thought. In line with our core values, one of our principal priorities is promoting the talent of our employees while creating an inclusive work environment to permit us to leverage our employees’ diversity and to deliver exceptional results for our clients. We have an active employee relations function to ensure that we regularly communicate with and understand our employees, and are able to swiftly respond to specific needs and concerns as they arise. We periodically conduct employee surveys to monitor our employee satisfaction and engagement.
Headquartered in New York, as of March 31, 2022, we are made up of over 39,000 professionals, with more than 50 offices spanning six continents.
EXL locations
Our People
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EXL is made up of more than32,700 professionals (as of March 31, 2020) in locations throughout the United States, the United Kingdom, Europe, India, the Philippines, Colombia, Australia and South Africa.Sustainability
Diversity, &equity and inclusion (“DEI”) is a focus at EXL, as we believe that our employees’ diversity of thought and experience are key to our ability to innovate on a global scale, in line with our long-term corporate strategy. Our DEI program is led by our Chief Human Resources Officer, together with our Diversity and Inclusion
Council, and is ultimately overseen by our board. Our Diversity and Inclusion Council consists of a global, diverse mix of leaders, provides inputs to the design of our diversity and inclusion program to bring in diverse perspectives, collaborates with external partners for customization inputs, conducts periodic reviews of the progress of our program and provides execution leadership for specific diversity initiatives.
We seek to improve diversity and inclusion through offering a blendof in-person workshops, virtual sessions, and e-learning programs.
We are committed to hiring a diverse workforce and to improving diversity in our senior leadership, and include diversity and inclusion among the guiding principles in our talent acquisition, training and retention practices.
We have several Company-wide initiatives aimed at promoting diversity, inclusion and leadership opportunities for our diverse employees:
| 45%* | 65%* | |||||||
| Gender Diversity Company-wide | Gender Diversity Company-wide Vice President and Up | Gender Diversity | Racial and Ethnic Diversity** U.S. Reporting Employees | Racial and Ethnic Diversity** Senior Management | ||||
*As of December 31, 2021.
**Any group other than White, Non-Hispanic
***Executive Committee and Operating Committee
Our DEI program is designed around three pillars: capability development, communication and recruitment. Key features of our DEI program are as follows:
| We seek to improve diversity and inclusion through offering a blend of in-person workshops, virtual sessions, and e-learning programs. |
| We are committed to hiring a diverse workforce and to improving diversity in our senior leadership, and include diversity equity, and inclusion among the guiding principles in our talent acquisition, training and retention practices. | |
We expect drive greater diversity within our workforce through a combination of promotion within our organization and external hiring, accounting for any attrition of existing employees. |
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| Pay equity is an important tenet of our long-term strategy. We completed a pay equity study in 2021 through a third party consultant to review pay variations among our employees, and identify whether any gaps exist that are attributable to factors that are contrary to our mission of Company-wide pay equity, including gender or racial/ethnic group. Our assessments did not reveal any systematic pay inequity. |
| We have several Company-wide initiatives aimed at promoting diversity, equity and inclusion and leadership opportunities for our diverse employees, including several initiatives that are focused specifically on supporting and developing women at EXL: | |
•Managing Unconscious Bias Training, Company-wide, mandatory training for all employees to bring awareness to and address unconscious bias in the workplace to create a more inclusive workplace | ||
•Executive Women VP Development Program, a nine-month leadership development program offered to all of our women vice presidents in 2021 that includes virtual courses and workshops on executive leadership offered through Cornell University’s eCornell platform, coaching and mentoring for strategic leadership capability development and leadership conversations between participants and our executive and operating committee members on DEI issues | ||
•Employee Resource Groups, focus groups of select employee-communities aimed at supporting diverse groups and interests within the Company | ||
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Sustainability
• Diversity and Inclusion Springboard – Make your Mark, a six-month certification program for women at the mid- to senior-level for personal and professional advancement | ||
• “Super Mom,” a program to improve retention and engagement of new mothers through employee-friendly parental leave policies, flexible / reduced working hours for pre- and post-maternity, reorientation after long leave, extended leave, nursing stations and employee care, among others | ||
• WE (Women at EXL), a platform with initiatives such as Employee Resource Groups, a mentoring program (WE NURTURE), inner circles, women back to work, web chat series and face-to-face talks | ||
• In 2021 we expanded our U.S. paid parental leave benefit | ||
WE (Women at EXL), a platform with initiatives such as Employee Resource Groups, Mentoring program (WE NURTURE), Inner circles, Women back to work, Series of web chatsTalent recruitment, development and face to face talks. WE has been designed to enable women atretention
Talent-first mindset | Integrated talent management framework | Active role for senior leadership | Continuous employee development | |||
| We view talent as a differentiator for our Company’s competitive advantage and, under the leadership of our board of directors and senior executives, are committed to a talent-first mindset. | We maintain an integrated talent management framework, employing active collaboration between our recruitment, capability development and human resource functions. | Our senior leadership team and board of directors play a critical role in defining our talent priorities to align with our strategic vision for each of our business units, as well as with our clients’ priorities. | We focus continuously developing our employees through our rigorous promotion standards, client and industry-specific training and competitive compensation packages that include incentive- based compensation. | |||
We consider EXL to advance their careersbe a “learning” company, and achieve professional growth through discussion, collaboration, networking, training, development and mentorship opportunities
We are committed to buildingpromote a strong network of diverse suppliers through our U.S. supplier diversity program, which provides opportunities to small businesses and minority, veteran disability, LGBT and women-owned businesses.
Talent Recruitment, Development and Retention
We view talent as a differentiator for our Company’s competitive advantage and, under the leadership of our board of directors and senior executives, are committed to a talent-first mindset.
We maintain an integrated talent management framework, employing active collaboration between our recruitment, capability development and human resource functions.
Our senior leadership team and board of directors play a critical role in defining our talent priorities to align with our strategic vision for each of our business units, as well as with our clients’ priorities.
We focus on recruiting the right talent and continuously developing our employees through our rigorous promotion standards, client and industry-specific training and competitive compensation packages that include incentive-based compensation.
self-learning culture. We have institutionalized a comprehensive set of practices, processes and programs to create an active learning culture and to proactively build market-relevant talent within our Company in four stages:
Prejoining: Assessments, development on online learning platforms
Onboarding: Company orientation, trainings and informal team meetings
Job readiness: Education on client processes, tools and technologies, communication effectiveness and cultural sensitivity
Ongoing development: Continued formal learning activities, on the job, supervisor feedback and coaching, regular talent reviews and talent inventory succession, leadership training to identify and develop new leaders
Our capability development framework is focused on developing our employees’ digital and domain expertise and leadership.leadership as a means to develop our talent internally. We do this through our learning academies, and through partnerships with industry organizations, institutes, business schools and consulting firms.
In 2021, we continued to use our capability ecosystem that permits our employees to engage in self-directed learning by participating in collaborative trainings that are personalized to their interests and positions and are delivered virtually from any location, at any time.
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Sustainability
Academies
2019 Trainings:2021 Training
99+% of employees31,400+ trainedemployees completed one or more trainings in “Digital Intelligence” and EXL’s proprietary “Digital EXLerator” framework for delivering digital, transformation to our clients
99+% of employeestrained in diversity and inclusion – managing unconscious bias
2100+570,800+ learninghours invested by our employees on their professional development
15.1 hours average time per employeespent on reskilling for critical digital, domain, functional and leadership capabilities
219,350+ courses and certifications completed by our employees
1,000+ managers trained and certified in “Leading in a virtual environment”
1,100+ employees participated in the “Be the Leader who matters” leadership program
1,400+ managers participated in a leadership course titled “Why should anyone be led by you”
17.2 training hours completed by 80% of our employees on the digital ecosystem
3,200+ specializations in cloud, analytics, artificial intelligence solution architecture, product & data management, and other digital technologies/methodologies.
100+ Vice Presidents completed an artificial intelligence masterclass learning series
6,200+employees trained on variousin domain capabilities across industry verticals
1,581 analysts trained in using analytics tools and technologies (data visualization, artificial intelligence, data science)
6552,481 employees trained on digital methodologies
Some of our employees, including some of our managers, have participated in other trainings (including one titled “Leading high-performance teams”) and received certifications such as the CX transformation professional certification.
450team leadersEmployee engagement and communication
We consider communication and engagement with our more than 39,000 employees distributed throughout more than 50 offices worldwide to be important to our ability to promote our ONE EXL culture that prioritizes inclusivity and collaboration. This was especially true in 2021, when 93% of our employees worked remotely. We continued to rely on, and improve, our digital communication and collaboration platforms and multi-channel approach to keeping our employees informed that we built out in 2020
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Sustainability
in response to COVID-19, including virtual town halls on leadership and employee-wide levels and using EXL Social, our app-based employee-exclusive communications platform to provide comprehensive information and updates on status, actions and key decisions.
We also conducted confidential digital employee engagement surveys in 2021, with more than 90% participation among our employees. These surveys included questions relating to remote work productivity and support, manager support, career growth and overall employee satisfaction and engagement. The results of these surveys were trainedshared with management by business unit and geography.
Benefits
| Enhanced leave for employees impacted by COVID-19 and for employees receiving COVID-19 vaccines | |
| Paid leave for new parents | |
| Excused days of absence | |
| Generous vacation policy | |
| Paid holidays | |
| Employee assistance program providing confidential counseling services | |
Our employees also participate in our new leaders training
| Annual bonuses or incentives: 100% of our employees are eligible to receive | |
| 401K plans with Company match: 100% of our U.S. employees are eligible to enroll within three months of their employment at EXL | |
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550team leaders were trainedSustainability
Employee health, safety and wellbeing
Because our people are so important to us, we have always viewed employee health, safety and wellbeing as one of our top commitments. We periodically provide trainings on health and safety to our employees, suppliers and partners. In 2021, 90% of our employees completed our health and safety training e-module. We also conduct a risk assessment every six months with the aim of minimizing risk in operations management
Over the past two years, given COVID-19, our commitment to employee health, safety and wellbeing has become even more important. In 2021, we took actions that focused on supporting our employees’ health, safety and wellness, including:
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1,030employeeSustainability
Cybersecurity at EXL
We are committed to protecting the confidentiality, integrity, availability and privacy of the information assets of our clients and their customers, as well as our employees, vendors and any other third parties, that are shared with us and for which we are responsible and have developed robust information security and cybersecurity and data privacy controls, safeguards and enabling measures in accordance with applicable laws, regulations and information security standards.
We have implemented and maintain, and regularly improve upon, tools and capabilities to identify, protect, detect, respond and recover from cyber threats, incidents and attacks; reduce vulnerabilities; and minimize the impact from cyber incidents. We have an established culture of compliance around cybersecurity matters, and have a strong governance program built upon and supported by policies and processes, tools and technologies, and periodic knowledge and awareness training. Each of our employees receives periodic knowledge and awareness training on risk mitigation and management and controls and procedures relating to information security, cybersecurity and data privacy.
We comply with and/or are certified in the insurance, healthcare, travel, transport and logistics and finance and accountingfollowing standards:
ISO 27001:2013 Global Information Security Standard – Company-wide | PCI DSS 3.2.1 Credit Card and Payment Industry Certification – India, Philippines and South Africa operations | SOX 404 / SSAE 16, SOC 1 and SOC 2 – Company-wide | Hitrust Certification – healthcare operations | ISO22301 Business Resiliency Certification – India, Philippines and South Africa operations |
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We have an active employee relations function to ensure thatwe regularly communicate with and understand our employees, and are able to swiftly respond to specific needs and concerns as they arise.Sustainability
For more information on our cybersecurity risk management, please see “Cybersecurity risk management” on page 42. For more information on our information security and data privacy procedures, please refer to our Sustainability Report, which is available on our website at www.exlservice.com/corporate-sustainability.
Responsible artificial intelligence
We seek to ensuring that our use of artificial intelligence (including in machine learning processes and deep learning processes) in our business and operations is ethical and trustworthy. We emphasize data integrity as key to eliminate bias in the application of AI. In 2021, we created a new global AI Governance Policy and framework, and a new cross-functional AI Governance Committee that oversees and governs our use of AI, with the overall aim of vetting and minimizing potential unethical or unlawful biases in AI processes. Pursuant to our AI Governance Policy, for each deployment of AI deployments, our business teams are guided by our AI bias policies and, in many cases, include a risk assessment exercise. Applicable employees also participate in trainings to identify and reduce bias in AI.
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Sustainability
Achievements, certifications and awards
Health and safety management system, and 72% of our delivery centers as of December 31, 2021, are certified to ISO45001:2018, meeting international standards for occupational health and safety | ||||
All of our delivery centers worldwide outside of the United States are ISO 14001:2015 certified, meeting international standards for
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Participant in the CDP’s Climate Change disclosure program with respect to GHG emissions and climate change data |
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Safety Excellence Award for Women’s Safety 2021 | Industry Sector Safety Award (IT/ITES) 2020 | Safest Workplace Award 2021 | ||||||||||
| International Institute of Safety & Security Management (IISM) Global Conclave | International Institute of Safety & Security Management (IISM) Global Conclave | World Safety Forum | ||||||||||
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EHS Award 2021 | COVID-19 Assurance | 2022 Most Trusted | ||||||||||
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World Safety Forum | British Safety Council | Newsweek | ||||||||||
Environmental, social and governance matters and pay-for-performance at EXL
A portion of our CEO’s total compensation is tied to the achievement of specific performance goals relating to ESG matters. For more information, see “Detailed review of compensation components – Incentive bonus – Determination of individual performance measure achievement” on page 75.
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Sustainability
Sustainability oversight
For more information on our oversight of sustainability and ESG-related matters and risks, see “Environmental, social and governance risk management” on page 42.
Learn more about sustainability and environmental, social and governance matters at EXL
Please visit www.exlservice.com/about/sustainability to learn more about our efforts toward sustainability and the impacts we are making on our communities and the environment. Information on our website referred to in this Proxy Statement does not constitute a part of this Proxy Statement.
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Our executive officers
Our Executive Officersexecutive officers
| Rohit Kapoor (age 57) |Vice Chairman and CEO See section entitled “Our board of directors” above. | |
| Ajay Ayyappan (age 44) |Senior Vice President, General Counsel and Corporate Secretary Mr. Ayyappan has served as our Senior Vice President, General Counsel and Corporate Secretary since December 2018 and our Vice President, Acting General Counsel and Corporate Secretary since August 2018. He previously served as Vice President, Deputy General Counsel and Assistant Secretary from April 2014 to August 2018 and Vice President and Assistant General Counsel from March 2007 to March 2014. Prior to joining us, Mr. Ayyappan was a corporate associate at the law firm of Morgan, Lewis & Bockius LLP. | |
| Vikas Bhalla (age 50) |Executive Vice President and Business Head, Insurance Mr. Bhalla has served as our Executive Vice President and Business Head, Insurance since January 2014 and as our Head of Outsourcing since November 2009. He previously served as Vice President, Operations of EXL India from June 2006 to October 2009 and as Vice President, Migrations, Quality and Process Excellence of EXL India from April 2002 to June 2006 and as Director, Quality Initiatives of EXL India from May 2001 to March 2002. From May 1998 to May 2001, Mr. Bhalla served in various capacities at General Electric, including as the Quality Leader and E-Business Leader for GE Plastics India. Mr. Bhalla is based in Delhi, India. | |
| Vivek Jetley (age 47) |Executive Vice President and Business Head, Analytics Mr. Jetley has served as our Executive Vice President and Business Head, Analytics since January 2020. He previously served in various leadership roles with us, including heading enterprise strategy and setting up a strategic deal team. Mr. Jetley has been with EXL since 2006. Prior to joining us, Mr. Jetley was a Partner at Inductis. | |
| Narasimha Kini (age 53) |Executive Vice President and Business Head, Emerging Business Mr. Kini has served as our Executive Vice President and Business Head, Emerging Business since October 2021. He previously served in several leadership roles with us, including in our strategic initiatives and finance and accounting services. Mr. Kini has been with EXL since 2001. Prior to joining us, Mr. Kini was a Finance Leader at Willis Faber. | |
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Rohit Kapoor(age 55)Vice Chairman and CEOSee section entitled “Our Board of Directors” above.Our executive officers
Ajay Ayyappan (age 42)Senior Vice President, General Counsel and Corporate Secretary
Mr. Ayyappan has served as our Senior Vice President, General Counsel and Corporate Secretary since December 2018 and our Vice President, Acting General Counsel and Corporate Secretary since August 2018. He previously served as Vice President, Deputy General Counsel and Assistant Secretary from April 2014 to August 2018 and Vice President and Assistant General Counsel from March 2007 to March 2014. Prior to joining us, Mr. Ayyappan was a corporate associate at the law firm of Morgan, Lewis & Bockius LLP.
Pavan Bagai (age 58)President and Chief Operating Officer
Mr. Bagai has served as our President and Chief Operating Officer since April 2012, as our Chief Operating Officer from May 2008 to March 2012 and as Vice President, Head of Outsourcing Services of EXL India from June 2006 until April 2008. In addition, he served as our interim Chief Financial Officer from December 2019 through February 2020. He previously served as Vice President, Research and Analytics of EXL India from December 2004 to May 2006, as Vice President, Operations of EXL India from November 2003 to November 2004 and as Vice President, Strategic Businesses of EXL India from July 2002 to November 2003. Prior to joining us, Mr. Bagai served in various capacities in several business areas across markets in Europe and Asia, including India, at Bank of America beginning in 1985.
Vikas Bhalla (age 48)Executive Vice President and Business Head, Insurance
Mr. Bhalla has served as our Executive Vice President and Business Head, Insurance since January 2014 and as our Head of Outsourcing since November 2009. He previously served as Vice President, Operations of EXL India from June 2006 to October 2009 and as Vice President, Migrations, Quality and Process Excellence of EXL India from April 2002 to June 2006 and as Director, Quality Initiatives of EXL India from May 2001 to March 2002. From May 1998 to May 2001, Mr. Bhalla served in various capacities at General Electric, including as the Quality Leader and E-Business Leader for GE Plastics India.
Vivek Jetley (age 45)Executive Vice President and Business Head, Analytics
Mr. Jetley began serving as our Executive Vice President and Business Head, Analytics in January 2020. He previously served in various leadership roles with us, including heading enterprise strategy and setting up a strategic deal team. Mr. Jetley has been with EXL since 2006. Prior to joining us, Mr. Jetley was a Partner at Inductis.
Anita Mahon (age 53) |Executive Vice President and Chief Growth Officer Ms. Mahon has served as our Executive Vice President and Chief Growth Officer since March 2020. Prior to joining us, Ms. Mahon served as Vice President, Data, Strategy & Portfolio Officer at IBM Watson Health, a business unit focused on developing cognitive and data-driven technologies to advance health. Ms. Mahon joined IBM in 2016 through its acquisition of Truven Health Analytics, a healthcare information and analytics business, where she served as Chief Strategy Officer. Prior to Truven, she held other leadership roles that placed her at the intersection of strategy, technology and analytics. | ||
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Samuel Meckey (age 51) |Executive Vice President and Business Head, Healthcare
Mr. Meckey has served as an Executive Vice President since November 2018 and as Business Head, Healthcare beginning in 2019. Prior to joining us, Mr. Meckey served as President of UnitedHealth Group’s Optum Global Solutions and before that has held various executive roles at UnitedHealth Group, where he was employed from May 2004 to June 2018. Prior to joining UnitedHealth Group, Mr. Meckey was an officer and naval aviator in the United States Navy from May 1992 to August 2002.
Nalin Miglani (age 61) |Executive Vice President and Chief Human Resource Officer
Mr. Miglani has served as our Executive Vice President, Chief Human Resource Officer since December 2014. Mr. Miglani is responsible for the global human resources function at the Company. Prior to joining the Company, he was the Chief HR and Corporate Development Officer for Nutreco, based in Amsterdam, Netherlands, from March 2013 to November 2014. Mr. Miglani also served as the Chief HR and Communications Officer for Tata Global Beverages Company, London, UK, from June 2008 to February 2013. In addition, Mr. Miglani held various global and regional HR leadership roles around the world during his career at The Coca-Cola Company and British American Tobacco.
Anita Mahon (age 51)Executive Vice President and Chief Growth Officer
Ms. Mahon began serving as our Executive Vice President and Chief Growth Officer in March 2020. Prior to joining us, Ms. Mahon served as Vice President, Data, Strategy & Portfolio Officer at IBM Watson Health, a business unit focused on developing cognitive and data-driven technologies to advance health. Ms. Mahon joined IBM in 2016 through its acquisition of Truven Health Analytics, a healthcare information and analytics business, where she served as Chief Strategy Officer. Prior to Truven, she held other leadership roles that placed her at the intersection of strategy, technology and analytics.
Samuel Meckey (age 49)Executive Vice President and Business Head, Healthcare
Mr. Meckey has served as an Executive Vice President since November 2018 and as Business Head, Healthcare beginning in 2019. Prior to joining us, Mr. Meckey served as President of UnitedHealth Group’s Optum Global Solutions and before that has held various executive roles at UnitedHealth Group, where he was employed from May 2004 to June 2018. Prior to joining UnitedHealth Group, Mr. Meckey was an officer and naval aviator in the United States Navy from May 1992 to August 2002.
Nalin Miglani (age 59)Executive Vice President and Chief Human Resource Officer
Mr. Miglani has served as our Executive Vice President, Chief Human Resource Officer since December 2014. Mr. Miglani is responsible for the global human resources function at the Company. Prior to joining the Company, he was the Chief HR and Corporate Development Officer for Nutreco, based in Amsterdam, Netherlands, from March 2013 to November 2014. Mr. Miglani also served as the Chief HR and Communications Officer for Tata Global Beverages Company, London, UK, from June 2008 to February 2013. In addition, Mr. Miglani held various global and regional HR leadership roles around the world during his career at The Coca-Cola Company and British American Tobacco.
Maurizio Nicolelli (age 51)
53) |Executive Vice President and Chief Financial Officer
Mr. Nicolelli was appointedhas served as our Executive Vice President and Chief Financial Officer of the Company in Januarysince February 2020. Prior to joining the Company, Mr. Nicolelli served as Senior Vice President and Chief Financial Officer of Casa Systems beginning in 2019. He previously served 23 years at FactSet Research Systems, where he was Senior Vice President, Principal and Chief Financial Officer from 2009 to 2018.
Ankor Rai (age 46) |Executive Vice President and Chief Digital Officer
Mr. Rai has served as our Executive Vice President and Chief Digital Officer since October 2021. He previously served in several leadership roles with us, including as the global co-head of our Analytics business. Mr. Rai has been with EXL since 2006. Prior to joining us, Mr. Rai was a Partner at Inductis.
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Compensation Discussion and Analysis
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Executive compensation
Compensation Discussion and Analysis
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Executive compensation
As determined in accordance with SEC rules, our named executive officers (“NEOs”) for 2021 are:
Rohit Kapoor, our Vice Chairman and CEO
Maurizio Nicolelli, our Executive Vice President and CFO
Vikas Bhalla, our Executive Vice President and Business Head, Insurance
Vivek Jetley, our Executive Vice President and Business Head, Analytics
Samuel Meckey, our Executive Vice President and Business Head, Healthcare
Select 2021 financial and business highlights
Our annual revenues increased 17.1% from $958.4 million in fiscal year 2020 to $1.12 billion in fiscal year 2021. Analytics revenue increased 27.0% and digital operations and solutions revenue increased 11.1%.
Our operating income margin increased by 240 basis points from 11.5% in 2020 to 13.9%. Factors contributing to the increase were improved utilization of people and facilities and lower travel expenses, partially offset by higher sales and marketing expenses and employee costs, including bonuses.
We improved our net income attributable to stockholders by 28.3% to $114.7 million.
Diluted EPS increased from $2.59 to $3.35, an increase of 29.3%.
Added approximately 5,000 employees to our global work force, mainly in our delivery centers.
We acquired Clairvoyant AI Inc., a global data, AI, and cloud services firm.
In 2021, the Company returned capital to stockholders by repurchasing $115.6 million of shares. The Company’s board of directors authorized a $300 million common stock repurchase program beginning January 1, 2022.
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Named Executive Officers
As determined in accordance with SEC rules, our named executive officers (“NEOs”) for 2019 are:
Executive Summary
Executive compensation The following graphs compare our 1-year, 3-year and 5-year cumulative total stockholder return (“TSR”) as of December 31, 2021 with the median TSR of companies comprising Nasdaq, S&P 600 and our peer group. As shown in the table, our 1-Year, 3-Year and 5-Year 3-Year TSR 5-Year TSR Awards and industry recognition Our people are our primary assets, and they continue to be recognized across the industry. As in prior years, we continued to receive numerous industry recognitions and awards, including: Recognized as a Leader in the Everest Group Advanced Analytics and Insights Services PEAK Matrix® and Healthcare Analytics Services PEAK Matrix®Assessments Named a Top Performer in Recognized as a Leader in all four categories in the ISG Provider Lens™ for Digital Finance and In 2021, we won 58 new clients adding to the 45 new clients we won in 2020. In the past year, revenue from our top 20 clients grew by 17.1%, with 15 of those clients contracting for our solutions in both analytics and digital operations and solutions. / Executive compensation Summary of key compensation considerations & decisions in 2021 The following highlights the Compensation Committee’s key considerations and compensation decisions in 2021 and with respect to performance for 2021 for our NEOs. Items Considerations and decisions Over 99% of our stockholders approved, on a non-binding basis (excluding broker non-votes), of our compensation of our NEOs. Base salaries for our NEOs (excluding Mr. Nicolelli) were revised effective April 1, 2021, as described below. We based our annual bonuses on achievement of Company goals (Adjusted EPS, revenue, & AOPM) and personal performance goals. In 2021, we delivered 118.77% of our Adjusted EPS target, 103.83% of our revenue performance target, and 116.49% of our AOPM target, resulting in annual incentive payout calculations for our NEOs, ranging from 176% of target performance to 188% of target performance of the named executive officers. This was the third and final performance year for the 2019 performance-based restricted stock units. We achieved 96.65% of the revenue target for the revenue-linked restricted stock units resulting in 66.52% of target funding of those grants. The Company’s TSR performance was at the 87.23 percentile amongst its peer group, resulting in the executives earning 200% of the 2019 relative TSR-linked restricted stock units pursuant to the terms of the original grant resulting in vesting of shares at 133.25% of target performance. No adjustments were made to the 2019 performance-based restricted stock units or the associated performance targets – or the outstanding 2020 and 2021 performance-based restricted stock units or associated performance targets. We also made additional equity grants to certain executive officers (other than our CEO) to further encourage long-term stock ownership and future executive retention. Our executive compensation philosophy is focused on pay-for-performance. In this regard, we link a significant portion of each NEO’s total compensation to the achievement of specified performance goals. This variable compensation is “at-risk” and rewards performance and contributions to both short- and long-term financial performance Executive compensation As illustrated by the following charts, the majority of compensation that may be earned by our named executive officers is tied to the achievement of financial performance metrics (annual performance bonuses and PRSUs) or fluctuates with the underlying value of our common stock (RSUs). *Base salary also includes other compensation / Executive compensation Executive compensation program, practices and policies Our compensation programs, practices and policies are reviewed and re-evaluated regularly and are subject to change from time to time in line with market best practices, including alignment of pay with performance. Our executive compensation philosophy is aligned with our core values, focused on pay-for-performance and designed to reflect appropriate governance practices aligned with the needs of our business. Listed below are some of the Company’s more significant practices and policies that were in effect during fiscal year 2021, which were adopted to drive performance and to align our executives’ interests with those of our stockholders. What we don’t do Align our executive pay with performance: We link a significant portion of each NEO’s total compensation to the achievement of specific performance goals. Use appropriate peer groups when establishing compensation: We established a peer group to help us review market practices and We set compensation of our executive officers at levels that we believe are Ensure equity compensation best practices: We design equity incentives to encourage our executives to maintain a long-term view of stockholder value creation, to encourage retention and to ensure a significant portion of the award is performance-based. Equity awards are granted on the basis of the executive’s prior year’s performance and are subject to We hold dividends accrued under our equity awards, if any, until the recipient vests in the underlying shares or units. / Executive compensation Maintain an independent Compensation Committee and consultant: Compensation decisions for our NEOs are approved by a Compensation Committee composed of non-employee independent directors. Our Compensation Committee is advised by an independent consultant who reports directly to the Compensation Committee and provides no other services to the Company or management. Limited perquisites: We No tax gross-ups:We do not provide “gross-ups” to any of our named executive officers, including gross-ups for any excise taxes imposed with respect to Section 280G (change-in-control payments) or Section 409A (nonqualified deferred compensation) of the No hedging: We maintain a policy in which the following persons are prohibited from engaging in hedging transactions involving our shares and Maintain a robust stock ownership policy: We maintain a stock ownership policy that requires our CEO to maintain aggregate stock ownership equal to at least six times his base salary and vested stock ownership equal to at least three times his base salary, and that, effective as of January 1, 2022, requires the other members of our executive committee to maintain vested stock ownership equal to at least two times their respective base salaries. Covered executives have three years from their hire date to attain the required stock ownership levels (or three years from January 1, 2022 for existing covered executives). We maintain a similar stock ownership policy for our non-employee directors that requires directors to maintain stock ownership of at least five times their respective annual retainers. Directors have five years from their appointment date to attain the required stock ownership levels. As of December 31, 2021, all covered executives and directors were in compliance with the stock ownership policy. / Executive compensation Overview of compensation policies and philosophies We believe that our long-term success is linked to our ability to recruit, train, motivate and retain employees at every level. There is significant competitive pressure in our industry for qualified managers with a track record of achievement. It is critical that we recruit, train, motivate and retain highly talented individuals at all levels of the organization who are committed to our core values of innovation, collaboration, excellence, integrity and mutual respect. We believe that our executive compensation programs are integral to achieving this end. Our Compensation Committee bases its executive compensation programs on the following objectives, which guide us in establishing all of our compensation programs: Compensation should be based on responsibility and performance. Our compensation program should deliver top-tier compensation in return for top-tier individual and company performance, and lower tier compensation for individual performance and/or our performance that falls short of expectations. Pay-for-performance and retention must be balanced in order to ensure ongoing motivation and commitment of our employees. Compensation should balance long-term and short-term objectives. Equity-based compensation should be higher for persons with higher levels of responsibility and greater influence on long-term results. To enable us to attract and retain top talent, compensation should reflect the value of the job in the marketplace. Compensation programs should be easy to understand. Compensation should be administered uniformly across the Company with clear- cut objectives and performance metrics. / Executive compensation Compensation process: roles and responsibilities Our Compensation Committee has established a number of processes to assist it in ensuring that our executive compensation programs are achieving their objectives. Our Compensation Committee, our management and our independent compensation consultant are each engaged in these processes, as described in greater detail below. Company performance – Compensation Committee Establishment of performance measures At the beginning of each year, or the end of the prior year, our Compensation Committee establishes the Company-wide and relevant business line performance measures on which our named executive officers’ annual incentive bonuses and equity incentive awards are largely based. These measures reflect targets that are intended to encourage stretch performance. Assessment of Company performance At the end of the performance period, the Compensation Committee reviews and certifies our performance achievement in relation to the pre-established targets, and considers the appropriateness of adjustments to the performance criteria and calculations of performance achievement. Individual performance – board of directors, Compensation and Nominating and Governance Committees, and Vice Chairman and CEO The evaluation of an individual’s performance determines a portion of the payouts under our incentive bonus program and also influences any changes in base salary for each of our named executive officers. Assessment of Vice Chairman and CEO performance For Mr. Kapoor, our board of directors reviews and provides feedback on a self-evaluation prepared by Mr. Kapoor. Once all directors have given feedback on Mr. Kapoor’s performance, our Chairman leads a comprehensive discussion of the full board of directors on Mr. Kapoor’s performance, leadership accomplishments and overall competence to evaluate the achievement of established objectives. Assessment of performance for all other NEOs and executive officers For all other NEOs and executive officers, Mr. Kapoor makes a performance assessment and compensation recommendation to our board of directors. He bases the performance assessments on our named executive officers’ self-evaluations and his performance appraisals of each of them. Our board of directors reviews the performance assessments with Mr. Kapoor, and evaluates the achievement of established objectives by each named executive officer and his business line, if applicable, and his contribution to our performance, leadership accomplishments and overall competence. The board of directors may exercise their judgment based on the named executive officer’s interactions with the board of directors. Other matters relevant to compensation decisions – Compensation Our Compensation Committee / Executive compensation For 2021, the • reviewing our executive pay philosophy • collecting and evaluating external market data regarding executive compensation and performance, • selecting peer group companies, • reviewing the Proxy Statement, • advising the Compensation Committee on developing trends and best practices in • advising the Compensation Committee on incentive plan design that aligns with our strategy. In addition Farient advises our Nominating and Corporate Governance Committee regarding director compensation. Other than performing these consulting services, Farient does not provide other services to us or our executive officers. We have affirmatively determined that no conflict of interest has arisen in connection with the work of Farient as compensation consultant for the Compensation Committee. Peer market data Compensation Committee and independent compensation consultants We review peer compensation data at the beginning of the year (or the end of the prior year) in order to set compensation for each year. At the time compensation decisions were made for our U.S.-based and other senior executive officers in 2021, our Compensation Committee reviewed publicly available compensation data for companies that are engaged in business and technology services like us taking into account whether the companies had market capitalizations, geographic locations, or annual revenues similar to ours. The companies that comprised our peer group for 2021 were as follows: Blackbaud, CoreLogic, CSG Systems International, Inc., EPAM Systems, Inc., Genpact Limited, Guidewire Software, Inc., Sykes Enterprises, Virtusa, WNS (Holdings) Limited. In the middle of 2021, we, alongside our independent compensation consultant, reevaluated our peer group in light of various M&A activity as well as new criteria, consisting of companies that are similar to us in terms of annual revenue, operate in similar industries, have similar business models as ours. This new group was used for certain 2021 compensation decisions as well as 2022 compensation decisions and consists of Cloudera, Inc. (acquired), CSG Systems International, Inc., EPAM Systems, Inc., Genpact Limited, Guidewire Software, Inc., Inovalon Holdings, Inc. (acquired), Perficient, Inc., Splunk Inc., Sykes Enterprises, Incorporated (acquired), Teradata Corporation, TTEC Holdings, Inc., Verisk Analytics, Inc., MultiPlan Corporation, WNS (Holdings) Limited. The following chart shows the respective industries and revenues of our peer group companies: Revenue ($MM, USD) / Executive compensation Management also separately engaged Aon Consulting in 2019 for the purpose of providing a survey of compensation data (the parameters of which were not prepared by Aon Consulting) for individuals in our global industry holding analogous positions to our executive officers. While the Compensation Committee reviewed and considered the data provided by these surveys, it did not consider or review the compensation paid to executives at the component companies included within such surveys and did not use this information or any other data as a definitive benchmark to set executive compensation for fiscal year Our Compensation Committee reviews compensation information provided by Farient and other third party data in order to evaluate each executive’s base pay, incentive bonus and equity incentives when changes in compensation are considered. Compensation decisions are designed to promote our fundamental business objectives and strategy. Our Compensation Committee uses the compensation data to obtain a general understanding of current market practices, so it can design our executive compensation program to be competitive. Market data is not used exclusively, but rather as a point of reference to draw comparisons and distinctions. Components of executive compensation for 2021 For 2021, the compensation of executive officers consisted of the following five primary components: Compensation component Description Objectives Base salary Fixed compensation that is reviewed annually and is based on performance, experience, responsibilities, skill set and market value. Provide a base level of compensation that corresponds to the job function performed. Attract, retain, reward and motivate qualified and experienced executives. Annual incentives “At-risk” compensation earned based on performance measured against pre-established annual goals. 75% of each NEOs award is tied to company-wide performance with the remaining 25% to the achievement of individualized goals. Incentivize executives to achieve annual goals that ultimately contribute to long-term company growth and stockholder return. Long-term incentives “At-risk” compensation in the form of restricted stock unit awards whose value fluctuates according to stockholder value. 50% of the award vests based on continued service. 50% vests based on achievement of total stockholder return goals. Align executive interests with those of stockholders. Reward continuous service with the company. Incentivize executives to achieve goals that drive company performance over the long-term. Other benefits Broad-based benefits provided to company employees (e.g., health and group insurance), a retirement savings plan and other personal benefits where appropriate. Provide a total compensation package that is competitive with the marketplace and addresses unique needs, especially for overseas executives. Severance and change Protect executives during potentially tumultuous corporate transaction. Provide reduced post-employment compensation upon other involuntary terminations. Allow executives to focus on generating stockholder value during a change in control transaction. Provide market-competitive post-employment compensation recognizing executives likely require more time to find subsequent employment. / Executive compensation Detailed review of compensation components As discussed above, we provide our executive officers fixed compensation commensurate with their performance, experience, responsibilities, skill set and market value. This attracts and retains an appropriate caliber of talent for the position and provides a base wage that is not subject to our performance risk. In setting base salaries for 2021, our Compensation Committee considered: Market data Upon completing its review, the Compensation Committee determined it was appropriate to maintain current base salaries for all of our named executive officers. While these salaries were first approved in February 2020, they did not take effect until April 1, 2021. The fixed compensation amount for Mr. Bhalla covers not only base salary, but also amounts available as a travel allowance, an automobile allowance, a housing allowance, a medical allowance and a cash supplementary allowance, consistent with compensation practices in India. 2021 Base salary Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey (1) Equivalent to $329,611, converted at 74.33 INR to 1 USD, which was the exchange rate on December 31, 2021. We have established an annual incentive bonus program in order to align our executive officers’ goals with our performance targets for the current year and to encourage meaningful contributions to our future financial performance. Our Compensation Committee approved the framework of our incentive bonus program in late 2020 for the year 2021 for bonuses payable in respect of 2021 performance. Under the program, bonus target amounts, expressed as a percentage of base salary or annual fixed compensation, are established for participants at the beginning of each year unless their employment agreements contain different terms. Funding of potential bonus payouts for the year are determined by our financial results for the year relative to predetermined performance measures and our assessment of each named executive officer’s performance relative to his predetermined individual performance goals. If our performance falls short of target, our aggregate funding of the annual cash bonus incentive pool declines. If we do not achieve a minimum threshold for the established financial performance objectives, then the bonus pool is not funded for that particular objective. Although the Compensation Committee has not historically done so, it has the discretion under the 2018 Plan to adjust an award payout from the amount yielded by the formula at the end of the performance period for reasons such as the effect of changes in laws or regulatory rules, acquisitions or divestitures, extraordinary accounting items, foreign exchange gains or losses, and/or any specific unusual or non-recurring events. The Compensation Committee did not utilize any discretion for the 2021 bonus awards. Executive compensation Our Compensation Committee considered the following when establishing the awards for 2021: Bonus targets Bonus targets were established based on job responsibilities and comparable market data. Our objective was to set bonus targets such that total annual cash compensation was within the broad middle range of market data and a substantial portion of that compensation was linked to our performance. Consistent with our executive compensation policy, individuals with greater job responsibilities had a greater proportion of their total compensation tied to our performance. During 2021, our Compensation Committee established the following bonus targets (expressed as a percentage of base salary or annual fixed compensation) as well as maximum bonus targets for each named executive officer. Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Business Line or Other Company Performance(2) Vivek Jetley Samuel Meckey Performance measures Our executives were eligible to earn annual bonuses based 75% on their achievement of Company-wide performance metrics with the remaining 25% based on individual performance. The Company-wide portion of 2021 annual bonuses were based 30% on the Company’s Adjusted EPS goal, 40% on the Company’s revenue goal, and 30% on the Company’s adjusted operating profit margin (AOPM) for all employees whose incentive bonus is linked to Company-wide financial performance, including our named executive officers. In 2021, the Compensation Committee continued to set the Company-wide performance goals as well as the individual performance goals described above for all named executive officers to ensure the executives were properly focused on the Company’s Adjusted EPS, revenue, and AOPM goals and other areas of performance that are unique to their positions within the organization. Executive compensation Determination of financial performance achievement For 2021, our Compensation Committee established an Adjusted EPS target of $4.05 14.7% higher than our actual Adjusted EPS for the prior year and 11.0% higher than the prior year’s target performance), a revenue target of $1.075 billion (12.0% higher than our actual revenue for the prior year and the same as our prior year’s target performance), and an AOPM target of $178.9 million (16.6% higher than our actual for the prior year and 8.2% higher than our prior year’s target). As shown below, the portion of incentive bonus payments that were subject to these financial performance measures could have ranged from zero to 210% of target depending on the achievement of the performance goals: Performance targets: adjusted EPS ($4.05); revenue ($1.075 billion); and AOPM ($178.9 million) % of performance achieved compared to target goal Above 110% 105% At 100% At 90% Less than 90% 0% Linear interpolation for performance between discrete points Based on our performance during the 2021 fiscal year, we achieved 118.77% of our Adjusted EPS target (resulting in funding of 210%), 103.83% of our revenue target (resulting in funding of 145.96%), and 116.49% of our AOPM target (resulting in funding of 210%) for a weighted funding of 184.39%. / Executive compensation Determination of individual performance measure achievement Our named executive officers earn a portion of their respective annual incentive bonuses based on the achievement of individual performance measures that are designed to balance the attention of the officer between the achievement of near-term objectives that improve specific processes or performance metrics and long-term objectives for us. For more information on the process, roles and responsibilities for determining individual performance measure achievement, please see “Compensation process: roles and responsibilities” on page 69. Below is a summary of each named executive officer’s individual performance measures, and a summary of the achievements and accomplishments toward meeting those performance measures: Named Executive Officer 2021 Individual performance measure 2021 Individual performance achievement RohitKapoor • Drive profitability • Improve return on invested capital (“ROIC”) • Execute on EXL’s digital strategy • Improve talent acquisition & development • Ensure agile decisioning and strengthen Enterprise Risk Management • Continue to advance ESG program • Strong growth across all business units, resulting in revenues for 2021 that were up $163.9 million, or 17.1%, compared to 2020 • ROIC increased to 12.6% in 2021, compared to 8.9% in 2020 • Developed a strong foundation of digital and established an • Increased focus on talent acquisition and strong progress on building expanded leadership and capabilities • Strengthened overall risk culture • Strong progress on ESG as outlined in EXL’s second annual Sustainability Report, including through progress in environmental stewardship, emphasis on employee development and wellness, and expansion of MaurizioNicolelli • Provide effective leadership to finance team • Drive profitability and improve ROIC • Execute on long term M&A strategy • Strong capital allocation • Led the finance team effectively, resulting in strong governance and high-quality controllership • Strong profitability and ROIC growth across all business units • Led the acquisition of Clairvoyant, broadening our data engineering and cloud computing capabilities • Drove capital allocation through EXL’s share buyback program and repayment of our convertible debt facility to improve ROIC VikasBhalla • Drive profitability for Insurance • Create and implement innovative data and analytics solutions • Improve Insurance ROIC • Insurance revenue grew to $382.0 million with strong gross margins • Developed digital-led solutions for insurance industry • Improved Insurance business ROIC in 2021 VivekJetley • Drive profitability and build high growth business for Analytics • Build EXL’s data management and cloud enablement capabilities, and build our data assets • Analytics revenue grew to $460.7 million with strong gross margins • Created significant foundational capabilities in data management and cloud enablement areas SamMeckey • Deliver profitable growth for Healthcare • Execute on EXL’s digital strategy • Improve ROIC for Healthcare • Healthcare revenues grew to $112.4 million with strong gross margins • Integrated digital solutions into EXL Healthcare business • Improved Healthcare ROIC / Executive compensation The table below sets out the 2021 incentive bonuses paid to our named executive officers (paid in March 2022): 2021 Actual incentive bonus awarded ($)(1) Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey The Compensation Committee continues to believe that long-term equity awards provide employees with the incentive to stay with us for longer periods of time, which in turn provides us with greater stability as we grow. These incentives foster the long-term perspective necessary for continued success in our business because the value of the awards is directly linked to long-term stock price performance, and they ensure that our executive officers are properly focused on stockholder value. Moreover, the Compensation Committee favors restricted stock unit awards as these awards offer executives the opportunity to receive shares of our common stock on or shortly following the date that the restrictions lapse. Such awards serve both to reward and retain executives because value is linked to the price of our stock on the date that the restriction lapses, and the executive must generally remain in employment through the date that the restrictions lapse. Restricted stock unit awards provide a significant degree of alignment of interests between our executives and stockholders. The Compensation Committee also believes that the mix between Time-Vested RSUs and Performance-Vested RSUs provides an appropriate balance between incentivizing our executives to continue their employment with the Company and to ensure they are focused on long-term financial performance and generating stockholder value, which will enable them to realize additional compensation. Finally, restricted stock units are potentially less dilutive to stockholders’ equity than stock options because restricted stock awards are full value awards, and our Compensation Committee can award fewer shares than an equivalent value of stock options. / Executive compensation Compensation Under our equity compensation program, our executive officers received restricted stock units under the 2018 Omnibus Incentive Plan approved by the Company’s stockholders at the annual meeting of stockholders held in June 2018 (the “2018 Plan”). We awarded restricted stock units to nearly all of our named executive officers in the proportions shown below. In response to the continuing COVID-19 pandemic, we revised our long-term equity incentive program for 2021 to remove the revenue performance metric because the uncertainty and market volatility caused by the pandemic made it difficult to predict a three-year revenue target. As a result, the 2021 PRSUs are based solely on TSR performance as compared to a pre-determined set of peer companies. Time-vested RSUs Relative TSR-linked PRSUs LTI award The table below shows the amount of Time-Vested and Performance-Vested RSUs our Compensation Committee awarded our named executive officers in 2021. In general, the Compensation Committee believes that the size of the award granted to an executive officer should increase based on the executive officer’s level of responsibility within the Company. Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey The “Time-Vested RSUs” will vest in increments of 25% on each of the first four anniversaries of the grant date, subject to continuous service with the Company through the applicable vesting date. The Compensation Committee believes these Time-Vested RSUs provide an important role in promoting retention of our executive officers. The “Performance-Vested” portion of the 2021 RSUs (“PRSUs”) cliff-vest on December 31 of the third fiscal year in the performance period, based on the achievement of relative total stockholder return performance of the Company against a peer group over the grant’s three-year performance period of January 1, 2021 to December 31, 2023 and continuous employment through December 31, 2023 — we call these awards “Relative TSR-Linked PRSUs.” The Company’s TSR for the TSR performance period will be computed and then compared to the TSR of the companies in the TSR peer group, which is comprised of the public companies traded on either the NYSE or NASDAQ stock markets in our 8-digit Global / Executive compensation Percentage of Relative TSR-Linked PRSUs Earned The percentage of Relative TSR-Linked PRSUs earned will be determined based on straight-line interpolation to the extent the Company’s TSR falls in between the 20th and 80th percentiles, as per the chart below: 80.0 or more 65.0 50.0 35.0 20.0 or less The Compensation Committee believes the PRSUs focus our executives on key drivers of our Company’s business that will ultimately lead to creation of additional stockholder value. In September 2021, we made additional equity grants to certain executives (other than the CEO) who are critical, sought-after talent needed for executing the Company’s strategy to promote long-term ownership, and alignment of executive and stockholder interests. Therefore, these additional equity grants were comprised of time-based RSUs that vest 1/3 on the second anniversary of the grant date and 2/3 on the third anniversary of the grant date, subject to continued employment. In addition, each award requires the executive to hold any acquired shares of Company stock for a period of two years following the applicable settlement date. The table below shows the amount of additional restricted stock units our Compensation Committee awarded our named executive officer subject to these terms and conditions. Relatedly, in 2022 we also adopted a Share Matching Program (see “2022 Incentive compensation” on page 79) to progress the same objectives. Finally, our modified executive stock ownership policy see “Maintain a robust stock ownership policy” on page 67) doubles the amount of Company equity that each executive officer other than the CEO is expected to maintain and went into effect in 2022, which serves to further align executive and stockholder interests. Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey Executive compensation Payout of awards granted in prior fiscal years This was the third and final performance year for the 2019 performance-based restricted stock units. We achieved 96.65% of the revenue target for the revenue-linked restricted stock units resulting in 66.52% of target funding of those grants. The Company’s TSR performance was at the 87.23 percentile amongst its peer group, resulting in the executives earning 200% of the 2019 relative TSR-linked restricted stock units pursuant to the terms of the original grant. No adjustments were made to the 2019 performance-based restricted stock units or the associated performance targets to account for the impact of the COVID-19 pandemic in the 2020 and 2021 fiscal year. 2022 Incentive compensation As noted above, for fiscal year 2021, we removed the revenue performance metric from our long-term equity incentive program because the uncertainty and market volatility resulting from the COVID-19 pandemic made it difficult to predict a three-year revenue target. The decision to remove the revenue metric for 2021 was only made with respect to the 2021 grants and was not intended to reflect a permanent change to the long-term equity incentive program. Therefore, for fiscal year 2022, we again revised our long-term equity incentive program to re-insert a revenue performance metric that will apply to 40% of our executive officers’ PRSUs. We have also adjusted the weighting of our restricted stock units to increase the percentage of PRSUs to 60% of the annual award for each executive officer, which further increases the percentage of incentive compensation tied to performance. For fiscal year 2022, we also adopted a Share Matching Program (“SMP”) under the 2018 Plan for certain employees, including NEOs (other than the CEO). The SMP generally entitles a participant to one restricted stock unit for every share of Company common stock newly acquired and held by the participant during a specified acquisition period, up to a pre-established maximum. In general, as long as a participant continues to hold their newly acquired shares and remains employed with the Company, the associated restricted stock units received will cliff vest in two installments with 1/3 vesting on the second anniversary of the grant date and the remaining 2/3 vesting on the third anniversary of the grant date. In addition, each award requires the executive to hold any acquired shares of Company stock for a period of two years following the applicable settlement date such that each award ties the executive’s compensation to the Company’s stock performance for a total of five years. This SMP is designed to encourage key executives to acquire a larger equity ownership interest in the Company thereby further aligning the personal interests of these key executives with the interest of stockholders. In April 2022, we entered into employment agreements with Messrs. Bhalla and Jetley. These employment agreements are substantially similar to those in effect for our other executive officers and will continue throughout their employment with the Company. The employment agreements generally entitle Messrs. Bhalla and Jetley to base salary, an annual cash bonus based upon performance, annual equity awards (time and/or performance-based) at the discretion of the Compensation Committee, and a cash severance payment upon a termination without cause or for good reason. They also condition the severance payments and termination-related equity acceleration on the execution of a release of claims against us and subject each executive to confidentiality restrictions at all times, as well as noncompetition, nondisparagement and nonsolicitation restrictions during his employment and for one year thereafter. Executive compensation We offer employee benefits coverage in order to: provide our global workforce with a reasonable level of financial support in the event of illness or injury; and provide market-competitive benefits that enhance productivity and job satisfaction through programs that focus on work/life balance. The benefits available for all U.S. employees include customary medical and dental coverage, disability insurance and life insurance. In addition, our 401(k) plan provides a reasonable level of retirement income reflecting employees’ careers with us. A number of our U.S. employees, including our U.S.-based named executive officers, participate in these plans. The cost of employee benefits is partially borne by our employees, including our named executive officers. Our named executive officers in India, Mr. Bhalla, is We generally do not provide significant perquisites or personal benefits to executive officers other than our Vice Chairman and CEO and our executive officers in India. Our Vice Chairman and CEO is provided a limited number of perquisites which we believe are reasonable and consistent with market trends, which are intended to be part of a competitive overall compensation program. A discussion of the benefits provided to our Vice Chairman and CEO is provided under “Employment agreements” beginning on page 86. Risk and compensation policies Our Compensation Committee has taken into account its discussions with management and Farient regarding our compensation practices and has concluded that any risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. This conclusion was based on the features of our compensation programs, practices and policies set forth under “Executive compensation program, practices and policies” on page 66. Severance and change-in-control benefits Each named executive officer, including Mr. Bhalla and Jetley as of April 2022, is party to an employment agreement or letter that sets forth the terms of his or her employment, including compensation, which was negotiated through arms’-length contract negotiations. Under these employment agreements or letters, we are obligated to pay severance or other enhanced benefits upon termination of their employment. A discussion of the severance and other enhanced benefits provided to our named executive officers is provided under “Potential payments upon termination or change in control at fiscal 2021 year-end” beginning on page 91. We have provided change-in-control severance protection for some of our executive officers, including our named executive officers. Our Compensation Committee believes that such protection is intended to preserve employee morale and productivity and encourage retention in the face of the disruptive impact of an actual or rumored change in control. In addition, for executive officers, the program is intended to align executive officers’ and stockholders’ interests by enabling executive officers to consider corporate transactions that are in the best interests of our stockholders and other constituents without undue concern over whether the transactions may jeopardize the executive officers’ own employment. Executive compensation Senior executive officers, including our named executive officers, have enhanced levels of benefits based on their job level, seniority and probable loss of employment after a change in control. We also consider it likely that it will take more time for senior executive officers to find new employment. Deductibility cap on executive compensation As in the past, our Compensation Committee expects to continue to take into consideration the tax deductibility of compensation, but reserves the right to authorize payments that may not be deductible if it believes that the payments are appropriate and consistent with our compensation philosophy. Despite the limited availability of Code Section 162(m) performance-based compensation exceptions following the Tax Cuts and Jobs Act of 2017, / Executive compensation The Compensation Committee of the board of directors of ExlService Holdings, Inc. has reviewed and discussed the Compensation Discussion and Analysis with our management and, based on such review and discussion, has recommended to the board of directors of ExlService Holdings, Inc. that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and our Proxy Statement relating to the Annual Meeting. Compensation Committee Ms. Jaynie M. Studenmund (Chair) Ms. Anne Minto Mr. Som Mittal Mr. Clyde W. Ostler Ms. Kristy Pipes Mr. Garen K. Staglin Executive compensation Summary compensation table for fiscal year 2021 The following table sets forth information for compensation earned in fiscal years Rohit Kapoor 2021 742,603 — 7,209,918 2,050,000 — 31,068 (5) 10,033,589 Vice Chairman & CEO 2020 599,016 — 5,701,209 810,000 — 31,041 7,141,267 2019 720,000 — 4,121,410 1,304,453 — 49,354 6,195,217 Maurizio Nicolelli 2021 475,000 100,000 2,220,441 640,498 — 9,204 (6) 3,445,143 Executive Vice President and CFO 2020 384,283 125,000 1,166,955 243,097 — 8,970 1,928,305 2019 — — — — — — — Vikas Bhalla 2021 276,716 (1) — 2,711,454 444,718 16,865 19,034 (7) 3,468,787 Executive Vice President and Business Head, Insurance 2020 229,016 — 1,399,048 169,370 5,067 37,962 1,840,463 2019 263,809 — 973,685 285,636 5,186 40,367 1,568,683 Vivek Jetley 2021 415,068 — 2,429,371 586,146 — 9,204 (8) 3,439,789 Executive Vice President and Business Head, Analytics 2020 — — — — — — — 2019 — — — — — — — Samuel Meckey 2021 437,808 — 2,321,257 577,214 — 9,204 (9) 3,345,483 Executive Vice President and Business Head, Healthcare 2020 382,152 — 1,106,585 239,063 — 9,054 1,736,853 2019 425,000 — 765,547 364,320 — 9,444 1,564,311 (1) The amount set forth in the “Salary” column for Mr. Bhalla includes $112,421 of base salary, $98,720 of a cash supplementary allowance, $36,030 of housing allowance (which Mr. Bhalla elected to receive instead in cash), $9,365 of travel allowance (which Mr. Bhalla elected to receive instead in cash), and $20,180 of a special car allowance (which Mr. Bhalla elected to receive instead in cash). (2) Amounts reflect the total grant date fair value of awards (RSUs and revenue based PRSUs) and Monte Carlo value of awards (TSR based PRSUs) (recognized for financial statement reporting purposes for the fiscal years ended December 31, 2019, 2020 and 2021, in accordance with FASB ASC Topic 718 (disregarding any forfeiture assumptions). Assumptions used in the calculation of these amounts are included (i) for 2021, in footnotes 2 and 22 to the audited financial statements for the fiscal year ended December 31, 2021, included in the 2021 Form 10-K filed with the Securities and Exchange Commission; (ii) for 2020, in footnotes 2 and 23 to the audited financial statements for the fiscal year ended December 31, 2020, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2021; and (iii) for 2019, in footnotes 2 and 23 to the audited financial statements for the fiscal year ended December 31, 2019, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2020. With respect to stock awards granted in 2021, the table below sets forth the value attributable to performance restricted stock units valued at target achievement. Performance restricted stock units granted in 2021 may pay out up to 200% of the target award, which would have amounted to the grant date fair values listed as the maximum total grant date fair value for each named executive officer in the table below. Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey / Executive compensation (3) Reflects the cash incentive bonuses earned in respect of 2021 and paid in 2022. For details on our annual incentive bonus program, see “Compensation Discussion and Analysis—Incentive bonus” beginning on page 72. (4) Reflects the present value of accruals under the Gratuity Plan for Indian employees. Information regarding our Gratuity Plan (including the assumptions used to calculate these amounts) may be found under “Pension benefits for fiscal year 2021” beginning on page 90. (5) Amount for Mr. Kapoor includes the travel allowance ($13,927) provided for under his employment agreement, to be used for once-a-year business class airfare for himself and his family between the United States and India, costs associated with use of an automobile and driver ($2,565), car lease rental ($5,372), contribution to our 401(k) plan ($8,700), and Company-paid Life Insurance ($504). (6) Amount for Mr. Nicolelli includes contribution to our 401(k) plan ($8,700), Company-paid Life Insurance ($504). (7) Amount for Mr. Bhalla includes contributions to the Employees’ Provident Fund Scheme (a statutorily required defined contribution program for Indian employees) ($13,491), costs associated with use of an automobile and driver in India ($5,408), and home internet and telephone charges ($135). (8) Amount for Mr. Jetley includes contributions to 401(k) plan ($8,700) and Company paid Life Insurance premiums ($504). (9) Amount for Mr. Meckey includes contributions to 401(k) plan ($8,700) and Company paid Life Insurance premiums ($504). (10) Mr. Nicolelli received $100,000 as the final payment of his joining bonus in 2021. Unless otherwise specified, U.S. dollar figures in this Proxy Statement have been converted from Indian rupees at a rate of 74.33 Indian rupees to $1.00, the Indian rupee to U.S. dollar exchange rate in effect as of December 31, 2021. Some of the information in the Summary Compensation Tables for fiscal years 2020 and 2019 was converted using the exchange rates in effect as set forth below: 2019 / Executive compensation Grants of plan-based awards table for fiscal year 2021 The following table sets forth information concerning grants of stock and option awards and non-equity incentive plan awards granted to our named executive officers during fiscal year 2021: Estimated future payouts under Grant Date Fair and Option Awards(5) ($) Threshold Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey (1) These amounts reflect the target and maximum cash incentive bonuses set for 2021. For details of our annual incentive bonus program, see “Compensation Discussion and Analysis – Incentive bonus” beginning on page 72. (2) Represents annual awards of Relative TSR-Linked PRSUs granted under the 2018 Plan, subject to the vesting set forth in footnote 6. (3) Represents annual awards of restricted stock units granted under the 2018 Plan, subject to the vesting set forth in footnote 6. (4) Represents additional restricted stock units granted to all named executive officers other than our CEO under the 2018 Plan, subject to the vesting set forth in footnote 6. (5) The grant date fair value reflects time-based restricted stock units valued based on grant date fair market value and TSR linked performance-based restricted stock units valued using Monte Carlo fair market valuation. (6) The vesting schedules of the stock grants mentioned in the table are as follows for each named executive officer (subject to continued employment through each applicable vesting date). / Executive compensation 2/17/2021 2/17/2021 Estimated Future Payouts Estimated Future Payouts All Other Grant Date Name Grant Date Threshold Target Maximum Threshold Target Maximum 9/1/2021 In addition to the terms described below, the employment and severance agreements for each of our named executive officers include severance, termination and/or noncompetition provisions, which are described below under “Potential payments upon termination or change in control at fiscal 2021 year-end” beginning on page 91. Subsequent to fiscal 2021, we entered into employment agreements with Messrs. Bhalla and Jetley, see “2022 Incentive compensation” on page 79. Mr. Kapoor serves as our Vice Chairman and CEO, and is based at our executive offices in New York, New York. Our engagement of Mr. Kapoor has been under the terms of employment agreements for over 15 years. Effective as of August 3, 2020, the Company entered into a second amended and restated employment agreement with Mr. Kapoor (the “Kapoor Agreement”). The Kapoor Agreement provides for an employment term that extends until Mr. Kapoor’s termination or resignation. Salary, bonus and equity In 2020, Mr. Kapoor’s base salary was increased from $720,000 to $750,000, as documented in the Kapoor Agreement. Mr. Kapoor’s base salary can be increased at our sole discretion and cannot be decreased unless a Company-wide decrease in pay is implemented. Mr. Kapoor can earn an annual cash bonus, with a target of 150% of base salary and a maximum payout of 310% of base salary, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Kapoor remains eligible to receive equity-based awards annually during the term, in amounts and forms determined by the Compensation Committee but with terms no less favorable than his direct reports. Personal benefits We provide Mr. Kapoor with certain personal benefits, including certain club memberships, home office supplies, term life insurance policy (with a face value of $500,000), once-a-year business class airfare between the United States and India for the executive and his family, up to $12,000 for personal tax and estate planning expenses, up to $1,400 per month car allowance, up to $12,000 per year for expenses associated with maintaining an automobile in India (including cost of a driver), personal security for the executive and his family while in India, reimbursement for first-class business travel, and a per diem allowance for certain trips. In addition, his employment agreement entitles him to certain other benefits in the event he is relocated to India, but which are not applicable currently as he maintains a U.S. residency. / Executive compensation Mr. Kapoor’s employment agreement also includes severance, termination and noncompetition provisions which are described below under “Potential payments upon termination or change in control at fiscal 2021 year-end” beginning on page 91. Mr. Nicolelli serves as our Executive Vice President and CFO and is based at our executive offices in New York, New York. We entered into an employment agreement with him, effective February 3, 2020, which will continue throughout Mr. Nicolelli’s employment with the Company. In connection with his appointment, Mr. Nicolelli received a joining bonus of $225,000, payable in two installments, and an initial grant of restricted stock units of the Company’s common stock with a fair market value of $425,000, which will vest in four equal, annual installments beginning on the first anniversary of the grant date. Salary, bonus and equity Compensation Committee. Mr. Nicolelli’s agreements also includes severance, termination and noncompetition provisions which are described below under “Potential payments upon termination or change in control at fiscal 2021 year-end” beginning on page 91. Vikas Bhalla Mr. Bhalla serves as our Executive Vice President and Business Head, Insurance, and is based in Delhi, India. We entered into an employment agreement with him, effective April 28, 2001 and a severance letter, effective March 15, 2011, each of which will continue throughout Mr. Bhalla’s employment with the Company. Subsequent to fiscal 2021, we entered into an employment agreement with Mr. Bhalla that supersedes his prior agreements, see “2022 Incentive compensation” on page 79. Salary, bonus and equity Mr. Bhalla’s agreements also includes severance, termination and noncompetition provisions which are described below under “Potential payments upon termination or change in control at fiscal 2021 year-end” beginning on page 91. Mr. Meckey serves as our Executive Vice President and Business Head, Healthcare, and is based at our executive offices in New York, New York. We entered into an employment agreement with him, effective November 5, 2018, which will continue throughout Mr. Meckey’s employment with the Company. Executive compensation Salary, bonus and equity Mr. Meckey’s agreements also includes severance, termination and noncompetition provisions which are described below under “Potential payments upon termination or change in control at fiscal 2021 year-end” beginning on page 91. / Executive compensation Outstanding Name Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey (1) Unless otherwise noted, this column represents annual restricted stock unit awards Option Awards Stock Awards Name Option / Number of Securities Underlying Options (#) Exercisable(1) Number of Securities Underlying Unexercised Options (#) Unexercisable Option Price ($) Option Expiration Date Number of Shares of Stock Have Not Vested Market Units of Vested ($)(4) Equity (#)(3) Equity Vested ($)(4) Value ($) Number of Shares (#) Value Realized ($) / Number of Years Credited Service (#)(1) Present Value of Accumulated Benefit ($) Payments During Last Fiscal Year ($) Executive compensation (2) These restricted stock unit awards vest and convert to shares in accordance with the following schedule (generally subject to continued employment through each applicable vesting date): 1/3 of the restricted stock units vest on the second anniversary of the grant date with the remaining 2/3 vesting on the third anniversary of the grant date. (3) These restricted stock unit awards vest and convert to shares in accordance with the following schedule (generally subject to continued employment through each applicable vesting date): 50% of the restricted stock units vested on October 22, 2021 and 50% vest on October 22, 2022. (4) The performance restricted stock unit awards in this table vest and convert to shares in accordance with the following schedules (generally subject to continued employment through the applicable vesting date and achievement of applicable performance goals): (a) 100% of the restricted stock units vest on December 31, 2022. This amount represents the 2020 Revenue-Linked PRSUs and reflects maximum performance. (b) 100% of the restricted stock units vest on December 31, 2022. This amount represents the 2020 Relative TSR-Linked PRSUs and reflects maximum performance. (c) 100% of the restricted stock units vest on December 31, 2023. This amount represents 2021 Relative TSR-Linked PRSUs and reflects target performance. (5) The price used in determining the market values set forth in this table is $144.77, which was the closing price of our stock on December 31, 2021. Option exercises and stock vested during fiscal year 2021 The following table provides additional information about the value realized by our named executive officers on option award exercises and stock award vesting during fiscal year 2021: Value realized on ($) Value realized on ($) Rohit Kapoor Maurizio Nicolelli Vikas Bhalla Vivek Jetley Samuel Meckey Pension benefits for fiscal year 2021 The following table discloses the present value of accumulated benefits payable to each of the named executive officers and the years of Vikas Bhalla (1) Consists of the number of years of service credited as of December 31, 2021 for the purpose of determining benefit service under the Gratuity Plan. Credited service is determined based on the completed years of continuous employment (rounded to the nearest whole number of years) with the Company since the executive’s date of hire. (2) Liabilities with regard to the Gratuity Plan is determined by actuarial valuation using the projected unit credit method. Under this method, we determine our liability based upon the discounted value of salary increases until the date of separation arising from retirement, death, resignation or other termination of services. Critical assumptions used in measuring the plan expense and projected liability under the projected unit credit method include the discount rate, expected return on assets and the expected increase in the compensation rates. Details regarding the assumptions used in the calculation of these amounts are included in footnote 19 to the audited financial statements for the fiscal year ended December 31, 2021 included in the 2021 Form 10-K. Executive compensation We are required to provide all Indian employees with benefits under the Gratuity Plan, a defined benefit pension plan in India. Distributions from the Gratuity Plan are made in a single lump sum following retirement from the Company. An executive’s benefit under the Gratuity Plan is determined at any time as the executive’s annual base salary (determined based on the executive’s most recent monthly base salary) divided by 26, multiplied by 15, and the product multiplied by the executive’s completed years of continuous service with the Company. An executive has a vested and nonforfeitable right to payment of his accrued Gratuity Plan benefit only after five years of service. The present value of Mr. Bhalla’s accumulated benefits has been determined based on his monthly basic salary rate in effect on December 31, 2021, which was approximately $9,614. Potential payments upon termination or change in control at fiscal 2021 year-end The following tables summarize the amounts payable to each named executive officer upon a change in control or termination of his employment with us on December 31, 2021. In calculating potential payments for purposes of this disclosure, we have quantified our equity-based payments using the closing stock price on December 31, 2021, which was $144.77. Some of the capitalized terms used in the employment agreements for our named executive officers are defined in the section entitled “Certain defined terms” on page 98. Rohit Kapoor Cash severance If Mr. Kapoor’s employment were terminated by us without “cause” or by the executive for “good reason” or by “retirement” (in each case, as described below) on December 31, 2021, he would have been entitled to cash severance consisting of: except in the case of retirement, continuation of his base salary for 24 months; except in the case of retirement, his actual bonus, if any, earned for the year of termination, determined as if he had been employed for the full year of termination, paid ratably over the remaining period of base salary payments; any unpaid bonus amounts from prior periods; any accrued but unpaid base salary and vacation days or unreimbursed expenses; costs of continued COBRA coverage under the Company’s group health plan on behalf of the executive and his eligible dependents (described in more detail below), until the earlier of (x) the 18-month anniversary of termination and (y) the date the executive becomes eligible to receive comparable benefits from a subsequent employer; and except in the case of retirement, continuation of life insurance coverage until the earlier of (x) the 18-month anniversary of termination and (y) the date the executive commences employment with a subsequent employer. Change-in-control cash severance Executive compensation Death or disability If Mr. Kapoor’s employment terminates due to his death or is terminated by either the executive or us due to his disability, he (or his estate) will be entitled to a prorated portion of his projected bonus amount for the year of termination. Noncompetition and non-solicitation provisions Mr. Kapoor is subject to confidentiality and non-disparagement restrictions at all times, as well as noncompetition and non-solicitation restrictions during his employment and for one year thereafter. Annual equity awards If Mr. Kapoor’s employment is terminated by us without cause or by Mr. Kapoor for good reason, Mr. Kapoor will be treated as if he was still employed by the Company for a period of twenty-seven months following the termination date. On a “change in control” (as defined in the 2006 Plan, 2015 Plan, or 2018 Plan, as applicable), retirement (as defined below), or on death, Mr. Kapoor’s outstanding annual equity awards will vest as described below: Time-Vested RSUs If a change in control occurs prior to the end of the four-year vesting period, Mr. Kapoor’s Time-Vested RSUs will be advanced by one year. In addition, all of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested if he is terminated without cause in specific contemplation of or within 12 months following a change in control, or he voluntarily terminates his employment for good reason within 12 months following a change in control. If Mr. Kapoor dies before the end of the four-year vesting period, all of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested. If Mr. Kapoor retires and the applicable award has been outstanding for at least 6 months, Mr. Kapoor will become fully vested in any unvested RSUs that would have vested within the next 12 months absent his retirement. Revenue-Linked PRSUs If a change in control occurs prior to the end of the performance period, 100% of target of Mr. Kapoor’s Revenue-Linked PRSUs will be deemed earned, will be subject to a three-year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Kapoor’s outstanding Revenue-Linked PRSUs will become fully vested if, (i) he is terminated without cause in specific contemplation of or within 12 months following a change in control; (ii) he voluntarily terminates his employment for good reason within 12 months following a change in control; or (iii) he dies following a change in control. If Mr. Kapoor dies prior to the end of the performance period and no change in control has occurred, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of completed full months during the three-year performance period up to the date of Mr. Kapoor’s death divided by (y) 36 multiplied by (z) 100% of Mr. Kapoor’s Revenue-Linked PRSUs. If Mr. Kapoor retires and the award has been outstanding for at least 6 months, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of years of service completed by Mr. Kapoor from the grant date (rounding up to the closest whole number) divided by (y) 3 multiplied by (z) the number of Revenue-Linked PRSUs earned based on actual performance. Executive compensation Relative TSR-Linked PRSUs If a change in control occurs on or prior to the first anniversary of the grant date, 100% of target of Mr. Kapoor’s Relative TSR-Linked PRSUs will be deemed earned. If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation Committee will determine the number of earned Relative TSR-Linked PRSUs based on the TSR of the Company and the peer group as of such date. In either scenario, the Relative TSR-Linked PRSUs that are deemed earned will be subject to a three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Kapoor’s outstanding Relative TSR-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) voluntarily terminates his employment for good reason or (ii) dies. If Mr. Kapoor dies prior to the end of the performance period and no change in control has occurred, Mr. Kapoor will become vested in a portion of the outstanding Relative TSR-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Kapoor’s death divided by (y) 36 multiplied by (z) 100% of Mr. Kapoor’s Relative TSR-Linked PRSUs. If Mr. Kapoor retires and the award has been outstanding for at least 6 months, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of years of service completed by Mr. Kapoor from the grant date (rounding up to the closest whole number) divided by (y) 3 multiplied by (z) the number of Revenue-Linked PRSUs earned based on actual performance. Release of claims Mr. Kapoor’s severance payments and termination-related equity acceleration are subject to his execution of a release of claims against us, his not having committed a material breach of the restrictive covenants that has remained uncured for 15 days after we have given him notice of such breach and his resignation from the board of directors and all committees thereof, if requested by the Company. Code Section 280G Mr. Kapoor’s employment agreement also contains a “modified cut-back” provision such that any payments that constitute “excess parachute payments” under Section 280G of the Code will be reduced to an amount that does not trigger the applicable excise taxes, to the extent such reduced amount is larger than the amount Mr. Kapoor would have received on a present-value net-after-tax basis (including excise taxes) absent such a reduction. Executive compensation Indicative payouts for Rohit Kapoor Payments upon termination Death prior to a control ($) Death after a change in control ($) Disability ($) Termination for ($) Change in control ($) Termination in control or without cause in control ($) Base salary payout Bonus payout Life insurance Health insurance Restricted stock units Performance restricted stock units (1) As described above, upon his termination for good reason or without cause, Mr. Kapoor is treated as having continued his employment for two additional years for purposes of his annual equity awards. The information in this table was calculated assuming target performance over the additional two year-period, however, the actual payment would depend upon the Company’s actual performance following Mr. Kapoor’s termination. Maurizio Nicolelli Either Mr. Nicolelli or we may terminate Mr. Nicolelli’s employment at any time with 30 days’ notice (or 90 days’ notice if termination is by Mr. Nicolelli). If Mr. Nicolelli is terminated by us without “cause” (other than due to death or disability), or if Mr. Nicolelli resigns for “good reason”, Mr. Nicolelli will receive a cash severance payment equal to twelve months’ of his then-current base salary, with 25% payable on the first payroll date at least 10 days following termination and the remainder payable in nine equal monthly installments. Death Prior to a Change in Control ($) Death After a Change in Control ($) Termination for Good Reason or Without Cause Change in Control Termination Without Cause or for Good Reason Following Change in Control or Termination Without Cause in Specific Contemplation of Change in Control On a “change in control” (as defined in the 2018 Plan) or death, Mr. Nicolelli’s outstanding equity awards will vest as described below: Time-Vested RSUs: If a change in control occurs prior to the end of the four-year vesting period, Mr. Nicolelli’s Time-Vested RSUs will be advanced by one year. In addition, all of Mr. Nicolelli’s outstanding Time-Vested RSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he terminates his employment for good reason. If Mr. Nicolelli dies before the end of the four-year vesting period, all of Mr. Nicolelli’s outstanding Time-Vested RSUs will become fully vested. If Mr. Nicolelli retires with at least 10 years of service and the applicable award has been outstanding for at least 6 months, Mr. Nicolelli will become vested in all unvested RSUs that would have vested within the next 12 months absent his retirement. If Mr. Nicolelli retires with at least 5 years of service but less than 10, the number of vested Time-Vested PRSUs will be calculated as described in the preceding sentence and then reduced by 50%. Vesting of the restricted stock units granted in September 2021; however, is only accelerated (i) on Mr. Nicolelli’s death or (ii) if following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he terminates his employment for good reason. / Executive compensation Revenue-Linked PRSUs: If a change in control occurs prior to the end of the performance period, 100% of Mr. Nicolelli’s Revenue-Linked PRSUs will be deemed earned, will be subject to a new three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Nicolelli’s outstanding Revenue-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) terminates his employment for good reason or, (ii) dies. If Mr. Nicolelli dies prior to the end of the performance period and no change in control has occurred, Mr. Nicolelli will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Nicolelli’s death divided by (y) 36 multiplied by (z) 100% of Mr. Nicolelli’s Revenue-Linked PRSUs. If Mr. Nicolelli retires with at least 10 years of service and the award has been outstanding for at least 6 months, Mr. Nicolelli will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of years of service completed by Mr. Nicolelli from the grant date (rounding up to the closest whole number) divided by (y) 3 multiplied by (z) the number of Revenue-Linked PRSUs earned based on actual performance. If Mr. Nicolelli retires with at least 5 years of service but less than 10, the number of vested Revenue-Linked PRSUs will be calculated as described in the preceding sentence and then reduced by 50%. Relative TSR-Linked PRSUs: If a change in control occurs on or prior to the first anniversary of the grant date, 100% of Mr. Nicolelli’s Relative TSR-Linked PRSUs will be deemed earned. If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation Committee will determine the number of earned Relative TSR-Linked PRSUs based on the TSR of the Company and the peer group as of such date. In either scenario, the Relative TSR-Linked PRSUs that are deemed earned will be subject to a new three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Nicolelli’s outstanding, earned TSR-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) voluntarily terminates his employment for good reason or, (ii) dies. If Mr. Nicolelli dies prior to the end of the performance period and no change in control has occurred, Mr. Nicolelli will become vested in a portion of the outstanding Relative TSR-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Nicolelli’s death divided by (y) 36 multiplied by (z) 100% of Mr. Nicolelli’s Relative TSR-Linked PRSUs. If Mr. Nicolelli retires with at least 10 years of service and the award has been outstanding for at least 6 months, Mr. Nicolelli will become vested in a portion of the outstanding Relative TSR-Linked PRSUs equal to (x) the number of years of service completed by Mr. Nicolelli from the grant date (rounding up to the closest whole number) divided by (y) 3 multiplied by (z) the number of Relative TSR-Linked PRSUs earned based on actual performance. If Mr. Nicolelli retires with at least 5 years of service but less than 10, the number of vested Relative TSR-Linked PRSUs will be calculated as described in the preceding sentence and then reduced by 50%. Mr. Nicolelli’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. Nicolelli is subject to confidentiality restrictions at all times, as well as noncompetition and nonsolicitation restrictions for two years following termination of his employment. Death After a Change in Control Disability ($) Termination for Good Reason or Without Cause Change in Control Termination Without Cause or for Good Reason Following Change in Control or Termination Without Cause in Specific Contemplation of Change in Control — — 104,196 Executive compensation Death Prior to a Change in Control ($) Death After a Change in Control ($) Termination for Good Reason or Without Cause ($) Change in Control ($) Termination Without Cause or for Good Reason Following Change in Control or Termination Without Cause in Specific Contemplation of Change in Control ($) Indicative Payouts for Maurizio Nicolelli Death Prior to a Change in Control ($) Death After a Change in Control ($) Termination for Good Reason or Without Cause Change in Control Termination Without Cause or for Good Reason Following Change in Control or Termination Without Cause in Specific Contemplation of Change in Control Payments upon termination Death prior to a ($) Death after a ($) Termination for ($) Change in control ($) Termination for good reason in control or without cause in specific contemplation of ($) Base salary payout Restricted stock units Performance restricted stock units Vikas Bhalla Either Mr. Bhalla or we may terminate Mr. Bhalla’s employment at any time with three months’ notice (or pay three months’ salary in lieu of notice). If Mr. Bhalla is terminated by us without “cause” (other than due to disability) at any time following a change in control or in specific contemplation of a change in control, or if Mr. Bhalla resigns for “good reason” after at least six months following a “change in control” (as defined in the 2015 Plan), Mr. Bhalla will receive a cash severance payment equal to twelve months’ of his then-current annual fixed compensation, payable in twelve equal monthly installments. On a “change in control” (as defined in the 2018 Plan) or death, Mr. Bhalla’s outstanding equity awards will vest in the same manner as described for Mr. Nicolelli’s outstanding equity awards beginning on page 94, except that his restricted stock units granted in September 2021 will not vest if he terminates his employment for good reason following a change in control. Mr. Bhalla’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. Bhalla is subject to confidentiality restrictions at all times, as well as noncompetition and nonsolicitation restrictions for two years following termination of his employment. Indicative payouts for Vikas Bhalla Payments upon termination Termination for without cause Change in control ($) Termination following change in contemplation of Base salary payout Restricted stock units Performance restricted stock units Government-required payouts(1) (1) Represents distributions under the Gratuity Plan, which is due to Mr. Bhalla because he has earned over five years of credited service. Executive compensation Vivek Jetley Either Mr. Jetley or we may terminate Mr. Jetley’s employment at any time. On a “change in control” (as defined in the 2018 Plan) or death, Mr. Jetley’s outstanding equity awards will vest in the same manner as described for Mr. Nicolelli’s outstanding equity awards on page 94, except that his restricted stock units granted in September 2021 will not vest if he terminates his employment for good reason following a change in control. Mr. Jetley’s termination-related equity acceleration is subject to his execution of a release of claims against us. Indicative payouts for Vivek Jetley Payments upon termination Death prior to a ($) Death after a ($) Termination for without cause Change in control ($) Termination in control or without cause in contemplation of Base salary payout Restricted stock units Performance restricted stock units Samuel Meckey Either Mr. Meckey or we may terminate Mr. Meckey’s employment at any time (though we must give Mr. Meckey 30 days’ notice if the termination is without “cause” and Mr. Meckey must give us 60 days’ advance notice upon any resignation). If Mr. Meckey’s employment with the Company is terminated by the Company without “cause” (other than due to death or disability) or by Mr. Meckey for “good reason” (both “cause” and “good reason” as defined above), Mr. Meckey will receive a cash severance payment equal to 12 months base salary, with 25% payable as a lump sum payment and the remaining 75% payable in accordance with the Company’s regular payroll practices. On a “change in control” (as defined in the 2018 Plan) or death, Mr. Meckey’s outstanding equity awards will vest in the same manner as described for Mr. Nicolelli’s outstanding equity awards on page 94. Mr. Meckey’s severance payments and termination-related equity acceleration are subject to his execution of a release of claims against us. Mr. Meckey is subject to confidentiality restrictions at all times, as well as noncompetition, nondisparagement and nonsolicitation restrictions during his employment and for one year thereafter. Death Prior to a Change in Control ($) Death After a Change in Control ($) Termination for Good Reason or Without Cause Change in Control Termination Without Cause or for Good Reason Following Change in Control or Termination Without Cause in Specific Contemplation of Change in ControlSelect 2019 Financial and Business Highlights●Improved our annual revenues from $883.1 million in fiscal year 2018 to $991.3 million in fiscal year 2019 on a reported currency basis (an increase of over 12%)●Improved net income attributable to stockholders by 19% to $67.7 million●Substantially completed the wind down of the operations of our Health Integrated business on December 31, 2019●Added approximately 2,600 employees to our global work force, mainly in our delivery centers●Added our fourth Digital Lab in London to complement our labs in Manila, Philippines, Noida and Bangalore, India, and our Digital Experience Center in the United States●Won 28 new clients and received numerous awards and industry recognitions in our primary segments of Insurance, Healthcare and AnalyticsEXLSERVICE.COM ∕ 43 Total Stockholder ReturnThe following graphs compare our 1-year, 3-year and 5-year total stockholder return (“TSR”) with that of the companies comprising Nasdaq, S&P 500 and our peer group. As shown in the table, our 1-Year TSR outperformed all but one of our market benchmarks while our 5-year TSR outperformed all of our market benchmarks.
(1) Cumulative growth rate as of December 31, 2019.
(2) Peer group
data excludes Convergys Corporation, which was acquired in October 2018, and DST Systems, which was acquired in April 2018.Awards and Industry Recognition
●Our people are our primary assets, and they continue to be recognized across the industry.●As in prior years, we continued to receive numerous industry recognitions and awards, including being recognized as a Leader in the ISG Provider Lens for Insurance BPO Digital Services – U.S. 2019 for Property & Casualty Insurance Services, Life & Annuity Digital Services and Life & Annuity TPA Services and recognized as a Leader in the Everest Group Clinical and Care Management BPS Services PEAK Matrix™ Assessment 2019.– – ClientsPositioned in the Winners Circle in the HFS Research’s 2021 OneOffice™ Services Top 10 for Data and OperationsDecisions, with the top score for the Voice of the Customer●In 2019 we won 28 new clients adding to the 50 new clients we won in 2018.●In the past year, revenue from our top 30 clients grew by 14.6%.– Summary of Key Compensation ConsiderationsPositioned as a Leader in all three categories in the ISG Provider Lens for Insurance Services U.S. 2020: P&C Services, Life & Decisions in 2019Retirement Services and TPA Services– The following highlightsRecognized as a Leader in the Compensation Committee’s key considerationsEverest Group Property & Casualty Insurance BPS PEAK Matrix® and compensation decisionsLife and Pensions Insurance BPS/TPA PEAK Matrix®Assessments– 2019the 2021 KLAS Risk Adjustment & Analytics Performance Report– with respect to performance for 2019Accounting Outsourcing ServicesEXL 2022 Proxy Statement 63 EXLSERVICE.COM ∕ 44 Say on Pay Approval Base Salaries Annual Bonuses Equity Incentives ItemsConsiderations and DecisionsSay on Pay Approval97% of our stockholders approved, on a non-binding basis (excluding broker non-votes), of our compensation of our NEOs.Base SalariesWe held base salaries constant in 2019.Annual BonusesWe based our annual bonuses on achievement of company goals (Adjusted EPS & revenue), business unit goals (total revenues & business operating income) and personal performance goals. In 2019, we delivered 104.1% of our Adjusted EPS target and 99.2% of our revenue target resulting in annual incentive payouts to our NEOs, ranging from 114% of target performance to 124% of target performance.Equity IncentivesWe continued to grant a mix of time-based and performance-based restricted stock units (revenue- & TSR-linked performance goals).This was the third and final performance year for the 2017 performance-based restricted stock units. We achieved 102.61% of the revenue target for the revenue-linked restricted stock units resulting in 126.14% of target funding of those grants. The Company’s TSR performance was at the 51.2 percentile amongst its peer group, resulting in the executives earning 104.07% of the 2017 relative TSR-linked restricted stock units pursuant to the terms of the original grant resulting in vesting of shares at 115.11% of target performance.64 Pay-for-Performance / EXL 2022 Proxy Statement Our executive compensation philosophy is focused on pay-for-performance. In this regard, we link a significant portion of each NEO’s total compensation to the achievement of specified performance goals. This variable compensation is “at-risk” and rewards performance and contributions to both short- and long-term financial performance.
Vice Chairman & CEO NEO compensation mix compensation mix (Excluding Vice Chairman & CEO) 
EXL 2022 Proxy Statement EXLSERVICE.COM ∕ 45 65 Executive Compensation Program, Practices and Policies What we do
OurVariable compensation programs,is “at-risk” and rewards performance and contributions to both short- and long-term financial performance.
No option repricing: We prohibit option repricing without stockholder approval. policiesdesign a competitive compensation program. The criteria for peer group selection include, annual revenues, similarity in business model and strategic focus, scope of operations, potential mobility of talent and industry alignment.reviewedappropriate relative to the compensation paid to similarly situated officers of our peers, giving consideration to market and re-evaluated periodicallyother factors.No option backdating or discounting: We prohibit option backdating and discounting. change from time or performance-based vesting conditions. A significant portion of such awards only pay out according to time. Our executive compensation philosophy is aligned with our core values, focused on pay-for-performance and designed to reflect appropriate governance practices aligned with the needsachievement of our business. Listed below are some of the Company’s more significant practices and policies that were in effect during fiscal year 2019, which were adopted to driveCompany performance and to align our executives’ interests with those of our stockholders.goals covering a 3-year period.What We DoWhat We Don’t Do✓ Align our Executive Pay with Performance:No excessive overhang or dilution: We link a significant portion of each NEO’s total compensation to the achievement of specific performance goals, as described below.Variable compensation is “at-risk” and rewards performance and contributions to both short- and long-term financial performance.ûNo Option Repricing: We prohibit option repricing without stockholder approval.✓ Use Appropriate Peer Groups When Establishing Compensation: We established a peer group to help us review market practices and design a competitive compensation program. The criteria for peer group selection include similar market capitalization, scope of operations, potential mobility of talent and industry alignment.We set compensation of our executive officers at levels that we believe are appropriate relative to the compensation paid to similarly situated officers of our peers, giving consideration to market and other factors.ûNo Option Backdating or Discounting: We prohibit option backdating and discounting.✓ Ensure Equity Compensation Best Practices: We design equity incentives to encourage our executives to maintain a long-term view of stockholder value creation, to encourage retention and to ensure a significant portion of the award is performance-based.We hold dividends accrued under our equity awards, if any, until the recipient vests in the underlying shares or units.ûNo Excessive Overhang or Dilution: We do not have excessive overhang or dilution from equity grants.✓ Maintain an Independent Compensation Committee: Compensation decisions for our NEOs are approved by a Compensation Committee composed of non-employee independent directors.66 EXL 2022 Proxy Statement Our Compensation Committee is advised by an independent consultant who reports directly to the Compensation Committee and provides no other services to the Company or management.ûNo Excessive Perquisites: We provide our named executive officers with only limited perquisites and personal benefits that serve an important business purpose in addition to the regular benefits offered to all employees.We consider the perquisites and personal benefits that we offer to our executives in India to be customary benefits which allow us to remain competitive for top talent.EXLSERVICE.COM ∕ 46 What We DoWhat We Don’t Do✓ Mitigate Risks: The mix and design of our compensation programs serves to mitigate operational, financial, legal, regulatory, strategic and reputational risks.ûNo Tax Gross-Ups: We do not provide “gross-ups” to any of our named executive officers, including gross-ups for any excise taxes imposed with respect to Section 280G (change-in-control payments) or Section 409A (nonqualified deferred compensation) of the U.S. Internal Revenue Code of 1986, as amended (which we refer to as the “Code”).✓ Maintain a Clawback Policy: We maintain a compensation recovery policy that allows the Company to recover compensation (including cash and/or equity awards) previously paid to one or more officers in the event of a financial restatement caused by noncompliance with reporting requirements that impacts the applicable performance metric if, in the opinion of our Board or Compensation Committee, the identified executive’s misconduct was a material factor causing the restatement.ûNo Hedging: We maintain a policy in which the following persons are prohibited from engaging in hedging transactions involving our shares and other securities: our directors and their secretaries and other assistants; our executive officers and their secretaries and other assistants; our employees in the accounting, finance and legal departments; the members and permanent invitees of our operating and executive committees; and all of our vice president level 2 and 3 officers (whom we refer to collectively as “Reporting Persons”). For this purpose, “hedging” refers to any strategy to offset or reduce the risk of price fluctuations in our shares or other securities or to protect, in whole or in part, against declines in the value of our shares or other securities. This prohibition thus applies to all transactions in derivative securities based on our stock such as other securities, including puts, calls, swaps and collar arrangements.✓ Maintain a Robust Stock Ownership Policy: We maintain a stock ownership policy that requires our CEO to maintain stock ownership equal to at least six times his base salary and that requires the other members of our executive committee to maintain stock ownership of at least two times their respective base salaries. Covered executives have five years from December 2014 (or their hire date, if later) to attain the required stock ownership levels.We maintain a similar stock ownership policy for our non-employee directors that requires directors to maintain stock ownership of at least five times their respective annual retainers.As of December 31, 2019, all covered executives and directors were in compliance with the stock ownership policy.ûNo Pledging: Under our policy mentioned above, Reporting Persons (as defined above) are only permitted to pledge shares of our stock that exceed those required to be owned under our Stock Ownership Policy described above.EXLSERVICE.COM ∕ 47 Overview of Compensation Policies and Philosophiesbelieveconsider the perquisites and personal benefits that we offer to our executives in India to be customary benefits which allow us to remain competitive for top talent.Mitigate risks: The mix and design of our compensation programs serves to mitigate operational, financial, legal, regulatory, strategic and reputational risks. long-term successU.S. Internal Revenue Code of companies1986, as amended (which we refer to as the “Code”).Maintain a clawback policy: We maintain a compensation recovery policy that provide outsourcing, transformationallows the Company to recover compensation (including cash and/or equity awards) previously paid to one or more officers in the event of a financial restatement caused by noncompliance with reporting requirements that impacts the applicable performance metric if, in the opinion of our board of directors or Compensation Committee, the identified executive’s misconduct was a material factor causing the restatement.analytics services globally is linkedother securities: our directors and their secretaries and other assistants; our executive officers and their secretaries and other assistants; our employees in the accounting, finance and legal departments; the members and permanent invitees of our operating and executive committees; and all of our vice president level 2 and 3 officers (whom we refer to collectively as “Reporting Persons”). For this purpose, “hedging” refers to any strategy to offset or reduce the risk of price fluctuations in our shares or other securities or to protect, in whole or in part, against declines in the value of our shares or other securities. This prohibition thus applies to all transactions in derivative securities based on our stock such as other securities, including puts, calls, swaps and collar arrangements.No pledging: Under our policy mentioned above, Reporting Persons (as defined above) are only permitted to pledge shares of our stock that exceed those required to be owned under our Stock Ownership Policy described above. EXL 2022 Proxy Statement 67 ●Compensation should be based on the level of job responsibility, individual performance and our performance. As employees progress to higher levels in the organization, they are able to more directly affect our results and strategic initiatives, and therefore an increasing proportion of their pay should be linked to our performance and tied to creation of stockholder value. Our programs should deliver top-tier compensation in return for top-tier individual and company performance; conversely, where individual performance and/or our performance falls short of expectations, the programs should deliver lower-tier compensation. In addition, the objectives of pay-for-performance and retention must be balanced. Even in periods of temporary downturns in our performance, the programs should continue to ensure that successful, high-achieving employees remain motivated and committed.compensation based on responsibility and performance●Compensation should balance long-term focus that is linked to stockholder value as well as short-term financial objectives. Consistent with this philosophy, equity-based compensation should be higher for persons with higher levels of responsibility and greater influence on long-term results, thereby making a significant portion of their total compensation dependent on long-term stock price appreciation. In addition, compensation should focus management on achieving short-term performance goals in a manner that supports and ensures long-term success and profitability.compensation should balance long-term and short-term objectives●Compensation should reflect the value of the job in the marketplace. We compete for talent globally. In order to attract and retain a highly skilled workforce, we must remain competitive with the pay of other employers who compete with us for talent in the relevant markets.●Compensation programs should be easy to understand. We believe that all aspects of executive compensation should be clearly, comprehensibly and promptly disclosed to employees in order to effectively motivate them. Employees need to easily understand how their efforts can affect their pay, both directly through individual performance accomplishments, and indirectly through contributing to our achievement of strategic, financial and operational goals. We also believe that compensation for our employees should be administered uniformly across the company and should be administered with clear-cut objectives and performance metrics.compensation programs should be easy to understand68 EXL 2022 Proxy Statement EXLSERVICE.COM ∕ 48 Committee’s ProcessesCommitteehas established a numberperiodically reviews related matters such as succession planning and management, evaluation of processes to assist itmanagement performance, changes in ensuring that ourthe scope of managerial responsibilities, and consideration of the business environment, and considers such matters in making compensation decisions. The Compensation Committee also takes into account an executive officer’s job responsibilities, performance, qualifications and skills in determining individual compensation programs are achieving their objectives. Among those are the following:levels.●Assessment of Company Performance: Our Compensation Committee uses financial performance measures to determine a significant portion of the payouts under our annual incentive bonus program and equity incentive program. The financial performance measures with respect to our named executive officers’ incentive bonuses and equity incentive awards are largely based on the achievement of Company-wide goals. In addition, the incentive bonuses payable under our annual incentive bonus program to our senior executives who have responsibility for business lines are tied to such business lines’ financial or other performance. These Company-wide and business-line performance measures are established by our Compensation Committee annually at the end of the prior year or the beginning of the year. At the end of the year or performance period, in the case of our equity incentive program, our Compensation Committee reviews and certifies our performance achievement, and considers the appropriateness of adjustments to the performance criteria and calculations of performance achievement.―We generally pay bonuses at target when we achieve the established financial measures that are set forth in our annual operating plan and personal performance goals, as described below. These measures reflect targets that are intended to encourage stretch performance.●Assessment of Individual Performance: Individual performance has a strong impact on the compensation of our employees, including our executive officers. The evaluation of an individual’s performance determines a portion of the payouts for each of our named executive officers made under our incentive bonus program and also influences any changes in base salary.―For Messrs. Chhibbar, Bagai, Miglani, Bhalla and Meckey, our Compensation Committee receives a performance assessment and compensation recommendation from our Vice Chairman and CEO. The performance assessments are based on each of our named executive officer’s respective self-evaluations and subsequent performance appraisals conducted by our Vice Chairman and CEO. Our Compensation Committee reviews the performance assessments of these executive officers with our Vice Chairman and CEO, and evaluates the achievement of established objectives by each executive officer and his or her business line (if applicable), as well as the executive officer’s contribution to our performance, leadership accomplishments and overall competence. In determining the numerical performance rating that translates into specific payouts under our incentive bonus program and also influences any changes in base salary, our Compensation Committee may exercise its judgment based on our board of directors’ interactions with such executive officers.―For Mr. Kapoor, our board of directors receives a self-evaluation prepared by Mr. Kapoor and provides feedback to our Chairman. Our Chairman then discusses the consolidated feedback from the board of directors with our Compensation and Nominating and Governance Committees. Our board of directors and Compensation and Nominating and Governance Committees evaluate the self-evaluation and feedback as well as Mr. Kapoor’s performance, leadership accomplishments and overall competence and evaluate the achievement of established objectives.●Review of Peer Company Market Data: At the time compensation decisions were made for our U.S.-based and other senior executive officers in 2019, our Compensation Committee reviewed publicly available compensation data for companies that are engaged in business and technology services like us. TheEXLSERVICE.COM ∕ 49 EXL 2022 Proxy Statement Compensation Committee took into account whether the companies had market capitalizations or annualrevenues similar to ours, as well as the relevance of their geographic areas. The companies that comprised our peer group for 2019 were as follows:Peer Group Companies 69 BlackbaudGenpact LimitedConvergys Corporation(1)LiveRamp HoldingsCSG Systems International, Inc.Sykes EnterprisesDST Systems(2)VirtusaEPAM SystemsWNS (Holdings) Limited(1) Convergys Corporation was acquired by SYNNEX Corporation in October 2018.(2) DST Systems was acquired by SS&C Technologies in April 2018.Generally,Independent compensation consultantCompany reviews peerCompensation Committee retained the services of Farient, a qualified and independent compensation data every two years. The compensation data for our peer group was compiled directly by FW Cook, the independent consultant, to aid the Compensation Committee in 2018. Alsoperforming its duties. The Compensation Committee’s compensation consultant assists in:2018, managementexecutive and director compensation and equity and compensation governance, andCompany Industry Genpact Limited Data Processing and Outsourced Services $4,022 EPAM Systems, Inc. IT Consulting and Other Services $3,758 Verisk Analytics, Inc. Research and Consulting Services $2,999 Splunk Inc. Application Software $2,674 TTEC Holdings, Inc. Data Processing and Outsourced Services $2,273 Teradata Corporation Systems Software $1,917 Sykes Enterprises, Incorporated Data Processing and Outsourced Services $1,710 ExlService Holdings, Inc. Data Processing and Outsourced Services $1,122 MultiPlan Corporation Health Care Technology $1,118 CSG Systems International, Inc. Data Processing and Outsourced Services $1,046 WNS (Holdings) Limited Data Processing and Outsourced Services $ 913 Cloudera, Inc. Application Software $ 869 Perficient, Inc. IT Consulting and Other Services $ 761 Guidewire Software, Inc. Application Software $ 743 Inovalon Holdings, Inc. Health Care Technology $ 668 70 EXL 2022 Proxy Statement 2019.2021. The Compensation Committee also takes into account an executive officer’s job responsibilities, performance, qualifications and skills in determining individual compensation levels.●Total Compensation Review: Our Compensation Committee reviews compensation information provided by FW Cook and the Aon survey in order to evaluate each executive’s base pay, incentive bonus and equity incentives when changes in compensation are considered. Compensation decisions are designed to promote our fundamental business objectives and strategy. Our Compensation Committee periodically reviews related matters such as succession planning and management, evaluation of management performance, changes in the scope of managerial responsibilities, and consideration of the business environment, and considers such matters in making compensation decisions.●Role of the Compensation Committee’s Independent Compensation Consultant: For 2019, the Compensation Committee retained the services of FW Cook, a qualified and independent compensation consultant, to aid the Compensation Committee in performing its duties. The Compensation Committee’s compensation consultant assists in collecting and evaluating external market data regarding executive compensation and performance, selecting peer group companies, reviewing the proxy statement and advising the Compensation Committee on developing trends and best practices in executive compensation, director compensation and equity and incentive plan design. Other than performing these consulting services, FW Cook does not provide other services to us or our executive officers. We have affirmatively determined that no conflictEXLSERVICE.COM ∕ 50 of interest has arisen in connection with the work of FW Cook as compensation consultant for the Compensation Committee.Components of Executive Compensation for 2019For 2019, the compensation of executive officers consisted of the following five primary components:Compensation ComponentDescriptionObjectivesBase SalaryFixed compensation that is reviewed annually and is based on performance, experience, responsibilities, skill set and market value.Provide a base level of compensation that corresponds to the job function performed.Attract, retain, reward and motivate qualified and experienced executives.Annual Incentives“At-risk” compensation earned based on performance measured against pre-established annual goals.Goals are tailored to each executive’s position.Incentivize executives to achieve annual goals that ultimately contribute to long-term company growth and stockholder return.Long-Term Incentives“At-risk” compensation in the form of restricted stock unit awards whose value fluctuates according to stockholder value.50% of the award vests based on continued service.50% vests based on achievement of revenue and total stockholder returnAlign executive interests with those of stockholders.Reward continuous service with the company.Incentivize executives to achieve goals that drive company performance over the long-term.Other BenefitsBroad-based benefits provided to company employees (e.g., health and group insurance), a retirement savings plan and other personal benefits where appropriate.Provide a total compensation package that is competitive with the marketplace and addresses unique needs, especially for overseas executives.Severance and Change in Control ProtectionsProtect executives during potentially tumultuous corporate transaction.Provide reduced post-employment compensation upon other involuntary terminations.
in control protectionsEXL 2022 Proxy Statement 71 EXLSERVICE.COM ∕ 51 Detailed ReviewIndividual performanceThe degree to which the executive met and exceeded expectations. Market data to test reasonableness of Compensation Componentscompensation.Base SalaryAs discussed above, we provide our executive officers fixedOverall compensation commensurate with their performance, experience, responsibilities, skill set and market value. This attracts and retains an appropriate caliber of talent for the position and provides a base wage that is not subject to our performance risk. In setting base salaries for 2019, our Compensation Committee considered:mixIndividual PerformanceThe degree to which the executive met and exceeded expectations.Market DataGeographical and market data to test reasonableness of compensation.Overall Compensation Mix Senior employees should have a greater portion of their compensation tied to increasing stockholder value. Upon completing its review and as shown in the table below, and considering base salaries were increased for 2018, the Compensation Committee determined that it was appropriate to hold constant the base salary for each of our named executive officers in 2019. The fixed compensation paid to Messrs. Bagai and Bhalla is paid in Indian Rupees and was held constant in Indian Rupees for each of Messrs. Bagai and Bhalla in 2019. Further, these amounts coverName 2018 Base Salary /
Annual Fixed Compensation
(Effective April 1, 2018)2019 Base Salary /
Annual Fixed Compensation
(Effective April 1, 2019) % Increase /
DecreaseRohit Kapoor $720,000(1) $720,000 — Vishal Chhibbar $450,000 $450,000 — Pavan Bagai(2) INR26,000,000(3) INR26,000,000(4) — Nalin Miglani $450,000 $450,000 — Vikas Bhalla(2) INR22,000,000(5) INR22,000,000(6) — Samuel Meckey $425,000 $425,000 — (1) Mr. Kapoor’s base Namewas revised effective January 1, 2018. There was no change in 2019./(2) Theannual fixed
compensation paid to Messrs. Bagai and($)750,000 475,000 is paid in Indian Rupees (INR).INR24,500,000(1) 420,000 442,000 (3) Equivalent to $407,077, converted at 63.87 INR to 1 USD, which was the exchange rate on December 31, 2018.72 (4) Equivalent to $364,248, converted at 71.38 INR to 1 USD, which was the exchange rate on December 31, 2019./ EXL 2022 Proxy Statement (5) Equivalent to $344,450, converted at 63.87 INR to 1 USD, which was the exchange rate on December 31, 2018.(6) Equivalent to $308,210, converted at 71.38 INR to 1 USD, which was the exchange rate on December 31, 2019. NameEXLSERVICE.COM ∕ 52 Incentive Bonus targetWe have established an annual incentive bonus program in order to align our executive officers’ goals with our performance targets for the current year and to encourage meaningful contributions to our future financial performance. Our Compensation Committee approved the framework of our incentive bonus program in December 2018 for the year 2019 for bonuses payable in respect of 2019 performance. Under the program, bonus target amounts, expressed as a percentageBonus maximum150% of base salary or annual fixed compensation, are established for participants at the beginning of each year unless their employment agreements contain different terms. Funding of potential bonus payouts for the year are determined by our financial results for the year relative to predetermined performance measures and our assessment of each named executive officer’s performance relative to his predetermined individual performance goals. If our performance falls short of target, our aggregate funding of the annual cash bonus incentive pool declines. If we do not achieve a minimum threshold for the established financial performance objectives, then the bonus pool is not funded for that particular objective. Although the Compensation Committee has not historically done so, it has the discretion to adjust an award payout from the amount yielded by the formula at the end of the performance period.Our Compensation Committee considered the following when establishing the awards for 2019:●Bonus Targets. Bonus targets were established based on job responsibilities and comparable market data. Our objective was to set bonus targets such that total annual cash compensation was within the broad middle range of market data and a substantial portion of that compensation was linked to our performance. Consistent with our executive compensation policy, individuals with greater job responsibilities had a greater proportion of their total compensation tied to our performance. During 2019, our Compensation Committee established the following bonus targets (expressed as a percentage of base salary or annual fixed compensation) as well as maximum bonus targets for each named executive officer.NameBonus TargetBonus MaximumRohit Kapoor150% of base salary310% of base salaryVishal Chhibbar75% of base salary155% of base salaryPavan Bagai75% of annual fixed compensation155% of annual fixed compensationNalin Miglani75% of base salary155% of base salaryVikas Bhalla75% of annual fixed compensation154% of annual fixed compensationSamuel Meckey75% of base salary154%311% of base salary EXLSERVICE.COM ∕ 53 75% of base salary 156% of base salary ●Performance Measures. Our executives were eligible to earn annual bonuses based on their achievement of company-wide performance metrics, business line or other company performance metrics and individual performance, as described in the tables below.Name Company-Wide
Performance(1)Individual
PerformanceRohit Kapoor 65% 15% 20% Vishal Chhibbar 60% 20% 20% Pavan Bagai 65% 15% 20% Nalin Miglani 60% 20% 20% Vikas Bhalla 40% 20% 40% Samuel Meckey 40% 20% 40% (1) Based 50% on the Company’s Adjusted EPS goal and 50% on the Company’s revenue goal, for all employees whose incentive bonus is linked to Company-wide financial performance, including our named executive officers.(2) For Messrs. Kapoor, Chhibbar, Bagai and Miglani, based on aggregate Revenue and Adjusted EPS for specific business units. For Messrs. Bhalla and Meckey, based on total revenue and business operating income for specific business units. Business operating income is a component for measuring business unit performance that is computed as the business unit’s gross margin less direct operating expenses.In 2019, the Compensation Committee continued to set the business line and other Company performance goals as well as the individual performance goals described above for all named executive officers to ensure the executives were properly focused on both the Company’s Adjusted EPS and revenue goals, aggregate75% of business units’ performanceannual fixed compensation156% of annual fixed compensation 75% of base salary 156% of base salary 75% of base salary 156% of base salary In 2018, we decided to move away from basing our annual bonus in part on Adjusted EPS and, instead, to base it in part on Adjusted profits before tax (“PBT”) targets because of the uncertain effect of proposed U.S. tax reforms on the Company and the Adjusted EPS calculation. Adjusted PBT, by its nature, is a measure that is unaffected by the then-current year’s taxation. However, since the enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017, the Compensation Committee decided to return to using the Adjusted EPS target as the basis, in part, for the 2019 annual incentive awards. The Compensation Committee believes achievement of these performance metrics will drive our business and, in turn, lead to increased stockholder value.EXL 2022 Proxy Statement Determination of Financial Performance Achievement: In 2019,/ 73 % of target portion funded 210% 160% 100% 10% 74 EXL 2022 Proxy Statement Adjusted EPS targetAI:OS framework$3.175 (14.6% higher than our actual Adjusted EPS for the prior year) and a revenue target of $989.0 million (12.0% higher than our actual revenue for the prior year). As shown below, the portion of incentive bonus payments that were subject to these financial performance measures could have ranged from zero to 210% of target depending on the achievement of the performance goals:CSR program, among othersEXLSERVICE.COM ∕ 54 EXL 2022 Proxy Statement 75 Name 2,050,000 640,498 444,718 586,146 577,214 Performance Targets: Adjusted EPS ($3.175) and Revenue ($989.0 million)% of Performance Achieved Compared to Target Goal% of Target Portion FundedLess than 90%0%At 90%10%90% to 100%Linear interpolation from 10% to 100%At 100%100%100% to 105%Linear interpolation from 100% to 160%105% to 110%Linear interpolation from 160% to 210%Above 110%210%Based on our performance during the 2019 fiscal year, we achieved 104.1% of our Adjusted EPS target, and 99.2% of our revenue target.The bonus pool funding for employees whose bonuses are tied to the performance of specific business lines is determined by targets established for such businesses by our Compensation Committee.●Individual Performance Measures: As discussed above, each of our named executive officers earns a portion of his respective annual incentive bonuses based on the achievement of individual performance measures. These goals are designed to balance the attention of our named executive officers between the achievement of near-term objectives that improve specific processes or performance metrics and long-term objectives for us. While some of the goals are subjective, other goals, such as client and employee satisfaction metrics, are capable of objective measurement. The individual performance measures are generally based on strategic performance indicators such as improving sales productivity, strengthening our sales effectiveness, supporting inorganic growth through mergers and acquisitions, improving recruitment capabilities, enhancing market recognition, advancing our technological and automation capabilities and achieving revenue growth targets within specific areas.●(1) Determination of Individual Performance Achievement: Mr. Kapoor made performance assessments and compensation recommendations for Messrs. Bagai, Miglani, Bhalla and Meckey and our Compensation Committee approved the recommendations after reviewing similar considerations for such named executive officers. For Mr. Bagai, our Compensation Committee noted his contribution in providing leadership to the analytics business, building significant client relationships and driving efficient operations across the enterprise. For Mr. Miglani, our Compensation Committee noted his contribution in building digital capabilities across the organization, significantly expanding the diversity of leadership, driving margin enhancement initiatives and enabling a new organization design. For Mr. Bhalla, our Compensation Committee noted that the Insurance vertical had a successful year. During this year, existing client relationships were expanded and greater geographic diversification was achieved. For Mr. Meckey, our Compensation Committee noted his contribution in developing a growth strategy for the healthcare vertical, building a team of industry experts to drive the strategy and an efficient wind down of the Health Integrated business. For Mr. Kapoor, the Compensation Committee noted that 2019 was one of the best years for growth and profitability. This was in addition to laying the foundation for the future through building a diverse leadership team, developing a long term strategy and creating depth in the leadership team.EXLSERVICE.COM ∕ 55 ●Actual Bonus Payments: The table below sets out the 2019 incentive bonuses for our named executive officers (paid in March 2020).NameEarned 2019 — Incentive Bonus ($)Rohit Kapoor1,304,453Vishal Chhibbar(1)—Pavan Bagai(2)323,814Nalin Miglani411,735Vikas Bhalla(2)285,636Samuel Meckey364,320(1) There was no bonus payout for Mr. Chhibbar since his last working day at the Company was December 13, 2019.(2) The exchange rate used for the bonus conversion from Indian rupees to U.S. dollars for Messrs. Bagai andMr. Bhalla was 71.3874.33 INR to 1 USD, which was the exchange rate on December 31, 2019.2021.Long-Term Equity IncentivesThe Committee continues to believe that long-term equity awards provide employees with the incentive to stay with us for longer periods of time, which in turn, provides us with greater stability as we grow. These incentives foster the long-term perspective necessary for continued success in our business because the value of the awards is directly linked to long-term stock price performance, and they ensure that our executive officers are properly focused on stockholder value.Moreover, the Committee favors restricted stock unit awards as these awards offer executives the opportunity to receive shares of our common stock on or shortly following the date that the restrictions lapse. Such awards serve both to reward and retain executives because value is linked to the price of our stock on the date that the restriction lapses, and the executive must generally remain in employment through the date that the restrictions lapse. Restricted stock unit awards provide a significant degree of alignment of interests between our executives and stockholders.76 EXL 2022 Proxy Statement EXLSERVICE.COM ∕ 56 50% + 50% = Total Name Annual Time-Vested RSUs(1) Relative TSR-Linked PRSUs 35,400 35,400 6,920 6,920 7,340 7,340 5,955 5,955 7,415 7,415 (1) Fiscal Year 2019 AwardsUnder ourTime-Vested RSUs do not include the additional equity compensation program, our executive officers received restricted stock units under the 2015 Amendment and Restatement of the 2006 Omnibus Award Plan (the “2015 Plan”). Subsequent awards were made pursuant to the 2018 Omnibus Incentive Plan approved by the Company’s stockholders at the annual meeting of stockholders heldgrant awarded in June 2018 (the “2018 Plan”). We awarded restricted stock units toSeptember 2021 for all of our named executive officers in the portions shown below.
The table below shows the amount of Time-Vested and Performance-Vested RSUs our Compensation Committee awarded our named executive officers in 2019. In general, the Compensation Committee believes that the size of the award granted to an executive officer should increase basedNEOs except Mr. Kapoor, see page 78 for more information on the executive officer’s level of responsibility within the Company.Name Time-Vested RSUs Revenue-Linked PRSUs Relative TSR-Linked PRSUs Rohit Kapoor 28,910 14,455 14,455 Vishal Chhibbar 7,085 3,543 3,542 Pavan Bagai 10,925 5,463 5,462 Nalin Miglani 6,175 3,088 3,087 Vikas Bhalla 6,830 3,415 3,415 Samuel Meckey 5,370 2,685 2,685 ●TheTime-Vested RSUs will vest in increments of 25% on each of the first four anniversaries of the grant date, subject to continuous service with the Company through the applicable vesting date.●The Committee believes these Time-Vested RSUs provide an important role in promoting retention of our executive officers.●The “Performance-Vested” portion of the 2019 RSUs (“PRSUs”) are split into two types that each vest based on separate performance measures as follows:―Revenue-Linked PRSUs: 50% of these performance-based restricted stock unit awards will cliff-vest on December 31 of the third fiscal year in the performance period, subject to achievement of threshold Company revenues against an aggregate revenue target over the grant’s three year performance period of January 1, 2019 to December 31, 2021 and continuous employment through December 31, 2021 — we call these awards “Revenue-Linked PRSUs.” The ultimate amount of Revenue-Linked PRSUs that a recipient earns may be up to 200% of the target award of Revenue-Linked RSUs. To the extent the Company’s revenue falls in between 90% and 98%, the percentage of Revenue-Based RSUS earned will beEXLSERVICE.COM ∕ 57 determined based on straight line interpolation calculated using a revenue target range between 90% and 100% and a funding range between 0% and 100%. Likewise, if performance is between 102% and 110%, the percentage of Revenue-Based RSUs earned will be determined based on straight line interpolation calculated using a revenue target range between 100% and 110% and a funding range between 100% and 200%. The chart below sets forth the revenue target achievement thresholds and corresponding funding percentage:these awards.Revenue Target AchievementFunding Percentage110% or more200%98% to 102%100%90% or less0%– ―Relative TSR-Linked PRSUs: The remaining 50% of the performance-based restricted stock unit awards cliff-vest on December 31 of the third fiscal year in the performance period, based on the achievement of relative total stockholder return performance of the Company against a peer group over the grant’s three-year performance period of January 1, 2019EXL 2022 Proxy Statement 77 Industry Classification Standard sub-industry group. This comparator set is more appropriate than the compensation peer group for this purpose as it provides a more robust comparison of our performance to the marketplace by the inclusion of more companies and eliminating size as a selection criteria, which is more relevant for compensation than performance comparison. For the Relative TSR-Linked PRSUs granted in 2021, and continuous employment through December 31, 2021 — we call these awards “Relative TSR-Linked PRSUs.” The Company’s TSR for the TSR performance period will be computed and then compared to the TSR of the companies in the TSR peer group, which is comprised of the public companies traded on either the NYSE or NASDAQ stock markets in our 8-digit Global Industry Classification Standard sub-industry group. This comparator set is more appropriate than the compensation peer group for this purpose as it provides a more robust comparison of our performance to the marketplace by the inclusion of more companies and eliminating size as a selection criteria, which is more relevant for compensation than performance comparison. For the Relative TSR-Linked PRSUs granted in 2019, the Company included a negative TSR cap. Under the negative TSR cap, if the total stockholder return is negative over the course of the three year performance period, no named executive officer may receive greater than 100% funding of the TSR-Linked PRSUs.The percentage of Relative TSR-Linked PRSUs earned will be determined based on straight-line interpolation to the extent the Company’s TSR falls in between the 20th and 80th percentiles, as per the chart below:TSR Peer Group Percentile 80.0 or more 200% 65.0 150% 50.0 100% 35.0 50% 20.0 or less 0% – ●The Committee believes the PRSUs focus our executives on key drivers of our Company’s business that will ultimately lead to creation of additional stockholder value.EXLSERVICE.COM ∕ 58 TSR peer group percentile Percentage of Relative TSR-Linked PRSUs earned 200% 150% 100% 50% 0% – Name Additional Time-Based RSUs 8,121 12,181 12,181 8,121 78 Payout of Awards Granted in Prior Fiscal Years/ EXL 2022 Proxy Statement EXL 2022 Proxy Statement This was the third and final performance year for the 2017 performance-based restricted stock units. We achieved 102.61% of the revenue target for the revenue-linked restricted stock units resulting in 126.14% of target funding of those grants. The Company’s TSR performance was at the 51.2 percentile amongst its peer group, resulting in the executives earning 104.07% of the 2017 relative TSR-linked restricted stock units pursuant to the terms of the original grant./Benefits and Perquisites 79 ●provide our global workforce with a reasonable level of financial support in the event of illness or injury; and● partially borne by our employees, including our named executive officers. Our named executive officers in India, Messrs. Bagai and Bhalla, are eligible to participate in the Company’s pension benefit, health and welfare and fringe benefit plans otherwise available to executive employees in India.We generally do not provide significant perquisites or personal benefits to executive officers other than our Vice Chairman and CEO and our executive officers in India. Our Vice Chairman and CEO is provided a limited number of perquisites which we believe are reasonable and consistent with market trends, which are intended to be part of a competitive overall compensation program. A discussion of the benefits provided to our Vice Chairman and CEO is provided under “Employment Agreements” beginning on page 65.Risk and Compensation PoliciesOur Compensation Committee has taken into account its discussions with management and FW Cook regarding our compensation practices and has concluded that any risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. This conclusion was based on the features of our compensation programs, practices and policies set forth under “Executive Compensation Program, Practices and Policies” on page 46.Severance and Change-in-Control BenefitsEach named executive officer is party to an employment agreement or letter that sets forth the terms of his or her employment, including compensation, which was negotiated through arms’-length contract negotiations. Under these employment agreements or letters, we are obligated to pay severance or other enhanced benefits upon termination of their employment. A discussion of the severance and other enhanced benefits provided to our named executive officers is provided under “Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-End” beginning on page 71.We have provided change-in-control severance protection for some of our executive officers, including our named executive officers. Our Compensation Committee believes that such protection is intended to preserve employee morale and productivity and encourage retention in the face of the disruptive impact of an actual or rumored change in control. In addition, for executive officers, the program is intended to align executive officers’ and stockholders’EXLSERVICE.COM ∕ 59 80 Senior executive officers, including our named executive officers, have enhanced levels of benefits based on their job level, seniority and probable loss of employment after a change in control. We also consider it likely that it will take more time for senior executive officers to find new employment./2020 CompensationFor fiscal year 2020, we enhanced our executive stock ownership policy by adding an additional ownership threshold requirement that our CEO and executive committee members must satisfy with respect to our common stock and vested common stock equivalents. We generally continued the annual bonus program and our long-term equity incentives, subject, of course, to new performance goals. For 2020, our Company-Wide Performance Metrics under our annual bonus program was revised such that 40% is based on revenue; 30% on adjusted operating profit margin (AOPM); and 30% on Adjusted EPS. In addition, the split between the Company, Business Unit and Individual components has changed for Messrs. Bhalla and Meckey. Lastly, our Compensation Committee made certain market-based adjustments in compensation to be more competitive and, as a result, the performance-based portion of Mr. Kapoor’s long-term incentive compensation mix became larger than his service-based component (previously the split was 50-50). In light of current global and economic conditions, the Compensation Committee will continue to monitor our 2020 executive compensation program in the second half of the year.Deductibility Cap on Executive CompensationThe Tax Cuts and Jobs Act of 2017 significantly altered our ability to deduct for federal income tax purposes compensation paid to certain of our executives. Prior to its passage, Section 162(m) of the Code limited our ability to deduct compensation paid to our named executive officers (other than our chief financial officer) in excess of $1 million per year, unless the compensation was “performance-based”, as described in the regulations under Code Section 162(m). In general, EXL 2022 Proxy Statement eliminated the exception from Code Section 162(m)’s deduction limits for performance-based compensation, clarified that chief financial officers are covered by the deduction limitation, and made certain other changes, including providing for transition relief for written binding contracts in effect on November 2, 2017.As in the past, our Compensation Committee expects to continue to take into consideration the tax deductibility of compensation, but reserves the right to authorize payments that may not be deductible if it believes that the payments are appropriate and consistent with our compensation philosophy.Despite the changes made to Code Section 162(m) outlined above, our Compensation Committee does not anticipate a shift away from variable or performance-based compensation payable to our named executive officers. Similarly, we do not expect to apply less rigor in the process by which we establish performance goals or evaluate performance against pre-established goals with respect to compensation paid to our named executive officers.EXLSERVICE.COM ∕ 60 The Compensation Committee of the board of directors of ExlService Holdings, Inc. has reviewed and discussed the Compensation Discussion and Analysis with our management and, based on such review and discussion, has recommended to the board of directors of ExlService Holdings, Inc. that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and our proxy statement relating to the Annual Meeting.COMPENSATION COMMITTEEEXL 2022 Proxy Statement 81 Ms. Anne Minto (Chair)Ms. Deborah KerrMr. Som MittalMr. Clyde W. OstlerMs. Jaynie M. StudenmundEXLSERVICE.COM ∕ 61 82 EXL 2022 Proxy Statement 2017, 2018 and 2019, 2020 and 2021 by our named executive officers:Name andPrincipal PositionYearSalary($)Bonus($)StockAwards($)(4)Non-EquityIncentivePlanCompensation($)(5)Change inPensionValue andNonqualifiedDeferredCompensationEarnings($)(6)All OtherCompensation($)Total($)Rohit KapoorVice Chairman & CEO201920182017720,000720,000620,000———4,121,4103,791,2773,145,6871,304,453532,748591,028———49,35461,48441,413(7) Name and
principal position Year Salary
($) Bonus
($)(10) Stock
awards
($)(2) Non-equity
incentive
plan
compensation
($)(3) Change in
pension value
and
nonqualified
deferred
compensation
earnings
($)(4) All other
compensation
($) Total
($) Name Total grant date fair value ($) Maximum total grant date fair value ($) 4,240,920 8,481,840 829,016 1,658,032 879,332 1,758,664 713,409 1,426,818 888,317 1,776,634 6,195,2175,105,5094,398,128Vishal ChhibbarFormer Executive Vice President and CFO201920182017427,808437,671400,000——1,010,024928,709717,639—173,210252,608———11,28911,4658,990(8)1,449,1211,551,0561,379,237Pavan BagaiPresident & Chief Operating Officer and Interim CFO(1)201920182017311,554301,448296,139(2)———1,557,4541,339,3631,134,418323,814133,946265,5616,12917,1246,05947,89357,28466,207(9)2,246,8451,849,1641,768,384Nalin MiglaniExecutive Vice President and Chief Human Resources Officer201920182017450,000440,137410,000———880,294809,936705,312411,735164,579249,083———9,4448,6408,490(10)1,751,4731,423,2921,372,885Vikas BhallaExecutive Vice President and Business Head, Insurance201920182017263,809——(3)———973,685——285,636——5,186——40,367——(11)1,568,683——Samuel MeckeyExecutive Vice President and Business Head, Healthcare201920182017425,000—————765,547——364,320—————9,444——(12)1,564,311—— EXL 2022 Proxy Statement 83 Fiscal year Rate Exchange rate of INR per US$1 2020 December 31, 2020 73.065 December 31, 2019 71.38 84 EXL 2022 Proxy Statement Name Grant
date
non-equity incentive plan awards(1) Estimated future payouts
under equity incentive plan awards All other
stock awards:
number of
shares of
stock or units
(#)
Value of Stock
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) 1,113,904 3,467,027 2/17/21 35,400 (3) 2,968,998 2/17/21 35,400 (2) 70,800 4,240,920 356,250 554,414 2/17/21 6,920 (3) 580,380 9/1/21 8,121 (4) 811,044 2/17/21 6,920 (2) 13,840 829,016 240,988 375,038 2/17/21 7,340 (3) 615,606 9/1/21 12,181 (4) 1,216,516 2/17/21 7,340 (2) 14,680 879,332 311,301 484,463 2/17/21 5,955 (3) 499,446 9/1/21 12,181 (4) 1,216,516 2/17/21 5,955 (2) 11,910 713,409 328,356 511,004 2/17/21 7,415 (3) 621,896 9/1/21 8,121 (4) 811,044 2/17/21 7,415 (2) 14,830 888,317 EXL 2022 Proxy Statement 85 Grant date Vesting start date Vesting schedule (1) In addition to his other roles, Mr. Bagai served as our interim Chief Financial Officer in December 2019.(2) The amount set forth in the “Salary” column for Mr. Bagai includes $127,487 of base salary, $129,796 of a cash supplementary allowance, $32,934 of housing allowance (which Mr. Bagai elected to receive in cash), $10,620 of travel allowance (which Mr. Bagai elected to receive in cash), $210 of medical allowance (which Mr. Bagai elected to receive in cash), and $10,507 of a car allowance (which Mr. Bagai elected to receive in cash). The values set forth in this column are before any compensation reduction under any Company 401(k) savings or non-qualified plan.2/17/2021 Relative TSR-Linked PRSUs:
100% vesting on 12/31/2023(3) The amount set forth in the “Salary” column for Mr. Bhalla includes $107,874 of base salary, $92,802 of a cash supplementary allowance, $32,923 of housing allowance (which Mr. Bhalla elected to receive in cash), $8,986 of travel allowance (which Mr. Bhalla elected to receive in cash), $210 of medical allowance (which Mr. Bhalla elected to receive in cash), and $21,014 of a car allowance (which Mr. Bhalla elected to receive in cash). The values set forth in this column are before any compensation reduction under any Company 401(k) savings or non-qualified plan.(4) Amounts reflect the total grant date fair value of awards (RSUs and revenue based PRSUs) and Monte Carlo value of awards (TSR based PRSUs) (recognized for financial statement reporting purposes for the fiscal years ended December 31, 2017, 2018 and 2019, in accordance with FASB ASC Topic 718 (disregarding any forfeiture assumptions). Assumptions used in the calculation of these amounts are included (i) for 2019, in footnotes 2 and 23 to the audited financial statements for the fiscal year ended December 31, 2019, included in the 2019 Form 10-K; (ii) for 2018, in footnotes 2 and 24 to the audited financial statements for the fiscal year ended December 31, 2018, included in our Annual Report on Form 10-KEXLSERVICE.COM ∕ 62 filed with the Securities and Exchange Commission on February 28, 2019; and (iii) for 2017, in footnotes 2 and 21 to the audited financial statements for the fiscal year ended December 31, 2017, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2018. With respect to stock awards granted in 2019, the table below sets forth the value attributable to performance restricted stock units valued at target achievement. Performance restricted stock units granted in 2019 may pay out up to 200% of the target award, which would have amounted to the grant date fair values listed as the maximum total grant date fair value for each named executive officer in the table below.Name Target Total Grant Date Fair Value ($) Maximum Total Grant Date Fair Value ($) Rohit Kapoor 2,261,629 4,523,259 Vishal Chhibbar 554,246 1,108,491 Pavan Bagai 854,649 1,709,298 Nalin Miglani 483,056 966,113 Vikas Bhalla 534,311 1,068,622 Samuel Meckey 420,095 840,190 (5) Reflects the cash incentive bonuses earned in respect of 2019 and paid in 2020. For details on our annual incentive bonus program, see “Compensation Discussion and Analysis—Incentive Bonus” beginning on page 53.(6) Reflects the present value of accruals under the Gratuity Plan for Indian employees. Information regarding our Gratuity Plan (including the assumptions used to calculate these amounts) may be found under “Pension Benefits For Fiscal Year 2019” beginning on page 70.(7) Amount for Mr. Kapoor includes the travel allowance provided for under his employment agreement, to be used for once-a-year business class airfare for himself and his family between the United States and India ($20,605), costs associated with use of an automobile and driver in India ($358), car lease rental ($5,372), contribution to our 401(k) plan ($9,000), Company-paid life insurance ($444) and tax preparation assistance ($13,575).(8) Amount for Mr. Chhibbar includes Company-paid life insurance ($444) and tax preparation assistance ($10,845).(9) Amount for Mr. Bagai includes housing allowance ($30,809.70), contributions to the Employees’ Provident Fund Scheme (a statutorily required defined contribution program for Indian employees) ($15,298.40), costs associated with use of an automobile and driver in India ($453.90), home internet and telephone charges ($1,331.40).(10) Amount for Mr. Miglani includes contribution to our 401(k) plan ($9,000) and Company-paid life insurance premiums ($444).(11) Amount for Mr. Bhalla includes car allowance ($21,014.12), contributions to the Employees’ Provident Fund Scheme (a statutorily required defined contribution program for Indian employees) ($12,944.80), costs associated with use of an automobile and driver in India ($5,253.57), home internet and telephone charges ($1,154.92).(12) Amount for Mr. Meckey includes contribution to our 401(k) plan ($9,000) and Company-paid life insurance premiums ($444).Unless otherwise specified, U.S. dollar figures in this proxy statement have been converted from Indian rupees at a rate of 71.38 Indian rupees to $1.00, the Indian rupee to U.S. dollar exchange rate in effect as of December 31, 2019. Some of the information in the Summary Compensation Tables for fiscal years 2018 and 2017 was converted using the exchange rates in effect as set forth below:Fiscal Year Rate Exchange Rate of INR per US$1 2018 December 31, 2018 69.77 2017 December 31, 2017 63.87 EXLSERVICE.COM ∕ 63 Grants of Plan-Based Awards Table for Fiscal Year 2019The following table sets forth information concerning grants of stock and option awards and non-equity incentive plan awards granted to our named executive officers during fiscal year 2019:
Under Non-Equity Incentive
Plan Awards(1)
Under Equity Incentive
Plan Awards
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
Fair Value
of Stock
and Option
Awards(5)
($)
($)
($)
($)
(#)
(#)
(#)Rohit 1,080,000 2,234,520 Kapoor 2/20/2019 28,910 (4) 1,859,780 2/20/2019 14,455 (2) 28,910 929,890 2/20/2019 14,455 (3) 28,910 1,331,739 (6) Vishal 337,500 696,600 Chhibbar 2/20/2019 7,085 (4) 455,778 2/20/2019 3,543 (2) 7,086 227,921 2/20/2019 3,542 (3) 7,084 326,324 (6) Pavan 273,186 565,221 Bagai 2/20/2019 10,925 (4) 702,805 2/20/2019 5,463 (2) 10,926 351,435 2/20/2019 5,462 (3) 10,924 503,214 (6) Nalin 337,500 696,600 Miglani 2/20/2019 6,175 (4) 397,238 2/20/2019 3,088 (2) 6,176 198,651 2/20/2019 3,087 (3) 6,174 284,405 (6) Vikas 231,157 473,410 Bhalla 2/20/2019 6,830 (4) 439,374 2/20/2019 3,415 (2) 6,830 219,687 2/20/2019 3,415 (3) 6,830 314,624 (6) Samuel 318,750 652,800 Meckey 2/20/2019 5,370 (4) 345,452 2/20/2019 2,685 (2) 5,370 172,726 2/20/2019 2,685 (3) ,370 247,369 6) (1) These amounts reflect the target and maximum cash incentive bonuses set for 2019. For details of our annual incentive bonus program, see “Compensation Discussion and Analysis – Incentive Bonus” beginning on page 53.(2) Represents annual awards of Revenue-Linked PRSUs granted under the 2018 Plan, subject to the vesting set forth in footnote 7.(3) Represents annual awards of Relative TSR-Linked PRSUs granted under the 2018 Plan, subject to the vesting set forth in footnote 7.(4) Represents annual awards of restricted stock units granted under the 2018 Plan, subject to the vesting set forth in footnote 7.(5) Represents one-time special retention awards of restricted stock units granted under the 2018 plan, subject to the vesting set forth in footnote 7.EXLSERVICE.COM ∕ 64 (6) The grant date fair value of the estimated future payouts for the Relative TSR-Linked PRSUs are based on the Monte Carlo value.(7) The vesting schedules of the stock grants mentioned in the table are as follows for each named executive officer (subject to continued employment through each applicable vesting date):Grant DateVesting Start DateVesting Schedule2/20/20192/20/2019Revenue Linked PRSUs: 100% vesting on 12/31/20212/20/20192/29/2019Relative TSR-Linked PRSUs: 100% vesting on 12/31/20212/20/20192/20/2019Restricted Stock Units: Vesting over 4 years2/17/2021 Restricted Stock Units:
Vesting over 4 Years – 25% each yearEmployment AgreementsIn addition to the terms described below, the employment9/1/2021 Restricted Stock Units:
Vesting over 3 years – 1/3 after 2 years and severance agreements for each of our named executive officers include severance, termination and/or noncompetition provisions, which are described below under “Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-End” beginning on page 71.Rohit Kapoor Mr. Kapoor serves as our Vice Chairman and CEO, and is based at our executive offices in New York, New York. Our engagement of Mr. Kapoor has been under the terms of employment agreements for over 14 years. On September 19, 2017, we entered into an amended and restated employment agreement with Mr. Kapoor that became effective on January 1, 2018. That employment agreement provides for an initial term from January 1, 2018 until December 31, 2020, and automatically renews for successive one-year periods unless terminated with 120 days’ prior notice.●Salary, Bonus and Equity: Mr. Kapoor’s base salary increased to $720,000, effective April 1, 2018 and was held constant in 2019. Mr. Kapoor’s base salary can be increased at our sole discretion and cannot be decreased unless a Company-wide decrease in pay is implemented. Mr. Kapoor can earn an annual cash bonus, with a target of 150% of base salary and a maximum of 326% of base salary, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Kapoor remains eligible to receive equity-based awards annually during the term, in amounts and forms determined by the Compensation Committee, but with vesting terms no less favorable than ratable vesting over four2/3 after 3 years from the date of grant.●Personal Benefits:Mr. Kapoor’s employment agreement also includes severance, termination and noncompetition provisions which are described below under “Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-End” beginning on page 71.86 EXL 2022 Proxy Statement EXLSERVICE.COM ∕ 65 Vishal Chhibbar Mr. Chhibbar served as our Executive Vice PresidentNicolelli’s base salary was set at $475,000 upon his hire in 2020 and CFO until his last day of employment on December 13, 2019. Mr. Chhibbar wasis subject to confidentiality restrictionsreview on an annual basis. In addition, Mr. Nicolelli can earn an annual cash bonus, with a target of 75% of base salary, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Nicolelli is also eligible, subject to performance and other conditions, to receive annual equity awards at all times, as well as noncompetition, nondisparagement and nonsolicitation restrictions during his employment and for one year thereafter.Pavan Bagai Mr. Bagai serves as our President and Chief Operating Officer, and is based in India. We entered into two employment agreements with him, effective July 31, 2002 and August 1, 2002, respectively and a severance letter, effective March 15, 2011, eachthe discretion of which will continue throughout Mr. Bagai’s employment with the Company.●Salary, Bonus and Equity: Mr. Bagai’s annual fixed compensation, measured in U.S. dollars rather than his home currency of Indian rupees (using an exchange rate of 71.38 INR to 1 USD, which was the exchange rate on December 31, 2019), was decreased to $364,248 effective April 1, 2019. Mr. Bagai’s annual fixed compensation includes base salary, as well as amounts available as a leave travel allowance, a housing allowance, an automobile allowance, a medical allowance and a cash supplementary allowance. In addition, Mr. Bagai can earn an annual cash bonus, with a target of 75% of annual fixed compensation and a maximum of 163% of annual fixed compensation, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Bagai is also eligible, subject to performance and other conditions, to receive annual equity awards at the discretion of the Compensation Committee.Mr. Bagai’s agreements also includes severance, termination and noncompetition provisions which are described below under “Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-End” beginning on page 71.Nalin Miglani Mr. Miglani serves as our Executive Vice President and Chief Human Resources Officer, and is based at our executive offices in New York, New York. We entered into an employment agreement with him, effective December 1, 2014, which will continue throughout Mr. Miglani’s employment with the Company.●Salary, Bonus and Equity: Mr. Miglani’s base salary was held constant at $450,000 in 2019 but may be increased from time to time by our Board. While employed, Mr. Miglani can earn an annual cash bonus, with a target of 75% of base salary and a maximum of 162% of base salary, based upon attainment of performance criteria determined by our Compensation Committee. Mr. Miglani is also eligible, subject to performance and other conditions, to receive annual equity awards at the discretion of the Compensation Committee. Mr. Miglani’s employment agreement provided for: (i) an initial equity award of 20,000 restricted stock units that will vest according to the schedule described below under “Outstanding Equity Awards at Fiscal 2019 Year-End” beginning on page 68 and (ii) a one-time joining bonus of $200,000 half of which was paid on the commencement of his employment and the other half paid in March 2015, based on his continued service with the Company. Mr. Miglani received $100,000 in connection with his relocation from Amsterdam to New York in 2014.Mr. Miglani’s employment agreement also includes severance, termination and noncompetition provisions which are described below under “Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-End” beginning on page 71.EXLSERVICE.COM ∕ 66 Vikas Bhalla Mr. Bhalla’s annual fixed compensation, measured in his home currency of Indian rupees set at 1,659,382 Indian rupees when his employment agreement was first executed in 2001 and is subject to review on an annual basis. Mr. Bhalla’s annual fixed compensation includes base salary, as well as amounts available as a leave travel allowance, a housing allowance, an automobile allowance, a medical allowance and a cash supplementary allowance. In addition, Mr. Bhalla can earn an annual cash bonus, with a target of 75% of annual fixed compensation, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Bhalla is also eligible, subject to performance and other conditions, to receive annual equity awards at the discretion of the Compensation Committee. ●Salary, Bonus and Equity: Mr. Bhalla’s annual fixed compensation, measured in U.S. dollars rather than his home currency of Indian rupees (using an exchange rate of 71.38 INR to 1 USD, which was the exchange rate on December 31, 2019), was decreased from $344,450 to $308,210 effective April 1, 2019. Mr. Bhalla’s annual fixed compensation includes base salary, as well as amounts available as a leave travel allowance, a housing allowance, an automobile allowance, a medical allowance and a cash supplementary allowance. In addition, Mr. Bhalla can earn an annual cash bonus, with a target of 75% of annual fixed compensation and a maximum of 162% of annual fixed compensation, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Bhalla is also eligible, subject to performance and other conditions, to receive annual equity awards at the discretion of the Compensation Committee.Mr. Bhalla’s agreements also includes severance, termination and noncompetition provisions which are described below under “Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-End” beginning on page 71.EXL 2022 Proxy Statement Samuel Meckey/Mr. Meckey serves as our Executive Vice President and Business Head, Healthcare, and is based at our executive offices in New York, New York. We entered into an employment agreement with him, effective November 5, 2018, which will continue throughout Mr. Meckey’s employment with the Company. 87●Salary, Bonus and Equity: Mr. Meckey’s annual fixed compensation was held constant at $425,000 in 2019. In addition, Mr. Meckey can earn an annual cash bonus, with a target of 75% of annual fixed compensation and a maximum of 162% of annual fixed compensation, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Meckey is also eligible, subject to performance and other conditions, to receive annual equity awards at the discretion of the Compensation Committee.Mr. Meckey’s agreementsbase salary was set at $425,000 when his employment agreement was first executed in 2018 and is subject to review on an annual basis. In addition, Mr. Meckey can earn an annual cash bonus, with a target of 75% of base salary, based upon the attainment of performance criteria determined by our Compensation Committee. Mr. Meckey is also includes severance, terminationeligible, subject to performance and noncompetition provisions which are described below under “Potential Payments upon Termination or Change in Controlother conditions, to receive annual equity awards at Fiscal 2019 Year-End” beginning on page 71.the discretion of the Compensation Committee.EXLSERVICE.COM ∕ 67 88 EXL 2022 Proxy Statement Equity Awards at Fiscal 2019 Year-EndThe following table sets forth the equity awards at fiscal 2021 year-end Stock award
grant date
Number of shares or
units of stock that
have not vested
(#)(1)
Market value of shares or
units of stock that have
not vested ($)(5)
Equity incentive plan awards:
number of unearned shares,
units or other rights that have
not vested (#)(4)
Equity incentive plan awards: market
or payout value of unearned shares,
units or other rights that have not
vested ($)(5)
2/22/2018 7,502 1,086,065 2/20/2019 14,455 2,092,650 2/20/2020 17,640 2,553,743 2/20/2020 42,660(a) 6,175,888 2/20/2020 42,660(b) 6,175,888 2/17/2021 35,400 5,124,858 2/17/2021 35,400(c) 5,124,858 2/3/2020 4,424 640,462 2/19/2020 3,274 473,977 2/19/2020 4,366(a) 632,066 2/19/2020 4,364(b) 631,776 2/17/2021 6,920 1,001,808 2/17/2021 6,920(c) 1,001,808 9/1/2021 8,121 (2) 1,175,677 2/22/2018 1,664 240,897 2/20/2019 3,415 494,390 2/19/2020 6,225 901,193 2/19/2020 8,300(a) 1,201,591 2/19/2020 8,300(b) 1,201,591 2/17/2021 7,340 1,062,612 2/17/2021 7,340(c) 1,062,612 9/1/2021 12,181 (2) 1,763,443 2/22/2018 590 85,414 2/20/2019 1,445 209,193 10/22/2019 4,567 (3) 661,165 2/19/2020 3,274 473,977 2/19/2020 4,366(a) 632,066 2/19/2020 4,364(b) 631,776 2/17/2021 5,955 862,105 2/17/2021 5,955(c) 862,105 9/1/2021 12,181 (2) 1,763,443 11/8/2018 2,127 307,926 2/20/2019 2,685 388,707 2/19/2020 4,924 712,847 2/19/2020 6,566(a) 950,560 2/19/2020 6,564(b) 950,270 2/17/2021 7,415 1,073,470 2/17/2021 7,415(c) 1,073,470 9/1/2021 8,121 (2) 1,175,677 we have made to our named executive officers that were outstanding as of December 31, 2019. The market values set forth in the table are based on a price of $69.46, which was the closing price of our stock on December 31, 2019.
Stock
Award
Grant Date
Unexercised
Exercise
or Units
That
(#)(2)
Value of
Shares or
Stock
That Have
Not
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
Incentive Plan
Awards: Market
or Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not Rohit 2/7/2012 29,259 — 24.77 2/7/2022 Kapoor 2/24/2016 9,375 651,188 2/23/2017 15,945 1,107,540 2/22/2018 22,504 1,563,128 2/22/2018 30,006(a) 2,084,217 2/22/2018 30,004(b) 2,084,078 2/20/2019 28,910 2,008,089 2/20/2019 14,455(c) 1,004,044 2/20/2019 14,455(d) 1,004,044 Vishal 2/24/2016 1,750 121,555 Chhibbar 2/23/2017 3,638 252,695 2/22/2018 5,513 382,933 2/22/2018 7,350(a) 510,531 2/22/2018 7,350(b) 510,531 2/20/2019 7,085 492,124 2/20/2019 3,543(c) 246,097 2/20/2019 3,542(d) 246,027 Pavan 2/24/2016 3,125 217,063 Bagai 2/23/2017 5,750 399,395 2/22/2018 7,950 552,207 2/22/2018 10,600(a) 736,276 2/22/2018 10,600(b) 736,276 2/20/2019 10,925 758,851 2/20/2019 5,463(c) 379,460 2/20/2019 5,462(d) 379,391 Nalin 2/24/2016 1,500 104,190 Miglani 2/23/2017 3,575 248,320 2/22/2018 4,808 333,964 2/22/2018 6,410(a) 445,239 2/22/2018 6,410(b) 445,239 2/20/2019 6,175 428,916 2/20/2019 3,088(c) 214,492 2/20/2019 3,087(d) 214,423 Vikas 2/24/2016 1,625 112,873 Bhalla 2/23/2017 2,723 189,140 2/22/2018 4,992 346,744 2/22/2018 6,656(a) 462,326 2/22/2018 6,654(b) 462,187 2/20/2019 6,830 474,412 2/20/2019 3,415(c) 237,206 2/20/2019 3,415(d) 237,206 Samuel 11/8/2018 6,380 443,155 Meckey 2/20/2019 5,370 373,000 2/20/2019 2,685(c) 186,500 2/20/2019 2,685(d) 186,500 (1) The stock option awards for Mr. Kapoor became vested in increments of 25% on each of the first, second, third and fourth anniversaries of the grant date, generally subject to continued employment through each applicable vesting date.EXLSERVICE.COM ∕ 68 (2) The restricted stock unit awards in this table vest and convert to shares in accordance with the following schedule (generally subject to continued employment through each applicable vesting date): 25% of the restricted stock units vest on each of the first, second, third and fourth anniversaries of the grant date.(3) The performance restricted stock unit awards in this table vest and convert to shares in accordance with the following schedules (generally subject to continued employment through the applicable vesting date and achievement of applicable performance goals):(a) 100% of the restricted stock units vest on December 31, 2020. This amount represents the 2018 Revenue-Linked PRSUs and reflects maximum performance.(b) 100% of the restricted stock units vest on December 31, 2020. This amount represents the 2018 Relative TSR-Linked PRSUs and reflects maximum performance.(c) 100% of the restricted stock units vest on December 31, 2021. This amount represents 2019 Revenue-Linked PRSUs and reflects target performance.(d) 100% of the restricted stock units vest on December 31, 2021. This amount represents 2019 Relative TSR-Linked PRSUs and reflects target performance.(4) The price used in determining the market values set forth in this table is $69.46, which was the closing price of our stock on December 31, 2019.Option Exercises and Stock Vested During Fiscal Year 2019The following table provides additional information about the value realized by our named executive officers on option award exercises and stock award vesting during fiscal year 2019: Option Awards Stock Awards Name Number of Shares
Acquired on
Exercise
(#)
Realized on
Exercise
Acquired on
Vesting
on VestingRohit Kapoor 18,241 841,498 70,929 4,883,578 Vishal Chhibbar 33,000 1,679,807 8,406 535,362 Pavan Bagai — — 26,887 1,844,141 Nalin Miglani — — 15,521 1,070,423 Vikas Bhalla — — 13,717 935,835 Samuel Meckey — — 2,126 147,034 EXLSERVICE.COM ∕ 69 EXL 2022 Proxy Statement 89 Pension Benefits for Fiscal Year 2019The following table discloses the present value of accumulated benefits payable to each of the named executive officers and the years of service credited to each named executive under the Gratuity Plan for Indian Employees as of December 31, 2019:Name Plan Name Pavan Bagai Gratuity Plan for Indian Employees(2) 17 104,196 — Vikas Bhalla Gratuity Plan for Indian Employees(2) 19 98,538 — (1) Consists of the number of years of service credited as of December 31, 2019 for the purpose of determining benefit service under the Gratuity Plan. Credited service is determined based on the completed years of continuous employment (rounded to the nearest whole number of years) with the Company since the executive’s date of hire.(2) Liabilities with regard to the Gratuity Plans are determined by actuarial valuation using the projected unit credit method. Under this method, we determine our liability based upon the discounted value of salary increases until the date of separation arising from retirement, death, resignation or other termination of services. Critical assumptions used in measuring the plan expense and projected liability under the projected unit credit method include the discount rate, expected return on assets and the expected increase in the compensation rates. Details regarding the assumptions used in the calculation of these amounts are included in footnote 20 to the audited financial statements for the fiscal year ended December 31, 2019 included in the 2019 Option awards Stock awards Name Number of shares
acquired on
exercise
exerciseNumber of shares
acquired on
vesting
vesting — — 67,107 6,850,980 — — 2,565 206,664 — — 15,911 1,624,588 6,500 433,481 11,759 1,285,497 — — 12,266 1,378,072 Name Plan name Number of
years credited
service (#)(1)Present value
of accumulated
benefit ($)Payments during
last fiscal year
($) Gratuity Plan for Indian Employees(2) 21 116,473 — We are required to provide all Indian employees with benefits under the Gratuity Plan, a defined benefit pension plan in India. Distributions from the Gratuity Plan are made in a single lump sum following retirement from the Company. An executive’s benefit under the Gratuity Plan is determined at any time as the executive’s annual base salary (determined based on the executive’s most recent monthly base salary) divided by 26, multiplied by 15, and the product multiplied by the executive’s completed years of continuous service with the Company. An executive has a vested and nonforfeitable right to payment of his accrued Gratuity Plan benefit only after five years of service. The present value of Messrs. Bagai and Bhalla’s accumulated benefits has been determined based on their monthly basic salary rates in effect on December 31, 2019, which are approximately $10,624 and $8,989, respectively.EXLSERVICE.COM ∕ 70 90 Potential Payments upon Termination or Change in Control at Fiscal 2019 Year-EndThe following tables summarize the amounts payable to each named executive officer upon a change in control or termination of his employment with us on December 31, 2019. In calculating potential payments for purposes of this disclosure, we have quantified our equity-based payments using the closing stock price on December 31, 2019, which was $69.46. Some of the capitalized terms used in the employment agreements for our named executive officers are defined in the section entitled “Certain Defined Terms” on page 77.Rohit Kapoor/Cash Severance: If Mr. Kapoor’s employment were terminated by us without “cause” or by the executive for “good reason” (in each case, as described below) on December 31, 2019, he would have been entitled to cash severance consisting of: EXL 2022 Proxy Statement ●continuation of his base salary for 24 months;●his actual bonus, if any, earned for the year of termination, determined as if he had been employed for the full year of termination, paid ratably over the remaining period of base salary payments;●any unpaid bonus amounts from prior periods;●any accrued but unpaid base salary and vacation days or unreimbursed expenses;●costs of continued COBRA coverage under the Company’s group health plan on behalf of the executive and his eligible dependents (described in more detail below), until the earlier of (x) the 18-month anniversary of termination and (y) the date the executive becomes eligible to receive comparable benefits from a subsequent employer; and●continuation of life insurance coverage until the earlier of (x) the 18-month anniversary of termination and (y) the date the executive commences employment with a subsequent employer.Change-in-Control Cash Severance: If Mr. Kapoor’s employment is terminated by us without “cause” or by the executive for “good reason” (in each case, as described above) within 12 months following a “change in control” or in specific contemplation of a change in control, the executive will receive, in lieu of the cash severance described above, (1) a lump sum payment equal to 24 months of base salary and (2) his actual bonus, if any, earned for the year of termination, determined as if he had been employed for the full year of termination, paid ratably over the remaining period of base salary payments.EXL 2022 Proxy Statement Death or Disability: If Mr. Kapoor’s employment terminates due to his death or is terminated by either the executive or us due to his disability, he (or his estate) will be entitled to a prorated portion of his projected bonus amount for the year of termination./ 91 92 Noncompetition and Nonsolicitation Provisions: Mr. Kapoor is subject to confidentiality and nondisparagement restrictions at all times, as well as noncompetition and nonsolicitation restrictions during his employment and for one year thereafter./ EXL 2022 Proxy Statement EXL 2022 Proxy Statement Annual Equity Awards: If Mr. Kapoor’s employment is terminated by us without cause or by Mr. Kapoor for good reason, Mr. Kapoor will be treated as if he was still employed by the Company for a period of two years following the termination date. On a “change in control” (as defined in the 2006 Plan, 2015 Plan, or 2018 Plan, as applicable) or on death, Mr. Kapoor’s outstanding annual equity awards will vest as described below:/ 93 EXLSERVICE.COM ∕ 71 ●Time-Vested RSUs: If a change in control occurs prior to the end of the four-year vesting period, Mr. Kapoor’s Time-Vested RSUs will be advanced by one year. In addition, all of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested if, he is terminated without cause in specific contemplation of or within 12 months following a change in control or, he voluntarily terminates his employment for good reason within 12 months following a change in control. If Mr. Kapoor dies before the end of the four-year vesting period, all of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested.●Revenue-Linked PRSUs: If a change in control occurs prior to the end of the performance period, 100% of target of Mr. Kapoor’s Revenue-Linked PRSUs will be deemed earned, will be subject to a three-year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Kapoor’s outstanding Revenue-Linked PRSUs will become fully vested if, (i) he is terminated without cause in specific contemplation of or within 12 months following a change in control; (ii) he voluntarily terminates his employment for good reason within 12 months following a change in control; or (iii) he dies following a change in control. If Mr. Kapoor dies prior to the end of the performance period and no change in control has occurred, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of completed full months during the three-year performance period up to the date of Mr. Kapoor’s death divided by (y) 36 multiplied by (z) 100% of Mr. Kapoor’s Revenue-Linked PRSUs.
change in
good reason or
without cause
without cause or for
good reason
following change
termination
specific
contemplation of
change in — — — 1,500,000 — 1,500,000 2,050,000 2,050,000 2,050,000 2,050,000 — 2,050,000 — — — 4,239 — 4,239 — — — 37,936 — 37,936 10,857,316 10,857,316 — 9,576,101 4,264,852 10,857,316 11,300,746 14,388,690 — 11,300,746(1) 12,680,575 14,388,690 ●Relative TSR-Linked PRSUs: If a change in control occurs on or prior to the first anniversary of the grant date, 100% of target of Mr. Kapoor’s Relative TSR-Linked PRSUs will be deemed earned. If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation Committee will determine the number of earned Relative TSR-Linked PRSUs based on the TSR of the Company and the peer group as of such date. In either scenario, the Relative TSR-Linked PRSUs that are deemed earned will be subject to a three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Kapoor’s outstanding Relative TSR-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) voluntarily terminates his employment for good reason or (ii) dies. If Mr. Kapoor dies prior to the end of the performance period and no change in control has occurred, Mr. Kapoor will become vested in a portion of the outstanding Relative TSR-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Kapoor’s death divided by (y) 36 multiplied by (z) 100% of Mr. Kapoor’s Relative TSR-Linked PRSUs.Release of Claims: Mr. Kapoor’s severance payments and termination-related equity acceleration are subject to his execution of a release of claims against us, his not having committed a material breach of the restrictive covenants that has remained uncured for 15 days after we have given him notice of such breach and his resignation from the board of directors and all committees thereof, if requested by the Company.Code Section 280G: Mr. Kapoor’s employment agreement also contains a “modified cut-back” provision such that any payments that constitute “excess parachute payments” under Section 280G of the Code will be reduced to an amount that does not trigger the applicable excise taxes, to the extent such reduced amount is larger than the amount Mr. Kapoor would have received on a present-value net-after-tax basis (including excise taxes) absent such a reduction.EXLSERVICE.COM ∕ 72 Indicative Payouts for Rohit KapoorPayments upon
TerminationDisability
($)
($)
($)
($)Base salary payout — — — 1,440,000 — 1,440,000 Bonus payout 1,304,453 1,304,453 1,304,453 1,304,453 — 1,304,453 Life insurance — — — 4,149 — 4,149 Health insurance — — — 36,676 — 36,676 Restricted stock units 5,329,944 5,329,944 — 3,804,810 2,227,999 5,329,944 Performance restricted stock units 2,058,797 3,571,216 — 4,092,236(1) 2,901,921 3,571,216 (1) As described above, upon his termination for good reason or without cause, Mr. Kapoor is treated as having continued his employment for two additional years for purposes of his annual equity awards. The information in this table was calculated assuming target performance over the additional two year-period, however, the actual payment would depend upon the Company’s actual performance following Mr. Kapoor’s termination.Pavan BagaiEither Mr. Bagai or we may terminate Mr. Bagai’s employment at any time with three months’ notice (or pay three months’ salary in lieu of notice). If Mr. Bagai is terminated by us without “cause” (other than due to disability) at any time following a change in control or in specific contemplation of a change in control, or if Mr. Bagai resigns for “good reason” following a “change in control” (as defined in the 2015 Plan), Mr. Bagai will receive a cash severance payment equal to twelve months’ of his then-current annual fixed compensation, payable in twelve equal monthly installments.On a “change in control” (as defined in the 2006 Plan, 2015 Plan, or 2018 Plan, as applicable) or death, Mr. Bagai’s●Time-Vested RSUs: If a change in control occurs prior to the end of the four-year vesting period, Mr. Bagai’s Time-Vested RSUs will be advanced by one year. In addition, all of Mr. Bagai’s If Mr. Bagai dies before the end of the four-year vesting period, all of Mr. Bagai’s outstanding Time-Vested RSUs will become fully vested.●Revenue-Linked PRSUs: If a change in control occurs prior to the end of the performance period, 100% of Mr. Bagai’s Revenue-Linked PRSUs will be deemed earned, will be subject to a new three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Bagai’s outstanding Revenue-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) terminates his employment for good reason or, (ii) dies. If Mr. Bagai dies prior to the end of the performance period and no change in control has occurred, Mr. Bagai will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) theEXLSERVICE.COM ∕ 73 94 EXL 2022 Proxy Statement number of completed full months during the 3 year performance period up to the date of Mr. Bagai’s death divided by (y) 36 multiplied by (z) 100% of Mr. Bagai’s Revenue-Linked PRSUs.●Relative TSR-Linked PRSUs: If a change in control occurs on or prior to the first anniversary of the grant date, 100% of Mr. Bagai’s Relative TSR-Linked PRSUs will be deemed earned. If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation Committee will determine the number of earned Relative TSR-Linked PRSUs based on the TSR of the Company and the peer group as of such date. In either scenario, the Relative TSR-Linked PRSUs that are deemed earned will be subject to a new three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Bagai’s outstanding, earned TSR-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) voluntarily terminates his employment for good reason or, (ii) dies. If Mr. Bagai dies prior to the end of the performance period and no change in control has occurred, Mr. Bagai will become vested in a portion of the outstanding Relative TSR-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Bagai’s death divided by (y) 36 multiplied by (z) 100% of Mr. Bagai’s Relative TSR-Linked PRSUs.Mr. Bagai’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. BagaiEXL 2022 Proxy Statement Indicative Payouts for Pavan Bagai/Payments upon Termination Death Prior to a Change in Control
($)
($)
($)
($)
($)Base salary payout — — — 364,248 — 364,248 Restricted stock units 1,927,515 1,927,515 — 790,542 1,927,515 Performance restricted stock units 743,800 1,311,058 — 1,058,133 1,311,058 Government-required payouts(1) 104,196 104,196 104,196 — 104,196 (1) Represents distributions under the Gratuity Plan, which is due to Mr. Bagai because he has earned over five years of credited service. 95 EXLSERVICE.COM ∕ 74 Nalin MiglaniEither Mr. Miglani or we may terminate Mr. Miglani’s employment at any time (though we must give Mr. Miglani 30 days’ notice if the termination is without “cause” and Mr. Miglani must give us 90 days’ advance notice upon any resignation). If Mr. Miglani’s employment with the Company is terminated by the Company without “cause” (other than due to death or disability) or by Mr. Miglani for “good reason” (both “cause” and “good reason” as defined above), Mr. Miglani will receive a cash severance payment equal to 12 months base salary, with 25% payable as a lump sum payment and the remaining 75% payable in accordance with the Company’s regular payroll practices.On a “change in control” (as defined in the 2006 Plan, 2015 Plan, or 2018 Plan, as applicable) or death, Mr. Miglani’s outstanding equity awards will vest in the same manner as described for Mr. Bagai’s outstanding equity awards beginning on page 73.Mr. Miglani’s severance payments and termination-related equity acceleration are subject to his execution of a release of claims against us. Mr. Miglani is subject to confidentiality restrictions at all times, as well as noncompetition, nondisparagement and nonsolicitation restrictions during his employment and for one year thereafter.Indicative Payouts for Nalin MiglaniPayments upon Termination Base salary payout — — 450,000 — 450,000 Restricted stock units 1,115,389 1,115,389 — 446,888 1,115,389 Performance restricted stock units 439,798 762,844 — 619,887 762,844 Vikas BhallaEither Mr. Bhalla or we may terminate Mr. Bhalla’s employment at any time with three months’ notice (or pay three months’ salary in lieu of notice). If Mr. Bhalla is terminated by us without “cause” (other than due to disability) at any time following a change in control or in specific contemplation of a change in control, or if Mr. Bhalla resigns for “good reason” after at least six months following a “change in control” (as defined in the 2015 Plan), Mr. Bhalla will receive a cash severance payment equal to twelve months’ of his then-current annual fixed compensation, payable in twelve equal monthly installments.On a “change in control” (as defined in the 2006 Plan, 2015 Plan, or 2018 Plan, as applicable) or death, Mr. Bhalla’s outstanding equity awards will vest in the same manner as described for Mr. Bagai’s outstanding equity awards beginning on page 73.Mr. Bhalla’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. Bhalla is subject to confidentiality restrictions at all times, as well as noncompetition and nonsolicitation restrictions for two years following termination of his employment.EXLSERVICE.COM ∕ 75 Indicative Payouts for Vikas BhallaPayments upon
Termination
($)
($)
($)Base salary payout — — 308,210 — 308,210 Restricted stock units 1,123,168 1,123,168 — 441,592 1,123,168 Performance restricted stock units 466,308 821,121 — 663,000 821,121 Government-required payouts(1) 98,538 98,538 98,538 98,538
change in control
change in control
good reason or
without cause
without cause or
following change
termination
change in control — — 475,000 — 475,000 3,291,925 3,291,925 — 621,896 3,291,925 755,205 1,949,618 — 1,615,715 1,949,618 Death prior to a
change in control
($) Death after a
change in control
($)
good reason or
($)
without cause or for
good reason
control or termination
without cause in
specific
change in control
($) — — 329,611 — 329,611 4,462,535 4,462,535 — 1,224,682 4,462,535 1,155,269 2,864,998 — 2,510,830 2,864,998 116,473 116,473 116,473 — 116,473 96 Samuel MeckeyEither Mr. Meckey or we may terminate Mr. Meckey’s employment at any time (though we must give Mr. Meckey 30 days’ notice if the termination is without “cause” and Mr. Meckey must give us 60 days’ advance notice upon any resignation). If Mr. Meckey’s employment with the Company is terminated by the Company without “cause” (other than due to death or disability) or by Mr. Meckey for “good reason” (both “cause” and “good reason” as defined above), Mr. Meckey will receive a cash severance payment equal to 12 months base salary, with 25% payable as a lump sum payment and the remaining 75% payable in accordance with the Company’s regular payroll practices./On a “change in control” (as defined in the 2018 Plan) or death, Mr. Meckey’s outstanding equity awards will vest in the same manner as described for Mr. Bagai’s outstanding equity awards on page 73. EXL 2022 Proxy Statement
change in control
change in control
good reason or
($)
without cause or for
good reason
following change
termination
specific
change in control
($) — — 420,000 — 420,000 4,055,297 4,055,297 — 1,224,682 4,055,297 708,641 1,809,915 — 1,522,575 1,809,915 EXLSERVICE.COM ∕ 76 EXL 2022 Proxy Statement Indicative Payouts for Samuel Meckey/Payments upon
Termination
($)
($)
($)Base salary payout — — 425,000 — 425,000 Restricted stock units 816,155 816,155 — 240,957 816,155 Performance restricted stock units 124,321 373,000 — 248,679 373,000 Certain Defined TermsDefinition of Cause 97The following definition of “cause” applies to Messrs. Kapoor, Chhibbar, Bagai, Miglani, Bhalla and Meckey unless stated otherwise. “Cause” will occur if: (i) there is a final nonappealable conviction of, or pleading of no contest to, (1) a crime of moral turpitude which causes serious economic injury or serious injury to our reputation or (2) a felony; (ii) the executive engages in fraud, embezzlement, gross negligence, self-dealing, dishonesty or other gross and willful misconduct which causes serious and demonstrable injury to us; (iii) the executive materially violates any of our material policies (for Mr. Kapoor, which is not remedied within 15 days of receipt of notice from the Company specifying the breach in reasonable detail); (iv) the executive willfully and continually fails to substantially perform his duties (other than for reason of physical or mental incapacity) which continues beyond 15 days after we notify him in writing of his need to substantially improve his performance; provided that a failure to achieve performance objectives will not by itself constitute cause and no act or failure to act shall be considered “willful” unless done or failed to be done by the executive in bad faith and without a reasonable belief that his actions or omission was in our best interest; (v) the executive fails to reasonably cooperate in a governmental investigation involving us; (vi) the executive materially, knowingly and intentionally fails to comply with applicable laws with respect to the execution of the Company’s business operations (subject to a presumption of good faith if the executive is following advice of counsel); (vii) the executive fails to follow his supervisor’s (or, for Messrs. Kapoor and Bagai our board of directors’) lawful instructions and does not remedy the failure for 15 days after we give him written notice; (viii) the executive’s use of alcohol or drugs materially interferes with the performance of his duties; (ix) for Mr. Kapoor only, he fails to take reasonable steps to end certain affiliations specified in his employment agreement within six months after a request by our board of directors; or (x) for Mr. Kapoor only, he materially breaches any material term of his employment agreement which is not remedied within 15 days of receipt of notice from the Company specifying the breach in reasonable detail.Definition of Good Reason
Executive compensation
Indicative payouts for Samuel Meckey
Payments upon termination | Death prior to a ($) | Death after a ($) | Termination for without cause | Change in control ($) | Termination in control or without cause in contemplation of | |||||||||||||||
Base salary payout | — | — | 442,000 | — | 442,000 | |||||||||||||||
Restricted stock units | 3,658,627 | 3,658,627 | — | 1,008,178 | 3,658,627 | |||||||||||||||
Performance restricted stock units | 991,429 | 2,499,020 | — | 2,141,232 | 2,499,020 | |||||||||||||||
Definition of cause
The following definition of “cause” applies to all named executive officers unless stated otherwise. “Cause” will occur if: (i) there is a final nonappealable conviction of, or pleading of no contest to, (1) a crime of moral turpitude which causes serious economic injury or serious injury to our reputation or (2) a felony; (ii) the executive engages in fraud, embezzlement, gross negligence, self-dealing, dishonesty or other gross and willful misconduct which causes serious and demonstrable injury to us; (iii) the executive materially violates any of our material policies (for Mr. Kapoor, which is not remedied within 15 days of receipt of notice from the Company specifying the breach in reasonable detail); (iv) the executive willfully and continually fails to substantially perform his duties (other than for reason of physical or mental incapacity) which continues beyond 15 days after we notify him in writing of his need to substantially improve his performance; provided that a failure to achieve performance objectives will not by itself constitute cause and no act or failure to act shall be considered “willful” unless done or failed to be done by the executive in bad faith and without a reasonable belief that his actions or omission was in our best interest; (v) the executive fails to reasonably cooperate in a governmental investigation involving us; (vi) the executive materially, knowingly and intentionally fails to comply with applicable laws with respect to the execution of the Company’s business operations (subject to a presumption of good faith if the executive is following advice of counsel); (vii) the executive fails to follow his supervisor’s (or, for Messrs. Kapoor our board of directors’) lawful instructions and does not remedy the failure for 15 days after we give him written notice; (viii) the executive’s use of alcohol or drugs materially interferes with the performance of his duties; (ix) for Mr. Kapoor only, he fails to take reasonable steps to end certain affiliations specified in his employment agreement within six months after a request by our board of directors; or (x) for Mr. Kapoor only, he materially breaches any material term of his employment agreement which is not remedied within 15 days of receipt of notice from the Company specifying the breach in reasonable detail.
Definition of good reason
For Mr. Kapoor, “good reason” generally means: (i) his duties or responsibilities are substantially reduced, he is required to report to anyone other than our board of directors, or his title as our officer is adversely changed; however, if following a change in control, his new title and authority are similar to his old title and authority, then any change in the executive’s title will not
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Executive compensation
constitute a significant reduction in his duties and authorities, it being understood that “good reason” shall be deemed to exist if Mr. Kapoor is no longer the chief executive officer of the Company or any entity that acquires the Company; (ii) his base salary is reduced, or his target annual bonus opportunity is reduced below 100% of his base salary; (iii) the office or location where he is based in the metropolitan New York City area is moved more than 30 miles, and the new location is more than 30 miles from his primary residence in the metropolitan New York City area; or (iv) we breach any material term of his employment agreement. If Mr. Kapoor plans to terminate his employment for good reason, he must notify us within 45 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem.
The following definition of “good reason” applies to Messrs. Nicolelli, Bhalla, and Meckey unless stated otherwise. “Good reason” means, without the executive’s prior written consent: (i) the executive’s duties or responsibilities are substantially reduced, or he is required to report to anyone other than our board of directors, or our CEO; (ii) the executive’s title as our officer is adversely changed; however, if following a change in control (as defined in the 2018 Plan), his new title and authority are similar to his old title and authority, then any change in the executive’s title will not constitute a significant reduction in his duties and authorities; (iii) for Messrs. Nicolelli and Meckey only, there is a change in the office or location where the executive is based of more than 50 miles and such new office or location is more than 50 miles from the executive’s primary residence; or (iv) we breach any material term of the executive’s employment agreement or severance agreement. If the executive plans to terminate his employment for good reason, he must notify us within 30 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem.
Definition of change in control his new title and authority are similar to his old title and authority, then any change in
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the executive’s title will not constitute a significant reduction in his duties and authorities, it being understood that “good reason” shall be deemed to exist if Mr. Kapoor is no longer the chief executive officer of the Company or any entity that acquires the Company; (ii) his base salary is reduced, or his target annual bonus opportunity is reduced below 100% of his base salary; (iii) the office or location where he is based in the metropolitan New York City area is moved more than 30 miles, and the new location is more than 30 miles from his primary residence in the metropolitan New York City area; or (iv) we breach any material term of his employment agreement. If Mr. Kapoor plans to terminate his employment for good reason, he must notify us within 45 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem.
The following definition of “good reason” applies to Messrs. Chhibbar, Bagai, Miglani, Bhalla and Meckey unless stated otherwise. “Good reason” means, without the executive’s prior written consent: (i) the executive’s duties or responsibilities are substantially reduced, or he is required to report to anyone other than our board of directors, or our CEO; (ii) the executive’s title as our officer is adversely changed; however, if following a change in control (as defined in the 2015 Plan and 2018 Plan, as applicable), his new title and authority are similar to his old title and authority, then any change in the executive’s title will not constitute a significant reduction in his duties and authorities; (iii) for Mr. Bagai only, the executive’s base salary or annual cash bonus opportunity is reduced, other than in connection with a proportionate reduction impacting all members of our executive committee; (iv) for Messrs. Chhibbar, Miglani and Meckey only, there is a change in the office or location where the executive is based of more than 50 miles and such new office or location is more than 50 miles from the executive’s primary residence; or (v) we breach any material term of the executive’s employment agreement or severance agreement. If the executive plans to terminate his employment for good reason, he must notify us within 30 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem.
Definition of Change in Control
A “change in control” (as generally defined in Mr. Kapoor’s employment agreement the 2006 Plan the 2015 Plan, and the 2018 Plan, as applicable) generally means any of the following events: (i) any person or group becomes a beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of more than 50% (50% or more in the 2006 Plan) of either (1) the combined voting power of our then-outstanding voting securities entitled to vote in the election of directors or (2) our outstanding shares of common stock, assuming all rights to acquire common stock through options, warrants, conversion of convertible stock or debt, and the like are exercised; (ii) a majority of the members of our board of directors changes from those in office as of the date of Mr. Kapoor’s employment agreement or the effective date of the 2006 Plan, 2015 Plan or 2018 Plan (as applicable), except that the election of any new director whose election or nomination was approved by at least two-thirds of our incumbent directors will not be regarded towards a change in the majority for these purposes; (iii) our dissolution or liquidation; (iv) the sale, transfer or other disposition of all or substantially all of our business or our assets; or (v) consummation of a reorganization, recapitalization, merger, consolidation or similar transaction with another entity which requires the approval of our stockholders; however, any such transaction will not be a change in control if after the transaction (1) more than 50% of the total voting power of the resulting entity or its ultimate parent is represented by what were our outstanding voting securities before the transaction in substantially the same proportion among holders; (2) no person or group is or becomes the beneficial owner of more than 50% (50% or more in the 2006 Plan) of the total voting power of the outstanding voting securities eligible to elect members of our board of directors of the parent or surviving company; and (3) at least a majority of the members of our board of directors of the parent or surviving company following the transaction were our board members when our board first approved the transaction.
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CEO Pay Ratio
In accordance with SEC rules and the Dodd-Frank Wall Street Reform and Consumer Protection Act, presented below is an estimate of the ratio of our CEO’s annual total compensation to our median employee’s annual total compensation (our “Pay Ratio”). Due to the size and complexity of our organization, which as of March 31, 2020 was made up of over 32,700 professionals throughout the world, with delivery centers in over 10 countries, our Pay Ratio is based on reasonable assumptions and estimates described below.
We calculated our Pay Ratio by looking at our entire employee population (excluding our CEO) as of December 31, 2019, but excluding leased employees and independent contractors. We then calculated each employee’s “total pay” using the sum of his or her fixed pay / base salary and variable pay (including any performance bonus, sales commission, and retention or signing bonus). We also annualized total pay for all full-time and part-time employees that were employed for less than the full fiscal year 2019.
Executive compensation
Definition of retirement
A “retirement” generally means a named executive officer’s voluntary termination of employment that is effective after he reaches age 60.
In accordance with SEC rules and the Dodd-Frank Wall Street Reform and Consumer Protection Act, presented below is an estimate of the ratio of our CEO’s annual total compensation to our median employee’s annual total compensation (our “Pay Ratio”). Due to the size and complexity of our organization, which as of December 31, 2021 was made up of approximately 37,000 professionals throughout the world, with delivery centers in over 10 countries, our Pay Ratio is based on reasonable assumptions and estimates described below.
We calculated our Pay Ratio by looking at our entire employee population (excluding our CEO) as of December 31, 2021, but excluding leased employees and independent contractors. We then calculated each employee’s “total pay” using the sum of his or her fixed pay / base salary and variable pay (including any performance bonus, sales commission, and retention or signing bonus). We also annualized total pay for all full-time and part-time employees that were employed for less than the full fiscal year 2021.
For all employees located in jurisdictions other than the United States, a cost-of-living adjustment was made to align their compensation with the cost-of-living standards in the United States, the jurisdiction in which our CEO resides. Finally, we identified the median employee and calculated his or her annual total compensation and the CEO’s annual total compensation in the manner required by Item 402(u) of Regulation S-K, to determine the pay ratio shown in the table below.
Pay Ratio – all employees (with COLA)(1) Chief Executive Officer’s annual total compensation Median employee’s annual total compensation Ratio of Chief Executive Officer’s annual total compensation to median employee’s annual total compensation(1) 2019 Mercer Combined Index. Our median employee, identified without performing a cost-of-living adjustment, is based in India and had an annual total compensation of $6,676, resulting in a pay ratio of 928: $ 10,033,589 $ 10,275 977:1
(1) 2021 Mercer Combined Index. Our median employee, identified without performing a cost-of-living adjustment, is based in India and had an annual total compensation of $6,780, resulting in a pay ratio of 1480:1.
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| EXL 2022 Proxy Statement |
Executive compensation
Approximately 94% of our employees are located outside of the United States, primarily in India and the Philippines. As is common with many global companies, our compensation programs are market based, and as such they may differ for employees based on the country where an employee works. Accordingly, we believe that it is important to show our pay-ratio calculated in a similar manner as described above using the median U.S.-based employee to provide a commensurable view of our pay practices.
Pay Ratio – United States employees | ||||
Chief Executive Officer’s annual total compensation | $ | 10,033,589 | ||
Median employee’s annual total compensation | $ | 93,916 | ||
Ratio of Chief Executive Officer’s annual total compensation to median employee’s annual total compensation | 107:1 | |||
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Executive compensation
Director compensation for fiscal year 2021
The following table sets forth information for compensation earned in fiscal year 2021 by our non-executive directors who served during fiscal year 2021:
Name(1) | Fees earned or ($) | Stock awards ($)(2)(3) | All Other compensation ($)(4) | Total ($) | ||||||||||||
David Kelso(5) | 37,813 | — | — | 37,813 | ||||||||||||
Deborah Kerr(5) | 36,667 | — | — | 36,667 | ||||||||||||
Anne Minto | 80,000 | 140,000 | 10,623 | 230,623 | ||||||||||||
Som Mittal | 80,000 | 140,000 | 2,765 | 222,765 | ||||||||||||
Clyde Ostler | 95,000 | 140,000 | — | 235,000 | ||||||||||||
Vikram Pandit(6) | 82,500 | 140,000 | — | 222,500 | ||||||||||||
Kristy Pipes | 82,500 | 140,000 | — | 222,500 | ||||||||||||
Nitin Sahney | 92,500 | 140,000 | — | 232,500 | ||||||||||||
Garen Staglin | 180,000 | 240,000 | 61,908 | 481,908 | ||||||||||||
Jaynie Studenmund | 92,500 | 140,000 | — | 232,500 | ||||||||||||
(1) Mr. Kapoor’s compensation during 2021 was based solely on his role as CEO, as disclosed in the “Summary compensation table for fiscal year 2021” beginning on page 83 and discussed in “Compensation Discussion and Analysis” beginning on page 60. He does not receive any additional compensation for his services as a director. Ms. Pipes, a current non-executive director, was appointed to the board of directors effective January 19, 2021.
(2) Amounts reflect the aggregate grant date fair value of stock awards and option awards recognized for financial statement reporting purposes for the fiscal year ended December 31, 2021, in accordance with FASB ASC Topic 718 (disregarding any forfeiture assumptions). Assumptions used in the calculation of these amounts are included in footnotes 2 and 22 to our audited financial statements for the fiscal year ended December 31, 2021 included in the 2021 Form 10-K.
(3) The outstanding equity awards held by our non-employee directors on December 31, 2021 is set forth on the table below:
Name | No. of securities | No. of securities underlying unexercised options (#) unexercisable | No. of shares or units of stock that have not vested | |||||||||
David Kelso | 0 | 0 | 0 | |||||||||
Deborah Kerr | 0 | 0 | 0 | |||||||||
Anne Minto | 3,093 | 0 | 1,420 | |||||||||
Som Mittal | 0 | 0 | 1,420 | |||||||||
Clyde Ostler | 0 | 0 | 1,420 | |||||||||
Vikram Pandit | 0 | 0 | 1,420 | |||||||||
Kristy Pipes | 0 | 0 | 2,069 | |||||||||
Nitin Sahney | 0 | 0 | 1,420 | |||||||||
Garen Staglin | 0 | 0 | 2,695 | |||||||||
Jaynie Studenmund | 0 | 0 | 1,420 | |||||||||
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Director Compensation for Fiscal Year 2019
The following table sets forth information for compensation earned in fiscal year 2019 by our non-executive directors who served during fiscal year 2019:
| Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2)(3) | All Other Compensation | Total ($) |
| David Kelso | 92,500 | 110,000 | — | 202,500 |
| Deborah Kerr | 80,000 | 110,000 | — | 190,000 |
| Anne Minto | 90,000 | 110,000 | 28,765 | 228,765 |
| Som Mittal | 80,000 | 110,000 | 23,887 | 213,887 |
| Clyde Ostler | 95,000 | 110,000 | — | 205,000 |
| Vikram Pandit | 72,500 | 110,000 | — | 182,500 |
| Nitin Sahney | 82,500 | 110,000 | — | 192,500 |
| Garen Staglin | 130,000 | 210,000 | 52,116 | 392,116 |
| Jaynie Studenmund | 82,500 | 110,000 | — | 192,500 |
(1) Mr. Kapoor’s compensation during 2019 was based solely on his role as CEO, as disclosed
Executive compensation
(4) For Ms. Minto and Mr. Mittal, amount reflects our reimbursement to the director for fees associated with tax preparer services. For Mr. Staglin, amount reflects our reimbursement for costs associated with secretarial services.
(5) Mr. Kelso and Ms. Kerr each departed from the board of directors following the Company’s 2021 Annual Meeting of Stockholders in June 2021.
(6) Pursuant to the Investment Agreement, Mr. Pandit’s 2021 compensation was paid to The Orogen Group.
For 2021, non-employee directors (other than the non-executive Chairman) were eligible to receive an annual retainer fee in the amount of $60,000 in cash and $140,000 in equity valued at the time of grant. The non-executive Chairman of our board of directors was eligible to receive an annual retainer fee in the amount of $160,000 in cash and $240,000 in equity valued at the time of grant. New non-employee directors who join our board of directors during a calendar quarter are eligible to receive the full cash fee for such calendar quarter and a pro-rated equity grant. The chairperson of our Audit Committee was eligible to receive an additional annual fee of $25,000 in cash, and other members of our Audit Committee were eligible to receive an additional annual fee of $12,500 in cash. The Chairpersons of committees other than our Audit Committee were eligible to receive an additional annual fee of $20,000 in cash, and members of committees other than our Audit Committee were eligible to receive an additional annual fee of $10,000. For 2022, we revised our director compensation program to increase our annual retainer fee to $85,000 in cash and $190,000 in equity, remove additional annual fees for non-chair committee membership, and adjust additional annual fees for committee chairs.
There are no additional fees payable for attendance at our board or committee meetings (whether in person, telephonic or otherwise). We make quarterly cash payments in respect of the director fees to our directors.
Holders of restricted stock units do not receive the underlying shares of common stock until the units have vested and are settled. Unless the director elects otherwise, the “Summary Compensation Table for Fiscal Year 2019” beginning on page 62 and discussed in “Compensation Discussion and Analysis” beginning on page 62. He does not receive any additional compensation for his services as a director.
(2) Amounts reflect the aggregate grant date fair value of stock awards and option awards recognized for financial statement reporting purposes for the fiscal year ended December 31, 2019, in accordance with FASB ASC Topic 718 (disregarding any forfeiture assumptions). Assumptions used in the calculation of these amounts are included in footnotes 2 and 23 to our audited financial statements for the fiscal year ended December 31, 2019 included in the 2019 Form 10-K.
(3) The outstanding equity awards held by our non-employee directors on December 31, 2019 is set forth on the table below:
| Name | No. of Securities Underlying Options (#) | No. of Securities Unexercised Unexercisable | No. of Shares Stock That Have Not Vested | |
| David Kelso | 26,294 | 0 | 1,796 | |
| Deborah Kerr | 0 | 0 | 1,796 | |
| Anne Minto | 3,093 | 0 | 1,796 | |
| Som Mittal | 0 | 0 | 1,796 | |
| Clyde Ostler | 7,258 | 0 | 1,796 | |
| Vikram Pandit | 0 | 0 | 1,796 | |
| Nitin Sahney | 0 | 0 | 1,796 | |
| Garen Staglin | 15,831 | 0 | 3,498 | |
| Jaynie Studenmund | 0 | 0 | 1,796 |
4) For Ms. Minto and Mr. Mittal, amount reflects our reimbursement to the director for tax planning fees as well as tax gross-up amounts ($6,395 for Ms. Minto and $12,373 for Mr. Mittal). For Mr. Staglin, amount reflects our reimbursement for costs associated with secretarial services.
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For 2019, non-employee directors (other than the non-executive Chairman) were eligible to receive an annual retainer fee in the amount of $60,000 in cash and $110,000 in equity valued at the time of grant. The non-executive Chairman of our board of directors was eligible to receive an annual retainer fee in the amount of $110,000 in cash and $210,000 in equity valued at the time of grant. New non-employee directors who join our board of directors during a calendar quarter are eligible to receive the full cash fee for such calendar quarter and a pro-rated equity grant. The chairperson of our Audit Committee was eligible to receive an additional annual fee of $25,000 in cash, and other members of our Audit Committee were eligible to receive an additional annual fee of $12,500 in cash. The Chairpersons of committees other than our Audit Committee were eligible to receive an additional annual fee of $20,000 in cash, and members of committees other than our Audit Committee were eligible to receive an additional annual fee of $10,000.
There are no additional fees payable for attendance at our board or committee meetings (whether in person, telephonic or otherwise). We make quarterly cash payments to our directors who elect to receive a portion of their director fees in the form of cash.
Holders of restricted stock units do not receive the underlying shares of common stock until the units have vested and are settled. The restricted stock units issued to each of our non-employee directors will settle on the earliest of:
such director’s death;
180 days following the end of such director’s term on our board of directors, or if the director has satisfied our stock ownership guidelines and made an election prior to the grant, the vesting date of the award; and
the occurrence of a “change in control,” as defined in the 2006 Plan, |
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STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL OWNERS/
Stock ownership of directors, executive officers and certain beneficial owners
Stock ownership of directors, executive officers and certain beneficial owners
Unless otherwise indicated, the table below sets forth information with respect to the beneficial ownership of our common stock by:
each of our directors and each of our named executive officers individually;
each person who is known to be the beneficial owner of more than 5% of our common stock; and
all of our current directors and current executive officers (i.e., not just named executive officers) as a group.
The amounts and percentages of common stock beneficially owned below are as of March 31, 2022 (the “Determination Date”) and are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of the Determination Date. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. Except as otherwise indicated below, each of the persons named in the table has sole voting and investment power with respect to the securities beneficially owned by such person as set forth opposite such person’s name.
Beneficial ownership
| Name and address(1) | Shares | %(2) | Vested but unsettled RSUs(3) | Total | ||||||||||||||
5% Beneficial owners | ||||||||||||||||||
Blackrock Inc.(4) | 4,986,346 | 14.96% | — | |||||||||||||||
The Vanguard Group, Inc.(5) | 3,556,074 | 10.70% | — | |||||||||||||||
FMR LLC(6) | 2,056,711 | 6.17% | — | |||||||||||||||
Named Executive Officers | ||||||||||||||||||
Rohit Kapoor | 655,867 | (7) | 1.97% | — | 655,867 | |||||||||||||
Maurizio Nicolelli | 7,527 | * | — | 7,527 | ||||||||||||||
Vikas Bhalla | 16,863 | * | — | 16,863 | ||||||||||||||
Vivek Jetley | 49,662 | * | — | 49,662 | ||||||||||||||
Samuel Meckey | 13,581 | * | — | 13,581 | ||||||||||||||
Directors | ||||||||||||||||||
Anne E. Minto | 3,093 | (8) | * | 21,437 | 24,530 | |||||||||||||
Som Mittal | — | * | 13,033 | 13,033 | ||||||||||||||
Clyde W. Ostler | 22,261 | * | 37,184 | 59,445 | ||||||||||||||
Vikram S. Pandit | 310,394 | (9) | * | 5,358 | 5,358 | |||||||||||||
Kristy Pipes | — | * | 649 | 649 | ||||||||||||||
Nitin Sahney | — | * | 10,862 | 10,862 | ||||||||||||||
Garen K. Staglin | 35,028 | (10) | * | 53,502 | 88,530 | |||||||||||||
Jaynie M. Studenmund | 3,645 | * | 5,399 | 9,044 | ||||||||||||||
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| All current directors and executive officers as a group (18 people)(11) | 1,169,958 | (12) | 3.51 |
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The amounts and percentages of common stock beneficially owned below are as of March 31, 2020 (the “Determination Date”), and are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of the Determination Date. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. Except as otherwise indicated below, each of the persons named in the table has sole voting and investment power with respect to the securities beneficially owned by such person as set forth opposite such person’s name.
| Beneficial Ownership | Vested but Unsettled Restricted Stock Units(3) | |||||||||||
| Name and Address of Beneficial Owner(1) | Shares | %(2) | Total | |||||||||
| 5% Beneficial Owners | ||||||||||||
| Blackrock Inc.(4) | 5,107,172 | 14.88 | — | |||||||||
| Vanguard Group, Inc.(5) | 3,562,322 | 10.38 | — | |||||||||
| FMR LLC(6) | 2,105,848 | 6.14 | — | |||||||||
| NEOs and Directors | ||||||||||||
| Pavan Bagai | 44,060 | * | — | 44,060 | ||||||||
| Vishal Chhibbar | 18,036(7) | * | — | 18,036 | ||||||||
| Rohit Kapoor | 898,671(8) | 2.62 | — | 898,671 | ||||||||
| David B. Kelso | 30,005(9) | * | 38,061 | 68,066 | ||||||||
| Deborah Kerr | — | * | 10,127 | 10,127 | ||||||||
| Samuel Meckey | 2,350 | * | — | 2,350 | ||||||||
| Nalin Miglani | — | * | — | — | ||||||||
| Anne E. Minto | 3,093(10) | * | 17,278 | 20,371 | ||||||||
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| Beneficial Ownership | Vested but Unsettled Restricted Stock Units(3) | |||||||||||
| Name and Address of Beneficial Owner(1) | Shares | %(2) | Total | |||||||||
| Som Mittal | 5,657 | * | 8,874 | 14,531 | ||||||||
| Clyde W. Ostler | 26,820(11) | * | 34,445 | 61,625 | ||||||||
| Vikram S. Pandit | — | * | 1,199 | 1,199 | ||||||||
| Nitin Sahney | — | * | 6,703 | 6,703 | ||||||||
| Garen K. Staglin | 29,663(12) | * | 49,343 | 79,006 | ||||||||
| Jaynie M. Studenmund | 2,220 | * | 1,240 | 3,460 | ||||||||
| All current directors and executive officers as a group (18 persons)(13) | 1,099,964(14) | 3.20 | ||||||||||
*Less than 1%.
(1) Unless otherwise noted, the business address of each beneficial owner is c/o ExlService Holdings, Inc., 320 Park Avenue, 29th Floor, New York, New York 10022.
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| EXL 2022 Proxy Statement |
Stock ownership of directors, executive officers and certain beneficial owners
(1) Unless otherwise noted, the business address of each beneficial owner is c/o ExlService Holdings, Inc., 320 Park Avenue, 29th Floor, New York, New York 10022.
(2) Based on 33,328,744 shares outstanding as of the Determination Date.
(3) For non-management directors, this column includes restricted stock units (previously granted for service on the Board) that have vested but are unsettled. Because vested restricted stock units generally settle 180 days following the director’s term of service (see “Director compensation for fiscal year 2021” for additional details on settlement), the units are not treated as beneficially owned under SEC rules because the holder does not have the right to acquire the underlying stock within 60 days of the Determination Date. However, restricted stock units that are vested but unsettled provide a meaningful alignment with the Company’s stockholders, and they count towards our stock ownership policy for non-employee directors, which requires directors to maintain stock ownership of at least five times their respective annual retainers.
(4) Based on the Schedule 13G/A filed on January 28, 2022, BlackRock, Inc. had sole voting power with respect to 4,947,704 shares and sole dispositive power with respect to 4,986,346 shares. The business address of Blackrock, Inc. is 55 East 52nd Street, New York, New York 10022.
(5) Based on the Schedule 13G/A filed on February 10, 2022, The Vanguard Group, Inc. had shared voting power with respect to 62,521 shares, sole dispositive power with respect to 3,474,157 shares and shared dispositive power with respect to 91,917 shares. The business address of The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, PA 19355.
(6) Based on the Schedule 13G/A filed on February 9, 2022, FMR LLC had sole voting power with respect to 600,920 shares and sole dispositive power with respect to 2,056,711 shares. The business address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
(7) The amount includes: (a) 177,134 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 under a 2005 grantor-retained annuity trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (b) 40,219 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 under a 2013 grantor retained annuity trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (c) 84,000 shares of our common stock owned indirectly by Mr. Kapoor through a spousal lifetime access trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (d) 84,000 shares of our common stock owned indirectly by Mr. Kapoor through a spousal lifetime access trust for Mr. Kapoor’s spouse, for which Mr. Kapoor and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, and (e) 97,185 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 for which Mr. Kapoor is the investment advisor to Commonwealth Trust Company, the trustee.
(8) The amount includes: (a) 177,134 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 under a 2005 grantor-retained annuity trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (b) 40,219 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 under a 2013 grantor retained annuity trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (c) 84,000 shares of our common stock owned indirectly by Mr. Kapoor through a spousal lifetime access trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (d) 84,000 shares of our common stock owned indirectly by Mr. Kapoor through a spousal lifetime access trust for Mr. Kapoor’s spouse, for which Mr. Kapoor and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, and (e) 233,185 shares of our common stock owned indirectly by Mr. Kapoor through a family trust for which Mr. Kapoor is the investment advisor to Commonwealth Trust Company, the trustee.
(9) This amount consists of 26,294 shares of our common stock of which Mr. Kelso has the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
(10) This amount consists of 3,093 shares of our common stock of which Ms. Minto has the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
(9) Mr. Pandit has shared dispositive and voting control over the reported securities, which are held by Orogen Echo LLC (“OE”). The Orogen Group LLC (“Orogen”) is the sole member of OE and Mr. Pandit is the Chairman and Chief Executive Officer of Orogen. Orogen Holdings LLC and Atairos-Orogen Holdings, LLC are the sole members with joint investment control of Orogen. Mr. Pandit has majority voting control of Orogen Holdings LLC.
(10) This amount includes 1,854 shares of our common stock owned indirectly by Mr. Staglin through an irrevocable family trust created in 2018, for which Mr. Staglin’s spouse is the sole beneficiary and trustee with sole dispositive and voting control over the shares in the trust.
(11) Includes all eight current non-employee directors and our 10 current executive officers.
(12) This amount includes an aggregate of 3,093 shares of our common stock of which Ms. Minto has the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
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(11) This amount includes 7,528 shares of our common stock of which Mr. Ostler has the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
(12) This amount includes 1,854 shares of our common stock owned indirectly by Mr. Staglin through an irrevocable family trust created in 2018, for which Mr. Staglin’s spouse is the sole beneficiary and trustee with sole dispositive and voting control over the shares in the trust, and 7,258 shares of our common stock of which Mr. Staglin has the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
(13) Includes all nine current non-employee directors and our nine current executive officers.
(14) This amount includes an aggregate of 54,723 shares of our common stock of which our current directors and current executive officers have the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
| EXL 2022 Proxy Statement | |
Certain relationships and related person transactions
Certain relationships and related person transactions
Review andapproval of related party transactions We review all relationships and transactions in which we, our directors and executive officers or their immediate family members and our 5% stockholders are participants to determine whether such persons have a direct or indirect material interest in such transactions. Our Code of Conduct and Ethics instructs our directors, officers and employees to report |
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Related Party Transactions
As required under SEC rules, transactions that are determined to be directly or indirectly material to us or a related person and which involve amounts exceeding $120,000 in the previous fiscal year are disclosed in our proxy statement.
On October 1, 2018, the Company entered into the Investment Agreement with the Orogen Echo LLC, an affiliate of The Orogen Group LLC (the “Purchaser”). One of the Company’s directors, Vikram Pandit, is the Chairman and Chief Executive Officer of The Orogen Group LLC. Under the terms of the Investment Agreement, the Company issued to the Purchaser $150,000,000 in aggregate principal amount of 3.50% Convertible Senior Notes due October 1, 2024. In addition, we appointed Mr. Pandit, a nominee of the Purchaser, to our board of directors pursuant to the Investment Agreement. After considering the facts and circumstances of any such transaction or potential transaction to our General Counsel or our Audit Committee. Our board of directors has adopted a policy regarding the relationship,review of potential related party transactions. Under this policy, our General Counsel will
Factors used in assessing related party transactions
• The nature of the Boardrelated party transaction
• The related party’s interest in the transaction
• The material terms of the transaction, including the amount involved and type of transaction
• The importance of the transaction to us and to the related party
• Whether the transaction would impair the judgment of a director or executive officer to act in our best interest
Related party transactions
As required under SEC rules, transactions that are determined to be directly or indirectly material to us or a related person and which involve amounts exceeding $120,000 in the previous fiscal year are disclosed in our Proxy Statement.
On October 1, 2018, the Company entered into the Investment Agreement with the Purchaser, an affiliate of The Orogen Group. One of the Company’s directors, Vikram Pandit, is the Chairman and Chief Executive Officer of The Orogen Group. Under the terms of the Investment Agreement, the Company issued to the Purchaser $150,000,000 in aggregate principal amount of 3.50% Convertible Senior Notes due October 1, 2024 (the “Notes”). In addition, we appointed Mr. Pandit, a nominee of the Purchaser, to our board of directors pursuant to the Investment Agreement. We subsequently entered into a Payoff and Termination Agreement where we agreed with the Purchaser to (i) a negotiated private exchange and prepayment of the Notes and (ii) except as set forth in the Payoff and Termination Agreement, terminate the Investment Agreement, including the Purchaser’s board appointment rights related to the initial issuance of the Notes and other matters set forth therein.
After considering the facts and circumstances regarding the relationship, our board of directors has determined that the Investment Agreement (and the Payoff and Termination Agreement) did not and does not impair Mr. Pandit’s independence under applicable Nasdaq standards and federal securities laws.
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Audit Committee Report
The Audit Committee of the board of directors of ExlService Holdings, Inc. assists our board of directors in fulfilling its oversight responsibilities with respect to the following:
our accounting and financial reporting processes, including the integrity of the financial statements and other financial information provided by us to our stockholders, the public, stock exchanges and others;
our compliance with legal and regulatory requirements;
our registered independent public accounting firm’s qualifications and independence;
the audit of our financial statements; and
the performance of our internal audit function and independent registered public accounting firm.
In connection with these responsibilities, the Audit Committee met with management and Deloitte & Touche LLP to review and discuss the December 31, 2021 audited consolidated financial statements. The Audit Committee also discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Audit Committee also received written disclosures and the letter from Deloitte & Touche LLP required by Rule 3526 of the Public Company Accounting Oversight Board (Communications with Audit Committees Concerning Independence), and the Audit Committee discussed with Deloitte & Touche LLP the firm’s independence.
Based on the review and discussions referred to above, the Audit Committee approved the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Audit Committee
Ms. Kristy Pipes (Chair)
Mr. Vikram Pandit
Mr. Clyde W. Ostler
Mr. Nitin Sahney
Ms. Jaynie Studenmund
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Proposal 1 - Election of directors
Proposal 1 — Election of directors
The nominees
Our Nominating and Governance Committee has nominated, and our board of directors has designated, Mses. Minto, Pipes and Studenmund and Messrs. Kapoor, Mittal, Ostler, Pandit, and Sahney to stand for election as directors at the Annual Meeting. One of our current directors, Mr. Staglin, will not be standing for re-election at the Annual Meeting.
Term of office
If elected, each of the director nominees will serve a term of one year on our board of directors, until our 2023 Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws.
Voting instructions and substitutes
The proxies given to the proxy holders will be voted or not voted as directed and, if no direction is given, will be voted FOR these six nominees. Our board of directors knows of no reason why any of these nominees should be unable or unwilling to serve. However, if for any reason any nominee should be unable or unwilling to stand for election, the shares represented by proxies will be voted for the election of any substitute nominee designated by our board of directors to fill the vacancy.
General information about nominees
The age, tenure on our board of directors and committee membership, if any, of each nominee appears below. Information regarding the business experience during at least the last five years and directorships of other publicly owned corporations of each nominee can be found above under “Our board of directors.” Other information required with respect to any solicitation of proxies in connection with the election of directors is found elsewhere in this Proxy Statement.
Name | Age | Director since | Independent | Committee membership | ||||
Vikram Pandit Chairman | 65 | October 2018 | Yes | Audit; Nominating and Governance | ||||
Rohit Kapoor Vice Chairman and CEO | 57 | November 2002 | No | None | ||||
Anne Minto | 68 | March 2013 | Yes | Compensation; Nominating and Governance | ||||
Som Mittal | 70 | December 2013 | Yes | Compensation; Nominating and Governance | ||||
Clyde Ostler | 75 | December 2007 | Yes | Audit; Compensation | ||||
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Proposal 1 - Election of directors
Name | Age | Director since | Independent | Committee membership | ||||
Kristy Pipes | 62 | January 2021 | Yes | Audit (Chair); Compensation | ||||
Nitin Sahney | 59 | January 2016 | Yes | Nominating and Governance (Chair); Audit | ||||
Jaynie Studenmund | 67 | September 2018 | Yes | Compensation (Chair); Audit | ||||
Required vote
The affirmative vote of a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) at the Annual Meeting will elect the eight nominees as directors for a term of one year. If any nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, our by-laws provide that such person will tender to the board of directors his or her resignation as a director. Unless marked to the contrary, proxies received will be voted “FOR” the nominees.
Our board recommends that you vote: | ||
FOR | the election of Mses. Minto, Pipes and Studenmund and Messrs. | |
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
Background
We are asking our stockholders to approve the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan (referred to hereafter as the “ESPP”), at the Annual Meeting. The ESPP was adopted by the Compensation Committee and our board of directors in April 2022, subject to approval by our stockholders.
Approval of the ESPP will allow us to provide our Company employees and employees of certain of our subsidiaries the opportunity to acquire an ownership interest in the Company through their participation in the ESPP, thereby encouraging them to remain in our service and more closely aligning their interests with those of our stockholders.
If this Proposal 2 is approved by our stockholders, the maximum number of shares of our common stock that may be issued under the ESPP will be 800,000 shares. We do not maintain any other employee stock purchase plans. As of the close of business on March 31, 2022, a total of 33,328,744 shares of our common stock were outstanding and the closing price of our common stock on the Nasdaq Global Select Market was $143.27 per share. The ESPP share reserve represents approximately 2.3% of the total number of shares of our common stock outstanding as of March 31, 2022.
If this Proposal 2 is approved by our stockholders, the ESPP will become effective as of the date of the Annual Meeting. In the event that our stockholders do not approve this Proposal 2, the ESPP will not become effective.
Summary of the ESPP
The material features of the ESPP are described below. The following description of the ESPP is a summary only and is qualified in its entirety by reference to the complete text of the ESPP. Stockholders are urged to read the actual text of the ESPP in its entirety, which is attached hereto as Annex A.
Purpose
The purpose of the ESPP is to provide our employees an opportunity to purchase shares of our common stock. This will assist us in retaining the services of our employees, secure and retain the services of new employees and provide incentives for employees to exert maximum efforts for our success and increased stockholder value.
The ESPP is designed to allow eligible U.S. employees to purchase our common stock in a manner that is intended to qualify for favorable tax treatment under Section 423 of the Code. In addition, at the discretion of the Plan Administrator (as defined below), the ESPP will permit eligible employees to participate who are foreign nationals or employed outside of the U.S. However, such employees will not qualify for favorable tax treatment under U.S. laws.
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
Administration
The Compensation Committee (hereafter referred to as the “Plan Administrator”) will administer the ESPP. The Plan Administrator has the final power to construe and interpret both the provisions of the ESPP and the rights granted under it. In addition, the Plan Administrator has the power, subject to the provisions of the ESPP, to determine when and how rights to purchase our common stock will be granted, the provisions of each offering of such rights (which need not be identical), and whether employees of our subsidiary companies will be eligible to participate in the ESPP. Finally, the Plan Administrator has the authority to adopt procedures and sub-plans as necessary to permit participation by non-U.S. individuals.
Stock subject to the ESPP
Subject to adjustment for certain changes in our capitalization, the maximum number of shares of our common stock that may be issued under the ESPP is 800,000 shares. If any rights granted under the ESPP terminate without being exercised in full, the shares of common stock not purchased under such rights shall again become available for issuance under the ESPP. The shares of common stock issuable under the ESPP will be shares of authorized but unissued or reacquired common stock, including shares repurchased by us on the open market.
Offerings
The Plan Administer will implement and operate the ESPP through periodic offerings to all eligible employees the opportunity to purchase our common stock. The Plan Administrator will determine the duration of each offering period, provided that in no event may an offering period exceed 12 months. The Plan Administrator may establish separate offerings which vary in terms (although such terms may not be inconsistent with the provisions of the ESPP or the requirements of applicable laws). Each offering period may have one or more purchase dates (see discussion of purchase prices below), as determined by the Plan Administrator and communicated to the eligible employees prior to the commencement of the offering period. The Plan Administrator has the authority to alter the terms of an offering prior to the commencement of the offering period, including the duration of subsequent offering periods. When an eligible employee elects to join an offering period, he or she is granted a right to purchase shares of our common stock on each purchase date within the offering period. On the purchase date, all contributions collected from the participant are automatically applied to the purchase of our common stock, subject to certain limitations (which are described further below under “Eligibility”).
Eligibility – broad-based participation
The Plan Administrator shall determine who is eligible to participate in the Plan. The Plan Administrator may, for example, require that employees must work more than 20 hours per week and/or more than five months per calendar year in order to be eligible to participate in the Plan. The Plan Administrator may also limit or restrict the offering to other employment criteria that it deems appropriate, provided such limits or restrictions comply with applicable law. For foreign subsidiaries and those employees and foreign nationals working in the U.S., the Plan Administrator, at its discretion will develop and implement eligibility requirements for those subsidiaries and employees in accordance applicable laws (including foreign laws, as necessary).
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
No employee will be eligible to participate in the ESPP if, immediately after the grant of purchase rights, the employee would own, directly or indirectly, stock possessing 5% or more of the total combined voting power or value of all classes of our stock or of any of our subsidiary companies, including any stock which such employee may purchase under all outstanding purchase rights and options
As of March 31, 2022, approximately 2,400 U.S. employees would have been eligible to participate in the ESPP. We expect that, subject to establishment of sub-plans and any required filings, as appropriate under applicable law, most of our employees across the world will be eligible to participate in the ESPP.
Participation in the ESPP; limits on employee contributions
An eligible employee may enroll in the ESPP by delivering to the Plan Administrator or its delegate, prior to the date selected by the Plan Administrator as the beginning of an offering period, an agreement authorizing contributions which may not exceed the maximum amount specified by the Plan Administrator, but in any case, with respect to purchase rights intended to receive favorable tax treatment under Section 423 of the Code, which may not exceed 15% of such employee’s compensation during the offering period. Each participant will be granted a separate purchase right for each offering in which he or she participates. Unless an employee’s participation is discontinued, his or her purchase right will be exercised automatically at the end of each purchase period at the applicable purchase price.
Purchase price and limits; payroll deductions
The Committee will establish one or more dates during the purchase period where it will purchase common stock (the “purchase dates”). The purchase price per share of our common stock on each purchase date during an offering period will not be less than 85% of the lesser of:
| (i) | the fair market value of a share of our common stock on the first day of the offering period, or |
| (ii) | the fair market value of a share of our common stock on the date selected by the Plan Administrator for purchasing the common stock (the “purchase date”). |
As of March 31, 2022, the closing price of our common stock as reported on the Nasdaq Global Select Market was $143.27 per share. The ESPP does not provide for matching contributions from the Company.
The purchase of shares during an offering period generally will be funded by a participant’s payroll deductions accumulated during the offering period. A participant may change his or her rate of contributions, as determined by the Plan Administrator and set forth in the offering document. All contributions made for a participant are credited to his or her account under the ESPP and deposited with our general funds.
In connection with each offering made under the ESPP, the Plan Administrator may specify (i) a maximum number of shares of our common stock that may be purchased by any participant on any purchase date pursuant to such offering, or as determined by the
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
Plan Administrator, a maximum dollar amount which may not exceed 15% of such employee’s eligible earnings during the offering period, (ii) a maximum aggregate number of shares of our common stock that may be purchased by all participants pursuant to such offering, and/or (iii) a maximum aggregate number of shares of our common stock that may be purchased by all participants on any purchase date pursuant to such offering. If the aggregate purchase of shares of our common stock issuable upon exercise of purchase rights granted under such offering would exceed any such maximum aggregate number, then the Plan Administrator will make a pro rata allocation of available shares in a uniform and equitable manner. In addition, no employee may purchase more than $25,000 worth of our common stock (determined based on the fair market value of the shares at the time such rights are purchased) in each calendar year. The Plan Administrator may lower the dollar value purchase limit at its discretion.
Holding period
Unless otherwise provided by the Plan Administrator, no shares of common stock purchased in any offering under the Plan may be transferred out of the participant’s Plan investment account to any other brokerage account designated by the participant for twelve (12) months after the purchase date on which such shares were purchased.
Withdrawal; termination of employment; restrictions on transfer
Participants may withdraw from a given offering by delivering a withdrawal form to us and terminating their contributions. Such withdrawal may be elected at any time prior to the end of an offering, except as otherwise provided by the Plan Administrator and set forth in the offering document. Upon such withdrawal, we will distribute to the employee his or her accumulated but unused contributions without interest, and such employee’s right to participate in that offering will terminate. However, an employee’s withdrawal from an offering does not affect such employee’s eligibility to participate in subsequent offerings under the ESPP.
A participant’s rights under any offering under the ESPP will terminate immediately if the participant either (i) is no longer employed by us or any of our subsidiary companies (subject to any post-employment participation period required by law) or (ii) is otherwise no longer eligible to participate. In such event, we will distribute to the participant his or her accumulated but unused contributions without interest.
Rights granted under the ESPP are not transferable except by will, by the laws of descent and distribution, or if permitted by us, by a beneficiary designation. During a participant’s lifetime, such rights may only be exercised by the participant.
Changes in capitalization and effect of certain corporate transactions
In the event of certain changes in our capitalization, the Plan Administrator will appropriately adjust: (i) the class(es) and maximum number of securities subject to the ESPP; (ii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding purchase rights; and (iii) the class(es) and number of securities that are the subject of any purchase limits under each ongoing offering.
In the event of a corporate transaction (as defined in the ESPP and described below), (i) any surviving or acquiring corporation (or its parent company) may assume or continue outstanding purchase rights granted under the ESPP or may substitute similar rights
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
(including a right to acquire the same consideration paid to the stockholder in the corporate transaction) for such outstanding purchase rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such outstanding purchase rights or does not substitute similar rights for such outstanding purchase rights, then the participants’ accumulated contributions will be used to purchase shares of our common stock within ten business days prior to the corporate transaction under such purchase rights, and such purchase rights and the Plan will terminate immediately after such purchase.
For purposes of the ESPP, a corporate transaction generally will be deemed to occur in the event of the consummation of: (i) a sale or other disposition of all or substantially all of our consolidated assets; (ii) a sale or other disposition of at least 50% of our outstanding securities; (iii) a merger, consolidation or similar transaction following which we are not the surviving corporation; or (iv) a merger, consolidation or similar transaction following which we are the surviving corporation but the shares of our common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of such transaction.
Duration, amendment and termination
The Plan Administrator may amend, suspend or terminate the ESPP at any time. However, for certain capitalization adjustments, any such amendment must be approved by our stockholders if such approval is required by applicable law, including any listing requirements.
Any outstanding purchase rights granted before an amendment or termination of the ESPP will not be materially impaired by any such amendment or termination, except (i) with the consent of the employee to whom such purchase rights were granted, (ii) as necessary to comply with applicable laws, including any listing requirements or governmental regulations (including Section 423 of the Code), or (iii) as necessary to obtain or maintain favorable tax, listing or regulatory treatment.
Notwithstanding anything in the ESPP or any offering to the contrary, the Plan Administrator will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, if applicable; (ii) permit contributions in excess of the amount designated by a participant and/or via cash, check or wire transfer in lieu of payroll deductions to adjust for mistakes in processing of properly completed contribution elections; (iii) establish reasonable waiting and adjustment periods and/ or accounting and crediting procedures to ensure that amounts applied toward the purchase of common stock for each participant properly correspond with that participant’s contributions; (iv) amend any outstanding purchase rights or clarify any ambiguities regarding the terms of any offering or purchase period to enable the purchase rights to qualify under and/or comply with Section 423 of the Code; and (v) establish other limitations or procedures as the Plan Administrator determines in its sole discretion advisable that are consistent with the ESPP and to correct for mistakes in the Company’s processing of properly completed contribution elections; provided in each case that such actions qualify under and/or comply with Section 423 of the Code. Any such actions by the Plan Administrator will not be considered to alter or impair any purchase rights granted under an offering as they are part of the initial terms of each offering and the purchase rights granted under each offering.
Federal income tax information
The following is a summary of the principal United States federal income tax consequences to participants and us with respect to participation in the ESPP. This summary is not intended to be exhaustive and does not discuss the income tax laws of any local,
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
state or foreign jurisdiction in which a participant may reside. The information is based upon current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participant’s tax adviser regarding the federal, state, local, and other tax consequences of the grant or exercise of a purchase right or the sale or other disposition of common stock acquired under the ESPP. The ESPP is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.
The ESPP, and the rights of participant employees to make purchases thereunder, qualify for treatment under the provisions of Sections 421 and 423 of the Code. Under these provisions, no income will be taxable to a participant until the shares purchased under the ESPP are sold or otherwise disposed of.
Employees will generally be subject to tax in an amount that depends on the employee’s holding period with respect to the commons stock purchased under the ESPP.
| (i) | If the common stock is sold or disposed of more than one year from the date of purchase and more than two years after the first day of the offering period in which it was purchased, or upon the employee’s death while owning the common stock, the employee will recognize ordinary income in an amount generally equal to the lesser of: |
| (A) | an amount equal to 15% of the fair market value of the common stock on the first day of the offering period, and |
| (B) | the excess of the sale price of the common stock over the purchase price. |
Any additional gain will be treated as long-term capital gain. If the common stock held for the periods described above are sold and the sale price is less than the purchase price, then the employee will recognize a long-term capital loss in an amount equal to the excess of the purchase price over the sale price of the common stock.
| (ii) | If the common stock is sold or otherwise disposed of before the expiration of the holding periods described above, other than following the employee’s death while owning the common stock, the employee generally will recognize as ordinary income an amount equal to the excess of the fair market value of the common stock on the date the common stock were purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the employee’s holding period with respect to the |
We are not entitled to a deduction for amounts taxed as ordinary income or capital gain to an employee except to the extent of ordinary income recognized upon a sale or disposition of common stock prior to the expiration of the holding periods described above.
Employees who are foreign nationals or employed by a foreign subsidiary are not entitled to the tax treatment above. Foreign nationals who participate in the ESPP while employed by the Company in the U.S. will recognize ordinary income at the time the common stock is purchased measured as the excess of the fair market value of the common stock purchased over the purchase price. The Company will be entitled to a corresponding deduction. Any additional gain or loss on the subsequent sale or disposition will be long-term or short-term capital gain or loss, depending on the capital gain holding period. The foreign national maybe subject to additional taxes in his or her country of domicile. Any employees employed by a foreign subsidiary and participating in the ESPP will be subject to the tax laws of his or her respective tax jurisdiction.
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Proposal 2 — Approval of the ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
New plan benefits
Participation in the ESPP is voluntary and each eligible employee will make his or her own decision regarding whether and to what extent to participate in the ESPP. In addition, our board of directors and the Compensation Committee have not granted any purchase rights under the ESPP that are subject to stockholder approval of this Proposal 2. Accordingly, the benefits or amounts that will be received by or allocated to our executive officers and other employees under the ESPP, as well as the benefits or amounts which would have been received by or allocated to our executive officers and other employees for fiscal year 2021 if the ESPP had been in effect, are not determinable. Our non-employee directors will not be eligible to participate in the ESPP.
Equity compensation plan information
The following table provides information as of December 31, 2021 with respect to the shares of our common stock that may be issued under our existing equity compensation plans. For a description of our equity compensation plans, see Note 22 - Stock Based Compensation to our consolidated financial statements in the 2021 Form 10-K.
| Plan category | Number of securities to be issued upon exercise/vesting of outstanding options, warrants and rights* | Weighted and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||
| Equity compensation plans approved by security holders | 1,378,667 | $ | 27.62 | 1,777,687 | |||||||||||
| Equity compensation plans not approved by security holders | — | — | — | ||||||||||||
| Total | 1,378,667 | 27.62 | 1,777,687 | ||||||||||||
*This includes outstanding options and unvested Restricted Stock Units, which include Time-Based Restricted Stock Units and Performance-Based Restricted Stock Units. See Note 22 - Stock Based Compensation to our consolidated financial statements in the 2021 Form 10-K for further details.
Required vote
The approval of the ESPP as set forth herein requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” ratification of the appointment.
Based on the review and discussions referred to above, the Audit Committee approved the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
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Proposal 1 — Election of Directors Our board recommends that you vote:
FOR
The Nominees
Our Nominating and Governance Committee has nominated, and our board of directors has designated, Mses. Minto and Studenmund and Messrs. Kapoor, Kelso, Mittal and Ostler to stand for election as directors at the Annual Meeting.
Term of Office
Effective at the 2019 Annual Meeting of Stockholders, the classificationapproval of the Board of Directors began to be phased out, such that (i) at the 2019 Annual Meeting of Stockholders, each of the directors formerly in Class I were elected to hold office for a term of one year, (ii) at the Annual Meeting, each of the Directors in former Class I and in Class II will be elected to hold office for a term of one year, and (iii) at the 2021 Annual Meeting of Stockholders, each of the Directors in former Class I, former Class II and Class III will be elected to hold office for a term of one year, and thereafter the classification of the Board of Directors will terminate in its entirety. Thus, if elected, each of the director nominees will serve a term of one year on our board of directors, until our 2021 Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws.ExlService Holdings, Inc. 2022 Employee Stock Purchase Plan
Voting Instructions and Substitutes
The proxies given to the proxy holders will be voted or not voted as directed and, if no direction is given, will be voted FOR these six nominees. Our board of directors knows of no reason why any of these nominees should be unable or unwilling to serve. However, if for any reason any nominee should be unable or unwilling to stand for election, the shares represented by proxies will be voted for the election of any substitute nominee designated by our board of directors to fill the vacancy.
General Information about Nominees
The age, tenure on our board of directors and committee membership, if any, of each nominee appears below. Information regarding the business experience during at least the last five years and directorships of other publicly owned corporations of each nominee can be found above under “Our Board of Directors.” Other information required with respect to any solicitation of proxies in connection with the election of directors is found elsewhere in this proxy statement.
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Proposal 3 — Ratification of the appointment of independent registered public accounting firm
Proposal 3 — Ratification of the appointment of independent registered public accounting firm
Our Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit the Company’s and its subsidiaries’ books, records and accounts for the fiscal year 2022. Our board of directors has endorsed this appointment. Ratification of the appointment of Deloitte by our stockholders is not required by law. However, as a matter of good corporate practice, such appointment is being submitted to our stockholders for ratification at the Annual Meeting. If our stockholders do not ratify the appointment, our board of directors and our Audit Committee will reconsider whether or not to retain Deloitte, but may nonetheless retain Deloitte. Even if the appointment is ratified, the Audit Committee in its discretion may change such appointment at any time during the year if it determines that such change would be in the best interests of the Company and our stockholders.
In retaining Deloitte as the Company’s independent registered public accounting firm, the Audit Committee considered whether the provision of non-audit services by Deloitte was compatible with maintaining Deloitte’s independence and concluded that it was. Representatives of Deloitte are expected to be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions. Deloitte has served as our independent registered public accounting firm since February 28, 2018.
Audit and non-audit fees
The following is a summary of the fees billed or expected to be billed to us by the Company’s independent registered public accounting firm for professional services rendered in each of the last two fiscal years:
Fee category | Fiscal 2021 | Fiscal 2020 | ||||||||||
(in thousands)
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Audit fees | $ | 1,601 | $ | 1,451 | ||||||||
Audit-related fees | — | — | ||||||||||
Tax fees | 80 | 758 | ||||||||||
All other fees | 34 | — | ||||||||||
Total fees | $ | 1,715 | $ | 2,209 | ||||||||
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Proposal 3 — Ratification of the appointment of independent registered public accounting firm
Audit fees:
Consist of fees billed or expected to be billed for professional services rendered for the audit of our consolidated financial statements, including (i) the audit of effectiveness of internal control over financial reporting, (ii) review of our consolidated financial statements included in our quarterly reports, and (iii) services that are normally provided by our registered independent public accountants including services in connection with statutory or regulatory filings or engagements for those fiscal years.
Audit-related fees:
Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”
Tax fees:
Consist primarily of fees billed or expected to be billed for other tax filing and advisory projects.
All other fees:
Consist of fees billed or expected to be billed for other permissible work performed by the Company’s independent public registered accounting firm that does not meet the above category descriptions.
Our Audit Committee pre-approves and is responsible for the engagement of all auditing services provided by our independent registered public accountants and all non-auditing services to be provided by such accountants to the extent permitted under Section 10A of the Exchange Act, including all fees and other terms of engagement. Our Audit Committee may delegate the authority to pre-approve audit and permitted non-audit services between meetings of our Audit Committee to a designated member of our Audit Committee, provided that the decisions made by such member are presented to our full Audit Committee for ratification at its next scheduled meeting.
All of the fees paid to Deloitte in fiscal year 2021 were pre-approved by the Audit Committee.
Required vote
The ratification of the appointment of Deloitte as our independent registered public accounting firm requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” ratification of the appointment.
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Required Vote
The affirmative vote of a majority of votes (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) cast in person or represented by proxy and entitled to vote at the Annual Meeting will elect the six nominees as directors for a term of one year. If any nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, our by-laws provide that such person will tender to the board of directors his or her resignation as a director. Unless marked to the contrary, proxies received will be voted “FOR” the nominees.
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PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit the Company’s and its subsidiaries’ books, records and accounts for the fiscal year 2020. Our board of directors has endorsed this appointment. Ratification of the appointment of Deloitte by our stockholders is not required by law. However, as a matter of good corporate practice, such appointment is being submitted to our stockholders for ratification at the Annual Meeting. If our stockholders do not ratify the appointment, our board of directors and our Audit Committee will reconsider whether or not to retain Deloitte, but may nonetheless retain Deloitte. Even if the appointment is ratified, the Audit Committee in its discretion may change such appointment at any time during the year if it determines that such change would be in the best interests of the Company and our stockholders.
In retaining Deloitte as the Company’s independent registered public accounting firm, the Audit Committee considered whether the provision of non-audit services by Deloitte was compatible with maintaining Deloitte’s independence and concluded that it was. Representatives of Deloitte are expected to be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions. Deloitte has served as our independent registered public accounting firm since February 28, 2018.
Change in Accountants
Ernst & Young LLP (“EY”) audited our consolidated financial statements for fiscal year 2017. On February 27, 2018, pursuant to the Audit Committee determination, the Company dismissed EY as the Company’s independent registered public accounting firm. EY’s reports on the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2017 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. During the fiscal year ended December 31, 2017, and the subsequent interim periods through February 27, 2018, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between the Company and EY on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to EY’s satisfaction, would have caused EY to make reference thereto in their reports; and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
In connection with the filing of the Company’s Current Report on Form 8-K dated February 27, 2018 (the “Form 8-K”), the Company provided EY with a copy of the above disclosures, and requested that EY furnish a letter addressed to the SEC stating whether or not EY agrees with the statements in the immediately preceding paragraph. The Company subsequently received the requested letter, and a copy of EY’s letter, dated March 1, 2018, was filed as Exhibit 16.1 to the Form 8-K.
As of February 28, 2018, pursuant to the Audit Committee’s determination, the Company engaged Deloitte to serve as its independent registered public accounting firm for fiscal year 2018. During the fiscal year ended December 31, 2017 and the subsequent interim periods through February 28, 2018, neither the Company nor anyone on its behalf consulted with Deloitte regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that Deloitte concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that
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was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
The change in independent registered public accounting firm did not result from any dissatisfaction with the quality of professional services rendered by EY.
Audit and Non-Audit Fees
The following is a summary of the fees billed or expected to be billed to us by the Company’s independent registered public accounting firm for professional services rendered in each of the last two fiscal years:
| Fee Category | Fiscal 2019 | Fiscal 2018 |
| (in thousands) | ||
| Audit Fees | $1,391 | $1,425 |
| Audit-Related Fees | 114 | — |
| Tax Fees | 696 | 523 |
| All Other Fees | — | 54 |
| Total Fees | $2,201 | $2,002 |
Audit Fees: Consist of fees billed or expected to be billed for professional services rendered for the audit of our consolidated financial statements, including (i) the audit of effectiveness of internal control over financial reporting, (ii) review of our consolidated financial statements included in our quarterly reports, and (iii) services Our board recommends that are normally provided by our registered independent public accountants including services in connection with statutory or regulatory filings or engagements for those fiscal years.you vote:
Audit-Related Fees: Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include SSAE 18 service organization audits and due diligence in connection with acquisition activity. FOR
Tax Fees: Consist primarily of fees billed or expected to be billed for other tax filing and advisory projects.
All Other Fees: Consist of fees billed or expected to be billed for other permissible work performed by the Company’s independent public registered accounting firm that does not meet the above category descriptions.
Our Audit Committee pre-approves and is responsible for the engagement of all auditing services provided by our independent registered public accountants and all non-auditing services to be provided by such accountants to the extent permitted under Section 10A of the Exchange Act, including all fees and other terms of engagement. Our Audit Committee may delegate the authority to pre-approve audit and permitted non-audit services between meetings of our Audit Committee to a designated member of our Audit Committee, provided that the decisions made by such member are presented to our full Audit Committee for ratification at its next scheduled meeting.
All of the fees paid to Deloitte in fiscal year 2019 were pre-approved by the Audit Committee.
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Required Vote
The ratification of the appointment of Deloitte as our independent registered public accounting firm requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” ratification of the appointment.
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PROPOSAL 3 — ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION/
Proposal 4 — Advisory (non-binding) vote on executive compensation
Proposal 4 — Advisory (non-binding) vote on executive compensation
Proposal 4 is a vote, on a non-binding advisory basis, to approve the compensation of our executive officers as described in this Proxy Statement. Although the vote is advisory and is not binding on the board of directors, our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. We refer to this vote as the “say-on-pay” vote.
At the 2018 Annual Meeting of Stockholders, our stockholders voted on a proposal relating to the frequency of the “say-on-pay” vote. We recommended, and our stockholders approved on a non-binding advisory basis, an annual say-on-pay vote. Accordingly, we include the say-on-pay vote each year as a regular part of each Annual Meeting of Stockholders, and the next such say-on-pay vote will occur at next year’s Annual Meeting of Stockholders. The next vote on the frequency of the “say-on-pay” vote will be held at the Annual Meeting to be held in 2023.
Our board of directors is committed to corporate governance best practices and recognizes the significant interest of stockholders in executive compensation matters.
Proposal 3 is a vote, on a non-binding advisory basis, to approve the compensation of our executive officers as described in this proxy statement. Although the vote is advisory and is not binding on the board of directors, our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. We refer to this vote as the “say-on-pay” vote.
At the 2018 Annual Meeting of Stockholders, our stockholders voted on a proposal relating to the frequency of the “say-on-pay” vote. We recommended, and our stockholders approved on a non-binding advisory basis, an annual say-on-pay vote. Accordingly, we include the say-on-pay vote each year as a regular part of each Annual Meeting of Stockholders, and the next such say-on-pay vote will occur at next year’s Annual Meeting of Stockholders. The next vote on the frequency of the “say-on-pay” vote will be held at the Annual Meeting to be held in 2023.
Our board of directors believes that our current executive compensation program directly links executive compensation to our performance and aligns the interests of our executive officers with those of our stockholders. For example, the bulk of our annual incentive bonuses are earned based on achievement of three core financial metrics: Adjusted EPS, revenues and AOPM. As we discuss in greater detail in our Compensation Discussion and Analysis, these financial metrics focus our named executive officers on top-line revenues and bottom-line earnings that are likely to make meaningful contributions to our future financial performance. We believe rewarding our executives with incentive pay based on achievement of these three financial metrics closely aligns management with the interests of our stockholders.
In addition, our philosophy places more emphasis on variable elements of compensation (such as incentive bonuses and equity-based compensation) than fixed remuneration.
Our stockholders have the opportunity to vote for, against or abstain from voting on the following resolution:
“Resolved, that the stockholders approve on an advisory basis the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC (which disclosure shall include the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this Proxy Statement).”
The above-referenced disclosures related to the compensation of our named executive officers appear beginning at page 60 of this Proxy Statement.
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Proposal 4 — Advisory (non-binding) vote on executive compensation
Required vote
The approval, on an advisory (non-binding) basis, of the compensation of our named executive officers requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” the approval of the compensation of our named executive officers.
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FOR | the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC
Miscellaneous Stockholder proposals and director nominations for the 2023 Annual Meeting Stockholder proposals intended to be included in our proxy materials for the 2023 Annual Meeting of Stockholders (“2023 Annual Meeting”) must be received by the deadline calculated in accordance with SEC Rule 14a-8, which is 120 days before the anniversary of the date of this year’s Proxy Statement. This year’s deadline is December 29, 2022. Such proposals must include the information required by SEC rules, and should be sent in writing by courier or certified mail to the Corporate Secretary of the Company at 320 Park Avenue, 29th Floor, New York, New York 10022. Stockholder proposals that are sent to any other person or location or by any other means may not be received in a timely manner and thus may be ineligible for inclusion. Stockholders who intend to submit proposals at the 2023 Annual Meeting but whose proposals are not included in the proxy materials for the meeting, and stockholders who intend to submit nominations for directors at the 2023 Annual Meeting, are required to notify the Corporate Secretary of the Company (at the address above) of their proposal or nominations not less than 90 days, nor more than 120 days, before the anniversary of this year’s Annual Meeting of Stockholders, in accordance with our by-laws. Such notices of proposals for the 2023 Annual Meeting must be delivered between February 21, 2023 and March 23, 2023. Special notice provisions apply under the by-laws if the date of the 2023 Annual Meeting is more than 30 days before or 70 days after the anniversary date of this year’s Annual Meeting of Stockholders. Any notice of proposed business or nomination, whether or not included in our Proxy Statement, must include the information required under our by-laws, including Section 2.11.4, in order for the matter to be eligible for consideration at the 2023 Annual Meeting. In addition, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 22, 2023. The presiding officer of the 2023 Annual Meeting may refuse to acknowledge any matter or nomination not made in compliance with the procedures in our by-laws. Our by-laws can be found on our website and the current SEC rules for submitting stockholder proposals can be obtained from the SEC at: Division of Corporation Finance, 100 F. Street, N.E., Washington, DC 20549, or through the SEC’s Internet website at www.sec.gov. Delivery of documents to stockholders sharing an address If you are the beneficial owner, but not the record holder, of shares of our common stock, your broker, bank, trust or other nominee may only deliver one copy of this Proxy Statement and the 2021 Form 10-K, which serves as our Annual Report to Stockholders under Regulation 14A (the “2021 Annual Report”), to multiple stockholders who share an address unless that nominee has received contrary instructions from one or more of the stockholders. We will deliver promptly, upon written or oral request, a separate copy of this Proxy Statement and the 2021 Annual Report to a stockholder at a shared address to which a single copy of the documents was delivered. A stockholder who wishes to receive a separate copy of the Proxy Statement and annual
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Strategic insight
