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PROXY STATEMENT SUMMARY | |
Date and Time | | | Place | | | Record Date | | |||||||||
| | Wednesday, May 17, 2023 at 10:00 a.m. Eastern Time | | | | | Virtual Meeting Site: meetnow.global/ | | | | | You can vote if you were a stockholder of record as of the close of business on | |
| | | | Board Vote Recommendation | | | | Page Reference (for more detail) | |
PROPOSAL 1: Election of Directors To elect | | | | each Director Nominee | | | | | |
PROPOSAL 2: Ratification of the Appointment of our Independent Public Accounting Firm To ratify the appointment of KPMG LLP as the company’s independent registered public accounting firm for fiscal year | | | | | | | | ||
PROPOSAL 3: | |||||||||
To conduct an advisory vote to approve the executive compensation of the company’s named executive officers (“NEOs”) as disclosed in this Proxy Statement. | | | | | | | |||
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| Chief Financial Officer (November 2022) | | | Carolyn Roach Chief Human Resources Officer (January 2023) | | | Ali Faghri Chief Strategy Officer (January 2023) | | | Michael Abrahams Chief Communications Officer (January 2023) | | | Wendy Cassity Chief Legal Officer (March 2023) | |
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| | | August 2021: ✓ XPO spun off its contract logistics business into a ✓ As a part of the ■ New directors included Jason Aiken, Mary Kissel, Allison Landry and | Johnny C. Taylor Jr. | |
✓ Board | |||||
directors ■ Johnny C. Taylor Jr. named new Compensation Committee chair | | ||||
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| | ✓ XPO divested its intermodal operation May 2022: ✓ Conducted extensive stockholder engagement with select participation from Compensation Committee members — AnnaMaria DeSalva, Allison Landry and shares outstanding | | ||
■ Engagements focused on | |||||
✓ Held 2022 Annual Meeting | |
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| | | August 2022: ✓ Announced Mario Harik as CEO to succeed Brad Jacobs once the spin-off of RXO was completed ✓ Appointed Brad Jacobs to serve as executive chairman October 2022: ✓ As a part of the planned RXO spin-off, announced three directors would depart and three directors would be added to the Board effective upon completion of the spin-off, in order to continue to align our Board’s composition with XPO’s post-spin-off strategy ■ New directors included Bella Allaire, Mario Harik and Irene Moshouris ✓ Announced strategic LTL growth plan at XPO’s Investor Day, including plan to achieve 11-13% adjusted EBITDA CAGR for six-year period 2021-2027 ✓ Initiated multi-month stockholder engagement with select participation from Compensation Committee members — Allison Landry and Johnny C. Taylor Jr. — culminating in engagement with stockholders representing 44% of shares outstanding ■ Engagements focused on understanding stockholder concerns that drove the say-on-pay vote, as well as seeking feedback related to anticipated compensation adjustments as a result of the RXO spin-off ✓ Named Carl Anderson as Chief Financial Officer (“CFO”), effective November 2022 November 2022: ✓ Completed the spin-off of RXO, our tech-enabled brokered transportation services business unit, positioning XPO as the leading pure-play LTL transportation provider in North America ✓ Refreshed Board leadership ■ Appointed Johnny C. Taylor, Jr. to serve as lead independent director ■ Appointed Allison Landry to serve as Vice Chair and Chair of the Nominating, Governance and Sustainability Committee ✓ Added Irene Moshouris to the Compensation Committee, Nominating, Corporate Governance and Sustainability Committee, and Audit Committee ✓ Added Bella Allaire to the Nominating, Corporate Governance and Sustainability Committee | | |
| | | January 2023: ✓ Named Carolyn Roach as Chief Human Resources Officer, Ali Faghri as Chief Strategy Officer and Michael Abrahams as Chief Communications Officer ✓ Initiated sustainability roadmap efforts to assess and align on ESG priorities for stand-alone XPO, alongside independent ESG consultant March 2023: ✓ Named Wendy Cassity as Chief Legal Officer ✓ Appointed Wes Frye to XPO’s Board, adding direct LTL operational experience to the Board April 2023: ✓ Created new Operational Excellence Committee of the Board, focused on overseeing the company’s operational strategy and progress ■ Appointed CEO Mario Harik as Chair and Wes Frye and Allison Landry as members | |
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| | | | | | | | | | | | Committee Memberships | | | | | | | | | | | | | Committee Memberships | | |||||||||||||||||||||||
| Name | | Director Since | | Age | | Occupation | | Independent | | AC | | CC | | NCGSC | | Name | | Director Since | | Age | | Occupation | | Independent | | AC | | CC | | NCGSC | | OE | | |||||||||||||||
| Brad Jacobs | | 2011 | | 65 | | Chairman and Chief Executive Officer, XPO Logistics, Inc. | | | | | | | | | | Brad Jacobs | | 2011 | | 66 | | Executive Chairman of the Board, XPO | | | | | | | | | | | | |||||||||||||||
| Jason Aiken* | | 2021 | | 49 | | Senior Vice President and Chief Financial Officer, General Dynamics Corporation | | Y | | C | | | | | | Jason Aiken* | | 2021 | | 50 | | Executive Vice President, Technologies and Chief Financial Officer, General Dynamics Corporation | | Y | | C | | | | | | | | |||||||||||||||
| AnnaMaria DeSalva | | 2017 | | 53 | | Vice Chairman, XPO Logistics, Inc.; Global Chairman and Chief Executive Officer, Hill+Knowlton Strategies | | Y | | ✓ | | | | C | | Bella Allaire | | 2022 | | 69 | | Executive Vice President of Technology and Operations, Raymond James Financial, Inc. | | Y | | | | | | ✓ | | | | |||||||||||||||
| Michael Jesselson | | 2011 | | 70 | | Lead Independent Director, XPO Logistics, Inc.; President and Chief Executive Officer, Jesselson Capital Corporation | | Y | | ✓ | | | | ✓ | | Wes Frye | | 2023 | | 75 | | Former Senior Vice President and Chief Financial Officer, Old Dominion Freight Line, Inc. | | Y | | | | | | | | ✓ | | |||||||||||||||
| Adrian Kingshott | | 2011 | | 62 | | Managing Director, Spotlight Advisors, LLC | | Y | | | | | | ✓ | | Mario Harik | | 2022 | | 42 | | Chief Executive Officer, XPO | | | | | | | | | | C | | |||||||||||||||
| Mary Kissel | | 2021 | | 45 | | Executive Vice President and Senior Policy Advisor, Stephens Inc. | | Y | | | | ✓ | | | | Michael Jesselson | | 2011 | | 71 | | President and Chief Executive Officer, Jesselson Capital Corporation | | Y | | ✓ | | | | | | | | |||||||||||||||
| Allison Landry | | 2021 | | 43 | | Former Senior Transportation Research Analyst, Credit Suisse | | Y | | ✓ | | ✓ | | | | Allison Landry | | 2021 | | 44 | | Former Senior Transportation Research Analyst, Credit Suisse | | Y | | | | ✓ | | C | | ✓ | | |||||||||||||||
| Johnny C. Taylor, Jr. | | 2021 | | 53 | | President and Chief Executive Officer, Society of Human Resources Management | | Y | | | | C | | | | Irene Moshouris | | 2022 | | 62 | | Senior Vice President-Treasurer, United Rentals, Inc. | | Y | | ✓ | | ✓ | | ✓ | | | | |||||||||||||||
| Johnny C. Taylor, Jr. | | 2021 | | 54 | | President and Chief Executive Officer, Society of Human Resources Management | | Y | | | | C | | | | | |
| AC = Audit Committee CC = Compensation Committee | | | NCGSC =Nominating, Corporate Governance and Sustainability Committee OE = Operational Excellence Committee | | | C = Committee ✓ = Committee Member * = Audit Committee Financial Expert | |
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| | | | | Brad Jacobs | | | | Jason Aiken | | | | Allaire | | | | Frye | | | | Harik | | | | Jesselson | | | | Allison Landry | | | | Irene Moshouris | | | | Johnny C. Taylor, Jr. | | ||||||||
| Core Competencies that Contribute to Service on XPO’s Board | | ||||||||||||||||||||||||||||||||||||||||||||
| BUSINESS OPERATIONS experience provides a practical understanding of developing, implementing and assessing our operating plan and business strategy. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||
| CORPORATE GOVERNANCE experience bolsters Board and management accountability, transparency and a focus on stockholder interests. | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
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| ENVIRONMENTAL SUSTAINABILITY AND CORPORATE RESPONSIBILITY experience allows our Board’s oversight to guide our long-term value creation for stockholders in a way that is sustainable. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| EFFECTIVE CAPITAL ALLOCATION experience is crucial to our Board’s evaluation of our financial statements and capital structure. | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
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| CRITICAL ANALYSIS OF CORPORATE FINANCIAL STATEMENTS AND CAPITAL STRUCTURES experience assists our directors in overseeing our financial reporting and internal controls. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| HUMAN RESOURCES MANAGEMENT experience allows our Board to further our goals of making XPO an inclusive workplace and aligning human resources objectives with our strategic and operational priorities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| MULTINATIONAL CORPORATE MANAGEMENT experience informs the Board’s strategic thinking, given the global nature of our business. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| RISK MANAGEMENT experience is critical to our Board’s role in overseeing the risks facing our company, including mitigation measures. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||
| TALENT MANAGEMENT AND ENGAGEMENT experience helps our company attract, motivate and retain top candidates for leadership roles and innovation teams. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||
| Skills Central to XPO’s Strategy | | ||||||||||||||||||||||||||||||||||||||||||||
| CUSTOMER SERVICE experience brings an important perspective to our Board, given the importance of customer retention to our business model. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| SALES AND MARKETING experience helps our Board assist with our business strategy and with developing new services and operations. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| MERGERS AND ACQUISITIONS, INTEGRATION AND OPTIMIZATION experience helps our company identify the optimal strategic opportunities for profitable growth and realize synergies. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| TRANSPORTATION AND LOGISTICS INDUSTRY experience is important in understanding our competitive environment and market positioning. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| TECHNOLOGY AND INFORMATION SYSTEMS experience provides valuable insights as we continually seek to enhance customer outcomes and internal operations. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
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| Board and Committee Independence | | | Seven of our nine directors are independent. The Audit Committee, the Compensation Committee and the Nominating, Corporate Governance and Sustainability Committee each consist entirely of independent directors. | |
| Separation of Chairman and CEO Roles | | | Effective November 1, 2022, upon the completion of the RXO spin-off, Mr. Jacobs, our founder who had been our chairman and CEO since 2011, became our executive chairman, and Mr. Harik became our CEO. Our Board determined that splitting the chairman and CEO roles would be in the best interests of the company and our stockholders in order to facilitate a smooth CEO transition. | |
| Independent Board Oversight and Leadership Roles | | | We are committed to independent Board oversight. Alongside our executive chairman, our Board leadership structure includes a lead independent director and an independent vice chair. Our lead independent director is responsible for, among other duties, coordinating with the chairman with respect to meeting agendas, and calling and chairing sessions of the independent directors. Our vice chair is responsible for assisting the lead independent director in carrying out his duties and acting on his behalf when he is not present. The Board believes its leadership structure, as well as the leadership structure of the company, function cohesively and serve the best interests of our stockholders. | |
| Board Refreshment | | | Our Board is committed to ensuring that its composition includes a range of expertise aligned with the company’s business, as well as fresh perspectives on strategy. One of the ways the Board acts on this commitment is through the thoughtful refreshment of directors when appropriate. Upon the RXO spin-off, the composition of the Board changed to align more closely to the company’s business and strategy. Three directors stepped down from the Board, five directors including Mr. Jacobs remained on the board, and three new directors including Mr. Harik, our CEO, joined the Board. In March 2023, the Board appointed an additional new director. Each new director brings valuable experience and perspectives to the Board. | |
| Committee Rotations | | | As part of its annual review of committee assignments, the Board reconstitutes its committees and their chairs as needed to support the evolving needs of the company. Most recently, the company’s committees were reconstituted in November 2022 upon the completion of the RXO spin-off. | |
| Director Elections | | | All directors are elected annually for one-year terms or until their successors are elected and qualified. | |
| Majority Voting for Director Elections | | | Our bylaws provide for a majority voting standard in uncontested elections, and further require that a director who fails to receive a majority vote must tender his or her resignation to the Board. | |
| Board Evaluations | | | Our Board reviews committee and director performance through an annual process of self-evaluation. | |
| Risk Oversight and Financial Reporting | | | Our Board seeks to provide robust oversight of current and potential risks facing our company by engaging in regular deliberations and participating in management meetings. Our Audit Committee contributes to strong financial reporting oversight through regular meetings with management and dialogue with our auditors. | |
| Active Board Participation | | | Our Board held ten meetings during 2022. Each person currently serving as a director, except Mr. Wes Frye who was elected a director on March 8, 2023, attended at least 90% of the meetings of the Board and any committee(s) on which he or she served during the time he or she served on the Board or committee(s). | |
| Direct Oversight of Sustainability | | | The Nominating, Corporate Governance and Sustainability Committee is tasked in its charter with supporting the Board in its oversight of the company’s purpose-driven sustainability strategies and external disclosures; this includes engaging with management on material ESG matters and stakeholder perspectives. | |
| Political Activity Disclosure and Oversight | | | In December 2022, the company adopted a Political Activity Policy that gives the Nominating, Corporate Governance and Sustainability Committee final approval over all political contributions by the company. The Policy also includes a commitment to publicly disclosing any political contributions by the company via a dedicated webpage that is easily accessible on the company’s website. | |
| Established Operational Excellence Committee | | | In April 2023, the company established the Operational Excellence Committee to review the company’s strategies and objectives with respect to operational excellence, including continuous improvement of quality and service, operational efficiency, cost control, occupational safety, environmental compliance, and technological innovation. The Committee also will review, with management, reports and key performance indicators relating to progress and trends in company operational excellence and achievement against the company’s strategies and objectives. | |
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| | WHAT WE HEARD FROM STOCKHOLDERS | | | | RESPONSIVE ACTIONS | | |
| | Modifications to Outstanding Awards | | | ||||
| | Equity Mix | | | | | | |
| | ■ Stockholders generally expressed a preference for the outstanding 2020 Cash Long-Term Incentive (“LTI”) performance-based awards to incorporate an equity component, as opposed to being entirely cash-based. | | | | ■ Converted 100% of the target value of Mr. Jacobs and Mr. Harik’s final 2023 tranche of the 2020 Cash LTI performance-based awards into performance-based equity. | | |
| | Metrics | | | | | | |
| | ■ Some stockholders expressed a preference to remove the adjusted cash flow per share metric in the 2020 Cash LTI performance-based awards and, in choosing new operational or financial metrics for go-forward performance-based stock unit (“PSU”) awards, to exclude gains from sales of real estate in calculating the selected measures. ■ Most stockholders continued to support the inclusion of relative metrics, such as relative total shareholder return (“TSR”), in LTI award structures. | | | | ■ Eliminated the adjusted cash flow per share metric from the final 2023 tranche of the 2020 Cash LTI performance-based awards and replaced it with a relative TSR metric to further align executive compensation with stockholder interests. ■ Operational and financial metrics used in our PSU award constructs exclude the impact of gains from real estate sales. | | |
| | Change-in-Control Provision | | | | | | |
| | ■ Stockholders inquired about the Compensation Committee’s stance on moving away from a single-trigger change-in-control provision in the previously granted awards, and indicated a preference for double-trigger provisions. | | | | ■ Eliminated single-trigger change-in-control provisions from outstanding performance-based awards held by NEOs, including those converted following the RXO spin-off; double-trigger provisions have now been applied to all outstanding awards. | | |
| | Go-Forward Compensation Program Structure | | | ||||
| | Formulaic Structure | | | | | | |
| | ■ Stockholders expressed a preference for short-term incentive (“STI”) and LTI program structures to be less discretionary, more predictable and more formulaic. | | | | ■ Committed to a STI award that is purely formulaic • 2023 Annual Incentive for executive chairman, CEO and CFO based on adjusted EBITDA, with the application of a linear bonus payout curve from 50% threshold for performance at 90% of target to 200% at maximum for 120% of target ■ Adopted a formulaic LTI program with multiyear vesting periods, to be granted annually; this further reinforces a reliable, predictable incentive structure and aligns pay with performance • For executive chairman and CEO 80% of the award opportunity in the form of performance-based RSUs and 20% as time-based RSUs • For CFO 65% of the award opportunity in the form of performance-based RSUs and 35% as time-based RSUs | | |
| | CEO Promotion | | | | | | |
| | ■ Stockholders overall asked for XPO to continue its robust disclosure of the CEO compensation package and sought to understand the structure of the Promotion PSU award granted to Mr. Harik in connection with his transition to the CEO position after the RXO spin-off. | | | | ■ As described further in this CD&A, Mr. Harik received a promotion award at his assumption to the CEO role to recognize his contributions to date and provide a competitive compensation package commensurate with the role. The Promotion PSU award is based entirely on achieving challenging relative TSR goals over a four-year cliff period, with target paying out if XPO’s performance is at the 67th percentile relative to the S&P Midcap 400, and payout of 150% of target if performance is at the 83rd percentile ranking, with a chance to qualify for a modifier (up to a cap of 200% total payout) if XPO’s TSR further outperforms select transportation peers. | | |
| | CD&A Disclosure | | | | | | |
| | ■ Stockholders requested more clear disclosure of the Compensation Committee’s considerations with respect to how it structured LTIs awarded to top executives, the reasoning behind the metrics chosen, and the level of pay granted. | | | | ■ The CD&A discloses the Compensation Committee’s considerations around changes made to executive awards, which included reevaluating the pay program’s structure in the context of stockholder feedback, and its relevance for the current company after two successive spin-offs. | | |
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| | WHAT WE HEARD FROM STOCKHOLDERS | | | | RESPONSIVE ACTIONS | | |
| | ■ Stockholders requested more clarity around the Compensation Committee’s use of a 25% modifier in the STI formula and the use of an ESG Scorecard. | | | | ■ The CD&A includes a thorough description of the Compensation Committee’s go-forward approach to executive compensation, including the removal of discretionary components of the STI program and a new construct for the annual LTI awards. ■ The Compensation Committee expanded its disclosure of the initiatives embedded in the ESG scorecard by providing a view of all 43 deliverables relevant to the determination of 2022 performance achievement within the 2020 Cash LTI program, as well as the adjustments to the scorecard deemed necessary by the Compensation Committee in connection with the RXO spin-off for the final 2023 tranche of the award (now a part of a replacement PSU structure, remaining at a weighting of 25%). See Annex B entitled “ESG Scorecard — 2022 Deliverables and Achievements”. | | |
WHAT WE DO | | | WHAT WE DON’T DO | |
Significant emphasis on variable compensation. Our compensation program is heavily weighted toward variable compensation, including LTIs that are majority performance-based, and annual short-term cash incentives that are formulaically determined based on adjusted EBITDA. This allows the Committee to closely align total compensation values with company performance on an annual and long-term basis. | | | No exceptional perquisites. Our NEOs have no relocation benefits or supplemental pension or retirement savings beyond what is provided broadly to all XPO employees. In addition, our NEOs have no personal use of executive health services, club memberships, stipends or financial planning services. | |
Substantial portion of compensation linked to creation of stockholder value. Performance-based awards are, and have been, subject to meaningful stock price and/or earnings-related performance goals measured over service-based vesting periods. While performance-based awards have an important role in sustaining the NEOs’ focus on the company’s strategic objectives, the Committee also regularly reviews the full portfolio of XPO stockholdings for each NEO to ensure there is a sufficient amount of compensation at risk if the objectives are not met, further aligning compensation with stockholder returns and value creation, while sustaining the NEOs’ focus on the company’s strategic objectives. | | | No pledging or hedging of company stock. Under our insider trading policy, our company’s directors and executive officers, including the NEOs, are prohibited from pledging or holding company securities in a margin account. In addition, they are prohibited from engaging in hedging transactions, such as prepaid variable forwards, equity swaps, collars and exchange funds or any other transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of company equity securities. | |
Stock ownership policies. The Board has established stock ownership guidelines and stock retention requirements that encourage a strong ownership mindset among our NEOs. Our ownership guidelines reflect 6x annual base salary for our CEO and 3x annual base salary for our other NEOs. In addition, certain awards of our executive chairman and CEO were amended during 2022 to include one-year holding periods after vesting, as described above. | | | No guaranteed annual salary increases. Salary increases are not guaranteed annually and are benchmarked against market values. | |
Clawback policy. Our NEOs are subject to clawback restrictions with respect to incentive compensation. | | | No stock option repricing or discounted exercise price. Our company’s equity incentive plan does not permit either stock option repricing without stockholder approval or stock option awards with an exercise price below fair market value. | |
Restrictive covenants. Our NEOs are subject to comprehensive non-competition and other restrictive covenants. | | | No golden parachute excise tax gross-ups. XPO does not provide golden parachute excise tax gross-ups. | |
Engage with stockholders. Our Board values stockholder feedback and carefully considers investor perspectives for incorporation into its decision-making processes for governance, compensation and sustainability practices. | | | No consultant conflicts. The Committee retains an independent compensation consultant who performs services only for the Committee, as described in more detail below under the heading Role of the Committee’s Independent Compensation Consultant. | |
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CORPORATE GOVERNANCE | |
| Brad Jacobs Age: | | | Executive Chairman since 2022 | | |||
| Mr. Jacobs has served as an additional four years. He served eight years as chairman and chief executive officer of United Waste Systems. | | ||||||
| Board Committees: None | | ||||||
| Other Public Company Boards: GXO Logistics, Inc. (NYSE: GXO); RXO, Inc. (NYSE: RXO) | | ||||||
| Mr. ▪ In-depth knowledge of the company’s business resulting from his years of service with the company as its chief executive ▪ Leadership experience as the company’s chairman and chief executive officer of several public companies lends Mr. Jacobs the ability to facilitate productive decision-making and ▪ Extensive past and current experience as the chairman of boards of directors of several public companies | |
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| | Jason Aiken Age: | | | Independent Director since 2021 | | |
| | Mr. Aiken has served as a director of the company since August 2, 2021. He has served as executive vice president, technologies and chief financial officer of General Dynamics Corporation since January 2023 and previously held the title of senior vice president and chief financial officer from January 2014 to January 2023. Prior to that, Mr. Aiken was the senior vice president and chief financial officer of General Dynamics defense contractors. He holds a masters in business administration degree from the Kellogg School of Management at Northwestern University, and a bachelor’s degree in business administration and accounting from Washington and Lee University. | | | |||
| | Board Committees: ▪ | | | |||
| | Other Public Company Boards: None | | | |||
| | Mr. ▪ Significant financial and accounting expertise through his service as chief financial officer and other senior finance positions with a Fortune 100 ▪ Senior operational, transactional and strategic | | |
| Age: | | | Independent Director since 2022 | | |||
| Ms. | | ||||||
| Board Committees: ▪ | | ||||||
| Other Public Company Boards: None | | ||||||
| Ms. ▪ Deep technical knowledge through her executive roles overseeing technological transformation and operations provide the ▪ Significant experience in | |
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| | Wes Frye Age: 75 | | | Independent Director since 2023 | | | |||
| | Mr. Frye has served as a director of the company since March 8, 2023. He served as senior vice president and chief financial officer for the last 18 years of his 30-year tenure at Old Dominion Freight Line, Inc. (NYSE: ODFL) from 1985 until his retirement in 2015. Mr. Frye holds an MBA degree in finance from the University of North Carolina at Charlotte, and a bachelor’s degree in business administration from Appalachian State University. | | | ||||||
| | Board Committees: ▪ Member of the Operational Excellence Committee | | | ||||||
| | Other Public Company Boards: None | | | ||||||
| | Mr. Frye’s Skills and Experience Aligned with XPO’s Strategy: ▪ Mr. Frye’s direct LTL operational experience through 30-year tenure at Old Dominion Freight Line adds important industry expertise to the Board as the company continues in its next chapter as a pure-play LTL business; and ▪ Extensive finance and accounting knowledge gained through role as an operationally oriented chief financial officer at Old Dominion Freight Line gives Mr. Frye an understanding of financial undertakings and risks associated with XPO’s business and the industry. | | |
| Mario Harik Age: 42 | | | Director since 2022 | | |||
| Mr. Harik has served as a director and as chief executive officer of the company since November 1, 2022. Previously, Mr. Harik served as president of the company’s North America Less-Than-Truckload business unit from October 2021 to October 2022. He was also XPO’s chief information officer from November 2011 to October 2022 and chief customer officer from February 2021 to October 2022. Prior to XPO, Mr. Harik held positions as chief information officer and senior vice president of research and development with Oakleaf Waste Management, chief technology officer with Tallan, Inc., and co-founder and chief architect of web and voice applications with G3 Analyst. He holds a master’s degree in engineering, information technology from Massachusetts Institute of Technology, and a degree in engineering, computer and communications from the American University of Beirut in Lebanon. | | ||||||
| Board Committees: ▪ Chair of the Operational Excellence Committee | | ||||||
| Other Public Company Boards: None | | ||||||
| Mr. Harik’s Skills and Experience Aligned with XPO’s Strategy: ▪ Extensive leadership and company-specific experience as chief information officer, chief customer officer and president, North American LTL at XPO lends him a deep understanding of the business and the industry-best technology platform. Mr. Harik has helped build a platform to connect shippers and carriers more efficiently and build XPO into one of the largest North American trucking and logistics companies; and ▪ Mr. Harik’s experience leading XPO’s global technology strategy, organization and proprietary technology development demonstrates the value of his technical knowledge for XPO’s Board. | |
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| | Michael Jesselson Age: | | | Independent Director since 2011 | | | |||
| | Mr. Jesselson has served as a director of the company since September 2, 2011 and served as lead independent director C-III Capital Partners LLC, Clarity Capital and other private companies, as well as numerous philanthropic organizations. Mr. Jesselson also serves as the chairman of Bar Ilan University in Israel. He attended New York University School of Engineering. | | | ||||||
| | Board Committees: ▪ Member of the Audit | | | ||||||
| | Other Public Company Boards: | | | ||||||
| | Mr. ▪ Significant experience with public company governance through prior service on the board of directors of American Eagle Outfitters, including as its lead independent ▪ |
Mr. | ||||||||
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| Allison Landry Age: | | | Independent Director since 2021 Vice Chair since 2022 | | |||||||||
| Allison Landry has served as a director of the company since August 2, | | ||||||||||||
| Board Committees: ▪ ▪ Member of the Compensation Committee ▪ Member of the Operational Excellence Committee | | ||||||||||||
| Other Public Company Boards: None | | ||||||||||||
| Ms. ▪ More than 15 years experience in the transportation sector, equity markets, research and ▪ Significant experience in investments, financial analysis and | |
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| | Age: | | | Independent Director since | | | |||
| | Ms. Moshouris has served as a director of the company since November 1, 2022. She has served as senior vice president-treasurer of United Rentals, Inc. (NYSE: URI) since April 2011 and previously held the position of vice president-treasurer from August 2006 to April 2011. Prior to that, Ms. Moshouris was vice president and deputy treasurer with Avon Products, Inc., corporate tax manager with GTE Corporation, tax director-pharmaceutical group with Sterling Winthrop Inc. and tax manager with Arthur Andersen & Co. She holds a master of laws in taxation from New York University School of Law, juris doctorate from Brooklyn Law School and bachelor’s degree from Queens College. | | | ||||||
| | Board Committees: ▪ Member of the Audit Committee, the Compensation Committee and the Nominating, Corporate Governance and Sustainability Committee | | | ||||||
| | Other Public Company Boards: None | | | ||||||
| | Ms. Moshouris’ Skills and Experience Aligned with XPO’s Strategy: ▪ Financial leadership experience gained through her role as senior vice president and treasurer of United Rentals, as well as numerous treasury and tax management positions with global corporations, provides Ms. Moshouris with strong oversight skills necessary for a member of the audit committee; and ▪ International business experience, including international treasury role and director of global finance for Avon in Europe and Latin America, contributes to Board’s oversight of strategy given the global nature of XPO’s business. | | |
| Johnny C. Taylor, Jr. Age: 54 | | | Independent Director since 2021 Lead Independent Director since 2022 | | |||||||||||
| Mr. Taylor has served as a director of the company since August 2, and chief executive officer of the Society of Human Resources Management (SHRM) since December 2017. Previously, Mr. Taylor served as president and chief executive officer of the Thurgood Marshall College Fund from May 2010 to December 2017. He has served as a member of the board of directors of Guild Education since February 2021 and of iCIMS, Inc. since March 2021. He has served as a trustee of the University of Miami since June 2017, as a corporate member of Jobs for America’s Graduates since January 2018, and as a member of the National Board of Governors of the American Red Cross since June 2018. He’s served as chairman of the President’s Advisory Board on Historically Black Colleges and Universities and on the White House American Workforce Policy Advisory Board since February 2018. Mr. Taylor holds a juris doctorate degree and a master’s degree from Drake University, and a bachelor’s degree from the University of Miami. | | ||||||||||||||
| Board Committees: ▪ | | ||||||||||||||
| Other Public Company Boards: None | | ||||||||||||||
| Mr. ▪ ▪ | |
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| | AUDIT COMMITTEE | | | | COMMITTEE | | | | NOMINATING, CORPORATE GOVERNANCE AND SUSTAINABILITY COMMITTEE | | |
| | ■ Oversees the policies that govern the process by which our exposure to risk is assessed and managed by management. In that role, the Audit Committee discusses major financial risk exposures with our management and discusses the steps that management has taken to monitor and control these exposures. ■ Responsible for reviewing risks arising from related party transactions involving our company, and for overseeing our companywide Code of Business Ethics and overall compliance with legal and regulatory requirements. | | | | Monitors the risks associated with our compensation philosophy and programs. | ||||||
■ Ensures that the company’s compensation structure strikes an appropriate balance in motivating our senior executives to deliver long-term results for the company’s stockholders, while simultaneously holding our senior leadership team accountable. | | | | ■ Oversees risks related to our governance structure and processes, as well as risks associated with the company’s corporate sustainability practices and reporting. ■ Oversees the company’s political activity and, pursuant to our Political Activity Policy, has final approval over all political contributions of the company. | | |
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| Name | | | Audit Committee | | | Compensation Committee | | | Nominating, Corporate Governance and Sustainability Committee | | | Operational Excellence Committee | |
| Jason Aiken* | | | C | | | | | | | | | | |
| | | | | | | | | ✓ | | | | | |
| Wes Frye | | | | | | | | | | | | ✓ | |
| Mario Harik | | | | | | | | | | | | C | |
| Michael Jesselson | | | ✓ | | | | | | |||||
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| | | | | | ✓ | | | C | | | ✓ | | |
| | | ✓ | | | ✓ | | | ✓ | | | | | |
| Johnny C. Taylor, Jr. | | | | | | C | | | | | | | |
| C = Committee | | | ✓ = Committee member | | | * = Audit Committee Financial Expert | |
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| Name | | Fees Earned in Cash(2) | | Stock Awards(3) | | Total | | Name | | Fees Earned in Cash(2) | | Stock Awards(3) | | Total | | ||||||||||||||||||||||||
| Jason Aiken(4) | | | $ | 43,370 | | | | $ | 79,123 | | | | $ | 122,493 | | | Jason Aiken(4) | | | $ | 105,000 | | | | $ | 190,000 | | | | $ | 295,000 | | | ||||||
| Gena Ashe(5) | | | | 46,957 | | | | | 110,877 | | | | | 157,834 | | | Bella Allaire(5) | | | | 13,261 | | | | | 31,753 | | | | | 45,014 | | | ||||||
| Marlene Colucci(6) | | | | 46,957 | | | | | 110,877 | | | | | 157,834 | | | AnnaMaria DeSalva(6) | | | | 104,280 | | | | | 158,247 | | | | | 262,527 | | | ||||||
| AnnaMaria DeSalva(7) | | | | 125,000 | | | | | 190,000 | | | | | 315,000 | | | Michael Jesselson(7) | | | | 100,856 | | | | | 190,000 | | | | | 290,856 | | | ||||||
| Michael Jesselson(8) | | | | 105,000 | | | | | 190,000 | | | | | 295,000 | | | Adrian Kingshott(8) | | | | 66,739 | | | | | 158,247 | | | | | 224,986 | | | ||||||
| Adrian Kingshott(9) | | | | 88,804 | | | | | 190,000 | | | | | 278,804 | | | Mary Kissel(9) | | | | 66,739 | | | | | 158,247 | | | | | 224,986 | | | ||||||
| Mary Kissel(10) | | | | 33,043 | | | | | 79,123 | | | | | 112,166 | | | Allison Landry(10) | | | | 87,459 | | | | | 190,000 | | | | | 277,459 | | | ||||||
| Allison Landry(11) | | | | 105,043 | | | | | 79,123 | | | | | 184,166 | | | Irene Moshouris(11) | | | | 13,261 | | | | | 31,753 | | | | | 45,014 | | | ||||||
| Jason Papastavrou, Ph.D.(12) | | | | 58,696 | | | | | 110,877 | | | | | 169,573 | | | Johnny C. Taylor, Jr.(12) | | | | 104,144 | | | | | 190,000 | | | | | 294,144 | | | ||||||
| Oren Shaffer(13) | | | | 61,630 | | | | | 110,877 | | | | | 172,507 | | | |||||||||||||||||||||||
| Johnny C. Taylor, Jr.(14) | | | | 41,304 | | | | | 79,123 | | | | | 120,427 | | |
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RELATED PARTY TRANSACTIONS | |
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| Name of Beneficial Owner | | Shares of Common Stock Beneficially Owned | | Percentage of Common Stock Outstanding(1) | | Name of Beneficial Owner | | Shares of Common Stock Beneficially Owned | | Percentage of Common Stock Outstanding(1) | | ||||||||||||||||
| Beneficial Ownership of 5% or more: | | | | | | | | | | | | Beneficial Ownership of 5% or more: | | | | | | | | | | | | ||||
| Jacobs Private Equity, LLC | | | | 11,915,701(2) | | | | | 10.4% | | | MFN Partners, LP(2) | | | | 12,675,369 | | | | | 11.0% | | | ||||
| Orbis Investment Management Limited(3) | | | | 11,104,073 | | | | | 9.7% | | | BlackRock, Inc.(3) | | | | 11,244,910 | | | | | 9.7% | | | ||||
| BlackRock, Inc.(4) | | | | 9,143,216 | | | | | 7.9% | | | The Vanguard Group(4) | | | | 10,751,543 | | | | | 9.3% | | | ||||
| The Vanguard Group(5) | | | | 9,032,676 | | | | | 7.9% | | | Orbis Investment Management Limited(5) | | | | 9,992,273 | | | | | 8.6% | | | ||||
| MFN Partners, LP(6) | | | | 6,075,369 | | | | | 5.3% | | | Directors: | | | | | | | | | | | | ||||
| Directors: | | | | | | | | | | | | Jason Aiken | | | | 4,960(6) | | | | | * | | | ||||
| Jason Aiken | | | | 920 | | | | | * | | | Bella Allaire | | | | 902 | | | | | * | | | ||||
| AnnaMaria DeSalva | | | | 14,851(7) | | | | | * | | | Wes Frye | | | | 1,500 | | | | | * | | | ||||
| Michael Jesselson | | | | 295,969(8) | | | | | * | | | Michael Jesselson | | | | 305,917(7) | | | | | * | | | ||||
| Adrian Kingshott | | | | 113,465(9) | | | | | * | | | Allison Landry | | | | 4,960 | | | | | * | | | ||||
| Mary Kissel | | | | 920 | | | | | * | | | Irene Moshouris | | | | 902 | | | | | * | | | ||||
| Allison Landry | | | | 920 | | | | | * | | | Johnny C. Taylor, Jr. | | | | 4,960(8) | | | | | * | | | ||||
| Johnny C. Taylor, Jr. | | | | 920 | | | | | * | | | NEOs: | | | | | | | | | | | | ||||
| NEOs: | | | | | | | | | | | | Brad Jacobs+ | | | | 1,688,117(9) | | | | | 1.5% | | | ||||
| Brad Jacobs+ | | | | 12,303,117(10) | | | | | 10.7% | | | Mario Harik+ | | | | 123,548 | | | | | * | | | ||||
| Mario Harik | | | | 123,548 | | | | | * | | | Carl D. Anderson II(10) | | | | — | | | | | — | | | ||||
| Ravi Tulsyan | | | | 56,269(11) | | | | | * | | | Ravi Tulsyan(11) | | | | 20,025 | | | | | * | | | ||||
| Troy Cooper | | | | 113,315(12) | | | | | * | | | Current Directors and Executive Officers as a Group: (10 People) | | | | 2,135,766(12) | | | | | 1.8% | | | ||||
| David Wyshner | | | | 4,691(13) | | | | | * | | | ||||||||||||||||
| Current Directors and Executive Officers as a Group: (10 People) | | | | 12,910,899(14) | | | | | 11.2% | | |
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EXECUTIVE COMPENSATION | |
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| NEO | | | | |
| Brad Jacobs | | | Executive Chairman commencing November 1, 2022 | |
| Mario Harik | | | Chief Information Officer, Chief Customer Officer, and Chief Executive Officer commencing November 1, 2022 | |
| Carl Anderson | | | Chief Financial Officer commencing November 8, 2022 | |
| Ravi Tulsyan | | | Chief Financial Officer | |
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| 2023 COMPENSATION PROGRAM (discussed on page 36) | | | | ■ Following the completion of the GXO and RXO spin-offs over the course of two years and with the announcement of Mr. Harik as XPO’s new CEO as well as other management hires, the newly reconstituted Committee redesigned the compensation program for 2023 in order to be responsive to stockholder feedback and align with the new business priorities. ■ For 2023, and with the intention to maintain this structure going forward, contingent upon stockholder feedback, the Committee: • Established a formulaic STI award for executives ▪ 2023 Annual Incentive for executive chairman, CEO and CFO based on adjusted EBITDA • Communicated intention to grant long-term incentive awards on an annual basis ▪ For executive chairman and CEO structured LTI to consist of 80% performance-based RSUs and 20% as time-based RSUs ▪ For CFO structured LTI to consist of 65% performance-based RSUs and 35% as time-based RSUs | |
| 2022 COMPENSATION PROGRAM (discussed on page 42) | | | | ■ The Committee made a number of changes to compensation awards in 2022, reflecting modifications of prior awards from cash to equity and granting of awards in connection with the promotion of Mr. Harik to CEO. These include but not are not limited to: • Replacement LTL PSUs in place of the 2022 cash tranche of the 2020 LTI award equity for 50% of Mr. Jacobs’ award and 100% of Mr. Harik’s which required completion of the RXO spin-off no later than December 31, 2022 and achievement of targets across two metrics. • Regular LTL PSUs with a three-year vesting period and metrics aligned with path to LTL long-term targets. • A relative TSR PSU granted to Mr. Harik and Mr. Anderson in connection with their appointments as CEO and CFO and based on rigorous relative TSR target to incentivize a strong focus on XPO’s growth in market position versus core competitors. • A new hire RSU award for Mr. Harik in connection with his appointment as CEO. | |
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| OUTSTANDING 2020 LTI AWARDS (discussed on page 48) | | | | ■ In February 2023, the Committee re-evaluated the structure of the remaining 2023 tranche of the 2020 LTI awards for both Mr. Jacobs and Mr. Harik. Based on stockholder feedback and the impact of the RXO spin-off on the company’s profile, the Committee decided to effectively cancel the original version of the award, denominated in cash, and replace it with new performance-based shares, with metrics that were realigned with post-spin-off strategic priorities. ■ The target amounts and combined vesting/sales restriction schedules were preserved in the issuance of the replacement awards, however, the weighting of the two metrics were changed so that relative TSR of XPO vs. the S&P Transportation Select Index represents 75% of the award and the ESG scorecard represents 25%. The ESG scorecard was recalibrated to better align with our current business. The new performance measurement period begins on November 1, 2022 and ends on December 31, 2024. | |
| OUTSTANDING 2018 & 2019 LTI AWARDS (discussed on page 50) | | | | ■ Prior to the RXO spin-off, Mr. Jacobs and Mr. Harik held two unvested performance-based stock awards. These PSUs included two separate performance hurdles within each award structure to achieve target payout, with a ‘hit-or-miss’ payout structure. The Committee evaluated market practice for how to properly handle the modification requirements for these awards and found that 72% of companies converted some or all of their outstanding executive PSUs into time-based RSUs vesting on their original schedules in conjunction with a spin-off. ■ Taking into account the extraordinary value creation created by Mr. Jacobs and Mr. Harik over the length of the PSU award, the difficulty in making a fair adjustment methodology following two successive spin-offs and the prevailing market practice, the Committee decided to convert the combined target shares in these two outstanding awards to a single time-based RSU award for each of Mr. Jacobs and Mr. Harik, effective as of the RXO spin-off date. ■ Taking into account stockholder feedback on how to address outstanding awards, the Committee extended the vesting schedule of the 2018 award by two years to December 31, 2024, aligning with the original vesting schedule of the 2019 award and also applied a post-vesting sales restriction on the entire pool of shares across both awards, which expires on December 31, 2025. | |
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| | WHAT WE HEARD FROM STOCKHOLDERS | | | | RESPONSIVE ACTIONS | | |
| | Modifications to Outstanding Awards | | | ||||
| | Equity Mix | | | | | | |
| | ■ Stockholders generally expressed a preference for the outstanding 2020 Cash LTI performance-based awards to incorporate an equity component, as opposed to being entirely cash-based. | | | | ■ Converted 100% of the target value of Mr. Jacobs and Mr. Harik’s final 2023 tranche of the 2020 Cash LTI performance-based awards into performance-based equity. | | |
| | Metrics | | | | | | |
| | ■ Some stockholders expressed a preference to remove the adjusted cash flow per share metric in the 2020 Cash LTI performance-based awards and, in choosing new operational or financial metrics for go-forward PSU awards, to exclude gains from sales of real estate in calculating the selected measures. ■ Most stockholders continued to support the inclusion of relative metrics, such as relative TSR, in LTI award structures. | | | | ■ Eliminated the adjusted cash flow per share metric from the final 2023 tranche of the 2020 Cash LTI performance-based awards and replaced it with a relative TSR metric to further align executive compensation with stockholder interests. ■ Operational and financial metrics used in our PSU award constructs exclude the impact of gains from real estate sales. | | |
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| | WHAT WE HEARD FROM STOCKHOLDERS | | | | RESPONSIVE ACTIONS | | |
| | Change-in-Control Provision | | | | | | |
| | ■ Stockholders inquired about the Committee’s stance on moving away from a single-trigger change-in-control provision in the previously granted awards, and indicated a preference for double-trigger provisions. | | | | ■ Eliminated single-trigger change-in-control provisions from outstanding performance-based awards held by NEOs, including those converted following the RXO spin-off; double-trigger provisions have now been applied to all outstanding awards. | | |
| | Go-Forward Compensation Program Structure | | | ||||
| | Formulaic Structure | | | | | | |
| | ■ Stockholders expressed a preference for STI and LTI program structures to be less discretionary, more predictable and more formulaic. | | | | ■ Committed to a STI award that is purely formulaic • 2023 Annual Incentive for executive chairman, CEO and CFO based on adjusted EBITDA, with the application of a linear bonus payout curve from 50% threshold for performance at 90% of target to 200% at maximum for 120% of target ■ Adopted a formulaic LTI program with multiyear vesting periods, to be granted annually; this further reinforces a reliable, predictable incentive structure and aligns pay with performance • For executive chairman and CEO 80% of the award opportunity in the form of performance-based RSUs and 20% as time-based RSUs • For CFO 65% of the award opportunity in the form of performance-based RSUs and 35% as time-based RSUs | | |
| | CEO Promotion | | | | | | |
| | ■ Stockholders overall asked for XPO to continue its robust disclosure of the CEO compensation package and sought to understand the structure of the Promotion PSU award granted to Mr. Harik in connection with his transition to the CEO position after the RXO spin-off. | | | | ■ As described further in this CD&A, Mr. Harik received a promotion award at his assumption to the CEO role to recognize his contributions to date and provide a competitive compensation package commensurate with the role. The Promotion PSU award is based entirely on achieving challenging relative TSR goals over a four-year cliff period, with target paying out if XPO’s performance is at the 67th percentile relative to the S&P Midcap 400, and payout of 150% of target if performance is at the 83rd percentile ranking, with a chance to qualify for a modifier (up to a cap of 200% total payout) if XPO’s TSR further outperforms select transportation peers. | | |
| | CD&A Disclosure | | | | | | |
| | ■ Stockholders requested more clear disclosure of the Committee’s considerations with respect to how it structured LTIs awarded to top executives, the reasoning behind the metrics chosen, and the level of pay granted. ■ Stockholders requested more clarity around the Committee’s use of a 25% modifier in the STI formula and the use of an ESG Scorecard. | | | | ■ This CD&A discloses the Committee’s considerations around changes made to executive awards, which included reevaluating the pay program’s structure in the context of stockholder feedback, and its relevance for the current company after two successive spin-offs. ■ This CD&A includes a thorough description of the Committee’s go-forward approach to executive compensation, including the removal of discretionary components of the STI program, and a new construct for the annual LTI awards. ■ The Committee expanded its disclosure of the initiatives embedded in the ESG scorecard by providing a view of all 43 deliverables relevant to the determination of 2022 performance achievement | | |
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| | | | | | Component | | | | Key Characteristics | | | ||||
| | 1 | | | | Base Salary | | | | ■ ■ No guaranteed annual increases; the Committee determines eligibility for | | | ||||
| | 2 | | | | Short-Term Incentives (STI) for our Executive Chairman, CEO and | | | | ■ ■ | ■ ■ | | | |||
| | | | | Long-Term Incentives (LTI) for our Executive Chairman, CEO and CFO | | | | ■ ■ Annual award opportunity for the CFO is 65% allocated to PSUs and 35% to allocated RSUs ■ XPO’s LTI allocation of PSU mix is higher than industry peers (e.g., peer group CEO median is 61% based on 2021 compensation structures) ■ LTI target levels will be assessed annually by the Committee using market benchmarking analysis ■ PSUs emphasize high growth and high returns, with rigorous standards for threshold, target, and maximum payouts: • Financial performance | • • Awards | | |
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| | | | | | | | ANNUAL CASH COMPENSATION | | | | ANNUAL LTI COMPENSATION | | | | ||||||||||||||
NEO | | | | Base Salary | | | | Target Bonus (% of Base Salary) | | | | Target Bonus ($ Value) | | | | Total Target Annual Cash Compensation | | | | Target PSUs | | | | Target RSUs | | | | Total Target Annual Direct Compensation | |
Brad Jacobs | | | | $600,000 | | | | 150% | | | | $900,000 | | | | $1,500,000 | | | | $4,000,000 | | | | $1,000,000 | | | | $6,500,000 | |
Executive Chairman | | | | | | | | | | | | | | | | | | | | (80% of LTI) | | | | (20% of LTI) | | | | | |
Mario Harik | | | | $850,000 | | | | 200% | | | | $1,700,000 | | | | $2,550,000 | | | | $6,000,000 | | | | $1,500,000 | | | | $10,050,000 | |
Chief Executive Officer | | | | | | | | | | | | | | | | | | | | (80% of LTI) | | | | (20% of LTI) | | | | | |
Carl Anderson | | | | $625,000 | | | | 100% | | | | $625,000 | | | | $1,250,000 | | | | $1,137,500 | | | | $612,500 | | | | $3,000,000 | |
Chief Financial Officer | | | | | | | | | | | | | | | | | | | | (65% of LTI) | | | | (35% of LTI) | | | | | |
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| | | | | | | | 2023 Go-Forward Incentive Plan | | | ||||||||||
| | Performance Metric | | | | 100% based on absolute adjusted EBITDA (inclusive of all company businesses) | | | | Maintain ■ XPO has typically viewed adjusted EBITDA as a mainstay goal for financial performance measurement in ■ All CD&A Peer Group companies use a profitability metric in their STI plans (with a median weighting of 50%) | | | ||||||||
| | | | | ■ 90% cut-in to be eligible for bonus (with payout at 50% of target) | | | | Maintain ■ More rigorous than companies in the CD&A Peer Group, in which the median cut-in is 80% for profitability metrics, with 50% of target payout | | | |||||||||
| | | | | ■ Final bonus payout for the NEOs aligns to the calculated corporate pool, once the 90% cut-in is met ■ Linear interpolation between attainment points, based on the curve shown below ■ Maximum payout of 200% at 120% of target | | | | Maintain ■ The median performance range associated with a profitability metric is 80% of target at threshold and 120% of target at maximum ■ Most companies in the CD&A Peer Group cap payout at 200% of target | | | |||||||||
| | | | | Modifier (up to +25% of accrued bonus) ■ Considers supplemental KPIs (e.g., revenue, free cash flow and annual TSR), as well as strategic initiatives and individual performance | | | | Eliminate ■ Stockholders prefer an entirely formulaic structure, with no adjustments considered without precise measurements for each individual modification proposed | | | |||||||||
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| | Weighting | | | | Performance Metrics | | | | Performance Target and Measurement Period | | | | Payout Scale (Straight-line interpolation between values) | | | ||||
| | 40% | | | | LTL Adjusted EBITDA Growth | | | | CAGR of 8% (FY 2023 — FY 2025) | | | | % of Target | | | | % PSU Earned | | |
| 90% | | | | 50% | | | |||||||||||||
| 100% | | | | 100% | | | |||||||||||||
| 120% | | | | 200% | | | |||||||||||||
| | 20% | | | | LTL Adjusted Operating Ratio Improvement | | | | 300 bps (FY 2023 — FY 2025) | | | | Achievement Level | | | | % PSU Earned | | |
| 200 bps | | | | 50% | | | |||||||||||||
| 300 bps | | | | 100% | | | |||||||||||||
| 400 bps | | | | 200% | | | |||||||||||||
| | 40% | | | | Relative TSR: XPO vs. S&P Transportation Select Index | | | | Three-year XPO TSR relative to three-year TSR of companies in the index (3/6/2023 -3/6/2026) | | | | Percentile vs. Index | | | | % PSU Earned | | |
| < 40th | | | | 0% | | | |||||||||||||
| 40th | | | | 25% | | | |||||||||||||
| 50th | | | | 65% | | | |||||||||||||
| 60th | | | | 100% | | | |||||||||||||
| 75th | | | | 200% | | | |||||||||||||
| | Additional Key Features | | | ||||||||||||||||
| | ■ Vesting schedule: Cliff vesting date of March 6, 2026, contingent upon achievement of the performance hurdles and continued XPO employment through the vesting date. | | | ||||||||||||||||
| | ■ Post-vesting sales restriction: A one-year lock-up on the sale or transfer of shares post-vesting will apply to ensure continued long-term alignment with stockholder interests. | | |
| STI FOR PERFORMANCE YEAR 2021(1) | | |||||||||||||||||||
| | | | | | | Target | | | | Actual | | |||||||||
| Executive Officer | | | Annual Base Salary | | | Annual STI Opportunity as a percentage of annual base salary | | | Annual STI Opportunity | | | Total Combined Salary and STI | | | | STI(2) | | | Total Combined Salary and STI(2) | |
| Brad Jacobs | | | $1,000,000 | | | 200% | | | $2,000,000 | | | $3,000,000 | | | | $3,125,000 | | | $4,125,000 | |
| Mario Harik | | | $500,000 | | | 125% | | | $625,000 | | | $1,125,000 | | | | $1,076,563 | | | $1,576,563 | |
| Ravi Tulsyan | | | $500,000 | | | 100% | | | $500,000 | | | $1,000,000 | | | | $881,250 | | | $1,381,250 | |
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| Knight-Swift Transportation | | | ||||||||
| | Norfolk Southern Corporation | | | |||||||
| | Ryder System, Inc. | | | |||||||
| | Union Pacific Corporation | | | |||||||
| | United Parcel Service, Inc. | | | |||||||
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| | ADDITIONAL PEERS | | |
| | ArcBest Corporation | | |
| | Avis Budget Group, Inc. | | |
| | Hertz Global Holdings, Inc. | | |
| | Hub Group, Inc. | | |
| | Landstar System, Inc. | | |
| | Matson, Inc. | | |
| | Old Dominion Freight Line, Inc. | | |
| | Schneider National, Inc. | | |
| | TFI International Inc. | | |
| | Werner Enterprises, Inc. | | |
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| # | | | | CONSIDERATION | | | | MARKET ANALYSIS | | | | COMMITTEE’S OUTCOME | | | |
| 1 | | | The ratio of | | | | This ratio was 50% at the median of the | | | | At target as CEO, Mr. Jacobs’ annual total compensation was $13 million*. This was reduced to $6.5 million, yielding the | | | ||
| | 2 | | | | The ratio of EC total compensation to the new CEO’s total compensation | | | | This yielded a range of 50% to 70% across the full data set, and 70% to 90% in cases where the EC had a longer, multi-year tenure | | | | Mr. Jacobs’ $6.5 million target compensation is 65% of Mr. Harik’s $10.05 million target compensation — below the typical range of a longer-serving EC, and in the middle of the range across the full data set | | |
| | 3 | | | | The absolute total direct compensation of all ECs in the 43-company data set | | | | $7 million at the group median | | | | $6.5 million annual target compensation for Mr. Jacobs | | |
| | 4 | | | | The absolute total compensation of Mr. Jacobs and Mr. Harik combined, at target value, relative to the full data set | | | | | | Mr. Jacobs’ and Mr. Harik’s combined total compensation is $16.55 million, falling within the market range (within 7% of the median) | | | ||
| | 5 | | | | Pay mix of LTI and at-risk compensation relative to | | | | 57% of | | | | Of the $6.5 million in | | |
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| | | | | January 1 – October 31 | | | | November 1 – December 31 | | |
| Name | | | | | | | | | | STI Target | | | | | | | | | | | | | | | | STI Target | | | | | | | | | ||||||||||||||||||
| Salary | | | % of Salary | | | $ Amount | | | Target Cash Compensation | | | | Salary | | | % of Salary | | | $ Amount | | | Target Cash Compensation | | | ||||||||||||||||||||||||||||
| Brad Jacobs* | | | | | $ | 1,000,000 | | | | | | 200% | | | | | $ | 2,000,000 | | | | | $ | 3,000,000 | | | | | | $ | 600,000 | | | | | | 200% | | | | | $ | 1,200,000 | | | | | $ | 1,800,000 | | | |
| Mario Harik | | | | | $ | 500,000 | | | | | | 125% | | | | | $ | 625,000 | | | | | $ | 1,125,000 | | | | | | $ | 850,000 | | | | | | 200% | | | | | $ | 1,700,000 | | | | | $ | 2,550,000 | | | |
| Ravi Tulsyan | | | | | $ | 500,000 | | | | | | 100% | | | | | $ | 500,000 | | | | | $ | 1,000,000 | | | | | | $ | 500,000 | | | | | | 100% | | | | | $ | 500,000 | | | | | $ | 1,000,000 | | | |
| Carl Anderson | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | $ | 625,000 | | | | | | 100% | | | | | $ | 625,000 | | | | | $ | 1,250,000 | | | |
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| | | | | | | Target | | | | Formulaic Bonus Payout | | | | Committee Assessment | | | | | |
| Name | | | | Salary | | | | STI Target % | | | | Payout Curve Achievement | | | | STI Based on EBITDA Achievement | | | | % Modifier Applied to EBITDA Funded Bonus | | | | Bonus Adjusted following Committee Assessment | | | | 2022 Salary + Final Bonus Payout | | | ||||||||||||||||||||||
| Brad Jacobs* | | | | | $ | 929,561 | | | | | | | 200% | | | | | | $ | 1,859,121 | | | | | | | 140% | | | | | | $ | 2,602,769 | | | | | Committee did not exercise the plan modifier available in 2022, yielding a purely formulaic outcome; plan modifier removed for 2023 | | | | | $ | 3,532,329 | | | | ||||
| Mario Harik | | | | | $ | 557,857 | | | | | | | 138% | | | | | | $ | 768,096 | | | | | | | 140% | | | | | | $ | 1,075,334 | | | | | | $ | 1,633,192 | | | | ||||||||
| Carl Anderson | | | | | $ | 93,750 | | | | | | | 100% | | | | | | $ | 93,750 | | | | | | | 140% | | | | | | $ | 131,250 | | | | | | $ | 225,000 | | | |
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| | 2020 LTI AWARD ACHIEVEMENT FOR PERFORMANCE YEAR 2021 | | | ||||||||
| | NEO | | | | Target Value at 100% | | | | Actual Value Earned at 175% | | |
| | Brad Jacobs | | | | $10,000,000 | | | | $17,500,000 | | |
| | Troy Cooper(1) | | | | $3,350,000 | | | | $5,798,253 | | |
| | Mario Harik | | | | $2,250,000 | | | | $3,937,500 | | |
| | AWARD GRANTED | | | | DESCRIPTION | | | | THE COMMITTEE’S RATIONALE | | |
| | REPLACEMENT LTL PSUs Recipients: Mr. Jacobs Mr. Harik | | | | ■ Grant Date: March 7, 2022 ■ Vesting Schedule: Cliff vest on December 31, 2023 (aligned with the performance period of the 2022 Cash LTI tranche it replaced) ■ Performance Metrics: ■ Gating Factor: Completion of the RXO spin-off no later than December 31, 2022 ■ 50% weighted on 2022 LTL adjusted EBITDA ■ 50% weighted on 2022 LTL adjusted operating ratio improvement versus prior year ■ Details provided in the “LTL Performance-Based Stock Units (LTL PSUs)”table below ■ Performance Certified? Yes ■ 52% Earned Payout(subject to continued time vesting through vest date) | | | | ■ Replaced 2022 cash tranche included in the 2020 Cash LTI award, in response to stockholder feedback in 2021 indicating a preference for stock-based compensation ■ Aligned metrics with path to LTL long-term targets conveyed to investors in 2022 ■ The binary nature of the gating factor ensures a focus on successfully completing the spin-off transaction to position XPO for significant stockholder value creation through expected higher trading multiples over time | | |
| | REGULAR LTL PSUs Recipients: Mr. Harik Mr. Tulsyan | | | | ■ Grant Date: March 7, 2022 ■ Vest Schedule: Cliff vest on March 7, 2025 ■ Performance Metrics: ■ Gating Factor: Completion of the RXO spin-off no later than December 31, 2022 ■ 50% weighted on 2022 LTL adjusted EBITDA ■ 50% weighted on 2022 LTL adjusted operating ratio improvement versus prior year ■ Details provided in the “LTL Performance-Based Stock Units (LTL PSUs)” table below ■ Performance Certified? Yes ■ 52% Earned Payout(subject to continued time vesting through vest date) ■ Details of the pro-rata vesting of equity awards held by Mr. Tulsyan in connection with his termination are included in the “Potential Payments Upon Termination or Change of Control” table below. | | | | ■ Aligned metrics with path to LTL long-term targets conveyed to investors in 2022. ■ The binary nature of the gating factor ensures a focus on successfully completing the spin-off transaction to position XPO for significant stockholder value creation through expected higher trading multiples over time Applicable only to Mr. Harik: ■ Granted to Mr. Harik in recognition of his promotion to LTL acting president (appointed in October 2021) Applicable only to Mr. Tulsyan: ■ Granted to Mr. Tulsyan as part of his annual CFO total compensation structure, bringing total direct compensation to $4 million ■ 100% of LTI for Mr. Tulsyan was granted in PSUs, compared to an average 50% for at-risk, performance-based LTIs for CFOs in the CD&A Peer Group | | |
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| AWARD GRANTED | | | | DESCRIPTION | | | | THE COMMITTEE’S RATIONALE | | | |
| | Mr. Harik Mr. Anderson | | | | ■ ■ Mr. Harik — August 5, 2022 ■ Mr. Anderson — November 8, 2022 ■ Vest Schedule: Cliff vest on fourth anniversary of grant date ■ Performance Metrics: ■ 100% relative TSR with two-step calculation process: (i) a baseline measuring XPO’s four-year TSR performance against that of companies within the ■ Details provided in the “Relative TSR Performance-Based Stock Units” table below Applicable only to Mr. Harik: ■ Gating Factor: Completion of the ■ Post-Vest Sales Restriction: Lock-up on the sale or transfer of shares for one year after settlement of shares, except in the event of a change in control or death ■ Performance Certified? No (performance is still outstanding) | | | | ■ Aligned with stockholder interest for high growth of XPO’s stock price over the long-term; no payout below a 67th percentile ranking against the broader market index, and maximum 200% payout requires a percentile ranking of 83 against the broader index, as well as meaningful outperformance of select transportation peers Applicable only to Mr. Harik: ■ Granted in connection with Mr. Harik’s promotion to CEO ■ The Committee felt it was appropriate to recognize this milestone career accomplishment of Mr. Harik while applying rigor to the award design to incentivize a strong focus on XPO’s growth in ■ The binary nature of the Applicable only to Mr. Anderson: ■ Provided as part of new hire sign-on award in the | | |
| | Mr. Anderson | | | | ■ ■ Performance Certified? No (time-based only) | | | | ■ Provided as part of new hire sign-on award in the CFO offer package (50% of total sign-on award), in line with standard market practice for C-suite level roles | | |
| | RXO SPIN-OFF INCENTIVE Recipient: Mr. Tulsyan | | | | ■ Grant Date: March 7, 2022 ■ Vest Schedule: Cliff vest on March 7, 2025 ■ Gating Factor: Completion of the RXO spin-off no later than December 31, 2022 ■ Time-based vesting after gating factor is achieved ■ Performance Certified? Yes ■ 100% Earned Payout ■ Details of the pro-rata vesting of equity awards held by Mr. Tulsyan in connection with his termination are included in the “Potential Payments Upon Termination or Change of Control” table below.” | | | | ■ Granted to incentivize successful execution of the RXO spin-off, recognizing Mr. Tulsyan’s critical role in leading the complex strategic process over the course of eight months and delivering on stockholder requests to simplify the company’s business portfolio | | |
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| | Weighting | | | | Performance Metrics | | | | 2022 Target | | | | Payout Scale (Straight-line interpolation between values) | | | ||||
| | Gating Factor to Qualify: Completion of the RXO Spin-Off no later than December 31, 2022 | | | ||||||||||||||||
| | 50% | | | | LTL Adjusted EBITDA | | | | $1 billion | | | | LTL Adjusted EBITDA | | | | % PSU Earned | | |
| < $1 billion | | | | 0% | | | |||||||||||||
| $1 billion | | | | 100% | | | |||||||||||||
| $966 million | | | | 200% | | | |||||||||||||
| | 50% | | | | LTL Adjusted Operating Ratio Improvement | | | | 100 bps improvement vs. 2021 (as measured on December 31, 2022) | | | | Basis Point Improvement | | | | % PSU Earned | | |
| < 100 bps | | | | 0% | | | |||||||||||||
| 100 bps | | | | 100% | | | |||||||||||||
| 200 bps | | | | 200% | | |
| | Relative TSR Performance Measures | | | | Payout Scale (Straight-line interpolation between values) | | | ||||||||
| | STEP 1: Baseline | | | | XPO TSR performance vs. TSR of all companies within the S&P Midcap 400 Index | | | | Percentile Position vs. Index Companies | | | | % PSU Earned | | |
| < 67th | | | | 0% | | | |||||||||
| 67th | | | | 100% | | | |||||||||
| 83rd | | | | 200% | | | |||||||||
| | STEP 2: Multiplier | | | | XPO TSR performance vs. combined ODFL TSR (weighted 66.7)% and SAIA TSR (weighted 33.3)% | | | | Annualized Basis Points Outperformance vs. Peers | | | | % of Baseline Achieved | | |
| ≤ 200 bps | | | | 100% | | | |||||||||
| ≥ 500 bps | | | | 133% | | |
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| | Weighting | | | | Performance Metrics | | | | 2022 Target | | | | 2022 Actual(1) | | | | Payout % | | | | Payout Scale (Straight-line interpolation between values) | | | ||||
| | Gating Factor to Qualify – Achieved: Completion of the RXO Spin-Off no later than December 31, 2022 | | | ||||||||||||||||||||||||
| | 50% | | | | LTL Adjusted EBITDA(1) | | | | $1 billion | | | | $1.002 billion | | | | 104% | | | | Adjusted EBITDA | | | | % PSU Earned | | |
| < $1 billion | | | | 0% | | | |||||||||||||||||||||
| $1 billion | | | | 100% | | | |||||||||||||||||||||
| $966 million | | | | 200% | | | |||||||||||||||||||||
| | 50% | | | | LTL Adjusted Operating Ratio Improvement(2) | | | | 100 basis- point improvement vs. 2021 | | | | 38 bps | | | | 0% | | | | Basis Point Improvement | | | | % PSU Earned | | |
| < 100 bps | | | | 0% | | | |||||||||||||||||||||
| 100 bps | | | | 100% | | | |||||||||||||||||||||
| 200 bps | | | | 200% | | | |||||||||||||||||||||
| | Blended Payout %: 52% | | | ||||||||||||||||||||||||
| | (1) Performance metrics have been calculated in accordance with applicable award agreements | | | ||||||||||||||||||||||||
| | Payout values (using XPO’s stock price as of December 31, 2022) for Mr. Jacobs, Mr. Harik and Mr. Tulsyan are detailed in the Long-Term Incentives section above, and are subject to continued time-based vesting | | |
| | Weighting | | | | Performance Metrics | | | | 2022 Target | | | | 2022 Actual(1) | | | | Payout % | | | | Payout Scale (2022 Tranche) | | | ||||
| | 50% | | | | XPO Absolute Adjusted Cash Flow Per Share | | | | $5.35 | | | | $6.19 | | | | 178% | | | | Achievement Level | | | | % Earned | | |
| < $5.35 | | | | 0% | | | |||||||||||||||||||||
| $5.35 | | | | 100% | | | |||||||||||||||||||||
| $5.89 | | | | 150% | | | |||||||||||||||||||||
| ≥ $6.42 | | | | 200% | | | |||||||||||||||||||||
| | 25% | | | | Relative Cumulative Growth in Adjusted Cash Flow Per Share vs. 2020 (Compared to 15- Peer Comparator Group) | | | | 55th Percentile Rank | | | | Ranked 3rd out of 16 (~85th percentile) | | | | 200% | | | | XPO Percentile Rank | | | | % Earned | | |
| < 55th | | | | 0% | | | |||||||||||||||||||||
| 55th | | | | 100% | | | |||||||||||||||||||||
| 65th | | | | 150% | | | |||||||||||||||||||||
| ≥ 75th | | | | 200% | | | |||||||||||||||||||||
| | 25% | | | | ESG Scorecard (43 initiatives for 2022, each equally weighted at 2.3 points) | | | | 80 – 85 points out of 100 | | | | Final Score of 86.2 (Details provided in Annex B) | | | | 150% | | | | Scorecard Grade (Scale of 1-100) | | | | % Earned | | |
| < 80 points | | | | 0% | | | |||||||||||||||||||||
| ≥ 80 points and < 85 points | | | | 100% | | | |||||||||||||||||||||
| ≥ 85 points and < 90 points | | | | 150% | | | |||||||||||||||||||||
| ≥ 90 points | | | | 200% | | | |||||||||||||||||||||
| | Blended Payout %: Approximately 177% | | |
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| | ESG Category | | | | 2021 | | | | 2022 | | | | 2023 | | |
| | | | | | Weighting of ESG category within each performance period(2) | | | ||||||||
| | Workforce and talent | | | | 18.2% | | | | 19.5% | | | | 21.6% | | |
| | Employee and community safety | | | | 27.3% | | | | 26.8% | | | | 21.6% | | |
| | Diversity, equity and inclusion | | | | 20.5% | | | | 17.1% | | | | 18.9% | | |
| | Information security | | | | 11.4% | | | | 12.2% | | | | 13.5% | | |
| | Environment and sustainability | | | | 18.2% | | | | 19.5% | | | | 16.2% | | |
| | Governance | | | | 4.5% | | | | 4.9% | | | | 8.1% | | |
| | (A) Total | | | | 100% | | | | 100% | | | | 100% | | |
| | (B) Total # of Initiatives | | | | 44 | | | | 41 | | | | 37 | | |
| | # of Points Awarded Per Initiative (A/B)(2) | | | | 2.3 | | | | 2.4 | | | | 2.7 | | |
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| | | | | | PSU GRANT | | | | GRANT DATE | | | | ORIGINAL CLIFF VEST DATE | | | | # UNITS OUTSTANDING | | | | PERFORMANCE METRICS | | |
| | 1 | | | | 2018 PSU | | | | August 16, 2018 | | | | December 31, 2022 | | | | ■ Mr. Jacobs: 393,346 ■ Mr. Harik: 38,124 | | | | ■ Achievement of both $9.25 adjusted cash flow per share and $114.08 stock price by December 31, 2022 | | |
| | 2 | | | | 2019 PSU | | | | June 5, 2019 | | | | December 31, 2024 | | | | ■ Mr. Jacobs: 781,149 ■ Mr. Harik: 183,799 | | | | ■ Achievement of both compounded annual growth of at least 19% in adjusted EPS and relative TSR outperformance of at least 310 percentage points against the S&P Transportation Select Industry by December 31, 2022 | | |
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| | Weighting | | | | Performance Metrics | | | | Performance Measurement Period | | | | Payout Scale (straight-line interpolation between values for relative TSR) | | | ||||
| | 75% | | | | Relative TSR: XPO vs. S&P Transportation Select Index | | | | November 1, 2022 (RXO spin-off date) through December 31, 2024 (start of 30-day trading average represents the period from November 1, 2022 – December 13, 2022) | | | | Percentile vs. Index | | | | % PSU Earned | | |
| < 40th | | | | 0% | | | |||||||||||||
| 40th | | | | 25% | | | |||||||||||||
| 50th | | | | 65% | | | |||||||||||||
| 60th | | | | 100% | | | |||||||||||||
| 75th | | | | 200% | | | |||||||||||||
| | 25% | | | | ESG Scorecard | | | | 2023 deliverables stated in the ESG scorecard, modified to reflect remaining XPO business operations post-RXO spin-off | | | | Scorecard Grade (Scale of 1-100) | | | | % PSU Earned | | |
| < 80 points | | | | 0% | | | |||||||||||||
| ≥ 80 points and < 85 points | | | | 100% | | | |||||||||||||
| ≥ 85 points and < 90 points | | | | 150% | | | |||||||||||||
| ≥ 90 points | | | | 200% | | | |||||||||||||
| | Additional Key Features | | | ||||||||||||||||
| | ■ Vesting schedule: Cliff vest on February 9, 2025, contingent upon achievement of the above performance hurdles and continued employment through the vesting date. ■ Post-vest sales restriction: Lock-up on the sale or transfer of shares post-vesting until January 15, 2026. Vesting plus sales lock-up aligns with the total vesting period of the 2023 original tranche of the 2020 Cash LTI. | | |
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| | Weighting | | | | Performance Metrics | | | | Payout Scale (2023 Tranche) | | | ||||
| | 50% | | | | XPO Absolute Adjusted Cash Flow Per Share | | | | Achievement Level | | | | % Earned (straight-line interpolation between values) | | |
| < $5.95 | | | | 0% | | | |||||||||
| $5.95 | | | | 100% | | | |||||||||
| $6.55 | | | | 150% | | | |||||||||
| ≥ $7.14 | | | | 200% | | | |||||||||
| | 25% | | | | Relative Cumulative Growth in Adjusted Cash Flow Per Share vs. 2020 (compared to Peer Group) | | | | XPO Percentile Rank | | | | % Earned (straight-line interpolation between values) | | |
| < 55th | | | | 0% | | | |||||||||
| 55th | | | | 100% | | | |||||||||
| 65th | | | | 150% | | | |||||||||
| ≥ 75th | | | | 200% | | | |||||||||
| | 25% | | | | ESG Scorecard (39 initiatives for 2023, each equally weighted at 2.6 points) | | | | Scorecard Grade (Scale of 1-100) | | | | % Earned | | |
| < 80 points | | | | 0% | | | |||||||||
| ≥ 80 points and < 85 points | | | | 100% | | | |||||||||
| ≥ 85 points and < 90 points | | | | 150% | | | |||||||||
| ≥ 90 points | | | | 200% | | |
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| | | | | | 2023 ESG INITIATIVES | | | | TARGET | | | | CHANGE / RATIONALE | | |
| | 1 | | | | US DOT-Recordable Preventable Accident Frequency Rate (when holding number of miles driven constant with full-year 2020) | | | | Prior year actual + 3% improvement | | | | Removed RXO-related impact | | |
| | 2 | | | | Lost Workday Rate | | | | <59 | | | | Removed RXO-related impact | | |
| | 3 | | | | Total Recordable Incident Rate (TRIR) | | | | <0.95 | | | | Removed RXO-related impact | | |
| | 4 | | | | Fuel Efficiency Improvement | | | | Maintain 7.1 mpg or higher by year end | | | | Removed RXO-related impact | | |
| | 5 | | | | Registration as a Smartway Approved Carrier Partner | | | | Maintain Partnership | | | | Removed RXO-related impact | | |
| | 6 | | | | Average Age of Tractors | | | | 2.5 years | | | | Removed RXO-related impact | | |
| | 7 | | | | CO2 Emissions Control in Europe: Includes machinery equipment, installations, and road truck emissions | | | | Minimum 5% improvement from prior year | | | | Replaced entirely due to unavailability of EcoTransit tool that was intended to provide the basis for this measurement; see point 8 below | | |
| | 8 | | | | CO2 Emissions Reduction in Europe: Achieved with electric vehicles, biofuels, reduction of empty miles and renewable energies usage | | | | Minimum 10 million Kg of CO2 reduced in 2023 | | | | New goal replaces CO2 Emissions Control in Europe: Achieves a similar environmental benefit as the original goal and alleviates the measurement difficulties caused by a delay in the implementation of the EcoTransit tool | | |
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| Name and Principal Position | | | | Year | | | | Salary ($) | | | | Bonus(1) ($) | | | | Stock Awards(2)(3) ($) | | | | Non-Equity Incentive Plan Compensation(4) ($) | | | | All Other Compensation(5) ($) | | | | Total ($) | | Name and Principal Position | | | | Year | | | | Salary ($) | | | | Bonus(1) ($) | | | | Stock Awards(2)(3) ($) | | | | Non-Equity Incentive Plan Compensation(4) ($) | | | | All Other Compensation(5) ($) | | | | Total ($) | | ||||||||||||||||||||||||||||||||||||||||||
| Brad Jacobs(6) Chairman and Chief Executive Officer | | | | | | 2021 | | | | | | $ | 1,000,000 | | | | | | | — | | | | | | | — | | | | | | $ | 20,625,000 | | | | | | $ | 418,280 | | | | | | $ | 22,043,280 | | | Brad Jacobs(6) Executive Chairman | | | | | | 2022 | | | | | | $ | 929,561 | | | | | | | — | | | | | | $ | 34,600,992(7) | | | | | | $ | 11,446,524 | | | | | | $ | 13,880 | | | | | | $ | 46,990,957 | | |
| | | 2020 | | | | | | $ | 1,000,000 | | | | | | $ | 3,300,000 | | | | | | | — | | | | | | $ | 17,500,000 | | | | | | $ | 12,660 | | | | | | $ | 21,812,660 | | | | | | 2021 | | | | | | $ | 1,000,000 | | | | | | | — | | | | | | | — | | | | | | $ | 20,625,000 | | | | | | $ | 418,280 | | | | | | $ | 22,043,280 | | | |||||||
| | | 2019 | | | | | | $ | 838,462 | | | | | | | — | | | | | | $ | 7,007,415(7) | | | | | | | — | | | | | | $ | 12,460 | | | | | | $ | 7,858,337 | | | | | | 2020 | | | | | | $ | 1,000,000 | | | | | | $ | 3,300,000 | | | | | | | — | | | | | | $ | 17,500,000 | | | | | | $ | 12,660 | | | | | | $ | 21,812,660 | | | |||||||
| Mario Harik Chief Information Officer | | | | | | 2021 | | | | | | $ | 500,000 | | | | | | $ | 100,000 | | | | | | | — | | | | | | $ | 4,914,063 | | | | | | $ | 12,863 | | | | | | $ | 5,526,925 | | | Mario Harik(8) Chief Executive Officer | | | | | | 2022 | | | | | | $ | 557,857 | | | | | | | — | | | | | | $ | 7,381,069(7) | | | | | | $ | 1,075,334 | | | | | | $ | 13,463 | | | | | | $ | 9,027,723 | | |
| | | 2020 | | | | | | $ | 500,000 | | | | | | $ | 1,031,250 | | | | | | | — | | | | | | $ | 3,937,500 | | | | | | $ | 12,660 | | | | | | $ | 5,481,410 | | | | | | 2021 | | | | | | $ | 500,000 | | | | | | $ | 100,000 | | | | | | | — | | | | | | $ | 4,914,063 | | | | | | $ | 12,863 | | | | | | $ | 5,526,925 | | | |||||||
| | | 2019 | | | | | | $ | 467,692 | | | | | | | — | | | | | | $ | 1,648,799(7) | | | | | | | — | | | | | | $ | 12,271 | | | | | | $ | 2,128,762 | | | | | | 2020 | | | | | | $ | 500,000 | | | | | | $ | 1,031,250 | | | | | | | — | | | | | | $ | 3,937,500 | | | | | | $ | 12,660 | | | | | | $ | 5,481,410 | | | |||||||
| Ravi Tulsyan(8) Chief Financial Officer | | | | | | 2021 | | | | | | $ | 431,539 | | | | | | $ | 100,000 | | | | | | $ | 2,084,951(9) | | | | | | $ | 874,800 | | | | | | $ | 12,545 | | | | | | $ | 3,503,835 | | | Carl Anderson(9) Chief Financial Officer | | | | | | 2022 | | | | | | $ | 93,750 | | | | | | | — | | | | | | $ | 1,091,845(10) | | | | | | $ | 129,452 | | | | | | $ | 263 | | | | | | $ | 1,315,310 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ravi Tulsyan(11) Former Chief Financial Officer | | | | | | 2022 | | | | | | $ | 498,626 | | | | | | | — | | | | | | | — | | | | | | $ | 93,550 | | | | | | $ | 13,463 | | | | | | $ | 605,639 | | | ||||
| Troy Cooper(10) Former President | | | | | | 2021 | | | | | | $ | 650,000 | | | | | | | — | | | | | | | — | | | | | | $ | 5,798,253 | | | | | | $ | 13,238 | | | | | | $ | 6,461,491 | | | | | | 2021 | | | | | | $ | 431,539 | | | | | | $ | 100,000 | | | | | | $ | 2,084,951 | | | | | | $ | 874,800 | | | | | | $ | 12,545 | | | | | | $ | 3,503,834 | | | |||
| | | 2020 | | | | | | $ | 650,000 | | | | | | $ | 2,145,000 | | | | | | | — | | | | | | $ | 5,862,500 | | | | | | $ | 12,660 | | | | | | $ | 8,670,160 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | 2019 | | | | | | $ | 601,539 | | | | | | | — | | | | | | $ | 3,751,031(7) | | | | | | | — | | | | | | $ | 12,460 | | | | | | $ | 4,365,030 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| David Wyshner(11) Former Chief Financial Officer | | | | | | 2021 | | | | | | $ | 437,173 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 33,775 | | | | | | $ | 470,948 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| | | 2020 | | | | | | $ | 525,096 | | | | | | $ | 1,225,000 | | | | | | $ | 3,032,212(12) | | | | | | | — | | | | | | $ | 1,050 | | | | | | $ | 4,783,358 | | |
| Name and Principal Position | | | | Year | | | | Salary ($) | | | | Bonus(1) ($) | | | | Stock Awards(2)(3) ($) | | | | Non-Equity Incentive Plan Compensation(4) ($) | | | | All Other Compensation(5) ($) | | | | Total ($) | | |||||||||||||||||||||
| Brad Jacobs(6) Executive Chairman | | | | | | 2022 | | | | | | $ | 929,561 | | | | | | | — | | | | | | | —(7) | | | | | | $ | 11,446,524 | | | | | | $ | 13,880 | | | | | | $ | 12,389,965 | | |
| | | 2021 | | | | | | $ | 1,000,000 | | | | | | | — | | | | | | | — | | | | | | $ | 20,625,000 | | | | | | $ | 418,280 | | | | | | $ | 22,043,280 | | | ||||
| | | 2020 | | | | | | $ | 1,000,000 | | | | | | $ | 3,300,000 | | | | | | | — | | | | | | $ | 17,500,000 | | | | | | $ | 12,660 | | | | | | $ | 21,812,660 | | | ||||
| Mario Harik(8) Chief Executive Officer | | | | | | 2022 | | | | | | $ | 557,857 | | | | | | | — | | | | | | | —(7) | | | | | | $ | 1,075,334 | | | | | | $ | 13,463 | | | | | | $ | 1,646,654 | | |
| | | 2021 | | | | | | $ | 500,000 | | | | | | $ | 100,000 | | | | | | | — | | | | | | $ | 4,914,063 | | | | | | $ | 12,863 | | | | | | $ | 5,526,925 | | | ||||
| | | 2020 | | | | | | $ | 500,000 | | | | | | $ | 1,031,250 | | | | | | | — | | | | | | $ | 3,937,500 | | | | | | $ | 12,660 | | | | | | $ | 5,481,410 | | | ||||
| Carl Anderson(9) Chief Financial Officer | | | | | | 2022 | | | | | | $ | 93,750 | | | | | | | — | | | | | | $ | 1,091,845(10) | | | | | | $ | 129,452 | | | | | | $ | 263 | | | | | | $ | 1,315,310 | | |
| Ravi Tulsyan(11) Former Chief Financia Officer | | | | | | 2022 | | | | | | $ | 498,626 | | | | | | | — | | | | | | | — | | | | | | $ | 93,550 | | | | | | $ | 13,463 | | | | | | $ | 605,639 | | |
| | | 2021 | | | | | | $ | 431,539 | | | | | | $ | 100,000 | | | | | | $ | 2,084,951 | | | | | | $ | 874,800 | | | | | | $ | 12,545 | | | | | | $ | 3,503,834 | | |
| | | | 57 | | | | | | © 2023 XPO, Inc. | |
| | | | | | | |
| Name | | | | Matching Contributions to 401(k) Plan(1) ($) | | | | Company- Paid Life Insurance Premiums(2) ($) | | | | Total ($) | | |||||||||
| Brad Jacobs | | | | | $ | 12,200 | | | | | | $ | 1,680 | | | | | | $ | 13,880 | | |
| Mario Harik | | | | | $ | 12,200 | | | | | | $ | 1,263 | | | | | | $ | 13,463 | | |
| Carl Anderson(3) | | | | | | — | | | | | | | — | | | | | | | — | | |
| Ravi Tulsyan | | | | | $ | 12,200 | | | | | | $ | 1,263 | | | | | | $ | 13,463 | | |
| | | | 58 | | | | | | © 2023 XPO, Inc. | |
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| | | | | | | | | | | | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | | | | Grant Date Fair Value of Stock Awards ($)(3) | | |||||||||||||||||||||||
| Name | | | | Grant Date | | | | Grant Type | | | | Threshold (#) | | | | Target (#)(2) | | | | Maximum (#) | | | ||||||||||||||||||||||
| Brad Jacobs | | | | 3/7/2022 | | | | PSU | | | | | | — | | | | | | | 82,932 | | | | | | | 165,864 | | | | | | | — | | | | | | | — | | |
| 11/1/2022 | | | | RSU | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 1,174,495 | | | | | | $ | 34,600,992 | | | ||||
| Mario Harik | | | | 3/7/2022 | | | | PSU | | | | | | — | | | | | | | 37,320 | | | | | | | 74,640 | | | | | | | — | | | | | | | — | | |
| 3/7/2022 | | | | PSU | | | | | | — | | | | | | | 53,906 | | | | | | | 107,812 | | | | | | | — | | | | | | | — | | | ||||
| 8/5/2022 | | | | PSU | | | | | | — | | | | | | | 172,871 | | | | | | | 345,742 | | | | | | | — | | | | | | | — | | | ||||
| 11/1/2022 | | | | RSU | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 221,923 | | | | | | $ | 7,381,069 | | | ||||
| Carl Anderson(4) | | | | 11/8/2022 | | | | RSU | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 14,112 | | | | | | $ | 499,988 | | |
| 11/8/2022 | | | | PSU | | | | | | — | | | | | | | 14,112 | | | | | | | 28,224 | | | | | | | — | | | | | | $ | 591,857 | | | ||||
| Ravi Tulsyan | | | | 3/7/2022 | | | | PSU | | | | | | — | | | | | | | 49,759 | | | | | | | 99,518 | | | | | | | — | | | | | | | — | | |
| 3/7/2022 | | | | PSU | | | | | | — | | | | | | | 82,932 | | | | | | | 82,932 | | | | | | | — | | | | | | | — | | |
| | | | | Stock Awards | | ||||||||||||||||||||||||
| Name | | | | Number of Shares or Units of Stock That Have Not Vested (#)(1)(2) | | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1)(4) | | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | ||||||||||||
| Brad Jacobs | | | | | | 1,174,495(5) | | | | | | $ | 39,098,939(5) | | | | | | | 82,932(6) | | | | | | $ | 2,760,806(6) | | |
| Mario Harik | | | | | | 221,923(7) | | | | | | $ | 7,387,817(7) | | | | | | | 264,097(8) | | | | | | $ | 8,791,789(8) | | |
| Carl Anderson | | | | | | 14,112(9) | | | | | | $ | 469,788(9) | | | | | | | 14,112(10) | | | | | | $ | 469,788(10) | | |
| Ravi Tulsyan | | | | | | 23,296(11) | | | | | | $ | 775,524(11) | | | | | | | 153,161(12) | | | | | | $ | 5,098,738(12) | | |
| | | | 59 | | | | | | © 2023 XPO, Inc. | |
| | | | | | | |
| | | | | Stock Awards(1) | | ||||||||||
| Name | | | | Number of Shares Acquired on Vesting (#) | | | | Value Realized on Vesting ($)(2) | | ||||||
| Brad Jacobs | | | | | | — | | | | | | | — | | |
| Mario Harik | | | | | | — | | | | | | | — | | |
| Carl Anderson | | | | | | — | | | | | | | — | | |
| Ravi Tulsyan | | | | | | 20,949 | | | | | | $ | 1,163,477 | | |
| | | | | | | | | © | | |
| | | | | | | |
| Name | | | | Matching Contributions to 401(k) Plan(1) ($) | | | | Company- Paid Life Insurance Premiums(2) ($) | | | | Reimbursement For Filing Fees(3) ($) | | | | Payout of Paid Time Off(4) ($) | | | | Severance ($) | | | | Total ($) | | ||||||||||||||||||
| Brad Jacobs | | | | | $ | 11,600 | | | | | | $ | 1,680 | | | | | | $ | 405,000 | | | | | | | — | | | | | | | — | | | | | | $ | 418,280 | | |
| Mario Harik | | | | | $ | 11,600 | | | | | | $ | 1,263 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 12,863 | | |
| Ravi Tulsyan | | | | | $ | 11,600 | | | | | | $ | 945 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 12,545 | | |
| Troy Cooper | | | | | $ | 11,600 | | | | | | $ | 1,638 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 13,238 | | |
| David Wyshner | | | | | $ | 11,600 | | | | | | $ | 1,202 | | | | | | | — | | | | | | $ | 20,973 | | | | | | | — | | | | | | $ | 33,775 | | |
| | | | | | | | | | | | | Estimated Future Payouts Equity Incentive Plan Awards(1) | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | | Grant Date Fair Value of Stock Awards ($)(3) | | |||||||||||||||||||||||
| Name | | | | Grant Date | | | | Grant Type | | | | Threshold (#) | | | | Target (#)(2) | | | | Maximum (#) | | | ||||||||||||||||||||||
| Brad Jacobs | | | | n/a | | | | — | | | | | | — | �� | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Mario Harik | | | | n/a | | | | — | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Ravi Tulsyan | | | | 3/10/2021(4) | | | | RSU | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,702 | | | | | | $ | 334,970 | | |
| 9/8/2021 | | | | RSU | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 8,773 | | | | | | $ | 750,004 | | | ||||
| 9/8/2021 | | | | PSU | | | | | | — | | | | | | | 11,697 | | | | | | | 23,394 | | | | | | | — | | | | | | $ | 999,977 | | | ||||
| Troy Cooper | | | | n/a | | | | — | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| David Wyshner | | | | n/a | | | | — | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| | | | | Option Awards | | | | Stock Awards | | ||||||||||||||||||||
| Name | | | | Number of Shares Acquired on Exercise (#) | | | | Value Realized on Exercise ($) | | | | Number of Shares Acquired on Vesting (#) | | | | Value Realized on Vesting ($)(1) | | ||||||||||||
| Brad Jacobs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Mario Harik | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Ravi Tulsyan | | | | | | — | | | | | | | — | | | | | | | 5,889 | | | | | | $ | 735,284 | | |
| Troy Cooper | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| David Wyshner | | | | | | — | | | | | | | — | | | | | | | 8,773 | | | | | | $ | 1,051,356 | | |
|
| | | | | Brad Jacobs | | | | Mario Harik | | | | Ravi Tulsyan | | | | Troy Cooper(1) | | | | David Wyshner(2) | | | | | | Brad Jacobs | | | | Mario Harik | | | | Carl Anderson | | | | Ravi Tulsyan(1) | | |||||||||||||||||||||||||||
| Termination without Cause: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination without Cause: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3)(4)(5) | | | | | $ | 1,000,000 | | | | | | $ | 500,000 | | | | | | $ | 500,000 | | | | | | $ | 1,950,000(6) | | | | | | | — | | | Continuation of cash compensation(2)(3)(4)(5) | | | | | $ | 4,500,000 | | | | | | $ | 3,400,000 | | | | | | $ | 1,875,000 | | | | | | $ | 1,745,892(6) | | |
| Acceleration of equity-based awards(7)(8) | | | | | $ | 53,090,034 | | | | | | $ | 9,330,315 | | | | | | $ | 884,947 | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards(7)(8)(9) | | | | | $ | 41,859,745(14) | | | | | | $ | 8,420,006 | | | | | | $ | 52,066 | | | | | | $ | 4,914,722(10) | | |
| Outstanding performance-based equity awards(9) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 20,324,633 | | | | | | | — | | | Outstanding performance-based equity awards(11) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 92,926 | | |
| Acceleration of 2020 LTI(10) | | | | | $ | 10,000,000 | | | | | | $ | 2,250,000 | | | | | | | — | | | | | | $ | 5,798,253 | | | | | | | — | | | Acceleration of 2020 LTI(12) | | | | | $ | 8,833,702 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits(11) | | | | | $ | 7,932 | | | | | | $ | 11,076 | | | | | | $ | 9,864 | | | | | | $ | 7,932 | | | | | | | — | | | Continuation of medical / dental benefits(13) | | | | | $ | 16,632 | | | | | | $ | 23,220 | | | | | | $ | 9,684 | | | | | | $ | 9,684 | | |
| Total | | | | | $ | 64,097,966 | | | | | | $ | 12,091,391 | | | | | | $ | 1,394,811 | | | | | | $ | 28,080,818 | | | | | | | — | | | Total | | | | | $ | 55,210,079 | | | | | | $ | 11,843,226 | | | | | | $ | 1,936,750 | | | | | | $ | 6,763,225 | | |
| Voluntary Termination with Good Reason: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Voluntary Termination with Good Reason: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3)(5) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of cash compensation(2)(5) | | | | | $ | 4,500,000 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of equity-based award | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards(7)(8)(9) | | | | | $ | 41,859,745 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of 2020 LTI | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Acceleration of 2020 LTI(12) | | | | | $ | 8,833,702 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of medical / dental benefits(13) | | | | | $ | 16,632 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Total | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Total | | | | | $ | 55,210,079 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Termination for Cause or Voluntary Termination without Good Reason: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination for Cause or Voluntary Termination without Good Reason: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3)(5) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of cash compensation | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of equity-based awards | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of 2020 LTI | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Acceleration of 2020 LTI | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Total | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Total | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Disability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Disability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3)(5) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of cash compensation(2)(5) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of equity-based award | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards(8) | | | | | $ | 39,098,939 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of 2020 LTI | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Acceleration of 2020 LTI | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Total | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Total | | | | | $ | 39,098,939 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Death: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Death: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of cash compensation | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of equity-based awards(7)(8) | | | | | $ | 90,941,148 | | | | | | $ | 17,183,498 | | | | | | $ | 4,331,589 | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards(7)(8)(9) | | | | | $ | 41,859,745 | | | | | | $ | 16,179,606 | | | | | | $ | 939,577 | | | | | | | — | | |
| Acceleration of 2020 LTI and Cash LTI(10) | | | | | $ | 30,000,000 | | | | | | $ | 6,750,000 | | | | | | $ | 93,550 | | | | | | | — | | | | | | | — | | | Acceleration of 2020 LTI(12) | | | | | $ | 8,833,702 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Total | | | | | $ | 120,941,148 | | | | | | $ | 23,933,498 | | | | | | $ | 4,425,139 | | | | | | | — | | | | | | | — | | | Total | | | | | $ | 50,693,447 | | | | | | $ | 16,179,606 | | | | | | $ | 939,577 | | | | | | | — | | |
| Change of Control and No Termination: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change of Control and No Termination: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of cash compensation | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of equity-based awards(7)(8) | | | | | $ | 90,941,148 | | | | | | $ | 17,183,498 | | | | | | $ | 1,319,485 | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Acceleration of 2020 LTI and Cash LTI(10) | | | | | $ | 30,000,000 | | | | | | $ | 6,750,000 | | | | | | $ | 93,550 | | | | | | | — | | | | | | | — | | | Acceleration of 2020 LTI(12) | | | | | $ | 8,833,702 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | Continuation of medical / dental benefits | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Total | | | | | $ | 120,941,148 | | | | | | $ | 23,933,498 | | | | | | $ | 1,413,034 | | | | | | | — | | | | | | | — | | | Total | | | | | $ | 8,833,702 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Change of Control and Termination without Cause or for Good Reason: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change of Control and Termination without Cause or for Good Reason: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash severance(3) | | | | | $ | 8,970,000 | | | | | | $ | 2,250,000 | | | | | | $ | 2,000,000 | | | | | | | — | | | | | | | — | | | Continuation of cash compensation(2)(3)(4)(5) | | | | | $ | 5,400,000 | | | | | | $ | 9,324,500 | | | | | | $ | 3,125,000 | | | | | | | — | | |
| Acceleration of equity-based awards(7)(8) | | | | | $ | 90,941,148 | | | | | | $ | 17,183,498 | | | | | | $ | 4,331,589 | | | | | | | — | | | | | | | — | | | Acceleration of equity-based awards(7)(8)(9) | | | | | $ | 41,859,745 | | | | | | $ | 16,179,606 | | | | | | $ | 939,577 | | | | | | | — | | |
| Acceleration of 2020 LTI and Cash LTI(10) | | | | | $ | 30,000,000 | | | | | | $ | 6,750,000 | | | | | | $ | 93,550 | | | | | | | — | | | | | | | — | | | Acceleration of 2020 LTI(12) | | | | | $ | 8,833,702 | | | | | | | — | | | | | | | — | | | | | | | — | | |
| Continuation of medical / dental benefits(11) | | | | | $ | 31,728 | | | | | | $ | 44,304 | | | | | | $ | 39,456 | | | | | | | — | | | | | | | — | | | Continuation of medical / dental benefits(13) | | | | | $ | 33,264 | | | | | | $ | 46,440 | | | | | | $ | 38,736 | | | | | | | — | | |
| Total | | | | | $ | 129,942,876 | | | | | | $ | 26,227,802 | | | | | | $ | 6,464,595 | | | | | | | — | | | | | | | — | | | Total | | | | | $ | 56,126,711 | | | | | | $ | 25,550,546 | | | | | | $ | 4,103,313 | | | | | | | — | | |
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| | Fiscal Year | | | | Summary Compensation Table Total for PEO 1(1) | | | | Compensation Actually Paid to PEO 1(2) | | | | Summary Compensation Table Total for PEO 2(1) | | | | Compensation Actually Paid to PEO 2(2) | | | | Average Summary Compensation Table Total for non-PEO NEOs | | | | Average Compensation Actually Paid to non-PEO NEOs | | | | Value of Initial Fixed $100 Investment Based On: | | | | Net Income ($ in millions) | | | | Company- Selected Measure: Adjusted EBITDA ($ in millions)(4) | | | ||||||||||||||||||||||||||||||||||
| Total Shareholder Return | | | | Peer Group(3) Total Shareholder Return | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | (a) | | | | (b) | | | | (c) | | | | (b) | | | | (c) | | | | (d) | | | | (e) | | | | (f) | | | | (g) | | | | (h) | | | | (i) | | | ||||||||||||||||||||||||||||||
| | 2022 | | | | | $ | 46,990,957 | | | | | | $ | 66,874,224 | | | | | | $ | 9,027,723 | | | | | | $ | 19,687,049 | | | | | | $ | 1,310,474 | | | | | | $ | 3,184,179 | | | | | | $ | 116.26 | | | | | | $ | 122.85 | | | | | | $ | 666 | | | | | | $ | 997 | | | |
| | 2021 | | | | | $ | 22,043,280 | | | | | | $ | 22,043,280 | | | | | | $ | — | | | | | | $ | — | | | | | | $ | 3,990,800 | | | | | | $ | 3,600,679 | | | | | | $ | 164.27 | | | | | | $ | 151.16 | | | | | | $ | 341 | | | | | | $ | 812 | | | |
| | 2020 | | | | | $ | 21,812,660 | | | | | | $ | 25,043,462 | | | | | | $ | — | | | | | | $ | — | | | | | | $ | 4,638,287 | | | | | | $ | 4,255,500 | | | | | | $ | 149.56 | | | | | | $ | 114.73 | | | | | | $ | 117 | | | | | | $ | 609 | | | |
| | | | | | PEO 1 | | | |||||||||||||||
| | Prior FYE Current FYE Fiscal Year | | | | 12/31/2019 12/31/2020 2020 | | | 12/31/2020 12/31/2021 2021 | | | 12/31/2021 12/31/2022 2022(a) | | | |||||||||
| | Summary Compensation Table Total | | | | | $ | 21,812,660 | | | | | $ | 22,043,280 | | | | | $ | 46,990,957 | | | |
| | - Grant Date Fair Value of Modified Awards Disclosed in Fiscal Year (FASB ASC 718) | | | | | | | | | | | | | | | | | | (54,298,870) | | | |
| | + Previously Reported Grant Date Fair Value of Modified Awards | | | | | | | | | | | | | | | | | | 19,697,878 | | | |
| | - Grant Date Fair Value of Modified Awards over Previously Reported Grant Date Fair Value of Modified Awards | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | (34,600,992) | | | |
| | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 54,484,259 | | | |
| | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | | | $ | 3,230,802 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | Compensation Actually Paid | | | | | $ | 25,043,462 | | | | | $ | 22,043,280 | | | | | $ | 66,874,224 | | | |
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| | | | | | PEO 2 | | | |||||||||||||||
| | Prior FYE Current FYE Fiscal Year | | | | 12/31/2019 12/31/2020 2020 | | | 12/31/2020 12/31/2021 2021 | | | 12/31/2021 12/31/2022 2022(a) | | | |||||||||
| | Summary Compensation Table Total | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 9,027,723 | | | |
| | - Grant Date Fair Value of Modified Awards Disclosed in Fiscal Year (FASB ASC 718) | | | | | | | | | | | | | | | | | | (10,259,872) | | | |
| | + Previously Reported Grant Date Fair Value of Modified Awards | | | | | | | | | | | | | | | | | | 2,878,803 | | | |
| | - Grant Date Fair Value of Modified Awards over Previously Reported Grant Date Fair Value of Modified Awards | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | (7,381,069) | | | |
| | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 18,040,395 | | | |
| | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | Compensation Actually Paid | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 19,687,049 | | | |
| | | | | | NEO | | | |||||||||||||||
| | Prior FYE Current FYE Fiscal Year | | | | 12/31/2019 12/31/2020 2020 | | | 12/31/2020 12/31/2021 2021 | | | 12/31/2021 12/31/2022 2022 | | | |||||||||
| | Summary Compensation Table Total | | | | | $ | 4,638,287 | | | | | $ | 3,990,800 | | | | | $ | 1,310,474 | | | |
| | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | | | | | $ | (1,317,067) | | | | | $ | (521,238) | | | | | $ | (545,923) | | | |
| | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | | | | $ | 627,445 | | | | | $ | 1,199,280 | | | | | $ | 4,175,040 | | | |
| | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | | | | | $ | 124,838 | | | | | $ | 0 | | | | | $ | 0 | | | |
| | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | | | | | $ | 61,561 | | | | | $ | 0 | | | | | $ | 184,257 | | | |
| | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | | | $ | 180,900 | | | | | $ | 9,732 | | | | | $ | (86,372) | | | |
| | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | | | | | $ | (60,464) | | | | | $ | (1,077,895) | | | | | $ | (1,853,297) | | | |
| | Compensation Actually Paid | | | | | $ | 4,255,500 | | | | | $ | 3,600,679 | | | | | $ | 3,184,179 | | | |
| 2022 Most Important Measures (Unranked) | | |||
| ■ Adjusted EBITDA | | | ■ Relative TSR | |
| ■ Adjusted Operating Ratio LTL | | | ■ ESG Scorecard | |
| ■ Adjusted Cash Flow per Share | | | ■ Relative Adjusted Cash Flow per Share | |
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| Plan Category | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(1) (b) | | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | Plan Category | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | ||||||||||||||||||
| Equity compensation plans approved by security holders | | | | | | 3,474,453(2) | | | | | | $ | 9.80 | | | | | | | 3,374,850(3) | | | Equity compensation plans approved by security holders | | | | | | 3,446,708(1) | | | | | | | — | | | | | | | 6,628,280(2) | | |
| Equity compensation plans not approved by security holders | | | | | | — | | | | | | | — | | | | | | | — | | | Equity compensation plans not approved by security holders | | | | | | — | | | | | | | — | | | | | | | — | | |
| Total | | | | | | 3,474,453 | | | | | | $ | 9.80 | | | | | | | 3,374,850 | | | Total | | | | | | 3,446,708 | | | | | | | — | | | | | | | 6,628,280 | | |
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REPORTS | |
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AUDIT-RELATED MATTERS | |
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| Fee Category | | | | 2021 | | | | 2020 | | Fee Category | | | | 2022 | | | | 2021 | | ||||||||||||
| Audit Fees | | | | | $ | 5,306,000 | | | | | | $ | 5,849,335 | | | Audit Fees | | | | | $ | 6,963,000 | | | | | | $ | 5,306,000 | | |
| Audit-Related Fees | | | | | | 4,815,197 | | | | | | | 8,664,528 | | | Audit-Related Fees | | | | | | 3,386,200 | | | | | | | 4,815,197 | | |
| Tax Fees | | | | | | 5,893 | | | | | | | — | | | Tax Fees | | | | | | 11,213 | | | | | | | 5,893 | | |
| All Other Fees | | | | | | — | | | | | | | — | | | All Other Fees | | | | | | — | | | | | | | — | | |
| Total Fees | | | | | $ | 10,127,090 | | | | | | $ | 14,513,863 | | | Total Fees | | | | | $ | 10,360,413 | | | | | | $ | 10,127,090 | | | |
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ABOUT OUR ANNUAL MEETING | |
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AT THE ANNUAL MEETING | |
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| | | | | Fiscal Year Ended December 31, | | |||||||||||||||||
| | | | | 2021 | | | | 2020 | | | | 2019 | | |||||||||
| Options Granted | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | |
| Restricted Stock Units Granted | | | | | | 839 | | | | | | | 1,053 | | | | | | | 1,148 | | |
| Performance-based Restricted Stock Units Vested | | | | | | 23 | | | | | | | 104 | | | | | | | 407 | | |
| Weighted Average Common Shares Outstanding | | | | | | 112,000 | | | | | | | 92,000 | | | | | | | 96,000 | | |
| Volatility Multiplier | | | | | | 2.0 | | | | | | | 2.0 | | | | | | | 2.0 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | 3-Year Average | | |||
| Burn Rate | | | | | | 1.15% | | | | | | | 1.89% | | | | | | | 2.43% | | | | | | | 1.82% | | |
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ADDITIONAL INFORMATION | |
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RECONCILIATION OF NON-GAAP MEASURES
CONSOLIDATED RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA Unaudited $ in millions
(1) The goodwill impairment relates to the European Transportation reportable segment CONSOLIDATED RECONCILIATION OF NET INCOME Unaudited $ in millions, except per share data
(1)
CONSOLIDATED RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS TO FREE CASH FLOW Unaudited $ in millions
CONSOLIDATED RECONCILIATION OF NET LEVERAGE AND NET DEBT Unaudited $ in millions
(1) Represents amounts previously reported for the periods presented, prior to RXO spin-off
RECONCILIATION OF CONSTANT CURRENCY REVENUE FOR EUROPEAN TRANSPORTATION SEGMENT Unaudited $ in millions
(1) Constant currency revenue growth is calculated as the relative change in year-over-year constant currency revenue, expressed as a percentage of 2021 constant currency revenue RECONCILIATION OF NORTH AMERICAN
Unaudited $ in millions
Effective in the fourth quarter 2022, the financial results of the company’s trailer manufacturing operations are reported in the North American LTL segment and prior period results have been recast to reflect the current presentation (1) Operating ratio is calculated as (1 – (operating income divided by revenue)) (2) Other income primarily consists of pension income (3) Adjusted operating ratio is calculated as (1 – (adjusted operating income divided by revenue)); adjusted operating margin is the inverse of adjusted operating ratio (4) Adjusted EBITDA is used by
RECONCILIATION OF NORTH AMERICAN LTL SEGMENT ADJUSTED OPERATING RATIO AND ADJUSTED EBITDA REFLECTING INCREMENTAL CORPORATE COSTS Unaudited $ in millions
Effective in the first quarter of 2023, XPO began allocating incremental Corporate costs to its North American LTL segment. The above table reflects a recast of our previously reported results to reflect incremental allocations of approximately $80 million annually. (1) Fuel, operating expenses and supplies includes fuel-related taxes (2) Operating ratio is calculated as (1 – (operating income divided by revenue)) (3) Adjusted operating ratio is calculated as (1 – (adjusted operating income divided by revenue)); adjusted operating margin is the inverse of adjusted operating ratio (4) Adjusted EBITDA is used by our chief operating decision maker to evaluate segment profit (loss) in accordance with ASC 280 (5) Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue
NORTH AMERICAN LTL SEGMENT RETURN ON INVESTED CAPITAL Unaudited $ in millions
(1) Effective in the first quarter of 2023, XPO began allocating incremental Corporate costs to its North American LTL segment. The return on invested capital calculation reflects these incremental allocations of approximately $80 million annually (2) Operating lease interest is calculated as period end operating lease assets multiplied by XPO’s incremental borrowing rate, net of tax (3) Cash taxes is calculated as the ratio of the North American LTL segment’s adjusted EBITDA, excluding real estate gains, to XPO adjusted EBITDA, multiplied by XPO’s cash paid for taxes
NON-GAAP FINANCIAL MEASURES As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this XPO’s non-GAAP financial measures used in this We believe that the above adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not be reflective of, or are unrelated to, XPO and its business segments’ core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures should only be used as supplemental measures of our operating performance. Adjusted EBITDA, adjusted net income from continuing operations attributable to common shareholders and adjusted EPS include adjustments for transaction and integration costs We believe that free cash flow is an important measure of our ability to repay maturing debt or fund other uses of capital that we believe will enhance stockholder value. We With respect to our full year 2021 financial target for FORWARD-LOOKING STATEMENTS This These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include our ability to
American LTL business; our ability to benefit from a sale All forward-looking statements set forth in this
ANNEX B— ESG SCORECARD—2022 DELIVERABLES
03S97D 1 U P X+ YOUR VOTE IS 0001166003 6 2022-01-01 2022-12-31 |