| | | | | | Stock | | | | •
Establishes a performance-based equity component of total compensation over a three-year period that extends the Company, which are intendedexecutive’s decision-making vision beyond the current year to drive sustainablelong-term growth and create long-termprosperity •
Designed to forge a direct link between executive and stockholder value. Annual incentive compensation is paidinterests by transforming executives into stockholders •
Aids in executive retention | | | | Payout based on C&I Capital Generation performance: •
2023 C&I Capital Generation* (34%) •
2024 C&I Capital Generation Growth (33%) •
2025 C&I Capital Generation Growth (33%) with applicable performance targets established in early 2023 at the form of cash and RSUs. Cash incentive and RSUs are each intended to reflect one-third of an executive officer’s total annual incentive compensation opportunity. The Committee sets collective annual incentive compensation targets for the NEOs and a performance range with accompanying variability of compensation is determined for each metric. Pursuant to the termsbeginning of the annual incentive program, following the determination ofthree-year performance at the end of the fiscal year, the annual incentive awards, to the extent earned, are paid in cash and RSUs. RSUs vest in three equal annual installments, with the first installment vesting at the time the Committee certifies that the applicable performance goals have been achieved and the second and third installments vesting one and two years later.period.
For 2021, annual incentive compensation comprised 80% financial performance metrics and 20% qualitative metrics. The financial performance metrics were selected to align compensation with our business strategy and performance and to reward achievement of financial targets and effective strategic leadership. Qualitative metrics were selected to align with the Company’s strategic objectives, including positioning for the future, continuing to optimize our core business, stabilizing our core business to accommodate growth, continuing to maintain and strengthen the balance sheet and driving our mission as a socially responsible company.•
Based on the target performance metrics originally set for 2021, the overall achievement level for our weighted financial performance was 139.4%. However, the Committee determined that it was appropriate to apply negative discretion to our performance because our 2021 compensation targets had not contemplated a significant government stimulus in the first quarter of 2021, which drove net credit lossesSubject to a historic low and contributedthree-year TSR modifier, which will adjust the payout up or down 20% based on Relative TSR compared to C&I Net Charge-Offs and C&I ROR performance that was superior to target levels. Due to the external naturea broader group of this event, the Committee reduced our performance on these metrics
to target levels, which resulted in an adjusted weighted financial performance of 120.6%. In determining its qualitative assessment of performance, the Committee evaluated the non-financial performance of the Company for 2021 and determined that a 110% achievement for the qualitative metrics appropriately reflected such performance. In combination with the adjusted weighted financial performance, this resulted in an overall payout ratio of 118.5% of target.
Our 2021 financial performance and resulting payout approved by the Committee, inclusive of the Committee’s application of negative discretion, are reflected in the table below.
| | | 2021 Incentive Performance Scorecard | | | | | | Metric(1) | | | | Weight | | | | Target | | | | Result | | | | Adjusted
Result(2) | | | | Achievement
Level | | | | | | C&I Capital Generation | | | | | | 30% | | | | | | $ | 1,080 | | | | | | $ | 1,303 | | | | | | $ | 1,303 | | | | | | | 150% | | | | | | | C&I Net Charge-Offs | | | | | | 15% | | | | | | $ | 1,060 | | | | | | $ | 768 | | | | | | $ | 1,060 | | | | | | | 100% | | | | | | | C&I Operating Expenses | | | | | | 15% | | | | | | $ | 1,325 | | | | | | $ | 1,341 | | | | | | $ | 1,341 | | | | | | | 93.4% | | | | | | | C&I ROR | | | | | | 15% | | | | | | | 12.9% | | | | | | | 14.6% | | | | | | | 13.0% | | | | | | | 100% | | | | | | | Customer Accounts (in thousands) | | | | | | 5% | | | | | | | 2,370 | | | | | | | 2,451 | | | | | | | 2,451 | | | | | | | 150% | | | | | | | Weighted Financial Performance | | | | | | 80% | | | | | | | 100.0% | | | | | | | 139.4% | | | | | | | 120.6% | | | | | | | 120.6% | | | | | | | Qualitative Assessment | | | | | | 20% | | | | | | | | | | | | | | | | | | | | | | | | | | | | 110.0% | | | | | | | Incentive Payout Ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 118.5% | | | |
(1)
Refer to the Appendix for a description of these metrics, other than customer accounts, and reconciliation of non-GAAP financial measures.consumer finance peers**
(2)
Reflects the Committee’s application of negative discretion to adjust C&I Net Charge-Offs and C&I ROR due to its determination that our results surpassed such targets partially due to positive external impacts. This had the effect of reducing the financial performance metrics to 120.6% rather than the 139.4% that would have been achieved had the Committee not applied negative discretion.
The table below reflects the target and earned annual incentive amounts based on the 118.5% payout ratio reflected in the preceding table, as well as the value of the cash and RSU components of the total earned annual incentive compensation.
| | | 2021 Annual Incentive Awards | | | | | | | | | | Target
Annual Incentive
Compensation | | | | Earned Cash
Component | | | | Earned RSU
Component(1) | | | | Earned
Annual Incentive
Compensation | | | | | | Douglas H. Shulman | | | | | $ | 4,333,334 | | | | | | $ | 2,567,500 | | | | | | $ | 2,592,449 | | | | | | $ | 5,159,949 | | | | | | | Micah R. Conrad | | | | | $ | 1,233,333 | | | | | | $ | 730,750 | | | | | | $ | 737,821 | | | | | | $ | 1,468,571 | | | | | | | Rajive Chadha | | | | | $ | 1,166,667 | | | | | | $ | 691,250 | | | | | | $ | 697,939 | | | | | | $ | 1,389,189 | | | |
(1)
RSUs were granted in January 2022 and, in accordance with SEC rules, will be reported as 2022 compensation in the Summary Compensation Table in the Proxy Statement for our 2023 Annual Meeting. The price used to determine the number of RSUs granted was $51.43, which was the volume-weighted average of the closing price for the five days preceding the grant date of January 26, 2022. The value of the RSU component is computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC 718”), based on a closing grant date stock price of $51.93 multiplied by the number of RSUs granted.
Long-Term Performance-Based Equity Awards
PSUs are intended to reflect one-third of an executive officer’s total target incentive compensation opportunity. PSUs for the 2021-2023 performance period will be earned upon the attainment of three-year cumulative performance goals tied to two Economic Earnings metrics:
| | 2021 Performance Share Unit Targets | | | | | Metric* |
*
Refer to Appendix A for a description of these non-GAAP financial measures and reconciliations to the most directly comparable measures calculated under GAAP. **
See page 48 for the TSR Modifier Peer Group.
2023 Total Direct Compensation Components in Detail The Committee determines the individual compensation components of the program within the competitive target value for an executive officer’s total direct compensation. Base salary is the only fixed component of our executives’ total direct compensation that establishes a minimum level of cash compensation for our executive officers, including the NEOs. | | | | | | | 2023
Base Salary | | | | 2022
Base Salary | | | | | | Douglas H. Shulman | | | | | $ | 1,000,000 | | | | | | $ | 1,000,000 | | | | | | | Micah R. Conrad | | | | | $ | 600,000 | | | | | | $ | 500,000 | | | | | | | Rajive Chadha | | | | | $ | 600,000 | | | | | | $ | 500,000 | | | |
The Committee annually reviews the base salaries of our NEOs considering market data, evolving responsibilities of the position, and individual performance. Based on this input, the base salary for each of Messrs. Conrad and Chadha increased by 20% from 2022 to 2023. The Committee determined to maintain the base salary for Mr. Shulman, which has not increased since 2021. Annual Incentive Compensation Our executive officers are eligible to receive annual incentive compensation contingent upon the attainment of specific, pre-established financial performance metrics and strategic objectives for the Company, which are intended to drive sustainable growth and create long-term stockholder value. Annual incentive compensation for 2023 was paid in the form of cash based on the achievement of annual financial and qualitative performance metrics. For 2023, annual incentive compensation comprised 70% financial performance metrics and 30% qualitative metrics. The financial performance metrics were selected to align compensation with our business strategy and performance and to reward achievement of financial targets and effective strategic leadership. For 2023, the Committee determined to remove C&I Capital Generation ROR and Customer Accounts, and updated metric weightings to emphasize building for the future and to remove redundancy. Each quantitative metric was capped at 150% of target, which served as a cap for the annual incentive opportunity. | | | Metric | | | | Weighting | | | | | | C&I Capital Generation* | | | | 50% | | | | | | C&I Operating Expenses* | | | | 10% | | | | | | New Products/Channels | | | | 10% | | | | | Economic Earnings Average Growth | | | | | | 67% |
*
Refer to Appendix A for a description of these non-GAAP financial measures and reconciliations to the most directly comparable measures calculated under GAAP. Qualitative strategic factors represent 30% of our annual incentive award and were selected to align with the Company’s strategic objectives, with an achievement value of up to 200%. For 2023, qualitative factors consisted of the following: •
manage the core loan business through economic uncertainty; •
continue investing in new products and omni-channel platform; •
invest in analytics, data and cloud capabilities; •
continue to be the employer of choice for our team members and focus on our external reputations; and •
advance funding and investor strategy.
The Committee evaluated performance against pre-established qualitative strategic objectives and the Company’s progress on its strategic priorities for 2023 and determined that the following achievement levels were appropriate: 130% for Doug Shulman; 150% for Micah Conrad; and 100% for Rajive Chadha. The Committee considered the following actions under the leadership of our NEOs: •
Actively managed through a dynamic credit environment, which included significant adjustments to the credit box, pricing, and enhanced collections strategy, outperforming peers. •
Continued to execute on other strategic efforts including expanding customer engagement across digital channels. •
Significant progress made on getting new products ready to scale and expanding channels, including the continuation of a disciplined BrightWay credit card roll-out, expansion of our secured auto lending distribution channel partnerships while maintaining credit quality in a difficult environment and improving yield, announcing the acquisition of Foursight to expand into indirect auto finance, and providing free Trim financial wellness benefits to our customers. •
Continued advancement in our data science and analytics capabilities with advancements in cash flow underwriting, new data sources, and new models that enhance risk identification, while also looking at opportunities to leverage Generative Artificial Intelligence. •
Further matured our foundational capabilities in technology with key performance indicators showing improvements across all core metrics, along with better customer management and information management and a strategic digital roadmap. •
Continued to enhance our cybersecurity program. •
Positioned ourselves as an employer of choice with increased employee engagement scores, certified as one of America’s Most Loved Workplaces a second year in a row, creating Diverse Leaders and Women’s Leadership programs. •
Expanded our Credit Worthy by OneMain Financial free digital education program to over 3,400 high schools and over 275,000 students since inception. •
Continued to refine our funding and investor strategy, including raising approximately $3 billion in asset-backed securities and $1.6 billion of unsecured bonds in a challenging capital markets environment. Renewed and added bank partners and maintained a 24-month liquidity runway. Achievement level of the annual compensation metrics is included in the table below. | | | 2023 Annual Incentive Compensation Performance Scorecard | | | | | | | | | | Weight | | | | Target(1) | | | | Result(1) | | | | Achievement
Level | | | | | | C&I Capital Generation(2) | | | | | | 50% | | | | | $720 – $880 | | | | | $ | 794 | | | | | 100% | | | | | | C&I Operating Expenses(2) | | | | | | 10% | | | | | $1,537 – $1,463 | | | | | $ | 1,487 | | | | | 100% | | | | | | New Products/Channels | | | | | | 10% | | | | | $1,080 – $1,320 | | | | | $ | 1,127 | | | | | 100% | | | | | | | | | | | | 70% | | | | | | | | | | | | | | | | 100% | | | | | | | | | | | | 30% | | | | | | | | | | | | | | | | 100 – 150%(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | 100 – 115%(4) | | |
(1)
Amounts in millions. (2)
Refer to Appendix A for a description of these non-GAAP financial measures and reconciliations to the most directly comparable measures calculated under GAAP. (3)
Achieved at 130% for Mr. Shulman, 150% for Mr. Conrad and 100% for Mr. Chadha. (4)
Achieved at 109% for Mr. Shulman, 115% for Mr. Conrad and 100% for Mr. Chadha.
The table below reflects the target and earned annual incentive amounts based on the results reflected in the preceding table. | | | 2023 Annual Incentive Awards | | | | | | | | | | Target Annual
Incentive
Compensation | | | | Earned Annual
Incentive
Compensation | | | | | | Douglas H. Shulman | | | | | $ | 2,350,000 | | | | | | $ | 2,562,000 | | | | | | | Micah R. Conrad | | | | | $ | 720,000 | | | | | | $ | 828,000 | | | | | | | Rajive Chadha | | | | | $ | 720,000 | | | | | | $ | 720,000 | | | |
Long-term incentive awards tie executive compensation to the achievement of annual financial and qualitative performance metrics and are intended to align our NEOs’ interests with those of our long-term shareholders. Long-term incentives are split evenly between RSUs and PSUs. 2023 Restricted Stock Unit Grants Under our modified executive compensation program effective for 2023, RSUs will be granted annually, with vesting to occur in three annual installments subject to continued service. | | | 2023 RSU Grant | | | | | | Douglas H. Shulman | | | | | $ | 3,525,000 | | | | | | | Micah R. Conrad | | | | | $ | 992,405 | | | | | | | Rajive Chadha | | | | | $ | 938,112 | | | |
2023 Performance Share Unit Awards PSUs are tied to the achievement of C&I Capital Generation achievement over a three-year performance period, including a three-year Relative TSR modifier. The C&I Capital Generation goals for the three-year period were set at the beginning of the performance period. The target for the first year of the performance period was set as a base dollar value, with targets for the second and third years set as growth rates. Performance against target (whether dollar value or growth rate) will be measured for each year, generating three annual payout percentages. The three annual payout percentages will be weighted averaged, as presented in the table below, to determine the final payout percentage. The payout percentage ranges from 0%, if the threshold C&I Capital Generation value or growth is not achieved, to 200%, if the maximum C&I Capital generation value or growth is achieved. | | | 2023 PSU Metric | | | | | | | | | | Weighting | | | | | | 2023 C&I Capital Generation* | | | | | | 34% | | | | | | | 2024 C&I Capital Generation Growth* | | | | | | 33% | | | | | | | 2025 C&I Capital Generation Growth* | | | | | | 33% | | | | | | Economic Average Unlevered Return | | | | | | 33% |
*
Refer to Appendix A for a description of this metric. The Committee selected this metric for 2023 as it aligns with how we are managing the business over the longer term, with targets aligned to our annual plan and requiring year-over-year growth. C&I Capital Generation, a non-GAAP metric described further in Appendix A, is the key performance measure of our segment that measures the capital created during a period and that we use to manage our business. Capital Generation reflects Consumer & Insurance adjusted pretax income, which excludes regulatory settlements,
net gain or loss resulting from repurchases and repayments of debt, and other items and strategic activities (for example, restructuring charges), and also excludes the change in our Consumer & Insurance allowance for finance receivable losses in the period while still considering the Consumer & Insurance net charge-offs incurred during the period. The PSUs are also subject to a three-year TSR modifier, which will adjust payout down by 20% if Relative TSR is in the bottom quartile when compared to the TSR Modifier Peer Group, and increase payout by 20% if in the top quartile, with no change occurring if Relative TSR is in the second and third quartiles. PSUs, including the impact of the Relative TSR modifier, have possible payouts ranging between 0% and 240% of the target level. The following reflects target PSU opportunity for our NEOs: | | | 2023 PSU Target | | | | | | Douglas H. Shulman | | | | | $ | 3,525,000 | | | | | | | Micah R. Conrad | | | | | $ | 992,405 | | | | | | | Rajive Chadha | | | | | $ | 938,112 | | | |
Previously Granted Performance-Based Awards 2022 Incentive RSU Awards The 2022 Incentive RSUs granted in early 2023 as the equity component of the 2022 annual incentive awards vest in three equal increments following the grant date based on continued service, with one-third having vested on February 17, 2023, one-third having vested on February 20, 2024 and one-third vesting on February 20, 2025. These are the final 2022 Incentive RSUs granted under our annual incentive program. | | | 2022 Incentive RSU Grants | | | | | | Douglas H. Shulman | | | | | $ | 1,906,666 | | | | | | | Micah R. Conrad | | | | | $ | 542,667 | | | | | | | Rajive Chadha | | | | | $ | 513,333 | | | |
In January 2024, the Committee determined final payout levels for PSU awards granted in 2021 with a performance cycle ending at the end of 2023. For the three-year performance period, our Economic Average Diluted EPS Growth was (2.6)% and our Economic Average Unlevered Return was 11.8%. As a result, no payouts were made for the 2021-2023 performance cycle. Economic Average Diluted EPS Growth and Economic Average Unlevered Return are non-GAAP financial measures. Refer to Appendix A for a description of these non-GAAP financial measures and reconciliations to the most directly comparable measures calculated under GAAP. | | | Payout of 2021 PSU Awards | | | | | | Douglas H. Shulman | | | | | $ | 0 | | | | | | | Micah R. Conrad | | | | | $ | 0 | | | | | | | Rajive Chadha | | | | | $ | 0 | | | |
Outstanding Performance Option Awards In 2018 and 2019, the Committee granted cash-settled performance-based awards (the “Performance Option Awards”) to our NEOs, which were intended to provide additional incentives to significantly drive shareholder value and grow the Company following the completion of the Consortium Acquisition and the related changes to our Board and executive management. The Performance Option Awards were granted in three tranches for each NEO and were subject to achievement of double-trigger vesting conditions based on: (x) a reduction in the Company’s common stock owned by the Consortium to specified levels and (y) the
Company’s stock attaining (i) a specified volume-weighted average trading price (“VWAP”) over a consecutive six-month period ending on or before the date the Consortium reduced its ownership below the applicable level or (ii) a fair market value on the date following such reduction in ownership that was not less than 10% below the applicable VWAP trigger. The Performance Option Awards were designed to closely align the interests of our management team with those of our stockholders, and vesting of the first two of the three tranches required that the Consortium, and therefore our stockholders generally, receive substantial pre-specified returns on investment based on the stock price at the time of the Consortium Acquisition. Such vesting conditions related to the first two tranches of the Performance Option Awards were satisfied in 2021. In 2021, the Performance Option Awards were amended to extend the period to achieve the specified VWAP over a consecutive six-month period from the applicable Consortium sell-down date until July 2024, subject to the NEO’s continued employment through the vesting date or an earlier qualifying termination of employment. The third tranche of the Performance Option Awards, representing approximately one-fifth of the Performance Option Awards (125,000 shares for Mr. Shulman and 40,000 shares each for Messrs. Conrad and Chadha), remains unvested with a VWAP trigger as of December 31, 2023 of $71.61, with respect to Mr. Shulman, and $72.11, with respect to Messrs. Conrad and Chadha, as reported in the Outstanding Equity Awards at 2023 Fiscal Year-End Table. This VWAP trigger, as adjusted per the award terms for one-half of future dividends, must be achieved for a consecutive six-month period by July 26, 2024 for vesting to occur. | | 3 | | | Employee Benefits and Other Compensation | |
We provide benefit programs that are designed to be competitive with market and provide reasonable security for employees. For 2023, welfare and retirement benefits were offered at essentially the same level to all U.S. salaried employees, including executive officers. Retirement Benefits All of our NEOs are eligible to participate in our general tax-qualified, defined contribution retirement savings 401(k) plan. We match a percentage of each participant’s contributions to the 401(k) plan up to the statutory limits. Our NEOs are not eligible to participate in our tax qualified pension plan, which was frozen effective December 31, 2012. In October 2021, the Committee adopted the OneMain Holdings, Inc. Nonqualified Deferred Compensation Plan (the “NQDC Plan”) which provides eligible participants, including our NEOs, with the option to defer receipt of some or all of their annual cash incentives and some of their base salaries, in each case, that are earned on or after January 1, 2022. The Committee determined to adopt such plan after reviewing our executive compensation plans in light of our goals and objectives, and deemed it to be in our and our stockholders’ best interests to provide certain employees with additional opportunities to defer compensation. Eligible participants include all employees with a base salary equal to or in excess of $200,000, including each of our NEOs. Participant contributions will be fully vested at all times. Employer contributions are not permitted under the NQDC Plan. Distributions of participant accounts will be made following a participant’s separation of service, death, disability, unforeseeable emergency or as of a future payment date specified by the participant. For additional information, please see “Compensation Discussion and Analysis — Executive Compensation Tables — 2023 Nonqualified Deferred Compensation.” Welfare Benefits Each of our executive officers is eligible to participate in our various group health and welfare benefit plans and fringe benefit programs that are generally available to all of our employees on a non-discriminatory basis.
Severance and Change-in-Control Arrangements For discussion of our severance and change-in-control arrangements, including a description of our Executive Severance Plan and the employment agreements with Messrs. Shulman and Chadha, please see “Compensation Discussion and Analysis — Executive Compensation Tables — Severance and Change-in- Control Arrangements.” Other Compensation Other compensation for our executive officers consists primarily of dividend equivalents with respect to unvested and outstanding RSUs, Performance Option Awards and PSUs granted prior to 2023. Such awards are credited with dividend equivalents equal to the per share cash dividends paid on our common stock, multiplied by the total number of equity awards subject to the award that are outstanding on the record date for such dividend. Half of the dividend equivalents are paid at the time of the dividend and half accrue and are paid at the time of vesting. As discussed above, dividend equivalents will not be paid on unvested PSUs granted from 2023 onward. The crediting of dividend equivalents is meant to treat the equity award holders consistently with stockholders, which serves to further align the interests of our executive officers with our stockholders, with half of the amount deferred until vesting for retention purposes. Because they are not included in the grant date fair value of awards, dividend equivalents are reported in the All Other Compensation column of the Summary Compensation Table. We generally limit perquisites for our executive officers, and when perquisites are provided they are limited to items that serve a reasonable business purpose. | | 4 | | | How We Make Compensation Decisions | |
Role of the Compensation Committee The Committee is responsible to our Board for overseeing the development and administration of our executive compensation and employee benefit plans and practices. The Committee, which consists of three independent directors, is responsible for the review and approval of all aspects of our executive officer compensation program. The Committee is responsible for evaluating annually the performance of each of our NEOs and determining and approving their compensation (including, but not limited to, base pay and annual and long-term incentive award opportunities) based on such evaluation. Additionally, the Committee is responsible for the following, among its other duties: •
Reviewing the Company’s executive compensation plans, including the goals and objectives relevant to compensation; •
Evaluating the performance of our executive officers in light of such goals and objectives; •
Reviewing and approving any severance or termination arrangements to be made with any executive officer; •
Reviewing any perquisites or other personal benefits provided to any executive officer; and •
Reviewing whether incentive and other forms of pay encourage excessive risk-taking and the relationship between risk management policies and practices, corporate strategy and the Company’s compensation arrangements. The role of the Committee is described in detail in the Compensation Committee charter, which is available under the Corporate Governance tab on our investor relations website at http://investor.onemainfinancial.com. The Committee is supported in its work by our Executive Vice President, Chief Human Resources Officer, her staff, and the Committee’s independent compensation consultant, as described below.
Role of the Independent Compensation Consultant The Committee recognizes the importance of using an independent compensation consultant that provides services to our Board and its committees. In 2023, the Committee retained FW Cook as its independent executive compensation consultant to provide independent advice, information and analysis on executive compensation, incentive plan performance measures and compensation program design and developments. FW Cook is engaged by and reports directly to the Committee, and the Committee may replace its compensation consultant or hire additional consultants at any time. A representative of FW Cook attends meetings of the Committee when requested, and communicates with the Committee Chair between meetings. Compensation Consultant Independence The Committee has assessed the independence of FW Cook pursuant to NYSE rules, and the Committee has concluded that the work performed by FW Cook for the Committee during 2023 did not raise any conflicts of interest that would prevent FW Cook from independently advising the Committee. Role of Management The Committee receives recommendations from the CEO, working with management, regarding our executive compensation structure, metrics, and goals. Our CEO does not make any recommendations with respect to his own compensation. The Committee also receives information from our CFO and General Counsel to evaluate whether our incentive compensation programs for our executive officers and other employees encourage responsible investment of our resources and do not unintentionally encourage or reward imprudent risk-taking. After a review of our compensation plans by our CFO and General Counsel, who provided the Committee with a briefing in April 2024, the Committee concluded that our compensation plans were well designed and well documented. Additionally, our incentive compensation plans were not unbalanced such that they encourage excessive or unnecessary risk-taking that would endanger the reputation or financial well-being of the Company or otherwise have any material adverse effect on the Company. Stockholder Feedback At our 2020 Annual Meeting, our stockholders voted in favor of conducting advisory votes on our executive compensation program on a triennial basis. We also conducted an advisory vote on our executive compensation program at our 2023 Annual Meeting of Stockholders, at which approximately 95% of the votes cast were in favor of our executive compensation program, representing an 8% increase in support from the votes cast in favor at our 2020 Annual Meeting. Following the vote, the Board and the Compensation Committee reviewed these results and continue to enhance, and engage with stockholders on, our executive compensation policies. Stockholders will again be asked to vote, on an advisory basis, on the compensation paid to our NEOs at our 2026 Annual Meeting. Informed by the feedback we have received during our stockholder engagement program and the high support at our 2023 Annual Meeting, our Board believes the realigned program appropriately reflects our current business and short- and long-term strategic and current economic environment. Shareholders generally expressed support for the simplified structure. The new program is more in line with market practices, while retaining our objective of attracting, retaining and incentivizing key talent. Use of Peer Groups In the course of designing and implementing our executive compensation program, the Committee uses compensation data compiled from a group of publicly traded peer companies in the diversified financial services industries (including banking, consumer finance, thrifts and mortgage finance), as well as the specialty
retail and IT services industries. The Committee periodically reviews and updates the Primary Peer Group, as necessary, upon the recommendation of its independent compensation consultant. We believe our Primary Peer Group represents the industries with which we currently compete for executive talent, and also includes our principal business competitors. | | | •
The Aaron’s Company Inc.
(Specialty Retail) •
Credit Acceptance Corporation
(Consumer Finance) •
Dollar Tree, Inc.
(Multiline Retail) •
Huntington Bancshares Incorporated
(Banking) •
Navient Corporation
(Consumer Finance) •
Synchrony Financial
(Consumer Finance) •
The Western Union Company
(IT Services) | | | •
Bread Financial Holdings, Inc.(1)
(IT Services) •
Commerce Bancshares, Inc.
(Banking) •
Comerica Incorporated
(Banking) •
Fidelity National Information Services, Inc.
(IT Services) •
LendingClub Corporation
(Consumer Finance) •
Mr. Cooper Group Inc.
(Thrifts and Mortgage Finance) •
SLM Corporation
(Consumer Finance) | | | | | | (1) Alliance Data Systems Corporation changed its name to Bread Financial Holdings, Inc. in March 2022. | | |
The Committee relies on various sources of compensation information to determine the competitive market for our NEOs. To assess the competitiveness of our executive compensation program, we (together with our independent compensation consultant) analyze compensation data obtained from the proxy materials of Primary Peer Group members as well as compensation and benefits survey data provided by other national compensation consulting firms. As part of this process, we measure our program’s competitiveness by comparing relevant market data against actual pay levels within each compensation component and in the aggregate for each executive officer position. We also review the mix of our compensation components with respect to fixed versus variable, short-term versus long-term, and cash versus equity-based pay. This information is then presented to the Committee for its review and use.
For purposes of evaluating Relative TSR as a modifier for the PSU portion of our long-term incentive program, the Committee compares the Company’s TSR against a broader set of consumer finance and other companies that the Committee deemed relevant based on its industry (the “TSR Modifier Peer Group”). The TSR Modifier Peer Group includes the following companies: | | | •
*
Refer to the Appendix for a description of these metrics.Ally Financial Inc.
The Committee has discretion to adjust the metrics if net charge-offs exceed 7% in any calendar year during the performance period. These are the same metrics as used in prior year PSUs, which the Committee determined to continue using for the PSUs granted in 2021 based on a review of our compensation program and strategic priorities. PSUs have possible payouts ranging between 0% and 150% of the target level:
| | | | | | | 2021 PSU Target | | | | | | Douglas H. Shulman | | | | | $ | 1,833,333 | | | | | | | Micah R. Conrad | | | | | $ | 616,667 | | | | | | | Rajive Chadha | | | | | $ | 583,333 | | | |
2021 Incentive-Based Retention Awards•
In July 2021 and September 2021, the Committee granted retention equity awards to Mr. Shulman and Messrs. Chadha and Conrad, respectively. The Committee determined such grants were necessary to retain and incentivize these executives to achieve continued stockholder value creation during an important growth period for the Company and at a time of significant uncertainty when our largest stockholder was in the process of transitioning out of the stock of the Company through the Consortium Transactions. In approving the terms of the awards, the Committee conducted a review of the Company’s performance under the executives’ leadership, including against its peers, during Mr. Shulman’s three years as CEO, considered the competition for talent in the industry and received input from our independent compensation consultant.
The Committee granted 200,000 shares to Mr. Shulman and 75,000 shares to each of Messrs. Chadha and Conrad, structured as follows:
•
50% in RSUs that will vest in equal annual increments over a four-year period beginning on the first anniversary of the grant date, subject to continued employment through the applicable vesting date.Bread Financial Holdings, Inc.
•
50% in PSUs that may be earned based on achievement of specified TSR thresholds over a seven-year period,Consumer Portfolio Services, Inc.
•
CURO Group Holdings Corp. •
Encore Capital Group, Inc. •
EZCORP, Inc. •
Green Dot Corp. •
LendingClub Corporation •
Medallion Financial Corp. •
Navient Corporation •
Nicholas Financial, Inc. •
Oportun Financial Corp. •
Regional Management Corp. •
SLM Corp. •
Upstart Holdings, Inc. | | | •
Atlanticus Holdings Corp. •
Capital One Financial Corp. •
Credit Acceptance Corp. •
Discover Financial Services •
Enova International, Inc. •
FirstCash Holdings, Inc. •
Katapult Holdings, Inc. •
LendingTree, Inc. •
Mogo Inc. •
Nelnet, Inc. •
Open Lending Corp. •
PRA Group, Inc. •
SoFi Technologies, Inc. •
Synchrony Financial •
World Acceptance Corp. | | |
Accounting and Tax Treatment The accounting and tax treatment of the elements of our executive compensation is one factor considered in the design of the program. Although the Committee may consider the impact of tax and accounting consequences when developing and implementing the Company’s executive compensation program, the Committee retains the flexibility to design and administer a compensation program that is in the best interests of the Company and its stockholders. | | | Compensation Committee Report | | | | | | The Committee reviewed and discussed the Compensation Discussion and Analysis set forth herein with a 10% annual reduction inmanagement. Based upon the target number of PSUs that can be earned for each yearCommittee’s review and discussion, the Committee recommended to the Board that the applicable tranche is achieved followingCompensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for the fifth year ended December 31, 2023. | | | | | | Compensation Committee of the performance period.Board of Directors | | | | | | Roy A. Guthrie | | | | | | Aneek S. Mamik | | | | | | Richard A. Smith | | |
| | | Total Stockholder Return
Performance Goal | | | | Vesting % of Target | | | | | | 80% | | | | | | 50% | | | | | | | 100% | | | | | | 100% | | | | | | | 120% | | | | | | 150% | | | |
The following table reflects the grant date fair values of the RSU and PSU components of the retention equity awards, as reflected in the Summary Compensation Table.
| | | | | | | RSU | | | | PSU Target | | | | | | Douglas H. Shulman | | | | | $ | 5,934,000 | | | | | | $ | 4,000,667 | | | | | | | Micah R. Conrad | | | | | $ | 2,111,250 | | | | | | $ | 1,410,250 | | | | | | | Rajive Chadha | | | | | $ | 2,111,250 | | | | | | $ | 1,410,250 | | | |
To avoid a potential windfall, these retention equity awards do not contain any retirement provisions. The PSUs would not vest upon termination outside of a change in control and the RSUs would vest upon termination only in limited scenarios outside of a change in control.
In addition, to further align Mr. Shulman’s interests with those of the Company’s stockholders and to demonstrate commitment to the creation of stockholder value over the long-term, as the Company moves to its next phase of growth, Mr. Shulman agreed to purchase an aggregate value of $1 million of the Company’s common stock.
Performance-Based Awards Earned in 2021
Payout of Performance-Based Awards Granted in Prior Years
2019-2021 PSU Payout
In January 2022 the Committee determined final payout levels for PSU awards granted in 2019 with a performance cycle ending at the end of 2021. For the three-year performance period, our Economic Average Diluted EPS Growth was 27.7% and our Economic Average Unlevered Return was 13.3%, in each case exceeding the maximum threshold established and resulting in a payout factor of 150% for the 2019-2021 performance cycle.
2019-2021 Performance-Based Cash Awards to Messrs. Conrad and Chadha
During 2019, we entered into a special, long-term incentive program to provide three-year performance-based cash awards to Messrs. Conrad and Chadha. The special program was motivated by a desire to provide additional incentives to continue to grow the Company following the completion of the Consortium Acquisition and the related changes to our Board, as well as additions to executive management, and was created following consultation with our independent compensation consultant. The special incentive awards consisted of a $1,000,000 target cash payment award established by the Committee with a performance period of 2019-2021. Performance of the goals was designed to be achievable, but require the coordinated, cross-functional focus and effort of Messrs. Conrad and Chadha. These cash awards were paid to each of Messrs. Conrad and Chadha in the first quarter of 2022 in the amount of $1,000,000 each. These amounts are reported in the Non-Equity Incentive Plan Compensation column to the Summary Compensation Table on page 49.
2018 and 2019 Performance Option Awards
During 2018 and 2019, the Committee granted cash-settled performance-based awards to our NEOs which were intended to provide additional incentives to significantly grow the Company following the completion of the Consortium Acquisition and the related changes to our Board and executive management, and were made following consultation with our independent compensation consultant. In July 2018, Mr. Shulman was granted performance options with respect to 650,000 shares of the Company’s common stock (in three tranches of 300,000, 225,000 and 125,000 shares). Messrs. Conrad and Chadha were each granted performance-based awards in July 2019 with respect to 200,000 shares of the Company’s common stock (in three tranches of 90,000, 70,000 and 40,000 shares). We refer to these performance-based awards collectively as the “Performance Option Awards.”
| | Executive Compensation Tables | | | | |
2023 Summary Compensation Table The table below summarizes information regarding compensation for the years 2021 through 2023, as applicable, for each of our NEOs. | | | Name and Principal
Position | | | | Year | | | | Salary(1)
($) | | | | Stock
Awards(2)
($) | | | | Option
Awards | | | | Non-Equity
Incentive Plan
Compensation(3)
($) | | | | Changes in
Pension Value &
Nonqualified
Deferred
Compensation
Earnings
($) | | | | All Other
Compensation(4)
($) | | | | Total
($) | | | | | | Douglas H. Shulman,
Chairman and Chief Executive Officer | | | | | | 2023 | | | | | | | 1,000,000 | | | | | | | 10,267,357 | | | | | | | — | | | | | | | 2,562,000 | | | | | | | — | | | | | | | 1,619,311 | | | | | | | 15,448,668 | | | | | | | | 2022 | | | | | | | 1,000,000 | | | | | | | 4,713,173 | | | | | | | — | | | | | | | 1,906,666 | | | | | | | — | | | | | | | 3,206,129 | | | | | | | 10,825,968 | | | | | | | | 2021 | | | | | | | 889,231 | | | | | | | 14,005,170 | | | | | | | — | | | | | | | 2,567,500 | | | | | | | — | | | | | | | 4,253,167 | | | | | | | 21,715,068 | | | | | | | Micah R. Conrad, Executive Vice President and Chief Financial Officer | | | | | | 2023 | | | | | | | 598,077 | | | | | | | 2,896,841 | | | | | | | — | | | | | | | 828,000 | | | | | | | — | | | | | | | 533,623 | | | | | | | 4,856,541 | | | | | | | | 2022 | | | | | | | 495,000 | | | | | | | 1,341,398 | | | | | | | — | | | | | | | 542,667 | | | | | | | — | | | | | | | 763,306 | | | | | | | 3,142,371 | | | | | | | | 2021 | | | | | | | 450,000 | | | | | | | 4,890,638 | | | | | | | — | | | | | | | 1,730,750 | | | | | | | — | | | | | | | 1,128,810 | | | | | | | 8,200,198 | | | | | | | Rajive Chadha,
Former Executive Vice President and Chief Operating Officer | | | | | | 2023 | | | | | | | 598,077 | | | | | | | 2,738,731 | | | | | | | — | | | | | | | 720,000 | | | | | | | — | | | | | | | 518,517 | | | | | | | 4,575,325 | | | | | | | | 2022 | | | | | | | 495,000 | | | | | | | 1,268,895 | | | | | | | — | | | | | | | 513,333 | | | | | | | — | | | | | | | 877,204 | | | | | | | 3,154,432 | | | | | | | | 2021 | | | | | | | 450,000 | | | | | | | 4,816,622 | | | | | | | — | | | | | | | 1,691,250 | | | | | | | — | | | | | | | 1,174,119 | | | | | | | 8,131,991 | | | |
(1)
The amount in this column reflects the salary each NEO received as base salary in the year reported. (2)
This column reports the grant date fair value of each form of equity award granted to our NEOs in accordance with ASC 718. For 2023, the amounts in this column include 2022 Incentive RSUs reflecting the equity component of our 2022 annual incentive program and 2023 annual PSU grants. The 2023 amounts are reflected in the following table: | | | Name | | | | 2022 Incentive
RSU Grant(a)
($) | | | | 2023 Total RSU
Grant(b)
($) | | | | 2023 Total PSU
Grant(c)
($) | | | | Total Stock
Awards
($) | | | | | | Douglas H. Shulman | | | | | | 2,039,580 | | | | | | | 3,939,315 | | | | | | | 4,288,462 | | | | | | | 10,267,357 | | | | | | | Micah R. Conrad | | | | | | 580,486 | | | | | | | 1,109,030 | | | | | | | 1,207,325 | | | | | | | 2,896,841 | | | | | | | Rajive Chadha | | | | | | 549,099 | | | | | | | 1,048,357 | | | | | | | 1,141,275 | | | | | | | 2,738,731 | | | |
(a)
The 2022 Incentive RSUs granted in early 2023 as the equity component of the 2022 annual incentive awards vest in three equal increments following the grant date based on continued service, with one-third having vested on February 17, 2023, one-third having vested on February 20, 2024 and one-third vesting on February 20, 2025. As discussed in the CD&A, these are the final 2022 Incentive RSUs granted under our annual incentive program. (b)
The RSUs granted in 2023 include annual RSUs and RSUs as part of the transition of our RSU grant practices to our equity incentive program and will vest in three equal increments following the grant date based on continued service, with one-third having vested on February 20, 2024, one-third vesting on February 20, 2025 and one-third vesting on February 20, 2026. (c)
The PSUs granted in 2023 include annual PSUs and PSUs as part of the transition of our equity incentive program. The reported grant date fair value of the PSUs reported in this column and included in the Summary Compensation Table is based on target payouts of such awards. If the maximum level of performance had been assumed, the grant date fair value of such PSUs would have been $10,292,291 for Mr. Shulman, $2,897,542 for Mr. Conrad and $2,739,050 for Mr. Chadha. The PSUs will vest after three years if the performance goals established by the Committee for the 2023-2025 performance period are attained. For a summary of the assumptions used in the valuation of these equity-based awards, please see Note 16, Share- Based Compensation, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
(3)
The amounts in this column reflect the annual cash awards paid with respect to performance for the applicable year under the annual incentive program. (4)
The amounts shown in this column include the following for 2023: | | | Name | | | | 401(k)
Match
($) | | | | Dividend
Equivalents(a)
($) | | | | Total All Other
Compensation
($) | | | | | | Douglas H. Shulman | | | | | | 13,200 | | | | | | | 1,606,111 | | | | | | | 1,619,311 | | | | | | | Micah R. Conrad | | | | | | 13,200 | | | | | | | 520,423 | | | | | | | 533,623 | | | | | | | Rajive Chadha | | | | | | 13,200 | | | | | | | 505,317 | | | | | | | 518,517 | | | |
(a)
The values in this column represent dividend equivalent payments during 2023 in respect of RSUs, PSUs granted in 2021 and 2022 (PSUs granted in 2023 do not receive dividend equivalents) and Performance Option Awards held by our NEOs. These amounts are reported in this column because they are not included in the grant date fair value of awards.
2023 Grants of Plan-Based Awards Table The table below summarizes information regarding grants of plan-based awards to our NEOs during 2023. | | | Name | | | | Grant
Date | | | | Estimated Future Payouts Under Non-
Equity Incentive Plan Awards(1) | | | | Estimated Future Payouts Under
Equity Incentive Plan Awards(2) | | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(3)
(#) | | | | Grant Date
Fair Value
of Stock
Awards(4)
($) | | | | | Threshold
($) | | | | Target
($) | | | | Maximum
($) | | | | Threshold
(#) | | | | Target
(#) | | | | Maximum
(#) | | | | | | Douglas H. Shulman | | | | | | 1/20/2023 | | | | | | | 1,010,500 | | | | | | | 2,350,000 | | | | | | | 3,877,500 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | 2/6/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 46,553 | | | | | | | 93,106 | | | | | | | 223,454 | | | | | | | — | | | | | | | 4,288,462 | | | | | | | | 1/20/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 50,360 | | | | | | | 2,039,580 | | | | | | | | 2/6/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 93,106 | | | | | | | 3,939,315 | | | | | | | Micah R. Conrad | | | | | | 1/20/2023 | | | | | | | 309,600 | | | | | | | 720,000 | | | | | | | 1,188,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | 1/20/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 8,148 | | | | | | | 16,296 | | | | | | | 39,110 | | | | | | | — | | | | | | | 750,594 | | | | | | | | 2/6/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,958 | | | | | | | 9,916 | | | | | | | 23,798 | | | | | | | — | | | | | | | 456,731 | | | | | | | | 1/20/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 14,333 | | | | | | | 580,487 | | | | | | | | 2/6/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 26,212 | | | | | | | 1,109,030 | | | | | | | Rajive Chadha | | | | | | 1/20/2023 | | | | | | | 309,600 | | | | | | | 720,000 | | | | | | | 1,188,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | 1/20/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 7,699 | | | | | | | 15,398 | | | | | | | 36,955 | | | | | | | — | | | | | | | 709,232 | | | | | | | | 2/6/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,690 | | | | | | | 9,380 | | | | | | | 22,512 | | | | | | | — | | | | | | | 432,043 | | | | | | | | 1/20/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 13,558 | | | | | | | 549,099 | | | | | | | | 2/6/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 24,778 | | | | | | | 1,048,357 | | | |
(1)
Represents cash awards under the 2023 annual incentive program. The amounts reported represent the threshold, target and maximum awards (43%, 100% and 165% of target, respectively) that could be earned based on achievement of quantitative and qualitative goals as determined by the Committee. Based on the actual achievement for 2023 under the terms of the annual incentive program, the Committee approved cash payouts in early 2024, as reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2023 above. (2)
Represents annual PSUs granted in 2023. The PSUs will vest after three years on a date to be determined by the Committee, to the extent earned based upon the attainment of performance goals established by the Committee for the 2023-2025 performance period and as further described in the CD&A. (3)
The grants reported in this column on January 20, 2023 represent 2022 Incentive RSUs granted under the 2022 annual incentive program. The amount reported in this table represents the 2022 Incentive RSUs that were granted in early 2023 following the Committee’s determination that 2022 performance goals had been achieved. The 2022 Incentive RSUs vest in three equal annual installments following the grant date based on continued service, with one-third having vested on February 17, 2023, one-third having vested on February 20, 2024 and one-third vesting on February 20, 2025. As discussed in the CD&A, these are the final 2022 Incentive RSUs granted under our annual incentive program. The grants reported in this column on February 6, 2023 represent RSUs granted for 2023 as part of the transition of our RSU grant practices to our equity incentive program. These RSUs will vest in three equal increments following the grant date based on continued service, with one-third having vested on February 20, 2024, one-third vesting on February 20, 2025 and one-third vesting on February 20, 2026. (4)
Amounts reported in this column are calculated in accordance with ASC 718 based on the probable achievement of the underlying performance conditions. For a summary of the assumptions used in the valuation of these equity- based awards, please see Note 16, Share-Based Compensation, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
The 2023 Grants of Plan-Based Awards Table reports the dollar value of cash (non-equity) incentive awards and the number and value of equity awards granted to each executive officer during 2023. With regard to cash incentives, this table reports the range of potential values that could have been obtained by the executive officer; whereas the Summary Compensation Table reports the actual value realized for 2023. Equity amounts represent the grant date values of the awards determined under ASC 718 for purposes of financial statement reporting, which are based on probable outcomes. Grant date fair values reflected in the 2023 Grants of Plan-Based Awards Table do not include dividend equivalent payments with respect to the underlying equity-based awards.
Outstanding Equity Awards at 2023 Fiscal Year-End Table The following table summarizes the equity awards held by our NEOs that were unvested and outstanding as of December 31, 2023. | | | | | | | Option Awards(1) | | | | Stock Awards | | | | | | | | | | Number of
Securities
Underlying
Unexercised
Options | | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unearned
Options
(#) | | | | Option
Exercise
Price
($) | | | | Option
Expiration
Date | | | | Number of
Shares or
Units of
Stock
That
Have
Not
Vested
(#) | | | | Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)(2) | | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | | | Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(2) | | | | | | Name | | | | Exercisable
(#) | | | | Unexercisable
(#) | | | | | | Douglas H. Shulman | | | | | | — | | | | | | | — | | | | | | | 125,000 | | | | | | | 20.01 | | | | | | | 7/16/2024 | | | | | | | 193,321(3) | | | | | | | 9,511,393 | | | | | | | 167,617(6) | | | | | | | 8,246,756 | | | | | | | Micah R. Conrad | | | | | | — | | | | | | | — | | | | | | | 40,000 | | | | | | | 17.11 | | | | | | | 7/26/2024 | | | | | | | 59,254(4) | | | | | | | 2,915,297 | | | | | | | 56,601(7) | | | | | | | 2,784,769 | | | | | | | Rajive Chadha | | | | | | — | | | | | | | — | | | | | | | 40,000 | | | | | | | 17.11 | | | | | | | 7/26/2024 | | | | | | | 57,047(5) | | | | | | | 2,806,712 | | | | | | | 55,560(8) | | | | | | | 2,733,552 | | | |
(1)
The Performance Option Awards held by the NEOs were issued in three tranches, the first two of which settled during 2021. The third tranche remains unvested and is reflected in this column. The unvested tranche is subject to a vesting condition relating to the Company achieving a specified VWAP over a consecutive six-month period by July 2024. As of December 31, 2023, the VWAP goal for Tranche III was $71.61 for Mr. Shulman and $72.11 for Messrs. Conrad and Chadha, in each case subject to further adjustment (as described below). The awards include reductions to the VWAP and the base calculation price of unvested awards as follows: an amount equal to 50% of any cash dividends is applied to reduce the VWAP and the base calculation price; the remaining 50% of any cash dividends is paid to the award holder as soon as practicable following the date such cash dividend is paid to holders of shares of common stock, provided that the award holder remains employed. If the award holder is no longer employed, an amount equal to 100% of any cash dividend is applied to reduce the VWAP and the base calculation price. (2)
Based on the closing market price of Company common stock on December 29, 2023 of $49.20 per share. (3)
Represents RSUs granted to Mr. Shulman in 2021, 2022 and 2023 that were unvested as of December 31, 2023. The vesting schedule for the RSUs is as follows: 64,463 vested in February 2024, 25,000 are scheduled to vest in July 2024, 47,822 are scheduled to vest in February 2025, 25,000 are scheduled to vest in July 2025 and 31,036 are scheduled to vest in February 2026. (4)
Represents RSUs granted to Mr. Conrad in 2021, 2022 and 2023 that were unvested as of December 31, 2023. The vesting schedule for the RSUs is as follows: 18,251 vested in February 2024, 9,375 are scheduled to vest in September 2024, 13,515 are scheduled to vest in February 2025, 9,375 are scheduled to vest in September 2025 and 8,738 are scheduled to vest in February 2026. (5)
Represents RSUs granted to Mr. Chadha in 2021, 2022 and 2023 that were unvested as of December 31, 2023. The vesting schedule for the RSUs is as follows: 17,258 vested in February 2024, 9,375 are scheduled to vest in September 2024, 12,779 are scheduled to vest in February 2025, 9,375 are scheduled to vest in September 2025 and 8,260 are scheduled to vest in February 2026. Upon Mr. Chadha’s departure from the Company, certain of these RSUs will be forfeited. (6)
Represents PSUs granted to Mr. Shulman in 2021, 2022 and 2023, reflecting actual performance levels with respect to annual PSUs granted in 2021, and threshold performance levels with respect to annual PSUs granted in 2022 and 2023 and target performance for retention PSUs granted in 2021. The vesting schedule for the PSU awards is as follows: 21,064 annual PSUs will vest in the first quarter of 2025, 46,553 annual PSUs will vest in the first quarter of 2026 and 100,000 retention PSUs granted in 2021 will vest no later than July 2028, in each case based upon actual achievement of the quantitative goals as determined by the Committee. (7)
Represents PSUs granted to Mr. Conrad in 2021, 2022 and 2023 reflecting actual performance levels with respect to annual PSUs granted in 2021, threshold performance levels with respect to annual PSUs granted in 2022 and 2023 and target performance for retention PSUs granted in 2021. The vesting schedule for the PSU awards is as follows: 5,995 annual PSUs will vest in the first quarter of 2025, 13,106 annual PSUs will vest in the first quarter of 2026 and 37,500
retention PSUs will vest no later than September 2028, in each case based upon actual achievement of the quantitative goals as determined by the Committee. (8)
Represents PSUs granted to Mr. Chadha in 2021, 2022 and 2023 reflecting actual performance levels with respect to annual PSUs granted in 2021, threshold performance levels with respect to annual PSUs granted in 2022 and 2023 and target performance for retention PSUs granted in 2021. The vesting schedule for the PSU awards is as follows: 5,671 annual PSUs in the first quarter of 2025, 12,389 annual PSUs in the first quarter of 2026 and 37,500 retention PSUs no later than September 2028, in each case based upon actual achievement of the quantitative goals as determined by the Committee. However, upon Mr. Chadha’s departure from the Company, these PSUs will be forfeited. 2023 Options Exercised and Stock Vested Table | | | | | | | 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
($) | | | | | | Douglas H. Shulman(1) | | | | | | — | | | | | | | — | | | | | | | 101,125 | | | | | | | 4,369,405 | | | | | | | Micah R. Conrad(2) | | | | | | — | | | | | | | — | | | | | | | 33,250 | | | | | | | 1,378,191 | | | | | | | Rajive Chadha(3) | | | | | | — | | | | | | | — | | | | | | | 31,959 | | | | | | | 1,324,053 | | | |
(1)
Represents 29,240 PSUs that vested on February 9, 2023 with a value of $38.39 per share, 46,885 RSUs that vested on February 17, 2023 with a value of $44.42 per share and 25,000 RSUs that vested on July 14, 2023 with a value of $46.57 per share on the respective vesting dates. (2)
Represents 9,835 PSUs that vested on February 9, 2023 with a value of $38.39 per share, 14,040 RSUs that vested on February 17, 2023 with a value of $44.42 per share and 9,375 RSUs that vested on September 7, 2023 with a value of $40.21 per share on the respective vesting dates. (3)
Represents 9,303 PSUs that vested on February 9, 2023 with a value of $38.39 per share, 13,281 RSUs that vested on February 17, 2023 with a value of $44.42 per share and 9,375 RSUs that vested on September 7, 2023 with a value of $40.21 per share on the respective vesting dates. 2023 Nonqualified Deferred Compensation The amounts shown in this table reflect NEO activity under our NQDC Plan, which took effect in 2022. | | | Name | | | | Executive
Contributions in
Last
Fiscal Year
($)(1) | | | | Registrant
Contributions in
Last Fiscal Year
($)(2) | | | | Aggregate
Earnings in Last
Fiscal Year
($) | | | | Aggregate
Withdrawals /
Distributions in Last
Fiscal Year
($) | | | | Aggregate
Balance at Last
Fiscal Year End
($) | | | | | | Douglas H. Shulman | | | | | | — | | | | | | | — | | | | | | | 41,207 | | | | | | | — | | | | | | | 279,352 | | | | | | | Micah R. Conrad | | | | | | — | | | | | | | — | | | | | | | 5,396 | | | | | | | — | | | | | | | 59,663 | | | | | | | Rajive Chadha | | | | | | — | | | | | | | — | | | | | | | 59,924 | | | | | | | — | | | | | | | 316,591 | | | |
(1)
No elections were made by our NEOs to defer base salary or annual cash incentives under our NQDC Plan for 2023. (2)
Employer contributions are not permitted under our NQDC Plan.
Potential Payments Upon Termination or Change-In-Control for 2023 The following table shows the payments and benefits that our NEOs would have been eligible to receive if their employment had been terminated or if a change in control of the Company had occurred as of December 31, 2023. Amounts used for equity awards are based on the closing market price of our common stock on December 29, 2023 of $49.20 per share. | | | Name | | | | Type of Payment
or Benefit | | | | Voluntary
Resignation
without
Good
Reason or
Retirement
($) | | | | Termination
Due to
Disability or
Death
($) | | | | Termination
without
Cause
($) | | | | Termination
for Good
Reason
($) | | | | Change
in
Control
($)(1) | | | | Termination without
Cause or for Good
Reason following a
Change in Control
($) | | | | | | Douglas H. Shulman(2) | | | | Cash Severance Payment | | | | | | — | | | | | | | — | | | | | | | 17,739,636 | | | | | | | 17,739,636 | | | | | | | — | | | | | | | 17,739,636 | | | | | | Acceleration of Unvested RSUs | | | | | | — | | | | | | | 9,511,393 | | | | | | | 4,401,580 | | | | | | | — | | | | | | | — | | | | | | | 9,511,393 | | | | | | Acceleration of Unvested PSUs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 11,573,513 | | | | | | Continuation of
Benefits Payment | | | | | | — | | | | | | | — | | | | | | | 26,818 | | | | | | | 26,818 | | | | | | | — | | | | | | | 26,818 | | | | | | Total | | | | | | — | | | | | | | 9,511,393 | | | | | | | 22,168,034 | | | | | | | 17,766,454 | | | | | | | — | | | | | | | 38,851,360 | | | | | | | Micah R. Conrad(3)(4) | | | | Cash Severance Payment | | | | | | — | | | | | | | — | | | | | | | 600,000 | | | | | | | — | | | | | | | — | | | | | | | 600,000 | | | | | | Acceleration of Unvested RSUs | | | | | | — | | | | | | | 2,915,297 | | | | | | | 1,359,199 | | | | | | | — | | | | | | | — | | | | | | | 2,915,297 | | | | | | Acceleration of Unvested PSUs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,724,538 | | | | | | Continuation of
Benefits Payment | | | | | | — | | | | | | | — | | | | | | | 26,818 | | | | | | | 26,818 | | | | | | | — | | | | | | | 26,818 | | | | | | Total | | | | | | — | | | | | | | 2,915,297 | | | | | | | 1,986,017 | | | | | | | 26,818 | | | | | | | — | | | | | | | 7,266,653 | | | | | | | Rajive Chadha(3)(5) | | | | Cash Severance Payment | | | | | | — | | | | | | | — | | | | | | | 600,000 | | | | | | | — | | | | | | | — | | | | | | | 600,000 | | | | | | Acceleration of Unvested RSUs | | | | | | — | | | | | | | 2,806,712 | | | | | | | 1,310,344 | | | | | | | — | | | | | | | — | | | | | | | 2,806,712 | | | | | | Acceleration of Unvested PSUs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,622,104 | | | | | | Continuation of
Benefits Payment | | | | | | — | | | | | | | — | | | | | | | 18,477 | | | | | | | 18,477 | | | | | | | — | | | | | | | 18,477 | | | | | | Total | | | | | | — | | | | | | | 2,806,712 | | | | | | | 1,928,821 | | | | | | | 18,477 | | | | | | | — | | | | | | | 7,047,293 | | | |
(1)
None of the NEOs is eligible to receive benefits solely in the event of a change in control. Notwithstanding the foregoing, the Omnibus Incentive Plan and certain of the NEOs’ award agreements contemplate acceleration of vesting of equity awards if such awards are not assumed and/or substituted upon a change in control. (2)
Under Mr. Shulman’s employment agreement, in the event of a termination by the Company without cause or by the executive for good reason (whether or not in connection with a change in control), he will receive a cash severance payment of an aggregate amount equal to (i) $2,633,333 payable over 24 months (or, if such termination occurs within the 24-month period following a change in control, a single lump sum), plus (ii) any earned but unpaid annual and long-term incentive for the calendar year immediately preceding the termination, plus (iii) an amount equal to two-thirds of the average annual and long-term incentive earned in respect of the three years completed prior to the year of termination. Under the terms of Mr. Shulman’s employment agreement, he is also entitled to a lump sum distribution equal to 12 months of premiums for COBRA continuation for Mr. Shulman and his dependents, representing $26,818. Mr. Shulman’s RSU award agreements provide that (a) upon a termination without cause, the RSUs next scheduled to vest will vest, representing a total of 89,463 RSUs, or $4,401,580, and (b) upon a termination without cause (or, for the RSUs granted in 2021, 2022 and 2023, resignation for good reason) during the 12 months following a change in control, or upon his death or disability, all unvested RSUs will vest, representing 193,321 RSUs, or $9,511,393.
Mr. Shulman’s PSU award agreements, including his annual PSUs and retention PSUs, provide that a total of 235,234 PSUs will vest upon a termination without cause (or, for the PSUs granted in 2021, 2022 and 2023, resignation for good reason) during the 12 months following a change in control, or $11,573,513, and do not otherwise vest upon termination. (3)
As of December 31, 2023, Messrs. Conrad and Chadha were eligible to receive severance benefits pursuant to the Executive Severance Plan. Under the Executive Severance Plan, upon a termination by the Company without cause (whether or not in connection with a change in control) or by the executive for good reason within 12 months following a change in control, each executive receives base salary continuation for 12 months and a lump sum distribution equal to 12 months of premiums for COBRA continuation for the executive and his dependents at the rates in effect on the date of termination. Messrs. Conrad and Chadha are eligible to receive lump-sum COBRA premiums pursuant to the terms of the Executive Severance Plan in the amounts of $26,818 and $18,477, respectively. (4)
Mr. Conrad’s RSU award agreements provide that (a) upon a termination without cause, the RSUs next scheduled to vest will vest, representing a total of 27,626 RSUs, or $1,359,199, and (b) upon a termination without cause (or, for the RSUs granted in 2021, 2022 and 2023, resignation for good reason) during the 12 months following a change in control, or upon his death or disability, all unvested RSUs will vest, representing 59,254 RSUs, or $2,915,297. Mr. Conrad’s PSU award agreements, including his annual PSUs and retention PSUs, provide that a total of 75,702 PSUs will vest upon a termination without cause (or, for the PSUs granted in 2021, 2022 and 2023, resignation for good reason) during the 12 months following a change in control, or $3,724,538, and do not otherwise vest upon termination. (5)
Mr. Chadha’s RSU award agreements provide that (a) upon a termination without cause, the RSUs next scheduled to vest will vest, representing a total of 26,633 RSUs, or $1,310,344, and (b) upon a termination without cause (or, for the RSUs granted in 2021, 2022 and 2023, resignation for good reason) during the 12 months following a change in control, or upon his death or disability, all unvested RSUs will vest, representing 57,047 RSUs, or $2,806,712. Mr. Chadha’s PSU award agreements, including his annual PSUs and retention PSUs, provide that a total of 73,620 PSUs will vest upon a termination without cause (or, for the PSUs granted in 2021, 2022 and 2023, resignation for good reason) during the 12 months following a change in control, or $3,622,104, and do not otherwise vest upon termination. Severance and Change-in-Control Arrangements Our Executive Severance Plan is intended to facilitate changes in the leadership team by establishing terms for the separation of an executive officer in advance, allowing for a smooth transition of responsibilities when it is in the best interests of the Company. As of December 31, 2023, the Committee had identified Messrs. Chadha and Conrad as “eligible executives,” as defined in the Executive Severance Plan for purposes of participation in such plan. The Executive Severance Plan provides for severance payments and benefits to the eligible executives in the event of a “qualifying termination.” A qualifying termination is defined as (i) a termination by the Company without “cause” or (ii) a termination by the executive for “good reason” on or before the 12-month anniversary of a “change in control” (each term, as defined in the Executive Severance Plan). In the event of a qualifying termination and subject to the eligible executive’s adherence to the covenants contained in the Executive Severance Plan and execution of a severance agreement (including a general waiver and release of claims along with certain non-competition and intellectual property protections), the Executive Severance Plan provides for (i) continued payment of the eligible executive’s annual base salary for a period of 12 months and (ii) a lump sum cash payment in an amount equal to 12 months of premiums for COBRA continuation coverage for the eligible executive and their eligible dependents. In January 2021, we amended our Omnibus Incentive Plan to provide that, unless otherwise determined by the plan administrator, if a change in control occurs (as defined in the Omnibus Incentive Plan), and the employment of the holder of an award granted under the plan (an “Award”) is terminated by the Company without cause (as defined in the Omnibus Incentive Plan) on or after the effective date of the change in control but prior to 12 months following the change in control, then: (i) any unvested portion of any Award carrying a right to exercise shall become fully vested and exercisable; and (ii) the restrictions, deferral
limitations, payment conditions, and forfeiture conditions applicable to an Award granted under the Omnibus Incentive Plan shall lapse and such Award shall be deemed fully vested and any performance goals imposed with respect to such Awards shall be deemed to be fully achieved. The change in control protection provided by the Omnibus Incentive Plan does not apply to the voluntary termination of employment by an Award recipient following a change in control for “good reason” or otherwise. Mr. Shulman’s Employment Agreement In July 2018, we entered into an employment agreement with Mr. Shulman pursuant to which he began serving as our CEO on September 8, 2018, and which reflected advice from our independent compensation consultant and consideration of the terms of Mr. Shulman’s compensation arrangements with his prior employer. Pursuant to our employment agreement with Mr. Shulman, Mr. Shulman receives an annual base salary of at least $800,000 and is eligible for an annual target incentive of at least $5,500,000, payable in cash, RSUs and PSUs. The employment agreement also provided that the PSUs to be granted to Mr. Shulman pursuant to our annual equity grant determination for 2019 would include a prorated grant made with respect to his 2018 service. Mr. Shulman is eligible to receive the termination benefits pursuant to his employment agreement. If Mr. Shulman’s employment is terminated by the Company other than for “cause” (as defined in the agreement, but not including a termination of employment due to death or disability) or he resigns for “good reason” (as defined in the agreement and summarized below), and if Mr. Shulman executes a general release of claims in a form acceptable to the Company and continues to comply with all applicable restrictive covenants, then he would be entitled to: (i) a severance payment equal to $2,633,333, payable in equal installments over a 24-month period in accordance with the Company’s payroll (or, if such termination occurs within the 24-month period following a “change in control” (as defined in the agreement), a single lump sum); (ii) any earned but unpaid annual and long-term incentive for the calendar year immediately preceding the termination; (iii) an amount equal to two-thirds of the average annual and long-term incentive earned in respect of the three years completed prior to the year of termination; and (iv) a lump sum payment equal to 12 months of COBRA premiums. For purposes of Mr. Shulman’s employment agreement, “good reason” means (i) a material reduction in his duties, authorities, responsibilities or reporting relationships; (ii) the reduction of his base salary or annual and long-term incentive opportunity (in each case, other than an across-the-board reduction affecting all senior management of the Company which reduction results in the decrease of his base salary or annual and long-term incentive opportunity, as applicable, of less than 10%); (iii) relocation of his principal location of employment by more than 50 miles (unless such new location is closer to his primary residence in New York City); (iv) the failure to nominate him as a member of the board of directors of the Company; or (v) the failure to pay him compensation when due under the terms of his employment agreement. Pursuant to the employment agreement, as amended in July 2021, Mr. Shulman is bound by certain restrictive covenants including confidentiality, non-disparagement, work product and, during the term of his employment and for a period of one year thereafter, non-solicitation of employees, consultants and customers and non-competition. The Company is bound by a non-disparagement covenant. Mr. Chadha’s Employment Agreement In connection with Mr. Chadha’s appointment as Executive Vice President and Chief Operating Officer, the Company entered into an offer letter agreement with Mr. Chadha setting forth the terms of his employment and compensation. The terms of the offer letter agreement reflected consideration of the terms of Mr. Chadha’s compensation arrangements with his prior employer and the results of negotiations between the parties to the agreement. The letter agreement provided for an annual base salary of $450,000 and eligibility for a 2019 annual target incentive of $1,750,000, with one-third payable in cash, one-third granted in RSUs (in each case, subject to the
achievement of performance goals established by the Committee relating to the 2019 performance period), and the remaining one-third granted in PSUs, with vesting based on performance over the 2019- 2021 performance period. In addition to the annual incentive award, Mr. Chadha was granted a three-year performance-based cash award and Performance Option Awards, subject to vesting conditions described in “Compensation Discussion & Analysis — 2023 Compensation Elements — Previously Granted Performance-Based Awards.” In addition, Mr. Chadha received certain relocation benefits, including reimbursed commuting expenses, home sale assistance and home purchase assistance. As announced on April 1, 2024, Mr. Chadha stepped down as Executive Vice President and Chief Operating Officer on March 31, 2024 and will continue to serve as a Senior Advisor to the Company up to September 15, 2024. In accordance with SEC rules, we have calculated the ratio between the total compensation of our CEO and our median employee for 2023. To select our median employee, we evaluated our employee population and determined our median employee using W-2 income as our consistently applied compensation measure. We selected our median employee from our entire employee population as of December 31, 2023, using annualized base pay for employees who were hired in 2023, and converting compensation for employees paid in currencies other than the U.S. dollar into U.S. dollars using a fiscal year 2023 exchange rate. We did not make any full-time equivalent adjustment for any employee when annualizing base pay. We examined a small group of employees for whom total cash compensation was clustered within a few dollars around the median. From this group, we selected an individual we determined to be reasonably representative of our median employee. The 2023 annual total compensation for the median employee, who serves as a branch manager, determined in accordance with SEC rules was $49,916. The 2023 annual total compensation for our CEO, Mr. Shulman, was $15,448,668, as reported in the “Total” column of the Summary Compensation Table. The resulting pay ratio is estimated to be approximately 309 to 1. Amounts reported in the Summary Compensation Table for our NEOs, including our CEO, are determined pursuant to SEC rules that do not necessarily reflect amounts actually received or realized by, or value actually delivered to, our NEOs, including our CEO. In addition, other companies have different employee demographics and compensation and benefit practices. As a result, CEO pay ratios reported by other companies may vary significantly and likely are not comparable to our CEO pay ratio.
The following table presents certain information regarding compensation paid to our CEO and other NEOs, and certain measures of financial performance, for the four years ended December 31, 2023. The amounts shown below are calculated in accordance with Item 402(v) of Regulation S-K. | | | Year | | | | Summary
Compensation
Table Total for
CEO | | | | Compensation
Actually Paid
to CEO(1) | | | | Average
Summary
Compensation
Table Total for
Non-CEO
NEOs(2) | | | | Average
Compensation
Actually Paid to
Non-CEO NEOs(2) | | | | Value of Initial Fixed $100
Investment Based On: | | | | Net
Income(4)
(in millions) | | | | C&I Capital
Generation(4)(5)
(in millions) | | | | | Total
Stockholder
Return | | | | Peer Group
Total
Stockholder
Return(3) | | | | | | 2023 | | | | | $ | 15,448,668 | | | | | | $ | 19,411,856 | | | | | | $ | 4,715,933 | | | | | | $ | 6,039,373 | | | | | | $ | 198.75 | | | | | | $ | 125.32 | | | | | | $ | 641 | | | | | | $ | 794 | | | | | | | 2022 | | | | | $ | 10,825,968 | | | | | | $ | 3,745,311 | | | | | | $ | 3,148,402 | | | | | | $ | 647,344 | | | | | | $ | 121.88 | | | | | | $ | 106.95 | | | | | | $ | 872 | | | | | | $ | 1,064 | | | | | | | 2021 | | | | | $ | 21,715,068 | | | | | | $ | 39,608,197 | | | | | | $ | 8,166,095 | | | | | | $ | 14,259,457 | | | | | | $ | 167.32 | | | | | | $ | 122.43 | | | | | | $ | 1,314 | | | | | | $ | 1,303 | | | | | | | 2020 | | | | | $ | 9,739,632 | | | | | | $ | 13,192,003 | | | | | | $ | 3,238,132 | | | | | | $ | 3,902,537 | | | | | | $ | 135.33 | | | | | | $ | 97.76 | | | | | | $ | 730 | | | | | | $ | 1,056 | | | |
(1)
Mr. Shulman served as our Chief Executive Officer for each year presented. (2)
Messrs. Conrad and Chadha were our other NEOs for each year presented. (3)
The market index used was the NYSE Financial Sector Index. (4)
On January 1, 2023, the Company adopted ASU 2018-12, Financial Services — Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption. See our Annual Report on Form 10-K for the year ended December 31, 2023, for additional information on the adoption of ASU 2018-12. (5)
The company-selected measure is C&I Capital Generation, which is a non-GAAP financial measure. Refer to Appendix A for a description of how this measure is calculated and, for 2023, a reconciliation to the most directly comparable measure calculated under GAAP. The following table reconciles the total compensation shown in the Summary Compensation Table to the compensation actually paid to NEOs shown in the Pay Versus Performance Table above. | | | Year | | | | Summary
Compensation
Table Total | | | | Less: Equity
Awards
Included in
Summary
Compensation
Table | | | | Add: Year-End
Value of
Unvested
Equity Awards
Granted in Year | | | | Add: Change in
Year-End Value
of Unvested
Equity Awards
Granted in
Prior Years | | | | Add: Vesting
Date Value of
Equity Awards
Granted and
Vested During
Year | | | | Add: Change
in Value of
Unvested
Equity Awards
Granted in
Prior Years
that Vested
During Year(a) | | | | Total
Compensation
Actually
Paid(a) | | | | | | | | | | | | 2023 | | | | | $ | 15,448,668 | | | | | | $ | (10,267,357) | | | | | | $ | 11,461,489 | | | | | | $ | 1,474,642 | | | | | | $ | 745,634 | | | | | | $ | 548,780 | | | | | | $ | 19,411,856 | | | | | | | 2022 | | | | | $ | 10,825,968 | | | | | | $ | (4,713,173) | | | | | | $ | 2,511,907 | | | | | | $ | (5,796,156) | | | | | | $ | 865,280 | | | | | | $ | 51,485 | | | | | | $ | 3,745,311 | | | | | | | 2021 | | | | | $ | 21,715,068 | | | | | | $ | (14,005,170) | | | | | | $ | 13,771,899 | | | | | | $ | 84,304 | | | | | | $ | 659,124 | | | | | | $ | 17,382,972 | | | | | | $ | 39,608,197 | | | | | | | 2020 | | | | | $ | 9,739,632 | | | | | | $ | (4,221,360) | | | | | | $ | 3,870,523 | | | | | | $ | 2,949,852 | | | | | | $ | 865,897 | | | | | | $ | (12,541) | | | | | | $ | 13,192,003 | | | | | | | | | | | | | 2023 | | | | | $ | 4,715,933 | | | | | | $ | (2,817,786) | | | | | | $ | 3,143,590 | | | | | | $ | 664,689 | | | | | | $ | 206,464 | | | | | | $ | 126,483 | | | | | | $ | 6,039,373 | | | | | | | 2022 | | | | | $ | 3,148,402 | | | | | | $ | (1,305,147) | | | | | | $ | 695,579 | | | | | | $ | (2,052,692) | | | | | | $ | 239,616 | | | | | | $ | (78,414) | | | | | | $ | 647,344 | | | | | | | 2021 | | | | | $ | 8,166,095 | | | | | | $ | (4,853,630) | | | | | | $ | 5,009,300 | | | | | | $ | (51,126) | | | | | | $ | 215,683 | | | | | | $ | 5,773,135 | | | | | | $ | 14,259,457 | | | | | | | 2020 | | | | | $ | 3,238,132 | | | | | | $ | (1,381,488) | | | | | | $ | 1,266,680 | | | | | | $ | 533,624 | | | | | | $ | 283,366 | | | | | | $ | (37,777) | | | | | | $ | 3,902,537 | | | |
(a)
Amounts reported for 2021 reflect the settlement of two tranches of Performance Option Awards. The following charts reflect the compensation actually paid to the Company’s Chief Executive Officer and the average compensation actually paid to the non-CEO NEOs, respectively, and their relation to (i) the Company’s TSR, (ii) the Company’s net income, and (iii) the Company’s selected measure of financial
performance, C&I Capital Generation, for each year presented. We also show below the relationship between the Company’s TSR and the TSR of the NYSE Financial Sector Index over this period. The Company’s TSR increased in three of the last four years, with total TSR increasing 99% over this period. The TSR of the NYSE Financial Sector Index also grew in three of the last four years, but at a lower rate than the Company’s TSR, with total TSR of the NYSE Financial Sector Index increasing 28% from 2020 through 2023. The Company’s net income and C&I Capital Generation trended up from 2020 to 2021 before declining in 2022 and 2023. Compensation actually paid to the Company’s Chief Executive Officer and average compensation actually paid to the non-CEO NEOs increased from 2020 to 2021 before declining significantly in 2022 and then increasing in 2023 to levels that were higher than 2020 but less than 2021. The increase in compensation actually paid in 2023 was largely due to higher equity grant values in 2023 for the reasons discussed in the CD&A, as well as increased stock price performance during 2023, which increased the value of outstanding equity awards held by our NEOs. Compensation Actually Paid
and OneMain TSR Compensation Actually Paid
and Net Income
Compensation Actually Paid
and C&I Capital Generation OneMain TSR and Peer Group TSR OneMain considers the following to be the most important financial performance measures it uses to link compensation actually paid to its NEOs, for 2023, to company performance. | | | Financial Performance Measures | | | | | | C&I Capital Generation* | | | | | | C&I Capital Generation Growth* | | | | | | C&I Operating Expenses* | | | | | | New Products/Channels | | |
*
Refer to Appendix A for a description of these non-GAAP financial measures and reconciliations to the most directly comparable measures calculated under GAAP.
Proposal 2 – Ratification of Appointment of Independent Auditors The Audit Committee has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the consolidated financial statements of the Company for the year ending December 31, 2024. The Board is asking stockholders to ratify the appointment. Although SEC regulations and NYSE listing standards require the Company’s independent registered public accounting firm to be engaged, retained and supervised by the Audit Committee, the Board considers the selection of an independent registered public accounting firm to be an important corporate governance matter for stockholders to provide input to the Audit Committee and the Board. If the appointment of PricewaterhouseCoopers LLP is not ratified, the Audit Committee will consider the vote to constitute a recommendation to consider the appointment of another independent registered public accounting firm for future fiscal years. Representatives of PricewaterhouseCoopers LLP are expected to be available at the Annual Meeting by phone and will be given an opportunity to make a statement if they desire to do so. They also will be available to respond to appropriate stockholder questions regarding the Company’s financial statements. | | | | | The Performance Option Awards were subject to achievement of double-trigger vesting conditions based on: (x)Board recommends a reduction invote “FOR” the portionratification of the Company’s common stock owned by the Consortium to specified levels and (y)appointment of PricewaterhouseCoopers LLP as the Company’s stock attaining (i)independent registered public accounting firm for the year ending December 31, 2024. | |
Audit Committee Policies and Procedures Audit Committee’s Pre-Approval Policies and Procedures Our Audit Committee is responsible for pre-approving all audit services and permitted non-audit services, including the fees and terms thereof, to be performed for us and our subsidiaries by our independent registered public accounting firm, PricewaterhouseCoopers LLP. The Audit Committee has adopted a pre-approval policy and implemented procedures that provide that all engagements of our independent registered public accounting firm are reviewed and pre-approved by the Audit Committee, except for such services that fall within the de minimis exception for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that our Audit Committee approves prior to the completion of the audit. The pre-approval policy also permits the delegation of pre-approval authority to a member of the Audit Committee between meetings of the committee, and any such approvals are reviewed and ratified by the committee at its next scheduled meeting. The Audit Committee has delegated to the Chair of the committee the authority to pre-approve permissible non-audit services. Independent Auditor Tenure and Rotation As part of its auditor engagement process, the Audit Committee considers whether to rotate the independent audit firm. PricewaterhouseCoopers LLP has been our independent auditor since 2002. PricewaterhouseCoopers LLP rotates its lead audit engagement partner every five years and the Audit Committee interviews proposed candidates and selects the lead audit engagement partner. The Audit Committee believes there are significant benefits to having an independent auditor with an extensive history with the Company.
Independent Registered Public Accounting Firm Fees and Services For the years ended December 31, 2023 and 2022, professional services were performed for us by PricewaterhouseCoopers LLP, our independent registered public accounting firm, pursuant to the oversight of our Audit Committee. Set forth below are the fees billed to us by PricewaterhouseCoopers LLP for the years ended December 31, 2023 and 2022. All fees and services were pre-approved in accordance with the Audit Committee’s pre-approval policy. | | | | | 2023 | | | 2022 | | | | Audit Fees | | | | $ | 12,244,000 | | | | | $ | 12,045,000 | | | | | Audit-Related Fees | | | | $ | 1,320,000 | | | | | $ | 355,000 | | | | | Tax Fees | | | | $ | 295,000 | | | | | $ | 175,000 | | | | | All Other Fees | | | | $ | 8,000 | | | | | $ | 58,000 | | | | | | | | | $ | 13,867,000 | | | | | $ | 12,633,000 | | |
Audit Fees. Audit fees primarily related to the annual audits of the combined consolidated financial statements of the Company and OMFC included in our Annual Report on Form 10-K for the year ended December 31, 2023, the annual audit of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, the reviews of the combined condensed consolidated financial statements of the Company and OMFC included in our Quarterly Reports on Form 10-Q, and statutory audits of our insurance subsidiaries in 2022 and 2023. Audit-Related Fees. Audit related fees primarily related to comfort letters issued to underwriters for debt and security offerings, implementation of accounting standards updates and certain other agreed-upon procedures in 2022 and 2023. Tax Fees. Tax fees related to the computation of certain tax credits in 2022 and 2023 and tax planning initiatives in 2023. All Other Fees. All other fees related to services for our insurance subsidiaries in 2022 and 2023. | | | | | | The Audit Committee is a specified volume-weighted trading price over a consecutive six-month period ending on or before the date the Consortium reduced its ownership below the applicable level or (ii) a fair market value on the date following the Consortium’s reduction in ownership below the applicable level that was not less than 10% below the applicable volume-weighted trading price trigger. In July 2021, the Performance Option Awards were amended to extend the minimum period to achieve the specified volume-weighted trading pricestanding committee of the Company’s common stock over a consecutive six-month period from the applicable Consortium sell-down date until July 2024, subject to the NEO’s continued employment through the vesting date or an earlier qualifying terminationBoard that is comprised solely of employment.The Performance Option Awards were designed to closely align the interests of our management team with those of our stockholders. Accordingly, the payouts for Tranches I and II were designednon-employee directors who have been affirmatively determined to be triggered if“independent” within the Consortium,meaning of NYSE listing standards and therefore our shareholders generally, received substantial pre-specified returns on investment based on the stock price at the timeSection 10A of the Consortium Acquisition. Because the holders of Performance Option Awards would only receive payouts if certain sustained trading price thresholds were exceeded and if the Consortium electedExchange Act. The Audit Committee operates pursuant to reduce its ownership level below 25%, with respect to Tranche I, and 10%, with respect to Tranche II, the Committee believed the Performance Option Awards were important to incentivize management to drive long-term performance while aligning payout to the investment horizon of our largest stockholder group.
During 2021, the vesting conditions related to the first two of three tranches of the Performance Option Awards were satisfied, resulting in cash payouts to our NEOs reflecting the excess of the fair market value of the Company’s common stock over the applicable “base calculation price” of the Performance Option Awards, as reflected in the table below:
| | | Performance Option Award Targets and Payouts | | | | | | | | | | Tranche I | | | | Tranche II | | | | | | Douglas H. Shulman | | | | | $ | 10,393,500 | | | | | | $ | 7,023,375 | | | | | | | Micah R. Conrad | | | | | $ | 3,379,050 | | | | | | $ | 2,388,050 | | | | | | | Rajive Chadha | | | | | $ | 3,379,050 | | | | | | $ | 2,388,050 | | | |
The vesting of the Performance Option Awards is reported in the 2021 Options Exercised and Stock Vested Table on page 54. The third tranche of the Performance Option Awards, representing approximately one-fifth of the Performance Option Awards, remains unvested with an adjusted trigger price as of December 31, 2021 of $75.51, with respect to Mr. Shulman, and $76.01, with respect to Messrs. Conrad and Chadha, as reported in the Outstanding Equity Awards at 2021 Fiscal Year-End Table on page 53. This price, as adjusted for one-half of future dividends, must be achieved by July 2024 in order for vesting to occur.
| 3 | | | Employee Benefits and Other Compensation | |
We provide benefit programsa written charter that are designed to be competitive with market and provide reasonable security for employees. For 2021, welfare and retirement benefits were offered at essentially the same level to all U.S. salaried employees, including executive officers.
Retirement Benefits
All of our NEOs are eligible to participate in our general tax-qualified, defined contribution retirement savings 401(k) plan. We match a percentage of each participant’s contributions to the 401(k) plan up to the statutory limits.
Our NEOs are not eligible to participate in our tax qualified pension plan, which was frozen effective December 31, 2012. During 2021, we did not maintain any nonqualified deferred compensation plan in which our NEOs are eligible/elect to participate.
In October 2021, the Committee adopted the OneMain Holdings, Inc. Nonqualified Deferred Compensation Plan (the “NQDC Plan”) which provides eligible participants, including our NEOs, with the option to defer receipt of some or all of their annual cash incentives and some of their base salaries, in each case, that are earned on or after January 1, 2022. The Committee determined to adopt such plan after reviewing our executive compensation plans in light of our goals and objectives, and deemed it to be in our and our stockholders’ best interests to provide certain employees with additional opportunities to defer compensation. Eligible participants include all employees with a base salary equal to or in excess of $200,000, including each of our NEOs. Participant contributions will be fully vested at all times. Employer contributions are not permitted under the NQDC Plan. Distributions of participant accounts will be made following a participant’s separation of service, death, disability, unforeseeable emergency or as of a future payment date specified by the participant.
Welfare Benefits
Each of our executive officers is eligible to participate in our various group health and welfare benefit plans and fringe benefit programs that are generally available to all of our employees on a non-discriminatory basis.
Severance and Change-in-Control Arrangements
For discussion of our severance and change-in-control arrangements, including a description of our Executive Severance Plan and the employment agreements with Messrs. Shulman and Chadha, please see “Compensation Discussion and Analysis — Executive Compensation Tables — Severance and Change-in-Control Arrangements” beginning on page 56.
Other Compensation
Other compensation for our executive officers consists primarily of dividend equivalents with respect to unvested and outstanding RSUs, PSUs and Performance Option Awards. Such awards are credited with dividend equivalents equal to the per share cash dividends paid on our common stock, multiplied by the total number of equity awards subject to the award that are outstanding on the record date for such dividend. Half of the dividend equivalents are paid at the time of the dividend and half accrue and are paid at the time of vesting. The crediting of dividend equivalents is meant to treat the equity award holders consistently with stockholders, which serves to further align the interests of our executive officers with our stockholders, with half of the amount deferred until vesting for retention purposes. Because they are not included in the grant date fair value of awards, dividend equivalents are reported in the All Other Compensation column of the Summary Compensation Table.
We generally limit perquisites for our executive officers, and when perquisites are provided they are limited to items that serve a reasonable business purpose.
| 4 | | | How We Make Compensation Decisions | |
Role of the Compensation Committee
The Committee is responsible to our Board for overseeing the development and administration of our executive compensation and employee benefit plans and practices. The Committee, which consists of three independent directors, is responsible for the review and approval of all aspects of our executive officer compensation program.
The Committee is responsible for evaluating annually the performance of each of our NEOs and determining and approving their compensation (including, but not limited to, base pay and annual and long-term incentive award opportunities) based on such evaluation. Additionally, the Committee is responsible for the following, among its other duties:
•
Reviewing the Company’s executive compensation plans, including the goals and objectives relevant to compensation;
•
Evaluating the performance of our executive officers in light of such goals and objectives;
•
Reviewing and approving any severance or termination arrangements to be made with any executive officer;
•
Reviewing any perquisites or other personal benefits provided to any executive officer; and
•
Reviewing whether incentive and other forms of pay encourage excessive risk-taking and the relationship between risk management policies and practices, corporate strategy and the Company’s compensation arrangements.
The role of the Committee is described in detail in the Compensation Committee Charter, which is available under the Corporate Governance tab in the Investor Relations section ofon our investor relations website at http://investor.onemainfinancial.com. investor.onemainfinancial.com and is also available to stockholders upon request, addressed to OneMain Holdings, Inc., c/o Corporate Secretary, Attn: Legal Department, 601 NW Second Street, Evansville, Indiana 47708.
| | | | The CommitteeCompany’s management is supported in its work by our Executive Vice President, Chief Human Resources Officer, her staff, andresponsible for the Committee’s independent compensation consultant, as described below.Rolepreparation of the Independent Compensation Consultant
The Committee recognizes the importance of using an independent compensation consultant that provides services to our Board and its committees. In 2021, the Committee retained FW Cook as its independent executive compensation consultant to provide independent advice, information and analysis on executive compensation, incentive plan performance measures and compensation program design and developments. FW Cook is engaged by and reports directly to the Committee, and the Committee may replace its compensation consultant or hire additional consultants at any time. A representative of FW Cook attends meetings of the Committee, when requested, and communicates with the Committee Chair between meetings.
Compensation Consultant Independence
The Committee has assessed the independence of FW Cook pursuant to the NYSE rules, and the Committee has concluded that the work performed by FW Cook for the Committee during 2021 did not raise any conflicts of interest that would prevent FW Cook from independently advising the Committee.
Role of Management
The Committee receives recommendations from the CEO, working with management, regarding our executive compensation structure, metrics and goals. Our CEO does not make any recommendations with respect to his own compensation.
The Committee also receives information from our Chief Risk Officer to evaluate whether our incentive compensation programs for our executive officers and other employees encourage responsible investment of our resources and do not unintentionally encourage or reward imprudent risk-taking. After a review of our compensation plans by our Chief Risk Officer, who briefed the Committee at its meeting in October 2021, the Committee concluded that our compensation plans were well defined and well documented. Additionally, our incentive compensation plans were not unbalanced such that they encourage excessive or unnecessary risk-taking that would endanger the reputation or financial well-being of the Company or otherwise have any material adverse effect on the Company.
Stockholder Feedback
At our 2020 Annual Meeting, our stockholders voted in favor of conducting advisory votes on our executive compensation program on a triennial basis. We also conducted an advisory vote on our executive compensation program at our 2020 Annual Meeting, at which approximately 87% of the votes cast were in
favor of our executive compensation program. Following the vote, the Board and the Committee discussed and considered the results and determined that the existing executive compensation program is in the Company and stockholders’ best interest at this time. The next such say-on-pay vote will take place at our 2023 Annual Meeting.
Peer Group
In the course of designing and implementing our executive compensation programs, the Committee uses compensation data compiled from a group of publicly traded peer companies in the diversified financial services industries (including banking, consumer finance, thrifts and mortgage finance), as well as the specialty retail and IT services industries. The Committee periodically reviews and updates the Peer Group, as necessary, upon the recommendation of its independent compensation consultant. We believe our Peer Group represents the industries with which we currently compete for executive talent, and also includes our principal business competitors.
| | Peer Group and Industry | | | | | | | | •
The Aaron’s Company Inc.
(Specialty Retail)
•
Credit Acceptance Corporation
(Consumer Finance)
•
CIT Group Inc.(1)
(Banking)
•
Dollar Tree, Inc.
(Multiline Retail)
•
Huntington Bancshares Incorporated
(Banking)
•
Navient Corporation
(Consumer Finance)
•
Santander Consumer USA Holdings Inc.
(Consumer Finance)
•
Synchrony Financial
(Consumer Finance)
| | | •
Alliance Data Systems Corporation
(IT Services)
•
Commerce Bancshares, Inc.
(Banking)
•
Comerica Incorporated
(Banking)
•
Fidelity National Information Services, Inc.
(IT Services)
•
LendingClub Corporation
(Consumer Finance)
•
Mr. Cooper Group Inc.
(Thrifts and Mortgage Finance)
•
SLM Corporation
(Consumer Finance)
•
The Western Union Company
(IT Services)
| | | | | (1) CIT Group Inc. was acquired by First Citizens BankShares Inc. on January 3, 2022. | | |
The Committee relies on various sources of compensation information to determine the competitive market for our NEOs. To assess the competitiveness of our executive compensation program, we (together with our independent compensation consultant) analyze Peer Group compensation data obtained from peer company proxy materials as well as compensation and benefits survey data provided by other national compensation consulting firms. As part of this process, we measure our program’s competitiveness by comparing relevant market data against actual pay levels within each compensation component and in the aggregate for each executive officer position. We also review the mix of our compensation components with respect to fixed versus variable, short-term versus long-term, and cash versus equity-based pay. This information is then presented to the Committee for its review and use.
Accounting and Tax Treatment
The accounting and tax treatment of the elements of our executive compensation is one factor considered in the design of the program. Although the Committee may consider the impact of tax and accounting consequences when developing and implementing the Company’s executive compensation program, the
Committee retains the flexibility to design and administer a compensation program that is in the best interests of the Company and its stockholders.
| | Compensation Committee Report
| | | | | The Committee reviewed and discussed the Compensation Discussion and Analysis set forth herein with management. Based upon the Committee’s review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the 2021 Annual Report. | | | | | Compensation Committee of the Board of Directors | | | | | Roy A. Guthrie | | | | | Aneek S. Mamik | | | | | Richard A. Smith | | |
| 5 | | | Executive Compensation Tables | |
2021 Summary Compensation Table
The table below summarizes information regarding compensation for the years 2019 through 2021, as applicable, for each of our NEOs.
| | | Name and Principal
Position | | | | Year | | | | Salary
($)(1) | | | | Stock
Awards
($)(2) | | | | Option
Awards | | | | Non-Equity
Incentive Plan
Compensation
($)(3) | | | | Changes in
Pension Value &
Nonqualified
Deferred
Compensation
Earnings
($) | | | | All Other
Compensation
($)(4) | | | | Total
($) | | | | | | Douglas H. Shulman, Chairman and Chief Executive Officer | | | | | | 2021 | | | | | | | 889,231 | | | | | | | 14,005,170 | | | | | | | — | | | | | | | 2,567,500 | | | | | | | — | | | | | | | 4,253,167 | | | | | | | 21,715,068 | | | | | | | | 2020 | | | | | | | 800,000 | | | | | | | 4,221,360 | | | | | | | — | | | | | | | 1,945,166 | | | | | | | — | | | | | | | 2,773,106 | | | | | | | 9,739,632 | | | | | | | | 2019 | | | | | | | 800,000 | | | | | | | 4,361,640 | | | | | | | — | | | | | | | 2,238,500 | | | | | | | — | | | | | | | 1,018,191 | | | | | | | 8,418,331 | | | | | | | Micah R. Conrad,
Executive Vice President
and Chief Financial
Officer | | | | | | 2021 | | | | | | | 450,000 | | | | | | | 4,890,638 | | | | | | | — | | | | | | | 1,730,750 | | | | | | | — | | | | | | | 1,128,810 | | | | | | | 8,200,198 | | | | | | | | 2020 | | | | | | | 450,000 | | | | | | | 1,419,862 | | | | | | | — | | | | | | | 654,283 | | | | | | | — | | | | | | | 785,209 | | | | | | | 3,309,354 | | | | | | | | 2019 | | | | | | | 409,039 | | | | | | | 616,654 | | | | | | | — | | | | | | | 752,950 | | | | | | | — | | | | | | | 470,873 | | | | | | | 2,249,516 | | | | | | | Rajive Chadha,
Executive Vice President
and Chief Operating
Officer | | | | | | 2021 | | | | | | | 450,000 | | | | | | | 4,816,622 | | | | | | | — | | | | | | | 1,691,250 | | | | | | | — | | | | | | | 1,174,119 | | | | | | | 8,131,991 | | | | | | | | 2020 | | | | | | | 450,000 | | | | | | | 1,343,113 | | | | | | | — | | | | | | | 618,917 | | | | | | | — | | | | | | | 754,879 | | | | | | | 3,166,909 | | | | | | | | 2019 | | | | | | | 190,384 | | | | | | | 1,240,950 | | | | | | | — | | | | | | | 712,250 | | | | | | | — | | | | | | | 372,203 | | | | | | | 2,515,787 | | | |
(1)
The amount in this column reflects the salary each NEO received as base salary in 2021.
(2)
This column reports the grant date fair value of each form of equity award granted to our NEOs in accordance with ASC 718.
For 2021, the amounts in this column include RSUs reflecting the equity component of our annual incentive program, annual PSU grants and a retention equity award of RSUs and PSUs with performance and service-based components. The 2021 amounts are reflected in the following table:
| | | Name | | | | Annual
RSU Grant(a)
$ | | | | Annual
PSU Grant(b)
$ | | | | Retention
RSU Grant(c)
$ | | | | Retention
PSU Grant(d)
$ | | | | Total 2021
Stock Awards
$ | | | | | | Douglas H. Shulman | | | | | | 1,949,160 | | | | | | | 2,121,343 | | | | | | | 5,934,000 | | | | | | | 4,000,667 | | | | | | | 14,005,170 | | | | | | | Micah R. Conrad | | | | | | 655,594 | | | | | | | 713,544 | | | | | | | 2,111,250 | | | | | | | 1,410,250 | | | | | | | 4,890,638 | | | | | | | Rajive Chadha | | | | | | 620,157 | | | | | | | 674,965 | | | | | | | 2,111,250 | | | | | | | 1,410,250 | | | | | | | 4,816,622 | | | |
(a)
The RSUs granted in partial payment of the annual incentive awards vest in three equal increments following the grant date based on continued service, with one-third having vested on February 19, 2021, one-third having vested on February 19, 2022 and one-third vesting in February 2023.
(b)
The reported grant date fair value of the PSUs reported in this column and included in the Summary Compensation Table is based on target payouts of such awards. If the maximum level of performance had been assumed, the grant date fair value of such PSUs would have been $3,182,015 for Mr. Shulman, $1,070,316 for Mr. Conrad and $1,012,448 for Mr. Chadha. The PSUs vest after three years based upon the attainment of performance goals established by the Committee for the 2021-2023 performance period.
(c)
The retention RSUs will vest in equal annual increments over a four-year period beginning on the first anniversary of the grant date.
(d)
The retention PSUs will vest based on performance over a seven-year period. The grant date fair value of the retention PSUs reported in this column and included in the Summary Compensation Table is based on target payouts of such awards. If the maximum level of performance had been assumed, the grant date fair value of such awards would have been $6,001,001 for Mr. Shulman and $2,115,375 for each of Messrs. Conrad and Chadha. The PSUs in the retention grant will vest based on the Company’s TSR over a seven-year period, with 50% of the PSUs vesting at a TSR of 80%, 100% of the PSUs vesting at a TSR of 100% and 150% of the PSUs vesting at a TSR of 120%, with the payout being reduced by 10% for each year the tranche is achieved following year five of the seven-year performance period.
The amounts in this column with respect to 2020 include RSUs reflecting the equity component of our 2019 annual incentive program paid out in January 2020 and annual PSUs granted in 2020. The grant date fair value of the RSUs was $2,320,718 for Mr. Shulman, $780,566 for Mr. Conrad and $738,395 for Mr. Chadha. The grant date fair value of the annual PSUs was $1,900,642 for Mr. Shulman, $639,296 for Mr. Conrad and $604,718 for Mr. Chadha.
The amounts in this column with respect to 2019 include RSUs reflecting the equity component of our 2018 annual incentive program paid out in January 2019 and annual PSUs granted in 2019. The grant date fair value of the RSUs was $1,255,650 for Mr. Shulman, $0 for Mr. Conrad and $657,642 for Mr. Chadha. The grant date fair value of the annual PSUs was $3,105,990 for Mr. Shulman, $616,654 for Mr. Conrad and $583,308 for Mr. Chadha.
For a summary of the assumptions used in the valuation of these equity-based awards, please see Note 16, Share Based Compensation, to our audited consolidated financial statements included in the 2021 Annual Report.
(3)
The amounts in this column reflect (i) the annual cash awards paid with respect to performance for the applicable year under the annual incentive program and (ii) for 2021 only, payment to each of Messrs. Conrad and Chadha of the 2019-2021 performance-based cash awards in the amount of $1,000,000 each.
(4)
The amounts shown in this column include the following for 2021:
| | | Name | | | | 401(k)
Match
$ | | | | Dividend
Equivalents(a)
$ | | | | Other
Compensation(b)
$ | | | | Total All Other
Compensation
$ | | | | | | Douglas H. Shulman | | | | | | 11,600 | | | | | | | 4,240,015 | | | | | | | 1,552 | | | | | | | 4,253,167 | | | | | | | Micah R. Conrad | | | | | | 11,600 | | | | | | | 1,115,658 | | | | | | | 1,552 | | | | | | | 1,128,810 | | | | | | | Rajive Chadha | | | | | | 11,600 | | | | | | | 1,160,487 | | | | | | | 2,032 | | | | | | | 1,174,119 | | | |
(a)
The values in this column represent dividend equivalent payments during 2021 in respect of RSUs, PSUs and Performance Option Awards held by our NEOs. These amounts are reported in this column because they are not included in the grant date fair value of awards.
(b)
The values in this column represent employer-paid health spending account contributions and fringe benefit imputed income pursuant to group health and welfare benefit programs that are available generally to all employees.
2021 Grants of Plan-Based Awards Table
The table below summarizes information regarding grants of plan-based awards to our NEOs during 2021.
| | | Name | | | | Grant
Date | | | | Estimated Future Payouts Under Non-
Equity Incentive Plan Awards | | | | Estimated Future Payouts Under
Equity Incentive Plan Awards | | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) | | | | Grant Date
Fair Value
of Stock
Awards
($)(1) | | | | | Threshold
($) | | | | Target
($) | | | | Maximum
($) | | | | Threshold
(#) | | | | Target
(#) | | | | Maximum
(#) | | | | | | Douglas H. Shulman | | | | | | 1/28/2021(2) | | | | | | | 916,667 | | | | | | | 1,833,333 | | | | | | | 2,750,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | 1/28/2021(3) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 40,372 | | | | | | | 1,949,160 | | | | | | | | 2/9/2021(4) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 19,026 | | | | | | | 38,051 | | | | | | | 76,102 | | | | | | | — | | | | | | | 2,121,343 | | | | | | | | 7/16/2021(5) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 100,000 | | | | | | | 5,934,000 | | | | | | | | 7/16/2021(6) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 50,000 | | | | | | | 100,000 | | | | | | | 150,000 | | | | | | | — | | | | | | | 4,000,667 | | | | | | | | 7/16/2021(7) | | | | | | | 166,667 | | | | | | | 333,333 | | | | | | | 500,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | ��� | | | | — | | | | | | | — | | | | | | | Micah R. Conrad | | | | | | 1/28/2021(2) | | | | | | | 308,334 | | | | | | | 616,667 | | | | | | | 925,001 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | 1/28/2021(3) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 13,579 | | | | | | | 655,594 | | | | | | | | 2/9/2021(4) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 6,400 | | | | | | | 12,799 | | | | | | | 25,598 | | | | | | | — | | | | | | | 713,544 | | | | | | | | 9/7/2021(5) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 37,500 | | | | | | | 2,111,250 | | | | | | | | 9/7/2021(6) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 18,750 | | | | | | | 37,500 | | | | | | | 56,250 | | | | | | | — | | | | | | | 1,410,250 | | | | | | | Rajive Chadha | | | | | | 1/28/2021(2) | | | | | | | 291,667 | | | | | | | 583,333 | | | | | | | 875,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | 1/28/2021(3) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 12,845 | | | | | | | 620,157 | | | | | | | | 2/9/2021(4) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 6,054 | | | | | | | 12,107 | | | | | | | 24,214 | | | | | | | — | | | | | | | 674,965 | | | | | | | | 9/7/2021(5) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 37,500 | | | | | | | 2,111,250 | | | | | | | | 9/7/2021(6) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 18,750 | | | | | | | 37,500 | | | | | | | 56,250 | | | | | | | — | | | | | | | 1,410,250 | | | |
(1)
Amounts reported in this column are calculated in accordance with ASC 718 based on the probable achievement of the underlying performance conditions. For a summary of the assumptions used in the valuation of these equity-based awards, please see Note 16, Share Based Compensation, to our audited consolidated financial statements included in our 2021 Annual Report.
(2)
Represents 2021 cash awards under the annual incentive program. The amounts reported represent the threshold, target and maximum awards (50%, 100% and 150% of target, respectively) that could be earned based on achievement of quantitative and qualitative goals as determined by the Committee. Based on the actual achievement for 2021 under the terms of the annual incentive program, the Committee approved cash payouts in early 2022 at 118.5% of target, as reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2021 above.
(3)
Represents RSUs granted under the 2020 annual incentive program. The amount reported in this table represents the RSUs that were granted in 2021 following the determination of 2020 performance. The RSUs vest in three equal annual installments, with one-third having vested on February 19, 2021, one-third having vested on February 19, 2022 and one-third vesting in February 2023.
(4)
Represents annual PSUs granted in 2021. The PSU awards will fully vest in the first quarter of 2024, to the extent earned, based upon actual achievement of quantitative goals as determined by the Committee and as further described in the CD&A.
(5)
Represents the time-based RSU component of retention equity awards granted on July 16, 2021 to Mr. Shulman and on September 7, 2021 to Messrs. Conrad and Chadha. These grants will vest in equal annual increments over a four-year period beginning on the first anniversary of the grant date.
(6)
Represents the PSU component of retention equity awards granted on July 16, 2021 to Mr. Shulman and on September 7, 2021 to Messrs. Conrad and Chadha. These grants will vest based on the Company’s TSR over a seven-year period, with 50% of the PSUs vesting at a TSR of 80%, 100% of the PSUs vesting at a TSR of 100% and 150% of the PSUs vesting at a TSR of 120%, with the payout being reduced by 10% for each year the tranche is achieved following year five of the seven-year performance period.
(7)
Represents an incremental increase in the 2021 cash award for Mr. Shulman under the annual incentive program in connection with his salary increase in July 2021 as further described in the CD&A. The amounts reported represent
the threshold, target and maximum awards (50%, 100% and 150% of target, respectively) that could be earned based on achievement of quantitative and qualitative goals as determined by the Committee. Based on the actual achievement for 2021 under the terms of the annual incentive program, the Committee approved cash payouts in early 2022 at 118.5% of target, as reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2021 above.
The 2021 Grants of Plan-Based Awards Table reports the dollar value of cash (non-equity) incentive awards and the number and value of equity awards granted to each executive officer during 2021. With regard to cash incentives, this table reports the range of potential values that could have been obtained by the executive officer; whereas the Summary Compensation Table reports the actual value realized for 2021. Equity amounts represent the grant date values of the awards determined under ASC 718 for purposes ofoverall financial statement reporting which are based on probable outcomes. Grant date fair values reflected in the 2021 Grants of Plan-Based Awards Table do not include dividend equivalent payments with respect to the underlying equity-based awards.
Outstanding Equity Awards at 2021 Fiscal Year-End Table
The following table summarizes the equity awards held by our NEOs that were unvested and outstanding as of December 31, 2021.
| | | | | | | Option Awards | | | | Stock Awards | | | | | | | | | | Number of
Securities
Underlying
Unexercised
Options | | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unearned
Options
(#)(1) | | | | Option
Exercise
Price
($)(1) | | | | Option
Expiration
Date | | | | Number of
Shares or
Units of
Stock
That
Have
Not
Vested
(#) | | | | Market
Value
of
Shares or
Units of
Stock
That
Have
Not
Vested
($)(2) | | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | | | Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(2) | | | | | | Name | | | | Exercisable
(#) | | | | Unexercisable
(#) | | | | | | Douglas H. Shulman | | | | | | — | | | | | | | — | | | | | | | 125,000 | | | | | | | 23.91 | | | | | | | 7/16/2024 | | | | | | | 144,947(3) | | | | | | | 7,253,148 | | | | | | | 337,655(6) | | | | | | | 16,896,256 | | | | | | | Micah R. Conrad | | | | | | — | | | | | | | — | | | | | | | 40,000 | | | | | | | 21.01 | | | | | | | 7/26/2024 | | | | | | | 52,618(4) | | | | | | | 2,633,005 | | | | | | | 92,584(7) | | | | | | | 4,632,903 | | | | | | | Rajive Chadha | | | | | | — | | | | | | | — | | | | | | | 40,000 | | | | | | | 21.01 | | | | | | | 7/26/2024 | | | | | | | 60,646(5) | | | | | | | 3,034,726 | | | | | | | 88,021(8) | | | | | | | 4,404,571 | | | |
(1)
The Performance Option Awards held by the NEOs are in three tranches. The first two tranches settled during 2021, as reflected below in the 2021 Options Exercised and Stock Vested Table, and the third tranche remains unvested as reflected in this column. The unvested tranche is subject to a vesting condition relating to the Company achieving a specified volume-weighted average trading price (“VWAP”) over a consecutive six-month period by July 2024. As of December 31, 2021, the VWAP goal for Tranche III was $75.51 for Mr. Shulman and $76.01 for Messrs. Conrad and Chadha, in each case subject to further adjustment (as described below). The awards include reductions to the VWAP and the base calculation price of unvested awards as follows: an amount equal to 50% of any cash dividends is applied to reduce the VWAP and the base calculation price; the remaining 50% of any cash dividends is paid to the award holder as soon as practicable following the date such cash dividend is paid to holders of shares of common stock, provided that the award holder remains employed. If the award holder is no longer employed, an amount equal to 100% of any cash dividend is applied to reduce the VWAP and the base calculation price.
(2)
Based on the closing market price of Company common stock on December 31, 2021 of $50.04 per share.
(3)
Represents RSUs granted to Mr. Shulman in 2020 and 2021 that were unvested as of December 31, 2021. The vesting schedule for the RSUs is as follows: 31,489 vested in February 2022, 25,000 are scheduled to vest in July 2022, 13,458 are scheduled to vest in February 2023, 25,000 are scheduled to vest in July 2023, 25,000 are scheduled to vest in July 2024 and 25,000 are scheduled to vest in July 2025.
(4)
Represents RSUs granted to Mr. Conrad in 2020 and 2021 that were unvested as of December 31, 2021. The vesting schedule for the RSUs is as follows: 10,591 vested in February 2022, 9,375 are scheduled to vest in September 2022, 4,527 are scheduled to vest in February 2023, 9,375 are scheduled to vest in September 2023, 9,375 are scheduled to vest in September 2024 and 9,375 are scheduled to vest in September 2025.
(5)
Represents RSUs granted to Mr. Chadha in 2020 and 2021 that were unvested as of December 31, 2021. The vesting schedule for the RSUs is as follows: 10,020 vested in February 2022, 8,844 vested in April 2022, 9,375 are scheduled to vest in September 2022, 4,282 are scheduled to vest in February 20, 2023, 9,375 are scheduled to vest in September 2023, 9,375 are scheduled to vest in September 2024 and 9,375 are scheduled to vest in September 2025.
(6)
Represents PSUs granted to Mr. Shulman in 2019, 2020 and 2021, in each case assuming performance is achieved at maximum performance levels. The vesting schedule for the PSU awards is as follows: 155,300 annual PSUs vested in the first quarter of 2022, 44,304 annual PSUs will vest in the first quarter of 2023, 38,051 annual PSUs will vest in the first quarter of 2024 and 100,000 retention PSUs will vest no later than July 2028, in each case based upon actual achievement of the quantitative goals as determined by the Committee. The PSUs that were granted in 2019 and vested in the first quarter of 2022 included PSUs granted with respect to Mr. Shulman’s 2018 service pursuant to the terms of his employment agreement, as described on page 57.
(7)
Represents PSUs granted to Mr. Conrad in 2019, 2020 and 2021, in each case assuming performance is achieved at maximum performance levels. The vesting schedule for the PSU awards is as follows: 27,383 annual PSUs vested in the first quarter of 2022, 14,902 annual PSUs will vest in the first quarter of 2023, 12,799 annual PSUs will vest in the first quarter of 2024 and 37,500 retention PSUs will vest no later than September 2028, in each case based upon actual achievement of the quantitative goals as determined by the Committee.
(8)
Represents PSUs granted to Mr. Chadha in 2019, 2020 and 2021, in each case assuming performance is achieved at maximum performance levels. The vesting schedule for the PSU awards is as follows: 24,318 annual PSUs vested in the first quarter of 2022, 14,096 annual PSUs will vest in the first quarter of 2023, 12,107 annual PSUs will vest in the first quarter of 2024 and 37,500 retention PSUs will vest no later than September 2028, in each case based upon actual achievement of the quantitative goals as determined by the Committee.
2021 Options Exercised and Stock Vested Table
| | | | | | | Option Awards(1) | | | | Stock Awards | | | | | | Name | | | | Number of Shares
Acquired on
Exercise
(#) | | | | Value
Realized on
Exercise
($) | | | | Number of
Shares
Acquired on
Vesting
(#) | | | | Value
Realized on
Vesting
($) | | | | | | Douglas H. Shulman(2) | | | | | | 525,000 | | | | | | | 17,416,875 | | | | | | | 45,441 | | | | | | | 2,225,700 | | | | | | | Micah R. Conrad(3) | | | | | | 160,000 | | | | | | | 5,767,100 | | | | | | | 12,758 | | | | | | | 624,887 | | | | | | | Rajive Chadha(4) | | | | | | 160,000 | | | | | | | 5,767,100 | | | | | | | 17,831 | | | | | | | 908,521 | | | |
(1)
The Performance Option Awards were granted to the NEOs in three tranches (300,000, 225,000 and 125,000 for Mr. Shulman; and 90,000, 70,000 and 40,000 for Messrs. Conrad and Chadha). The first two tranches settled during 2021, as shown in the table above and were paid in cash pursuant to their terms.
(2)
Represents RSUs that vested on February 19, 2021 with a value of $48.98 per share on the vesting date.
(3)
Represents RSUs that vested on February 19, 2021 with a value of $48.98 per share on the vesting date.
(4)
Includes 10,018 RSUs that vested on February 19, 2021, with a value of $48.98 per share on the vesting date, and 7,813 RSUs that vested on April 20, 2021, with a value of $53.48 per share on the vesting date.
Potential Payments Upon Termination or Change-In-Control for 2021
The following table shows the payments and benefits that our NEOs would have been eligible to receive if their employment had been terminated or if a change in control of the Company had occurred as of December 31, 2021. Amounts used for equity awards are based on the closing market price of our common stock on December 31, 2021 of $50.04 per share.
| | | Name | | | | Type of Payment
or Benefit | | | | Voluntary
Resignation
without
Good
Reason or
Retirement
($) | | | | Termination
Due to
Disability or
Death
($) | | | | Termination
without
Cause
($) | | | | Termination
for Good
Reason
($) | | | | Change
in
Control
($)(1) | | | | Termination without
Cause or for Good
Reason following a
Change in Control
($) | | | | | | Douglas H. Shulman(2) | | | | Cash Severance Payment | | | | | | — | | | | | | | — | | | | | | | 12,875,700 | | | | | | | 12,875,700 | | | | | | | — | | | | | | | 12,875,700 | | | | | | Acceleration of Unvested RSUs | | | | | | — | | | | | | | 7,253,148 | | | | | | | 2,826,710 | | | | | | | — | | | | | | | — | | | | | | | 7,253,148 | | | | | | Acceleration of Unvested PSUs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 16,896,256 | | | | | | Continuation of
Benefits Payment | | | | | | — | | | | | | | — | | | | | | | 24,885 | | | | | | | 24,885 | | | | | | | — | | | | | | | 24,885 | | | | | | Total | | | | | | — | | | | | | | 7,253,148 | | | | | | | 15,727,295 | | | | | | | 12,900,585 | | | | | | | — | | | | | | | 37,049,989 | | | | | | | Micah R. Conrad(3)(4) | | | | Cash Severance Payment | | | | | | — | | | | | | | — | | | | | | | 450,000 | | | | | | | — | | | | | | | — | | | | | | | 450,000 | | | | | | Acceleration of Unvested RSUs | | | | | | — | | | | | | | 2,633,005 | | | | | | | 999,099 | | | | | | | — | | | | | | | — | | | | | | | 2,633,005 | | | | | | Acceleration of Unvested PSUs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,632,903 | | | | | | Continuation of
Benefits Payment | | | | | | — | | | | | | | — | | | | | | | 24,044 | | | | | | | 24,044 | | | | | | | — | | | | | | | 24,044 | | | | | | Total | | | | | | — | | | | | | | 2,633,005 | | | | | | | 1,473,143 | | | | | | | 24,044 | | | | | | | — | | | | | | | 7,739,952 | | | | | | | Rajive Chadha(3)(5) | | | | Cash Severance Payment | | | | | | — | | | | | | | — | | | | | | | 450,000 | | | | | | | — | | | | | | | — | | | | | | | 450,000 | | | | | | Acceleration of Unvested RSUs | | | | | | — | | | | | | | 3,034,726 | | | | | | | 1,413,080 | | | | | | | — | | | | | | | — | | | | | | | 3,034,726 | | | | | | Acceleration of Unvested PSUs | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,404,571 | | | | | | Continuation of
Benefits Payment | | | | | | — | | | | | | | — | | | | | | | 17,135 | | | | | | | 17,135 | | | | | | | — | | | | | | | 17,135 | | | | | | Total | | | | | | — | | | | | | | 3,034,726 | | | | | | | 1,880,215 | | | | | | | 17,135 | | | | | | | — | | | | | | | 7,906,432 | | | |
(1)
None of the NEOs is eligible to receive benefits solely in the event of a change in control. Notwithstanding the foregoing, the Omnibus Incentive Plan and certain of the NEOs’ award agreements contemplate acceleration of vesting of equity awards if such awards are not assumed and/or substituted upon a change in control.
(2)
Under Mr. Shulman’s employment agreement, in the event of a termination by the Company without cause or by the executive for good reason (whether or not in connection with a change in control), he will receive a cash severance payment of an aggregate amount equal to (i) $2,633,333 payable over 24 months (or, if such termination occurs within the 24-month period following a change in control, a single lump sum), plus (ii) any earned but unpaid annual and long-term incentive for the calendar year immediately preceding the termination, plus (iii) an amount equal to two-thirds of the average annual and long-term incentive earned in respect of the three years completed prior to the year of termination. Under the terms of Mr. Shulman’s employment agreement, he is also entitled to a lump sum distribution equal to 12 months of premiums for COBRA continuation for Mr. Shulman and his dependents, representing $24,885.
Mr. Shulman’s RSU award agreements provide that (a) upon a termination without cause, the RSUs next scheduled to vest will vest, representing a total of 56,489 RSUs, or $2,826,710, and (b) upon a termination without cause (or, for the RSUs granted in 2021, resignation for good reason) during the 12 months following a change in control, or upon his death or disability, all unvested RSUs will vest, representing 144,947 RSUs, or $7,253,148.
Mr. Shulman’s PSU award agreements, including his annual PSUs and retention PSUs, provide that a total of 337,655 PSUs will vest upon a termination without cause (or, for the PSUs granted in 2021, resignation for good reason) during the 12 months following a change in control, or $16,896,256, and do not otherwise vest upon termination.
(3)
As of December 31, 2021, Messrs. Conrad and Chadha were eligible to receive severance benefits pursuant to the Executive Severance Plan. Under the Executive Severance Plan, upon a termination by the Company without cause (whether or not in connection with a change in control) or by the executive for good reason within 12 months following a change in control, each executive receives base salary continuation for 12 months and a lump sum distribution equal to 12 months of premiums for COBRA continuation for the executive and his dependents at the rates in effect on the date of termination. Messrs. Conrad and Chadha are eligible to receive lump-sum COBRA premiums pursuant to the terms of the Executive Severance Plan in the amounts of $24,044 and $17,135, respectively.
(4)
Mr. Conrad’s RSU award agreements provide that (a) upon a termination without cause, the RSUs next scheduled to vest will vest, representing a total of 19,966 RSUs, or $999,099, and (b) upon a termination without cause (or, for the RSUs granted in 2021, resignation for good reason) during the 12 months following a change in control, or upon his death or disability, all unvested RSUs will vest, representing 52,618 RSUs, or $2,633,005.
Mr. Conrad’s PSU award agreements, including his annual PSUs and retention PSUs, provide that a total of 92,584 PSUs will vest upon a termination without cause (or, for the PSUs granted in 2021, resignation for good reason) during the 12 months following a change in control, or $4,632,903, and do not otherwise vest upon termination.
(5)
Mr. Chadha’s RSU award agreements provide that (a) upon a termination without cause, the RSUs next scheduled to vest will vest, representing a total of 28,239 RSUs, or $1,413,080, and (b) upon a termination without cause (or, for the RSUs granted in 2021, resignation for good reason) during the 12 months following a change in control, or upon his death or disability, all unvested RSUs will vest, representing 60,646 RSUs, or $3,034,726.
Mr. Chadha’s PSU award agreements, including his annual PSUs and retention PSUs, provide that a total of 88,021 PSUs will vest upon a termination without cause (or, for the PSUs granted in 2021, resignation for good reason) during the 12 months following a change in control, or $4,404,571, and do not otherwise vest upon termination.
Severance and Change-in-Control Arrangements
Executive Severance Plan
Our Executive Severance Plan is intended to facilitate changes in the leadership team by establishing terms for the separation of an executive officer in advance, allowing for a smooth transition of responsibilities when it is in the best interests of the Company. As of December 31, 2021, the Committee had identified Messrs. Chadha and Conrad as “eligible executives,” as defined in the Executive Severance Plan for purposes of participation in such plan. The Executive Severance Plan provides for severance payments and benefits to the eligible executives in the event of a “qualifying termination.” A qualifying termination is defined as (i) a termination by the Company without “cause” or (ii) a termination by the executive for “good reason” on or before the 12-month anniversary of a “change in control” (each term, as defined in the Executive Severance Plan). In the event of a qualifying termination and subject to the eligible executive’s adherence to the covenants contained in the Executive Severance Plan and execution of a severance agreement (including a general waiver and release of claims along with certain non-competition and intellectual property protections), the Executive Severance Plan provides for (i) continued payment of the eligible executive’s annual base salary for a period of 12 months and (ii) a lump sum cash payment in an amount equal to 12 months of premiums for COBRA continuation coverage for the eligible executive and their eligible dependents.
Omnibus Incentive Plan
In January 2021, we amended our Omnibus Incentive Plan to provide that, unless otherwise determined by the plan administrator, if a change in control occurs (as defined in the Omnibus Incentive Plan), and the employment of the holder of an award granted under the plan (an “Award”) is terminated by the Company without cause (as defined in the Omnibus Incentive Plan) on or after the effective date of the change in control but prior to 12 months following the change in control, then: (i) any unvested portion of any Award carrying a right to exercise shall become fully vested and exercisable; and (ii) the restrictions, deferral limitations, payment conditions, and forfeiture conditions applicable to an Award granted under the Omnibus Incentive Plan shall lapse and such Award shall be deemed fully vested and any performance goals imposed with respect to such Awards shall be deemed to be fully achieved. The change in control
protection provided by the Omnibus Incentive Plan does not apply to the voluntary termination of employment by an Award recipient following a change in control for “good reason” or otherwise.
Mr. Shulman’s Employment Agreement
In July 2018, we entered into an employment agreement with Mr. Shulman pursuant to which he began serving as our CEO on September 8, 2018, and which reflected advice from our independent compensation consultant and consideration of the terms of Mr. Shulman’s compensation arrangements with his prior employer.
Pursuant to our employment agreement with Mr. Shulman, and an adjustment to base salary and incentive opportunity approved by the Committee in July 2021, Mr. Shulman receives an annual base salary of $1,000,000 and is eligible for an annual target incentive of $6,500,000, payable in cash, RSUs and PSUs, subject to achievement of performance goals established by the Committee. The employment agreement also provided that the PSUs to be granted to Mr. Shulman pursuant to our annual equity grant determination for 2019 would include a prorated grant made with respect to his 2018 service.
Mr. Shulman is eligible to receive the termination benefits pursuant to his employment agreement. If Mr. Shulman’s employment is terminated by the Company other than for “cause” (as defined in the agreement, but not including a termination of employment due to death or disability) or he resigns for “good reason” (as defined in the agreement and summarized below), and if Mr. Shulman executes a general release of claims in a form acceptable to the Company and continues to comply with all applicable restrictive covenants, then he would be entitled to: (i) a severance payment equal to $2,633,333, payable in equal installments over a 24-month period in accordance with the Company’s payroll (or, if such termination occurs within the 24-month period following a “change in control” (as defined in the agreement), a single lump sum); (ii) any earned but unpaid annual and long-term incentive for the calendar year immediately preceding the termination; (iii) an amount equal to two-thirds of the average annual and long-term incentive earned in respect of the three years completed prior to the year of termination; and (iv) a lump sum payment equal to 12 months of COBRA premiums.
For purposes of Mr. Shulman’s employment agreement, “good reason” means (i) a material reduction in his duties, authorities, responsibilities or reporting relationships; (ii) the reduction of his base salary or annual and long-term incentive opportunity (in each case, other than an across-the-board reduction affecting all senior management of the Company which reduction results in the decrease of his base salary or annual and long-term incentive opportunity, as applicable, of less than 10%); (iii) relocation of his principal location of employment by more than 50 miles (unless such new location is closer to his primary residence in New York City); (iv) the failure to nominate him as a member of the board of directors of the Company; or (v) the failure to pay him compensation when due under the terms of his employment agreement.
Pursuant to the employment agreement, as amended in July 2021, Mr. Shulman is bound by certain restrictive covenants including confidentiality, non-disparagement, work product and, during the term of his employment and for a period of one year thereafter, non-solicitation of employees, consultants and customers and non-competition. The Company is bound by a non-disparagement covenant.
Mr. Chadha’s Employment Agreement
In connection with Mr. Chadha’s appointment as Executive Vice President and Chief Operating Officer, the Company entered into an offer letter agreement with Mr. Chadha setting forth the terms of his employment and compensation. The terms of the offer letter agreement reflect consideration of the terms of Mr. Chadha’s compensation arrangements with his prior employer and the results of negotiations between the parties to the agreement.
The letter agreement provides for an annual base salary of $450,000 and eligibility for a 2019 annual target incentive of $1,750,000, with one-third payable in cash, one-third granted in RSUs (in each case, subject to the achievement of performance goals established by the Committee relating to the 2019 performance
period), and the remaining one-third granted in PSUs, with vesting based on performance over the 2019-2021 performance period. In addition to the annual incentive award, Mr. Chadha was granted a three-year performance-based cash award and Performance Option Awards, subject to vesting conditions described in “Compensation Discussion & Analysis — Fiscal 2021 Compensation Elements — Performance-Based Awards Earned in 2021.” In addition, Mr. Chadha received certain relocation benefits, including reimbursed commuting expenses, home sale assistance and home purchase assistance.
In accordance with SEC rules, we have calculated the ratio between the total compensation of our CEO and our median employee for 2021. To select our median employee we evaluated our employee population and determined our median employee using W-2 income as our consistently applied compensation measure. We included our entire employee population as of December 31, 2020, annualized base pay for employees who were hired in 2020, and converted compensation for employees paid in currencies other than the U.S. dollar into U.S. dollars using a fiscal year 2020 exchange rate. We did not make any full-time equivalent adjustment for any employee when annualizing base pay. We examined a small group of employees for whom total cash compensation was clustered within a few dollars around the median. From this group, we selected an individual we determined to be reasonably representative of our median employee. The 2020 median employee has since left the Company and, as permitted by applicable SEC rules, we have substituted another employee whose 2020 compensation was substantially similar to the original median employee. We do not believe that there have been any changes in our employee population or employee compensation arrangements that would significantly impact our CEO pay ratio disclosure.
The 2021 annual total compensation for the median employee, who serves as a personal loan specialist, determined in accordance with SEC rules was $52,697. The 2021 annual total compensation for our CEO, Mr. Shulman, was $21,715,068, as reported in the “Total” column of the Summary Compensation Table. The resulting pay ratio is estimated to be approximately 412 to 1.
Amounts reported in the Summary Compensation Table for our NEOs, including our CEO, are determined pursuant to SEC rules that do not necessarily reflect amounts actually received or realized by, or value actually delivered to, our NEOs, including our CEO. In addition, other companies have different employee demographics and compensation and benefit practices. As a result, CEO pay ratios reported by other companies may vary significantly and likely are not comparable to our CEO pay ratio.
Audit Committee Matters
Proposal 2 – Ratification of Appointment of Independent Auditors
The Audit Committee has appointedprocess. PricewaterhouseCoopers LLP, as the independent registered public accounting firm to audit the consolidated financial statements of the Company for the year ending December 31, 2022. The Board is asking stockholders to ratify the appointment. Although SEC regulations and the NYSE listing requirements require the Company’s independent registered public accounting firm, to be engaged, retained and supervised by the Audit Committee, the Board considers the selection of an independent registered public accounting firm to be an important corporate governance matter for stockholders to provide input to the Audit Committee and the Board. If the appointment of PricewaterhouseCoopers LLP is not ratified, the matter of the appointment of the independent registered public accounting firm will be re-considered by the Audit Committee. Representatives of PricewaterhouseCoopers LLP are expected to be available at the Annual Meeting by phone and will be given an opportunity to make a statement if they desire to do so. They also will be available to respond to appropriate stockholder questions regarding the Company’s financial statements.
| | | | The Board recommends a vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022. | |
Audit Committee Policies and Procedures
Audit Committee’s Pre-Approval Policies and Procedures
Our Audit Committee is responsible for pre-approving all audit services and permitted non-audit services, includingexpressing opinions on the fees and terms thereof, to be performed for us and our subsidiaries by our independent registered public accounting firm, PricewaterhouseCoopers LLP. The Audit Committee has adopted a pre-approval policy and implemented procedures that provide that all engagements of our independent registered public accounting firm are reviewed and pre-approved by the Audit Committee, except for such services that fall within the de minimis exception for non-audit services described in Section 10A(i)(1)(B)conformity of the Exchange Act that our Audit Committee approves prior to the completion of the audit. The pre-approval policy also permits the delegation of pre-approval authority to a member of the Audit Committee between meetings of the committee, and any such approvals are reviewed and ratified by the committee at its next scheduled meeting. The Audit Committee has delegated to the Chair of the committee the authority to pre-approve permissible non-audit services.
Independent Auditor Tenure and Rotation
As part of its auditor engagement process, the Audit Committee considers whether to rotate the independent audit firm. PricewaterhouseCoopers LLP has been our independent auditor since 2002. PricewaterhouseCoopers LLP rotates its lead audit engagement partner every five years and the Audit Committee interviews proposed candidates and selects the lead audit engagement partner. The Audit Committee believes there are significant benefits to having an independent auditor with an extensive history with the Company.
Independent Registered Public Accounting Firm Fees and Services
For the years ended December 31, 2021 and 2020, professional services were performed for us by PricewaterhouseCoopers LLP, our independent registered public accounting firm, pursuant to the oversight of our Audit Committee. Set forth below are the fees billed to us by PricewaterhouseCoopers LLP for the years ended December 31, 2021 and 2020. All fees and services were pre-approved in accordance with the Audit Committee’s pre-approval policy.
| | | | | 2021 | | | 2020 | | | | Audit Fees | | | | $ | 11,591,000 | | | | | $ | 10,188,000 | | | | | Audit-Related Fees | | | | $ | 1,434,000 | | | | | $ | 871,000 | | | | | Tax Fees | | | | $ | 40,000 | | | | | $ | 500,000 | | | | | All Other Fees | | | | $ | 8,000 | | | | | $ | 9,000 | | | | | Total Fees | | | | $ | 13,073,000 | | | | | $ | 11,568,000 | | |
Audit Fees. Audit fees primarily related to the annual audits of the combinedCompany’s audited consolidated financial statements ofwith GAAP and on the Company and OMFC included in the 2021 Annual Report, the annual audit of ourCompany’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, the reviews of the combined condensed consolidated financial statements of the Company and OMFC included in our Quarterly Reports on Form 10-Q, and statutory audits of our insurance subsidiaries.
Audit-Related Fees. For 2021 and 2020, audit related fees primarily related to comfort letters issued to underwriters for debt and security offerings, implementation of accounting standards updates and certain other agreed-upon procedures.
Tax Fees. For 2021 and 2020 tax fees related to the computation of certain tax credits.
All Other Fees. For 2021 and 2020, all other fees related to services for our insurance subsidiaries.
| Audit Committee Report
| | | The Audit Committee is a standing committee of the Board that comprises solely non-employee directors who have been affirmatively determined to be “independent” within the meaning of the NYSE Listing Standards and Section 10A of the Exchange Act. The Audit Committee operates pursuant to a written charter that is available under the Corporate Governance tab in the Investor Relations section of the Company’s website at http://investor.onemainfinancial.com and is also available to stockholders upon request, addressed to OneMain Holdings, Inc., c/o Secretary, 601 NW Second Street, Evansville, Indiana 47708. | | | The Company’s management is responsible for the preparation of the Company’s consolidated financial statements and the Company’s overall financial reporting process. PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, is responsible for expressing opinions on the conformity of the Company’s audited consolidated financial statements with GAAP.reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee is also solely responsible for the selection and termination of the Company’s independent registered public accounting firm, including the approval of audit fees and any permissible non-audit services provided by and fees paid to the independent registered public accounting firm. See “Board of Directors — Board Structure — Committees of the Board — Audit Committee” above for additional information regarding the role and responsibilities of the Audit Committee. | | | In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2021, |
| | In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2023, the Audit Committee: | |
| | •
Reviewed and discussed the Company’s audited consolidated financial statements with management; 60
•
Discussed with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC governing communications between auditors and audit committees, including the scope of the audit, the Company’s critical accounting policies and estimates, new accounting guidance and the critical audit matter addressed during the audit; and •
Received the written disclosures and the letters from PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLP their independence. | | | | Based upon these reviews and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC. | | | | Audit Committee of the Board of Directors
| | | | Roy A. Guthrie
Philip L. Bronner
Richard A. Smith | | |
Information about Stock Ownership Persons Owning More than 5% of OneMain Stock The following table shows as of March 31, 2024, the most recent practicable date, according to publicly available information, the beneficial ownership of shares of Company common stock by each stockholder known to the Company to beneficially own more than 5% of Company common stock. As of March 31, 2024, there were 119,877,252 shares of the Company’s common stock issued and outstanding. | | Name and Address of Beneficial Owner | | | Amount and Nature
of Beneficial
Ownership | | | Percent
of Class | | | | The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355 | | | | | 12,198,452 | | | | | | 10.18% | | | | | FMR LLC(2)
245 Summer Street
Boston, MA 02210 | | | | | 9,447,927 | | | | | | 7.88% | | | | | Capital International Investors(3)
333 South Hope Street, 55th Fl.
Los Angeles, CA 90071 | | | | | 8,680,716 | | | | | | 7.24% | | | | | Värde Partners, Inc.(4)
901 Marquette Ave. S, Suite 3300
Minneapolis, MN 55402 | | | | | 6,696,718 | | | | | | 5.59% | | | | | Brave Warrior Advisors, LLC(5)
12 East 49th Street
New York, NY 10017 | | | | | 6,416,800 | | | | | | 5.35% | | | | | BlackRock, Inc.(6)
50 Hudson Yards
New York, NY 10001 | | | | | 6,338,297 | | | | | | 5.29% | | |
(1)
All information about The Vanguard Group (“Vanguard”) is based on Amendment No. 8 to its Schedule 13G filed with the SEC on February 12, 2024. Vanguard reported that it is the beneficial owner of 12,198,452 shares of Company common stock. Vanguard also reported that it has sole dispositive power with respect to 12,023,516 shares of common stock and shared dispositive power of 174,936 shares of common stock. (2)
All information about FMR LLC (“FMR”) is based on Amendment No. 10 to its Schedule 13G filed with the SEC on February 9, 2024. FMR reported that it is the beneficial owner of 9,447,927 shares of Company common stock. FMR also reported that it has sole voting power over 9,419,927 shares of common stock and sole dispositive power over 9,447,927 shares of common stock. FMR also disclosed the following: Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR, representing 49% of the voting power of FMR. The Johnson family group and all other Series B stockholders have entered into a stockholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the stockholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR. (3)
All information about Capital International Investors is based on Amendment No. 1 to its Schedule 13G filed with the SEC on February 9, 2024. Capital International Investors reported that it is the beneficial owner of 8,680,716 shares of Company common stock. Capital International Investors also reported that it has sole voting power over 8,680,632 shares of common stock and sole dispositive power over 8,680,716 shares of common stock. Capital International Investors also disclosed that it is a division of Capital Research and Management Company, as well as its investment management subsidiaries and affiliates Capital Bank and Trust Company, Capital International, Inc., Capital International Limited, Capital International Sarl, Capital International K.K., Capital Group Private Client Services, Inc., and Capital Group Investment Management Private Limited, and that its divisions of each of the
| •investment management entities collectively provide investment management services under the name “Capital International Investors.” (4)
All information about Värde is based on Amendment No. 6 to its Schedule 13D (the “Värde Schedule 13D”) filed with the SEC on December 5, 2023 by Värde Partners, Inc. (“Värde”) and the other reporting persons listed therein. Värde reported that: each of Värde Partners, Inc., Värde Partners, L.P., Uniform Investco GP LLC, Uniform Investco LP, Ilfryn C. Carstairs and Bradley P. Bauer beneficially owns and has shared voting and dispositive power over 6,696,718 shares of Company common stock; Uniform InvestCo Sub L.P. beneficially owns and has shared voting and dispositive power over 4,510,294 shares of Company common stock; each of The Värde Specialty Finance Fund G.P., L.P., The Värde Specialty Finance Fund U.G.P., LLC and Värde SFLT, L.P. beneficially owns and has shared voting and dispositive power over 2,078,081 shares of Company common stock; each of The Värde Fund XII UGP, LLC, The Värde Fund XII G.P., L.P. and The Värde Fund XII (Master), L.P. beneficially owns and has shared voting and dispositive power over 1,306,546 shares of Company common stock; Värde Investment Partners, L.P. beneficially owns and has shared voting and dispositive power over 787,169 shares of Company common stock; each of Värde Credit Partners UGP, LLC, Värde Credit Partners G.P., L.P. and Värde Credit Partners Master, L.P. beneficially owns and has shared voting and dispositive power over 616,793 shares of Company common stock; each of The Värde Skyway Fund UGP, LLC, The Värde Skyway Fund G.P., L.P. and The Värde Skyway Master Fund, L.P. beneficially owns and has shared voting and dispositive power over 804,081 shares of Company common stock; each of Värde Investment Partners UGP, LLC and Värde Investment Partners G.P., L.P., beneficially owns and has shared voting and dispositive power over 1,891,217 shares of Company common stock; Värde Investment Partners (Offshore) Master, L.P. beneficially owns and has shared voting and dispositive power over 769,607 shares of Company common stock; and The Värde Fund VI-A, L.P. beneficially owns and has shared voting and dispositive power over 334,441 shares of Company common stock. Various relationships among such persons are described in the Värde Schedule 13D. As set forth in the Värde Schedule 13D, the principal address of each of the foregoing persons other than Messrs. Carstairs and Bauer is c/o Värde Partners, Inc., 901 Marquette Avenue South, Suite 3300, Minneapolis, MN 55402; the principal address of Mr. Carstairs is 88 Market Street #23-04, Singapore 048948; the principal address of Mr. Bauer is 520 Madison Avenue, 34th Floor, New York 10022. (5)
All information about Brave Warrior Advisors, LLC (“Brave Warrior”) is based on its Schedule 13G filed with the SEC on February 14, 2024. Brave Warrior reported that it is the beneficial owner of 6,416,800 shares of Company common stock. Brave Warrior also reported that it has sole voting power over 6,416,800 shares of common stock and sole dispositive power over 6,416,800 shares of common stock. (6)
All information about BlackRock, Inc. (“BlackRock”) is based on its Schedule 13G filed with the SEC on January 31, 2024. BlackRock reported that it is the beneficial owner of 6,338,297 shares of Company common stock. BlackRock also reported that it has sole voting power with respect to 5,704,850 shares of common stock and sole dispositive power of 6,338,297 shares of common stock.
Reviewed and discussed the Company’s audited consolidated financial statements with management;
•
Discussed with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC governing communications between auditors and audit committees, including the scope of the audit, the Company’s critical accounting policies and estimates, new accounting guidance and the critical audit matter addressed during the audit; and
•
Received the written disclosures and the letters from PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLP their independence.
| | | Based upon these reviews and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s 2021 Annual Report, for filing with the SEC. | | | Audit Committee of the Board of Directors | | | Roy A. Guthrie
Philip L. Bronner
Richard A. Smith | |
Information about Stock Ownership
Persons Owning More than 5% of OneMain Stock
The following table shows as of March 31, 2022, the most recent practicable date according to publicly available information, the beneficial ownership of shares of Company common stock by each stockholder known to the Company to beneficially own more than 5% of Company common stock. As of March 31, 2022, there were 125,779,365 shares of the Company’s common stock issued and outstanding.
| | Name and Address of Beneficial Owner | | | Amount and Nature
of Beneficial
Ownership | | | Percent
of Class | | | | The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355 | | | | | 12,377,395 | | | | | | 9.84% | | | | | FMR LLC(2)
245 Summer Street
Boston, MA 02210 | | | | | 11,640,808 | | | | | | 9.25% | | | | | Värde Partners, Inc.(3)
901 Marquette Ave. S, Suite 3300
Minneapolis, MN 55402 | | | | | 7,552,292 | | | | | | 6.00% | | |
(1)
All information about The Vanguard Group (“Vanguard”) is based on Amendment No. 3 to its Schedule 13G filed with the SEC on February 10, 2022. Vanguard reported that it is the beneficial owner of 12,377,395 shares of Company common stock representing 9.56% of our issued and outstanding common stock as of December 31, 2021. Vanguard also reported that it has sole dispositive power with respect to 12,239,505 shares of common stock and shared dispositive power of 137,890 shares of common stock.
(2)
All information about FMR LLC (“FMR”) is based on Amendment No. 8 to its Schedule 13G filed with the SEC on February 9, 2022. FMR reported that it is the beneficial owner of 11,640,808 shares of Company common stock representing 8.989% of our issued and outstanding common stock as of December 31, 2021. FMR also reported that it has sole voting power over 1,264,069 shares of common stock and sole dispositive power over 11,640,808 shares of common stock. FMR also disclosed the following: Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR, representing 49% of the voting power of FMR. The Johnson family group and all other Series B stockholders have entered into a stockholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the stockholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR.
(3)
All information about Värde is based on Amendment No. 4 to its Schedule 13D (the “Värde Schedule 13D”) filed with the SEC on October 18, 2021 by Värde Partners, Inc. (“Värde”) and the other reporting persons listed therein. Värde reported that: each of Värde Partners, Inc., Värde Partners, L.P., Uniform Investco GP LLC, Uniform Investco LP, Ilfryn C. Carstairs and George G. Hicks beneficially owns and has shared voting and dispositive power over 7,552,292 shares of Company common stock; Uniform InvestCo Sub L.P. beneficially owns and has shared voting and dispositive power over 4,944,066 shares of Company common stock; each of The Värde Specialty Finance Fund G.P., L.P., The Värde Specialty Finance Fund U.G.P., LLC and Värde SFLT, L.P. beneficially owns and has shared voting and dispositive power over 1,888,073 shares of Company common stock; each of The Värde Fund XII UGP, LLC, The Värde Fund XII G.P., L.P. and The Värde Fund XII (Master), L.P. beneficially owns and has shared voting and dispositive power over 1,306,546 shares of Company common stock; Värde Investment Partners, L.P. beneficially owns and has shared voting and dispositive power over 1,268,785 shares of Company common stock; each of Värde Credit Partners UGP, LLC, Värde Credit Partners G.P., L.P. and Värde Credit Partners Master, L.P. beneficially owns and has shared voting and dispositive power over 1,004,455 shares of Company common stock; each of The Värde Skyway Fund UGP, LLC, The Värde Skyway Fund G.P., L.P. and The Värde Skyway Master Fund, L.P. beneficially owns and has shared voting and dispositive power over 853,409 shares of Company common stock; each of Värde Investment Partners UGP, LLC and Värde Investment Partners G.P., L.P., beneficially owns and has shared voting and dispositive power over 2,499,809 shares of Company common stock; Värde Investment Partners (Offshore) Master, L.P. beneficially owns and has shared voting and dispositive power over 876,066 shares of Company common stock;
and The Värde Fund VI-A, L.P. beneficially owns and has shared voting and dispositive power over 354,958 shares of Company common stock. Various relationships among such persons are described in the Värde Schedule 13D. As set forth in the Värde Schedule 13D, the principal address of each of the foregoing persons other than Mr. Carstairs is c/o Värde Partners, Inc., 901 Marquette Avenue South, Suite 3300, Minneapolis, MN 55402; the principal address of Mr. Carstairs is Värde Partners Asia Pte. Ltd., 6 Battery Road #21-01, Singapore 049909.
OneMain Stock Beneficially Owned by Officers and Directors The following table shows as of March 31, 2022,2024, the most recent practicable date, according to publicly available information, the beneficial ownership of shares of Company common stock by: (i) each present director, including the nominees for re-election at the Annual Meeting; (ii) the Company’s NEOs; and (iii) all directors and executive officers of the Company, as a group. As of March 31, 2022,2024, there were 125,779,365119,877,252 shares of the Company’s common stock issued and outstanding. Beneficial ownership means that the individual has or shares voting power or dispositive power with respect to the shares of Company common stock or the individual has the right to acquire the shares within 60 days following March 31, 2022.2024. Unless otherwise stated, the address for each beneficial owner is c/o Corporate Secretary, Attn: Legal Department, OneMain Holdings, Inc., 601 NW Second Street, Evansville, Indiana 47708. None of the directors or executive officers listed below owns 1% or more of the Company’s common stock, individually or in the aggregate. | | Name | | Common
Stock | | Right to
Acquire | | Total | | Name | | Common
Stock | | Right to
Acquire | | Total | | | | Douglas H. Shulman | | | | 199,372 | | | | | 0 | | | | | 199,372 | | | Douglas H. Shulman | | | | 280,304 | | | | | — | | | | | 280,304 | | | | | Micah R. Conrad | | | | 40,821 | | | | | 0 | | | | | 40,821 | | | Micah R. Conrad | | | | 70,460 | | | | | — | | | | | 70,460 | | | | | Rajive Chadha | | | | 31,749 | | | | | 8,844 | | | | | 40,593 | | | Rajive Chadha | | | | 61,923 | | | | | — | | | | | 61,923 | | | | | Philip L. Bronner | | | | 438 | | | | | 0 | | | | | 438 | | | Philip L. Bronner | | | | 7,466 | | | | | — | | | | | 7,466 | | | | | Phyllis R. Caldwell | | | | 1,739 | | | | | 0 | | | | | 1,739 | | | Phyllis R. Caldwell | | | | 1,739 | | | | | 7,028 | | | | | 8,767 | | | | | Toos N. Daruvala | | | | 0 | | | | | 0 | | | | | 0 | | | Toos N. Daruvala | | | | — | | | | | — | | | | | — | | | | | Roy A. Guthrie(1) | | | | 13,797 | | | | | 18,851 | | | | | 32,648 | | | Roy A. Guthrie(1) | | | | 13,797 | | | | | 25,879 | | | | | 39,676 | | | | | Valerie Soranno Keating | | | | 21,538 | | | | | 0 | | | | | 21,538 | | | Valerie Soranno Keating | | | | 47,033 | | | | | — | | | | | 47,033 | | | | | Aneek S. Mamik(2) | | | | 1,180 | | | | | 0 | | | | | 1,180 | | | Aneek S. Mamik(2) | | | | 1,180 | | | | | — | | | | | 1,180 | | | | | Richard A. Smith | | | | 8,730 | | | | | 5,575 | | | | | 14,305 | | | Richard A. Smith | | | | 8,730 | | | | | 12,603 | | | | | 21,333 | | | | | Directors and executive officers as a group (10 persons) | | | | 319,364 | | | | | 33,270 | | | | | 352,634 | | | Directors and executive officers as a group (11 persons) | | | | 499,466 | | | | | 45,510 | | | | | 544,976 | | |
(1)
Mr. Guthrie is the Investment Manager of Guthrie 2012 Investments LP, which owns 13,797 shares of common stock. Mr. Guthrie disclaims beneficial ownership of the shares of common stock held by Guthrie 2012 Investments LP except to the extent of his direct pecuniary interest therein. (2)
The amount included in the table above represents Mr. Mamik’s personal holdings in the Company’s common stock. Mr. Mamik is an affiliate of Värde and may be deemed to beneficially own the shares of Company common stock through entities affiliated with Värde as described in footnote 34 to the “Persons Owning More than 5% of OneMain Stock” table above, although Mr. Mamik disclaims beneficial ownership of the shares of common stock beneficially owned by Värde except to the extent of his indirect pecuniary interest therein, if any.
Equity Compensation Plan Information The following table sets forth information with respect to securities authorized for issuance under our equity compensation plans as of December 31, 2021:2023: | | Plan Category | | Number of securities to
be issued upon
exercise of
outstanding options,
warrants and rights(1) | | Weighted average
exercise price of
outstanding options,
warrants and rights(2) | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column)(3) | | Plan Category | | Number of securities to
be issued upon
exercise of
outstanding options,
warrants and rights(1) | | Weighted average
exercise price of
outstanding options,
warrants and rights | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))(2) | | | | Equity compensation plans approved by security holders | | | | 1,900,969 | | | | | — | | | | | 12,339,199 | | | Equity compensation plans approved by security holders | | | | 2,257,087 | | | | | — | | | | | 11,422,479 | | | | | Equity compensation plans not approved by security holders | | | | — | | | | | — | | | | | — | | | Equity compensation plans not approved by
security holders | | | | — | | | | | — | | | | | — | | | | | Total | | | | 1,900,969 | | | | | — | | | | | 12,339,199 | | | | | | | 2,257,087 | | | | | — | | | | | 11,422,479 | | |
(1)
Represents 1,900,969 shares of Company common stock reserved for issuance pursuant to RSUs and PSUs (assuming maximum achievement of the applicable performance metrics) that were outstanding as of December 31, 2021.2023. (2)
There is no exercise or purchase price for such RSUs.
(3)
Represents shares of Company common stock that remainedwere available for future issuance under our Omnibus Incentive Plan as of December 31, 2021,2023, excluding shares identified in column (a) that are reserved for issuance pursuant to RSUs and PSUs that were outstanding as of December 31, 2021. Under the terms of our Omnibus Incentive Plan, the number of shares available for future issuance increases annually on the first day of each fiscal year beginning in 2014 by a number of shares equal to the excess of (x) 10% of the number of outstanding shares on the last day of the immediately preceding fiscal year over (y) the number of shares remaining available for future issuance under the Omnibus Incentive Plan as of the last day of the immediately preceding fiscal year. Accordingly, effective January 1, 2022, the number of shares of Company common stock remaining available for future issuance under our Omnibus Incentive Plan was increased by 441,765 shares to 12,780,964 shares.2023.
Questions and Answers on the Annual Meeting and Voting Q:
What is this document? A:
This document is called a proxy statement and includes information regarding the matters to be acted upon at the Annual Meeting and certain other information required by the SEC and NYSE. This proxy statement is used by the Company’s Board of Directors to solicit proxies to be voted at the Annual Meeting. Proxies are solicited to give all stockholders an opportunity to vote on the matters to be presented at the Annual Meeting, even if they cannot attend the meeting. Q:
Who pays the cost of soliciting proxies? A:
We are making this solicitation and will pay all costs of soliciting proxies. We have retained Alliance Advisors, LLC as a proxy solicitor to assist us in soliciting proxies for the Annual Meeting. We will pay them a fee of $15,000, plus reimbursable expenses and customary charges. The solicitation of proxies or votes may be made by mail, in person, by telephone or by electronic communication by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. We also will reimburse brokerage firms and other custodians, nominees and fiduciaries for forwarding proxy and solicitation materials to stockholders. Q:
How is the Company distributing proxy materials? A:
We are using the SEC rule that allows companies to furnish proxy materials to their stockholders over the Internet. In accordance with this rule, on or about April 29, 2022,26, 2024, we mailed a Notice of Internet Availability to all stockholders entitled to vote at the Annual Meeting. By doing so, we save costs and reduce our impact on the environment. The Notice tells you how to: •
view our proxy materials for the Annual Meeting, including this proxy statement and the OneMain Holdings, Inc. Combined2023 Annual Report, on Form 10-K for the year ended December 31, 2021, on the Internet and vote; and •
instruct us to send proxy materials to you by mail or email. You may also request delivery of an individual copy of the proxy statement and 20212023 Annual Report by contacting us by mail at OneMain Holdings, Inc., c/o Corporate Secretary, Attn: Legal Department, 601 NW Second Street, Evansville, Indiana 47708 or by calling our Investor Relationsinvestor relations department at (212) 359-2432. Q:
What happens if multiple stockholders share the same address? A:
If you and others who share your mailing address own Company common stock through bank or brokerage accounts, you may have received a notice that your household will receive only one copy of the proxy statement and 20212023 Annual Report or Notice Regarding theof Internet Availability of Proxy Materials.Availability. This practice, known as “householding,” is designed to reduce the volume of duplicate information and reduce printing and postage costs. You may discontinue householding by contacting your bank or broker. Q:
When and where will the Annual Meeting be held? A:
The meeting will be held on June 13, 2022,12, 2024, at our corporate offices located at 601 NW Second Street, Evansville, Indiana 47708, beginning at 3:00 p.m.9:30 a.m. Central Time. Stockholders may obtain directions to the location of the meeting by contacting the Company’sour Corporate Secretary, Attn: Legal Department, at 601 NW Second Street, Evansville, Indiana 47708, Telephone: 812-424-8031. See “What if the Annual Meeting cannot be held as currently scheduled?” below for more information.or by telephone at (812) 468-5455.
Q:
How do I attend the Annual Meeting? A:
Admission to the Annual Meeting is limited to Company stockholders or their proxy holders. In order to be admitted to the Annual Meeting, each stockholder will be asked to present proof of stock ownership and a valid government-issued photo identification, such as a driver’s license. Proof of stock ownership may consist of the proxy card, or if shares are held in the name of a broker, bank or other nominee, i.e., in “street name,” an account statement or letter from the nominee indicating that you beneficially owned shares of Company common stock at the close of business on April 21, 2022,17, 2024, which is the record date for the Annual Meeting. Q:
What if the Annual Meeting cannot be held as currently scheduled?
A:
We currently plan to hold the Annual Meeting in person. However, we continue to actively monitor public health and travel safety concerns relating to COVID-19 and the advisories or mandates that federal, state and local governments and related agencies, may issue. In the event we determine that it is not possible or advisable to hold the Annual Meeting as currently planned, we will publicly announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting in a different location or solely by means of remote communication (i.e., a virtual-only annual meeting). If you are planning to attend our Annual Meeting, please check the Investor Relations section of our website, which can be accessed at http://investor.onemainfinancial.com, prior to the meeting date for any updated information.
Q:
What is the structure of our Board of Directors? A:
Our Board consists of eight members divided into three classes. Each class serves a three-year term. Three Class IIIII directors are up for re-election at the Annual Meeting. Q:
What matters will stockholders vote on at the meeting? A:
You will be voting on the following: 1.
To elect three Class IIIII directors, Valerie Soranno Keating, Aneek S. MamikPhilip L. Bronner, Toos N. Daruvala and Richard A. Smith,Douglas H. Shulman, to serve until the 20252027 Annual Meeting and until such director’s successor has been elected and qualified, or until such director’s earlier death, resignation or removal (the “Director Election Proposal”).removal. 2.
To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for OneMain Holdings, Inc. for the year ending December 31, 2022 (the “Auditor Ratification Proposal”).2024. 3.
Such other business as may be properly brought before the meeting or any adjournments or postponements thereof. Q:
What are the Board’s voting recommendations? A:
The Board unanimously recommends that you vote “FOR” each of the Class II director nominees named in Proposal 1, the Director Election Proposal, and “FOR” Proposal 2, the Auditor Ratification Proposal. Q:
Who may vote at the meeting? A:
All stockholders who owned shares of Company common stock at the close of business on the record date of April 21, 202217, 2024 may attend and vote at the meeting. Q:
How do I vote and what are the voting deadlines? A:
You can vote either in person at the meeting or by proxy whether you attend the meeting or not. You can vote by telephone or Internet by following the instructions on the proxy card. If you are a registered holder of shares of Company common stock, you can also vote by mail by completing, signing, dating
and returning your proxy card. If you hold your shares of our common stock beneficially in street name, you may submit proxies by following the voting instructions provided by your broker, bank or other nominee. See “What If I Am A ‘Beneficial Owner?Owner?’” below for more information. If you sign your proxy card but do not specify how you want your shares voted, they will be voted as recommended by the Board. The deadline for voting by telephone or electronically is 11:59 p.m., Eastern time,Time, on June 12, 2022.11, 2024. Q:
What if I am a “Beneficial Owner?” A:
If you are a “beneficial owner,” also known as a “street name” holder (that is, you hold your shares of our common stock through a broker, bank or other nominee), you will receive voting instructions (including, if your broker, bank or other nominee elects to do so, instructions on how to vote your shares by telephone or over the Internet) from the record holder, and you must follow those instructions to have your shares voted at the Annual Meeting. Q:
How do I change my voting instructions before the meeting? A:
You may revoke your proxy at any time before it is voted at the Annual Meeting by:
•
delivering a written notice of revocation to our Corporate Secretary, Attn: Legal Department, at 601 NW Second Street, Evansville, Indiana 47708; •
submitting another signed proxy card with a later date; •
submitting another proxy by telephone or over the Internet at a later date; or •
attending the Annual Meeting and voting in person. If your shares are held in “street name,” please follow the directions given by the institution that holds your shares to change or revoke your voting instructions. Q:
Is my vote confidential? A:
We keep all proxies, ballots and voting tabulations confidential as a matter of practice. We permit only our inspector of election to examine these documents. If you write comments on your proxy card or ballot, the proxy card or ballot may be forwarded to our management and the Board to review your comments. Q:
How many votes do I have? A:
You will have one vote for each share of Company common stock that you owned at the close of business on April 21, 2022,17, 2024, which is the record date for the meeting. Q:
How many shares of stock are eligible to vote at the Annual Meeting? A:
At the close of business on April 21, 2022,17, 2024, there were a total of 125,211,094119,825,391 shares of Company common stock issued and outstanding and eligible to vote at the Annual Meeting. Q:
How many shares must be present to hold the Annual Meeting? A:
The holders of a majority of the shares of Company common stock outstanding as of the record date and entitled to vote at the Annual Meeting must be present, in person or by proxy, in order to hold the Annual Meeting and conduct business. This is called a quorum. In determining whether a quorum is present, shares represented by votes to withhold, abstentions and broker non-votes will be deemed present at the Annual Meeting. Once a share is deemed present for any purpose at the Annual Meeting, it is deemed present for quorum purposes for the remainder of the Annual Meeting. Q:
How many votes are required to elect directors and adopt other proposals? A:
Proposal 1 — Director Election Proposal: Directors are elected by a pluralitymajority of the votes of holders of shares present, in person or by proxy, and entitled to votecast at a meeting of stockholders at which a quorum is present.
Accordingly, the three nominees named in this proxy statement with the highest number of “FOR” votes will be elected. Votes to withholdAbstentions and broker non-votes, if any, will not have any effect on the election of a director.
Proposal 2 — Auditor Ratification of Auditors Proposal: Approval of the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20222024 requires the affirmative vote of the holders of a majority of the total number of shares present, in person or by proxy, and entitled to vote on the proposal. Abstentions will be counted as present and entitled to vote on this proposal and will therefore have the same effect as a vote against this proposal. We do not expect there to be any broker non-votes with respect to this proposal. Other business: All other business that may properly come before the Annual Meeting requires the affirmative vote of the holders of a majority of the total number of shares present, in person or by proxy, and entitled to vote on any such other business. Q:
How will voting on any other business be conducted? A:
We do not know of any other matters to be brought before the Annual Meeting. If matters other than
the ones listed in this proxy statement properly come before the Annual Meeting or any adjournment or postponement thereof, the persons named in the proxy will vote the shares represented by the proxy according to their judgment.
Q:
What is the effect of abstentions and broker “non-votes”? A:
Proxies marked “abstain” or proxies required to be treated as broker “non-votes” are considered present for purposes of determining whether there is a quorum at the Annual Meeting. A broker non-vote occurs when you fail to provide your broker with voting instructions on a particular proposal that is non-routine. Brokers only have discretionary authority to vote your shares on proposals that are considered a “routine” matter. The only routine matter scheduled to be voted upon at the Annual Meeting is the Auditor Ratification of Auditors Proposal. The Director Election Proposal is considered non-routine. Accordingly, if you hold your shares in “street name” through a broker or other nominee, it is critical that you instruct your broker or other nominee how to vote on the Director Election Proposal if you want your shares to count in the vote rather than be treated as a broker non-vote. Abstentions and broker non-votes with respect to the Director Election Proposal will have no effect on the outcome of the Director Election Proposal. Abstentions will have the same effect as a vote against the Auditor Ratification Proposal. No broker non-votes are expected in connection with the Auditor Ratification of Auditors Proposal, which is considered a routine matter. Q:
Who will tabulate and count the votes? A:
Representatives or agents of Broadridge Financial Solutions, Inc. will tabulate the votes and act as the Company’s inspector of election. Q:
Where can I find the voting results of the Annual Meeting? A:
We intend to announce preliminary voting results at the Annual Meeting and report final results on a Current Report on Form 8-K, which we intend to file with the SEC within four business days after the Annual Meeting. Q:
How do I submit a stockholder proposal for inclusion in the proxy materials in connection with the 20232025 Annual Meeting? A:
Stockholders who wish to present proposals for inclusion in the proxy materials to be distributed by us in connection with our 20232025 Annual Meeting of Stockholders must submit their proposals to our Corporate Secretary on or before December 30, 2022.27, 2024.
All stockholder proposals must be addressed to OneMain Holdings, Inc., c/o Corporate Secretary, Attn: Legal Department, 601 NW Second Street, Evansville, Indiana 47708. Q:
How do I submit a stockholder proposal for consideration at the 20232025 Annual Meeting? A:
Stockholders who wish to present a proposal for consideration at our 20232025 Annual Meeting of Stockholders, but who do not wish to include such proposal in the proxy materials to be distributed by us in connection with our 20232025 Annual Meeting of Stockholders, must provide notice thereof to our Corporate Secretary on or before March 15, 2023.14, 2025. Apart from Exchange Act Rule 14a-8, certain procedures must be followed under our Bylaws for a stockholder to introduce an item of business at an annual meeting of stockholders. If our Annual Meeting is held on June 13, 2022,12, 2024, as expected, any stockholder proposal for our 20232025 Annual Meeting of Stockholders that is not intended for inclusion in our proxy statement and proxy card in respect of such meeting will be considered untimely under our Bylaws if it is received by us prior to February 13, 202312, 2025 or after March 15, 2023.14, 2025. An untimely proposal may not be brought before or considered
at our 20232025 Annual Meeting of Stockholders. Any stockholder proposal notice submitted must also be made in compliance with our Bylaws. All notices must be addressed to OneMain Holdings, Inc., c/o Corporate Secretary, Attn: Legal Department, 601 NW Second Street, Evansville, Indiana 47708. The chairman of our Annual Meeting may refuse to acknowledge the introduction of any stockholder proposal not made in compliance with the foregoing procedures. Q:
How do I submit a director nomination for consideration at the 20232025 Annual Meeting? A:
Stockholders who wish to present a director nomination for consideration at our 20232025 Annual Meeting of Stockholders must provide notice thereof to our Corporate Secretary on or before March 15, 2023.14, 2025. Certain procedures must be followed under our Bylaws for a stockholder to nominate persons for election as directors at an annual meeting of stockholders. If our Annual Meeting is held on June 13, 2022,12, 2024, as expected, a notice of director nomination for our 20232025 Annual Meeting of Stockholders that is not intended for inclusion in our proxy statement and proxy card in respect of such meeting will be considered untimely under our Bylaws if it is received by us prior to February 13, 202312, 2025 or after March 15, 2023.14, 2025. An untimely proposal may not be brought before or considered at our 20232025 Annual Meeting of Stockholders. Any notice of a director nomination submitted must also be made in compliance with our Bylaws. In addition to satisfyingBylaws which require, among other information, compliance with Rule 14a-19 under the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19.Exchange Act. For more information regarding our procedures for director nominations as set forth in our Bylaws, please refer to “Corporate Governance — The Board of Directors — Selection of Director Nominees.” All notices of director nominations must be addressed to OneMain Holdings, Inc., c/o Corporate Secretary, Attn: Legal Department, 601 NW Second Street, Evansville, Indiana 47708. The chairman of our Annual Meeting may refuse to acknowledge the introduction of any director nomination not made in compliance with the foregoing procedures.
Q:
How do I contact the Board? A:
Our Board welcomes feedback. Any Company stockholder or other interested party who wishes to communicate with the Board or any of its members (including the Lead Independent Director) may do so by writing to the Board of Directors (or any one or more members): c/o Corporate Secretary
Attn: Legal Department
OneMain Holdings, Inc.
601 NW Second Street
Evansville, Indiana 47708 Stockholders may also visit: https://investor.onemainfinancial.com/corporate-governance/contact-the-board/contact-the- board/default.aspx. Q:
Where can I find additional information? A:
The Company files annual, quarterly and current reports, proxy statements, amendments to these reports and other information with the SEC. These reports can be accessed, free of charge, on the SEC’s website, www.sec.gov, or through our Investor Relationsinvestor relations website, http://investor.onemainfinancial.com, under the heading “Financials & Filings.” We will also provide, without charge to each stockholder upon written request, a copy of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those reports. Written requests for copies can be made by mail to: Corporate Secretary, Attn: Legal Department, 601 NW Second Street, Evansville, Indiana 47708 or by telephone at (812) 424-8031.468-5455.
Appendix A – Non-GAAP Financial Measures and Key Performance Indicators This proxy statement contains certain financial metrics that we use, among other factors, to assess performance under our executive compensation program. For our cash awards under our annual incentive program and with respect to PSU awards. Thesefor 2023, these metrics include C&I Capital Generation, C&I Net Charge-Offs, C&I Operating Expenses and New Products/Channels. For PSU awards in 2023, these metrics include 2023 C&I ROR under our annual incentive program,Capital Generation, and 2024 and 2025 C&I Capital Generation Growth. For PSU awards granted in the 2021-2023 performance cycle, the metrics included Economic Average Diluted EPS Growth and Economic Average Unlevered Return and, for awards granted in 2021, Economic Earnings Average Growth, with respect to PSU awards. Of theseReturn. These metrics C&I Capital Generation, C&I Operating Expenses, C&I ROR, Economic Average Diluted EPS Growth, Economic Average Unlevered Return and Economic Earnings Average Growth are calculated on a basis other than in accordance with United States generally accepted accounting principles (“GAAP”). The tables below present the quantitative metrics provided in connection with our executive compensation program (other than the number of customer accounts outstanding) and, for eachthese non-GAAP financial measure,measures and a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These metrics, as well as theThis proxy statement also includes reference to our 2023 Managed Receivables, metric, which is also a key performance indicator,indicator. These metrics and their related components are calculated as follows:described below. •
C&I Capital Generation (non-GAAP) is equal to C&I adjusted net income, excluding the after-tax change in C&I allowance for finance receivable losses. •
C&I Net Charge-Offs represent annualized net charge-offs as a percentage of average net receivables in the C&I segment.
•
C&I Operating Expenses (non-GAAP) are operating expenses that are directly correlated to the C&I segment, adjusted to exclude the impact of theregulatory settlements, Performance Option Awards, and direct costs associated with COVID-19.restructuring charges. •
C&I ROR (non-GAAP) is determined on an adjusted C&I basis, and is the sum of C&I interest income on finance receivables and C&I other revenues, less C&I Net Charge-Offs, C&I Operating Expenses and insurance policy benefits and claims, divided by average C&I net receivables.
•
Economic Average Diluted EPS Growth (non-GAAP), which was used in connection with PSU awards previously granted to our NEOs, is Economic Earnings Average Growth (which is the simple three-year average of Economic Earnings, or GAAP net income excluding the after-tax impact of changes in loan loss reserve and intangible amortization), divided by the fully diluted average outstanding shares. •
Economic Average Unlevered Return (non-GAAP) is the simple three yearthree-year average of the annual economic unlevered return on receivables percentage, which is defined as pre-tax income, excluding interest expense, the impact of changes in the loan loss reserve, interest expense and intangible amortization, divided by average net receivables. •
Economic Earnings Average Growth (non-GAAP) is the simple three year average of Economic Earnings, which is defined as GAAP net income excluding after-tax impact of changes in loan loss reserve and intangible amortization.
•
Managed Receivables is the sum of C&I net finance receivables and finance receivables serviced for our whole loan sale partners. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the most directly comparable measure calculated in accordance with GAAP. In the context of our executive compensation program, we believe these non-GAAP financial measures provide useful information to evaluate the performance of our business. In many cases, non-GAAP financial measures are determined by adjusting the most directly comparable GAAP measure to exclude non-GAAP adjustments that we believe are not representative of our underlying business performance. Readers should consider the limitations associated with these non-GAAP financial measures, including the potential lack of comparability of these measures from one company to another.
C&I Adjusted Pretax Income (Non-GAAP) | | (unaudited, $ in millions) | | FY21 | | (unaudited, $ in millions) | | FY23 | | | | Consumer & Insurance | | | $ | 1,788 | | | Consumer & Insurance | | | $ | 845 | | | | | Other | | | | (7) | | | Other | | | | (6) | | | | | Segment to GAAP Adjustment | | | | (40) | | | Segment to GAAP Adjustment | | | | 1 | | | | | Income Before Income Taxes – GAAP basis | | | $ | 1,741 | | | Income Before Income Taxes – GAAP basis | | | $ | 840 | | | | | Pretax Income — Segment Accounting Basis | | | $ | 1,788 | | | C&I Pretax Income – Segment Accounting Basis | | | $ | 845 | | | | | Cash-Settled Performance Option Awards | | | | 54 | | | Regulatory settlements | | | | 26 | | | | | Direct Costs Associated with COVID-19 | | | | 6 | | | Other(1) | | | | 3 | | | | | Acquisition-Related Transaction and Integration Expenses | | | | 0 | | | C&I Adjusted Pretax Income (non-GAAP) | | | $ | 874 | | | | | Net Loss on Repurchases and Repayments of Debt | | | | 70 | | | Reconciling Items(2) | | | $ | (28) | | | | | Net Gain on Sale of Cost Method Investment | | | | 0 | | | | | | Restructuring Charges | | | | 0 | | | | | | C&I Adjusted Pretax Income (non-GAAP) | | | $ | 1,918 | | | | | | Reconciling Items(1) | | | $ | (171) | | | |
(1)
Includes strategic activities and other items. (2)
Reconciling items consist of Total Segment to GAAP Adjustment and the adjustments to C&I Pretax Income (Loss) – Segment Accounting Basis. Supplemental C&I Segment Metrics | | (unaudited, $ in millions) | | 12/31/2021 | | (unaudited, $ in millions) | | 12/31/2023 | | | | Consumer & Insurance | | | $ | 19,215 | | | Consumer & Insurance | | | $ | 21,349 | | | | | Segment to GAAP Adjustment | | | | (3) | | | Segment to GAAP Adjustment | | | | — | | | | | Net Finance Receivables – GAAP basis | | | $ | 19,212 | | | Net Finance Receivables – GAAP basis | | | $ | 21,349 | | | | | Consumer & Insurance | | | $ | 2,102 | | | Consumer & Insurance | | | $ | 2,480 | | | | | Segment to GAAP Adjustment | | | | (7) | | | Segment to GAAP Adjustment | | | | — | | | | | Allowance for Finance Receivable Losses – GAAP basis | | | $ | 2,095 | | | Allowance for Finance Receivable Losses – GAAP basis | | | $ | 2,480 | | |
Managed Receivables | | C&I Net Finance Receivables | | | $ | 19,215 | | | (unaudited, $ in millions) | | 12/31/2023 | | | | Finance Receivables Serviced for our Whole Loan Sale Partners | | | | 414 | | | C&I Net Finance Receivables | | | $ | 21,349 | | | | | Managed Receivables | | | $ | 19,629 | | | Finance Receivables Serviced for our Whole Loan Sale Partners | | | | 882 | | | | | | | | | $ | 22,231 | | |
C&I Adjusted Pretax Income and Adjusted Net Income (Non-GAAP) | | (unaudited, $ in millions, except per share statistics) | | FY21 | | (unaudited, $ in millions, except per share statistics) | | FY23 | | | | Interest Income | | | $ | 4,355 | | | Interest Income | | | $ | 4,559 | | | | | Interest Expense | | | | (930) | | | Interest Expense | | | | (1,015) | | | | | Provision for Finance Receivable Losses | | | | (587) | | | Provision for Finance Receivable Losses | | | | (1,721) | | | | | Net Interest Income after Provision for Finance Receivable Losses | | | $ | 2,838 | | | Net Interest Income after Provision for Finance Receivable Losses | | | | 1,823 | | | | | Insurance | | | | 434 | | | Insurance | | | | 448 | | | | | Investment | | | | 65 | | | Investment | | | | 116 | | | | | Gain on Sales of Finance Receivables | | | | 47 | | | Gain on Sales of Finance Receivables | | | | 52 | | | | | Other | | | | 51 | | | Other | | | | 111 | | | | | Total Other Revenues | | | $ | 597 | | | | | | | 727 | | | | | Operating Expenses | | | | (1,341) | | | Operating Expenses | | | | (1,487) | | | | | Insurance Policy Benefits and Claims | | | | (176) | | | Insurance Policy Benefits and Claims | | | | (189) | | | | | Total Other Expenses | | | $ | (1,517) | | | | | | | (1,676) | | | | | C&I Adjusted Pretax Income (non-GAAP) | | | $ | 1,918 | | | C&I Adjusted Pretax Income (non-GAAP) | | | | 874 | | | | | Income Taxes(1) | | | | (480) | | | Income Taxes(1) | | | | (219) | | | | | C&I Adjusted Net Income (non-GAAP) | | | $ | 1,438 | | | C&I Adjusted Net Income (non-GAAP) | | | $ | 655 | | | | | C&I Adjusted Diluted EPS | | | $ | 10.81 | | | C&I Adjusted Diluted EPS | | | $ | 5.43 | | |
(1)
Income taxes assume a 25% tax rate for 2021.
C&I Risk Adjusted Margin and Unlevered ROR (Non-GAAP)
| (unaudited, $ in millions) | | | FY21 | | | Revenue(1)
| | | | | 26.1% | | | | Net Charge-off | | | | | (4.2%) | | | | C&I Risk Adjusted Margin | | | | | 21.9% | | | | Operating Expenses | | | | | (7.3%) | | | | C&I Unlevered ROR (non-GAAP) | | | | | 14.6% | | |
(1)
Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.rate.
C&I Capital Generation (Non-GAAP) | | (unaudited, $ in millions) | | FY21 | | (unaudited, $ in millions) | | FY23 | | | | Provision for Finance Receivable Losses | | | $ | 587 | | | C&I Adjusted Pretax Income (non-GAAP) | | | $ | 874 | | | | | Net Charge-offs | | | | (768) | | | Provision for Finance Receivable Losses | | | | 1,721 | | | | | Change in C&I Allowance for Finance Receivable Losses (non-GAAP) | | | $ | (181) | | | Net Charge-offs | | | | (1,536) | | | | | C&I Adjusted Pretax Income (non-GAAP) | | | | 1,918 | | | Change in C&I Allowance for Finance Receivable Losses (non-GAAP) | | | | 185 | | | | | C&I Pretax Capital Generation (non-GAAP) | | | $ | 1,737 | | | C&I Pretax Capital Generation (non-GAAP) | | | | 1,059 | | | | | C&I Capital Generation, net of tax(1) (non-GAAP) | | | $ | 1,303 | | | C&I Capital Generation, net of tax(1) (non-GAAP) | | | $ | 794 | | | | | C&I Average Net Receivables | | | | 18,286 | | | | | | C&I Capital Generation Return on Receivables (non-GAAP) | | | | 7.1% | | | |
(1)
Income taxes assume a 25% tax rate for 2021.rate.
Economic Average Diluted EPS Growth (Non-GAAP) | | (unaudited, $ in millions, except per share statistics) | | FY18 | | FY19 | | FY20 | | FY21 | | (unaudited, $ in millions, except per share statistics) | | FY20 | | FY21 | | FY22 | | FY23 | | | | Net Income(1) | | | $ | 553 | | | | $ | 855 | | | | $ | 730 | | | | $ | 1,314 | | | Net Income | | | $ | 730 | | | | $ | 1,314 | | | | $ | 872 | | | | $ | 641 | | | | | Adjustments (net of tax) | | | | | | | | | | | | | | | | | | | | | | Adjustments, net of tax(1) | | | | | | | | | | | | | | | | | | | | | | | | Change in Allowance for Finance Receivable Losses | | | | 25 | | | | | 74 | | | | | 242 | | | | | (131) | | | Change in Allowance for Finance Receivable Losses | | | | 242 | | | | | (131) | | | | | 162 | | | | | 139 | | | | | Intangible Amortization | | | | 39 | | | | | 34 | | | | | 28 | | | | | 24 | | | Intangible Amortization | | | | 28 | | | | | 24 | | | | | 10 | | | | | 1 | | | | | Economic Earnings (non-GAAP) | | | $ | 617 | | | | $ | 963 | | | | $ | 1,000 | | | | $ | 1,207 | | | Economic Earnings (non-GAAP) | | | $ | 1,000 | | | | $ | 1,207 | | | | $ | 1,044 | | | | $ | 781 | | | | | Average Outstanding Shares (in millions) | | | | 136.0 | | | | | 136.3 | | | | | 134.9 | | | | | 133.1 | | | Average Outstanding Shares (in millions) | | | | 134.9 | | | | | 133.1 | | | | | 124.4 | | | | | 120.6 | | | | | Economic Average EPS (non-GAAP) | | | $ | 4.54 | | | | $ | 7.06 | | | | $ | 7.41 | | | | $ | 9.07 | | | Economic Average EPS (non-GAAP) | | | $ | 7.41 | | | | $ | 9.07 | | | | $ | 8.38 | | | | $ | 6.48 | | | | | Year-over-Year Economic EPS Growth (non-GAAP) | | | | | | | | | 55.7% | | | | | 4.9% | | | | | 22.4% | | | Year-over-Year Economic EPS Growth (non-GAAP) | | | | | | | | | 22.3% | | | | | (7.5)% | | | | | (22.7)% | | | | | Economic Average Diluted EPS Growth (non-GAAP) | | | | | | | | | | | | | | | | | | | 27.7% | | | Economic Average Diluted EPS Growth (non-GAAP) | | | | | | | | | | | | | | | | | | | (2.6)% | | |
Note: On January 1, 2023, the Company adopted ASU 2018-12, Financial Services — Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption. See OneMain Holdings, Inc. Annual Report on Form 10-K for year ended December 31, 2023, for additional information on the adoption of ASU 2018-12.
(1)
Net income for 2018 was adjusted upward by $106 million in connection with the Consortium Acquisition.Income taxes assume a 25% tax rate.
Economic Average Unlevered Return (Non-GAAP) | | (unaudited, $ in millions) | | FY19 | | FY20 | | FY21 | | (unaudited, $ in millions) | | FY21 | | FY22 | | FY23 | | | | Pre-Tax Income | | | $ | 1,098 | | | | $ | 977 | | | | $ | 1,741 | | | Pre-Tax Income | | | $ | 1,741 | | | | $ | 1,155 | | | | $ | 840 | | | | | Interest Expense | | | | 970 | | | | | 1,027 | | | | | 937 | | | Interest Expense | | | | 937 | | | | | 892 | | | | | 1,019 | | | | | Change in Allowance for Finance Receivable Losses | | | | 98 | | | | | 322 | | | | | (174) | | | Change in Allowance for Finance Receivable Losses | | | | (174) | | | | | 216 | | | | | 185 | | | | | Intangible Amortization | | | | 45 | | | | | 37 | | | | | 32 | | | Intangible Amortization | | | | 32 | | | | | 13 | | | | | 1 | | | | | Economic Unlevered Return (non-GAAP) | | | $ | 2,211 | | | | $ | 2,363 | | | | $ | 2,536 | | | Economic Unlevered Return (non-GAAP) | | | $ | 2,536 | | | | $ | 2,276 | | | | $ | 2,045 | | | | | Average Net Receivables | | | | 17,055 | | | | | 17,997 | | | | | 18,281 | | | Average Net Receivables | | | | 18,281 | | | | | 19,440 | | | | | 20,527 | | | | | Economic Unlevered ROR (non-GAAP) | | | | 13.0% | | | | | 13.1% | | | | | 13.9% | | | Economic Unlevered ROR (non-GAAP) | | | | 13.9% | | | | | 11.7% | | | | | 10.0% | | | | | Economic Average Unlevered Return (%) (non-GAAP) | | | | | | | | | | | | | | 13.3% | | | Economic Average Unlevered Return (%) (non-GAAP) | | | | | | | | | | | | | | 11.8% | | |
Note: On January 1, 2023, the Company adopted ASU 2018-12, Financial Services — Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption. See OneMain Holdings, Inc. Annual Report on Form 10-K for year ended December 31, 2023, for additional information on the adoption of ASU 2018-12.
![[MISSING IMAGE: tm223535d1-pxy_proxy1bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-053628/tm223535d1-pxy_proxy1bw.jpg) ![[MISSING IMAGE: px_onemainproxy01pg01-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-052921/px_onemainproxy01pg01-bw.jpg) SCAN TOVIEW MATERIALS &Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateTO VOTE, ONEMAINMARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYV46048-P11064For Against AbstainONEMAIN HOLDINGS, INC.ATTN: SECRETARY601 N.W.INC.ONEMAIN HOLDINGS, INC.CORPORATE SECRETARYATTN: LEGAL DEPARTMENT601 NW SECOND STREETEVANSVILLE, INDIANA 47708 VOTEIN 477082. To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for OneMain Holdings, Inc. for the yearending December 31, 2024.The Board of Directors recommends you vote FOR the following proposal:NOTE: The proxies are authorized to vote at their discretion upon any other matter that may properly come before the meeting or any adjournments orpostponements thereof.1. To elect three Class II directors to serve until the 2027Annual Meeting of Stockholders.The Board of Directors recommends you vote FOR eachof the three nominees listed under Proposal 1:Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor,administrator, or other fiduciary, please give full title as such. Joint owners should each signpersonally. All holders must sign. If a corporation or partnership, please sign in full corporateor partnership name by authorized officer.Nominees:! ! !! ! !! ! !For Against Abstain1b. Toos N. Daruvala1c. Douglas H. Shulman1a. Philip L. Bronner! ! !VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic deliveryof information up until 11:59 p.m. Eastern Time on June 12, 2022.11, 2024. Have yourproxy card in hand when you access the web sitewebsite and follow the instructions toobtain your records and to create an electronic voting instruction form.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxymaterials, you can consent to receiving all future proxy statements, proxycards and annual reports electronically via e-mail or the Internet. To sign upfor electronic delivery, please follow the instructions above to vote using theInternet and, when prompted, indicate that you agree to receive or access proxymaterials electronically in future years.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until11:59 p.m. Eastern Time on June 12, 2022.11, 2024. Have your proxy card in hand whenyou call and then follow the instructions.VOTE BY MAILMark, sign and date
your proxy card and return it in the postage-paidenvelope we have provided or return it to Vote Processing, c/o Broadridge,51 Mercedes Way, Edgewood, NY 11717. TO11717.SCAN TOVIEW MATERIALS & VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D83151-P73487 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ONEMAIN HOLDINGS, INC. The Board of Directors recommends you vote FOR all the nominees listed under Proposal 1: 1. To elect three Class III directors to serve until the 2025Annual Meeting of Stockholders. Nominees:01) Valerie Soranno Keating02) Aneek S. Mamik03) Richard A. Smith The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 2. To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for OneMain Holdings, Inc. for the yearending December 31, 2022. NOTE: The proxies are authorized to vote at their discretion upon any other matter that may properly come before the meeting or any adjournment orpostponement thereof. ForAllWithholdAllFor AllExcept To withhold authority to vote for any individualnominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor,administrator, or other fiduciary, please give full title as such. Joint owners should each signpersonally. All holders must sign. If a corporation or partnership, please sign in full corporateor partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
![[MISSING IMAGE: tm223535d1-pxy_proxy2bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-053628/tm223535d1-pxy_proxy2bw.jpg) ![[MISSING IMAGE: px_onemainproxy01pg02-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-052921/px_onemainproxy01pg02-bw.jpg) Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com D83152-P73487 ONEMAINV46049-P11064ONEMAIN HOLDINGS, INC.Annual Meeting of StockholdersJune 13, 2022 3:00 P.M.12, 2024 9:30 A.M. Central TimeThis proxy is solicited byon behalf of the Board of DirectorsThe stockholder(s) hereby appoint(s) Douglas H. Shulman, Micah R. Conrad, Lily Fu Claffee, and Jack R. Erkilla,Jeannette E. Osterhout, or any of them, as proxies,each with the power to appoint a substitute and hereby authorize(s) them to represent and to vote, as designated on the reversethereverse side of this proxy, and at their discretion on any matter that may properly come before the meeting, all of the shares of commonofcommon stock of OneMain Holdings, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders andStockholdersand any adjournment(s) or postponement(s) thereof, to be held at 3:00 P.M.9:30 A.M., Central Time, on Monday,Wednesday, June 13, 2022,12, 2024, at601 NW Second Street, Evansville, Indiana 47708. This proxy hereby revokes any proxies previously submitted by the stockholder stockholder(s)with respect to the shares represented by this proxy.IF NO OTHER INDICATION IS MADE ON AN EXECUTED PROXY CARD, THE PROXIES WILL VOTE
THE SHARES REPRESENTED BYREPRESENTEDBY THIS PROXY FOR EACH OF THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2. THE PROXIES ARE AUTHORIZEDAREAUTHORIZED TO VOTE IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING OR ANYORANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLYCARDPROMPTLY USING THE ENCLOSED REPLY ENVELOPE.Continued and to be signed on reverse sidesideImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and the 2023 Annual Report to Stockholders are available at www.proxyvote.com
0001584207 4 2023-01-01 2023-12-31 |
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