| ■ | determining the compensation of our presidentDetermining the compensation of our President and CEO and other executive officers; Reviewing and approving general salary and compensation policies for the rest of our senior officers; | ■ | reviewing and approving general salary and compensation policies for the rest of our senior officers; |
| ■ | overseeing the administration of our Annual Incentive Compensation Plan (AICP), equity incentive plans, and Employee Stock Purchase Plan; |
Overseeing the administration of our Annual Incentive Compensation Plan (AICP), equity incentive plans, and Employee Stock Purchase Plan; | ■ | assisting management in designing new compensation policies and plans; and |
Assisting management in designing new compensation policies and plans; | ■ | reviewingReviewing and providing guidance to management concerning succession plans and development actions for key leadership roles; Reviewing and assisting management regarding diversity and inclusion efforts across the Company; and Reviewing and discussing the Compensation Discussion and Analysis contained in this proxy statement and other compensation disclosures with management. |
Delegation Authority
The Compensation Committee has delegated compensation decisions regarding nonexecutive officers, including the establishment of specific salary and incentive compensation levels and certain matters relating to stock-based compensation, to the Management Compensation Committee, a committee comprised of senior leaders of Price Group.
Committee Procedures
Early each year, the Compensation Committee meets with the president and CEO and members of senior management in order to discuss goals and objectives for the coming year, including goals and objectives applicable to the named executive officers (NEOs) listed in our Summary Compensation Table. In addition, the Compensation Committee determines eligibility for the AICP bonus pool and sets forth the maximum percentage that may be paid to each participant. At its meeting in December, the Compensation Committee evaluates executive performance during the year as part of its determination of appropriate incentive compensation awards.
The Compensation Committee awards annual equity incentive grants to employees from stockholder-approved long-term incentive plans as part of the Company’s annual compensation program.
Role of Executive Officers
The Compensation Committee solicits input from the president and CEO and the Management Compensation Committee regarding general compensation policies, including the appropriate level and mix of compensation. The Compensation Committee also consults with the president and CEO regarding the appropriate bonus and salary levels for other executive officers.
Role of Compensation Consultants
Johnson Associates has been the Compensation Committee’s compensation consultant, since 2017. Johnson Associates has no relationship with Price Group other than as the Compensation Committee’s consultant. See the “Role of Independent Compensation Consultant” section of our Compensation Discussion and Analysis for additional details of their role.contained in this proxy statement and other compensation disclosures with management.
| Nominating and Corporate Governance Committee | | Meetings in 2020: 5 | | Chair | | Members | | | | | | The report of the Committee
appears on page 20. | |  | |  | |  |  | |  | | | Snowe | | Bush | | Hrabowski | Stevens | | Wilson |
Nominating and Corporate Governance Committee
Mses. Snowe and Bush, and Mr. Wilson serve on our Nominating and Corporate Governance Committee, which met on six occasions during 2018. The Board of Directors has determined that all Nominating and Corporate Governance Committee members meet the independence criteria of the NASDAQ Global Select Market.
Responsibilities The principal purposeNominating and goal of this committee is to maintainCorporate Governance Committee supervises and cultivatereviews the effectivenessaffairs of Price Group’sGroup in relation to the Board, of Directorsdirector nominees and oversee itscompensation, committee composition, stockholder communications, and other corporate governance policies. matters. Among the Nominating and Corporate Governance Committee’s responsibilities are Boardare: Identifying, evaluating, and committee composition,nominating director qualifications,candidates. Considering the continued membership of each director, and recommending the appropriate skills and characteristics of potential directors. Developing director orientation and education opportunities. Reviewing and Board evaluations. Members identify, evaluate, and nominate Board candidates; reviewapproving the compensation of independent directors;directors. Recommending committee and overseechair assignments. Overseeing procedures regarding stockholder nominations and other communications to the Board. In addition, they are responsible for monitoring Reviewing the effectiveness of the Board in the corporate governance process. Monitoring compliance with and recommending any changes to the Company’s Corporate Governance Guidelines.Guidelines and other governance policies. Monitoring and oversight of, in coordination with the Compensation Committee and the Board, succession planning for the Chief Executive Officer. Overseeing policies related to political expenditures and political activities. Monitoring policies related to environmental and climate matters, and recommending to the Board specific actions related thereto. Reviewing actions in furtherance of the Company’s corporate social responsibility, including the impact of the Company’s processes on employees, stockholders, citizens and communities. Reviewing key trends in legislation, regulation, litigation and public debate to determine whether the Company should consider additional corporate environmental, social responsibility or governance actions. | Executive Committee | | Chair | | Members | | |  | |  | |  | | Stromberg | | Wilson | | MacLellan |
During 2020, Mr. Stromberg, Mr. MacLellan and Mr. Wilson served on the Executive Committee. Responsibilities The Executive Committee functions between meetings of the Board in the event that prompt action be called for that requires formal action by or on behalf of the Board in circumstances where it is impractical to call and hold a full meeting of the Board. The Executive Committee possesses the authority to exercise all the powers of the Board except as limited by Maryland law. If the Executive Committee acts on matters requiring formal Board action, those acts are reported to the Board at its next meeting for ratification. Governance Policies and Procedures Code of Ethics Pursuant to rules promulgated under the Sarbanes-Oxley Act, the Board has adopted a Code of Ethics for Principal Executive and Senior Financial Officers. This Code is intended to deter wrongdoing and promote honest and ethical conduct; full, timely, and accurate reporting; compliance with laws; and accountability for adherence to the Code, including internal reporting of Code violations. A reportcopy of the Code of Ethics for Principal Executive and Senior Financial Officers is available on our website. We intend to satisfy the disclosure requirements regarding any amendment to, or waiver from, a provision of the Code of Ethics for Principal Executive and Senior Financial Officers by making disclosures concerning such matters available on the Investor Relations page of our website. We also have a Code of Ethics and Conduct that is applicable to all employees and directors of the Company. Our Code of Ethics and Conduct prohibits all employees and directors of the Company from (i) any short sales of our common stock, (ii) purchasing options on our common stock, or (iii) entering into any contract or purchasing any instrument designed to hedge or offset any decrease in the market value of our common stock. It is the Company’s policy for all employees to participate annually in continuing education and training relating to the Code of Ethics and Conduct. Corporate Governance Guidelines The Board represents the interests of stockholders in fostering a business that is successful in all respects. The Board is responsible for determining that the Company is managed with this objective in mind and that management is executing its responsibilities. The Board’s responsibility is to regularly monitor the effectiveness of management policies and decisions, including the execution of its strategies. In addition to fulfilling its obligations for representing the interests of stockholders, the Board has responsibility to the Company’s employees, the mutual funds and investment portfolios that the Company manages, the Company’s other customers and business constituents and the communities where the Company operates. All are essential to a successful business. Our Corporate Governance Guidelines can be found on our website, troweprice.com. Non-Employee Director Independence Determinations The Board has considered the independence of current Board members and nominees not employed by the Company and has concluded each such director qualifies as an independent director within the meaning of the applicable rules of the NASDAQ Global Select Market. To our knowledge, there are no family relationships among our directors or executive officers. In making its determination of independence, the Board applied guidelines that it has adopted concluding that the following relationships should not be considered material relationships that would impair a director’s independence: relationships where a director or an immediate family member of a director purchases or acquires investment services, investment securities, or similar products and services from the Company or one of its sponsored mutual funds and trusts (Price funds) so long as the relationship is on terms consistent with those generally available to other persons doing business with the Company, its subsidiaries, or its sponsored investment products; and relationships where a corporation, partnership, or other entity with respect to which a director or an immediate family member of a director is an officer, director, employee, partner, or member purchases services from the Company, including investment management or defined contribution retirement plan services, on terms consistent with those generally available to other entities doing business with the Company or its subsidiaries. The Board believes that this policy sets an appropriate standard for dealing with ordinary course of business relationships that may arise from time to time. Election of Directors In this proxy statement, eleven director nominees are presented pursuant to the recommendation of the Nominating and Corporate Governance Committee. All have been nominated by the Board to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualify.  | FOR | Recommendation of the Board of Directors | Vote Required | | We recommend that you vote FOR all the director nominees under Proposal 1. | |
All properly executed proxies received in time to be tabulated for the Annual Meeting will be voted FOR the election of the director nominees unless otherwise specified. Shares held by a bank, broker, or other nominee will not be voted on this Proposal absent specific instruction from you, which means your shares may go unvoted and not affect the outcome if you do not specify a vote. If any director nominee becomes unable or unwilling to serve between now and the Annual Meeting, proxies will be voted FOR the election of a replacement recommended by the Nominating and Corporate Governance Committee and approved by the Board. Corporate Governance Report of the Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee has general oversight responsibility for governance of the Company, including the assessment and recruitment of new director candidates and the evaluation of director and Board performance. We monitor regulatory and other developments in the governance area with a view toward both legal compliance and maintaining governance procedures at the Company consistent with what we consider to be best practices. In this regard, we routinely receive written and verbal information relating to best governance practices for institutions such as the Company, including input and reports from members of the Company’s proxy voting group concerning relevant trends. Board Engagement In Crisis Response In response to the COVID-19 pandemic, from March through June, the Board began holding bi-weekly special meetings to ensure the Company was well positioned to protect the health and safety of our associates, meet the evolving demands of our clients, and navigate market changes. The Board empowered management to take actions to protect the Company’s associates through remote work programs, supported investments in technology updates and business continuity solutions, and maintained oversight of our balance sheet to ensure the Company’s financial strength. During these meetings the Board also advised on the firm’s internal and external communication strategy and risk mitigation efforts with a view to the long-term success of the enterprise. The Board engaged with management on identifying and addressing strategic risks and opportunities arising out of COVID-19. During the pandemic, we adjusted our planned in-person Board meetings to hold them virtually to ensure continued effective functioning of the Board. Later in the spring, in response to the social unrest which swept across the U.S., the Board and management committed to develop programs and policies supporting the Board’s view that racial injustice was a serious problem which the Company was committed to combat. Governance Highlights Overview Our Board employs practices that foster effective Board oversight of critical matters such as strategy, management succession planning, financial and other controls, risk management and compliance. The Board reviews our major governance policies and processes regularly in the context of current corporate governance trends, regulatory changes and recognized best practices. During the year, the Board determined to heighten its focus on the Company’s environmental, social and governance matters from a corporate perspective. In furtherance of this goal, the Board received various updates from management on the Company’s environmental, social and governance efforts, and ultimately determined to amend the Nominating and Corporate Governance Committee’s charter to include oversight of the Company’s environmental and corporate social responsibility activities, beginsincluding considering the impact of the Company’s policies and processes on page 17employees, stockholders, citizens and communities. In addition, the Nominating and Corporate Governance Committee’s charter was amended to include oversight of this proxy statement.the Company’s policies related to political expenditures and political activities. Of note, however, is that the Company does not contribute corporate funds to candidates, political party committees, political action committees, or any political organization exempt from federal income taxes. Further the Company does not maintain a political action committee and does not spend corporate funds directly on independent expenditures. The Nominating and Corporate Governance Committee works diligently to support effective corporate governance and believes that the Company’s governance program aligns with the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies. TABLE OF CONTENTSTable of Contents
Management CommitteeISG Corporate Governance Principles
The Management Committee is responsiblefollowing sections provide an overview of our corporate governance structure and processes, including key aspects of our Board operations, and how they align with the ISG Corporate Governance Principles for guiding, implementing,U.S. Listed Companies. 
| PRINCIPLE | | COMPANY PRACTICE | | 1. Boards are accountable to shareholders. | | • Our directors are elected annually. • Our By-Laws mandate that directors be elected under a “majority voting” standard in uncontested elections. Each director nominee must receive more votes “For” his or her election than votes “Against” in order to be elected. A director who fails to obtain the required vote in an uncontested election must submit his or her resignation to the Board. • We have clear proxy access rules. • We do not have a poison pill plan. | | 2. Shareholders should be entitled to voting rights in proportion to their economic interest. | | • We have only one class of stock outstanding, and each share is entitled to one vote. | | 3. Boards should be responsive to shareholders and be proactive in order to understand their perspectives. | | • Our Company actively engages with stockholders, see page 25. • Our directors participate in our stockholder outreach, both in the preparation for such meetings, and during the presentations themselves. • We have established an email address for stockholders wishing to contact the Board. | | 4. Boards should have a strong, independent leadership structure. | | • We have a strong lead independent director. • Ten of our eleven board members are independent. • Our independent directors meet frequently without management. | | 5. Boards should adopt structures and practices that enhance their effectiveness. | | • Our directors have a diverse mix of experience and backgrounds relevant to our industry, our stockholders, our clients, and our stakeholders. See page 7. • The average tenure on our Board is six years. • During the year, the Board receives several key industry updates, strategic topics and other education sessions conducted by both outside experts and Company executives, all designed to assist the Board in executing their duties. • Our directors attended 100% of the Board and Committee meetings, and value in person attendance at meetings. | | 6. Boards should develop management incentive structures that are aligned with the long-term strategy of the company. | | • Our annual and long-term incentive programs are designed to align the interests of our management with our stockholders by focusing on long-term corporate performance and value creation. • Our executive compensation program received over 95% stockholder support in 2020. • The proxy statement clearly communicates the link between our compensation programs and the Company’s short and long-term performance. |
Board Composition Director Nomination Process Ongoing Assessment of Composition and reviewing major policyStructure In considering the overall qualifications of our nominees and operating initiativestheir contributions to our Board, and in determining our need for additional members of the Company. Mr. StrombergBoard, we seek to create a Board consisting of members with a diverse set of experiences and attributes who will be meaningfully involved in our Board activities and will facilitate a transparent and collaborative atmosphere and culture. Our Board members generally develop a long-term association with the Company, which we believe facilitates a deeper knowledge of our business and its strategies, opportunities, risks, and challenges. At the same time, we periodically look for additions to our Board to enhance our capabilities and bring new perspectives and ideas to our Board. Commitment to Diversity and Inclusion The Board has historically valued varying perspectives that individuals of differing backgrounds and experiences bring. We monitor the diversity profile of the Board and consider it an important factor relevant to any particular nominee and to the overall composition of our Board. In considering diversity, we recognize a person’s background and experience as well as their ethnic, gender, sexual orientation, racial, and other factors which we believe will inform the way they consider decisions brought before the Board. Our current Board comprises individuals with a substantial variety of skills and expertise, including with respect to executive management; financial institutions; government; accounting and finance; investment management; public company boards; academia; and not-for-profit organizations. Our Board is not just comprised of individuals knowledgeable about our business, but is also reflective of our clients, the communities we serve and our stakeholders. The Nominating and Corporate Governance Committee believes it is important to maintain a mix of experienced directors with a deep understanding of the Company and newer directors who bring a fresh perspective to the challenges of our industry. Board Replenishment The Board has eleven directors, ten of whom are independent. The tenure of our independent directors’ ranges from eighteen months to eleven years, with an average tenure of approximately six years. In considering Board membership, the Nominating and Corporate Governance Committee focuses on identifying candidates with the skills and backgrounds to complement the Board, in addition to seeking candidates who would bring further capabilities, experience, and diversity to our Board. Incumbent Nominations The Nominating and Corporate Governance Committee supervises the nomination process for directors. The committee considers the performance, independence, diversity, and other characteristics of our incumbent directors, including their willingness to serve for an additional term, and any change in their employment or other circumstances in considering their renomination each year. Identification and Consideration of New Nominees In the event that a vacancy exists, or we decide to increase the size of the Board, we identify, interview and examine, and make recommendations to the Board regarding appropriate candidates. We will consider Board members with diverse capabilities, and we generally look for Board members with capabilities in one or more of the following areas: accounting and financial reporting, financial services and money management, investments, general economics and industry oversight, legal, government affairs and corporate governance, general management, international, marketing and distribution, and technology and facilities management. In evaluating potential candidates, we consider independence from management, background, experience, expertise, commitment, diversity, number of other public board and related committee seats held, and potential conflicts of interest, among other factors, and take into account the composition of the Board at the time of the assessment. All candidates for nomination must: demonstrate unimpeachable character and integrity; have sufficient time to carry out their duties; have experience at senior levels in areas of expertise helpful to the Company and consistent with the objective of having a diverse and well-rounded Board; and | • | have the willingness and commitment to assume the responsibilities required of a director of the Company. |
In addition, candidates expected to serve on the Audit Committee must meet independence and financial literacy qualifications imposed by the NASDAQ Global Select Market and by the SEC and other applicable law. Candidates expected to serve on this committee or the Compensation Committee must meet independence qualifications set out by the NASDAQ Global Select Market, and members of the Compensation Committee must also meet additional independence tests imposed by the NASDAQ Global Select Market. Our evaluations of potential directors include, among other things, an assessment of a candidate’s background and credentials, personal interviews, and discussions with appropriate references. Once we have selected a candidate, we present him or her to the full Board for election if a vacancy occurs or is created by an increase in the size of the Board during the course of the year, or for nomination if the director is to be first elected by the Company’s stockholders. All directors serve for one-year terms and must stand for reelection annually. 
| Identification of Candidates | The Nominating and Corporate Governance Committee identifies, interviews and examines, and makes recommendations to the Board regarding appropriate candidates. The Nominating and Corporate Governance Committee identifies potential candidates principally through the following: • Consideration of incumbent directors • Suggestions from the Company’s directors and senior management • Third parties/national search organization • Candidates recommended or suggested by stockholders | | Evaluation of Candidates | The Nominating and Corporate Governance Committee’s evaluations of potential directors include the following: • An assessment of a candidate’s background and credentials • Personal interviews • Discussions with appropriate references | | Election of Candidates | Once the Nominating and Corporate Governance Committee has selected a candidate, the candidate is presented to the full Board for election if a vacancy occurs or is created by an increase in the size of the Board during the course of the year, or for nomination if the director is to be first elected by the Company’s stockholders. |
Stockholder Recommendations and Nominations Recommendations A stockholder who wishes to recommend a candidate for the Board should send a letter to the chair of the ManagementNominating and Corporate Governance Committee at the Company’s principal executive offices providing: (i) information relevant to the candidate’s satisfaction of the criteria described above under “Director Nomination Process”; and (ii) information that would be required for a director nomination under Section 1.11 of the Company’s Amended and Restated By-Laws (By-Laws). The Nominating and Corporate Governance Committee will consider and evaluate candidates recommended by stockholders in the same manner it considers candidates from other senior officerssources. Acceptance of a recommendation does not imply that the Nominating and Corporate Governance Committee will ultimately nominate the recommended candidate. Proxy Access and Nominations We have adopted a proxy access right to permit a stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials director-nominees constituting up to two individuals or 20% of the Board (whichever is greater), provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the By-Laws. Section 1.13 of the By-Laws sets out the procedures a stockholder must follow to use proxy access. Section 1.11 of the By-Laws sets out the procedures a stockholder must follow in order to nominate a candidate for Board membership outside of the proxy access process. For these requirements, please refer to the By-Laws as of February 9, 2021, filed with the SEC on February 11, 2021, as Exhibit 3.1 to our Annual Report on Form 10-K. Majority Voting We have adopted a majority voting standard for the election of our directors. Under our By-Laws, in an uncontested election, a nominee will not be elected unless he or she receives more “FOR” votes than “AGAINST” votes. Under Maryland law, any incumbent director not so elected would continue in office as a “holdover” director until removed or replaced. As a result, the By-Laws also provide that any director who fails to obtain the required vote in an uncontested election must submit his or her resignation to the Board. The Board must decide whether to accept or decline the resignation, or decline the resignation with conditions, taking into consideration the Nominating and Corporate Governance Committee’s recommendation after consideration of all factors deemed relevant, within 90 days after the vote has been certified. Plurality voting will apply to contested elections. Board Leadership Chair of the Board and Lead Independent Director  | | |  | William J. Stromberg
Chair of the Board | | | Alan D. Wilson
Lead Independent Director | | | | | Mr. Stromberg was elected as the chair of the Board in addition to his role as our President and CEO at the April 2019 Board meeting. By serving in both positions, Mr. Stromberg has been able to draw on his detailed knowledge of the Company to provide leadership to the Board in coordination with the lead independent director. The combined role of chair and CEO reflects our confidence in the leadership of Mr. Stromberg and also ensures that the Company presents its strategy to clients, employees and stockholders with a unified voice from the person most knowledgeable about and responsible for the implementation of the Company’s strategy. | | | Mr. Wilson was elected by our independent directors as lead independent director after the 2018 Annual Meeting and is expected to be re-elected after the Annual Meeting. The lead independent director role was created in 2004 and has continually developed since that time. The lead independent director chairs Board meetings at which the chair is not present, approves Board agendas and meeting schedules, and oversees Board materials distributed in advance of Board meetings. The lead independent director also calls meetings of the independent directors, chairs all executive sessions of the independent directors, and acts as liaison between the independent directors and management. The lead independent director is available to the general counsel and corporate secretary to discuss and, as necessary, respond to stockholder communications to the Board. Mr. Wilson’s significant executive management experience, including having served as chair and chief executive officer of a publicly traded company, makes him especially qualified to serve as the lead independent director for the Board. |
Independent Leadership The Board has determined that the election of a lead independent director, together with a combined chair and CEO, serve the best interests of the Company and its stockholders at this time. We believe that a well-empowered lead independent director provides independent leadership to our Board. The Company has a strong independent Board, and all of the members of the Board, other than Mr. Stromberg, are also members. independent under the NASDAQ Global Select Market standards. In addition, the Nominating and Corporate Governance Committee, the Audit Committee, and the Compensation Committee are all composed entirely of independent directors, and our chair and lead independent director, together with these committees, have significant and meaningful responsibilities designed to foster critical oversight and good governance practices. We believe that our structure is appropriate at this time and serves well the interests of the Company and its stockholders. The Management Board is confident that the duties and responsibilities allocated to its lead independent director, together with its other corporate governance practices and strong independent board, provides appropriate and effective independent oversight of management. Committee reportsLeadership and Rotation In 2015, Mr. Bartlett became the chair of the Audit Committee, Mr. MacLellan became the chair of the Compensation Committee and Ms. Snowe became the chair of the Nominating and Corporate Governance Committee. Our Corporate Governance Guidelines provide that periodic rotation of committee membership and chairpersons is generally beneficial to the Company, and contributes to healthy and collaborative Board engagement. However, this rotation is not mandatory, and in some circumstances continued service on a committee or as chair by persons with particular skills may be warranted. At least every 5 years, the Nominating and Corporate Governance Committee shall do a thorough review of all Board leadership positions to make recommendations to the Board about potential changes and to suggest skills which may be needed on the management and operationcommittees. Board Evaluations In January 2021, we asked all Board members to reply to an anonymous evaluation questionnaire regarding the performance of the Board and its committees during 2020, which evaluation was conducted by an outside third-party in consultation with the Chair of the Nominating and Corporate Governance Committee and the Lead Independent Director. Feedback from these questionnaires was supplemented by interviews of each independent director by our Lead Independent Director. The results of the evaluations and interviews were then discussed at a meeting of the Nominating and Corporate Governance Committee and a full report was also provided to the Board. Consistent with past practice, we consider suggestions from the evaluation process for inclusion during the course of the upcoming year. We plan to continue to conduct independent third-party evaluations and interviews each year and to periodically modify our procedures to ensure that we receive candid feedback and are responsive to future developments and suggestions from our directors. 
Engagement with our Stockholders As investment professionals, we know the value of engaging with companies. We maintain an active and open dialogue with our stockholders, visiting them in their cities, hosting them in our offices, and inviting them to our annual meeting of stockholders. We proactively engage them on a range of topics including corporate governance, and our philosophy and practices relating to environmental and social responsibility. We attempt to incorporate and address the feedback we receive from our stockholders into our practices. The work-from-home environment as a result of the coronavirus pandemic created new opportunities to engage our stockholders in 2020. We held nearly 100 meetings with our stockholders in the virtual environment, including a majority of our top 40 stockholders, to discuss the Company’s performance and progress against our long-term strategy, as well as broader trends across the investment management industry. Further, in an effort to provide greater transparency around our efforts and progress related to our environmental, social and governance initiatives, we also published our first-ever Corporate ESG Update for Stockholders. We look forward to continuing to expand our stockholder engagement efforts. | HOW | | WHAT | • Attendance at Conferences • Investor Day • Incoming stockholder calls and meetings • Annual Meeting of Stockholders • Outreach, calls and meetings with Investors’ corporate governance departments • Participation on industry panels • Universal access to an email address for stockholders wishing to contact the Board | | • Strategic and financial performance and goals • Corporate and business strategy • Board composition and leadership structure • Corporate governance and industry trends, including ESG considerations • Regulatory considerations • Respond to inquiries concerning broad range of topics |
Stockholder Proposals From time to time, we receive proposals from our stockholders intended for inclusion in our proxy statement. We typically work with Company through Mr. Stromberg. Asmanagement in reviewing these proposals and determining an appropriate course of March 14, 2019, currentaction in response, including, where necessary, a statement of our position for or in opposition to the proposal from the stockholder. Often in response the Board will ask management to engage with a stockholder on their proposal, which has led to meaningful dialogue and assisted the Board in understanding the concerns of our stockholders. Stockholder Communications with the Board of Directors Our Board members are interested in hearing the opinions of the stockholders. The Nominating and Corporate Governance Committee has established the following procedures in order to facilitate communications between our stockholders and our Board: | • | Stockholders may send correspondence, which should indicate that the sender is a stockholder, to our Board or to any individual director by mail to T. Rowe Price Group, Inc., c/o general counsel, P.O. Box 17134, Baltimore, MD 21297-1134, or by email to contact_the_board@troweprice.com or by Internet at troweprice.gcs-web.com/corporate-governance/contact-the-board. | | | | • | Our general counsel will be responsible for the first review and logging of this correspondence. The general counsel will forward the communication to the director or directors to whom it is addressed unless it is a type of correspondence that the Nominating and Corporate Governance Committee has identified as correspondence that may be retained in our files and not sent to directors. | | | | • | The Nominating and Corporate Governance Committee has authorized the general counsel to retain and not send to directors the following types of communications: |
| • | Advertising or promotional in nature (offering goods or services); | | | | | • | Complaints by clients with respect to ordinary course of business customer service and satisfaction issues; provided, however, that the general counsel will notify the chair of the Nominating and Corporate Governance Committee of any complaints that, in the opinion of the general counsel, warrant immediate committee attention by their nature or frequency; or | | | | | • | Those clearly unrelated to our business, industry, management, Board, or committee matters. |
These types of communications will be logged and filed but not circulated to directors. Except as described above, the general counsel will not screen communications sent to directors. The log of stockholder correspondence will be available to members of the ManagementNominating and Corporate Governance Committee include: Christopher D. Alderson, co-head of global equity; Scott B. David, head of individual and retirement plan services; Cèline S. Dufétel, chief financial officer and treasurer; Nigel K. Faulkner, head of global technology; Robert C.T. Higginbotham, head of global investment management services; Andrew C. McCormick, head of fixed income; David Oestreicher, chief legalfor inspection. At least once each year, the general counsel and corporate secretary; Sebastien Page, head of global multi-asset; Dorothy C. “Dee” Sawyer, head of human resources; Robert W. Sharps, head of investments and group chief investment officer; and Eric L. Veiel, co-head of global equity. Each of these members brings extensive experience and wisdomwill provide to the managementNominating and leadershipCorporate Governance Committee a summary of the Company.communications received from stockholders, including the communications not sent to directors in accordance with screening procedures approved by the Nominating and Corporate Governance Committee. By the Nominating and Corporate Governance Committee of the
Board of Directors of T. Rowe Price Group, Inc. | Olympia J. Snowe, Chair
Mary K. Bush
Dr. Freeman A. Hrabowski, III
Robert J. Stevens
Alan D. Wilson |
Compensation of Directors The Nominating and Corporate Governance Committee is responsible for periodically reviewing non-employee director compensation and benefits and recommending changes, if appropriate, to the full Board. Our non-employee director compensation program is designed to accomplish a number of objectives: | ■ | Align the interests of our non-employee directors with those of our stockholders; |
Align the interests of our non-employee directors with those of our stockholders; | ■ | Provide competitive compensation for service to the Board by our non-employee directors; |
Provide competitive compensation for service to the Board by our non-employee directors; | ■ | Maintain appropriate consistency with our approach to compensation for our executive officers and senior employees; and |
Maintain appropriate consistency with our approach to compensation for our executive officers and senior employees; and | ■ | Attract and retain a diverse mix of capable and highly qualified directors. |
Attract and retain a diverse mix of capable and highly qualified directors. We provide both cash and equity compensation to our directors and believe that, over time, cash and equity compensation should reflect approximately 40% and 60%, respectively, of the total compensation paid to our directors. The cash compensation component is based primarily on an annual retainer coupled with fees for committee attendance, lead director role, and committee chair roles. The equity compensation component is in the form of full value awards. We believe our total compensation package and compensation structure is comparable to and in line with other major financial service companies. The Nominating and Corporate Governance Committee periodically reviews and considers competitive market practices. In 20182020 there were no changes to the compensation program for our non-employee directors. Fees and Other Compensation in 20182020 All non-employee directors received the following in 2018:2020: | ■ | An annual retainer of $100,000 for all non-employee directors; |
An annual retainer of $100,000 for all non-employee directors; | ■ | A fee of $1,500 for each committee meeting attended; |
A fee of $1,500 for each committee meeting attended; | ■ | A fee of $15,000 for the lead director; |
A fee of $15,000 for the lead director; | ■ | A fee of $20,000 and $5,000, for the chair of the Audit Committee and each Audit Committee member, respectively; |
A fee of $20,000 and $5,000, for the chair of the Audit Committee and each Audit Committee member, respectively; | ■ | A fee of $10,000 for the chair of the Compensation Committee; |
A fee of $10,000 for the chair of the Compensation Committee; | ■ | A fee of $10,000 for the chair of the Nominating and Corporate Governance Committee; |
A fee of $10,000 for the chair of the Nominating and Corporate Governance Committee; | ■ | Directors and all U.S. employees of Price Group and its subsidiaries are eligible to have our sponsored T. Rowe Price Foundation match personal gifts up to an annual limit to qualified charitable organizations. For 2018, non-employee directors were eligible to have up to $10,000 matched; |
| ■ | The reimbursement of reasonable out-of-pocket expenses incurred in connection with their travel to and from, and attendance at each meeting of the Board and its committees and related activities, including director education courses and materials; |
| ■ | The reimbursement of spousal travel to and from and participation in events held in connection with the annual joint Price Group and Price funds’ boards of directors meeting; and |
14 T. ROWE PRICE GROUP
Rowe Price Foundation match personal gifts up to an annual limit to qualified charitable organizations. For 2020, non-employee directors were eligible to have up to $10,000 matched;TABLE OF CONTENTS
| ■ | In addition to the $100,000 annual retainer fee as a non-employee director and the other compensation described above, Mr. Rogers received a fee of $100,000 for his role as the nonexecutive chair of the Board. |
The reimbursement of reasonable out-of-pocket expenses incurred in connection with their travel to and from, and attendance at each meeting of the Board and its committees and related activities, including director education courses and materials; andThe reimbursement of spousal travel to and from and participation in events held in connection with the annual joint Price Group and Price funds’ boards of directors meeting. The annual retainer and fees noted above are prorated for the period of time during the calendar year that each director held the position. Pursuant to the Outside Directors Deferred Compensation Plan, non-employee directors can elect to defer payment of their director fees until the next calendar year.year or to defer payment of their director fees into vested restricted stock units (RSUs) pursuant to the 2017 Non-Employee Director Equity Plan, as amended (2017 Director Plan). The RSUs will be settled in shares of our common stock, or cash in the case of fractional shares, upon the director’s separation from service. Any such election needs to be received prior to the beginning of the year they wish to have their payment deferred. Dr. Hrabowski and Ms. Snowe and Mr. Wilson elected to have their 20182020 director fees deferred to 2019.2021. Messrs. MacLellan, Stevens, Wilson and Ms. Wijnberg elected to have their 2020 director fees deferred into vested RSUs. Equity-Based Compensation in 20182020 Pursuant to the 2017 Non-Employee Director Equity Plan, (2017 Director Plan) approved by the stockholders on April 26, 2017, each newly elected Board member is awarded an initial grant in the form, at their election, of restricted shares or restricted stock units (RSUs)RSUs having a value on the date of grant of $300,000 that vests one-year after the grant date. In each subsequent year, each non-employee director except Mr. Rogers, is awarded, at their election, restricted shares or RSUs having a value on the date of grant of $200,000 on the first business day after the Annual Meeting. For Mr. Rogers, the Committee determined that, in light of his already significant stock ownership, they would pay him a cash amount of $200,000 in lieu of participating in the annual equity award provided to other non-employee directors. Each of the award types vest upon the earliest of the non-employee director’s death or date on which the director becomes totally and permanently disabled, one year after the grant date, or the day before the annual meeting held in the calendar year after the year in which the grant is made, the non-employee director’s death or date on which the director becomes totally and permanently disabled, or the date on which a change in control occurs, provided the director continues to be a member of the Board on the applicable date. Restricted shares entitle the holder to the rights of a stockholder, including voting, dividend, and distribution rights, but are nontransferable until they vest. Vested stock units will be settled in shares of our common stock or cash, in the case of fractional shares, upon a non-employee director’s separation from service. Non-employee directors holding stock units are not entitled to voting, dividend, distribution, or other rights until the corresponding shares of our common stock are issued upon settlement; however, if and when we pay a cash dividend to our common stockholders, we will issue dividend equivalents in the form of additional stock units. Under the 2017 Director Plan, dividends and dividend equivalents payable with respect to unvested restricted shares and unvested stock units will be subject to the same vesting and risks of forfeiture as the restricted shares and stock units to which they are attributable. The 2017 Director Plan includes a provision that accelerates the vesting of all outstanding awards in connection with a change in control of Price Group. Upon a change in control, any outstanding stock units will be settled in cash or shares at the discretion of the Board. Ownership and Retention GuidelinesBoard Leadership
Each non-employee director added to the Board in 2015 or 2016 is required to hold shares
Chair of our common stock having a value equal to $300,000 within five years of the director’s appointment to the Board and directors added to the Board prior to 2015 have an ownership goal of $225,000 (in each case an amount equal to three (3) times the applicable cash retainer at the time of appointment). Directors who were new to the Board in 2017 or who will join in the future, have an ownership goal of five times the annual cash retainer in effect on the date they join the Board. For purposes of the calculation, unvested restricted shares and outstanding stock units are counted, but unexercised stock options are not. Once this ownership goal is achieved, the number of shares required to be held becomes fixed and must be maintained until the end of the director’s service on the Board. Until the ownership goal is achieved, the director is expected to retain “net gain shares” resulting from the exercise of stock options or vesting of restricted stock granted under the applicable director plan. Net gain shares are the shares remaining after payment of the stock option exercise price and taxes owed with respect to the exercise or vesting event. In addition, net gain shares realized under the applicable director plan after the ownership goal is achieved are expected to be held for two years prior to sale or other transfer, but not beyond the end of the director’s service on the Board. All of our directors, other than Mr. Verma who joined the Board in 2018, have achieved and maintain the ownership goal as of the date of this proxy statement. PROXY STATEMENT 2019 15
Lead Independent Director
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2018 Director Compensation1
The following table sets forth information regarding the compensation earned by, or paid to, directors who served on our Board during 2018. Directors who are also officers of Price Group do not receive separate directors’ fees and have been omitted from this table. Mr. Stromberg and Mr. Bernard appear in our Summary Compensation Table as named executive officers.
Name | Fees Earned
or Paid
in Cash | Stock
Awards4,5 | All Other
Compensation6 | Total | | Mark S. Bartlett | $ | 141,000 | | $ | 200,105 | | $ | 10,000 | | $ | 351,105 | | Mary K. Bush | $ | 118,000 | | $ | 237,533 | | $ | 10,000 | | $ | 365,533 | | H. Lawrence Culp, Jr.2 | $ | 92,333 | | $ | 200,105 | | $ | — | | $ | 292,438 | | Dr. Freeman A. Hrabowski, III | $ | 126,000 | | $ | 225,796 | | $ | 10,000 | | $ | 361,796 | | Robert F. MacLellan | $ | 136,000 | | $ | 214,186 | | $ | 10,000 | | $ | 360,186 | | Brian C. Rogers | $ | 400,000 | | $ | — | | $ | 10,000 | | $ | 410,000 | | Olympia J. Snowe | $ | 128,000 | | $ | 219,659 | | $ | 10,000 | | $ | 357,659 | | Dwight Taylor3 | $ | 42,500 | | $ | — | | $ | — | | $ | 42,500 | | Richard R. Verma3 | $ | 90,750 | | $ | 305,662 | | $ | — | | $ | 396,412 | | Anne Marie Whittemore3 | $ | 44,333 | | $ | — | | $ | — | | $ | 44,333 | | Sandra S. Wijnberg | $ | 126,000 | | $ | 212,836 | | $ | 10,000 | | $ | 348,836 | | Alan D. Wilson | $ | 129,250 | | $ | 232,882 | | $ | 10,000 | | $ | 372,132 | |
| 1 | Includes only those columns relating to compensation awarded to, earned by, or paid to non-employee directors for their services in 2018. All other columns have been omitted. | |
| 2 | Mr. Culp was paid fees for partWilliam J. Stromberg
Chair of the year until he resigned fromBoard | | | Alan D. Wilson
Lead Independent Director | | | | | Mr. Stromberg was elected as the Board in October 2018. The amount in the stock award column represents the grant date fair value of the annual award made in April 2018 that was forfeited under the terms of the grant agreement upon Mr. Culp’s resignation from the Board. |
| 3 | The fees earned by Mr. Taylor, Mr. Verma, and Ms. Whittemore represent pro-rata amounts for the time they were memberschair of the Board in 2018. |
| 4 | The following table representsaddition to his role as our President and CEO at the equity awards grantedApril 2019 Board meeting. By serving in 2018both positions, Mr. Stromberg has been able to certaindraw on his detailed knowledge of the non-employee directors named above. In accordanceCompany to provide leadership to the Board in coordination with the 2017 Director Plan, each non-employee director was awarded a grant date valuelead independent director. The combined role of $200,000, exceptchair and CEO reflects our confidence in the leadership of Mr. Verma who received an awardStromberg and also ensures that the Company presents its strategy to clients, employees and stockholders with a grant date value of $300,000 as a newly elected director. The equity value was converted to awards or units, usingunified voice from the closing stock price of our common stock onperson most knowledgeable about and responsible for the date of grant. Fractional shares were rounded up to the nearest whole share. The holders of RSUs also receive dividend equivalents in the form of additional vested stock units on eachimplementation of the Company’s dividend payment dates. Fractional shares earnedstrategy. | | | Mr. Wilson was elected by our independent directors as dividend equivalents have been roundedlead independent director after the 2018 Annual Meeting and is expected to be re-elected after the Annual Meeting. The lead independent director role was created in 2004 and has continually developed since that time. The lead independent director chairs Board meetings at which the chair is not present, approves Board agendas and meeting schedules, and oversees Board materials distributed in advance of Board meetings. The lead independent director also calls meetings of the independent directors, chairs all executive sessions of the independent directors, and acts as liaison between the independent directors and management. The lead independent director is available to the nearest whole share. |
Director | Grant Date | Number of
Restricted
Shares | Number of
Restricted
Units | Grant Date Fair
Value of Stock
and Option
Awards | Mark S. Bartlett | | 4/27/2018 | | | 1,755 | | | | | $ | 200,105 | | Mary K. Bush | | 3/29/2018 | | | | | | 86 | | $ | 9,269 | | | | 4/27/2018 | | | 1,755 | | | | | $ | 200,105 | | | | 6/29/2018 | | | | | | 80 | | $ | 9,329 | | | | 9/28/2018 | | | | | | 86 | | $ | 9,385 | | | | 12/28/2018 | | | | | | 103 | | $ | 9,445 | | H. Lawrence Culp, Jr. | | 4/27/2018 | | | 1,755 | | | | | $ | 200,105 | | Dr. Freeman A. Hrabowski, III | | 3/29/2018 | | | | | | 50 | | $ | 5,444 | | | | 4/27/2018 | | | | | | 1,755 | | $ | 200,105 | | | | 6/29/2018 | | | | | | 58 | | $ | 6,708 | | | | 9/28/2018 | | | | | | 62 | | $ | 6,748 | | | | 12/28/2018 | | | | | | 74 | | $ | 6,791 | | Robert F. MacLellan | | 3/29/2018 | | | | | | 32 | | $ | 3,487 | | | | 4/27/2018 | | | 1,755 | | | | | $ | 200,105 | | | | 6/29/2018 | | | | | | 30 | | $ | 3,510 | | | | 9/28/2018 | | | | | | 32 | | $ | 3,531 | | | | 12/28/2018 | | | | | | 39 | | $ | 3,553 | | Olympia J. Snowe | | 3/29/2018 | | | | | | 36 | | $ | 3,924 | | | | 4/27/2018 | | | | | | 1,755 | | $ | 200,105 | | | | 6/29/2018 | | | | | | 45 | | $ | 5,178 | | | | 9/28/2018 | | | | | | 48 | | $ | 5,209 | | | | 12/28/2018 | | | | | | 57 | | $ | 5,243 | |
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Director | Grant Date | Number of
Restricted
Shares | Number of
Restricted
Units | Grant Date Fair
Value of Stock
and Option
Awards | Richard R. Verma | | 4/27/2018 | | | | | | 2,632 | | $ | 300,101 | | | | 6/29/2018 | | | | | | 16 | | $ | 1,842 | | | | 9/28/2018 | | | | | | 17 | | $ | 1,854 | | | | 12/28/2018 | | | | | | 20 | | $ | 1,865 | | Sandra S. Wijnberg | | 3/29/2018 | | | | | | 29 | | $ | 3,153 | | | | 4/27/2018 | | | 1,755 | | | | | $ | 200,105 | | | | 6/29/2018 | | | | | | 27 | | $ | 3,173 | | | | 9/28/2018 | | | | | | 29 | | $ | 3,192 | | | | 12/28/2018 | | | | | | 35 | | $ | 3,213 | | Alan D. Wilson | | 3/29/2018 | | | | | | 67 | | $ | 7,199 | | | | 4/27/2018 | | | | | | 1,755 | | $ | 200,105 | | | | 6/29/2018 | | | | | | 73 | | $ | 8,474 | | | | 9/28/2018 | | | | | | 78 | | $ | 8,525 | | | | 12/28/2018 | | | | | | 94 | | $ | 8,579 | |
| 5 | The following table representsgeneral counsel and corporate secretary to discuss and, as necessary, respond to stockholder communications to the aggregate number of equity awards outstandingBoard.Mr. Wilson’s significant executive management experience, including having served as of December 31, 2018. The outstanding equity awards held by Mr. Rogers were granted while he was anchair and chief executive officer of a publicly traded company, makes him especially qualified to serve as the Company. Mr. Culp’s unexercised option awards expire five years following his resignation fromlead independent director for the Board. |
Director | Unvested
Stock Awards | Unvested
Stock Units | Unexercised
Option Awards | Total | Vested Stock
Units | Mark S. Bartlett | | 1,755 | | | | | | | | | 1,755 | | | | | Mary K. Bush | | 1,755 | | | | | | | | | 1,755 | | | 13,597 | | H. Lawrence Culp, Jr. | | | | | | | | 8,700 | | | 8,700 | | | | | Dr. Freeman A. Hrabowski, III | | | | | 1,791 | | | 26,008 | | | 27,799 | | | 7,986 | | Robert F. MacLellan | | 1,755 | | | | | | 42,942 | | | 44,697 | | | 5,115 | | Brian C. Rogers | | | | | 4,260 | | | 132,462 | | | 136,722 | | | | | Olympia J. Snowe | | | | | 1,791 | | | | | | 1,791 | | | 5,757 | | Richard R. Verma | | | | | 2,685 | | | | | | 2,685 | | | | | Sandra S. Wijnberg | | 1,755 | | | | | | | | | 1,755 | | | 4,625 | | Alan D. Wilson | | | | | 1,791 | | | | | | 1,791 | | | 10,560 | |
Independent Leadership The Board has determined that the election of a lead independent director, together with a combined chair and CEO, serve the best interests of the Company and its stockholders at this time. We believe that a well-empowered lead independent director provides independent leadership to our Board. The Company has a strong independent Board, and all of the members of the Board, other than Mr. Stromberg, are independent under the NASDAQ Global Select Market standards. In addition, the Nominating and Corporate Governance Committee, the Audit Committee, and the Compensation Committee are all composed entirely of independent directors, and our chair and lead independent director, together with these committees, have significant and meaningful responsibilities designed to foster critical oversight and good governance practices. We believe that our structure is appropriate at this time and serves well the interests of the Company and its stockholders. | 24 | 6 | Personal gifts matched by our sponsored T. Rowe Price Foundation to qualified charitable organizations.Group |
Report
The Board is confident that the duties and responsibilities allocated to its lead independent director, together with its other corporate governance practices and strong independent board, provides appropriate and effective independent oversight of management. Committee Leadership and Rotation In 2015, Mr. Bartlett became the chair of the Audit Committee, Mr. MacLellan became the chair of the Compensation Committee and Ms. Snowe became the chair of the Nominating and Corporate Governance Committee. Our Corporate Governance Guidelines provide that periodic rotation of committee membership and chairpersons is generally beneficial to the Company, and contributes to healthy and collaborative Board engagement. However, this rotation is not mandatory, and in some circumstances continued service on a committee or as chair by persons with particular skills may be warranted. At least every 5 years, the Nominating and Corporate Governance Committee shall do a thorough review of all Board leadership positions to make recommendations to the Board about potential changes and to suggest skills which may be needed on the committees. Board Evaluations In January 2021, we asked all Board members to reply to an anonymous evaluation questionnaire regarding the performance of the Board and its committees during 2020, which evaluation was conducted by an outside third-party in consultation with the Chair of the Nominating and Corporate Governance Committee and the Lead Independent Director. Feedback from these questionnaires was supplemented by interviews of each independent director by our Lead Independent Director. The results of the evaluations and interviews were then discussed at a meeting of the Nominating and Corporate Governance Committee and a full report was also provided to the Board. Consistent with past practice, we consider suggestions from the evaluation process for inclusion during the course of the upcoming year. We plan to continue to conduct independent third-party evaluations and interviews each year and to periodically modify our procedures to ensure that we receive candid feedback and are responsive to future developments and suggestions from our directors.
Engagement with our Stockholders As investment professionals, we know the value of engaging with companies. We maintain an active and open dialogue with our stockholders, visiting them in their cities, hosting them in our offices, and inviting them to our annual meeting of stockholders. We proactively engage them on a range of topics including corporate governance, and our philosophy and practices relating to environmental and social responsibility. We attempt to incorporate and address the feedback we receive from our stockholders into our practices. The work-from-home environment as a result of the coronavirus pandemic created new opportunities to engage our stockholders in 2020. We held nearly 100 meetings with our stockholders in the virtual environment, including a majority of our top 40 stockholders, to discuss the Company’s performance and progress against our long-term strategy, as well as broader trends across the investment management industry. Further, in an effort to provide greater transparency around our efforts and progress related to our environmental, social and governance initiatives, we also published our first-ever Corporate ESG Update for Stockholders. We look forward to continuing to expand our stockholder engagement efforts. | HOW | | WHAT | • Attendance at Conferences • Investor Day • Incoming stockholder calls and meetings • Annual Meeting of Stockholders • Outreach, calls and meetings with Investors’ corporate governance departments • Participation on industry panels • Universal access to an email address for stockholders wishing to contact the Board | | • Strategic and financial performance and goals • Corporate and business strategy • Board composition and leadership structure • Corporate governance and industry trends, including ESG considerations • Regulatory considerations • Respond to inquiries concerning broad range of topics |
Stockholder Proposals From time to time, we receive proposals from our stockholders intended for inclusion in our proxy statement. We typically work with Company management in reviewing these proposals and determining an appropriate course of action in response, including, where necessary, a statement of our position for or in opposition to the proposal from the stockholder. Often in response the Board will ask management to engage with a stockholder on their proposal, which has led to meaningful dialogue and assisted the Board in understanding the concerns of our stockholders. Stockholder Communications with the Board of Directors Our Board members are interested in hearing the opinions of the stockholders. The Nominating and Corporate Governance Committee has established the following procedures in order to facilitate communications between our stockholders and our Board: | • | Stockholders may send correspondence, which should indicate that the sender is a stockholder, to our Board or to any individual director by mail to T. Rowe Price Group, Inc., c/o general counsel, P.O. Box 17134, Baltimore, MD 21297-1134, or by email to contact_the_board@troweprice.com or by Internet at troweprice.gcs-web.com/corporate-governance/contact-the-board. | | | | • | Our general counsel will be responsible for the first review and logging of this correspondence. The general counsel will forward the communication to the director or directors to whom it is addressed unless it is a type of correspondence that the Nominating and Corporate Governance Committee has identified as correspondence that may be retained in our files and not sent to directors. | | | | • | The Nominating and Corporate Governance Committee has authorized the general counsel to retain and not send to directors the following types of communications: |
| • | Advertising or promotional in nature (offering goods or services); | | | | | • | Complaints by clients with respect to ordinary course of business customer service and satisfaction issues; provided, however, that the general counsel will notify the chair of the Nominating and Corporate Governance Committee of any complaints that, in the opinion of the general counsel, warrant immediate committee attention by their nature or frequency; or | | | | | • | Those clearly unrelated to our business, industry, management, Board, or committee matters. |
These types of communications will be logged and filed but not circulated to directors. Except as described above, the general oversight responsibility for governancecounsel will not screen communications sent to directors. The log of the Company, including the assessment and recruitment of new director candidates and the evaluation of director and Board performance. We monitor regulatory and other developments in the governance area with a view toward both legal compliance and maintaining governance practices at the Company consistent with what we considerstockholder correspondence will be available to be best practices. In this regard, we routinely receive written and verbal information relating to best governance practices for institutions such as the Company, including input and reports from members of the Company’s proxy voting group concerning relevant trendsNominating and Corporate Governance Committee for inspection. At least once each year, the general counsel will provide to the Nominating and Corporate Governance Committee a summary of the communications received from stockholders, including the communications not sent to directors in accordance with screening procedures approved by the Nominating and Corporate Governance Committee. By the Nominating and Corporate Governance Committee of the
Board of Directors of T. Rowe Price Group, Inc. | Olympia J. Snowe, Chair
Mary K. Bush
Dr. Freeman A. Hrabowski, III
Robert J. Stevens
Alan D. Wilson |
Compensation of Directors The Nominating and Corporate Governance Committee is responsible for periodically reviewing non-employee director compensation and benefits and recommending changes, if appropriate, to the full Board. Our non-employee director compensation program is designed to accomplish a number of objectives: Align the interests of our non-employee directors with those of our stockholders; Provide competitive compensation for service to the Board by our non-employee directors; Maintain appropriate consistency with our approach to compensation for our executive officers and senior employees; and Attract and retain a diverse mix of capable and highly qualified directors. We provide both cash and equity compensation to our directors and believe that, over time, cash and equity compensation should reflect approximately 40% and 60%, respectively, of the total compensation paid to our directors. The cash compensation component is based primarily on an annual retainer coupled with fees for committee attendance, lead director role, and committee chair roles. The equity compensation component is in the form of full value awards. We believe our total compensation package and compensation structure is comparable to and in line with other major financial service companies. The Nominating and Corporate Governance Committee periodically reviews and considers competitive market practices. In 2018,2020 there were no changes to the compensation program for our non-employee directors. Fees and Other Compensation in 2020 All non-employee directors received the following in 2020: An annual retainer of $100,000 for all non-employee directors; A fee of $1,500 for each committee meeting attended; A fee of $15,000 for the lead director; A fee of $20,000 and $5,000, for the chair of the Audit Committee and each Audit Committee member, respectively; A fee of $10,000 for the chair of the Compensation Committee; A fee of $10,000 for the chair of the Nominating and Corporate Governance Committee; Directors and all U.S. employees of Price Group and its subsidiaries are eligible to have our sponsored T. Rowe Price Foundation match personal gifts up to an annual limit to qualified charitable organizations. For 2020, non-employee directors were eligible to have up to $10,000 matched; The reimbursement of reasonable out-of-pocket expenses incurred in connection with their travel to and from, and attendance at each meeting of the Board and its committees and related activities, including director education courses and materials; and The reimbursement of spousal travel to and from and participation in events held in connection with the annual joint Price Group and Price funds’ boards of directors meeting. The annual retainer and fees noted above are prorated for the period of time during the calendar year that each director held the position. Pursuant to the Outside Directors Deferred Compensation Plan, non-employee directors can elect to defer payment of their director fees until the next calendar year or to defer payment of their director fees into vested restricted stock units (RSUs) pursuant to the 2017 Non-Employee Director Equity Plan, as amended (2017 Director Plan). The RSUs will be settled in shares of our common stock, or cash in the case of fractional shares, upon the director’s separation from service. Any such election needs to be received prior to the beginning of the year they wish to have their payment deferred. Dr. Hrabowski and Ms. Snowe elected to have their 2020 director fees deferred to 2021. Messrs. MacLellan, Stevens, Wilson and Ms. Wijnberg elected to have their 2020 director fees deferred into vested RSUs. Equity-Based Compensation in 2020 Pursuant to the 2017 Director Plan, each newly elected Board member is awarded an initial grant in the form, at their election, of restricted shares or RSUs having a value on the date of grant of $300,000 that vests one-year after the grant date. In each subsequent year, each non-employee director is awarded, at their election, restricted shares or RSUs having a value on the date of grant of $200,000 on the first business day after the Annual Meeting. Each of the award types vest upon the earliest of one year after the grant date, or the day before the annual meeting held in the calendar year after the year in which the grant is made, the non-employee director’s death or date on which the director becomes totally and permanently disabled, or the date on which a change in control occurs, provided the director continues to be a member of the Board on the applicable date. Restricted shares entitle the holder to the rights of a stockholder, including voting, dividend, and distribution rights, but are nontransferable until they vest. Vested stock units will be settled in shares of our common stock or cash, in the case of fractional shares, upon a non-employee director’s separation from service. Non-employee directors holding stock units are not entitled to voting, dividend, distribution, or other rights until the corresponding shares of our common stock are issued upon settlement; however, if and when we adopted with approval of stockholders certain amendmentspay a cash dividend to our chartercommon stockholders, we will issue dividend equivalents in the form of additional stock units. Under the 2017 Director Plan, dividends and dividend equivalents payable with respect to unvested restricted shares and unvested stock units will be subject to the same vesting and risks of forfeiture as the restricted shares and stock units to which they are attributable. The 2017 Director Plan includes a provision that eliminated voting limitations on stockholders holding 15%accelerates the vesting of all outstanding awards in connection with a change in control of Price Group. Upon a change in control, any outstanding stock units will be settled in cash or moreshares at the discretion of our outstanding common stock and removed a related super majority voting provision in our charter.the Board. Board Leadership
Chair of the Board of Directorsand Lead Independent Director In April 2017, Mr. Rogers assumed his role as the nonexecutive chair of the Board. Mr. Rogers has indicated he will retire from the Board effective as of the April 2019 Annual Meeting and, accordingly, will step down as our nonexecutive chair. The Board has announced that it will appoint Mr. Stromberg as the chair of the Board in addition to his current role as our president and CEO. By serving in both positions, Mr. Stromberg will be able to draw on his detailed knowledge of the Company to provide leadership to the Board in coordination with the lead independent director. The combined role of chair and CEO reflects our confidence in the leadership of Mr. Stromberg and also ensures that the Company presents its strategy to stockholders, employees and clients with a unified voice from the person most knowledgeable about and responsible for the implementation
| | | | William J. Stromberg
Chair of the Board | | | Alan D. Wilson
Lead Independent Director | | | | | Mr. Stromberg was elected as the chair of the Board in addition to his role as our President and CEO at the April 2019 Board meeting. By serving in both positions, Mr. Stromberg has been able to draw on his detailed knowledge of the Company to provide leadership to the Board in coordination with the lead independent director. The combined role of chair and CEO reflects our confidence in the leadership of Mr. Stromberg and also ensures that the Company presents its strategy to clients, employees and stockholders with a unified voice from the person most knowledgeable about and responsible for the implementation of the Company’s strategy. | | | Mr. Wilson was elected by our independent directors as lead independent director after the 2018 Annual Meeting and is expected to be re-elected after the Annual Meeting. The lead independent director role was created in 2004 and has continually developed since that time. The lead independent director chairs Board meetings at which the chair is not present, approves Board agendas and meeting schedules, and oversees Board materials distributed in advance of Board meetings. The lead independent director also calls meetings of the independent directors, chairs all executive sessions of the independent directors, and acts as liaison between the independent directors and management. The lead independent director is available to the general counsel and corporate secretary to discuss and, as necessary, respond to stockholder communications to the Board. Mr. Wilson’s significant executive management experience, including having served as chair and chief executive officer of a publicly traded company, makes him especially qualified to serve as the lead independent director for the Board. |
PROXY STATEMENT 2019
17
Independent Leadership
TABLE OF CONTENTS
of the strategy. The Board has determined that the appointmentelection of ana lead independent lead director, together with a combined chair and CEO, serve the best interests of the Company and its stockholders at this time. The Board is confident that the duties and responsibilities allocated to its independent lead director, together with its other corporate governance practices and strong independent board, provides appropriate and effective independent oversight of management.
Lead Independent Director
The lead independent director role was created in 2004 and has continually developed since that time. The lead independent director chairs Board meetings at which the chair is not present, approves Board agendas and meeting schedules, and oversees Board materials distributed in advance of Board meetings. The lead independent director also calls meetings of the independent directors, chairs all executive sessions of the independent directors, and acts as liaison between the independent directors and management. The lead independent director is available to the chief legal counsel and corporate secretary to discuss and, as necessary, respond to stockholder communications to the Board.
Mr. Wilson was appointed by our independent directors as Lead Independent Director after the 2018 Annual Meeting and is expected to be reappointed after the Annual Meeting.
Independent Leadership
We believe that a well-empowered lead independent director provides independent leadership to our Board. The Company has a strong independent Board, and following the Annual Meeting, all of the members of the Board, other than Mr. Stromberg, will beare independent under the NASDAQ Global Select Market standards. In addition, thisthe Nominating and Corporate Governance Committee, the Audit Committee, and the Compensation Committee are all composed entirely of independent directors, and our chair and lead independent director, together with these Committees,committees, have significant and meaningful responsibilities designed to foster critical oversight and good governance practices. We believe that our structure is appropriate at this time and serves well the interests of the Company and its stockholders.
The Board is confident that the duties and responsibilities allocated to its lead independent director, together with its other corporate governance practices and strong independent board, provides appropriate and effective independent oversight of management. Committee Leadership and Rotation During
In 2015, Mr. Bartlett became the chair of the Audit Committee, Mr. MacLellan became the chair of the Executive Compensation Committee and Ms. Snowe became the chair of the Nominating and Corporate Governance Committee. Our Corporate Governance Guidelines provide that periodic rotation of committee membership and chairpersons is desirable,generally beneficial to the Company, and that chairpersons will generally be considered for change at least every five years. Thiscontributes to healthy and collaborative Board engagement. However, this rotation is not an absolute rule, however,mandatory, and in some circumstances continued service on a committee or as chair by persons with particular skills may be warranted. Director Qualifications and the Nominations Process
Director Replenishment and Tenure
Messrs. Rogers and Bernard are stepping down as members of our Board effective as of the 2019 Annual Meeting. They both have been longtime members of our Board and important contributors to the Company as senior executives holding a number of roles at the Company. H. Lawrence Culp, Jr. also resigned as a member of the Board in October 2018 in connection with his appointment as the chief executive officer of General Electric Company. Richard Verma was first elected to our Board at the 2018 Annual Meeting.
A number of our long-tenured directors retired over the last five years. After the 2019 Annual Meeting, the Board will have nine directors, eight of whom are independent. The tenure of our independent directors ranges from one to nine At least every 5 years, with an average tenure of approximately five years. Only three of our directors have a tenure of greater than five years. Given the foregoing, and in light of trends with other boards of directors, during 2018 we increased our mandatory retirement age for directors from 72 years of age to 75 years of age.
We believe that the nominees presented in this proxy statement constitute a Board with an appropriate level and diversity of experience, education, skills, and independence. We routinely assess and monitor the capabilities of our existing directors and whether additional capabilities and independent directors should be added to the Board. In considering the need for additional independent directors, we consider any expected Board departures and retirements and factor succession planning for the Board members into our deliberations, with particular reference to specific skills and capabilities of departing Board members. We are very pleased with our current complement of directors and the varied perspectives they bring to the Board.
This committee supervises the nomination process for directors. We consider the performance, independence, diversity, and other characteristics of our incumbent directors, including their willingness to serve for an additional term, and any change in their employment or other circumstances in considering their renomination each year. In considering diversity, we consider
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diversity of background and experience as well as ethnic, gender, racial, and other forms of diversity. Although we do not have a formal policy regarding diversity in identifying nominees for a directorship, we monitor the diversity profile of the Board and consider it an important factor relevant to any particular nominee and to the overall composition of our Board.
In the event that a vacancy exists or we decide to increase the size of the Board, we identify, interview and examine, and make recommendations to the Board regarding appropriate candidates. We identify potential candidates principally through suggestions from the Company’s directors and senior management. The chair and CEO and other Board members may also seek candidates through informal discussions with third parties. During 2018, we elected to engage a national search organization to assist us in our identification of potential director candidates with capabilities fitting our required profile for potential Board members. We also consider candidates recommended or suggested by stockholders as described below.
In evaluating potential candidates, we consider independence from management, background, experience, expertise, commitment, diversity, number of other public board and related committee seats held, and potential conflicts of interest, among other factors, and take into account the composition of the Board at the time of the assessment. All candidates for nomination must:
| ■ | demonstrate unimpeachable character and integrity; |
| ■ | have sufficient time to carry out their duties; |
| ■ | have experience at senior levels in areas of expertise helpful to the Company and consistent with the objective of having a diverse and well-rounded Board; and |
| ■ | have the willingness and commitment to assume the responsibilities required of a director of the Company. |
In addition, candidates expected to serve on the Audit Committee must meet independence and financial literacy qualifications imposed by the NASDAQ Global Select Market and by the SEC and other applicable law. Candidates expected to serve on this committee or the Compensation Committee must meet independence qualifications set out by the NASDAQ Global Select Market, and members of the Compensation Committee must also meet additional independence tests imposed by the NASDAQ Global Select Market. Our evaluations of potential directors include, among other things, an assessment of a candidate’s background and credentials, personal interviews, and discussions with appropriate references. Once we have selected a candidate, we present him or her to the full Board for election if a vacancy occurs or is created by an increase in the size of the Board during the course of the year, or for nomination if the director is to be first elected by stockholders. All directors serve for one-year terms and must stand for reelection annually.
In accordance with the Company’s Corporate Governance Guidelines, the Nominating and Corporate Governance Committee considered Ms. Bush’s membership on four other public company boardshall do a thorough review of directors,all Board leadership positions to make recommendations to the Board about potential changes and approved her continued service on such public company boards, and renominated her to servesuggest skills which may be needed on the Board.committees.
Board Evaluations In January 2019,2021, we asked all Board members to reply to an anonymous evaluation questionnaire regarding the performance of the Board and its committees during 2018.2020, which evaluation was conducted by an outside third-party in consultation with the Chair of the Nominating and Corporate Governance Committee and the Lead Independent Director. Feedback from these questionnaires was supplemented by interviews of each independent director by our Lead Independent Director. We discussed theThe results of the evaluations and interviews were then discussed at oura meeting on February 11, 2019of the Nominating and providedCorporate Governance Committee and a full report was also provided to the Board. Consistent with past practice, we will implementconsider suggestions and conclusions from the evaluation process for inclusion during the course of the upcoming year. We plan to continue to conduct independent third-party evaluations and interviews each year and to periodically modify our procedures to ensure that we receive candid feedback and are responsive to future developments and suggestions from our directors. Director Orientation
Engagement with our Stockholders As investment professionals, we know the value of engaging with companies. We maintain an active and Continuing Educationopen dialogue with our stockholders, visiting them in their cities, hosting them in our offices, and Development Wheninviting them to our annual meeting of stockholders. We proactively engage them on a new independent director joinsrange of topics including corporate governance, and our philosophy and practices relating to environmental and social responsibility. We attempt to incorporate and address the Board,feedback we provide an orientation program for the purpose of providing the new director with an understandingreceive from our stockholders into our practices. The work-from-home environment as a result of the operationscoronavirus pandemic created new opportunities to engage our stockholders in 2020. We held nearly 100 meetings with our stockholders in the virtual environment, including a majority of our top 40 stockholders, to discuss the Company’s performance and the financial condition of the Companyprogress against our long-term strategy, as well as broader trends across the Board’s expectationsinvestment management industry. Further, in an effort to provide greater transparency around
our efforts and progress related to our environmental, social and governance initiatives, we also published our first-ever Corporate ESG Update for its directors. Each director is expectedStockholders. We look forward to maintain the necessary knowledge and informationcontinuing to perform his or her responsibilities as a director. To assist the directors in understanding the Company and its industry and maintaining the level of expertise required for the director, the Company will, fromexpand our stockholder engagement efforts. | HOW | | WHAT | • Attendance at Conferences • Investor Day • Incoming stockholder calls and meetings • Annual Meeting of Stockholders • Outreach, calls and meetings with Investors’ corporate governance departments • Participation on industry panels • Universal access to an email address for stockholders wishing to contact the Board | | • Strategic and financial performance and goals • Corporate and business strategy • Board composition and leadership structure • Corporate governance and industry trends, including ESG considerations • Regulatory considerations • Respond to inquiries concerning broad range of topics |
Stockholder Proposals From time to time, and at least annually, offer Company-sponsored continuing education programs or presentations in addition to briefings during Board meetings relating to the competitive and industry environment and the Company’s goals and strategies. The Board has joined the National Association of Corporate Directors, which provides resources that help directors strengthen board leadership. Each director is encouraged to participate at least once every three years in continuing education programs for public-company directors sponsored by nationally recognized educational organizations not affiliated with the Company. The cost of all such continuing education is paid for by the Company.
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Stockholder Proposals
We from time to timewe receive stockholder proposals from our stockholders intended for inclusion in our proxy statement. We typically will work with Company management in reviewing these proposals and determinedetermining an appropriate course of action in response, including, where necessary, a statement of our position for or in opposition to the proposal from the stockholder. Often in response the Board will ask management to engage with a stockholder on their proposal, which has led to meaningful dialogue and assisted the Board in understanding the concerns of our stockholders.
Policy With Respect
Stockholder Communications with the Board of Directors Our Board members are interested in hearing the opinions of the stockholders. The Nominating and Corporate Governance Committee has established the following procedures in order to facilitate communications between our stockholders and our Board: | • | Stockholders may send correspondence, which should indicate that the sender is a stockholder, to our Board or to any individual director by mail to T. Rowe Price Group, Inc., c/o general counsel, P.O. Box 17134, Baltimore, MD 21297-1134, or by email to contact_the_board@troweprice.com or by Internet at troweprice.gcs-web.com/corporate-governance/contact-the-board. | | | | • | Our general counsel will be responsible for the first review and logging of this correspondence. The general counsel will forward the communication to the director or directors to whom it is addressed unless it is a type of correspondence that the Nominating and Corporate Governance Committee has identified as correspondence that may be retained in our files and not sent to directors. | | | | • | The Nominating and Corporate Governance Committee has authorized the general counsel to retain and not send to directors the following types of communications: |
| • | Advertising or promotional in nature (offering goods or services); | | | | | • | Complaints by clients with respect to ordinary course of business customer service and satisfaction issues; provided, however, that the general counsel will notify the chair of the Nominating and Corporate Governance Committee of any complaints that, in the opinion of the general counsel, warrant immediate committee attention by their nature or frequency; or | | | | | • | Those clearly unrelated to our business, industry, management, Board, or committee matters. |
These types of communications will be logged and filed but not circulated to directors. Except as described above, the general counsel will not screen communications sent to directors. The log of stockholder correspondence will be available to members of the Nominating and Corporate Governance Committee for inspection. At least once each year, the general counsel will provide to the ConsiderationNominating and Corporate Governance Committee a summary of Director Candidates Recommended or Nominatedthe communications received from stockholders, including the communications not sent to directors in accordance with screening procedures approved by Stockholdersthe Nominating and Corporate Governance Committee. RecommendationsBy the Nominating and Corporate Governance Committee of the
Board of Directors of T. Rowe Price Group, Inc.
| Olympia J. Snowe, Chair
Mary K. Bush
Dr. Freeman A. Hrabowski, III
Robert J. Stevens
Alan D. Wilson |
Compensation of Directors The Nominating and Corporate Governance Committee is responsible for periodically reviewing non-employee director compensation and benefits and recommending changes, if appropriate, to the full Board. Our non-employee director compensation program is designed to accomplish a number of objectives: Align the interests of our non-employee directors with those of our stockholders; Provide competitive compensation for service to the Board by our non-employee directors; Maintain appropriate consistency with our approach to compensation for our executive officers and senior employees; and Attract and retain a diverse mix of capable and highly qualified directors. We provide both cash and equity compensation to our directors and believe that, over time, cash and equity compensation should reflect approximately 40% and 60%, respectively, of the total compensation paid to our directors. The cash compensation component is based primarily on an annual retainer coupled with fees for committee attendance, lead director role, and committee chair roles. The equity compensation component is in the form of full value awards. We believe our total compensation package and compensation structure is comparable to and in line with other major financial service companies. The Nominating and Corporate Governance Committee periodically reviews and considers competitive market practices. In 2020 there were no changes to the compensation program for our non-employee directors. Fees and Other Compensation in 2020 All non-employee directors received the following in 2020: An annual retainer of $100,000 for all non-employee directors; A stockholder who wishes to recommend a candidatefee of $1,500 for each committee meeting attended; A fee of $15,000 for the Board should send a letter tolead director; A fee of $20,000 and $5,000, for the chair of this committee at the Company’s principal executive offices providing (i) information relevant toAudit Committee and each Audit Committee member, respectively; A fee of $10,000 for the candidate’s satisfactionchair of the criteria described above under “Director Qualifications andCompensation Committee; A fee of $10,000 for the Nominations Process” and (ii) information that would be required for a director nomination under Section 1.11chair of the Company’s AmendedNominating and Restated By-Laws. The committee will considerCorporate Governance Committee; Directors and evaluate candidates recommended by stockholders in the same manner it considers candidates from other sources. Acceptanceall U.S. employees of a recommendation does not imply that the committee will ultimately nominate the recommended candidate.Proxy AccessPrice Group and Nominations
Weits subsidiaries are eligible to have adopted a proxy access right to permit a stockholder, or a group ofour sponsored T. Rowe Price Foundation match personal gifts up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years,an annual limit to nominate and include in the Company’s proxy materials director-nominees constitutingqualified charitable organizations. For 2020, non-employee directors were eligible to have up to two individuals or 20%$10,000 matched;
The reimbursement of reasonable out-of-pocket expenses incurred in connection with their travel to and from, and attendance at each meeting of the Board (whichever is greater), providedand its committees and related activities, including director education courses and materials; and The reimbursement of spousal travel to and from and participation in events held in connection with the annual joint Price Group and Price funds’ boards of directors meeting. The annual retainer and fees noted above are prorated for the period of time during the calendar year that each director held the stockholder(s) andposition. Pursuant to the nominee(s) satisfyOutside Directors Deferred Compensation Plan, non-employee directors can elect to defer payment of their director fees until the requirements specifiednext calendar year or to defer payment of their director fees into vested restricted stock units (RSUs) pursuant to the 2017 Non-Employee Director Equity Plan, as amended (2017 Director Plan). The RSUs will be settled in shares of our common stock, or cash in the amended By-Laws. Section 1.13case of fractional shares, upon the director’s separation from service. Any such election needs to be received prior to the beginning of the year they wish to have their payment deferred. Dr. Hrabowski and Ms. Snowe elected to have their 2020 director fees deferred to 2021. Messrs. MacLellan, Stevens, Wilson and Ms. Wijnberg elected to have their 2020 director fees deferred into vested RSUs. Equity-Based Compensation in 2020 Pursuant to the 2017 Director Plan, each newly elected Board member is awarded an initial grant in the form, at their election, of restricted shares or RSUs having a value on the date of grant of $300,000 that vests one-year after the grant date. In each subsequent year, each non-employee director is awarded, at their election, restricted shares or RSUs having a value on the date of grant of $200,000 on the first business day after the Annual Meeting. Each of the award types vest upon the earliest of one year after the grant date, or the day before the annual meeting held in the calendar year after the year in which the grant is made, the non-employee director’s death or date on which the director becomes totally and permanently disabled, or the date on which a change in control occurs, provided the director continues to be a member of the Board on the applicable date. Restricted shares entitle the holder to the rights of a stockholder, including voting, dividend, and distribution rights, but are nontransferable until they vest. Vested stock units will be settled in shares of our common stock or cash, in the case of fractional shares, upon a non-employee director’s separation from service. Non-employee directors holding stock units are not entitled to voting, dividend, distribution, or other rights until the corresponding shares of our common stock are issued upon settlement; however, if and when we pay a cash dividend to our common stockholders, we will issue dividend equivalents in the form of additional stock units. Under the 2017 Director Plan, dividends and dividend equivalents payable with respect to unvested restricted shares and unvested stock units will be subject to the same vesting and risks of forfeiture as the restricted shares and stock units to which they are attributable. The 2017 Director Plan includes a provision that accelerates the vesting of all outstanding awards in connection with a change in control of Price Group’s Amended and Restated By-Laws sets outGroup. Upon a change in control, any outstanding stock units will be settled in cash or shares at the procedures a stockholder must follow to use proxy access. Section 1.11 of Price Group’s Amended and Restated By-Laws sets out the procedures a stockholder must follow in order to nominate a candidate for Board membership outsidediscretion of the proxy access process. For these requirements, please referBoard. Ownership and Retention Guidelines Each non-employee director added to the AmendedBoard prior to 2017 is required to hold shares of our common stock, within five years of their appointment to the Board, having a value equal to three times the applicable cash retainer at the time they joined. The cash retainer amount was $300,000 in 2015 and Restated By-Laws2016, and $225,000 prior to 2015. Directors who were new to the Board in 2017 or who will join in the future, have an ownership goal of five times the annual cash retainer in effect on the date they join the Board. For purposes of the calculation, unvested restricted shares and outstanding stock units are counted, but unexercised stock options are not. Once this ownership goal is achieved, the number of shares required to be held becomes fixed and must be maintained until the end of the director’s service on the Board. Until the ownership goal is achieved, the director is expected to retain “net gain shares” resulting from the exercise of stock options or vesting of restricted stock granted under the applicable director plan. Net gain shares are the shares remaining after payment of the stock option exercise price and taxes owed with respect to the exercise or vesting event. All of our directors have achieved and maintain the ownership goal as of February 12, 2019, filed with the SEC on February 13, 2019, as Exhibit 3.1 to our Current Report on Form 8-K.date of this proxy statement. Olympia J. Snowe, Chair
Mary K. Bush
Alan D. Wilson
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Security OwnershipTable of Certain Beneficial Owners and ManagementContents
2020 Director Compensation1 Stock Ownership of 5% Beneficial Owners
To our knowledge, these are the following beneficial owners of more than 5% of our outstanding common stock as of February 22, 2019.
Name and Address
| Amount and Nature of
Beneficial Ownership
| Percent of
Class
| BlackRock, Inc.
| | | | | | | 55 East 52nd Street
| | | | | | | New York, NY 10055
| 17,275,244 shares1
| | 7.30
| %
| | | | | | State Street Corporation
| | | | | State Street Financial Center
| | | | | One Lincoln Street
| | | | | Boston, MA 02111
| 13,001,392 shares2
| | 5.49
| %
| | | | | | The Vanguard Group
| | | | | 100 Vanguard Boulevard
| | | | | Malvern, PA 19355
| 21,462,932 shares3
| | 9.07
| %
|
| 1 | Based solely on information contained in a Schedule 13G/A filed with the SEC on February 6, 2019, by BlackRock, Inc. Of the 17,275,244 shares beneficially owned, BlackRock, Inc., has sole power to vote or direct the vote of 15,065,615 shares and sole power to dispose or to direct the disposition of 17,275,244 shares. |
| 2 | Based solely on information contained in a Schedule 13G filed with the SEC on February 14, 2019, by State Street Corporation. Of the 13,001,392 shares beneficially owned, State Street Corporation has sole power to vote or direct the vote of 0 shares, sole power to dispose or to direct the disposition of 0 shares, shared power to vote or direct the vote of 11,947,718 shares, and shared power to dispose or direct the disposition of 12,998,536 shares. |
| 3 | Based solely on information contained in a Schedule 13G/A filed with the SEC on February 13, 2019, by The Vanguard Group. Of the 21,462,932 shares beneficially owned, The Vanguard Group has sole power to vote or direct the vote of 295,292 shares, sole power to dispose or to direct the disposition of 21,124,399 shares, shared power to vote or direct the vote of 49,455 shares, and shared power to dispose or to direct the disposition of 338,533 shares. |
Stock Ownership of Management
The following table sets forth information regarding the beneficial ownershipcompensation earned by, or paid to, directors who served on our Board during 2020. As an officer of our common stock as of the record date, February 22, 2019, by (i) each director and each nominee for director, (ii) each person namedPrice Group, Mr. Stromberg does not receive separate directors’ fees so he has been omitted from this table. Mr. Stromberg appears in theour Summary Compensation Table and (iii) all directors and executive officers as a group. Share amounts and percentages shown for each individual or group in the table assume the exercise of all stock options exercisable by such individual or group within 60 days of the record date and the settlement of RSUs that are vested or will vest within 60 days of the record date. Except as otherwise noted, all shares are owned individually with sole voting and dispositive power.NEO. Name of Beneficial Owner | Amount of Beneficial
Ownership | Percent of
Class1 | Christopher D. Alderson | | 440,483 | 2 | | | * | Mark S. Bartlett | | 20,992 | 3 | | | * | Edward C. Bernard | | 1,885,842 | 4 | | | * | Mary K. Bush | | 20,789 | 5 | | | * | Céline S. Dufétel | | 884 | | | | * | Dr. Freeman A. Hrabowski, III | | 62,642 | 6 | | | * | Robert F. MacLellan | | 55,975 | 7 | | | * | Kenneth V. Moreland | | 92,103 | 8 | | | * | Brian C. Rogers | | 2,818,974 | 9 | | 1.2 | % | Robert W. Sharps | | 428,105 | 10 | | | * | Olympia J. Snowe | | 15,057 | 11 | | | * | William J. Stromberg | | 1,075,413 | 12 | | | * | Richard R. Verma | | — | 13 | | | * | Sandra S. Wijnberg | | 9,217 | 14 | | | * | Alan D. Wilson | | 10,560 | 15 | | | * | Directors and All Executive Officers as a Group, excluding the former
CFO (21 persons) | | 7,320,261 | 16 | | 3.1 | % |
| NAME | | FEES EARNED
OR PAID IN CASH | | | STOCK
AWARDS2,3 | | | ALL OTHER
COMPENSATION4 | | TOTAL | | | Mark S. Bartlett | | $ | 135,000 | | | | $200,013 | | | $ | 10,000 | | | $345,013 | | | Mary K. Bush | | $ | 115,000 | | | | $250,939 | | | $ | 10,000 | | | $375,939 | | | Dina Dublon | | $ | 120,000 | | | | $215,565 | | | $ | 10,000 | | | $345,565 | | | Dr. Freeman A. Hrabowski, III | | $ | 118,583 | | | | $248,550 | | | $ | 10,000 | | | $377,133 | | | Robert F. MacLellan | | $ | — | | | | $350,125 | | | $ | 10,000 | | | $360,125 | | | Olympia J. Snowe | | $ | 125,000 | | | | $240,200 | | | $ | 10,000 | | | $375,200 | | | Robert J. Stevens | | $ | — | | | | $331,454 | | | $ | — | | | $331,454 | | | Richard R. Verma | | $ | 120,000 | | | | $221,991 | | | $ | 10,000 | | | $350,991 | | | Sandra S. Wijnberg | | $ | — | | | | $338,214 | | | $ | 10,000 | | | $348,214 | | | Alan D. Wilson | | $ | — | | | | $389,223 | | | $ | — | | | $389,223 | |
| 1 | Beneficial ownership of less than 1% is representedIncludes only those columns relating to compensation awarded to, earned by, an asterisk (*).or paid to non-employee directors for their services in 2020. All other columns have been omitted. |
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| | | 2 | Includes 77,596 shares that may be acquired by Mr. Alderson within 60 days uponThe following table represents the exercise of stock options. |
| 3 | Includes 1,755 unvested restricted stock awards. |
| 4 | Includes (i) 133,775 shares that may be acquired by Mr. Bernard within 60 days upon the exercise of stock options, (ii) 269,463 shares heldequity awards granted in a family trust, (iii) 60,500 shares held by a member of Mr. Bernard’s family, and (iv) 801,210 shares held by trusts for which Mr. Bernard is a trustee and disclaims beneficial ownership. Neither he nor any member of his family has any economic interest in the trusts described in (iv). |
| 5 | Includes 1,755 unvested restricted stock awards and 13,597 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Bush’s separation from the Board. |
| 6 | Includes (i) 26,008 shares that may be acquired by Dr. Hrabowski within 60 days upon the exercise of stock options, (ii) 7,986 vested stock units that will be settled in shares of the Company’s common stock upon Dr. Hrabowski’s separation from the Board, and (iii) 28,648 shares held by a member of Dr. Hrabowski’s family. |
| 7 | Includes (i) 42,942 shares that may be acquired by Mr. MacLellan within 60 days upon the exercise of stock options, (ii) 1,755 unvested restricted stock awards, and (iii) 5,115 vested stock units that will be settled in shares of the Company’s common stock upon Mr. MacLellan’s separation from the Board. |
| 8 | Includes 7,143 shares that may be acquired by Mr. Moreland within 60 days upon the exercise of stock options. |
| 9 | Includes (i) 123,238 shares that may be acquired by Mr. Rogers within 60 days upon the exercise of stock options, (ii) 200,000 shares held by a member of Mr. Rogers’ family, and (iii) 225,000 shares held in a family trust in which Mr. Rogers disclaims beneficial ownership. |
| 10 | Includes 113,415 shares that may be acquired by Mr. Sharps within 60 days upon the exercise of stock options and 2,400 unvested restricted stock awards. |
| 11 | Includes 5,757 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Snowe’s separation from the Board. |
| 12 | Includes (i) 111,775 shares that may be acquired by Mr. Stromberg within 60 days upon the exercise of stock options, (ii) 400,000 shares held by a limited liability company in which Mr. Stromberg has an interest, and (iii) 45,000 shares held in a family trust for which Mr. Stromberg disclaims beneficial ownership |
| 13 | Mr. Verma was elected2020 to the Board at the 2018 Annual Meeting, and does not own any shares of the Company’s common stock. The 2,685 unvested stock units which were granted to Mr. Verma in 2018 will vest following the Annual Meeting. |
| 14 | Includes 1,755 unvested restricted stock awards and 4,625 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Wijnberg’s separation from the Board. |
| 15 | Includes 10,560 vested stock units that will be settled in shares of the Company’s common stock upon Mr. Wilson’s separation from the Board. |
| 16 | Includes (i) 882,267 shares that may be acquired by all directors and executive officers as a group within 60 days upon the exercise of stock options, (ii) 14,742 unvested restricted stock awards held by certain directors and executive officers, (iii) 47,640 stock units held by six of the non-employee directors thatnamed above. In accordance with the 2017 Director Plan, each non-employee director was awarded a grant date value of $200,000. In addition pursuant to our 2017 Director Plan, some directors elected to have their fees, which are typically paid semi-annually, deferred into RSUs. The holders of RSUs also receive dividend equivalents in the form of additional vested and will be settled in sharesstock units on each of the Company’s quarterly dividend payment dates. The award value or dividend equivalent value was converted to awards or units, using the closing stock price of our common stock upon their separation fromon the Board, and (iv) 2,029,821date of grant. Fractional shares held by family members, held in family trusts or limited liability companies of certain directors and executive officers, and held by trusts in which certain executive officers are trustees.were rounded up to the nearest whole share. |
| | | | | | | | | GRANT DATE | | | | | | NUMBER OF | | NUMBER OF | | FAIR VALUE OF | | | | | | RESTRICTED | | RESTRICTED | | STOCK AND | | DIRECTOR | GRANT DATE | SHARES | | UNITS | | OPTION AWARDS | | | | | | | | | | | | | Mark S. Bartlett | | 5/13/2020 | | 1,853 | | | | $ | 200,013 | | Mary K. Bush | 3/30/2020 | | | | 127 | | $ | 12,577 | | | | | | | | | | | | | | | 5/13/2020 | | 1,853 | | | | $ | 200,013 | | | | | | | | | | | | | | | 6/30/2020 | | | | 103 | | $ | 12,691 | | | | | | | | | | | | | | | 9/29/2020 | | | | 100 | | $ | 12,784 | | | | | | | | | | | | | | | 12/30/2020 | | | | 86 | | $ | 12,874 | | | | | | | | | | | | | Dina Dublon | 3/30/2020 | | | | 26 | | $ | 2,596 | | | | 5/13/2020 | | | | 1,853 | | $ | 200,013 | | | | 6/30/2020 | | | | 35 | | | 4,288 | | | | 9/29/2020 | | | | 34 | | $ | 4,319 | | | | 12/30/2020 | | | | 29 | | $ | 4,349 | | Dr. Freeman A. Hrabowski, III | 3/30/2020 | | | | 109 | | $ | 10,742 | | | | | | | | | | | | | | | 5/13/2020 | | | | 1,853 | | $ | 200,013 | | | | | | | | | | | | | | | 6/30/2020 | | | | 101 | | $ | 12,508 | | | | | | | | | | | | | | | 9/29/2020 | | | | 99 | | $ | 12,599 | | | | | | | | | | | | | | | 12/30/2020 | | | | 85 | | $ | 12,688 | | | | | | | | | | | | | Robert F. MacLellan | 3/30/2020 | | | | 48 | | $ | 4,732 | | | | 5/13/2020 | | 1,853 | | | | $ | 200,013 | | | | 6/30/2020 | | | | 566 | | $ | 69,775 | | | | 9/29/2020 | | | | 41 | | $ | 5,284 | | | | 12/30/2020 | | | | 471 | | $ | 70,321 |
| | | | | | | | | GRANT DATE | | | | | | NUMBER OF | | NUMBER OF | | FAIR VALUE OF | | | | | | RESTRICTED | | RESTRICTED | | STOCK AND | | DIRECTOR | GRANT DATE | SHARES | | UNITS | | OPTION AWARDS | | | | | | | | | | | | | Olympia J. Snowe | 3/30/2020 | | | | 88 | | $ | 8,680 | | | | | | | | | | | | | | | 5/13/2020 | | | | 1,853 | | $ | 200,013 | | | | | | | | | | | | | | | 6/30/2020 | | | | 84 | | $ | 10,427 | | | | | | | | | | | | | | | 9/29/2020 | | | | 82 | | $ | 10,503 | | | | | | | | | | | | | | | 12/30/2020 | | | | 71 | | $ | 10,577 | | | | | | | | | | | | | Robert J. Stevens | 3/30/2020 | | | | 26 | | $ | 2,596 | | | | 5/13/2020 | | | | 1,853 | | $ | 200,013 | | | | 6/30/2020 | | | | 489 | | | 60,357 | | | | 9/29/2020 | | | | 37 | | $ | 4,727 | | | | 12/30/2020 | | | | 427 | | $ | 63,761 | | Richard R. Verma | 3/30/2020 | | | | 42 | | $ | 4,183 | | | | | | | | | | | | | | | 5/13/2020 | | | | 1,853 | | $ | 200,013 | | | | | | | | | | | | | | | 6/30/2020 | | | | 48 | | $ | 5,889 | | | | | | | | | | | | | | | 9/29/2020 | | | | 46 | | $ | 5,932 | | | | | | | | | | | | | | | 12/30/2020 | | | | 40 | | $ | 5,974 | | | | | | | | | | | | | Sandra S. Wijnberg | 3/30/2020 | | | | 43 | | $ | 4,278 | | | | 5/13/2020 | | 1,853 | | | | $ | 200,013 | | | | 6/30/2020 | | | | 521 | | $ | 64,317 | | | | 9/29/2020 | | | | 38 | | $ | 4,786 | | | | 12/30/2020 | | | | 434 | | $ | 64,820 | | Alan D. Wilson | 3/30/2020 | | | | 133 | | $ | 13,123 | | | | | | | | | | | | | | | 5/13/2020 | | | | 1,853 | | $ | 200,013 | | | | | | | | | | | | | | | 6/30/2020 | | | | 636 | | $ | 78,513 | | | | | | | | | | | | | | | 9/29/2020 | | | | 121 | | $ | 15,482 | | | | | | | | | | | | | | | 12/30/2020 | | | | 549 | | $ | 82,092 | | | | | | | | | | | |
| 3 | The following table represents the aggregate number of equity awards outstanding as of December 31, 2020. |
| | | UNVESTED | | UNVESTED | | UNEXERCISED | | | | VESTED | | DIRECTOR | STOCK AWARDS | | STOCK UNITS | | OPTION AWARDS | | TOTAL | STOCK UNITS | | | | | | | | | | | | | | Mark S. Bartlett | | 1,853 | | | | | | 1,853 | | | | Mary K. Bush | 1,853 | | | | | | 1,853 | | 14,391 | | | | | | | | | | | | | | Dina Dublon | | | | 1,891 | | | | 1,891 | | 2,971 | | Dr. Freeman A. Hrabowski, III | | | 1,891 | | 26,008 | | 27,899 | | 12,292 | | | | | | | | | | | | | | Robert F. MacLellan | 1,853 | | | | 26,008 | | 27,861 | | 6,383 | | Olympia J. Snowe | | | 1,891 | | | | 1,891 | | 9,932 | | | | | | | | | | | | | | Robert J. Stevens | | | | 1,891 | | | | 1,891 | | 3,826 | | Richard R. Verma | | | 1,891 | | | | 1,891 | | 4,786 | | | | | | | | | | | | | | Sandra S. Wijnberg | | 1,853 | | | | | | 1,853 | | 5,789 | | Alan D. Wilson | | | 1,891 | | | | 1,891 | | 15,982 | | | | | | | | | | | | |
| 4 | The amounts represent personal gifts matched by our sponsored T. Rowe Price Foundation to qualified charitable organizations. |
Section 16(a) Beneficial Ownership Reporting ComplianceHuman Capital
Our People Drive Our Success At T. Rowe Price, our people set us apart. We thrive because our Company culture is based on collaboration and diversity. We believe that our culture of collaboration enables us to identify opportunities others might overlook. Our associates’ knowledge, insight, enthusiasm, and creativity are the reasons our clients succeed and our firm excels. In order to attract and retain the highest quality talent, we develop key talent and succession plans, invest in Company diversity, equity and inclusion initiatives, provide opportunities for our associates to learn and grow, and provide strong benefits. As evidence of the success of our approach the average tenure of our associates is 8 years, and the average tenure of our investment professionals is 22 years. Investing In Our People At T. Rowe Price, we seek to help our clients achieve their long-term investment goals. In order to do this, we are committed to helping our associates achieve their long-term career goals. As part of this commitment, we seek to identify new opportunities within our firm for associates to expand their experience and grow their skills. As a result of allowing our associates to develop these skills we are able to promote from within, reflected by the fact that approximately 35% of our open positions are filled by internal applicants. We are committed to the professional growth of our associates through the development of our associates’ knowledge, skills and experience, by providing them access to in person and online training programs and by offering a generous tuition reimbursement program. We believe a critical driver of our firm’s future growth is our ability to grow leaders. Pursuant to this, we have held a series of leadership speaker events and offer our associates access to virtual programs focused on leadership development led by professors at leading universities. Hiring Diverse Talent In today’s dynamic business environment, having a diverse and inclusive workforce and providing an equal opportunity to all associates is a business and cultural imperative. Our priority is to increase our hiring, retention and development of talent from groups that are underrepresented in asset management; this includes both minorities and women. In 2020, 21% of our investment professionals globally were female and firm-wide 63% of new hires were either female or ethnically diverse. For every open senior role at the firm, our goal is that at least 30% of the candidates interviewed will be ethnically diverse and/or female. We believe a key component of combating racial inequality and injustice is greater representation of minorities in all areas of society and business—including at T. Rowe Price. To increase the pipeline of diverse candidates, we have created partnerships with historically black colleges and universities, latinx-serving institutions, and other colleges and universities with which we have had success in recruiting diverse talent in the United States. Other initiatives connect with prospective and future minority and female candidates as early as high school, through college, and on into graduate school. Throughout each year, we host on-site mentoring and recruitment initiatives in all U.S. offices and London, encouraging and attracting diverse candidates to consider careers in asset management. We remain steadfast in our commitment to supporting a diverse and inclusive workplace. An Inclusive Work Environment T. Rowe Price emphasizes a positive, welcoming, and collaborative culture, where associates are encouraged to be themselves—to draw from their experiences, express their viewpoints, and take the initiative to help our clients succeed. Diversity, equity and inclusion are pillars of our business approach. Our Management Committee ensures we are setting high standards for the way we recruit, hire, mentor and develop talent and establish and maintain work environments in every one of our business units in order to achieve these pillars. To support this, our Diversity and Inclusion Steering Committee (DISC) meets bi-monthly to discuss progress on specific diversity and inclusion initiatives and related challenges and concerns. We have developed a plan to provide additional programs to strengthen the experience and support for underrepresented minorities. How We Support Our Diverse Perspectives Business Resource Groups provide important perspectives that help shape our company culture, especially in recruitment, talent acquisition and retention. Our business resource groups are open to all filing requirementsassociates and provide valuable insight and programs to complystrengthen our inclusive culture, support career development of associates, extend our brand in the community and provide insight on delivering our services in the marketplace. T. Rowe Price business resource groups include: MOSAIC—Providing guidance and leadership to strengthen the attraction, retention and experience of ethnically diverse personnel. VALOR—Providing guidance and leadership to strengthen attraction, retention and experience of veterans, active reservists and their families. PRIDE—Providing guidance and leadership to strengthen attraction, retention and experience of LGBTQ+ personnel and allies. WAVE—Providing guidance and leadership to strengthen the attraction, retention and experience of women. Black Leadership Council—We formed a Black Leadership Council empowered to recommend to the Management Committee improvements to our black associate advancement strategy. At the end of 2020, forty-one percent (41%) of associates were members of at least one business resource group. Offering Benefits to Further Our Commitment In all of our global locations, we offer employee benefit solutions, including both healthcare and retirement benefits, where applicable, fitness club reimbursement, life insurance, and an Employee Assistance Program to support well-being. Benefit competitiveness and design is assessed within the relevant market for a given country, and offerings are aligned with Section 16(a)our global principles and local market practice. For example, retirement programs are uniquely designed to support associates in meeting retirement goals while also reflecting regional and country-specific practices in Asia, Europe, and the U.S. Focus on Family We have always emphasized the importance of spending quality time away from work. In addition to generous vacation time, the Securities Exchange Act were metfirm offers fully paid maternity leave for birth mothers, in addition to fully paid parental leave to all new mothers and fathers. We also provide adoption assistance to associates looking to expand their families. In the U.S., the UK, and Canada, we offer our associates backup child-care and eldercare. Managing Our Employee’s Safety and Well-being Through a Pandemic During 2020, our firm mobilized to ensure the safety of all our associates globally. Beginning first in the APAC region, and then worldwide, we migrated to a work from home environment for approximately 97% of our associates. We expanded our offerings for child and elder care assistance for our associates, and ensured that our health care coverage included COVID-19 testing and treatment. In response to the challenging situation, we offered our associates five additional wellness days along with free counseling through our Employee Assistance Program. Our Efforts in Reaction to Racial Inequity and Social Unrest As a Baltimore-based company, we have witnessed racial inequity firsthand as a systemic issue. Over the years, our associates have generously supported programs that address structural racism and disinvestment in our communities. The T. Rowe Price Foundation has partnered with local and national experts to learn about inequity and to incorporate these insights into its grant-making strategy. Together, our firm and our associates have quietly but consistently worked to bring about change. As a step toward furthering progress, our company donated $2 million toward racial justice causes. In addition, we enhanced internal programs that increased awareness of racial injustice, allowed our associates to have constructive conversations with each other about it, with the goal of having our Company become more inclusive and more diverse. For example, during the calendar year 2018.we held numerous diversity dialogues where associates in small settings were able to share their experiences in an effort to make all our associates aware of how systemic racism, gender discrimination or homophobia impacts their colleagues’ lives in a direct and personal way. Executive Compensation COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion & Analysis
The Compensation Discussion and Analysis (CD&A) provides an overview and analysis of our executive compensation philosophy, addresses the principal elements used to compensate our executive officers and explains how our executive compensation design aligns with the Company’s strategic objectives. We also address the 20182020 compensation decisions and theirthe rationale for those determinations for our named executive officers (NEOs).NEOs. This CD&A should be read together with the compensation tables that follow this section. Our NEOs for 2018 are2020 were as follows: Name
 | Title
|  | |  | |  | |  | William J. Stromberg | President and Chief Executive Officer
| Céline S. Dufétel1 | | Robert W. Sharps | | Christopher D. Alderson(1) | | Eric L. Veiel | Chair and Chief
Executive Officer | | Chief Operating Officer,
Chief Financial Officer
and Treasurer | Edward C. Bernard
| Vice Chairman
| Robert W. Sharps2
| President, Head of
Investments, and Group
Chief Investment Officer | Christopher D. Alderson
| | Co-Head of Global Equity | Kenneth V. Moreland3
| Former Chief Financial Officer and Treasurer
| Co-Head of Global Equity |
| 1 | Effective February 19, 2018, Ms. Dufétel became chief financial officer and treasurer. |
| 2 | Effective March 1, 2018, Mr. Sharps became the head of investments and group chief investment officer. |
| 3 | Effective March 1, 2018, Mr. Moreland retired from the Company. |
Executive Summary Our compensation programs recognize and reward performance, with a focus on rewarding the achievements of our NEOs, as measured by a number of factors over the short-term and long-term. Those factors include: | ■ | the financial performance and financial stability of Price Group; |
the financial performance and financial stability of Price Group; | ■ | relative investment performance of our investment products; and |
relative investment performance of our investment products; and | ■ | performance of our NEOs against pre-determined corporate and individual goals. |
performance of our NEOs against pre-determined corporate and individual goals. Our compensation programs are also designed to reward NEOs for their contributions to the Company’s culture, service quality, customer retention, risk management, corporate reputation, and to the quality and collaboration of our associates. A significant portion of NEO compensation is performance-based and includes a material long-term incentive component tied to Company stock performance, thereby ensuring compensation is dependent on the Company’s short-term and longer-term performance. Overall, we were pleased with our results during 2018.2020. We continued to perform well for our clients while achieving strong financial results for the Company. Below is a summary of results for key measures that the Compensation Committee considers when evaluating NEO performance and making annual and long-term incentive compensation decisions. TABLE OF CONTENTS
2018 FINANCIAL PERFORMANCE HIGHLIGHTS
| ■(1) | Our net revenuesMr. Alderson ceased being an executive officer and earnings per share have continued to grow significantly overretired from the last five years. Results for 2018 in comparison to the prior two years and 2013 (five years) are as follows: |
| | Assets
Under
Management
(in billions) | |
Net
Revenue
(in billions) | | Net Operating
Income
(in billions) | |
Operating
Margin
| | Net Income
Attributable
to TRPG
(in billions) | | Diluted
Earnings per
Share
| | Non-GAAP
Diluted
Earnings per
Share
| | Cash
Returned to
Stockholders
(in billions) |
2018
| |
$962.3
| |
$5.4
| |
$2.4
| |
44%
| |
$1.8
| |
$7.27
| |
$7.15
| |
$1.8
| | | | | | | | | |
20171
| |
$991.1
| |
$4.9
| |
$2.1
| |
43%
| |
$1.5
| |
$5.97
| |
$5.43
| |
$1.0
| | | | | | | | | |
20161
| |
$810.8
| |
$4.3
| |
$1.7
| |
40%
| |
$1.2
| |
$4.75
| |
$4.49
| |
$1.2
| | | | | | | | | |
2013
| |
$692.4
| |
$3.5
| |
$1.6
| |
47%
| |
$1.0
| |
$3.90
| |
$3.76
| |
$.4
|
| 1 | Certain amounts for 2017 and 2016 have been adjusted to reflect the adoption of new revenue accounting guidance on January 1, 2018. For more information see the notes to the consolidated financial statements in Item 8 of the 2018 Annual Report Form on 10-K. |
| ■ | Our assets under management (AUM) decreased by $28.8 billion fromCompany effective December 31, 2017, to $962.32020. |
2020 Financial Performance Highlights Our net revenues and earnings per share grew significantly over the last five years. Results for 2020 in comparison to the prior two years and 2015 (five years) are as follows: 
Our AUM increased by $263.7 billion from December 31, 2019, to $1,470.5 billion as of December 31, 2020 and our average AUM for 2020 increased 12.5% over the 2019 period. Clients added $5.6 billion, while market appreciation and income increased AUM by $256.9 billion. The firm also acquired client contracts from PNC Bank in September 2020 that added $1.2 billion of stable value assets under management Organic AUM growth of 0.5% was driven primarily by strong flows from both institutional and intermediary clients in APAC and EMEA, including success in our local Japanese funds and SICAV funds. The flows in APAC and EMEA were mostly offset by ongoing pressure from passive in U.S. Equity, and headwinds in our Target Date franchise, in part driven by the CARES Act. Our net revenues increased 10.5% over 2019, while our average AUM increased 12.5%, due primarily to client transfers to lower fee share classes and vehicles and money market fee waivers, which the firm began implementing in the second quarter of 2020, in order to maintain positive yield for investors. Our overall financial condition remains very strong, as we finished the year with $7.7 billion of stockholders’ equity, $4.2 billion of cash and discretionary investments, and no debt. We also had redeemable seed capital investments in T. Rowe Price investment products of $1.2 billion at December 31, 2020. Our strong balance sheet and operating results enabled us to return $2.0 billion, or 86% of 2020 net income, to stockholders through dividends and share repurchases. In 2020, we increased our annual recurring dividend for the 34th consecutive year, by 18.4%. In 2020, we expended $1.2 billion to repurchase 10.9 million shares, or 4.6% of our outstanding common stock at an average price of $109.30 per share. Dividends and stock repurchases vary depending upon our financial performance, liquidity, market conditions, and other relevant factors. 2020 Strategic Performance Highlights Investment Performance Strong investment performance and brand awareness are key drivers in attracting and retaining assets—and to our long-term success. The table below presents investment performance for specific asset classes and AUM weighted performance, of the Price funds performance against passive peers, and composite performance against benchmarks for the one-, three-, five-, and 10-years ended December 31, 2020. Past performance is no guarantee of future results. | | | 1 YEAR | | 3 YEARS | | 5 YEARS | | 10 YEARS | | % of U.S. mutual funds that outperformed Morningstar median1, 2 | | | | | | | | | | Equity | | 65% | | 71% | | 66% | | 85% | | Fixed Income | | 54% | | 55% | | 58% | | 57% | | Multi-Asset | | 94% | | 94% | | 85% | | 90% | | All Funds | | 70% | | 72% | | 69% | | 77% | | | | | | | | | | | | % of U.S. mutual funds that outperformed passive peer median1, 3 | | | | | | | | | | Equity | | 52% | | 67% | | 64% | | 68% | | Fixed Income | | 72% | | 59% | | 54% | | 47% | | Multi-Asset | | 91% | | 82% | | 70% | | 86% | | All Funds | | 69% | | 69% | | 63% | | 67% | | | | | | | | | | | | % of composites that outperformed benchmarks4 | | | | | | | | | | Equity | | 60% | | 65% | | 70% | | 77% | | Fixed Income | | 66% | | 56% | | 67% | | 68% | | All Composites | | 62% | | 62% | | 68% | | 74% |
| AUM-Weighted Performance | | 1 YEAR | | 3 YEARS | | 5 YEARS | | 10 YEARS | | % of U.S. mutual funds that outperformed Morningstar median1, 2 | | | | | | | | | | Equity | | 76% | | 79% | | 84% | | 92% | | Fixed Income | | 43% | | 51% | | 57% | | 59% | | Multi-Asset | | 100% | | 97% | | 96% | | 97% | | All Funds | | 79% | | 81% | | 85% | | 90% | | | | | | | | | | | | % of U.S. mutual funds that outperformed passive peer median1, 3 | | | | | | | | | | Equity | | 39% | | 81% | | 77% | | 73% | | Fixed Income | | 58% | | 50% | | 37% | | 43% | | Multi-Asset | | 95% | | 96% | | 95% | | 96% | | All Funds | | 54% | | 83% | | 79% | | 77% | | | | | | | | | | | | % of composites that outperformed benchmarks4 | | | | | | | | | | Equity | | 70% | | 71% | | 73% | | 73% | | Fixed Income | | 53% | | 47% | | 49% | | 72% | | All Composites | | 67% | | 67% | | 69% | | 73% |
| • | As of December 31, 2018, as sharp declines in equity markets near the end2020, 73 of the year outweighed our solid organic growth during 2018. Clients added $13.2 billion, while market depreciation, along with distributions not reinvested, reduced AUM by $42.0 billion. |
| ■ | The organic AUM growth of 1.3% was driven by diversified inflows across distribution channels and geographies, the strength123 (59%) of our multi-asset franchise, and positive flows into international equity and fixed income. |
| ■ | Our net revenues increased 10.7% over 2017, as average AUM increased 14.0% over the 2017 period. |
| ■ | Our overall financial condition remains very strong, as we finished the year with $6.1 billion of stockholders’ equity, $3.0 billion of cash and discretionary investments, and no debt. We also had redeemable seed capital investments in T. Rowe Price investment products of $1.1 billion at December 31, 2018. |
| ■ | Our strong balance sheet and operating results enabled us to return $1.8 billion, or nearly 100% of 2018 net income, to stockholders through share repurchases and dividends. We increased our annual recurring dividend for the 32nd consecutive year, by 22.8%. We expended $1.1 billion to repurchase 10.8 million shares, or 4.4% of our outstanding common stock, in 2018. Dividends and stock repurchases vary depending upon our financial performance and liquidity, market conditions, and other relevant factors. |
TABLE OF CONTENTS
2018 STRATEGIC PERFORMANCE HIGHLIGHTS
| ■ | Strong investment performance and brand awareness are key drivers in attracting and retaining assets—and to our long-term success. The percentage of the Pricerated U.S. mutual funds (across primary share classes) that outperformed their comparable Morningstar median onreceived an overall rating of 4 or 5 stars. By comparison, 32.5% of Morningstar’s fund population is given a total return basis and that arerate of four or five stars5. In addition, 84% of AUM in the top Morningstar quartile for the one-, three-, five-, and 10-yearsour rated U.S. mutual funds (across primary share classes) ended December 31, 2018, were:2020 with an overall rating of four or five stars. |
| 1 year | 3 years | 5 years | 10 years | Outperformed Morningstar median1 | | | | | | | | | | | | | All funds | | 66 | % | | 75 | % | | 79 | % | | 83 | % | Multi-asset funds | | 71 | % | | 96 | % | | 88 | % | | 89 | % | | | | | | | | | | | | | | Top Morningstar quartile1 | | | | | | | | | | | | | All funds | | 31 | % | | 46 | % | | 51 | % | | 54 | % | Multi-asset funds | | 38 | % | | 62 | % | | 66 | % | | 79 | % |
| | | 1 | Source: © 20182020 Morningstar, Inc. All rights reserved. The information contained herein: (1)1) is proprietary to Morningstar and/or its content providers; (2)2) may not be copied or distributed; and (3)3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee |
| 2 | Source: Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of future results. Historically, the firm has disclosedless than one year, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. The top chart reflects the percentage of U.S. mutualT. Rowe Price funds (across all share classes) that outperformed their comparable Lipper averages on a total return basiswith 1 year, 3 year, 5 year, and 10 year track record that are inoutperforming the top Lipper quartileMorningstar category median. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the same periods. Investment performance results using the new measures are similar to the Lipper results.time periods indicated. Total Fund AUM included for this analysis includes $493B for 1 year, $493B for 3 years, $493B for 5 years, and $484B for 10 years. |
| ■ | 86% of our rated U.S. mutual funds’ assets under management ended the quarter with an overall rating of four or five stars from Morningstar. |
| ■ | The performance of our funds and institutional strategies against benchmarks remains competitive and are very strong over the ten year time period. |
| ■ | We were very pleased with execution on our strategic initiatives across investment capabilities, products, distribution, and technology, including creating operational efficiency gains. Highlights from the year include: |
| ■ | We increased our global investment professional staff nearly 7% in 2018 to more than 600, including growth of our multi-asset solutions team and hiring additional investment analysts. |
| ■ | We continued to expand our product offerings with the launch of several new investment strategies to meet evolving client demands. These include such strategies as Multi-Strategy Total Return, Global Equity Dividend, and Asia Credit Bond. |
| ■ | We saw a 20% growth in client-facing associates in our U.S. intermediaries channel that supported the expansion of our regional coverage and increasing cash flows from broker-dealers. We continued to broaden and diversify our distribution capabilities through the launch of several sub-funds, share classes, and new vehicles across our international lineups, including Japanese Investment Trust Management Company, U.K Open-ended Investment Company, SICAV, Australian Unit Trusts, and Canadian Pension Pools. |
| ■ | We broadened efforts in our Maryland Innovation Center to transform our clients’ digital experiences and continued to build our team of data scientists and engineers in our New York Technology Development Center. |
| ■ | Global investment management and trading operation processes continue to evolve to meet growing complexity. The fund accounting systems transition to BNY Mellon was completed in 2018. |
| ■ | We achieved compliance with significant regulations that had broad reaching impact on the firm’s operations. |
| ■ | Our cost optimization efforts achieved savings as planned, enabling reinvestment back into the business. |
| ■ | We continue to enhance our governance and operating model, with significant changes being made to the Management Committee. Most specifically, Céline S. Dufétel transitioned into the chief financial officer role following Kenneth V. Moreland’s retirement. Additionally, we prepared for Edward C. Bernard’s retirement on December 31, 2018, by realigning his leadership team under the president and CEO. Mr. Bernard will continue in his vice chairman role on the Board through the 2019 Annual Meeting. |
TABLE OF CONTENTS
2018 COMPENSATION DECISIONS FOR OUR CHIEF EXECUTIVE OFFICER AND OTHER NEOs
| ■3 | Fixed base salary composes a small portionPassive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of overall compensation, whereas performance-based pay, in annual cash incentivesless than one year, funds with fewer than three peers, T. Rowe Price passive funds, and long-term equity awards, representsT. Rowe Price funds that are clones of other funds. This analysis compares T. Rowe Price active funds to the most significant portion.applicable universe of passive/index open-end funds and ETFs of peer firms. The mixtop chart reflects the percentage of compensation elements awardedT. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $475B for 1 year, to our president$473B for 3 years, $432B for 5 years, and CEO and other continuing NEOs, as illustrated below, reflects our compensation philosophy.$411B for 10 years. |
| ■4 | For 2018, Mr. Stromberg’s total compensation increased 12% overComposite net returns are calculated using the priorhighest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,355B for 1 year, $1,353B for 3 years, $1,328B for 5 years, and $1,290B for 10 years. |
| 5 | The Morningstar RatingTM for funds is calculated for funds with mostat least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Morningstar gives its best ratings of 5 or 4 stars to the top 32.5% of all funds (of the 32.5%, 10% get 5 stars and 22.5% get 4 stars). The Overall Morningstar RatingTM is derived from a weighted average of the increase being delivered in performance-based RSUs. This increase in total compensation reflects the Compensation Committee’s assessment of Mr. Stromberg’s performance as CEOfigures associated with a fund’s 3, 5, and aligns with the Company’s achievement of annual and long-term financial and strategic results previously discussed. Considerations were also made when comparing Mr. Stromberg’s pay to his peers in the industry.10 year (if applicable) Morningstar RatingTM metrics. |
Investment, Product and Distribution Capabilities We were pleased with execution on our strategic initiatives across investment capabilities, products, distribution, and technology, including creating operational efficiency gains. Highlights from the year include: We increased our global investment professional staff nearly 10% in 2020 to 724, and announced our plan to establish T. Rowe Price Investment Management, a separate SEC-registered investment advisor, to support the firm’s continued focus on generating strong investment results for clients. We advanced our corporate access, ESG and equity data insight capabilities. Expanded the firm’s product strategy with the launch of four active ETFs, our first sustainable funds range, and two new Japanese Investment Trust Management Companies. Successfully navigated shift to virtual client engagement model as a result of the coronavirus pandemic. We expanded our derivatives coverage and enhanced our complex product support model. Enterprise Capabilities and Talent We made progress toward our long-tern plan to make our operating and technology platforms more secure, efficient, and scalable. We maintained compliance with significant regulations that had broad reaching impact on the firm’s operations. We announced a new headquarters location. Successfully navigated pandemic crisis including managing remote working arrangements for 97% of our associates, and communications to our global work force to ensure coordination of our response. Advanced diversity and inclusion efforts and the creation of the Black Leadership Council and the MOSAIC Heritage Communities. We welcomed Stephon Jackson and Justin Thomson, to the Management Committee, effective January 1, 2021. | ■36 | On average, the other NEO’s compensation increased 13.5%. This average excludes Ms. Dufétel, as 2018 was her first year receiving an annual bonus, and Mr. Moreland, due to his retirement.T. Rowe Price Group |
2020 Compensation Decisions for our Chief Executive Officer and Other NEOs Fixed base salary is a small part of overall compensation, with performance-based pay, in annual cash incentives and long-term equity awards, representing the substantial majority of compensation. The compensation mix awarded this year to our CEO and other NEOs, as illustrated below, reflects our performance-based compensation philosophy.  For 2020, Mr. Stromberg’s total compensation increased 5.1% over the prior year, which is driven by an increase in both the value of his annual bonus and long-term equity award. The higher total compensation reflects the Compensation Committee’s assessment of Mr. Stromberg’s overall performance as CEO and aligns with the Company’s achievement of financial and strategic results previously discussed. Consideration was also given to Mr. Stromberg’s pay relative to his industry peers. Annual compensation for our other NEO’s also increased in 2020, consistent with Company performance and results in each of the NEO’s areas of responsibility. For Ms. Dufétel, her total compensation increase of 21% in 2020 also reflects a competitive adjustment following significant expansion of her responsibilities since becoming CFO in 2018, in addition to the Compensation Committee’s assessment of her performance and contributions to our financial and strategic results. In addition to her role as our CFO and Treasurer, Ms. Dufétel has also assumed firm-wide responsibilities for risk management, enterprise change management, investment operations and strategic initiatives, and in 2021 she was appointed as the Company’s Chief Operating Officer, in addition to her duties as CFO and treasurer. Our AICP is funded as a percentage of net operating income, and long-term equity awards to NEOs were split equally between performance-based RSUs subject to a three-year performance goal followed by two-year time based vesting, and time-based RSUs subject to a three-year vesting schedule. | ■2021 Proxy Statement | The Compensation Committee determined that, beginning in 2019, our Annual Incentive Compensation Plan (AICP) will be funded as a percentage of net operating income, and long-term equity awards to NEOs will consist of 50% time-based RSUs and 50% performance-based RSUs subject to a three-year performance goal. Further details of the changes are described under the Changes to the 2019 AICP and Long-Term Equity Awards section of this CD&A.37 |
| ■ | Mr. Moreland retired in March 2018 and did not receive a 2018 bonus or long-term equity award. Mr. Moreland was paid an amount for service he provided during a transition period leading up to his retirement on March 1, 2018. |
Executive Compensation Practices EXECUTIVE COMPENSATION PRACTICES
At the 2018 Annual Meeting,2020 annual meeting of stockholders, our stockholders cast a non-binding advisory vote on the compensation of the NEOs. Nearly 96% of the shares voted approved the compensation paid to our NEOs. The Compensation Committee welcomed this feedback and considers this outcome supportive of our approach to executive compensation. The Compensation Committee continues to implement and maintain practices in our compensation programs and related areas that reflect responsible corporate governance and compensation programs.practices. These include:  | What We Do
| What We Don’t Do
 | | WHAT WE DO | | WHAT WE DON’T DO |  Include all independent directors on the Compensation Committee.
| | Allow executives or independent directors to short-sell the Company stock or hedge to offset a possible decrease in the market value of Company stock held by them.
| | | | | | Impose stock ownership and retention requirements on our independent directors, NEOs, and other select members of senior management. | | Enter into change-in-control agreements with any of our executive officers.
| | | | | | Emphasize variable compensation, including long-term equity incentive compensation. | | Provide excise tax gross-ups.
| | | | | | Award Grant 50% of each NEOs long-term equity award value as performance- based RSUs, that are subject to a 12-month objective performance-based earning period and a five-year ratable vesting schedule. In 2019, performance-based RSUs will be subject towith a three-year objective performance goal. | | Enter into broad-based employment agreements with our United States-based executive officers.
| | | | | | goal and two additional years of time-based vesting. Impose double-trigger vesting on acceleration of awards granted under our 20122020 Long-Term Incentive Plan (2012 Incentive(2020 Plan) in the event we are acquired or taken over by another company. | | Pay dividends on unearned performance-based RSUs.
| | | | | | Engage an independent compensation consultant who provides services only to the Compensation CommitteeBoard and provides no other services to the Company or its management. | | Accelerate the vesting of equity awards on an executive officer’s retirement.
| | | | | | Use a comprehensive risk management program designed to identify, evaluate, and control risks and our compensation and stock ownership programs work within this risk management framework. | | Permit the repricing or exchange of equity awards in any scenario without stockholder approval.
| | | | | | Have a recoupment policy for both cash and equity incentive compensation in place for executive officers in the event of a material restatement of our financial results within three years of the original reporting. | |  Allow executives or independent directors to short-sell the Company stock or hedge to offset a possible decrease in the market value of Company stock held by them.
Enter into change-in-control agreements with any of our executive officers. Provide excise tax gross-ups. Pay dividends on unearned performance-based RSUs. Enter into broad-based employment agreements with our U.S.-based executive officers. Accelerate the vesting of equity awards on an executive officer’s retirement. Permit the repricing or exchange of equity awards in any scenario without stockholder approval. Sponsor any supplemental executive retirement plans or provide significant perquisites and other personal benefits to our executive officers. | | | | |
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Executive Compensation Philosophy and Objectives Our NEO and overall compensation programs are designed to satisfy two core objectives: | ■ | attract and retain talented and highly skilled management professionals with deep experience in investments, business leadership and client service; and |
attract and retain talented and highly skilled management professionals with deep experience in investments, business leadership and client service; and | ■ | maintain alignment of interests between our management professionals and our stockholders by focusing on long-term corporate performance and value creation, emphasizing appropriate enterprise risk-taking, reinforcing a “client-focused” and collaborative culture, and rewarding associates for the achievement of strategic goals. |
maintain alignment of interests between our management professionals and our stockholders by focusing on long-term corporate performance and value creation, emphasizing appropriate enterprise risk-taking, reinforcing a “client-focused” and collaborative culture, and rewarding associates for the achievement of strategic goals. We believe NEO compensation should be straight-forward, goal-oriented, longer-term focused, transparent, and consistent with stockholder interests. In addition, NEO compensation should be linked directly to our overall corporate performance, as well as to our success in achieving our long-term strategic goals. KEY ELEMENTS OF 2018
Key Elements of 2020 NEO COMPENSATIONCompensation
Our compensation program consists primarily of three elements: base salary, annual cash incentives, and long-term equity awards. Most NEO compensation is performance-based, which aligns payaligned to Company performance and to their individual performance against goals. There is no pre-established formula for the allocationmix between cash and non-cash compensation or between short-term and long-term awards. Instead, each year the Compensation Committee determines at its discretion, the appropriate level and mix of short-term and long-term awards tofor our NEOs to rewardrecognize annual performance and to encourage meeting our long-term strategic goals. The key features and purpose of the primary compensation elements are detailed in the table below. Element
ELEMENT | Key Features
| Purpose
KEY FEATURES | | PURPOSE | Salary | ■
| • Fixed annual cash amount.
•
■Salary paid to our most senior personnel in
the U.S. has been capped at $350,000
since 2005.
•
■ Mr. Alderson’s salary has beenSalaries for personnel outside the U.S. are also capped at
comparable levels of local currency. | | • £240,000 since January 1, 2017. | ■Represents a smallersmall component of total
compensation, so that the substantial
majority of NEO compensation is dependent
on performance-based annual incentive
compensation as well as long-term equity
incentives.
| Annual Incentive
Compensation
Plan (AICP) | ■
| Represents• Performance based and represents a material portion of the NEO’s
total compensation.
•
■Administered by the Compensation
Committee. • Committee.
■The AICP is part of the Company’s overall
bonus pool, in which nearly all employees
participate. • participate.
■The AICP representssets an aggregate maximum
bonus pool available to thefor NEOs that is
based solely on theCompany financial performance
of the Company in the current fiscal year.
The Compensation Committee annually
determines the maximum percentage of
the total bonusAICP pool set by the AICP that
can be awarded to each NEO.
This is a meaningful limit on the amount that can be awarded to each NEO that is tied to actual financial performance. •
■Actual bonus amounts awarded tofor each
NEO are based on the Company’s financial
and operating performance relative to
annual goals and objectives plus individual
performance and contributions of each NEO
contributions. • toward those results.
■Actual bonus amounts for each NEO are typically
significantly less lower than the maximum amount
determined under the plan. | ■
| • Provides structure for incentive compensation
and, coupled with the use of discretionjudgement by
the Compensation Committee, aligns cash
compensation of the NEOs and other senior
management to the Company’s annual performance of
performance. • the Company.
■Rewards NEOs for achievement of annual
Company goals and objectives that are key
to our long-term strategy.
•
■Provides competitive cash compensation to
attract and retain diverse high-quality talent. |
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Element
| Key Features
| Purpose
| Long-Term
Equity Awards | ■
| • Represents a materialsignificant portion of the NEO’s
total compensation and are earned over five-years. • total compensation.
■The grant value of the grant for each NEO is based
on the NEO’s relative level of corporate
management and functional responsibility,
competitive assessment of similar roles
within the marketplace, individual
performance, and expected future long-term
contributions. • contributions.
■For 2018, all2020, 50% of the long-term equity award values
granted tofor NEOs were in performance-based
RSUs tied to the attainment of a three-year objective performance goal. A NEO can earn from 0-100% of the performance RSUs based on the Company’s operating margin relative to the average operating margin for peers over the same period. If the Company achieves the three-year objective performance goal for the period 2021 through 2023, these awards would vest 50% per year starting in December 2024. • RSUs.
The remaining 50% of the long-term equity award for NEOs were in time-based RSUs that vest at a rate of 33 1/3% per year starting in December 2021. •
■Grants are awarded at the regularly
scheduled December meeting of the
Compensation Committee.
| | •
■ The performance-based RSUs an NEO can
earn can range from 0-100% of the total
units granted based on the Company’s
operating margin relative to peers.
■ For the 2018 annual grant, earned units will
vest at a rate of 20% per year starting in
February 2020. | ■Creates a strong link between NEO realized
compensation and stock performance.
•
■Provides a significant incentive to our NEOs
and other senior management to protect and
enhance stockholder value and profitability.
•
■Enhances the link between compensation
and long-term Company performance
through the granting of performance-based
performance- based RSUs. • RSUs.
■Provides competitive compensation to attract
and retain diverse high-quality talent. |
Annual Incentive Compensation Plan Bonus Pool The AICP provides that, unless approved by the Compensation Committee otherwise, the maximum bonus pool is equal to 6%5% of the first $50 million of “adjusted earnings,” plus 8% of the amount by which “adjusted earnings” exceeds $50 million. Adjusted earnings is defined as income before taxes as reflected in our audited consolidated statements ofCompany’s net operating income adjusted to exclude, certain extraordinary, unusual, or nonrecurring items;if any, charge relating to goodwill; and(i) the effects of goodwill impairment, (ii) the cumulative effect of changes in accounting policy. In 2018, we excludedpolicies or principles, (iii) gains or losses from discontinued operations, and (iv) unusual or nonrecurring gains, losses, or expenses. The Compensation Committee also established maximum individual bonuses as a percentage of the nonrecurring client repayments relatedAICP formula, however, they retained the right to the Dell appraisal rights matter to determine our adjusted earnings as definedaward an amount that was less than each NEO’s maximum. The amounts awarded under the AICP.AICP are part of the Company’s annual bonus program. The Company’s annual bonus program, under which nearly all of the employees of the Company are eligible to participate, is managed by the Compensation Committee and Management Compensation and Development Committee and is funded based on the Company’s financial results. Additional considerations include the Company’s investment performance, service quality for clients and progress toward stated objectives relating to the Company’s long-term strategies. The amounts awarded under the AICP are part of the Company’s annual bonus program. Compensation Committee’s Use of DiscretionJudgment in Incentive Compensation The Compensation Committee has exercised negative discretion to pay significantly less than the maximum amount available to each NEO under the AICP.
The Compensation Committee believes that judgment and thoughtful discretionconsideration of qualitative performance is a critical feature of the Company’s executive compensation program. While the Compensation Committee uses financial and other metrics to set the maximum amount of the bonus pool and as a significant factor in the evaluation ofevaluate the performance of our senior executives, our business is dynamic and requires us to respond rapidly to changes in market conditions and other factors outside our control that impact our financial performance. The Compensation Committee believes that a rigid, formulaic program based strictly on quantitative metrics could have unintended consequences, such as encouraging executives to place undue focus on achieving specific shorter-term metricsresults at the expense of the longer-term success of the company. In addition, solely formulaic compensation would not permit adjustments based on factors beyond the control of our executives as well as relative performance in relation to shifting market conditions and less quantifiable factors such as recognition of keystrategic developments and individual achievements. Thoughtful discretion alsoTherefore, thoughtful consideration of these additional factors allows the Compensation Committee to fully consider the overall performance of our executives over time, and it allowshas been a key ingredient in ensuring the Compensation Committee to maintain alignment between the NEO bonus amounts and the awards paid to other senior personnel.Company’s positive long-term financial results. Long-Term Equity Awards We believe our long-term equity award program is a significant factor in maintaining a strong correlation between the compensation of our top managers and professionals, including our NEOs, and the long-term interests of our clients and stockholders. Given the importance of this factor, for 2018 the Compensation Committee increased the percentage of each TABLE OF CONTENTS
NEO’s compensation attributable to long-term equity awards, except for Messrs. Moreland and Bernard who retired in 2018. This is most prevalent for the CEO. Similar to 2017, 2018 grants were made as a single annual grant in December to closely align our equity incentive grants to the timing of our annual bonus and other compensation decisions.
Our approach to long-term equity compensation has incorporated different award vehicles (e.g., stock options, restricted stock, or RSUs) and has varied over time. Currently we use RSUs and, in the case of our NEOs, we split the RSUs equally between performance-based RSUs and time-based RSUs. The usemix of time-based and performance-based RSUs which vest over five-years, emphasizes long-term stockholder alignment for our NEOs. As mentioned,
The performance-based RSUs awarded to our NEOs are subject to a three-year performance period that begins on January 1st of the year following the grant and ends on December 31st of the third year following the grant. The performance goal for the performance-based RSUs is the Company’s operating margin relative to peers. The number of performance-based RSUs earned, if any, will be determined by comparing the Company’s operating margin to the average operating margin of a peer group of companies for the same period. Any performance-based RSUs earned after the three-year performance period will vest in equal annual installments beginning in December of the year following the end of the performance period (years four and five after the grant). The time-based RSUs awarded to our NEOs vest in equal annual installments over three years beginning in December in the year following the grant. The individual equity award value is meant to be a reflection of the long-term value added by the individual as well as their potential for future contributions to the Company.contributions. The total award value granted to an NEO from year to year reflects an individual’sindividual performance and an assessment of the NEO’s relevant compensation positioning versus market peers in similar roles. The ultimate value realized from an equity award fluctuates with the Company’s stock price, thus aligning NEO pay with stockholder interests. Changes to
2020 Compensation Decisions Given our shared and collaborative leadership structure, when setting the 2019 AICP and Long-Term Equity Awards As part of their annual agendacompensation in 2018,2020, the Compensation Committee reviewedconsidered the designcollective contribution of the AICP and Long-Term Equity Award programs with assistance from management and the Committee’s independent compensation consultant, Johnson Associates. Based on their evaluation of peer practices and the desire to continue to align with long-term stockholder interests, the Committee approved the following changesNEOs to the incentive compensation program for our NEOs forCompany’s strategic imperatives as highlighted in the 2019 performance year:
AICP - Adjustedexecutive summary to this CD&A as well as their contributions to the incentive pool calculation to be equal to five percent of net operating income. This design simplifies the pool formula to a straight percentage of a financial metric and creates an incentive pool that should provide for greater alignment with actual bonuses paid to participating executive officers.related annual goals described below. The Compensation Committee willconsidered each NEO’s individual contributions to the achievement of these and longer-term goals and the NEO’s individual performance in their functional responsibilities. These broader goals included overall Company financial results, investment performance and progress on product goals, net flows and progress on distribution goals, major program execution and progress on shared services goals, and governance and talent development. The Compensation Committee also looked to maintain negative discretion to decrease calculated maximum bonuses.
Long-Term Equity Awards - Long-Term Equity Awards granted in 2019 will now be split equallyreasonable alignment between time-based RSUs and performance-based RSUs. The time-based RSUs will vest in equal annual installments over three years following the grant date. The performance-based RSUs will now be subject to a longer three-year performance measurement period, starting on January 1stcompensation of the year following grant dateNEOs and ending on December 31stother senior personnel in order to retain talent and maintain an internally consistent compensation environment.
In keeping with the third year. Any performance-based RSUs earned afterCompany’s commitment to pay for performance, the completionmaximum base salary of $350,000 for NEOs in the U.S., has remained unchanged since 2005 and is consistent with the base salaries paid to our most senior personnel. The Compensation Committee did not make any changes to base salaries for the NEOs in 2020. Incentive Compensation At the end of 2019, the Board approved senior management goals for 2020, which the Compensation Committee then used for evaluation of NEO performance measurement period will vest in equal annual installments beginning in December afterat the end of the year. These goals were designed to promote a team-oriented structure that operates in the best long-term interests of clients, associates, and stockholders. Long-term goals that apply every year include the objective to recruit, develop, and retain diverse associates of the highest quality while creating an environment of collaboration and appropriately rewarding individual achievements and initiatives. This focus on our associates is intended to create a combination of talent, culture, and processes that will allow us to achieve superior investment results, market our products effectively, and deliver outstanding service on a global basis. When evaluating performance and determining incentive compensation awards for our NEOs, the Compensation Committee considers both annual and longer-term results against these goals in order to reinforce our long-term management philosophy. Specific goals established for 2020 consisted of the following: | Investment Performance and Capabilities | | Product Capabilities | | | | • Sustain strong overall investment results and competitiveness of our investment strategies. • Grow investment management talent and leadership and extend investment capabilities. • Evolve global investment management and trading operating processes and systems to meet growing complexity. | | • Maintain and support a strong product range that meets evolving client needs through vehicle choices, pricing strategy, seed management, insightful content, long-term product roadmaps and consistent health checks. | | Net Flows and Distribution Capabilities | | Shared Services and Talent | | | | • Deliver on distribution performance targets for gross sales, net flows, diversification and operating/efficiency metrics. • Enhance sales, client service, and marketing capabilities across intermediary, institutional and U.S. direct channels in support of our clients and to position the firm for long-term growth, diversification and efficiency. | | • Modernize technology infrastructure and architecture across the firm to simplify our environment and reduce risk. • Build effective and efficient shared service capabilities to support the enterprise and ensure regulatory compliance. • Attract, develop, and retain a diverse and collaborative workforce. | | | | Enterprise Strategy, Governance and Financial Results | | | • Ensure the right strategy, allocation of resources, oversight, and governance models are in place to execute. • Manage our financial performance and position to protect/benefit our clients, associates, and stockholders, balancing short-term results with longer-term investment. |
Individual Performance Considerations In addition to contributions to the 2020 priorities summarized above, and the Company’s financial and strategic performance highlighted in the executive summary on page 33, the Compensation Committee considered the following individual contributions when setting 2020 compensation for our NEOs. | William J. Stromberg | 
Chair and Chief Executive Officer | ROLE CONSIDERATIONS • Leadership, responsibility, and performance as Chair, President and CEO and chair of our Management Committee and Management Compensation and Development Committee. INDIVIDUAL ACHIEVEMENTS • Clear leader for the delivery of the firm’s strategic plan; driver of important change throughout the firm while preserving a collaborative and client-centered culture. • Led firm’s response to the pandemic, including transition to work from home, putting associate safety first. Also led successful shift to a virtual annual stockholders’ meeting and virtual Board meetings. • Integrated new head of Global Human Resources. • Committed to the development of T. Rowe Price Investment Management (TRPIM) and acted as a senior advisor to its leadership team. Added TRPIM CEO Stephon Jackson to the Management Committee effective January 1, 2021. • Continued progress on diversity & inclusion strategy, including formation of the Black Leadership Council, a team of senior leaders that will advise the Management Committee on diversity matters and also guided firm’s response to racial injustice issues. • Overall investment performance remained strong for five-, and 10-year periods against active peers and was solid against benchmarks. • Revenues grew 10.5%, diluted non-GAAP earnings per share increased 18.7%, and dividends per share rose 18.4%. Return on equity was consistent with 2019 at a healthy 32% for 2020. • The Company returned $2.0 billion to stockholders in 2020 through dividends and active opportunistic share repurchases during the pandemic-induced bear market, while maintaining a very strong balance sheet. |
42 T. Rowe Price Group | Céline S. Dufétel | | 
Chief Operating Officer, Chief Financial Officer and Treasurer | ROLE CONSIDERATIONS • Leadership, responsibility and performance as CFO and Treasurer, and chair of the Risk and Operational Steering Committee. Expanded role and responsibilities in 2020 to include leadership of global investment operations and enterprise change management in addition to existing responsibilities for risk management and strategic initiatives. Responsibilities expanded again in 2021 when she was appointed as the Company’s Chief Operating Officer. INDIVIDUAL ACHIEVEMENTS • Led quarterly reviews of each business unit with a keen focus on critical success metrics; oversaw deep-dive strategic reviews of key business units and important strategic initiatives, including two business transformation and several growth revitalization initiatives across the firm. • As chair of the Risk and Operational Steering Committee, strengthened oversight of the firm’s change agenda and led reviews of audit, risk, cyber, compliance and operations; improved accountability and execution focus across the firm. • Continued enhancing strategic planning and approach to evaluation of opportunities, including the acquisition and integration of $1.2 billion of stable value assets from PNC. • Further strengthened the talent across the CFO Group while improving diversity; integrated new leaders of Global Investment Operations, Enterprise Change Office and Procurement functions. • Key contributor on Management and Management Compensation and Development Committees and on a variety of steering committees, including the Investment Management, Product Strategy, Service Agreement Oversight Committees. Serves an integral role at Price Group board meetings. • As owner of the business continuity function, worked with head of Global Human Resources and CEO to lead the firm’s pandemic response, preparing our facilities, and communicating to associates. • Managed multi-year evaluation of sites for corporate headquarters, culminating in signing letter of intent to construct a new headquarters complex to be ready in 2024. • Advanced stockholder engagement efforts and maintained strong relationships with the analyst community in both the U.S. and Europe. |
2021 Proxy Statement 43 | Robert W. Sharps | | 
President, Head of Investments, and Group Chief Investment Officer | ROLE CONSIDERATIONS • Leadership, responsibility, and performance as Head of Investments (including global trading), Group Chief Investment Officer, and chair of the Investment Management Steering Committee. In 2021, the Board appointed Mr. Sharps as the Company’s President. INDIVIDUAL ACHIEVEMENTS • Strong investment performance over five- and 10-years against active peers, particularly across multi-asset, with further broadening of the investment teams and their capabilities. • Committed to and advised on the development of our new investment management subsidiary, TRPIM, including selection of leadership team. Recruited and onboarded the leader of our ETF business and oversaw the planning and launch of our active ETF product. Oversaw successful leadership transition for International Equity. • Oversaw ESG function and its broad integration within Investments with outstanding ratings from industry services. Launched our first Responsible portfolios and prepared to launch first Impact strategy. • Outstanding work as chair of the Investment Management Steering Committee, which focuses on long term product evolution at the firm. Oversaw significant number of new product launches across Investments. Key thought leader on investment pricing decisions across the firm. • Led the five-person chief investment officer group that continues to represent our investment divisions with distinction. Co-chaired the firm’s Asset Allocation Committee with successful market shifts during the pandemic-driven bear market in the first quarter. • Served as executive sponsor of our Black Leadership Council. Also served as a director of the Price funds’ board and as integral presenter at Price Group board meetings. • Key contributor on the Management, Management Compensation and Development and Product Strategy Committees. Serves in an important leadership role on the U.S. Equity, International Equity, and Fixed Income Steering Committees. |
| Christopher D. Alderson | 
Co-Head of Global Equity | ROLE CONSIDERATIONS • Leadership, responsibility, and performance as Co-Head of Global Equity, Head of International Equity, and chair of the International Equity Steering Committee. INDIVIDUAL ACHIEVEMENTS • Investment performance for international equity remained strong over three-, five-, and 10-years against active peers and against benchmarks. • Effective chair of the International Equity Steering Committee. Central leadership role in developing the talent and culture of the team to deliver the division’s excellent results at increasing scale; executed an effective transition of leadership responsibilities to next head of International Equity, Justin Thomson. • Partnered successfully with Product team to progress the three-year product road map for International Equity. Successful launch of China Innovation Equity and planned 2021 launches of China Growth, Global Impact, Global Select, and UK Responsible Equity. • Key contributor on the Management, Management Compensation and Development Investment Management Steering, and Product Strategy Committees. • Led the firm’s initiative to establish an office in Shanghai, China, which opened in 2021. |
44 T. Rowe Price Group | Eric L. Veiel | | 
Co-Head of Global Equity | ROLE CONSIDERATIONS • Leadership, responsibility, and performance as Co-Head of Global Equity, Head of U.S. Equity, and chair of the U.S. Equity Steering Committee. INDIVIDUAL ACHIEVEMENTS • Investment performance for U.S. equity remained strong across the five- and 10-years against peers and solid against benchmarks. • Chaired the U.S. Equity Steering Committee, which oversees our largest investment division. Developed several new leaders that are taking on additional responsibilities. Significantly enhanced diversity programs to access and develop diverse talent within Equity. Served as executive sponsor of WAVE, our business resource group for women. • Advocated for and led day-to-day development of new investment management subsidiary, TRPIM, to be launched in the second quarter of 2022; work included development of organizational structure and operating plans, appointment of leadership team, recruitment and appointment of investment staff. • Continued progress on integration of ESG into investment process and collaborated on development of Global Impact and Global Select equity strategies. • Led the design and implementation of the plan to pay for third-party investment research in the U.S. and consulted on international implementation. • Hired new head of Quantitative Investing and successfully onboarded and integrated him during the pandemic. • Key contributor on the Management, Investment Management Steering, Multi-Asset Steering, and Product Strategy Committees. |
Annual Incentive Compensation At the beginning of the year, the Compensation Committee established each NEO’s maximum payout percentage from the AICP bonus pool. The established payout percentages reflect the Compensation Committee’s decision to impose a financially based limit on the maximum payout to each NEO and the Compensation Committee’s expectation of each NEO’s relative contribution to the Company’s performance. The Compensation Committee has the discretion to reduce or eliminate the share of the bonus pool payable to any NEO. The table below sets forth the maximum payout (in millions) allocated to our NEOs and the actual bonus awards (in millions) made by the Compensation Committee to our NEOs for 2020 and 2019. | NAME | | 2020
MAXIMUM
PAYOUT
BASED ON THE
TOTAL POOL | | 2020
ANNUAL
INCENTIVE
PAYMENT | | 2019
ANNUAL
INCENTIVE
PAYMENT | | 2020
PAYMENT
PERCENTAGE CHANGE
OVER 2019 | | William J. Stromberg | | $16.5 | | $9.0 | | $8.5 | | 5.9% | | Céline S. Dufétel | | $ 8.2 | | $4.5 | | $3.6 | | 25.4% | | Robert W. Sharps | | $16.5 | | $9.0 | | $8.7 | | 3.4% | | Christopher D. Alderson1 | | $13.7 | | $7.3 | | $7.1 | | 2.4% | | Eric L. Veiel | | $13.7 | | $7.4 | | $7.0 | | 5.0% |
| 1 | Bonus amounts received in 2020 and 2019 by Mr. Alderson were HKD 56.8 million and HKD 57.8 million, respectively. |
Consistent with past practice, the Compensation Committee exercised negative discretion and awarded less than the maximum payout amount to the NEOs. Exercising such negative discretion maintains alignment between the bonus amounts paid to the NEOs and the expected range of bonuses paid to peers with similar roles at our competitors. The significant increase in the annual incentive payment for Ms. Dufétel from 2019 to 2020 is a reflection of both her very strong performance as the CFO and Treasurer and her significantly expanded roles and responsibilities in 2020 as described above. The Compensation Committee has the power to authorize additional incentive compensation or bonuses outside the AICP but did not do so in 2020. 2021 Proxy Statement 45 Long-Term Equity Awards Pursuant to our long-term equity award program award values are split equally in the form of performance-based RSUs and time-based RSUs to our NEOs. Each long-term equity award value was converted to units using the closing stock price of our common stock on the date of grant ($153.17 for 2020). The NEOs were granted the following long-term incentive values (in millions) and resulting mix of performance-based and time-based RSUs in 2020. | NAME | | 2020
EQUITY
INCENTIVE
VALUE | | 2020
PERFORMANCE-
BASED
RESTRICTED
STOCK UNITS | | 2020 TIME-
BASED
RESTRICTED
STOCK
UNITS1 | | 2019 EQUITY
INCENTIVE
VALUE | | 2020 LTI
AWARD
VALUE
CHANGE
OVER 2019 | | William J. Stromberg | | $5.9 | | 19,260 | | 19,260 | | $5.7 | | 4.4% | | Céline S. Dufétel | | $2.5 | | 8,161 | | 8,161 | | $2.1 | | 19.0% | | Robert W. Sharps | | $5.6 | | 18,118 | | 18,118 | | $5.0 | | 12.1% | | Christopher D. Alderson | | $2.5 | | 8,161 | | 8,161 | | $2.5 | | —% | | Eric L. Veiel | | $3.5 | | 11,426 | | 11,426 | | $3.2 | | 11.1% | | | | | | | | | | | | |
| 1 | Time-based RSU’s vest in equal installments over the three years beginning in December in the year after the grant date. |
Performance-Based RSUs—Performance Thresholds and Vesting The performance thresholds established by the Compensation Committee for the performance-based RSUs granted in 2020 to our NEOs were based on the Company’s operating margin for the three-year performance period compared with the average operating margin of a designated group of public company peers (Industry Average Margin) that was composed of: | Affiliated Managers Group, Inc. | Janus Henderson Group | Invesco Ltd. | | AllianceBernstein L.P. | Federated Investors | | | BlackRock, Inc. | Franklin Resources | |
The peer group listed above is a subset of the peer group used in evaluating the competitive positioning of our compensation program. The Compensation Committee selected operating margin as the sole performance metric because it is a key indicator of profitability and relative financial performance in the asset management industry. Operating margin is determined by dividing net operating income by total revenues for the performance period, as reported in the consolidated financial statements filed with the SEC or, if such financial statements are not available for a peer company at the time of determination, as otherwise disclosed in a press release by such peer company. In each case, net operating income is adjusted to exclude the effects of goodwill impairment, the cumulative effect of changes in accounting policies or principles, and gains or losses from discontinued operations, as each is reflected on the face of or in the notes to the relevant financial statements. For performance-based RSUs awards made in 2020, the number of RSU’s earned will be determined by comparing the Company’s operating margin for the three-year performance period to the average operating margin of the peer group of companies for the same period, and thereafter vest over the following two years (years four and five after the grant date). The following table sets forth the performance metricthresholds and related percentage of RSUs eligible to be earned that were established by the Compensation Committee for the performance-based2020 awards. | TROW Operating Margin as Percent of Industry Average Margin | | >=100% | | 90%-99% | | 80%-89% | | 70%-79% | | 60%-69% | | 50%-59% | | <50% | | Amount of Restricted Stock Units Eligible to be Earned | | 100% | | 90% | | 80% | | 70% | | 60% | | 50% | | 0% |
| GRANT DATE | | PERFORMANCE PERIOD | | TROW OPERATING
MARGIN AS PERCENT
OF INDUSTRY
AVERAGE MARGIN | | AMOUNT EARNED
AND SUBJECT
TO STANDARD
VESTING SCHEDULE | | VESTING START
MONTH/YEAR | | December 2020 | | January 1, 2021 to December 31, 2023 | | Not determinable at this time | | December 2024 |
Performance-based RSUs willearned by each NEO following the completion of the relevant performance period vest at a rate of 50% per year beginning in the month and year specified in the chart above once the Compensation Committee certifies the number of RSUs earned. 46 T. Rowe Price Group Process for Determining Executive Compensation The Compensation Committee has established a comprehensive process for: reviewing our executive compensation program designs to ensure that they are aligned to our philosophy and objectives, evaluating performance by our NEOs against goals and objectives established or reviewed by the Compensation Committee, and setting compensation for the NEOs and other senior executives. The table below summarizes the actions taken by the Compensation Committee throughout 2020. 
2021 Proxy Statement 47 Delegation Authority The Compensation Committee has delegated compensation decisions regarding nonexecutive officers, including the establishment of specific salary and incentive compensation levels and certain matters relating to stock-based compensation, to the Management Compensation and Development Committee, a committee comprised of members of the Management Committee. Committee Procedures Early each year, the Compensation Committee meets with the President and CEO and members of senior management in order to discuss goals and objectives for the coming year, including goals and objectives applicable to the NEOs listed in our Summary Compensation Table. In addition, the Compensation Committee determines eligibility for the AICP bonus pool and sets forth the maximum percentage that may be assessed by comparingpaid to each participant. At its meeting in December, the Compensation Committee evaluates executive performance during the year as part of its determination of appropriate incentive compensation awards. The Compensation Committee awards annual equity incentive grants to employees from stockholder-approved long-term incentive plans as part of the Company’s operating marginannual compensation program. Role of Executive Officers The Compensation Committee solicits input from the President and CEO and the Management Compensation and Development Committee regarding general compensation policies, including the appropriate level and mix of compensation. The Compensation Committee also consults with the President and CEO regarding the appropriate bonus and salary levels for other executive officers. Role of Independent Compensation Consultant Johnson Associates served as the Compensation Committee’s independent compensation consultant in 2020 and attended all Compensation Committee meetings during the year, and regularly meets with the Compensation Committee in executive session. The Compensation Committee benefited from the consultant’s broad experience in advising other compensation committees, in-depth understanding of investor perspectives on compensation, and familiarity with our compensation programs and policies and those of peer companies in the asset management and financial services industry. Johnson Associates provides the Compensation Committee with information about the competitive market for senior management in the investment management and financial services industries and compensation trends across industries. Specifically in 2020, Johnson Associates reviewed, evaluated and recommended changes to the competitive market peer group to be used in evaluating NEO compensation, and periodically advised the Compensation Committee on trends and projected implications on executive compensation practices in response to the global pandemic. The consultant also provided competitive guidance to the Compensation Committee regarding 2020 incentive compensation decisions for the performance periodPresident and CEO, and for the other NEOs. Johnson Associates has no relationship with Price Group other than as the Board’s compensation consultant. Johnson Associates has not provided any services to the average operating marginCompany other than those provided to the Compensation Committee in their role as independent consultant. The Compensation Committee has assessed the independence of Johnson Associates pursuant to SEC rules and concluded that the work performed by the advisor does not raise any conflicts of interest. The Compensation Committee will continue to periodically review its relationship with Johnson Associates and their continued appointment as the Compensation Committee’s independent consultant. Many of our key competitors are not publicly traded or are subsidiaries of larger companies. These competitors generally do not publicly disclose the compensation data of their top executive officers. During the year, Johnson Associates presented a report of expected competitive pay for each NEO based on current industry trends and their market evaluation of each NEO’s role. This data, along with competitive market data provided to management by McLagan Partners (McLagan) and input from the CEO and other senior executive officers of the Company, provided guidance to the Compensation Committee in their compensation decisions for each NEO for 2020. McLagan has an extensive database on compensation for most investment management companies, including private companies for which information is not otherwise generally available. McLagan summarizes data by role across multiple companies without specifically identifying information for a particular company. Management uses the summary information from McLagan for a reasonable estimation of compensation levels in the industry for persons with specific roles relevant to our business (e.g., portfolio manager, analyst, client service manager, etc.). Relevant portions of this information are shared by executive management with the Compensation Committee. McLagan works with management and does not act as a compensation consultant to the Compensation Committee. 48 T. Rowe Price Group Competitive Positioning The Compensation Committee annually reviews competitive data regarding compensation at peer companies in the investment management industry with their independent compensation consultant and management. We do not set compensation levels to fall within specific ranges compared with benchmark data. Instead, we use the information provided by Johnson Associates, proxy data for peer group companies listed below, and survey data provided by McLagan and others about the competitive market for senior management to gain a general understanding of current compensation practices and to assist in the development of compensation programs and setting compensation levels for our senior executives. In 2020, the Compensation Committee asked Johnson Associates, in partnership with management, to review and assess the existing compensation peer group and, if warranted propose potential changes. The assessment was conducted in an effort to better reflect our size, complexity of offerings, scope of domestic and global capabilities, and diversified client base (retail and institutional), and the evolving competitive landscape, including the merger of several of former peer group comparators. Based on the review Johnson Associates suggested that for 2020 TIAA be added to the peer group for all executives, and that J.P. Morgan Asset Management, Morgan Stanley Asset Management and Goldman Sachs Asset Management, be included with the other firms when considering a peer group for the CEO. Below is the list of companies.the final 2020 peer group recommended by Johnson Associates and approved by the Compensation Committee: RISK MANAGEMENT AND THE ALIGNMENT OF MANAGEMENT WITH OUR STOCKHOLDERS
• Affiliated Managers Group, Inc. • AllianceBernstein L.P. • Ameriprise Financial, Inc. | • BlackRock Inc. • Charles Schwab Corporation • Eaton Vance Corp. | • Franklin Resources • Invesco Ltd. • Northern Trust • TIAA | • CEO Only: • J.P. Morgan Asset Management • Morgan Stanley Asset Management • Goldman Sachs Asset Management |
The companies making up the peer group listed above were selected because they are public asset managers, as well as comparable financial services and brokerage companies given their assets and scale, or in the case of the CEO Only firms listed above, because they are significant asset management subsidiaries of publicly-traded firms with significant AUM. The Compensation Committee will continue to review the composition of this peer group to analyze our executive compensation program and determine whether any changes should be made in the future. In addition to specific information on these companies, the Compensation Committee reviewed aggregated summary compensation data based on information from surveys that include some of the peer companies listed above as well as other public and nonpublic companies with which we compete for executive talent, including the Capital Group Companies Inc., Fidelity Investments, Goldman Sachs Asset Management, Janus Henderson Investors, J.P. Morgan Asset Management, MFS Investment Management, Pacific Investment Management Company LLC, The Vanguard Group Inc., Wellington Management Company LLP, and Western Asset Management Co. In light of our overall performance in 2020, the Compensation Committee believes that the compensation paid to our CEO and other NEOs is reasonable in relation to the compensation paid by our peer companies both on an absolute basis and in comparison to relevant financial performance metrics. Risk Management and the Alignment of Management with our Stockholders The Compensation Committee considers whether the executive compensation program rewards reasonable risk-taking and if incentive opportunities achieve the proper balance between rewarding employees and managing risk and protecting stockholder returns. While the design of our executive compensation program is primarily performance-based, we believe that it does not encourage inappropriate risk-taking. Ongoing and active discussions with management regarding progress on short-term and long-term goals enables informed decisions while avoiding the risks that can be associated with managing short-term results to achieve predetermined formulaic outcomes. Our compensation programs are designed to provide executive officers with appropriate incentives to create long-term value for stockholders while taking thoughtful and prudent risks to grow value over time. We believe that our equity program, our stock ownership guidelines, and the very significant stock ownership of our most tenured NEOs create important links between the financial interests of our executives and long-term performance and mitigate any incentive to disregard risks in return for potential short-term gains. In addition, we have a robust risk management program designed to identify, evaluate, and control risks. Through this program, we take a company-wide view of risks and have a network of systems and oversight to ensure that risks are not viewed in isolation and are appropriately controlled and reported, including a system of reporting to the chief executive officer, the Audit Committee, and the full Board. We believe that our compensation and stock ownership programs work effectively within this risk management program. 2021 Proxy Statement 49 TABLE OF CONTENTSTable of Contents
Process for Determining Executive Compensation
The Compensation Committee has established a comprehensive process for:
| ■ | reviewing our executive compensation program designs to ensure that they are aligned to our philosophy and objectives, |
| ■ | evaluating performance by our NEOs against goals and objectives established or reviewed by the Compensation Committee, and |
| ■ | setting compensation for the NEOs and other senior executives. |
The table below summarizes the actions taken by the Compensation Committee throughout 2018.
First Quarter
|
| Second Quarter
| ■ Certify prior-year financial results for payout of the
AICP.
■ Design and establish current year AICP and long-term
equity programs.
■ Designate participants in the current year AICP and
set each NEO’s maximum payout percentage.
| | ■ Review our compensation governance practices.
■ Assess progress against the Company’s strategic
imperatives and related goals and objectives for the
year.
■ Review the Company’s current year-to-date
performance, including financial, investment, and
client service performance.
■ Consider with members of the Management
Compensation Committee the potential funding size of
the overall annual bonus pool.
■ Consider stockholder and proxy advisor feedback in
connection with our say-on-pay vote results.
■ Evaluate and approve changes to the current peer
comparators used to assess competitive pay for
executive officers.
■ Review the design of peer short-term and long-term
incentive compensation programs.
|
Third Quarter
|
| Fourth Quarter
| ■ Review with management and our independent
compensation consultant the external trends in both
the investment management industry and, more
broadly, regulatory and other developments affecting
executive compensation.
■ Assess progress against the Company’s strategic
imperatives and related goals and objectives for the
year.
■ Review the Company’s current year-to-date
performance, including financial, investment, and
client service performance.
■ Consider with members of the Management
Compensation Committee the potential funding size of
the overall annual bonus pool.
■ Review and approve any changes to incentive plan
and award designs for the following fiscal year.
| | ■ Review projected peer compensation data provided
by our independent compensation consultant and
McLagan Partners survey data.
■ Evaluate the Company’s performance against its
goals.
■ Evaluate executive officer performance against goals
of their respective roles, with input from the CEO for
certain other executive officers.
■ Approve the size of the Company’s overall annual
bonus pool and determine the annual incentive cash
pool payout for each NEO and other AICP
participants.
■ Approve the size and parameters of the year’s equity
incentive program.
■ Define the performance metric(s) and performance
period for restricted stock units granted to the
executive officers as part of the annual equity
incentive program.
|
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ROLE OF INDEPENDENT COMPENSATION CONSULTANT
Johnson Associates served as the Compensation Committee’s independent compensation consultant in 2018 and attended all Compensation Committee meetings during the year. The Compensation Committee benefited from the consultant’s broad experience in advising other compensation committees, in-depth understanding of investor perspectives on compensation, and familiarity with our compensation programs and policies and those in the financial services industry.
Johnson Associates provides the Compensation Committee with information about the competitive market for senior management in the investment management and financial services industries and compensation trends across industries. Johnson Associates also worked with the Compensation Committee for the following items in 2018:
| ■ | Reviewed, evaluated and recommended changes to the competitive market peer group used to evaluate compensation for the NEOs and other executive officers; |
| ■ | Conducted market research on peer incentive plans to assist in the design of the 2019 incentive compensation plans for participating officers; and |
| ■ | Provided guidance on the formulation of the final 2018 incentive compensation decisions for the president and CEO and the incentive compensation recommended by management for the other NEOs at the Compensation Committee’s meeting in December 2018. |
The Compensation Committee will continue to periodically review its relationship with Johnson Associates and their continued appointment as the Committee’s independent consultant.
Many of our key competitors are not publicly traded or are subsidiaries of larger companies. These competitors generally do not make public the compensation data of their top executive officers. At the October 2018 Compensation Committee meeting, Johnson Associates presented a report of expected competitive pay for each NEO based on current industry trends and their market evaluation of each NEO’s role. This data, along with competitive market data provided to management by McLagan Partners (McLagan) and input from the CEO and other senior executive officers of the Company, provided guidance to the Committee in their compensation decisions for each NEO for 2018.
McLagan has an extensive database on compensation for most investment management companies, including private companies for which information is not otherwise generally available. McLagan summarizes data by role across multiple companies without specifically identifying information for a particular company. Management uses the summary information from McLagan for a reasonable estimation of compensation levels in the industry for persons with specific roles relevant to our business (e.g., portfolio manager, analyst, client service manager, etc.). Relevant portions of this information are shared by executive management with the Compensation Committee. McLagan works with management and does not act as a compensation consultant to the Compensation Committee.
Johnson Associates has not provided any services to the Company other than those provided to the Compensation Committee in their role as independent consultant. The Compensation Committee has assessed the independence of Johnson Associates pursuant to SEC rules and concluded that the work performed by the advisor does not raise any conflicts of interest.
COMPETITIVE POSITIONING
The Compensation Committee annually reviews competitive data regarding compensation at peer companies in the investment management industry with their independent compensation consultant and management. We do not set compensation levels to fall within specific ranges compared with benchmark data. Instead, we use the information provided by Johnson Associates and developed by management using proxy data for peer group companies and survey data provided by McLagan and others about the competitive market for senior management to gain a general understanding of current compensation practices and to assist in the development of compensation programs and setting compensation levels for our senior executives.
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In 2018, the Compensation Committee asked Johnson Associates, in partnership with management, to review and assess the existing compensation peer group and, if warranted propose potential changes. The assessment was conducted in an effort to better reflect our size, complexity of offerings, scope of domestic and global capabilities, and diversified client base (retail and institutional), and the evolving competitive landscape. After reviewing the analysis collected for both the existing peer set and potential additions, the Committee agreed to remove Janus Capital (now Janus Henderson) and Federated Investors from the peer group and add Ameriprise Financial, Charles Schwab, Northern Trust, and TD Ameritrade. Below is the list of the final 2018 peer group agreed to by the Compensation Committee:
Affiliated Managers Group, Inc.
| BlackRock Inc.
| Franklin Resources
| Northern Trust
| AllianceBernstein L.P.
| Charles Schwab Corporation
| Invesco Ltd.
| TD Ameritrade Holding Corp
| Ameriprise Financial, Inc.
| Eaton Vance Corp.
| Legg Mason, Inc.
| |
The companies making up the peer group listed above were selected because they are public asset managers with significant assets under management as well as comparable financial services and brokerage companies given their assets and scale. The Compensation Committee will continue to review the composition of this peer group to analyze our executive compensation program and determine whether any changes should be made in the future. In addition to specific information on these companies, the Compensation Committee reviewed aggregated summary compensation data based on information from surveys that include some of the peer companies listed above as well as other public and nonpublic companies with which we compete for executive talent, including the Capital Group Companies Inc., Fidelity Investments, Goldman Sachs Group Inc., JPMorgan Chase, MFS Investment Management, Oppenheimer & Co. Inc., Pacific Investment Management Company LLC., Putnam Investments, The Vanguard Group Inc., Wellington Management Company LLP, and Western Asset Management Co.
In light of our overall performance in 2018, the Compensation Committee believes that the compensation paid to our CEO and other NEOs is reasonable in relation to the compensation paid by our peer companies both on an absolute basis and in comparison to relevant financial performance metrics.
2018 Compensation Decisions
Given our shared and collaborative leadership structure, when setting the compensation in 2018, the Compensation Committee considered the collective contribution of the NEOs to the Company’s strategic imperatives as highlighted in the executive summary to this CD&A as well as their contributions to the related annual goals described below. The Compensation Committee considered each NEO’s individual contributions to the achievement of these and longer-term goals and the NEO’s individual performance in their functional responsibilities. These broader goals included overall Company financial results, investment performance and progress on product goals, net flows and progress on distribution goals, major program execution and progress on shared services goals, and governance and talent. The Compensation Committee also looked to maintain reasonable alignment between the compensation of the NEOs and other senior personnel in order to retain talent and maintain an internally consistent compensation environment.
In keeping with the Company’s commitment to pay for performance, the maximum NEO base salary of $350,000, or its local country equivalent, has remained unchanged since 2005 and is consistent with the base salaries paid to our most senior personnel. The Compensation Committee did not make any changes to base salaries for the NEOs in 2018.
INCENTIVE COMPENSATION
Long-term goals that apply every year include the objective to recruit, develop, and retain diverse associates of the highest quality while creating an environment of collaboration and appropriately rewarding individual achievements and initiatives. This focus on our associates is intended to create a combination of talent, culture, and processes that will allow us to achieve superior investment results, market our products effectively, and deliver outstanding service on a global basis. Specific goals established for 2018, and against which performance of our NEOs was judged at year-end, consisted of the following:
Perform for Our Clients
| ■ | Maintain our position as a premier active asset manager, creating durable value for clients. |
| ■ | Become a more recognized global partner for retirement-oriented investors (individuals, defined-contribution plan sponsors, or employers with defined-benefit liabilities). |
| ■ | Become more of an integrated investment solutions provider that leverages our diversified investment management and asset allocation capabilities to meet changing client needs. |
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Invest in Our People
| ■ | Remain a destination of choice for top talent including and beyond our investment teams, creating opportunities for associates to grow and excel, with a culture of greater accountability, empowerment, and rigor throughout the organization. |
| ■ | Continue to develop human talent capabilities, attract and retain a collaborative and diverse workforce, and enhance internal communications. |
Enhance Our Global Capabilities and Infrastructure
| ■ | Build T. Rowe Price into a more globally diversified asset manager that sources an increasing share of AUM from outside the U.S., while still growing our U.S. franchise. |
Deliver and Grow Operating Results and Maintain Financial Strength
| ■ | Manage our financial position and financial performance to protect and benefit our clients, associates, and stockholders, striking a balance between short-term financial results and the need to continuously invest in long-term capabilities. |
Individual Performance Considerations
In addition to the Company’s financial and strategic performance highlighted in the executive summary on page 23, the Compensation Committee considered the following individual contributions when setting 2018 compensation, with the exception of Kenneth V. Moreland who was compensated for 2018 under a separate retirement agreement.
Name
| Compensation Committee Considerations
| William J. Stromberg
President and Chief Executive Officer
| Role Considerations
| ■
| Leadership, responsibility, and performance as president and chief executive officer and chair of our Management Committee and Management Compensation Committee.
| | Individual Achievements
| | ■
| Clear leader of the firm’s development and implementation of its longer-term integrated strategic plan; driver of necessary change throughout the organization while preserving its culture of performing for our clients.
| | ■
| Re-aligned the leadership structure reporting to the President and CEO to prepare for the retirement of the Vice Chairman; broadened the Management Committee with the addition of the chief legal counsel and corporate secretary.
| | ■
| Overall investment performance remained strong for three-, five-, and 10-year periods against peers and solid against benchmarks; investment performance was very competitive in 2018.
| | ■
| Annual net revenues grew nearly 11% and diluted earnings per share on a non-GAAP basis increased nearly 32%, despite significant reinvestment back into the business to grow and diversify the Company. Return on equity was nearly 31% for 2018, compared with 28% in 2017.
| | ■
| The Company returned $1.8 billion to stockholders in 2018 through dividends and share repurchases, and the balance sheet strengthened further with $3.0 billion of cash and discretionary investments.
|
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Name
| Compensation Committee Considerations
| Céline S. Dufétel
Chief Financial Officer and Treasurer
| Role Considerations
| ■
| Leadership, responsibility and performance in first year as chief financial officer and treasurer.
| | Individual Achievements
| | ■
| Enhanced strategic planning and budgeting processes.
| | ■
| Delivered weekly and monthly financial reporting and enhanced metric transparency. Implemented quarterly business reviews for business units including an increased focus on business success metrics.
| | ■
| Filled key roles including the head of internal audit and head of procurement.
| | ■
| Key contributor on a variety of committees, including Management, the Risk and Operational Steering Committee, the Product Steering Committee, and Price Group board meetings.
| | ■
| Oversaw our operational efficiency initiatives with specific leadership of our successful and strategic sourcing effort.
| Edward C. Bernard
Vice Chairman
| Role Considerations
| ■
| Leadership, responsibility, and performance as chair of the Price funds’ boards and as leader of the marketing, distribution, operations, technology, and legal functions.
| | Individual Achievements
| | ■
| Key contributor on a variety of committees, including Management, Management Compensation, and the Product Steering Committee, the latter of which he chaired.
| | ■
| Oversaw enhancements to our diversified distribution and client service capabilities to support long-term organic AUM growth and client satisfaction which contributed to organic AUM growth of 1.3%.
| | ■
| Excellent transition planning contributions leading up to his retirement at the end of 2018. Lead support role to the president and CEO and key members of the Management Committee.
| | ■
| Led the transition of governance leadership for the Price funds to the Company’s chief legal counsel and corporate secretary, David Oestreicher, who serves as an inside director on the Price funds’ boards.
| Robert W. Sharps
Head of Investments and
Group Chief Investment
Officer
| Role Considerations
| ■
| Leadership, responsibility, and performance in his first full year as head of investments (includes global trading) and group chief investment officer.
| Individual Achievements
| | ■
| Strong investment performance over one-, three-, five-, and 10-years against peers, particularly across equity, with continued strengthening of the investment teams and collaboration between them.
| | ■
| Guided fixed income leadership transition to Andrew McCormick, due to upcoming retirement of Edward A. Wiese.
| | ■
| Leadership of the six-person chief investment officer group that continues to represent our investment divisions with distinction.
| | ■
| Key contributions as director of certain Price funds’ boards and as contributor to our Price Group board meetings.
| | ■
| Key contributor on the Management and Asset Allocation committees and a number of steering committees including U.S. Equity, International Equity, Fixed Income, and Product. Also led formation of new Investment Management Steering Committee.
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Name
| Compensation Committee Considerations
| Christopher D. Alderson
Co-Head of Global Equity
| Role Considerations
| ■
| Leadership, responsibility, and performance as co-head of global equity, head of international equity, and chair of the International Steering Committee.
| | Individual Achievements
| | ■
| Investment performance for international equity remained strong across the one-, three-, and five-years against peers and benchmarks. Central leadership role in developing the talent and culture of the team to deliver excellent results at scale.
| | ■
| Developed a three-year product road map for international equity products and led the implementation of the Global Equity Dividend strategy.
| | ■
| Key contributor on the Management, Asset Allocation, and the Product Steering Committees.
| | ■
| Outstanding client development contributions across U.S., Europe, and Asia.
| | ■
| Developed and began implementation of a plan to strengthen the leadership team of international equity.
|
Annual Incentive Compensation
At the beginning of the year the Compensation Committee established each NEO’s maximum payout percentage from the AICP bonus pool. The established payout percentages reflect the Compensation Committee’s expectation of each NEO’s relative contribution to the Company’s performance rather than a prediction of the likely amount that ultimately will be awarded. For 2018, the maximum payout under the AICP to all participants could not exceed 48% of the bonus pool. Under the AICP the Compensation Committee has the sole and exclusive discretion to reduce or eliminate the share of the bonus pool payable to any NEO.
The table below sets forth the maximum payout (in millions) allocated to our NEOs and the actual bonus awards (in millions) made by the Compensation Committee to our NEOs for 2018 and 2017, with the exception of Kenneth V. Moreland who was compensated for 2018 under a separate retirement agreement.
Name | 2018 Maximum
Payout Based
on the Total Pool | 2018
Annual
Incentive
Payment | 2017
Annual
Incentive
Payment | 2018
Payment
Percentage
Change
Over 2017 | William J. Stromberg | $ | 18.9 | | $ | 8.2 | | $ | 7.6 | | 7.9% | Céline S. Dufétel1 | $ | 5.7 | | $ | 2.0 | | | n/a | | n/a | Edward C. Bernard | $ | 17.0 | | $ | 6.6 | | $ | 6.0 | | 10.0% | Robert W. Sharps | $ | 18.9 | | $ | 8.1 | | $ | 7.3 | | 11.0% | Christopher D. Alderson2 | $ | 17.0 | | $ | 6.7 | 2 | $ | 5.8 | 2 | 15.1% |
| 1 | Ms. Dufétel was appointed to chief financial officer and treasurer in February 2018, and did not participate in the 2017 AICP. |
| 2 | Bonus amounts received by Mr. Alderson pursuant to his employment agreement are paid in British pounds. In 2018, Mr. Alderson received a bonus of GBP 5.2 million, an increase of 10.6% over his GBP 4.7 million bonus payout in 2017. |
Consistent with past practice, the Compensation Committee exercised negative discretion and paid significantly less than the maximum payout amount to the NEOs. Exercising such negative discretion maintains alignment between the bonus amounts paid to the NEOs and the expected range of bonuses paid to peers with similar roles at our competitors. The Compensation Committee has the power to authorize additional incentive compensation or bonuses outside the AICP but did not do so in 2018 other than in connection with the retirement agreement for Mr. Moreland.
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Long-Term Equity Awards
As part of our 2018 long-term equity award program, the Compensation Committee recommended to the Board, and the full Board approved, the granting of award values as performance-based RSUs to our NEOs at the regularly scheduled committee meeting in December 2018. Mr. Moreland did not receive a 2018 award as he retired in March 2018. Each long-term equity award value was converted to units using the closing stock price ($92.03 in 2018) of our common stock on the date of grant. The NEOs were granted the following long-term incentive values (in millions) and resulting performance-based RSUs in 2018.
Name | 2018
Equity
Incentive
Value | 2018
Performance
-Based
Restricted
Stock Units | 2017
Equity
Incentive
Value | 2017
Performance
-Based
Restricted
Stock Units | 2018 LTI
Award Value
Change Over
2017 | William J. Stromberg | $ | 4.5 | | | 48,354 | | $ | 3.6 | | | 34,876 | | 25.4% | Céline S. Dufétel | $ | 1.2 | | | 13,040 | | | n/a | | | n/a | | n/a | Edward C. Bernard | $ | 1.6 | | | 17,386 | | $ | 1.6 | | | 15,719 | | —% | Robert W. Sharps | $ | 4.1 | | | 44,551 | | $ | 3.1 | | | 29,964 | | 34.4% | Christopher D. Alderson | $ | 2.5 | | | 26,622 | | $ | 2.0 | | | 19,649 | | 22.5% |
The Compensation Committee has emphasized the need to provide a greater percentage of executive officer compensation in the form of long-term equity awards and has thus generally increased grant sizes, as a percentage of total compensation, incrementally over the past two years.
Performance-Based RSUs - Performance Thresholds and Vesting
Similar to prior years, the performance thresholds established by the Compensation Committee for the performance-based RSUs granted in 2018 to our NEOs were based on the Company’s operating margin for the performance period compared with the average operating margin of a designated group of public company peers (Industry Average Margin) that was composed of:
Affiliated Managers Group, Inc.
| Eaton Vance Corp.
| Invesco Ltd.
| AllianceBernstein L.P.
| Federated Investors
| Legg Mason, Inc.
| BlackRock, Inc.
| Franklin Resources
| |
The peer group listed above is similar to that used in evaluating the competitive positioning of our compensation program. The Compensation Committee selected operating margin as the sole performance metric because it is a key indicator of profitability and relative financial performance in the asset management industry. Operating margin was determined by dividing net operating income by total revenues for the performance period, as reported in the consolidated financial statements filed with the SEC or, if such financial statements are not available for a peer company at the time of determination, as otherwise disclosed in a press release by such peer company. In each case, net operating income is adjusted to exclude the effects of goodwill impairment, the cumulative effect of changes in accounting policies or principles, and gains or losses from discontinued operations, as each is reflected on the face of or in the notes to the relevant financial statements.
The following table sets forth the performance thresholds and related percentage of RSUs eligible to be earned that were established by the Compensation Committee for the 2018 awards.
TROW Operating Margin as
Percent of Industry Average
Margin | >=100% | 90%-99% | 80%-89% | 70%-79% | 60%-69% | 50%-59% | <50% | Amount of Restricted Stock Units Eligible to be Earned | 100% | 90% | 80% | 70% | 60% | 50% | 0% |
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As detailed in the table below, the NEOs earned the full number of eligible RSUs that were granted in December 2017.
Grant Date
| Performance Period
| TROW Operating
Margin
as Percent of Industry
Average Margin
| Amount Earned and
Subject to Standard
Vesting Schedule
| Vesting Start
Month/Year
| December 2017
| January 1, 2018 to December 31, 2018
| Greater than 100%
| 100% Granted
| February 2019
| December 2018
| January 1, 2019 to December 31, 2019
| Indeterminable at this time
| February 2020
|
The peer group used to calculate the Industry Average Margin for the 2017 performance-based RSUs includes the same companies included in the 2018 performance peer group referenced above. Performance-based RSUs earned by each NEO following the completion of the relevant 12-month performance period vest at a rate of 20% per year beginning in the month and year specified in the chart above once the Compensation Committee certifies the number of RSUs earned.
Other Compensation Policies and Practices DEFINED CONTRIBUTION PLAN
Defined Contribution Plan Our U.S. retirement program provides retirement benefits based on participant elective deferrals, Company contributions, and the investment performance of each participant’s account. For 2018,2020, we contributed $146,000$150,000 to this program for our U.S.-based NEOs as a group. We provide this program to all U.S. employees in order to assist them in their retirement planning. The contribution amounts are based on plan formulas that apply to all employees. Since relocating to our Hong Kong office in early 2020, Mr. Alderson is locatedparticipates in the UKmandatory retirement benefit program offered to all associates in Hong Kong. For 2020, we contributed $34,811 to this program on his behalf. Perquisites and we pay him cash in lieu of a contribution to the UK pension program as a result of a Fixed Protection election made with the UK tax authorities, which required him to opt out of the UK pension program. In 2018, we paid him $29,973, which is based on the contribution formula in the program and is equal to the amount he would have received had he stayed in the program.Other Personal Benefits PERQUISITES AND OTHER PERSONAL BENEFITS
We do not provide significant perquisites and other personal benefits to our executive officers. We make available to all senior officers programs related to executive health benefits and parking.parking available to all senior officers. We also cover certain costs associated with the NEOs’ spouses’ participation in events held in connection with the annual joint Price Group and Price funds’ boards of directors meeting as well as other Board and business-related functions. Mr. Alderson also receives, along with other senior personnel outside the U.S., a minor travel insurance allowance. SUPPLEMENTAL SAVINGS PLAN
TheSupplemental Savings Plan
For 2020, the Supplemental Savings Plan providesprovided certain senior officers including the NEOs, the opportunity to defer receipt of up to 100% ofa portion their cash incentive compensation earned for a year during which services are provided. The amounts deferred are adjusted in accordance with the hypothetical investments chosen by the officer from athe list of products offered under our U.S. retirement program. Any amounts so deferred must be deferred for a period of at least two years but may be deferred for a longer period or until termination of employment. Distributions from the Supplemental Savings Plan are made in a lump-sum payment upon termination or as installment payments for up to 15 years. For 2018, Messrs. Alderson, Bernard, Sharps, and Stromberg2020, no NEO elected to have a portion of their AICP payout deferred. See our Nonqualified Deferred Compensation Table on page 4857 for more information. POST-EMPLOYMENT PAYMENTS
In 2020, the Supplemental Savings Plan was amended, with the changes beginning with deferrals of 2021 compensation. The changes include reducing limits on the maximum permitted deferral to be the lesser of 50% of cash incentive compensation, or $2 million, increasing the minimum deferral period to at least five years, reducing the maximum number of installment payments to 10-years, and to provide for an automatic lump-sum payment upon termination prior to age 58. Post-Employment Payments We have not entered into severance or other post-employment agreements with any of our continuing NEOs. Consequently, we generally do not have any commitments to make post-employment payments to them. All agreements for stock option and stock awards granted to employees from our equity plans prior to February 2012 include provisions that may accelerate the vesting of outstanding equity awards upon the grantee’s death or in connection with a change in control of Price Group or, at the administrator’s discretion, upon disability of the grantee. We changed these acceleration provisions for stock options and stock awards granted on and after February 23, 2012, in the following ways: (1) aligned the treatment of the awards in the event of a grantee’s death or termination of employment due to total disability so that vesting acceleration will occur in both events; and (2) provided for “double-trigger” vesting acceleration in the event the equity incentive awards are not terminated as part of the change-in-control transaction. This means that in such a circumstance, accelerated vesting only occurs if, at the time of or within 18 months after the change-in-control transaction, a participant’s employment is terminated involuntarily without cause or the participant resigns with good reason (generally requiring a material diminution in authority or duties, TABLE OF CONTENTS
material reduction in compensation, or relocation by a substantial distance). If the acquiring entity requires that we terminate outstanding equity incentive awards as part of the change-in-control transaction, vesting also will accelerate and award holders will be given an opportunity to exercise outstanding stock options before such termination. The Compensation Committee can modify or rescind these provisions or adopt other acceleration provisions. See our Potential Payments on Termination or Change in Control on page 4858 for further details. RECOUPMENT POLICY
Recoupment Policy Our Board of Directors has adopted a Policy for Recoupment of Incentive Compensation for executive officers of the Company. This policy provides that in the event of a determination of a need for a material restatement of the Company’s financial results within three years of the original reporting, the Board will review the facts and circumstances that led to the requirement for the restatement 50 T. Rowe Price Group and will take actions it deems necessary and appropriate. The Board will consider whether any executive officer received incentive compensation, including equity awards, based on the original financial statements that in fact was not warranted based on the restatement. The Board will also consider the accountability of any executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement. The actions the Board could elect to take against a particular executive officer include: the recoupment of all or part of any bonus or other incentive compensation paid to the executive officer, including recoupment in whole or in part of equity awards; disciplinary actions, up to and including termination; and/or the pursuit of other available remedies, at the Board’s discretion. STOCK OWNERSHIP GUIDELINES
Stock Ownership Guidelines We have a stock ownership policy forcovering our executive officers. This policy provides that our NEOs, our other executive officers, and the members of our Management Committee are expected to reach levels of ownership determined as a stated multiple of an executive’s base salary within five years from the date when the executive assumed his or her position. The stated ownership multiples are 10 times base salary for the Chair and CEO, five times base salary for members of our Management Committee, and three times base salary for the remaining executive officers. For purposes of the guidelines, unvested RSUs are counted in an officer’s total ownership, but unexercised stock options, both vested and unvested, are not counted. Once the officer reaches the ownership target, the number of shares needed to reach the level is expected to be retained. With the exception of Ms. Dufétel, eachAll of our NEO’s, hasNEOs, have satisfied the applicable stock ownership multiple. TAX DEDUCTIBILITY OF COMPENSATION
Effective January 1, 2018 section 162(m)Tax Deductibility of the Internal Revenue Code (Code) was amended by the 2017 U.S. Tax Reform, originally known as the Tax Cuts and Jobs Act of 2017 (Tax Reform), to disallow a tax deduction for all compensation, including performance-based compensation, in excess of $1.0 million a public corporation pays to its covered employees, as defined under section 162(m) of the Code as amended by the Tax Reform. As a result, beginning in fiscal year 2018, compensationCompensation
Compensation in excess of $1.0 million paid to any NEO that is also a covered employee will not be deductible for tax purposes unless (i) it qualifies for transition relief applicable to a written binding contract that was in effect on November 2, 2017 and that was not materially modified after that date, or (ii) satisfies an exception under any other section of the Code to the limitation on deductibility under section 162(m). While the Compensation Committee will continue to consider the tax deductibility of compensation as one of many factors, the Compensation Committee believes stockholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in structuring compensation programs to attract, retain, and motivate key executives, even though such programs may result in non-deductible compensation expense. ACCOUNTING FOR STOCK-BASED COMPENSATION
Accounting for Stock-Based Compensation We account for stock-based compensation in accordance with generally accepted accounting principles. Pursuant to the guidance, stock-based compensation expense is measured on the grant date based on the fair value of the award. We recognize stock-based compensation expense ratably over the requisite service period of each award and we consider, in the case of performance-based restricted units, the probability of the performance thresholds being met. TABLE OF CONTENTS
Report of the Executive Compensation and Management Development Committee As part of our responsibilities, we have reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, which begins on page 2333 of this proxy statement. Based on such review and discussions, we have recommended to the Board of Directors the inclusion of the Compensation Discussion and Analysis in this proxy statement and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.2020. | | Robert F. MacLellan, Chair
Mark S. Bartlett
Mary K. Bush
Dina Dublon
Dr. Freeman A. Hrabowski, III
Olympia J. Snowe
Robert J. Stevens
Richard R. Verma
Sandra S. Wijnberg
Alan D. Wilson |
2021 Proxy Statement 51 TABLE OF CONTENTSTable of Contents
Executive Compensation of Named Executive OfficersTables SUMMARY COMPENSATION TABLESummary Compensation Table1
The following table summarizes the total compensation of our NEOs, who are the chief executive officer, the chief financial officer, and our three other most highly compensated executive officers. Name and Principal
Position | Year | Salary | Bonus3 | Stock
Awards4 | Non-Equity
Incentive Plan
Compensation5 | All Other
Compensation6 | Total | William J. Stromberg
President and Chief Executive Officer | | 2018 | | $ | 350,000 | | $ | — | | $ | 4,450,019 | | $ | 8,200,000 | | $ | 86,734 | | $ | 13,086,753 | | | 2017 | | $ | 350,000 | | $ | 39,759 | | $ | 3,550,028 | | $ | 7,600,000 | | $ | 130,182 | | $ | 11,669,969 | | | 2016 | | $ | 350,000 | | $ | — | | $ | 1,800,045 | | $ | 6,850,000 | | $ | 82,350 | | $ | 9,082,395 | | Céline S. Dufétel
Chief Financial Officer and Treasurer | | 2018 | | $ | 350,000 | | $ | — | | $ | 1,200,071 | | $ | 2,000,000 | | $ | 204,718 | | $ | 3,754,789 | | Kenneth V. Moreland
Chief Financial Officer and Treasurer (Former) | | 2018 | | $ | 59,659 | | $ | — | | $ | — | | $ | — | | $ | 5,071 | | $ | 64,730 | | | 2017 | | $ | 350,000 | | $ | 1,725,000 | | $ | — | | $ | — | | $ | 69,176 | | $ | 2,144,176 | | | 2016 | | $ | 350,000 | | $ | — | | $ | 485,061 | | $ | 1,000,000 | | $ | 80,742 | | $ | 1,915,803 | | Edward C. Bernard
Vice Chairman | | 2018 | | $ | 350,000 | | $ | — | | $ | 1,600,034 | | $ | 6,600,000 | | $ | 81,573 | | $ | 8,631,607 | | | 2017 | | $ | 350,000 | | $ | 17,920 | | $ | 1,600,037 | | $ | 6,000,000 | | $ | 81,095 | | $ | 8,049,052 | | | 2016 | | $ | 350,000 | | $ | — | | $ | 1,450,036 | | $ | 5,300,000 | | $ | 79,836 | | $ | 7,179,872 | | Robert W. Sharps
Head of Investments and Group Chief Investment Officer | | 2018 | | $ | 350,000 | | $ | — | | $ | 4,100,029 | | $ | 8,100,000 | | $ | 85,670 | | $ | 12,635,699 | | | 2017 | | $ | 350,000 | | $ | 34,159 | | $ | 3,050,036 | | $ | 7,300,000 | | $ | 84,169 | | $ | 10,818,364 | | Christopher D. Alderson2
Co-Head of Global Equity | | 2018 | | $ | 320,400 | | $ | — | | $ | 2,450,023 | | $ | 6,674,800 | | $ | 54,973 | | $ | 9,500,196 | | | 2017 | | $ | 309,300 | | $ | 21,345 | | $ | 2,000,072 | | $ | 5,799,200 | | $ | 32,800 | | $ | 8,162,717 | | | 2016 | | $ | 305,057 | | $ | — | | $ | 1,700,041 | | $ | 5,423,240 | | $ | 57,999 | | $ | 7,486,337 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NON-EQUITY | | | | | | | | | | | | | | | | | STOCK | | | INCENTIVE PLAN | | | ALL OTHER | | | | | | NAME AND PRINCIPAL POSITION | | YEAR | | | SALARY | | | AWARDS3 | | | COMPENSATION4 | | | COMPENSATION5 | | | TOTAL | | | William J. Stromberg | | | 2020 | | | $ | 350,000 | | | $ | 5,900,108 | | | $ | 9,000,000 | | | $ | 87,166 | | | $ | 15,337,274 | | | Chair and Chief | | | 2019 | | | $ | 350,000 | | | $ | 5,650,073 | | | $ | 8,500,000 | | | $ | 88,273 | | | $ | 14,588,346 | | | Executive Officer | | | 2018 | | | $ | 350,000 | | | $ | 4,450,019 | | | $ | 8,200,000 | | | $ | 86,734 | | | $ | 13,086,753 | | | Céline S. Dufétel | | | 2020 | | | $ | 350,000 | | | $ | 2,500,041 | | | $ | 4,450,000 | | | $ | 79,764 | | | $ | 7,379,805 | | | Chief Operating Officer, Chief Financial | | | 2019 | | | $ | 350,000 | | | $ | 2,100,055 | | | $ | 3,550,000 | | | $ | 79,798 | | | $ | 6,079,853 | | | Officer and Treasurer | | | 2018 | | | $ | 350,000 | | | $ | 1,200,071 | | | $ | 2,000,000 | | | $ | 204,718 | | | $ | 3,754,789 | | | Robert W. Sharps | | | 2020 | | | $ | 350,000 | | | $ | 5,550,268 | | | $ | 9,000,000 | | | $ | 87,165 | | | $ | 14,987,433 | | | President, Head of Investments, and | | | 2019 | | | $ | 350,000 | | | $ | 4,950,216 | | | $ | 8,700,000 | | | $ | 86,696 | | | $ | 14,086,912 | | | Group Chief Investment Officer | | | 2018 | | | $ | 350,000 | | | $ | 4,100,029 | | | $ | 8,100,000 | | | $ | 85,670 | | | $ | 12,635,699 | | | Christopher D. Alderson2 | | | 2020 | | | $ | 348,100 | | | $ | 2,500,041 | | | $ | 7,316,800 | | | $ | 60,054 | | | $ | 10,224,995 | | | Co-Head of Global Equity | | | 2019 | | | $ | 344,600 | | | $ | 2,500,111 | | | $ | 7,147,200 | | | $ | 48,769 | | | $ | 10,040,680 | | | | | | 2018 | | | $ | 320,400 | | | $ | 2,450,023 | | | $ | 6,674,800 | | | $ | 54,973 | | | $ | 9,500,196 | | | Eric L. Veiel | | | 2020 | | | $ | 350,000 | | | $ | 3,500,241 | | | $ | 7,350,000 | | | $ | 87,072 | | | $ | 11,287,313 | | | Co-Head of Global Equity | | | 2019 | | | $ | 350,000 | | | $ | 3,150,203 | | | $ | 7,000,000 | | | $ | 86,449 | | | $ | 10,586,652 | |
| 1 | Includes only those columns relating to compensation awarded to, earned by, or paid to the NEOs in 2018, 2017,2020, 2019, and 2016.2018. All other columns have been omitted. Ms. Dufétel was named chief financial officer and treasurer in February 2018 and therefore amounts for 2017 and 2016 have been omitted. We have excluded Mr. Sharps’ compensation for 2016 as he was notVeiel became a named executive officer in that year.2019, therefore the amounts for 2018 have been omitted. |
| 2 | Cash amounts received by Mr. Alderson pursuant to his employment agreement arewere paid in Hong Kong dollars (HKD) in 2020 and 2019 and British pounds.pounds (GBP) in 2018. In calculating the U.S. equivalent for amounts that are not denominated in U.S. dollars (USD), the Company converts each payment to Mr. Alderson into U.S. dollars based on an average daily exchange rate during the applicable year. The average exchange ratesrate for 2020 was 1 HKD to 0.12893 USD; 2019 was 1 HKD to 0.12763 USD; and 2018 2017, and 2016 werewas 1 GBP to 1.33496 1.28870 and 1.35581 U.S. dollars per British pound, respectively. In British pounds,USD. Mr. Alderson’s cash compensation for each year in local currency was HKD 57,020,000 in 2020, HKD 58,700,000 in 2019 and £5,240,000 in 2018 (10.5% increase), £4,740,000 in 2017 (12.2% increase), and £4,225,000 in 2016.2018. |
| 3 | Messrs. Stromberg, Bernard, Alderson, and Sharps, along with other equity incentive participants, were paid a one-time supplemental cash bonus in 2017 for the cash dividend equivalents lost as a result of changing from a semiannual equity grant to an annual equity grant. For Mr. Moreland, this amount represents the amount paid for the service he provided during a transition period leading up to his retirement on March 1, 2018. |
| 4 | Represents the full grant date fair value of performance-based RSUs granted. The fair value was computed using the market price per share of T. Rowe Price Group common stock on the date of grant multiplied by the target number of units, as this was considered the probable outcome. See the Grants of Plan-Based Awards Table for the target number of units for 2018.2020. |
| 54 | Represents cash amounts awarded by the Compensation Committee and paid to NEOs under the 20182020 AICP. See our Compensation Discussion and AnalysisCD&A and the Grants of Plan-Based Awards Table for more details regarding the workings of this plan. TheThese amounts include amounts elected to be deferred by all NEOs under the Supplemental Savings Plan. See the Nonqualified Deferred Compensation Table for further details. |
| 65 | The following types of compensation are included in the “All Other Compensation” column for 2018:2020: |
Name | Contributions
to Retirement
Program | Retirement
Program Limit
Bonusa | Matching
Contributions to
Stock Purchase
Planb | Matching Gifts
to Charitable
Organizationsc | Perquisites
and Other
Personal
Benefitsd | Total | William J. Stromberg | $ | 36,500 | | $ | 4,472 | | $ | 4,000 | | $ | 25,000 | | $ | 16,762 | | $ | 86,734 | | Céline S. Dufétel | $ | 36,500 | | $ | 4,472 | | $ | — | | $ | — | | $ | 163,746 | | $ | 204,718 | | Kenneth V. Moreland | $ | 3,878 | | $ | — | | $ | 1,193 | | $ | — | | $ | — | | $ | 5,071 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | MATCHING | | | | | | PERQUISITES | | | | | | | | CONTRIBUTIONS | | | RETIREMENT | | | CONTRIBUTIONS | | | MATCHING GIFTS | | | AND OTHER | | | | | | | | TO RETIREMENT | | | PROGRAM | | | TO STOCK | | | TO CHARITABLE | | | PERSONAL | | | | | | NAME | | PROGRAM | | | LIMIT BONUSa | | | PURCHASE PLANb | | | ORGANIZATIONSc | | | BENEFITSd | | | TOTAL | | | William J. Stromberg | | $ | 37,500 | | | $ | 4,754 | | | $ | 4,000 | | | $ | 25,000 | | | $ | 15,912 | | | $ | 87,166 | | | Céline S. Dufétel | | $ | 37,500 | | | $ | 4,754 | | | $ | — | | | $ | 25,000 | | | $ | 12,510 | | | $ | 79,764 | | | Robert W. Sharps | | $ | 37,500 | | | $ | 4,754 | | | $ | 4,000 | | | $ | 25,000 | | | $ | 15,911 | | | $ | 87,165 | | | Christopher D. Alderson | | $ | 34,811 | | | $ | — | | | $ | — | | | $ | 25,000 | | | $ | 243 | | | $ | 60,054 | | | Eric L. Veiel | | $ | 37,500 | | | $ | 4,754 | | | $ | 4,000 | | | $ | 25,000 | | | $ | 15,818 | | | $ | 87,072 | |
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Name | Contributions
to Retirement
Program | Retirement
Program Limit
Bonusa | Matching
Contributions to
Stock Purchase
Planb | Matching Gifts
to Charitable
Organizationsc | Perquisites
and Other
Personal
Benefitsd | Total | Edward C. Bernard | $ | 36,500 | | $ | 4,472 | | $ | 2,917 | | $ | 25,000 | | $ | 12,684 | | $ | 81,573 | | Robert W. Sharps | $ | 36,500 | | $ | 4,472 | | $ | 4,000 | | $ | 25,000 | | $ | 15,698 | | $ | 85,670 | | Christopher D. Alderson | $ | — | | $ | 29,973 | | $ | — | | $ | 25,000 | | $ | — | | $ | 54,973 | |
| a | Cash compensation for the amount calculated under the U.S. retirement program that could not be credited to their retirement accounts in 20182020 due to the contribution limits imposed under Section 415 of the Internal Revenue Code. ForSince relocating to our Hong Kong office in early 2019, Mr. Alderson the amount represents cash paid in lieu of a contribution to the UK pension program as result of a Fixed Protection election he made with the UK tax authorities, which required him to opt out of the UK pension program. This amount is based on the contribution formulaparticipates in the pensionmandatory retirement benefit program and is equaloffered to the amount he would have received had he stayedall associates in the pension program.Hong Kong. For 2020, we contributed $34,811 to this program on his behalf. |
| b | Matching contributions paid under our Employee Stock Purchase Plan offered to all employees of Price Group and its subsidiaries. |
| c | NEOs, directors, and all employees of Price Group and its subsidiaries are eligible to have personal gifts up to an annual limit to qualified charitable organizations matched by our sponsored T. Rowe Price Foundation, in the case of U.S. employees, and Price Group, in the case of employees outside the U.S. For 2018,2020, all of the NEOs were eligible to have up to $25,000 matched. |
| d | Costs incurred by Price Group under programs available to all senior officers, including the NEOs, for executive health benefits and parking, as well as certain costs covered by Price Group relating to spousal participation in events held in connection with the Price Group. For Ms. Dufétel, the amount also includes $150,000 that represents a sign-on bonus that was part of the compensation package she received when joining the firm in 2017. This bonus was not earned by Ms. Dufétel until 2018.Group Board meetings. |
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2018 GRANTS OF PLAN-BASED AWARDS TABLE2020 Grants of Plan-Based Awards Table1
The following table provides information concerning each plan-based award granted in 20182020 to the executive officers named in the Summary Compensation Table and other information regarding their grants. | Grant
Date | Date of
Compensation
Committee
Meeting at
Which Grant
Was Approved | Estimated Possible
Payouts under
Non-equity Incentive
Plan Awards2 | Estimated Possible
Payouts Under Equity
Incentive Plan Awards3 | Grant Date
Fair Value
of Stock
Awards4 | Name | Threshold
($) | Maximum
($) | Target
(#) | Maximum
(#) | William J. Stromberg | | 2/12/20182 | | | | | $ | — | | $ | 18,855,230 | | | | | | | | | | | | | 12/11/20183 | | | 12/10/2018 | | | | | | | | | 48,354 | | | 48,354 | | $ | 4,450,019 | | Céline S. Dufétel | | 2/12/20182 | | | | | $ | — | | $ | 5,656,569 | | | | | | | | | | | | | 12/11/20183 | | | 12/10/2018 | | | | | | | | | 13,040 | | | 13,040 | | $ | 1,200,071 | | Edward C. Bernard | | 2/12/20182 | | | | | $ | — | | $ | 16,969,707 | | | | | | | | | | | | | 12/11/20183 | | | 12/10/2018 | | | | | | | | | 17,386 | | | 17,386 | | $ | 1,600,034 | | Robert W. Sharps | | 2/12/20182 | | | | | $ | — | | $ | 18,855,230 | | | | | | | | | | | | | 12/11/20183 | | | 12/10/2018 | | | | | | | | | 44,551 | | | 44,551 | | $ | 4,100,029 | | Christopher D. Alderson | | 2/12/20182 | | | | | $ | — | | $ | 16,969,707 | | | | | | | | | | | | | 12/11/20183 | | | 12/10/2018 | | | | | | | | | 26,622 | | | 26,622 | | $ | 2,450,023 | |
| | | | | | | | | | | | | ESTIMATED | | | | | | | | | | | | DATE OF | | | POSSIBLE PAYOUTS | | | | | | | | | | COMPENSATION | | ESTIMATED POSSIBLE | | | UNDER EQUITY | | | | | | | | | | COMMITTEE | | PAYOUTS UNDER NON-EQUITY | | | INCENTIVE | | | | | | | | | | MEETING AT | | INCENTIVE PLAN AWARDS2 | | | PLAN AWARDS3 | | | GRANT DATE | | | | | | | WHICH GRANT | | THRESHOLD | | | MAXIMUM | | | TARGET | | | MAXIMUM | | | FAIR VALUE OF | | | NAME | | GRANT DATE | | WAS APPROVED | | ($) | | | ($) | | | (#) | | | (#) | | | STOCK AWARDS4 | | | William J. Stromberg | | 2/12/2020 | | | | $ | — | | | $ | 16,474,002 | | | | | | | | | | | | | | | | | 12/8/2020 | | 12/7/2020 | | | | | | | | | | | 38,520 | | | | 38,520 | | | $ | 5,900,108 | | | Céline S. Dufétel | | 2/12/2020 | | | | $ | — | | | $ | 8,237,001 | | | | | | | | | | | | | | | | | 12/8/2020 | | 12/7/2020 | | | | | | | | | | | 16,322 | | | | 16,322 | | | $ | 2,500,041 | | | Robert W. Sharps | | 2/12/2020 | | | | $ | — | | | $ | 16,474,002 | | | | | | | | | | | | | | | | | 12/8/2020 | | 12/7/2020 | | | | | | | | | | | 36,236 | | | | 36,236 | | | $ | 5,550,268 | | | Christopher D. Alderson | | 2/12/2020 | | | | $ | — | | | $ | 13,728,335 | | | | | | | | | | | | | | | | | 12/8/2020 | | 12/7/2020 | | | | | | | | | | | 16,322 | | | | 16,322 | | | $ | 2,500,041 | | | Eric L. Veiel | | 2/12/2020 | | | | $ | — | | | $ | 13,728,335 | | | | | | | | | | | | | | | | | 12/8/2020 | | 12/7/2020 | | | | | | | | | | | 22,852 | | | | 22,852 | | | $ | 3,500,241 | |
| 1 | Includes only those columns relating to plan-based awards granted during 2018.2020. All other columns have been omitted. Mr. Moreland has been excluded from the table as he did not receive any plan-based awards given his retirement on March 1, 2018. |
| 2 | The maximum represents the highest possible amount that could have been paid to each of these individuals under the 2018 Annual Incentive Compensation Plan2020 AICP based on our 20182020 audited financial statements. The Compensation Committee has discretion to award no bonus under this program, or to award up to the maximum bonus. As a result, there is no minimum amount payable even if performance goals are met. For 2018,2020, the Compensation Committee awarded significantly less than the maximum amount to the NEOs and the actual amount awarded has been disclosed in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.” See our Compensation Discussion and AnalysisCD&A for additional information regarding the Annual Incentive Compensation Plan.AICP. |
| 3 | Represents both time-based RSUs and performance-based RSUs granted as part of the Company’s annual equity incentive program from its 2012 Long-Term Incentive2020 Plan. TheseThe annual grant value awarded is equally split between time-based RSUs and performance-based RSUs. The time-based RSUs vesting occurs 33% on each of December 10, 2021, December 9, 2022, and December 8, 2023. The performance-based RSUs are subject to a performance-based vesting threshold with a 12-monththree-year performance period. The performance period, which for the December 20182020 grant, will run from January 1, 20192021 to December 31, 2019.2023. For each grant,performance-based RSU, the target payout represents the number of RSUs to be earned by the NEO if the Company’s operating margin for the performance period is at least 100% of the average operating margin of a designated peer group. The Company’s operating margin performance below this target threshold results in forfeiture of some or all of the performance-based RSUs. The performance-based RSUs earned by the NEO following the performance period are alsothen subject to time-based vesting, before they are settled in shares of our common stock. Vestingwhich occurs 20%50% on each of 2/28/2020, 2/26/2021, 2/28/2022, 2/28/2023,December 10, 2024 and 2/28/2024.December 10, 2025. These grant agreements include a provision that allows for the continued vesting of the grant, from the date of separation if certain age and service criteria are met for the U.S.-based NEOs and a service criteria is met for Mr. Alderson. Dividends on these performance-based RSUs are accrued during the performance period and are only paid on those units earned.earned units. Additional information related to these performance-based RSUs, including a listing of companies in the designated peer group, are included in our Compensation Discussion and Analysis.CD&A. |
| 4 | Represents the grant date fair value of the time-based RSUs and performance-based RSUs granted in 2018.2020. The grant date fair value of the performance-based RSUsawards was measured using the market price per share of T. Rowe Price Group common stock on the date of grant multiplied by the target number of units noted in the table, as this was considered the probable outcome. |
TABLE OF CONTENTSTable of Contents
OUTSTANDING EQUITY AWARDS TABLE AT DECEMBEROutstanding Equity Awards Table at December 31, 201820201
The following table shows information concerning equity incentive awards outstanding at December 31, 2018,2020, for each NEO. The grant agreements for all unexercisable option awards and unvested stock awards include a provision that allows for continued vesting for a period of 36 months from the date of separation for awards granted before 2017, and for the remaining unvested portion for awards granted in 2017, from the date of separation if certain age and service criteria are met for the U.S.-based NEOs and a service criteria is met for Mr. Alderson. In 2018, the provision that allows for continued vesting for all associates was modified for 2018 grants and thereafter to a tiered approach with three different age and service criteria, each having separate periods of continued vesting. | | Option Awards | Stock Awards | Name | Grant Date | Number of
Securities
Underlying
Unexercised
Options:
Exercisable | Number of
Securities
Underlying
Unexercised
Options:
Unexercisable | 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
($)2 | Equity
Incentive
Plan
Awards:
Number of
Unearned
Units That
Have Not
Vested (#) | Equity
Incentive
Plan
Awards:
Market Value
of Unearned
Units That
Have Not
Vested ($)2 | William J.
Stromberg | | 9/6/2012 | | | 20,819 | | | | | $ | 60.798 | | | 9/6/2022 | | | | | | | | | | | | | | | | 2/21/2013 | | | 20,498 | | | | | $ | 69.671 | | | 2/21/2023 | | | | | | | | | | | | | | | | 9/10/2013 | | | 20,499 | | | | | $ | 70.285 | | | 9/10/2023 | | | | | | | | | | | | | | | | 2/19/2014 | | | 14,349 | | | 3,587 | 3a | $ | 77.944 | | | 2/19/2024 | | | 1,050 | 4a | $ | 96,936 | 4a | | | | | | | | | 9/9/2014 | | | 14,348 | | | 3,588 | 3a | $ | 78.442 | | | 9/9/2024 | | | 1,050 | 4b | $ | 96,936 | 4b | | | | | | | | | 2/19/2015 | | | 10,762 | | | 7,174 | 3b | $ | 80.949 | | | 2/19/2025 | | | 2,100 | 4c | $ | 193,872 | 4c | | | | | | | | | 9/10/2015 | | | 10,500 | | | 7,000 | 3b | $ | 70.920 | | | 9/10/2025 | | | 2,100 | 4d | $ | 193,872 | 4d | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | 7,686 | 4e | $ | 709,572 | 4e | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | 7,845 | 4f | $ | 724,250 | 4f | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | | | | | | 34,876 | 5a | $ | 3,219,7525a | | | | 12/11/2018 | | | | | | | | | | | | | | | | | | | | | 48,354 | 5b | $ | 4,464,0415b | | Céline S.
Dufétel | | 12/6/2017 | | | | | | | | | | | | | | | | | | | | | 4,421 | 5a | $ | 408,1475a | | | | 12/11/2018 | | | | | | | | | | | | | | | | | | | | | 13,040 | 5b | $ | 1,203,8535b | | Kenneth V.
Moreland | | 2/21/2013 | | | 1,229 | | | | | $ | 69.671 | | | 6/1/2021 | | | | | | | | | | | | | | | | 9/10/2013 | | | 1,229 | | | | | $ | 70.285 | | | 6/1/2021 | | | | | | | | | | | | | | | | 2/19/2014 | | | 1,178 | | | 1,178 | 3a | $ | 77.944 | | | 6/1/2021 | | | 345 | 4a | $ | 31,850 | 4a | | | | | | | | | 9/9/2014 | | | 1,178 | | | 1,179 | 3a | $ | 78.442 | | | 6/1/2021 | | | 345 | 4b | $ | 31,850 | 4b | | | | | | | | | 2/19/2015 | | | 1,179 | | | 2,356 | 3b | $ | 80.949 | | | 6/1/2021 | | | 690 | 4c | $ | 63,701 | 4c | | | | | | | | | 9/10/2015 | | | 1,150 | | | 2,300 | 3b | $ | 70.920 | | | 6/1/2021 | | | 690 | 4d | $ | 63,701 | 4d | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | 1,381 | 4e | $ | 127,494 | 4e | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | 1,409 | 4f | $ | 130,079 | 4f | | | | | | |
TABLE OF CONTENTS
| | Option Awards | Stock Awards | Name | Grant Date | Number of
Securities
Underlying
Unexercised
Options:
Exercisable | Number of
Securities
Underlying
Unexercised
Options:
Unexercisable | 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
($)2 | Equity
Incentive
Plan
Awards:
Number of
Unearned
Units That
Have Not
Vested (#) | Equity
Incentive
Plan
Awards:
Market Value
of Unearned
Units That
Have Not
Vested ($)2 | Edward C.
Bernard | | 2/23/2012 | | | 26,023 | | | | | $ | 59.069 | | | 12/31/2021 | | | | | | | | | | | | | | | | 9/6/2012 | | | 23,421 | | | | | $ | 60.798 | | | 12/31/2021 | | | | | | | | | | | | | | | | 2/21/2013 | | | 23,060 | | | | | $ | 69.671 | | | 12/31/2021 | | | | | | | | | | | | | | | | 9/10/2013 | | | 16,399 | | | | | $ | 70.285 | | | 12/31/2021 | | | | | | | | | | | | | | | | 2/19/2014 | | | 14,349 | | | | | $ | 77.944 | | | 12/31/2021 | | | 1,050 | 4a | $ | 96,936 | 4a | | | | | | | | | 2/19/2014 | | | | | | 3,587 | 3a | $ | 77.944 | | | 3/31/2022 | | | | | | | | | | | | | | | | 9/9/2014 | | | 12,299 | | | | | $ | 78.442 | | | 12/31/2021 | | | 900 | 4b | $ | 83,088 | 4b | | | | | | | | | 9/9/2014 | | | | | | 3,075 | 3a | $ | 78.442 | | | 3/31/2022 | | | | | | | | | | | | | | | | 2/19/2015 | | | 9,224 | | | | | $ | 80.949 | | | 12/31/2021 | | | 1,800 | 4c | $ | 166,176 | 4c | | | | | | | | | 2/19/2015 | | | | | | 6,150 | 3b | $ | 80.949 | | | 3/31/2022 | | | | | | | | | | | | | | | | 9/10/2015 | | | 9,000 | | | | | $ | 70.920 | | | 12/31/2021 | | | 1,800 | 4d | $ | 166,176 | 4d | | | | | | | | | 9/10/2015 | | | | | | 6,000 | 3b | $ | 70.920 | | | 3/31/2022 | | | | | | | | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | 6,192 | 4e | $ | 571,645 | 4e | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | 6,320 | 4f | $ | 583,462 | 4f | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | | | | | | 15,719 | 5a | $ | 1,451,178 | 5a | | | 12/11/2018 | | | | | | | | | | | | | | | | | | | | | 17,386 | 5b | $ | 1,605,076 | 5b | Robert W.
Sharps | | 2/17/2011 | | | 1,479 | | | | | $ | 67.561 | | | 2/17/2021 | | | | | | | | | | | | | | | | 2/23/2012 | | | 1,692 | | | | | $ | 59.069 | | | 2/23/2022 | | | | | | | | | | | | | | | | 2/21/2013 | | | 20,498 | | | | | $ | 69.671 | | | 2/21/2023 | | | | | | | | | | | | | | | | 9/10/2013 | | | 20,499 | | | | | $ | 70.285 | | | 9/10/2023 | | | | | | | | | | | | | | | | 2/19/2014 | | | 16,399 | | | 4,100 | 3a | $ | 77.944 | | | 2/19/2024 | | | 1,200 | 6a | $ | 110,784 | 6a | | | | | | | | | 9/9/2014 | | | 16,399 | | | 4,100 | 3a | $ | 78.442 | | | 9/9/2024 | | | 1,200 | 6a | $ | 110,784 | 6a | | | | | | | | | 2/19/2015 | | | 18,449 | | | 12,299 | 3b | $ | 80.949 | | | 2/19/2025 | | | 3,600 | 6b | $ | 332,352 | 6b | | | | | | | | | 9/10/2015 | | | 18,000 | | | 12,000 | 3b | $ | 70.920 | | | 9/10/2025 | | | 3,600 | 6b | $ | 332,352 | 6b | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | 85,398 | 4e | $ | 7,883,943 | 4e | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | 11,316 | 6c | $ | 1,044,693 | 6c | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | 11,549 | 6c | $ | 1,066,204 | 6c | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | | | | | | 29,964 | 5a | $ | 2,766,276 | 5a | | | 12/11/2018 | | | | | | | | | | | | | | | | | | | | | 44,551 | 5b | $ | 4,112,948 | 5b |
TABLE OF CONTENTS
| | Option Awards | Stock Awards | Name | Grant Date | Number of
Securities
Underlying
Unexercised
Options:
Exercisable | Number of
Securities
Underlying
Unexercised
Options:
Unexercisable | 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
($)2 | Equity
Incentive
Plan
Awards:
Number of
Unearned
Units That
Have Not
Vested (#) | Equity
Incentive
Plan
Awards:
Market Value
of Unearned
Units That
Have Not
Vested ($)2 | Christopher
D. Alderson | | 2/17/2011 | | | 689 | | | | | $ | 70.330 | | | 2/17/2021 | | | | | | | | | | | | | | | | 9/8/2011 | | | 41,639 | | | | | $ | 48.560 | | | 9/8/2021 | | | | | | | | | | | | | | | | 2/23/2012 | | | 20,819 | | | | | $ | 59.069 | | | 2/23/2022 | | | | | | | | | | | | | | | | 9/6/2012 | | | 20,819 | | | | | $ | 60.798 | | | 9/6/2022 | | | | | | | | | | | | | | | | 2/21/2013 | | | 20,499 | | | | | $ | 69.671 | | | 2/21/2023 | | | | | | | | | | | | | | | | 9/10/2013 | | | 20,499 | | | | | $ | 70.285 | | | 9/10/2023 | | | | | | | | | | | | | | | | 2/19/2014 | | | 16,399 | | | 4,100 | 3a | $ | 77.944 | | | 2/19/2024 | | | 1,200 | 4a | $ | 110,784 | 4a | | | | | | | | | 9/9/2014 | | | 16,399 | | | 4,100 | 3a | $ | 78.442 | | | 9/9/2024 | | | 1,200 | 4b | $ | 110,784 | 4b | | | | | | | | | 2/19/2015 | | | 12,299 | | | 8,200 | 3b | $ | 80.949 | | | 2/19/2025 | | | 2,400 | 4c | $ | 221,568 | 4c | | | | | | | | | 9/10/2015 | | | 12,000 | | | 8,000 | 3b | $ | 70.920 | | | 9/10/2025 | | | 2,400 | 4d | $ | 221,568 | 4d | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | 7,259 | 4e | $ | 670,151 | 4e | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | 7,409 | 4f | $ | 683,999 | 4f | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | | | | | | 19,649 | 5a | $ | 1,813,996 | 5a | | | 12/11/2018 | | | | | | | | | | | | | | | | | | | | | 26,622 | 5b | $ | 2,457,743 | 5b |
| | | | | | | | OPTION AWARDS | | | | STOCK AWARDS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MARKET | | | INCENTIVE | | | | | | | | | | | | | | | | | | | | | | | | | | NUMBER | | | VALUE OF | | | | PLAN | | | EQUITY | | | | | | | | | | | | | | | | | | | | | | OF SHARES | | | SHARES | | | | AWARDS: | | | INCENTIVE | | | | | | | | | | NUMBER OF | | | | | | | | | | | | OR UNITS | | | OR UNITS | | | | NUMBER OF | | | PLAN AWARDS: | | | | | | | | | | SECURITIES | | | | | | | | | | | | OF STOCK | | | OF STOCK | | | | UNEARNED | | | MARKET VALUE | | | | | | | | | | UNDERLYING | | | | | | | | | | | | THAT | | | THAT | | | | UNITS | | | OF UNEARNED | | | | | | | | | | UNEXERCISED | | | OPTION | | | | OPTION | | | HAVE NOT | | | HAVE NOT | | | | THAT HAVE | | | UNITS THAT | | | | | | GRANT | | | | OPTIONS: | | | EXERCISE | | | | EXPIRATION | | | VESTED | | | VESTED | | | | NOT VESTED | | | HAVE NOT | | | NAME | | | DATE | | | | EXERCISABLE | | | PRICE | | | | DATE | | | | (#) | | | ($) | 2 | | | (#) | | | VESTED ($)2 | | | William J. Stromberg | | | 2/19/2015 | | | | 1,235 | | | $ | 80.949 | | | | 2/19/2025 | | | | | | | | | | | | | | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | 2,562 | 3a | | $ | 387,861 | 3a | | | | | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | | 2,615 | 3b | | $ | 395,885 | 3b | | | | | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | 20,926 | 3c | | $ | 3,167,987 | 3c | | | | | | | | | | | | | 12/11/2018 | | | | | | | | | | | | | | | | 38,684 | 3d | | $ | 5,856,371 | 3d | | | | | | | | | | | | | 12/3/2019 | | | | | | | | | | | | | | | | 15,592 | 5d | | $ | 2,360,473 | 5d | | | 23,388 | 4a | | $ | 3,540,709 | 4a | | | | | 12/8/2020 | | | | | | | | | | | | | | | | 19,260 | 5e | | $ | 2,915,771 | 5e | | | 19,260 | 4b | | $ | 2,915,771 | 4b | | Céline S. Dufétel | | | 12/6/2017 | | | | | | | | | | | | | | | | 2,653 | 3c | | $ | 401,638 | 3c | | | | | | | | | | | | | 12/11/2018 | | | | | | | | | | | | | | | | 10,432 | 3d | | $ | 1,579,300 | 3d | | | | | | | | | | | | | 12/3/2019 | | | | | | | | | | | | | | | | 5,795 | 5d | | $ | 877,305 | 5d | | | 8,693 | 4a | | $ | 1,316,033 | 4a | | | | | 12/8/2020 | | | | | | | | | | | | | | | | 8,161 | 5e | | $ | 1,235,494 | 5e | | | 8,161 | 4b | | $ | 1,235,494 | 4b | | Robert W. Sharps | | | 2/21/2013 | | | | 1,434 | | | $ | 69.671 | | | | 2/21/2023 | | | | | | | | | | | | | | | | | | | | | | 2/19/2014 | | | | 1,282 | | | $ | 77.944 | | | | 2/19/2024 | | | | | | | | | | | | | | | | | | | | | | 2/19/2015 | | | | 15,748 | | | $ | 80.949 | | | | 2/19/2025 | | | | | | | | | | | | | | | | | | | | | | 9/10/2015 | | | | 6,000 | | | $ | 70.920 | | | | 9/10/2025 | | | | | | | | | | | | | | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | 28,466 | 3a | | $ | 4,309,468 | 3a | | | | | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | 3,772 | 5a | | $ | 571,043 | 5a | | | | | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | | 3,850 | 5a | | $ | 582,852 | 5a | | | | | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | 17,979 | 3c | | $ | 2,721,841 | 3c | | | | | | | | | | | | | 12/11/2018 | | | | | | | | | | | | | | | | 35,641 | 3d | | $ | 5,395,691 | 3d | | | | | | | | | | | | | 12/3/2019 | | | | | | | | | | | | | | | | 13,661 | 5d | | $ | 2,068,139 | 5d | | | 20,491 | 4a | | $ | 3,102,132 | 4a | | | | | 12/8/2020 | | | | | | | | | | | | | | | | 18,118 | 5e | | $ | 2,742,884 | 5e | | | 18,118 | 4b | | $ | 2,742,884 | 4b | | Christopher D. Alderson | | | 2/17/2016 | | | | | | | | | | | | | | | | 2,420 | 3a | | | 366,364 | 3a | | | | | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | | 2,470 | 3b | | | 373,933 | 3b | | | | | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | 11,790 | 3c | | $ | 1,784,888 | 3c | | | | | | | | | | | | | 12/11/2018 | | | | | | | | | | | | | | | | 21,298 | 3d | | $ | 3,224,304 | 3d | | | | | | | | | | | | | 12/3/2019 | | | | | | | | | | | | | | | | 6,899 | 5d | | | 1,044,440 | 5d | | | 10,349 | 4a | | $ | 1,566,735 | 4a | | | | | 12/8/2020 | | | | | | | | | | | | | | | | 8,161 | 5e | | $ | 1,235,494 | 5e | | | 8,161 | 4b | | $ | 1,235,494 | 4b | | Eric L. Veiel | | | 2/19/2015 | | | | 17,936 | | | $ | 80.949 | | | | 2/19/2025 | | | | | | | | | | | | | | | | | | | | | | 9/10/2015 | | | | 17,500 | | | $ | 70.920 | | | | 9/10/2025 | | | | | | | | | | | | | | | | | | | | | | 12/10/2015 | | | | | | | | | | | | | | | | 5,455 | 3a | | $ | 825,832 | 3a | | | | | | | | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | 2,420 | 3a | | $ | 366,364 | 3a | | | | | | | | | | | | | 9/8/2016 | | | | | | | | | | | | | | | | 2,470 | 3b | | $ | 373,933 | 3b | | | | | | | | | | | | | 12/6/2017 | | | | | | | | | | | | | | | | 7,860 | 5b | | $ | 1,189,925 | 5b | | | | | | | | | | | | | 12/11/2018 | | | | | | | | | | | | | | | | 16,300 | 5c | | $ | 2,467,657 | 5c | | | | | | | | | | | | | 12/12/2018 | | | | | | | | | | | | | | | | 1,915 | 5c | | $ | 289,912 | 5c | | | | | | | | | | | | | 12/3/2019 | | | | | | | | | | | | | | | | 8,693 | 5d | | $ | 1,316,033 | 5d | | | 13,040 | 4a | | $ | 1,974,126 | 4a | | | | | 12/8/2020 | | | | | | | | | | | | | | | | 11,426 | 5e | | $ | 1,729,782 | 5e | | | 11,426 | 4b | | $ | 1,729,782 | 4b | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | Includes only those columns that related to outstanding equity awards at December 31, 2018.2020. All other columns have been omitted. |
| 2 | The market value of these stock awards was calculated using the closing market price per share of Price Group’s common stock on December 31, 2018.2020. |
| 3 | The following table represents the vesting schedules of the unexercisable outstanding option awards at December 31, 2018. |
Footnote
| Percentage of Outstanding
| Vest Dates
| 3a
| | 100
| %
| | 12/10/2019
| | | | | 3b
| | 50
| %
| | 12/10/2019
| | | 12/10/2020
| |
| 4 | For each performance-based RSU award earned and not vested at December 31, 2018,2020, the following table includes the date of the meeting or unanimous consent at which the Compensation Committee certified that the performance threshold was met, the award’sawards’ performance period, and the award’sawards remaining vesting schedule. |
Footnote
| Date
Certified
| Performance
Period Start
Date
| Performance
Period End Date
| Percentage
of
Outstanding
| Vest Dates
| PERFORMANCE | | PERFORMANCE | | | | | | | | | | | | | | | 4a
| | Feb-2015
| DATE | January 1, 2014
| December 31, 2014
| PERIOD | 100
| %
PERIOD | 12/10/2019
| REMAINING | | | | | | | | | | | | | 4b
FOOTNOTE | | Sep-2015
| CERTIFIED | July 1, 2014
| June 30, 2015
| START DATE | 100
| %
END DATE | 12/10/2019
| PERCENTAGE VESTING | | | VEST DATES | | | 4c
3a | | Feb-2016
| | January 1, 2015
Feb-2017 | December 31, 2015
| | 50
1/1/2016 | %
| 12/31/2016 | | | 100 | % | | | 12/10/20192021 | | 12/10/2020
| | | | | | | | | | 4d
3b | | Sep-2016
| | July 1, 2015
Sep-2017 | June 30, 2016
| | 50
7/1/2016 | %
| 6/30/2017 | | | 100 | % | | | 12/10/20192021 | | 12/10/2020
| | | | | | | | | | 4e
3c | | Feb-2017
| | January 1, 2016
Feb-2019 | December 31, 2016
| | 33
1/1/2018 | %
| 12/10/2019 31/2018 | | 12/10/2020
| 33 | % | 12/10/2021
| | 2/26/2021 | | | 2/28/2022 | | | 2/28/2023 | | �� | | | | 4f
3d | | Sep-2017
| | July 1, 2016
Feb-2020 | June 30, 2017
| | 33
1/1/2019 | %
| 12/10/31/2019 | | 12/10/2020
| 25 | % | 12/10/2021
| | 2/26/2021 | | | 2/28/2022 | | | 2/28/2023 | | | | 2/28/2024 | |
| 54 | For each performance-based RSU award unearned and not vested at December 31, 2018,2020, the following table includes the date of the meeting or unanimous consent at which the Compensation Committee certified that the performance threshold was met, the award’s performance period, and the award’s remaining vesting schedule. In 2020, all our NEOs received 50% of their equity award value in performance-based RSUs with a three-year performance period, which if earned, would vest in 2024 and 2025. |
Footnote
| Date
Certified
| Performance
Period Start
Date
| Performance
Period End Date
| Percentage
of
Outstanding
| Vest Dates
| PERFORMANCE | | PERFORMANCE | | | | | | | | | 5a
| | Feb-2019
| DATE | January 1, 2018
| December 31, 2018
| —%
PERIOD | 2/28/2019
| 2/28/2020
PERIOD | 2/26/2021
| 2/28/2022
REMAINING | 2/28/2023
| | | | | | 5b
FOOTNOTE | | | CERTIFIED | January 1, 2019
| December 31, 2019
| —%
START DATE | 2/28/2020
| 2/26/2021
END DATE | 2/28/2022
| 2/28/2023
PERCENTAGE VESTING | 2/28/
| | VEST DATES | | | 4a | | | | | | 1/1/2020 | | 12/31/2022 | | | 50% | | | 12/8/2023 | | | 12/10/2024 | | | 4b | | | | | | 1/1/2021 | | 12/31/2023 | | | 50% | | | 12/10/2024 | | | 12/10/2025 | |
TABLE OF CONTENTS
| 65 | Mr. Sharps and Mr. Veiel received time-based restricted stock awards and RSU awards through September 2016.that were not vested at December 31, 2020. Additionally, all our NEOs received 50% of their 2020 annual equity award value in time-based RSUs that vest over three years beginning in 2021. The following table represents the vesting schedules of the outstanding stock awards at December 31, 2018.2020. |
Footnote
| Remaining Percentage Vesting
| Vest Dates
| REMAINING | | | | | | | | | | | | | 6a
FOOTNOTE | | 100
| %
PERCENTAGE VESTING | | 12/10/2019
| VEST DATES | | | | | | | 6b
5a | | 50
| %
| 100% | | | 12/10/20192021 | | | 12/10/2020
| | | | | | | | | | 6c
5b | | 33
| %
| 50% | 12/10/2019
| | | 12/10/2020
| | | 12/10/2021 | | | 12/9/2022 | | | | | | | | | | | 5c | | | | 33% | | | 12/10/2021 | | | 12/9/2022 | | | | 12/8/2023 | | | | | | | 5d | | | | 50% | | | 12/10/2021 | | | 12/9/2022 | | | | | | | | | | | 5e | | | | 33% | | | 12/10/2021 | | | 12/9/2022 | | | | 12/8/2023 | | | | | |
2018 OPTION EXERCISES AND STOCK VESTED TABLE2020 Options Exercises and Stock Vested Table
The following table shows aggregate stock option exercises and restricted stock awards vesting in 20182020 and the related value realized on those events for each of the NEOs that experienced such events in 2018.NEOs. | Option Awards | Stock Awards | Name | Number of Shares
Acquired on
Exercise1, 5 | Value Realized on
Exercise2 | Number of Shares
Acquired on Vesting3, 5 | Value Realized on
Vesting3 | William J. Stromberg | | 110,600 | | $ | 6,164,462 | | | 11,777 | | $ | 1,088,784 | | Kenneth V. Moreland | | 11,227 | | $ | 376,295 | | | 3,495 | | $ | 323,113 | | Edward C. Bernard | | 50,569 | | $ | 2,681,607 | | | 10,230 | | $ | 945,764 | | Robert W. Sharps | | 63,449 | | $ | 3,452,853 | | | 58,369 | 4 | $ | 5,396,214 | 4 | Christopher D. Alderson | | 82,560 | | $ | 5,379,891 | | | 12,090 | | $ | 1,117,721 | |
| | | OPTION AWARDS | | | | STOCK AWARDS | | | | | | NUMBER OF SHARES | | | VALUE REALIZED | | | NUMBER OF SHARES | | | VALUE REALIZED | | | NAME | | ACQUIRED ON EXERCISE1,6 | | | ON EXERCISE2 | | | ACQUIRED ON VESTING3,6 | | | ON VESTING3 | | | William J. Stromberg | | | 71,507 | | | $ | 4,296,067 | | | | 31,718 | | | $ | 4,215,278 | | | Céline S. Dufétel | | | — | | | $ | — | | | | 6,390 | | | $ | 844,878 | | | Robert W. Sharps | | | 102,386 | | | $ | 6,624,958 | | | | 61,421 | 4 | | $ | 8,705,701 | 4 | | Christopher D. Alderson | | | 65,098 | | | $ | 4,044,522 | | | | 19,994 | | | $ | 2,695,976 | | | Eric L. Veiel | | | 53,295 | | | $ | 3,507,329 | | | | 26,792 | 5 | | $ | 4,001,117 | 5 |
| 1 | Represents the total number of shares underlying the exercised stock options. |
| 2 | Computed using the difference between the market price of Price Group’s common stock on the date of exercise and the exercise price, multiplied by the number of shares acquired. |
| 3 | Reflects the number of shares underlying the performance-based RSUs earned and vested. The value realized on vesting is computed using the closing market price per share of Price Group’s common stock on the vest date (December 10, 2018)2020) multiplied by the number of RSUs vesting. The following table shows the aggregate RSUs by NEOs listed in the table above by date of award: |
Date of Award | Performance Period
Completion Date | Number of
Shares Acquired on Vesting | Market Price on
Vest Date | Value Realized on
Vesting | 2/21/2013 | | 12/31/2013 | | | 4,110 | | $ | 92.45 | | $ | 379,970 | | 9/10/2013 | | 6/30/2014 | | | 3,720 | | $ | 92.45 | | $ | 343,914 | | 2/19/2014 | | 12/31/2014 | | | 3,645 | | $ | 92.45 | | $ | 336,980 | | 9/9/2014 | | 6/30/2015 | | | 3,495 | | $ | 92.45 | | $ | 323,113 | | 2/19/2015 | | 12/31/2015 | | | 3,495 | | $ | 92.45 | | $ | 323,113 | | 9/10/2015 | | 6/30/2016 | | | 3,495 | | $ | 92.45 | | $ | 323,113 | | 2/17/2016 | | 12/31/2016 | | | 36,202 | | $ | 92.45 | | $ | 3,346,875 | | 9/8/2016 | | 6/30/2017 | | | 7,896 | | $ | 92.45 | | $ | 729,985 | |
| | | | PERFORMANCE PERIOD | | NUMBER OF SHARES | | | MARKET PRICE | | | VALUE REALIZED | | | DATE OF AWARD | | | COMPLETION DATE | | ACQUIRED ON VESTING | | | ON VEST DATE | | | ON VESTING | | | 2/19/2015 | | | 12/31/2015 | | | 2,250 | | | $ | 149.34 | | | $ | 336,015 | | | 9/10/2015 | | | 6/30/2016 | | | 2,250 | | | $ | 149.34 | | | $ | 336,015 | | | 12/10/2015 | | | 12/31/2016 | | | 5,454 | | | $ | 149.34 | | | $ | 814,500 | | | 2/17/2016 | | | 12/31/2016 | | | 35,868 | | | $ | 149.34 | | | $ | 5,356,527 | | | 9/8/2016 | | | 6/30/2017 | | | 7,555 | | | $ | 149.34 | | | $ | 1,128,264 | | | 12/6/2017 | | | 12/31/2018 | | | 17,782 | | | $ | 118.01 | | | $ | 2,098,454 | | | 12/11/2018 | | | 12/31/2019 | | | 26,512 | | | $ | 118.01 | | | $ | 3,128,681 | |
| 4 | Mr. Sharps was also awarded restricted shares and RSUs untilprior to September 2016.2016, that vested in 2020. The table below shows, by date of the award, the number of restricted stock awards vested and value realized that are included in the table above. The value realized was computed using the closing market price per share of Price Group’s common stock on the vest date multiplied by the number of restricted stock awards vesting. |
Date of Award | Vesting Date | Number of Shares
Acquired on Vesting | Market Price on
Vest Date | Value Realized
on Vesting | 2/21/2013 | | 12/10/2018 | | | 1,200 | | $ | 92.45 | | $ | 110,940 | | 9/10/2013 | | 12/10/2018 | | | 15,081 | | $ | 92.45 | | $ | 1,394,238 | | 2/19/2014 | | 12/10/2018 | | | 1,200 | | $ | 92.45 | | $ | 110,940 | | 9/9/2014 | | 12/10/2018 | | | 1,200 | | $ | 92.45 | | $ | 110,940 | | 2/19/2015 | | 12/10/2018 | | | 1,800 | | $ | 92.45 | | $ | 166,410 | | 9/10/2015 | | 12/10/2018 | | | 1,800 | | $ | 92.45 | | $ | 166,410 | | 2/17/2016 | | 12/10/2018 | | | 3,772 | | $ | 92.45 | | $ | 348,721 | | 9/8/2016 | | 12/10/2018 | | | 3,850 | | $ | 92.45 | | $ | 355,933 | |
| | | | | | NUMBER OF SHARES | | | MARKET PRICE | | | VALUE REALIZED | | | DATE OF AWARD | | | VESTING DATE | | ACQUIRED ON VESTING | | | ON VEST DATE | | | ON VESTING | | | 2/19/2015 | | | 12/10/2020 | | | 1,800 | | | $ | 149.34 | | | $ | 268,812 | | | 9/10/2015 | | | 12/10/2020 | | | 1,800 | | | $ | 149.34 | | | $ | 268,812 | | | 2/17/2016 | | | 12/10/2020 | | | 3,772 | | | $ | 149.34 | | | $ | 563,310 | | | 9/8/2016 | | | 12/10/2020 | | | 3,850 | | | $ | 149.34 | | | $ | 574,959 | | | 12/3/2019 | | | 12/10/2020 | | | 6,830 | | | $ | 149.34 | | | $ | 1,019,992 | |
PROXY STATEMENT 2019 47
TABLE OF CONTENTS
| 5 | Mr. Veiel was awarded restricted shares and RSUs prior to becoming an NEO in 2019, that vested in 2020. The table below shows, by date of the award, the number of awards vested and value realized that are included in the table above. The value realized was computed using the closing market price per share of Price Group’s common stock on the vest date multiplied by the number of restricted stock awards vesting. |
| | | | | | NUMBER OF SHARES | | | MARKET PRICE | | | VALUE REALIZED | | | DATE OF AWARD | | | VESTING DATE | | ACQUIRED ON VESTING | | | ON VEST DATE | | | ON VESTING | | | 2/19/2015 | | | 12/10/2020 | | | 1,050 | | | $ | 149.34 | | | $ | 156,807 | | | 9/10/2015 | | | 12/10/2020 | | | 1,050 | | | $ | 149.34 | | | $ | 156,807 | | | 12/6/2017 | | | 12/10/2020 | | | 3,930 | | | $ | 149.34 | | | $ | 586,906 | | | 12/11/2018 | | | 12/10/2020 | | | 5,433 | | | $ | 149.34 | | | $ | 811,364 | | | 12/12/2018 | | | 12/10/2020 | | | 638 | | | $ | 149.34 | | | $ | 95,279 | | | 12/3/2019 | | | 12/10/2020 | | | 4,347 | | | $ | 149.34 | | | $ | 649,181 | |
| 6 | The number of shares actually acquired was less than the number presented in the tables above as a result of tendering shares for payment of the exercise price and the withholding of shares to pay taxes. The total net shares received by each NEO listed in the table is as follows: |
Name | Net Shares Acquired
on Exercise | Net Shares Acquired
on Vesting | William J. Stromberg | | 29,024 | | | 6,126 | | Kenneth V. Moreland | | 9,290 | | | 1,885 | | Edward C. Bernard | | 11,576 | | | 5,561 | | Robert W. Sharps | | 37,259 | | | 30,375 | | Christopher D. Alderson | | 51,278 | | | 6,409 | |
| | | NET SHARES ACQUIRED | | | NET SHARES ACQUIRED | | | NAME | | ON EXERCISE | | | ON VESTING | | | William J. Stromberg | | | 17,807 | | | | 16,804 | | | Céline Dufétel | | | — | | | | 3,303 | | | Robert W. Sharps | | | 26,417 | | | | 31,751 | | | Christopher D. Alderson | | | 65,098 | | | | 18,988 | | | Eric L. Veiel | | | 14,718 | | | | 13,940 | |
2018 NONQUALIFIED DEFERRED COMPENSATION TABLE2020 Nonqualified Deferred Compensation Table
The amounts in the following table represent each NEO’s account activity under the Supplemental Savings Plan, which was effective on January 1, 2015. Name | Executive’s
Contributions
in Last FY1 | Registrants
Contributions
in Last FY | Aggregate
Earnings in Last
FY2 | Aggregate
Withdrawals/
Distributions | Aggregate
Balance at Last
FYE3 | William J. Stromberg | $ | 3,200,000 | | $ | — | | $ | 175,924 | | $ | — | | $ | 9,441,518 | | Kenneth V. Moreland | $ | — | | $ | — | | $ | (56,245 | ) | $ | — | | $ | 1,115,531 | | Edward C. Bernard | $ | 3,000,000 | | $ | — | | $ | 98,983 | | $ | — | | $ | 9,799,461 | | Robert W. Sharps | $ | 4,100,000 | | $ | — | | $ | (166,249 | ) | $ | — | | $ | 11,763,269 | | Christopher D. Alderson4 | $ | 5,046,200 | | $ | — | | $ | (961,585 | ) | $ | — | | $ | 7,483,482 | |
| | | EXECUTIVE’S | | | REGISTRANTS | | | AGGREGATE | | | AGGREGATE | | | AGGREGATE | | | | | CONTRIBUTIONS | | | CONTRIBUTIONS | | | EARNINGS IN | | | WITHDRAWALS/ | | | BALANCE AT | | | NAME | | IN LAST FY1 | | | IN LAST FY | | | LAST FY2 | | | DISTRIBUTIONS | | | LAST FYE3 | | | William J. Stromberg | | $ | — | | | $ | — | | | $ | 4,247,728 | | | $ | — | | | $ | 20,760,789 | | | Céline Dufétel | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Robert W. Sharps | | $ | — | | | $ | — | | | $ | 6,638,701 | | | $ | — | | | $ | 28,142,959 | | | Christopher D. Alderson | | $ | — | | | $ | — | | | $ | 7,886,587 | | | $ | — | | | $ | 20,615,796 | | | Eric L. Veiel | | $ | — | | | $ | — | | | $ | 6,442,720 | | | $ | — | | | $ | 31,264,314 | |
| 1 | These amounts represent a portion of the bonus awarded to each NEO under the 2018 Annual Incentive Compensation Plan2020 AICP and are reported as Non-Equity Incentive Plan Compensation in the Summary Compensation Table. Under the Supplemental Savings Plan, certain senior officers including the NEOs, have the opportunity to defer receipt of up to 100% of their cash incentive compensation earned for a respective calendar year during which services are provided. |
| 2 | Each participant has the ability to allocate their account balance across a number of Price funds and the flexibility to rebalance their account as often as they would like. The amounts deferred are adjusted daily based on the investments chosen by the participant and, therefore, are not above market or preferential. As such, the earnings reported in this column are not included in the Summary Compensation Table. |
| 3 | These amounts represent the aggregate balances in each NEO’s account at December 31, 2018. A portion or all of each NEO’s 2018 deferral election was not contributed to their account until 2019, as the bonus awarded under the 2018 Annual Incentive Compensation Plan was not certified by the Compensation Committee until then. Additionally, the2020. The aggregate balance for Messrs. Stromberg, Moreland, Bernard, Sharps, and Alderson includeeach NEO at last FYE includes amounts previously reported as Non-Equity Incentive Plan Compensation in a prior year Summary Compensation Table.table. |
| 2021 Proxy Statement | 4 | Mr. Alderson elected to defer £4,000,000 of his annual bonus in 2018. The Company converted this deferral into U.S. dollars based on the exchange rate of 1.26155, which is the rate on the day all employee bonuses were paid.57 |
POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROLPotential Payments on Termination or Change in Control
All agreements for stock options and stock awards granted to associates from our equity incentive plans include provisions that may result in vesting acceleration of outstanding equity awards in connection with a change in control of Price Group or upon the grantee’s death or termination of employment due to total disability. See the “Post-Employment Payments” section of the Compensation Discussion and AnalysisCD&A for more details on these vesting acceleration provisions. Assuming that an event caused the vesting of all outstanding unvested stock options and stock awards on December 31, 2018,2020, to accelerate, the amount that would be realized upon the exercise of these stock options and vesting of restricted stock awards and units held by our NEOs are shown in the table below. In addition, all agreements for stock options and stock awards granted on and after February 23, 2012, and through December 5, 2017, included a provision that allows for continued vesting for a period of 36 months from the grantee’s date of termination if certain age and service criteria or, for certain grantees outside the United States, a specified service criteria, are met. Agreements for stock awards granted on or after December 6, 2017, and through December 10, 2018, included a provision that allows for continued vesting for a period of 60 months from the grantee’s date of termination so long as the same criteria described above are met. Agreements for awards granted to associates on or after December 11, 2018, include a provision that allows for continued vesting following the grantee’s date of termination for a period of 24, 36, or 60 months based on one of three different combinations of age and service requirements. As of December 31, 2018,2020, Messrs. BernardAlderson and TABLE OF CONTENTS
Moreland Stromberg have each satisfied the age and service criteria that allows for continued vesting for all of alltheir outstanding awards, listed in the Outstanding Equity Awards Table. As of December 31, 2018, Mr. Stromberg has satisfied the age and service criteria that allows for his December 2018 RSU award to continue vesting for 36 months if he wasthey were to separate from the Company. The table below shows the value as of December 31, 2018,2020, for those awards held by Messrs. Stromberg, Moreland,Alderson and BernardStromberg that will continue to vest following termination of employment according to the above described provisions.
The amounts in the table below are calculated using the closing price of our common stock on December 31, 2018,2020, for outstanding restricted stock awards and units, and the difference between the closing price of our common stock on December 31, 2018,2020 and the exercise price of each unexercisablefor outstanding stock option.options. Name | Change in Control
or Death/Disability | Voluntary
Termination or
Termination
Without Cause | William J. Stromberg | $ | 10,031,968 | | $ | 2,678,388 | | Céline S. Dufétel | $ | 1,612,000 | | $ | — | | Kenneth V. Moreland | $ | 557,982 | | $ | 557,982 | | Edward C. Bernard | $ | 5,016,310 | | $ | 5,016,310 | | Robert W. Sharps | $ | 18,272,829 | | $ | — | | Christopher D. Alderson | $ | 6,670,876 | | $ | — | |
| | | CHANGE IN | | | | | | | | CONTROL OR | | | POST-SEPARATION | | | NAME | | DEATH/DISABILITY | | | VESTING | | | William J. Stromberg | | $ | 21,540,828 | | | $ | 21,540,828 | | | Céline S. Dufétel | | $ | 6,645,264 | | | $ | — | | | Robert W. Sharps | | $ | 24,236,934 | | | $ | — | | | Christopher D. Alderson | | $ | 10,831,652 | | | $ | 10,831,652 | | | Eric L. Veiel | | $ | 12,263,346 | | | $ | — | |
CHIEF EXECUTIVE OFFICERChief Executive Officer Pay Ratio PAY RATIO
Our CEO pay ratio is calculated in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining the 20182020 salary and annual cash bonus paid to all associates, excluding our CEO, who were employed on December 31, 2018.2020. All active associates were included in the sample. This includes associates working on a full-time, part-time, or interim basis.basis were included in the sample. To facilitate comparison of all associates in U.S. dollars, compensation paid in foreign currencies was converted to U.S. dollars. We applied a local currency to U.S. dollar exchange rate on the monthly pay date. Each converted monthly salary was combined to determine the cumulative 2020 salary. With respect to annual cash bonuses paid to our non-U.S. associates, we applied a local currency to U.S. dollar exchange rate as of December 31, 2020. We did not make any adjustments or estimates with respect to salary, nor did we annualize the compensation for associates who began employment after the start of the fiscal year. We applied the local currency to U.S. dollar exchange spot rate as of December 31, 2018, to the compensation paid to our non-U.S. associates to facilitate comparison of all associates in U.S. dollars. Upon identifying the median associate, total compensation was calculated for this individual using the same methodology we use for our NEOs as set forth in the 20182020 Summary Compensation Table. For 2018,2020, Mr. Stromberg had an annual total compensation of $13,086,753$15,337,274 as reflected in the Summary Compensation Table. Our median associate’s 20182020 annual total compensation was $103,773.$114,473. Thus, Mr. Stromberg’s 20182020 annual total compensation was approximately 126134 times that of our median associate. Equity Compensation Plan Information
The following table sets forth information regarding outstanding stock options and RSUs and shares reserved for future issuance under our equity compensation plans as of December 31, 2018. None of the plans have outstanding warrants or rights other than stock options and RSUs. All plans have been approved by our stockholders.
Plan Category | Number of Securities to Be
Issued Upon Exercise of
Outstanding Options and
Settlement of Restricted
Stock Units (a) | Weighted-Average
Exercise Price of
Outstanding Options | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (excluding securities
reflected in column (a)) | Equity compensation plans approved by stockholders | | 17,951,952 | 1 | $ | 69.05 | 1 | | 22,365,129 | 2 | Equity compensation plans not approved by stockholders | | — | | | — | | | — | | Total | | 17,951,952 | | $ | 69.05 | | | 22,365,129 | |
| 1 | Includes 6,651,559 shares that may be issued upon settlement of outstanding RSUs. The weighted-average exercise price pertains only to the 11,300,393 outstanding stock options. |
| 258 | Includes shares that may be issued under our 2017 Director Plan and 2012 Incentive Plan and 2,340,343 shares that may be issued under our Employee Stock Purchase Plan. No shares have been issued under the Employee Stock Purchase Plan since its inception; all plan shares have been purchased in the open market. The number of shares available for future issuance under theT. Rowe Price Group |
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2012 Incentive Plan will increase under the termsTable of the plan as a result of all common stock repurchases that we make from proceeds generated by stock option exercises that occur after the inception of the 2012 Incentive Plan. The 2012 Incentive Plan allows for the grant of stock options, stock appreciation rights, and full-value awards.Contents
Proposal 2
Advisory Vote on the Compensation Paid to Our Named Executive Officers INTRODUCTION
In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our stockholders have the opportunity to cast an annual advisory vote to approve the compensation of our NEOs as disclosed pursuant to the SEC’s compensation disclosure rules, which disclosure includes the Compensation Discussion and Analysis,CD&A, the compensation tables, and the narrative disclosures that accompany the compensation tables (a “say-on-pay” vote). Our NEO compensation is straight-forward, goal-oriented, long-term focused, transparent, and aligned with the interests of our stockholders. Our incentive compensation programs are designed to motivate and reward performance, with a focus on rewarding the intermediate- and long-term achievements of our NEOs, as measured by a number of factors, including (i) the financial performance and financial stability of Price Group, (ii) the relative investment performance of our mutual funds and other investment portfolios, and (iii) the performance of our NEOs against the corporate and individual goals established at the beginning of the year. Our executive compensation programs are also designed to reward our NEOs for other important contributions to our success, including corporate integrity, service quality, customer loyalty, risk management, corporate reputation, and the quality of our team of professionals and collaboration within that team. Our equity awards create a strong alignment of the financial interests of our NEOs directly to the long-term performance of our Company, as measured by our stock price. NEO compensation in 20182020 was aligned with our financial and operational performance for 2018.2020. The structure of the compensation for our CEO and other NEOs reflects our performance-based compensation philosophy, which ties a significant portion of their pay to the success of the Company and to their individual performance goals. We urge you to read the Compensation Discussion and AnalysisCD&A section of this proxy statement for additional details on our executive compensation policies and practices, including our compensation philosophy, 20182020 objectives, and the 20182020 compensation decisions for our NEOs. We believe that, viewed as a whole, our compensation practices and policies are appropriate and fair to both the Company and its executives and to our stockholders. We value the feedback provided by our stockholders. At the 20182020 annual meeting of stockholders, nearly 96% of votes cast supported our executive compensation program. We have discussions with certain of our stockholders regarding various corporate governance topics, including executive compensation, and take into account the views of stockholders regarding the design and effectiveness of our executive compensation program. PROPOSAL
We are asking you to vote on the adoption of the following resolution:
BE IT RESOLVED by the stockholders of Price Group, that the stockholders approve the compensation of the Company’s Named Executive Officers as disclosed pursuant to Item 402 of Regulation S-K in the Company’s proxy statement for the 20192021 Annual Meeting of Stockholders. As an advisory vote, this Proposal is non-binding. Although the vote is non-binding, the Board of Directors and the Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote when designing and administering our compensation programs and when making future compensation decisions for our NEOs. RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
| Recommendation of the Board of Directors | Vote Required |  | FOR | We recommend that you vote FOR Proposal 2, the approval of the compensation of our NEOs as disclosed in the proxy statement pursuant to the SEC’s compensation disclosure rules. | |
We recommend that you vote FOR Proposal 2, the approval of the compensation of our NEOs as disclosed in the proxy statement pursuant to the SEC’s compensation disclosure rules. All properly executed proxies received in time to be tabulated for the Annual Meeting will be voted FOR the approval of the compensation of our NEOs as disclosed
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in this proxy statement pursuant to the SEC’s compensation disclosure rules unless otherwise specified.In order to be adopted at the Annual Meeting, Proposal 2 must be approved by the affirmative vote of a majority of the total votes cast at the Annual Meeting. Abstentions and broker non-votes are not considered votes cast and will have no effect on the outcome of the vote. Audit Matters Proposal 3
RatificationDisclosure of Fees Charged by the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2019
INTRODUCTION
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit Price Group’s consolidated financial statements. To execute this responsibility, the Audit Committee engages in an evaluation of the independent auditor’s qualifications, performance, and independence and periodically considers whether the independent registered public accounting firm should be rotated and the advisability and potential impact of selecting a different independent registered public accounting firm.
The Audit Committee has reappointed KPMG LLP to serve as our independent registered public accounting firm for 2019. KPMG was first appointed to serve as our independent registered public accounting firm on September 6, 2001. In accordance with SEC rules and KPMG policies, lead and reviewing audit partners are subject to rotation requirements that limit the number of consecutive years they may provide service in that capacity to five years. The process for selection of the lead audit partner pursuant to this rotation policy has included a discussion between the chair of the Audit Committee and the candidate for the role, as well as discussion of the selection by the full Committee with management.
The Audit Committee and the Board of Directors believe that the continued retention of KPMG as our independent registered public accounting firm is in the best interest of Price Group and our stockholders, and we are asking our stockholders to ratify the selection of KPMG as our independent registered public accounting firm for 2019.
Representatives of KPMG are expected to be present at the Annual Meeting and will have the opportunity to make a statement and respond to appropriate questions from stockholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
We recommend that you vote FOR Proposal 3, the ratification of the appointment of KPMG as our independent registered public accounting firm for 2019. All properly executed proxies received in time to be tabulated for the Annual Meeting will be voted FOR the ratification of the appointment of KPMG as our independent registered public accounting firm for 2019 unless otherwise specified. In order to be adopted at the Annual Meeting, Proposal 3 must be approved by the affirmative vote of a majority of the total votes cast at the Annual Meeting. In the event Proposal 3 does not obtain the requisite number of affirmative votes, the Audit Committee will reconsider the appointment of KPMG. Abstentions are not considered votes cast and will have no effect on the outcome of the vote.
DISCLOSURE OF FEES CHARGED BY THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table summarizes the fees charged by KPMG for services rendered to Price Group and its subsidiaries during 20182020 and 2017.2019. All services were approved by the Audit Committee pursuant to the preapproval procedures described below. Type of Fee | 2018 | 2017 | Audit Fees1 | $ | 3,329,593 | | $ | 3,054,532 | | Audit-Related Fees2 | | 182,614 | | | 120,444 | | Tax Fees3 | | 1,038,012 | | | 881,072 | | All Other Fees4 | | 173,208 | | | 82,088 | | | $ | 4,723,427 | | $ | 4,138,136 | |
| TYPE OF FEE | | 2020 | | 2019 | | Audit Fees1 | | $4,106,552 | | $3,628,632 | | Audit-Related Fees2 | | 260,755 | | 180,335 | | Tax Fees3 | | 1,149,823 | | 1,495,917 | | All Other Fees4 | | 102,800 | | 76,500 | | | | $5,619,930 | | $5,381,384 |
| 1 | Aggregate fees charged for annual audits, quarterly reviews, and the reports of the independent registered public accounting firm on internal control over financial reporting as of December 31, 20182020 and 2017.2019. |
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| 2 | Aggregate fees charged for assurance and related services that are reasonably related to the performance of the audit and are not reported as Audit Fees. In 20182020 and 2017,2019, these services included audits of several affiliated entities, including the corporate retirement plans and the T. Rowe Price Foundation, Inc., and fees for consultations concerning financial accounting and reporting matters, and fees associated with KPMG’s consents related to registration filings.matters. |
| 3 | Aggregate fees charged for tax compliance, planning, and consulting. Of the $1,038,012$1,149,823 in 2018, $701,6882020, $947,661 is related to tax compliance and preparation and $336,324$202,162 is related to tax planning.planning and consulting. |
| 4 | Both 20182020 and 20172019 include fees for KPMG’s performance of attestation engagements related to our compliance with the Global Investment Performance Standards and fees related to executive education. In addition, 2018The 2020 fees also include engagements relatedservices provided in relation to the review and analysisfiling of certain regulatory returns and our corporate social responsibility report.Form S-8 to register securities under 2020 Long-term Incentive Plan. |
AUDIT COMMITTEE PREAPPROVAL POLICIESAudit Committee Preapproval Policies
The Audit Committee has adopted policies and procedures which set forth the manner in which the committee will review and approve all audit and non-audit services to be provided by the independent registered public accounting firm before that firm is retained for such services. The preapproval policies and procedures are as follows: Any audit or non-audit service to be provided to Price Group by the independent registered public accounting firm must be submitted to the Audit Committee for review and approval. The proposed services are submitted on the Audit Committee’s “Independent Registered Public Accounting Firm Audit and Non-audit Services Request Form” with a description of the services to be performed, fees to be charged, and affirmation that the services are not prohibited under Section 201 of the Sarbanes-Oxley Act of 2002. The form must be approved by Price Group’s CEO, chief financial officer, or the principal accounting officer prior to the submission to the Audit Committee. The Audit Committee in its sole discretion then approves or disapproves the proposed services and documents such approval, if given, by signing the approval form. Preapproval actions taken during Audit Committee meetings are recorded in the minutes of the meetings. Any audit or non-audit service to be provided to Price Group that is proposed between meetings of the Audit Committee will be submitted to the Audit Committee chair on a properly completed “Independent Registered Public Accounting Firm Audit and Non-Audit Services Request Form” for the chair’s review and preapproval and will be included as an agenda item at the next scheduled Audit Committee meeting. | ■60 | Any audit or non-audit service to be provided toT. Rowe Price Group by the independent registered public accounting firm must be submitted to the Audit Committee for review and approval. The proposed services are submitted on the Audit Committee’s “Independent Registered Public Accounting Firm Audit and Non-audit Services Request Form” with a description of the services to be performed, fees to be charged, and affirmation that the services are not prohibited under Section 201 of the Sarbanes-Oxley Act of 2002. The form must be approved by Price Group’s CEO, chief financial officer, or the principal accounting officer prior to the submission to the Audit Committee. |
| ■ | The Audit Committee in its sole discretion then approves or disapproves the proposed services and documents such approval, if given, by signing the approval form. Preapproval actions taken during Audit Committee meetings are recorded in the minutes of the meetings. |
| ■ | Any audit or non-audit service to be provided to Price Group that is proposed between meetings of the Audit Committee will be submitted to the Audit Committee chair on a properly completed “Independent Registered Public Accounting Firm Audit and Non-audit Services Request Form” for the chair’s review and preapproval and will be included as an agenda item at the next scheduled Audit Committee meeting. |
TABLE OF CONTENTSTable of Contents
Report of the Audit Committee The Audit Committee oversees Price Group’s financial reporting process on behalf of the Board of Directors.Board. Our committee held eightfive meetings during 2018.2020. Management has the primary responsibility for the financial statements and the reporting process, including internal controls over financial reporting. The independent registered public accounting firm is responsible for expressing an opinion on the conformity of Price Group’s audited financial statements with generally accepted accounting principles and an opinion on the effectiveness of Price Group’s internal controls over financial reporting. We appointed KPMG as Price Group’s independent registered public accounting firm for 20182020 after reviewing the firm’s performance and independence from management and that appointment was ratified by our stockholders at the 20182020 annual meeting.meeting of stockholders. We reappointed KPMG as Price Group’s independent registered public accounting firm for fiscal year 20192021 at our January 20192021 meeting, after conducting the same set of reviews. In fulfilling our oversight responsibilities, we reviewed and discussed with management the audited financial statements prior to their issuance and publication in the 20182020 Annual Report on Form 10-K and in the 20182020 Annual Report to Stockholders. We reviewed with KPMG its judgments as to the quality, not just the acceptability, of Price Group’s accounting principles and discussed with its representatives other matters required to be discussed under generally accepted auditing standards, including matters required to be discussed by Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 16-Communications with Audit Committees. We also discussed with KPMG its independence from management and Price Group and received its written disclosures pursuant to applicable requirements of the PCAOB regarding the independent accountant’s communication with the audit committeeAudit Committee concerning independence. We further considered whether the non-audit services described elsewhere in this proxy statement provided by KPMG are compatible with maintaining its independence. We also discussed with management their evaluation of the effectiveness of Price Group’s internal controls over financial reporting as of December 31, 2018.2020. We discussed with KPMG its evaluation of the effectiveness of Price Group’s internal controls over financial reporting. We further discussed with Price Group’s internal auditors and KPMG the overall scope and plans for their respective audits. We met with the internal auditors and KPMG, with and without management present, to discuss the results of their examinations and their evaluations of Price Group’s internal controls. Lastly, as part of our responsibilities for oversight of the Price Group’s risk management process, we reviewed and discussed with the chief risk officer the Company’s framework with respect to the risk assessment, including discussions of individual risk areas, as well as an annual summary of the overall process. In reliance upon the reviews and discussions referred to above, we recommended to the Board, of Directors, and the Board approved, the inclusion of the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2018,2020, for filing with the SEC. Mark S. Bartlett, Chair
Dr. Freeman A. Hrabowski, III
Robert F. MacLellan
Richard R. Verma
Sandra S. Wijnberg
| Mark S. Bartlett, Chair | | Dina Dublon | | Robert F. MacLellan | | Richard R. Verma | | Sandra S. Wijnberg |
Ratification of the Appointment of KPMG LLP as our Independent Registered Public Accounting Firm for 2021 The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit Price Group’s consolidated financial statements. To execute this responsibility, the Audit Committee engages in an evaluation of the independent auditor’s qualifications, performance, and independence and periodically considers whether the independent registered public accounting firm should be rotated and the advisability and potential impact of selecting a different independent registered public accounting firm. The Audit Committee has reappointed KPMG LLP to serve as our independent registered public accounting firm for 2021. KPMG was first appointed to serve as our independent registered public accounting firm on September 6, 2001. In accordance with SEC rules and KPMG’s policies, lead and reviewing audit partners are subject to rotation requirements that limit the number of consecutive years they may provide service in that capacity to five years. The process for selection of the lead audit partner pursuant to this rotation policy has included a discussion between the chair of the Audit Committee and the candidate for the role, as well as discussion of the selection by the full Audit Committee with management. The Audit Committee and the Board believe that the continued retention of KPMG as our independent registered public accounting firm is in the best interest of Price Group and our stockholders, and we are asking our stockholders to ratify the selection of KPMG as our independent registered public accounting firm for 2021. Representatives of KPMG are expected to be present at the Annual Meeting and will have the opportunity to make a statement and respond to appropriate questions from stockholders. | Recommendation of the Board of Directors | Vote Required |  | FOR | We recommend that you vote FOR Proposal 3, the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2021. | |
All properly executed proxies received in time to be tabulated for the Annual Meeting will be voted FOR the ratification of the appointment of KPMG as our independent registered public accounting firm for 2021 unless otherwise specified. In order to be adopted at the Annual Meeting, Proposal 3 must be approved by the affirmative vote of a majority of the total votes cast at the Annual Meeting. In the event Proposal 3 does not obtain the requisite number of affirmative votes, the Audit Committee will reconsider the appointment of KPMG. Abstentions are not considered votes cast and will have no effect on the outcome of the vote. Stockholder Proposal For a Report on Voting by Our Funds and Portfolios on Matters Relating to Climate Change INTRODUCTION Zevin Asset Management, LLC, on behalf of Janet Axelrod 1997 Revocable Trust, has submitted the following proposal for our stockholders, which is co-sponsored by Boston Trust Walden Company and Friends Fiduciary Corporation (the address and number of shares of the Company’s common stock held by each of these stockholders will be provided upon request): PROPOSAL Whereas: T. Rowe Price Group is a respected leader in the financial services industry with several policies and practices addressing environmental, social and governance (ESG) topics. TROW’s “Policy Statement on Environmental, Social, and Governance Issues” describes how “ESG risk considerations” are incorporated into investment decisions. That policy expresses TROW’s belief that ESG issues can influence investment risk and return, thus affirming that such issues must be addressed carefully by investors. In its “Guidelines for Incorporating Environmental and Social Factors,” TROW acknowledges the importance of climate change risk: “We believe that speaking with company managements and other stakeholders about climate change is a good way to gather valuable investment insights as to the management’s process for assessing long-term risks and helps reinforce the notion that climate-related risk assessment should remain a priority.” TROW seems knowledgeable about the risks of climate change and the need for action by companies. TROW’s subsidiaries, which vote proxies, are guided by clients’ economic interests and support certain governance reforms proposed by shareholders who believe that these issues affect shareholder value. We believe ESG issues such as climate change risk also have a profound impact on shareholder value. TROW is a member of the Principles for Responsible Investment, a global network of investors and asset owners representing more than $100 trillion in assets. One of the Principles encourages investors to vote conscientiously on ESG issues. Yet the 2020 publicly reported proxy voting records for TROW’s subsidiaries reveal consistent votes against the vast majority of climate-focused shareholder proposals, such as requests for enhanced disclosure or adoption of greenhouse gas reduction goals, even when independent experts advance a strong business and economic case for support. In contrast, funds managed by investment firms such as JPMorgan, Columbia and State Street supported the majority of climate-related resolutions in 2020. TROW’s own “2020 Aggregate Proxy Voting Proxy Summary” reports on 17 percent support for resolutions on environmental topics. The voting practices of subsidiaries appear inconsistent with our Company’s statements about ESG and climate change. This contradiction poses reputational risk with both clients and investors. Moreover, proxy voting practices that do not properly take account of climate change seem to ignore significant company-specific and economy-wide risks associated with negative impacts of climate change. Investors seek information on whether the practices of TROW and its subsidiaries are suited to address material ESG considerations in proxy voting. Resolved: Shareowners request that the Board of Directors initiate a review and issue a report on the proxy voting policies and practices of its subsidiaries related to climate change, prepared at reasonable cost and omitting proprietary information, and including an assessment of any incongruities between the Company’s public statements and pledges regarding climate change (including ESG risk considerations associated with climate change), and the voting policies and practices of its subsidiaries. RECOMMENDATION OF CONTENTSTHE BOARD OF DIRECTORS; VOTE REQUIRED After careful consideration of this proposal, the Board has concluded that it is not in the best interest of our stockholders. Accordingly, the Board recommends a vote “AGAINST” this proposal for the following reasons: This proposal inappropriately connects the Company’s general position and actions on climate change with the separate voting practices of our subsidiaries that act as investment advisers (Price Advisers). The Board must act in what it believes to be the best interests of the Company and its stockholders, including appropriately addressing issues related to climate change. In this regard, the Company has a number of initiatives in place to reduce the Company’s environmental impact, including the installation of solar panels at its Maryland operations campus to minimize energy consumption and mitigate GHG emissions; efforts to recycle and reuse natural resources; and efforts to ensure that new buildings and substantial renovations of existing facilities qualify for LEED certification. The Company offers significant disclosure about these initiatives through its annual Sustainability Report, which can be found on our Investor Relations page at https://troweprice.gcs-web.com/, under the Corporate Responsibility tab. Such initiatives are important to the Company. However, the Company and its Board do not have direct responsibility for proxy voting conducted by the Price Advisers on behalf of its clients. The Company and the Board defer to the Price Advisers on these voting matters as Price Advisers has fiduciary responsibility under applicable law. Proxy voting is governed by the proxy voting policies of the Price Advisers (Proxy Voting Policies). It is the duty of the Price Advisers to vote shares in portfolio companies solely in the best interests of their clients, taking into account factors relevant to an investor. Consistent with these duties, Price Advisers have established an ESG Committee, which serves an independent function to oversee and guide the voting process to ensure that votes are cast in the long-term economic interests of Price Advisers’ clients. These advisory clients may or may not have the same interests as the stockholders of Company. The suggestion that the Board should intervene in oversight of the Price Advisers’ proxy voting is inappropriate and conflicts with the fiduciary principles applicable to the Price Advisers. The proxy votes of the Price Advisers on resolutions relating to climate change clearly reflect an analytical, case-by-case approach that is consistent with their Proxy Voting Policies and fiduciary duties. These policies state: “It is T. Rowe Price policy to analyze every shareholder proposal of a social or environmental nature on a CASE-BY-CASE basis. To do this, we utilize research reports from our external proxy advisor, company filings and sustainability reports, research from other investors and non-governmental organizations, our internal Responsible Investment team, and our internal industry research analysts. Generally speaking, we will consider supporting well targeted proposals addressing concerns that are particularly relevant for a company’s business but have not yet been adequately addressed by management.” The Price Advisers’ voting policies relating to climate change and other ESG issues are well articulated in the Proxy Voting Policies and other disclosures such as the Price Advisers’ Responsible Investment Guidelines. The specific voting record of the Price Advisers with regard to Price funds is publicly disclosed annually on the SEC’s website and on the Company’s website. By way of example, in 2020, Price funds, voted on 81 proposals related to environmental issues. Price funds voted in favor of 30% of these proposals and abstained from voting on 7% of these proposals because of conflict of interest or share blocking. Further, Price funds voted against 32% of the proposals because Price Advisers believed that the requested disclosure had already been provided, and did not think additional reporting was necessary. Price funds voted against 27% of these proposals, as we deemed they were too prescriptive for the entities involved following the analysis by both our Responsible Investment and Governance teams. Lastly, Price funds voted against 4% because we disagreed with the proponents’ objectives. We believe this voting record demonstrates that Price Advisers carefully considered these proposals and evaluated them on a case by case basis, considering not just the merits of the proposal, but also the its applicability to the company involved. We continue to believe that by utilizing this analytical approach, Price Advisors makes independent decisions in the best interests of the Price funds. No benefit would be realized from the resources that would have to be deployed for the Company to conduct a comprehensive review of the individual proxy voting policies and voting decisions made by the Price Advisers and determine whether they were consistent with any statement of the Company regarding climate change. Further, any such evaluation would be inappropriate and misaligned with each party’s responsibility. The Company’s stockholders voted on substantially the same proposal in 2020, and it was not approved, with only approximately 14.3% of the stockholders voting in favor of the proposal. The Company believes that the Price Advisers are best suited to determine the manner in which they vote proxies and that continued adherence to their disclosed voting and investment policies relating to ESG issues best serves the interests of our investment clients. | Recommendation of the Board of Directors | Vote Required |  | AGAINST | We recommend that you vote AGAINST Proposal 4, Stockholder Proposal for a Report on Voting by our Funds and Portfolios on Matters Relating to Climate Change. | |
In order to be adopted at the Annual Meeting, Proposal 4 must be approved by the affirmative vote of a majority of the total votes cast at the Meeting. Shares held by a bank, broker or other intermediary will not be voted on this Proposal 4 absent specific instruction from you, which means your shares may go unvoted and not affect the outcome if you do not specify a vote. Abstentions and broker non-votes are not considered votes cast and will have no effect on the outcome of the vote. All properly executed proxies received in time to be tabulated for the Annual Meeting will be voted AGAINST Proposal 4 unless otherwise specified. Stock Ownership and Related Transactions Equity Compensation Plan Information The following table sets forth information regarding outstanding stock options and RSUs and shares reserved for future issuance under our equity compensation plans as of December 31, 2020. None of the plans have outstanding warrants or rights other than stock options and RSUs. All plans have been approved by our stockholders. | PLAN CATEGORY | | NUMBER OF SECURITIES TO BE ISSUED
UPON EXERCISE OF OUTSTANDING OPTIONS
AND SETTLEMENT OF RESTRICTED
STOCK UNITS (A) | | WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS | | NUMBER OF SECURITIES REMAINING
AVAILABLE FOR FUTURE ISSUANCE UNDER
EQUITY COMPENSATION PLANS (EXCLUDING
SECURITIES REFLECTED IN COLUMN (A)) | | Equity compensation plans approved by stockholders | | 10,772,4661 | | 72.521 | | 12,688,2202 | | Equity compensation plans not approved by stockholders | | — | | | | — | | Total | | 10,772,466 | | 72.52 | | 12,688,220 |
| 1 | Includes 6,443,410 shares that may be issued upon settlement of outstanding RSUs. The weighted-average exercise price pertains only to the 4,329,056 outstanding stock options. |
| 2 | Includes 306,485 shares that may be issued under our 2017 Director Plan and 10,779,068 shares that may be issued under our 2020 Plan and 1,602,666 shares that may be issued under our Employee Stock Purchase Plan. No shares have been issued under the Employee Stock Purchase Plan since its inception; all plan shares have been purchased in the open market. The number of shares available for future issuance under the 2020 Plan will increase under the terms of the plan as a result of all common stock repurchases that we make from proceeds generated by stock option exercises. The 2020 Plan allows for the grant of stock options, stock appreciation rights, and full-value awards. |
Security Ownership of Certain Beneficial Owners and Management Stock Ownership of 5% Beneficial Owners To our knowledge, these are the following beneficial owners of more than 5% of our outstanding common stock as of March 11, 2021. | NAME AND ADDRESS | | AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP | | PERCENT
OF CLASS | BlackRock, Inc.
55 East 52nd Street
New York, NY 10055 | | 17,971,561 shares1 | | 7.70% | State Street Corporation
State Street Financial Center
One Lincoln Street
Boston, MA 02111 | | 11,462,942 shares2 | | 4.91% | The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355 | | 19,720,005 shares3 | | 8.45% |
| 1 | Based solely on information contained in a Schedule 13G/A filed with the SEC on February 1, 2021, by BlackRock, Inc. Of the 17,971,561 shares beneficially owned, BlackRock, Inc., has sole power to vote or direct the vote of 15,571,797 shares and sole power to dispose or to direct the disposition of 17,971,561 shares. |
| 2 | Based solely on information contained in a Schedule 13G filed with the SEC on February 11, 2021, by State Street Corporation. Of the 11,462,942 shares beneficially owned, State Street Corporation has sole power to vote or direct the vote of no shares, sole power to dispose or to direct the disposition of no shares, shared power to vote or direct the vote of 10,298,115 shares, and shared power to dispose or direct the disposition of 11,451,607 shares. |
| 3 | Based solely on information contained in a Schedule 13G/A filed with the SEC on February 10, 2021, by The Vanguard Group. Of the 19,720,005 shares beneficially owned, The Vanguard Group has sole power to vote or direct the vote of no shares, sole power to dispose or to direct the disposition of 18,713,083 shares, shared power to vote or direct the vote of 371,859 shares, and shared power to dispose or to direct the disposition of 1,006,922 shares. |
Stock Ownership of Management The following table sets forth information regarding the beneficial ownership of the Company’s common stock as of the record date, March 11, 2021, by (i) each director and each nominee for director, (ii) each person named in the Summary Compensation Table, and (iii) all directors and executive officers as a group. Share amounts and percentages shown for each individual or group in the table assume the exercise of all stock options exercisable by such individual or group within 60 days of the record date and the settlement of RSUs that are vested or will vest within 60 days of the record date. Except as otherwise noted, all shares are owned individually with sole voting and dispositive power. | NAME OF BENEFICIAL OWNER | | AMOUNT OF
BENEFICIAL
OWNERSHIP | | PERCENT
OF CLASS1 | | Christopher D. Alderson | | | 220,525 | | | * | | Mark S. Bartlett | | | 24,696 | 2 | | * | | Mary K. Bush | | | 16,244 | 3 | | * | | Dina Dublon | | | 2,971 | 4 | | * | | Céline S. Dufétel | | | 5,565 | | | * | | Dr. Freeman A. Hrabowski, III | | | 63,628 | 5 | | * | | Robert F. MacLellan | | | 50,447 | 6 | | * | | Robert W. Sharps | | | 375,505 | 7 | | * | | Olympia J. Snowe | | | 19,232 | 8 | | * | | Robert J. Stevens | | | 3,826 | 9 | | * | | William J. Stromberg | | | 936,631 | 10 | | * | | Eric L. Veiel | | | 160,731 | 11 | | * | | Richard R. Verma | | | 4,786 | 12 | | * | | Sandra S. Wijnberg | | | 14,085 | 13 | | * | | Alan D. Wilson | | | 15,982 | 14 | | * | | Directors and All Executive Officers as a Group (22 persons) | | | 2,420,612 | 15 | | 1.0% |
| 1 | Beneficial ownership of less than 1% is represented by an asterisk (*). |
| 2 | Includes 1,853 unvested restricted stock awards. |
| 3 | Includes (i) 1,853 unvested restricted stock awards and 14,391 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Bush’s separation from the Board. |
| 4 | Includes 2,971 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Dublon’s separation from the Board. |
| 5 | Includes (i) 26,008 shares that may be acquired by Dr. Hrabowski within 60 days upon the exercise of stock options, (ii) 12,292 vested stock units that will be settled in shares of the Company’s common stock upon Dr. Hrabowski’s separation from the Board, and (iii) 25,328 shares held by a member of Dr. Hrabowski’s family. |
| 6 | Includes (i) 26,008 shares that may be acquired by Mr. MacLellan within 60 days upon the exercise of stock options, (ii) 1,853 unvested restricted stock awards, and (iii) 6,383 vested stock units that will be settled in shares of the Company’s common stock upon Mr. MacLellan’s separation from the Board. |
| 7 | Includes 3,951 shares that may be acquired by Mr. Sharps within 60 days upon the exercise of stock options. |
| 8 | Includes 9,932 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Snowe’s separation from the Board. |
| 9 | Includes 3,826 vested stock units that will be settled in shares of the Company’s common stock upon Mr. Stevens’ separation from the Board. |
| 10 | Includes (i) 1,235 shares that may be acquired by Mr. Stromberg within 60 days upon the exercise of stock options, (ii) 400,000 shares held by a limited liability company in which Mr. Stromberg has an interest, and (iii) 15,000 shares held in a family trust for which Mr. Stromberg disclaims beneficial ownership. |
| 11 | Includes (i) 35,436 shares that may be acquired by Mr. Veiel within 60 days upon the exercise of stock options and (ii) 46,000 shares held by a member of Mr. Veiel’s family. |
| 12 | Includes 4,786 vested stock units that will be settled in shares of the Company’s common stock upon Mr. Verma’s separation from the Board. |
| 13 | Includes 1,853 unvested restricted stock awards and 5,789 vested stock units that will be settled in shares of the Company’s common stock upon Ms. Wijnberg’s separation from the Board. |
| 14 | Includes 15,982 vested stock units that will be settled in shares of the Company’s common stock upon Mr. Wilson’s separation from the Board. |
| 15 | Includes (i) 321,136 shares that may be acquired by all directors and executive officers as a group within 60 days upon the exercise of stock options, (ii) 7,412 unvested restricted stock awards held by certain directors and executive officers, (iii) 76,352 stock units held by nine of the non-employee directors that are vested and will be settled in shares of the Company’s common stock upon their separation from the Board, and (iv) 486,328 shares held by family members, held in family trusts or limited liability companies of certain directors and executive officers, and held by trusts in which certain executive officers are trustees. |
Section 16(a) Beneficial Ownership Reporting Compliance We believe that all filing requirements to comply with Section 16(a) of the Securities Exchange Act were met during the calendar year 2020, except for the late filing of SEC Form 4 in May 2020 for all of our independent directors as a result of an administrative error on part of the Company. The original filing for these director’s transactions were due on May 15, 2020, but were not filed until May 20, 2020. Each late Form 4 reported one transaction for each of Mses. Bush, Dublon, Snowe and Wijnberg, Messrs. Bartlett, MacLellan, Stevens, Verma and Wilson and Dr. Hrabowski. Certain Relationships and Related Transactions Since 2014, the Company has been a party to a software license agreement with Diligent Corporation (“Diligent”)(Diligent) to provide online access to board and committee materials to the Company’s officers and directors. The chief executive officer and president of Diligent, Corporation, Brian Stafford, is the spouse of our chief financial officerCOO/CFO and treasurer,Treasurer, Céline S. Dufétel. Pursuant to the agreement, the Company paid Diligent Corporation approximately $300,000$351,000 in 2018.2020. On December 20, 2018,
Questions and Answers About the Proxy Materials and the Annual Meeting Why did I receive a Notice of the Internet Availability of Proxy Materials in the mail? You received in the mail either a notice of the Internet availability of proxy materials or a printed proxy statement and 2020 Annual Report to Stockholders because you owned Price Group common stock at the close of business on March 11, 2021, which we entered into a consulting agreement with Mr. Bernard pursuantrefer to which he will provide strategicas the “Record Date,” and that entitles you to vote at the Annual Meeting. This proxy statement, the proxy card, and our 2020 Annual Report to Stockholders containing our consolidated financial statements and other consulting servicesfinancial information for the year ended December 31, 2020, constitute the “Proxy Materials.” The Board is soliciting your proxy to vote at the Annual Meeting or at any later meeting if the Annual Meeting is adjourned or postponed for any reason. Your proxy will authorize each of David Oestreicher and Jean-Marc Corredor as proxies to vote on your behalf at the Annual Meeting. By use of a proxy, you can vote whether or not you attend the Annual Meeting. This proxy statement describes the matters to be acted upon at the Annual Meeting, provides information on those matters, and provides information about Price Group that we must disclose when we solicit your proxy. Pursuant to rules adopted by the SEC, we have elected to provide access to our Proxy Materials over the Internet. We believe that Internet delivery of our Proxy Materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and continuereducing the environmental impact of our Annual Meeting. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, which we refer to serveas the “Notice,” to many of our stockholders (including beneficial owners) as of the Record Date. Our stockholders who receive the Notice will have the ability to access the Proxy Materials on a website referred to in the Notice or request to receive a printed set of the Proxy Materials. The Notice contains instructions on how to access the Proxy Materials over the Internet or to request a printed copy. In addition, stockholders may request to receive Proxy Materials in printed form by mail or electronically by email on an ongoing basis by calling Broadridge Financial Solutions, Inc. (Broadridge) at 1-800-579-1639. Please note that you may not vote using the Notice. The Notice identifies the items to be voted on at the Annual Meeting and describes how to vote, but you cannot vote by marking the Notice and returning it. Can I view the Proxy Materials on the Internet? Yes. As described in more detail in response to the prior question, most stockholders will receive the proxy statement online. If you received a paper copy, you can also view these documents on the Internet by accessing our website at troweprice.gcs-web.com/financial-information. The SEC also maintains a website at sec.gov that contains reports, proxy statements, and other information regarding Price Group. Who is entitled to vote at the Annual Meeting? Holders of our common stock at the close of business on the Record Date are entitled to vote their shares at the Annual Meeting. As of the Record Date, there were 227,453,209 shares outstanding. Each share outstanding on the Record Date is entitled to one vote on each proposal presented at the Annual Meeting. What am I voting on, and what are the Board voting recommendations? Our stockholders will be voting on the following proposals: | VOTING ITEM | | | BOARD VOTING
RECOMMENDATION | | 1 | | Election of Directors | | |  | FOR | | | | All Director-Nominees | | 2 | | Advisory Vote on the Compensation Paid to Our Named Executive Officers | | | | FOR | | 3 | | Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2021 | | | | FOR | | 4 | | Stockholder proposal requesting the preparation of a report on voting by our funds and portfolios on matters related to climate change | | |  | AGAINST |
Can other matters be decided at the Annual Meeting? At the time this proxy statement was completed we were not aware of any other matters to be presented at the Annual Meeting. If other matters are properly presented for consideration at the Annual Meeting, the proxy holders appointed by our Board (i.e., David Oestreicher and Jean-Marc Corredor) will have the discretion to vote on those matters in accordance with their best judgment on behalf of stockholders who provide a valid proxy by Internet, by telephone, or by mail. What is the procedure for voting? Whether you hold shares directly as the stockholder of record or beneficially in street name, you may vote before the Annual Meeting by granting a proxy to each of David Oestreicher and Jean-Marc Corredor or, for shares you beneficially own, by submitting voting instructions to your broker, bank, or other nominee. Stockholders have a choice of voting by using the Internet, by calling a toll-free telephone number within the United States or Puerto Rico, or by completing a proxy or voting instruction card and mailing it in the postage-paid envelope provided. Please refer to the summary instructions below and carefully follow the instructions included on your Notice; your proxy card; or, for shares you beneficially own, the voting instruction card provided by your broker, bank, or other nominee. The Notice identifies the items to be voted on at the Annual Meeting and provides instructions on how to vote, but you cannot vote by marking the Notice and returning it. If you hold shares in multiple accounts, you may receive multiple Proxy Materials packages. If you hold shares in multiple accounts, please be sure to vote all of your Price Group shares in each of your accounts in accordance with the voting instructions you receive for each such account.  | By Internet or Telephone |
You can vote your shares via the Internet at proxyvote.com. You can vote your shares by telephone by calling, toll-free 1-800-690-6903. Internet and telephone voting facilities for registered stockholders will be available 24 hours a day until 11:59 p.m., eastern daylight time, on May 10, 2021. If you vote your shares on the Internet or by telephone, you do not have to return your proxy card. Please have your proxy card (or the Notice or the email message you receive with instructions on how to vote) in hand when you go online. You will have an opportunity to confirm your voting selections before your vote is recorded. The availability of Internet and telephone voting for beneficial owners will depend on the voting processes of your broker, bank, or other nominee. You should follow the voting instructions in the materials that you received from your nominee.  | By Mail |
If you’d like to vote by mail, please request a paper proxy card in accordance with the instructions contained in the Notice and then complete, sign, and date the proxy card and return it in the postage-paid envelope provided. If voting instructions are provided, shares represented by the proxy card will be voted in accordance with the voting instructions. For shares held in street name, please use the voting instruction card provided by your broker, bank, or other nominee and mark, sign, date, and mail it back to your broker, bank, or other nominee in accordance with their instructions.  | In Person at the Annual Meeting |
All registered stockholders can vote in person at the Annual Meeting virtually. The Annual Meeting will be held through a live webcast. Voting your proxy electronically via the Internet, by telephone, or by mail does not limit your right to vote at the Annual Meeting. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/TROW2021, you must enter the 16-digit control number found next to the label “Control Number” on your Notice of Internet Availability, proxy card, or voting instruction form. If you are a beneficial shareholder, you may contact the bank, broker or other institution where you hold your account if you have questions about obtaining your control number. Whether or not you participate in the Annual Meeting, it is important that your shares be part of the voting process. You may log on to proxyvote.com and enter your Control Number. What is the difference between holding shares as a board memberregistered stockholder and as a beneficial owner? If your shares are registered directly in your name with our transfer agent, you are considered the “registered stockholder” (also known as a “record holder”) of UTI Asset Managementthose shares. We mail the Notice or Proxy Materials directly to you. Equiniti Trust Company Limited,(EQ) serves as the transfer agent and registrar for Price Group. If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the beneficial owner of shares held in “street name,” and these Proxy Materials or the Notice are being forwarded to you by your broker, bank, or other nominee who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote your shares, and you also are invited to attend the Annual Meeting. Your broker, bank, or other nominee also is obligated to provide you with a voting instruction card for you to use to direct them as to how to vote your shares. What must I do to participate in the Annual Meeting? You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on March 11, 2021, the record date, or hold a valid proxy for the meeting. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/TROW2021, you must enter the 16-digit control number found next to the label “Control Number” on your Notice of Internet Availability, proxy card, or voting instruction form, or in the email sending you the Proxy Statement. If you are a beneficial shareholder, you may contact the bank, broker or other institution where you hold your account if you have questions about obtaining your control number. The question and answer session will include questions submitted in advance of, and questions submitted live during, the Annual Meeting. You may submit a question in advance of the meeting at www.proxyvote.com after logging in with your Control Number. Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/TROW2021. We encourage you to access the Annual Meeting before it begins. Online check-in will start approximately fifteen minutes before the meeting on May 11, 2021. Can I change my proxy vote? Yes. If you are a registered stockholder, you can change your proxy vote or revoke your proxy no later than the day before the Annual Meeting by: Authorizing a new vote electronically through the Internet or by telephone. Returning a signed proxy card with a later date. Delivering a written revocation of your proxy to the general counsel and corporate secretary at T. Rowe Price Group, Inc., 100 East Pratt Street, Mail Code BA-1950, Baltimore, MD 21202. In addition, a registered stockholder may change their vote by voting in person at the Annual Meeting through the virtual meeting website. If you are a beneficial owner of shares, you can submit new voting instructions by contacting your broker, bank, or other nominee. You also can vote in person at the Annual Meeting if you obtain a legal proxy from your bank, broker, or other nominee (the registered stockholder) as described in the answer to the question “What is the procedure for voting?” on page 70. Your virtual attendance at the Annual Meeting does not revoke your proxy. Unless you vote at the Annual Meeting, your last valid proxy prior to or at the Annual Meeting will be used to cast your vote. What if I return my proxy card but do not provide voting instructions? Proxies that are signed and returned but do not contain voting instructions will be voted: FOR the election of all director-nominees listed in Proposal 1. FOR the advisory vote on the compensation paid by the Company to its Named Executive Officers (Proposal 2). FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2021 (Proposal 3). AGAINST the stockholder proposal requesting the preparation of a report on voting by our funds and portfolios on matters related to climate change (Proposal 4). In the best judgment of the named proxy holders if any other matters are properly presented at the Annual Meeting. How many shares must be present to hold the Annual Meeting? In order for us to lawfully conduct business at our Annual Meeting, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting is required. This is referred to as a quorum. Your shares are counted as present at the Annual Meeting if you attend the Annual Meeting and either vote in person or abstain from voting, or if you properly return a proxy by Internet, by telephone, or by mail in advance of the Annual Meeting and do not revoke the proxy. Will my shares be voted if I don’t provide my proxy or instruction card? Registered Stockholders If your shares are registered in your name, your shares will not be voted unless you provide a proxy by Internet, by telephone, or by mail or vote in person at the Annual Meeting. Beneficial Owners If you hold shares through an account with a broker, bank, or other nominee and you do not provide voting instructions, under the NASDAQ Global Select Market rules, your broker may vote your shares on routine matters only. The ratification of the appointment of KPMG (Proposal 3) is considered a routine matter, and your nominee can therefore vote your shares on that proposal even if you do not provide voting instructions. No other proposal is considered a routine matter, and your nominee cannot vote your shares on those proposals unless you provide voting instructions. Votes withheld by brokers, banks, and other nominees in the absence of voting instructions from a beneficial owner are referred to as “broker non-votes.” Multiple Forms of Ownership The Company cannot provide a single proxy or instruction card for stockholders who own shares as registered stockholders or beneficial owners in multiple accounts. As a result, if your shares are held in multiple types of accounts, you must submit your votes for each type of account in accordance with the instructions you receive for that account. What is the vote required for each proposal? For Proposal 1, the votes that stockholders cast “FOR” a director-nominee must exceed the votes that stockholders cast “AGAINST” a director-nominee to approve the election of each director-nominee. Please also see the discussion of our “Majority Voting” provisions within the Report of the Nominating and Corporate Governance Committee on page 20. For each of Proposals 2, 3 and 4 the affirmative vote of a majority of the votes cast is required to approve the proposal. Proposal 2 is advisory and non-binding, so the Board will review the voting results on this proposal and take the results into account when making future decisions regarding these matters. “Votes cast” exclude abstentions and broker non-votes. What is the effect of an abstention? A stockholder who abstains on some or all matters is considered present for purposes of determining if a quorum is present at the Annual Meeting, but an abstention is not counted as a vote cast. An abstention has no effect on the vote on any other proposal. What is the effect of a broker non-vote? If a broker casts a vote on Proposal 3 (ratification of the appointment of KPMG LLP as our independent registered public accounting firm), the vote will be included in determining whether a quorum exists for holding the Annual Meeting. The broker does not have authority to vote on the other proposals absent directions from the beneficial owner. As a result, if the beneficial owner does not vote on Proposals 1, 2 or 4, so that there is a “broker non-vote” on those items, the broker non-votes do not count as votes cast for those proposals. Thus, a broker non-vote on Proposals 1, 2 and 4 will not impact the following: our ability to obtain a quorum (unless a broker also does not cast a vote on Proposal 3 as described in the preceding paragraph), the outcome with respect to the election of directors (Proposal 1), the outcome of the vote on a proposal that requires the affirmative vote of a majority of the votes cast on the proposal (Proposal 2 and 4). Who will count the votes? Representatives of our proxy tabulator, Broadridge, will tabulate the votes and act as inspectors of election for the Annual Meeting. Where can I find the voting results of the Annual Meeting? The preliminary voting results will be announced at the Annual Meeting. The final voting results will be tallied by the inspectors of election and disclosed by the Company in a Current Report on Form 8-K filed with the SEC within four business days following the Annual Meeting. Is my vote confidential? Yes. The vote of each stockholder is held in confidence from Price Group’s directors, officers, and employees. We do not know how any person or entity votes unless this information is voluntarily disclosed. What is “householding” and how does it affect me? Some banks, brokers, and other nominees engage in the practice of “householding” our Proxy Materials. This means that only one copy of our Proxy Materials may be sent to multiple stockholders in your household unless you request otherwise. If requested, we will promptly deliver a separate copy of Proxy Materials to you if you share an address subject to householding. Please contact our general counsel and corporate secretary at 100 East Pratt Street, Mail Code BA-1950, Baltimore, MD 21202, or by telephone at 410-345-2000. Please contact your bank, broker, or other nominees if you wish to receive individual copies of our Proxy Materials in the future. Please contact your bank, broker, or other nominee or our general counsel and corporate secretary at 100 East Pratt Street, Mail Code BA-1950, Baltimore, MD 21202, or by telephone at 410-345-2000, if members of your household are currently receiving individual copies and you would like to receive a single household copy for future meetings. Can I choose to receive the proxy statement and the 2020 Annual Report to Stockholders on the Internet instead of receiving them by mail? Yes. If you are a registered stockholder or beneficial owner, you can elect to receive all future Proxy Materials on the Internet only and not receive notices or copies in the mail by visiting proxyvote.com. You will need to have your proxy card (or the Notice or the email message you receive with instructions on how to vote) in hand when you access the website. Your request for electronic transmission will remain in effect for all future annual reports and proxy statements, unless withdrawn. Withdrawal procedures also are at this website. If you hold Price Group shares in your own name and received more than one copy of our Proxy Materials at your address and wish to reduce the number of reports you receive and save the Company the cost of producing and mailing these reports, you should contact Price Group’s mailing agent Broadridge, at 1-866-540-7095 to discontinue the mailing of reports on the accounts you select. The mailing of dividend checks, dividend reinvestment statements, and special notices will not be affected by your election to discontinue duplicate mailings of proxy statements and annual reports. Registered stockholders may resume the mailing of our Proxy Materials to an account by calling Broadridge at 1-866-540-7095. If you own shares through a broker, bank, or other nominee and received more than one set of our Proxy Materials, please contact the holder of record to eliminate duplicate mailings. Who pays the cost of this proxy solicitation? We will pay for the costs of preparing materials for the Annual Meeting and soliciting proxies. Our solicitation may occur through the mail, but proxies also may be solicited personally or by telephone, email, letter, or facsimile. To assist in soliciting proxies, we have retained Morrow Sodali LLC, 470 West Avenue, Stamford, CT 06902 for a periodfee of one year. The consulting agreement is effective$7,000, plus reimbursement of out-of-pocket expenses. We ask brokers, banks, and other nominees to forward materials for the Annual Meeting to our beneficial stockholders as of January 1, 2019,the Record Date, and thereafter is automatically renewedwe will reimburse them for the reasonable out-of-pocket expenses they incur. Directors, officers, and employees of Price Group and our subsidiaries may solicit proxies personally or by other means, but will not receive additional compensation. Stockholders are requested to return their proxies without delay. Are stockholders entitled to call a special meeting? Yes. Pursuant to Section 2-502 of the Maryland Corporations and Associations Code, the secretary of a corporation shall call a special meeting of the stockholders on January 1the written request of each year. It canstockholders entitled to cast at least 25 percent of all the votes entitled to be terminated by either party for any reasoncast at the endmeeting. A request for a special meeting shall state the purpose of any year or uponthe meeting and the matters proposed to be acted on at least 30 days prior written notice. The agreement providesthe meeting. This is the current standard applicable for payments to Mr. BernardPrice Group. Can I find additional information on the Company’s website? Yes. Although the information contained on our website is not part of $350,000 per year, plus reimbursement for reasonable out-of-pocket expenses. In addition, while traveling forthe Proxy Materials, you will find information about the Company we will provide insurance and emergency travel assistance coverage to Mr. Bernard.our corporate governance practices at troweprice.gcs-web.com/corporate-governance/policies. Our website contains information about our Board, Board committees, Corporate Governance Guidelines, and other matters. Stockholder Proposals for the 20202022 Annual Meeting Any stockholder who wishes to submit a proposal or nominate a director for consideration at the 2020 Annual Meeting2022 annual meeting of stockholders and include that proposal or nomination in the 20202022 proxy statement should send their proposal to T. Rowe Price Group, Inc., c/o chief legalgeneral counsel and corporate secretary, 100 East Pratt Street, Mail Code BA-1360,BA-1950, Baltimore, MD 21202, and comply with the notice and other requirements described below. Proposals must be received no later than November 15, 2019,24, 2021, and satisfy the requirements under applicable SEC rules (including SEC Rule 14a-8) to be included in the proxy statement and on the proxy card that will be used for solicitation of proxies by the Board for the 2020 Annual Meeting.2022 annual meeting of stockholders. We have adopted a proxy access right to permit a stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in the Company’s proxy materials directors constituting up to two individuals or 20% of the Board (whichever is greater), provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the amended Bylaws.By-Laws. To be considered timely under our proxy access provisions, stockholder nominations must be received on or after October 16, 2019,25, 2021, and on or before November 15, 2019,24, 2021, inclusive. Our By-Laws also require advance notice of any proposal by a stockholder to be presented at the 2020 Annual Meeting2022 annual meeting of stockholders that is not included in our proxy statement and on the proxy card, including any proposal for the nomination of a director for election. To be properly brought before the 2020 Annual Meeting,2022 annual meeting of stockholders, written nominations for directors or other business to be introduced by a stockholder must be received on or after December 27, 2019,January 11, 2022, and on or before January 26, 2020.February 10, 2022. A notice of a stockholder proposal must contain the information required by our By-Laws about the matter to be brought before the Annual Meetingannual meeting of stockholders and about the stockholder proponent and persons associated with the stockholder through control, ownership of the shares, agreement, or coordinated activity. We reserve the right to reject proposals that do not comply with these requirements. Pursuant to Maryland law and our Amended and Restated By-Laws, a special meeting of our stockholders can generally be called by the chairmanchair of the Board, our president, our Board, or upon the written request of stockholders entitled to cast at least 25% of all votes entitled to be cast at the special meeting. 54
T. Rowe Price is an asset management firm focused on delivering global investment management excellence and retirement services that investors can rely on—now and over the long term. We provide an array of commingled funds, subadvisory services, separate account management, retirement recordkeeping, and related services for individuals, advisors, institutions, and/or retirement plan sponsors. Our intellectual rigor helps us seek the best ideas for our clients, our integrity ensures that we always put their interests first, and our stability lets us stay focused on their goals as we pursue better investment outcomes. For more information, visit troweprice.com. © 2020 T. Rowe Price. All Rights Reserved. T. ROWE PRICE, GROUP
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T. Rowe Price Group, Inc. 100 East Pratt Street Baltimore, Maryland 21202 (410) 345-2000 | troweprice.com VIEW OUR PROXY STATEMENT ONLINE AT: trow.client.shareholder.com/financials.cfm Table of Contents 
| Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. HOUSEHOLDING ELECTION - Please indicate if you consent to receive certain future investor communications in a single package per household. 1a. Mark S. Bartlett 1b. Mary K. Bush 1d. Dr. Freeman A. Hrabowski, III 1c. Dina Dublon 1e. Robert F. MacLellan 1f. Olympia J. Snowe 1g. Robert J. Stevens 1h. William J. Stromberg 1i. Richard R. Verma 1j. Sandra S. Wijnberg 1. Election of Directors: The Board of Directors Recommends a Vote FOR All Nominees Listed in Item 1. 1k. Alan D. Wilson 2. To approve, by a non-binding advisory vote, the compensation paid by the Company to its Named Executive Officers. The Board of Directors Recommends a Vote FOR Item 2. 3. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2021. 4. Stockholder proposal for a report on voting by our funds and portfolios on matters related to climate change. The Board of Directors Recommends a Vote FOR Item 3. The Board of Directors Recommends a Vote AGAINST Item 4. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, AS RECOMMENDED BY THE BOARD OF DIRECTORS. Please sign exactly as your name(s) appear(s) on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide the full name of the corporation and the title of the authorized officer signing the Proxy. T. ROWE PRICE GROUP, INC. D31910-P49628 Yes No ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! For Against Abstain ! ! T. ROWE PRICE GROUP, INC. 100 EAST PRATT STREET BALTIMORE, MD 21202-1009 For Against Abstain VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/TROW2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TABLE OF CONTENTS
Stockholder Communications With the Board of Directors
Our Board members are interested in hearing the opinions of the stockholders. The Nominating and Corporate Governance Committee has established the following procedures in order to facilitate communications between our stockholders and our Board:
| ■ | Stockholders may send correspondence, which should indicate thatD31911-P49628 Important Notice Regarding the sender is a stockholder, to our Board or to any individual director by mail to T. Rowe Price Group, Inc., c/o chief legal counsel, P.O. Box 17134, Baltimore, MD 21297-1134, or by email to contact_the_board@troweprice.com or by Internet at troweprice.gcs-web.com/corporate-governance/contact-the-board.
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| ■ | Our chief legal counsel will be responsibleAvailability of Proxy Materials for the first reviewAnnual Meeting: The Notice and logging of this correspondence. Counsel will forward the communication to the director or directors to whom it is addressed unless it is a type of correspondence that the NominatingProxy Statement and Corporate Governance Committee has identified as correspondence that may be retained in our files and not sent to directors. |
| ■ | The Nominating and Corporate Governance Committee has authorized chief legal counsel to retain and not send to directors the following types of communications: |
| ■ | Advertising or promotional in nature (offering goods or services); |
| ■ | Complaints by clients with respect to ordinary course of business customer service and satisfaction issues; provided, however, that the chief legal counsel will notify the chairAnnual Report are available at www.proxyvote.com. T. ROWE PRICE GROUP, INC. ANNUAL MEETING OF STOCKHOLDERS Tuesday, May 11, 2021, at 8:00 a.m. www.virtualshareholdermeeting.com/TROW2021 T. ROWE PRICE GROUP, INC. 2021 Proxy Revocable Proxy Solicited on Behalf of the NominatingBoard of Directors I hereby appoint David Oestreicher and Corporate Governance CommitteeJean-Marc Corredor, together and separately, as proxies to vote all shares of common stock which I have power to vote at the annual meeting of stockholders to be held on Tuesday, May 11, 2021, at 8:00 a.m., via a virtual format, and at any complaints that, in the opinion of the chief legal counsel, warrant immediate committee attention by their natureadjournments or frequency; or |
| ■ | Those clearly unrelated to our business, industry, management, Board, or committee matters. |
These types of communications will be logged and filed but not circulated to directors. Except as set forth in the preceding sentence, chief legal counsel will not screen communications sent to directors.
| ■ | The log of stockholder correspondence will be available to members of the Nominating and Corporate Governance Committee for inspection. At least once each year, chief legal counsel will provide to the Nominating and Corporate Governance Committee a summary of the communications received from stockholders, including the communications not sent to directorspostponements thereof, in accordance with screening procedures approvedthe instructions on the reverse side of this proxy card and as if I were present in person and voting such shares. The proxies are authorized in their discretion to name others to take their place. I also hereby acknowledge receipt of the Notice of Annual Meeting and Proxy Statement, dated March 24, 2021, and Price Group’s 2020 Annual Report to Stockholders. This proxy, when properly completed and returned, will be voted in the manner directed herein by the Nominatingstockholder named on the reverse side, or IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS. Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named proxies to vote the shares in the same manner as if you marked, signed and Corporate Governance Committee.returned your proxy card. Continued and to be signed on reverse side |
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