TABLE OF CONTENTSTable of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
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¨ | | Preliminary Proxy Statement |
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¨ | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) |
x | Definitive Proxy Statement |
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¨ | Definitive Additional Materials |
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¨ | Soliciting Material Pursuant to §240.14a-12 |
T. Rowe Price Group, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required. | |||
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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YOUR VOTE IS IMPORTANT!
Please execute and return the enclosed proxy promptly whether or not you plan to attend the T. Rowe Price Group, Inc.
A premier global active asset manager
Founded in 1937 | $1.47 TRILLION in assets under management (¹) | 724 investment professionals worldwide | Local presence in 16 COUNTRIES | 7,678 associates worldwide |
Independent Investment Organization Focused solely on investment management and related services | Alignment of Interests Publicly owned company with substantial employee ownership | Stable InvestmentLeadership Global equity and fixed income leaders average 22 years’ tenure at T. Rowe Price | ||
Financial Strength No outstanding debt and maintains substantial cash reserves | Global Investment Platform Full range of equity, fixed income, and multi-asset solutions |
Our multiyear strategic objectives
![]() | More global and diversified asset manager | ![]() | Strong process orientation and effective internal controls, while becoming a more adaptive and agile company |
![]() | Global partner for retirement investors and provider of integrated investment solutions | ![]() | Destination of choice for top talent with diverse workforce and inclusive culture |
![]() | Embedding best practices for sustainability and ESG throughout the company | ![]() | Strong financial results and balance sheet |
Past performance cannot guarantee future results. As of December 31, 2020.
(1) Firmwide AUM includes assets managed by T. Rowe Price Associates, Inc., 2019and its investment advisory affiliates.
2020 Performance
Investment Results
As investors, we remained focused on our strategic investing approach and delivering alpha for clients through active management. In 2020 our investment teams performed well across most asset classes, with 72%, 69%, and 77% of our U.S. mutual funds (primary share class only) outperforming their comparable Morningstar median over the 3-, 5-, and 10-year periods ended December 31, 2020.(1)
Financial Results
Our assets under management (AUM) grew by 22% to $1.47 trillion on December 31, 2020, with about 9.3% of our AUM domiciled outside the U.S. Average AUM grew 12.5% to $1.25 trillion, which led to revenues of more than $6.2 billion, up 10.5% or $590 million versus 2019. Operating expenses on a GAAP basis increased 7.1% to $3.5 billion. Diluted earnings per share grew 14.7% to $9.98 per share and adjusted diluted earnings per share grew 18.7% to $9.58 per share.
Responsibility Snapshot
Sustainable Investing on Behalf of Clients
Environmental, social, and governance (ESG) factors are key considerations in our investment approach—our investment teams focus on understanding the long-term sustainability of the companies in which we invest. ESG considerations are analyzed by two teams: Responsible Investing, which covers environmental and social factors, and Governance. Together, they help our investors make more informed decisions.
Reducing Our Environmental Footprint
We are committed to tackling the challenge of climate change in a way that balances business needs with the urgency for action. This means managing our environmental footprint, as well as incorporating climate considerations into our investment analysis—for the purpose of safeguarding our clients’ investments. Our original plan was to reduce greenhouse gas (GHG) emissions by 13% by 2025 and landfill waste by 92%. Since 2010, our benchmark year, we have reduced greenhouse gas emissions by 14.1%, even as our associate population rose by 70.6%. We have also reduced landfill waste by 93%. With a significant percentage of our workforce presently working from home and an uncertain timeframe to return to the office, the COVID-19 pandemic has constrained our ability to revisit our emission and waste reduction targets. Moreover, we have undertaken a firmwide assessment of future flexibility and remote work. The outcomes of these initiatives will also influence our emissions reduction trajectory. We will evaluate these questions and communicate our new targets.
Promoting Diversity
Our long-held reputation for excellence and reliability is made possible by the diversity of backgrounds, perspectives, skills, and experiences of our associates.
To bring diversity & inclusion to life, we:
![]() | Retain & attract diverse talent | ![]() | Include and engage our associates | ![]() | Develop our associates and leaders | ![]() | Hold ourselves accountable | ![]() | Act as an agent of change |
In 2020 | |||
60% | 49% | 44% | 29% |
of our independent Board members were ethnically diverse or women | of senior-level hires were ethnically diverse or women(2) | of our associates in our global workforce were women | of our U.S. associates were ethnically diverse |
(1) | Source: © 2020 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (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. Primary share class only. |
(2) | Senior roles are defined as people leaders and/or individual contributors with significant business or functional responsibility. |
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Notice of 2021 Annual Meeting of Stockholders.Stockholders
T. ROWE PRICE GROUP, INC.100 EAST PRATT STREETBALTIMORE, MD 21202
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
We will hold the Annual Meeting of Stockholders of T. Rowe Price Group, Inc., at the Company’s offices located at 4435 Painters Mill Road, Owings Mills, Maryland 21117, on Thursday, April 25, 2019, at 10 a.m. At this Annual Meeting, we will ask stockholders to:
Date and Time Tuesday May 11, 2021, 8 a.m. Eastern Time Record Date March 11, 2021. Only stockholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting Virtual Meeting This year’s Annual Meeting will be held virtually through www.virtualshareholdermeeting.com/ TROW2021 Voting Methods | |
![]() | |
![]() | Telephone |
![]() | |
![]() | In Person |
YOUR VOTE IS IMPORTANT! Please execute and return the enclosed proxy promptly whether or not you plan to attend the T. Rowe Price Group, Inc., 2021 Annual Meeting of Stockholders. T. ROWE PRICE GROUP, INC. 100 EAST PRATT STREET BALTIMORE, MD 21202 | |
VOTING ITEM | BOARD VOTING RECOMMENDATION | |||
1 | Elect a Board of | ![]() | FOR |
All Director-Nominees | ||||
2 | Approve, by a | ![]() | FOR |
3 | ![]() | FOR | |||
4 | Consider a stockholder proposal requesting the preparation of a report on voting by our funds and portfolios on matters related to climate change, if properly presented at the Annual Meeting | ![]() | AGAINST |
Stockholders who owned shares of our common stock as of February 22, 2019,March 11, 2021, are entitled to attend and vote at the Annual Meeting or any adjournments.
BY ORDER OF THE BOARD OF DIRECTORS
By Order of the Board of Directors,
David OestreicherChief Legal
General Counsel and Corporate Secretary
Baltimore, Maryland
March 14, 201924, 2021
TABLE OF CONTENTS
for the Stockholder Meeting to Be Held on May 11, 2021 | |||
This proxy statement and Stockholders who wish to attend the Annual Meeting must follow the instructions on page 71 under the section titled “What must I do to participate in the Annual Meeting?” |
2021 Proxy Statement | |||
This proxy statement is being made available to you in connection with the solicitation of proxies by the T. Rowe Price Group, Inc. (Price Group or the Company) Board of Directors (Board) for the 20192021 Annual Meeting of Stockholders (Annual Meeting). The purpose of the Annual Meeting is to:
This proxy statement, the proxy card, and our 20182020 Annual Report to Stockholders containing our consolidated financial statements and other financial information for the year ended December 31, 2018,2020, form your “Proxy Materials.” We have adopted the Securities and Exchange Commission’s (SEC) “Notice and Access” model of proxy notification, which allows us to furnish proxy materials online, with paper copies available upon request. We sent you a notice on how to obtain your Proxy Materials on March 14, 2019.24, 2021.
2 | T. Rowe Price Group |
Table of ContentsImportant Notice Regarding
Voting Roadmap |
Proposal 1 |
Election of Directors
Board Demographics | ||||
INDEPENDENCE | DIVERSITY | TENURE | ||
• 10 of 11 members of the Board are independent under the NASDAQ Global Select Market standards • All directors serving on the Audit, Executive Compensation and Management Development and Nominating and Corporate Governance Committees are independent • A well-empowered lead independent director provides independent leadership to our Board | Of our independent directors: | • Balanced mix of short- and long-tenured directors • The tenure of our independent directors ranges from 18 months to 11 years, with an average tenure of approximately six years • Longer-tenured directors in leadership roles |
QUALIFICATIONS, SKILLS, AND EXPERIENCE | BOARD ENGAGEMENT | ||||||
![]() | 100% Executive Leadership | ![]() | 82% Financial Management | ![]() | 45% Investment Management | • The Board held ten (10) meetings in 2020 • Each director attended at least 75% of the combined total number of meetings of the Board and Board committees of which he or she was a member • The independent directors met in executive session at five of the Board meetings in 2020 • All directors were at the 2020 annual meeting of stockholders virtually and were available to respond to questions from our stockholders | |
![]() | 73% International | ![]() | 36% Accounting and Financial Reporting | ![]() | 100% Strategy and Execution | ||
![]() | 55% Marketing and Distribution | ![]() | 73% Government and Regulatory | ![]() | 36% Technology |
![]() | FOR | Recommendation of the Board of Directors | Vote Required |
We recommend that you vote FOR all the director nominees under Proposal 1. |
2021 Proxy Statement | 3 |
Proposal 2 |
Advisory Vote on the AvailabilityCompensation Paid to Our Named Executive Officers
Our named executive officers’ (NEOs) compensation is straight-forward, goal-oriented, long-term focused, transparent, and aligned with the interests of Proxy Materialsour stockholders.
Our incentive compensation programs are designed to motivate and reward performance, as measured by a number of factors, including:
• | the financial performance and financial stability of Price Group |
• | the relative investment performance of our mutual funds and other investment portfolios |
• | 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 Stockholder Meetingquality 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 Be Held on April 25, 2019the long-term performance of our Company, as measured by our stock price.
This proxy statement
CEO COMPENSATION | OTHER NEOs COMPENSATION (EXCLUDING FORMER CFO) | FORM OF COMPENSATION | PERFORMANCE PERIOD | PERFORMANCE ALIGNMENT | ||||||
![]() | ![]() | ![]() | Cash | Ongoing | • Individual | |||||
![]() | ![]() | ![]() | Cash | Annual | • Maximum bonus pool cannot exceed 5% of net operating income (adjusted) • Actual NEO bonus amounts based on Company performance against financial and strategic goals, as well as individual performance | |||||
![]() | ![]() | ![]() | Performance Stock Units | Three-year performance period then vest 50% per year over two following years | • Company operating margin performance compared with peers • Company stock price | |||||
Restricted Stock Units | Vest one-third per year over three years | • Company stock price |
![]() | FOR | Recommendation of the Board of Directors | Vote Required |
We recommend that you vote FOR this proposal. |
4 | T. Rowe Price Group |
Proposal 3 |
Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2021
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 2018 Annual Report to Stockholders may be viewed, downloaded, and printed, at no charge, by accessingstockholders.
![]() | FOR | Recommendation of the Board of Directors | Vote Required |
We recommend that you vote FOR this proposal. |
Proposal 4 |
Stockholder Proposal Requesting the following Internet address: materials.proxyvote.com/74144T.
Stockholders who wish to attend the Annual Meeting in person must follow the instructions on page 3 under the section titled “Do I need to bring anything in order to attend the Annual Meeting?”
Questions and Answers About the Proxy Materials and the Annual Meeting
Why did I receive in the mail a Notice of the Internet Availability of Proxy Materials?
You received in the mail either a notice of the Internet availability of proxy materials or a printed proxy statement and 2018 Annual Report to Stockholders because you owned T. Rowe Price Group, Inc., common stock at the close of business on February 22, 2019, which we refer to as the “Record Date,” and that entitles you to vote at the Annual Meeting. This proxy statement, the proxy card, and our 2018 Annual Report to Stockholders containing our consolidated financial statements and other financial information for the year ended December 31, 2018, 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 usePreparation of a proxy, you can vote whether or not you attend the Annual Meeting.Report on Voting by Our Funds and Portfolios on Matters Related to Climate Change
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.
![]() | AGAINST | Recommendation of the Board of Directors | Vote Required |
We recommend that you vote AGAINST this proposal. |
2021 Proxy Statement | 5 |
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 reducing the environmental impact of our Annual Meeting. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, which we refer to as 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.
PROXY STATEMENT 2019 1
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 236,705,942 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:
6 | T. Rowe Price Group |
Can other matters be decided atBoard of Directors
Board Qualifications, Skills and Experience
We believe that the Annual Meeting?
At the timenominees presented in this proxy statement went to press, we were not awareconstitute a Board with an appropriate level and diversity of any other matters toexperience, education, skills, and independence. We routinely assess and monitor the capabilities of our existing directors and whether additional capabilities and independent directors should 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 referadded to the summary instructions belowBoard. In considering the need for additional independent directors, we consider any expected Board departures and carefully followretirements and factor succession planning for 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 instructions included on your Notice; your proxy card; or, for shares you beneficially own,varied perspectives they bring to the voting instruction card provided by your broker, bank, or other nominee. Board.
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 material 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
Internet and telephone voting facilities for registered stockholders will be available 24 hours a day until 11:59 p.m., eastern daylight time, on April 24, 2019. If you vote your sharesfollowing are highlights on the Internet or by telephone, you do not have to return your proxy card.composition of our current Board:
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
2 T. ROWE PRICE GROUP
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. Voting your proxy electronically via the Internet, by telephone, or by mail does not limit your right to vote at the Annual Meeting. You also can choose to be represented by another person at the Annual Meeting by executing a legally valid proxy designating that person to vote on your behalf.
If you are a beneficial owner of shares, you must obtain a legally valid proxy from your broker, bank, or other nominee and present it to the inspectors of election with your ballot to be able to vote at the Annual Meeting. A legal proxy is an authorization from your broker, bank, or other nominee to vote the shares held in the nominee’s name that satisfies Maryland law and the SEC requirements for proxies.
What is the difference between holding shares as a registered 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 those shares. We mail the Notice or Proxy Materials directly to you. Equiniti Trust Company (EQ) serves as the transfer agent and registrar for T. Rowe Price Group, Inc.
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.
Because you are not the stockholder of record, however, you may not vote these shares in person at the Annual Meeting unless you bring with you to the Annual Meeting a legally
valid proxy, executed in your favor, from the stockholder of record. 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.
Do I need to bring anything in order to attend the Annual Meeting?
Yes. You must bring documentation that allows us to verify your stock ownership. For “record holders”, this means you must bring a valid, government-issued photographic identification. For stockholders who own their shares in “street name”, you must bring a valid, government-issued photographic identification and a brokerage account statement or letter from your broker, bank, or other nominee reflecting stock ownership. If you do not have valid identification and documentation sufficient to verify your stock ownership, you will not be admitted into the Annual Meeting.
For security reasons, all hand-carried items will be subject to inspection. Cameras, audio and video recorders, communication devices, and similar equipment will not be allowed in the meeting room.
Can I change my proxy vote?
Yes. If you are a registered stockholder, you can change your proxy vote or revoke your proxy the day before the Annual Meeting by:
In addition, a registered stockholder may change their vote by submitting a written ballot in person at the Annual Meeting.
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 2.
Your personal 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.
PROXY STATEMENT 2019 3
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:
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 advance11 members 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 sharesBoard 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,independent under the NASDAQ Global Select Market rules, your broker may vote your shares on routine matters only. The ratificationstandards
INDEPENDENT DIRECTOR COMPOSITION
![]() | ![]() |
DIRECTOR TENURE | DIRECTOR INDEPENDENCE | |
![]() | ![]() |
2021 Proxy Statement7
The chart below summarizes the specific qualifications, attributes, 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 nomineesskills for each director. An “■” in the absencechart below indicates that the director has meaningfully useful expertise in that subject area. The lack of voting instructions froman “■” does not mean the director does not possess knowledge or skill. Rather, an “■” indicates a beneficial owner are referred to as “broker non-votes.”
Multiple Formsspecific area of Ownership
The Company cannot provide a single proxyfocus or instruction card for stockholders who own shares as registered stockholders or beneficial owners. 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 Proposal 1 on page 6. For each of Proposals 2 and 3, the affirmative voteexpertise of a majority ofdirector on which 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.board currently relies.
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 or 2, 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 will not impact the following:
Executive Leadership | Financial Management | Investment Management Industry | International Business Experience | Technology/ Cyber | Strategy Formation/ Execution | Marketing/ Distribution | Government/ Regulatory | Diversity | |
Name | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
William J. Stromberg | ■ |
■ | ■ |
■ | ■ | ■ | |||||||
Mark S. Bartlett | ■ | ■ | ■ | ■ | |||||
Mary K. Bush | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ||
Dina Dublon | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | |
Dr. Freeman A. Hrabowski, III | ■ | ■ | ■ | ■ | ■ | ■ | |||
Robert F. MacLellan | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ||
Olympia J. Snowe | ■ | ■ | ■ | ■ | |||||
Robert J. Stevens | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ||
Richard R. Verma | ■ | ■ | ■ | ■ | ■ | ||||
Sandra S. Wijnberg | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ |
Alan D. Wilson | ■ | ■ | ■ | ■ | ■ |
4 T. ROWE PRICE GROUP
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. We will promptly deliver a separate copy of Proxy Materials to you if you share an address subject to householding. Please contact our chief legal counsel and corporate secretary at 100 East Pratt Street, Mail Code BA-1360, 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 chief legal counsel and corporate secretary at 100 East Pratt Street, Mail Code BA-1360, 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 2018 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 future annual reports and proxy statements on the Internet only and not receive 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.
At least one account at your address must continue to receive a proxy statement and an annual report, unless you elect to view future annual reports and proxy statements over the Internet. 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. We expect that solicitation will occur primarily 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 fee of $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 the Record Date, and we 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.
Can I find additional information on the Company’s website?
Yes. Although the information contained on our website is not part of the Proxy Materials, you will find information about the Company and our corporate governance practices at troweprice.gcs-web.com/corporate-governance. Our website contains information about our Board, Board committees, Corporate Governance Guidelines, and other matters.
PROXY STATEMENT 2019 5
Proposal 1Election of Directors
In this proxy statement, nine director nominees are presented pursuant to the recommendation of the Nominating and Corporate Governance Committee. All have been nominated by the Board of Directors to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualify.
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 nominees named below 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 of Directors.
We have adopted a majority voting standard for the election of our directors. Under our current 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.
NON-EMPLOYEE DIRECTOR INDEPENDENCE DETERMINATIONS
The Board of Directors has considered the independence of current Board members and nominees not employed by8 T. Rowe Price 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.Group
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:
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.
THE NOMINEES AND THEIR QUALIFICATIONS, SKILLS, AND EXPERIENCE
In considering the overall qualifications of our nominees and their contributions to our Board, and in determining our need for additional members of the Board, 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
6 T. ROWE PRICE GROUP
facilitates a deeper knowledgeTable 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. 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.Contents
Each of our directors provides significant individual attributes important to the overall makeup and functioning of our Board, which are described in the biographical summaries provided below:
The Board of Directors recommends that you vote FOR all of the following nominees:
![]() Mark S. Bartlett, 70 | |
Retired Managing Partner Independent Director since: 2013 Committee Memberships: • Audit (Chair)
| Mr. Bartlett has been an independent director of Price Group since 2013 and serves as chair of the Audit Committee and as a member of the Executive Compensation and Management Development Committee. Mr. Bartlett received his B.S. from West Virginia University and attended the Executive Program at the Kellogg School of Business at Northwestern University. He also earned the designation of certified public accountant. Mr. Bartlett is a member of the board of directors, Mr. Bartlett offers |
![]() Mary K. Bush, 72 | ||
Chairman Independent Director since: 2012 Committee Memberships: • • Nominating and Corporate Governance | Ms. Bush has been an independent director of Price Group since 2012 and serves Ms. Bush holds an M.B.A. from the University of Chicago and a B.A. in economics and political science from Fisk University. Ms. Bush is a member of the board of directors and the risk oversight committee, and the chair of the nominating and corporate governance committee of Discover Financial Ms. Bush brings to our Board extensive financial, international and governmental affairs experience, her knowledge of corporate governance and financial oversight gained from her membership on the boards of other public companies, knowledge of public policy matters, and her significant experience providing strategic advisory services in the financial and international arenas. |
2021 Proxy Statement9
Dina Dublon, 67 | |
Retired Executive Vice President and Chief Financial Officer Independent Director since: 2019 Committee Memberships: • Audit • Executive Compensation and Management Development | Ms. Dublon has been an independent director of Price Group since 2019 and serves as a member of the Audit Committee and the Executive Compensation and Management Development Committee. She was the executive vice president and chief financial officer of JPMorgan Chase & Co. from 1998 until her retirement in 2004. Ms. Dublon previously held numerous positions at JPMorgan Chase & Co. and its predecessor companies, including corporate treasurer, managing director of the financial institutions division and head of asset liability management. Ms. Dublon received her B.A. in economics and mathematics from Hebrew University of Jerusalem and her M.S. from Carnegie Mellon University. Ms. Dublon has served as a director of PepsiCo, Inc. since 2005, where she serves as the chair of the public policy and sustainability committee and a member of the compensation committee. She previously served as chair of the audit committee. She serves as a member of the Independent Audit Quality Committee of EY USA and on the board of directors of Motive Capital Corp. She also serves on the board of advisors of Columbia University’s Mailman School of Public Health since 2018. From 2002 to 2017, Ms. Dublon served as a director of Accenture PLC; from 2013 to 2018 as a director of Deutsche Bank AG; from 2005 to 2014 as a director of Microsoft Corporation; and from 1999 to 2002 as a director of Hartford Financial Services Group, Inc. She previously served on the faculty of Harvard Business School and on the boards of several non-profit organizations, including the Women’s Refugee Commission and Global Fund for Women. Ms. Dublon brings to our Board significant accounting and financial reporting experience as well as substantial expertise with respect to the financials sector, mergers and acquisitions, global markets, public policy, and corporate finance gained throughout her career in the financial services industry, particularly her role as executive vice president and chief financial officer of a major financial institution. |
PROXY STATEMENT 2019 7
![]() Dr. Freeman A. Hrabowski, III, 70 | |
President Independent Director since: 2013 Committee Memberships: • • Nominating and Corporate Governance | Dr. Hrabowski has been an independent director of Price Group since January 2013 and serves on the University.Dr. Hrabowski Dr. Hrabowski brings to our Board valuable strategic and management leadership experience from his role as president of |
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10 T. Rowe Price Group
Robert F. MacLellan, 66 | |
Independent Director since: 2010 Committee Memberships: • • Executive • Executive Compensation and Management Development (Chair) | Mr. MacLellan has been an independent director of Price Group since 2010 and serves as chair of the Executive Compensation and Management Development Committee and as a member of the Audit Mr. MacLellan holds a B.Comm. from Carleton University and an M.B.A. from Harvard Mr. MacLellan is a member of the board of directors and chair of the audit committee of Magna International, Inc., a public company based in Aurora, Ontario. From 2012 to 2018, Mr. MacLellan brings substantial experience and perspective to |
8 T. ROWE PRICE GROUP
![]() Olympia J. Snowe, 74 | |
Independent Director since: 2013 Committee Memberships: • • Nominating and Corporate Governance (Chair) | Ms. Snowe has been an independent director of Price Group since June 2013 and serves as chair of the Nominating and Corporate Governance Committee and Ms. Snowe earned a B.S. from the University of Maine and has received honorary degrees from many colleges and universities. Ms. Snowe is a member of the board of directors of Synchrony Financial and serves as Ms. Snowe brings a broad range of valuable leadership and public policy experience to |
2021 Proxy Statement 11
Robert J. Stevens, 69 | ||
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Independent Director since: 2019 Committee Memberships: • Executive Compensation and Management Development
| Mr. Stevens has been an independent director of Price Group | since 2019 and serves as a member of the Executive Compensation and Management Development Committee and the Nominating and Corporate Governance Committee. Mr. Mr. Stevens received his B.A. from Slippery Rock University of Pennsylvania, his M.S. in industrial engineering and management from the New York University Tandon School of Engineering, and his M.S. in business from Columbia University. Mr. Stevens is an emeritus director of the Mr. Stevens brings to our Board significant executive management experience. He also adds additional perspective to our Board regarding financial matters, mergers and acquisitions, strategic leadership, and international operational experience based on his tenure as chief executive officer of |
William J. Stromberg, 61 | |
Chair and Chief Executive Officer Director since: 2016 Committee Memberships: • Executive (Chair) • Management (Chair) | Mr. Stromberg is the Chief Executive Officer (CEO) of Price Group and is the Chair of the Board. He is the chair of the Company’s Executive, Management, and Management Compensation and Development Committees. Mr. Stromberg earned a B.A. from Johns Hopkins University and an M.B.A. from the Tuck School of Business at Dartmouth. Mr. Stromberg also has He currently serves on the Johns Hopkins University board of trustees and the Hopkins Whiting School of Engineering advisory council. Mr. Stromberg previously served nine years on the Catholic Charities Mr. Stromberg brings to |
12 T. Rowe Price Group
PROXY STATEMENT 2019 9
TABLE OF CONTENTSTable of Contents
![]() Richard R. Verma, 52 | |
Executive Vice Independent Director since: 2018 Committee Memberships: • Audit
| Mr. Verma has been an independent director of Price Group since 2018 and Mr. Verma holds a B.S. Mr. Verma is Senior Fellow at Harvard University’s Belfer Center, serves as a trustee at Lehigh University, and is on the board of the National Endowment for Democracy. Mr. Verma brings substantial experience and a global perspective to |
![]() Sandra S. Wijnberg, 64 | ||
Former Partner and Chief Administrative Officer Independent Director since: 2016
• Audit •Executive | Ms. Wijnberg has been an independent director of Price Group since 2016 and Ms. Wijnberg holds a B.A. in English literature from the University of California, Los Angeles, and an M.B.A. from University of Southern California’s Marshall School of Business, for which she is a member of the board of leaders. Ms. Wijnberg is a member of the board of directors, chair of the audit committee, and member of the nominating and corporate governance committee of Automatic Data Processing, Inc. She is a member of the board of directors, chair of the audit committee and a member of the finance committee of Cognizant Technology Solutions Corp. From 2003 to 2016, Ms. Wijnberg served on the board of directors of Tyco International, PLC, and from 2007 to 2009 served on the board of directors of TE Connectivity, Inc. She is a director and the chair of the Audit Committee of Hippo Enterprises Inc., a private company. She is also a director of Seeds of Peace and is a trustee of the John Simon Guggenheim Memorial Foundation. Ms. Wijnberg brings to our Board a global perspective along with substantial financials sector, corporate finance, and management experience based on her roles at Aquiline Capital Partners, Marsh & McLennan, and YUM! Brands, Inc. |
2021 Proxy Statement13
10 T. ROWE PRICE GROUP
TABLE OF CONTENTSTable of Contents
![]() Alan D. Wilson, 63 | |
Retired Executive Chairman Independent Director since: 2015 Committee Memberships: • Executive
• Nominating and Corporate Governance | Mr. Wilson has been an independent director of Price Group since 2015 and serves as a member of the Mr. Wilson Mr. Wilson Mr. Wilson brings to our Board significant executive management experience, having led a publicly traded, multinational company. He also adds additional perspective |
THE BOARD OF DIRECTORS AND COMMITTEESDirector Engagement
Meetings
During 2018,2020, the Board of Directors held six10 meetings and approved one matter via unanimous written consent. Each director attended at least 75% of the combined total number of meetings of the Board and Board committees of which he or she was a member. Consistent with the Company’s Corporate Governance Guidelines, the independent directors met in executive session at each of the BoardBoard’s regular meetings in 2018.2020. Our Corporate Governance Guidelines provide that all directors are expected to attend the annual meeting of stockholders. All nominees for director submitted to the stockholders for approval at last year’s annual meeting on April 26, 2018,May 12, 2020, attended that meeting, and we anticipate that all nominees will attend the 2019 Annual Meeting.
Beyond the Boardroom
Director Orientation and Continuing Education and Development
When a new independent director joins the Board, we provide an orientation program for the purpose of providing the new director with an understanding of the operations and the financial condition of the Company as well as the Board’s expectations for its directors. Each director is expected to maintain the necessary knowledge and information 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, 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. In addition, at most meetings the Board receives special education sessions on one or more topics related to key industry trends, topical business issues and governance.
The Board is a member of the National Association of Corporate GovernanceDirectors, 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.
14 T. Rowe Price Group
Committees of the Board of Directors
Our Board of Directors has an Executive Committee, an Audit Committee, an Executive Compensation and Management Development Committee and(Compensation Committee), a Nominating and Corporate Governance Committee and an Executive Committee. The Board has also authorized a Management Committee that is made up entirely of senior officers of the Company.
Committee Charters
The Board has adopted a separate written charter for the Audit Committee, the Executive Compensation and Management Development Committee, and the Nominating and Corporate Governance Committee. Current copies of each charter, our Corporate Governance Guidelines, and our Code of Ethics for Principal Executive and Senior Financial Officers can be found on our website, troweprice.com, by selecting “Investor Relations” and then “Corporate Governance.“Governance.”
Code of Ethics
Audit Committee | ||||||||||
Meetings in 2020: 5 | Chair | Members | ||||||||
The report of the Committee appears on page 61. | ![]() | ![]() | ![]() | ![]() | ![]() | |||||
Bartlett | Dublon | MacLellan | Verma | Wijnberg |
Pursuant to rules promulgated under the Sarbanes-Oxley Act, the Board has adopted a Code of Ethics for Principal ExecutiveQualifications 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 copy 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.Expert Determination
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.
Executive Committee
During 2018, Mr. Rogers, Mr. Stromberg, and Anne Marie Whittemore served on the Executive Committee, until Ms. Whittemore’s retirement from the Board on April 26, 2018. Following Ms. Whittemore’s retirement from the Board, Mr. Wilson joined the Executive Committee. The Executive Committee functions between meetings of the Board of Directors
PROXY STATEMENT 2019 11
and 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 of Directors at its next meeting for ratification. The Executive Committee approved one matter via unanimous written consent during 2018.
Audit Committee
Messrs. Bartlett, MacLellan, and Verma, Dr. Hrabowski, and Ms. Wijnberg serve on the Audit Committee, which met eight times during 2018. The Board of Directors has determined that each of the Audit Committee members meet the independence and financial literacy criteria of the NASDAQ Global Select Market and the Securities and Exchange Commission.SEC. The Board also has concluded that Messrs. Bartlett and MacLellan and Ms.Mses. Dublon and Wijnberg meet the criteria for an audit committee financial expert as established by the SEC. Mr. Bartlett is a certified public accountant, was an audit partner at Ernst & Young for 28 years until he left the firm in 2012, and serves as the chair of the audit committee of Rexnord Corporation and Williams ScotsmanWillScot Mobile Mini Holdings Corp. and as a member of the audit committeecommittees of FTI Consulting, Inc. and Rexnord Corporation. Ms. Dublon was the executive vice president and chief financial officer of JPMorgan Chase & Co., from 1998 to 2004. She served as member and chair of the audit committee of PepsiCo, Inc. Mr. MacLellan is a chartered accountant, and serves as a memberchair of the audit committee of Magna International, Inc., and was a member of the audit committees for Ace Aviation Holdings, Inc., and Maple Leaf Sports and Entertainment, Ltd. Ms. Wijnberg was the chief financial officer of Marsh & McLennan Companies, Inc., from 2000 to 2006 and interim chief financial officer of YUM! Brands in 1999. She is currently the chair of the audit committeecommittees for Automatic Data Processing, Inc., and Cognizant Technology Solutions Corp, and she served as member and chair of the audit committees of Tyco International and TE Connectivity, respectively.
Audit Committee’s Primary
Responsibilities
The primary purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities with respect to: (1) the
The Audit Committee also providesCommittee:
2021 Proxy Statement | 15 |
Related Person Transaction Oversight
The Audit Committee is responsible under its charter for reviewing related person transactions and any change in, or waiver to, our Code of Ethics for our Principal Executive and Senior Financial Officers. Our Board has adopted a written Policy for the Review and Approval of Transactions with Related Persons. Any transaction that would require disclosure under Item 404(a) of Regulation S-K will not be initiated or materially modified until our Audit Committee has approved such transaction or modification and will not continue past its next contractual termination date unless it is annually reapproved by our Audit Committee. During its deliberations, the Audit Committee must consider all relevant details regarding the transaction including, but not limited to, any role of our employees in arranging the transaction, the potential benefits to our Company, and whether the proposed transaction is competitively bid or otherwise is on terms comparable to those available to an unrelated third party or our employees generally. The Audit Committee approves only those transactions that it determines in good faith to be on terms that are fair to us and comparable to those that could be obtained in an arms-length negotiation with an unrelated third party. Please see the disclosure provided in the section entitled “Certain Relationships and Related Transactions” beginning on page 54.68.
Risk Management Oversight
The Audit Committee oversees and evaluates our policies with respect to significant risks and exposures faced by the Company and the steps taken to assess, monitor, and manage those risks. The Company’s Risk and Operational Steering Committee, (formerly known as the Risk Management Oversight Committee), comprised of senior members of management including our chief risk officer, oversees the Company’s risk management strategy on behalf of the Management Committee. The Risk and Operational Steering Committee develops and maintains the Company’s risk management policies and procedures, and regularly monitors the significant risks inherent to our business, including investment risk, reputational risk, business continuity risk, information security risk and operational risk. The chief risk officer, head of internal audit, and officers responsible for financial reporting, legal, and compliance periodically report on these matters to the Audit Committee. Based on these reports, the Audit Committee reports and makes recommendations as necessary to the full Board with respect to managing our overall risk.
The report of the Audit Committee appears on page 53.
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Executive Compensation and Management Development Committee | ||||||||||||
Meetings in 2020: 5 | Chair | Members | ||||||||||
The report of the Committee appears on page 51. | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||
MacLellan | Bartlett | Bush | Dublon | Hrabowski | Snowe | |||||||
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Stevens | Verma | Wijnberg | Wilson |
Executive Compensation and Management Development Committee
All of the non-employee independent directors of the Board serve on the Executive Compensation and Management Development Committee (Compensation Committee), which met six times during 2018.Committee. The Board of Directors has determined that each of these members meets the independence criteria of the NASDAQ Global Select Market. The report of the Compensation Committee appears on page 40.
Committee Authority
Responsibilities
The Compensation Committee is responsible to the Board, and ultimately to our stockholders, for:
Determining 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;
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;
Responsibilities The Among the Nominating and Corporate Governance Committee’s responsibilities Identifying, evaluating, and 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 Recommending committee and Overseeing procedures regarding stockholder nominations and other communications to the Board. Reviewing the effectiveness of the Board in the corporate governance process. Monitoring compliance with and recommending any changes to the 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.
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 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.
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.
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.
Report of the Nominating and Corporate 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. 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, 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.
The
Director Nomination Process Ongoing Assessment of Composition and In considering the overall qualifications of our nominees and 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
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.
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 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
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
The Committee 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 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.
Stockholder Proposals From time to time, we receive proposals from our stockholders intended for inclusion in our proxy statement. We typically work with Company 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:
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 By the Nominating and Corporate Governance Committee of the
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 Fees and Other Compensation in All non-employee directors received the following in 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;
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
Equity-Based Compensation in Pursuant to the 2017 Each of the award types vest upon the earliest of 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.
Chair of
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.
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.
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:
These types of communications will be logged and filed but not circulated to directors. Except as described above, the general The log of By the Nominating and Corporate Governance Committee of the
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 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 Board Leadership Chair of the Board
We believe that a well-empowered lead independent director provides independent leadership to our Board. The Company has a strong independent Board, and
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
Board Evaluations In January
Engagement with our Stockholders As investment professionals, we know the value of engaging with companies. We maintain an active and
our efforts and progress related to our environmental, social and governance initiatives, we also published our first-ever Corporate ESG Update for
Stockholder Proposals From time to time,
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:
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
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 A fee of $15,000 for the A fee of $20,000 and $5,000, for the chair of A fee of $10,000 for the A fee of $10,000 for the Directors and
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 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
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 Ownership and Retention Guidelines Each non-employee director added to the
2020 Director Compensation1
The following table sets forth information regarding the
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 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 Focus on Family We have always emphasized the importance of spending quality time away from work. In addition to generous vacation time, the 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
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
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; relative investment performance of our investment products; and 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
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.
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. 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.
Executive Compensation Practices
At the
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 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
Key Elements of 2020 NEO Our compensation program consists primarily of three elements: base salary, annual cash incentives, and long-term equity awards. Most NEO compensation is performance-based,
Annual Incentive Compensation Plan Bonus Pool The AICP provides that, unless approved by the Compensation Committee otherwise, the maximum bonus pool is equal to 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. Compensation Committee’s Use of
The Compensation Committee believes that judgment and thoughtful 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.
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
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
2020 Compensation Decisions Given our shared and collaborative leadership structure, when setting the
In keeping with the 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 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:
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.
42 T. Rowe Price Group
2021 Proxy Statement 43
44 T. Rowe Price Group
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.
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.
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:
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
Performance-based RSUs 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 The Compensation Committee awards annual equity incentive grants to employees from stockholder-approved long-term incentive plans as part of the Company’s 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 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 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
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
Other Compensation Policies and Practices
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 Perquisites and
We do not provide significant perquisites and other personal benefits to our executive officers. We make
For 2020, the Supplemental Savings Plan
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
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
Recoupment Policy Our Board 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 We have a stock ownership policy
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 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.
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
2021 Proxy Statement 51
Executive Compensation
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.
The following table provides information concerning each plan-based award granted in
The following table shows information concerning equity incentive awards outstanding at December 31,
The following table shows aggregate stock option exercises and restricted stock awards vesting in
The amounts in the following table represent each NEO’s account activity under the Supplemental Savings Plan, which was effective on January 1, 2015.
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 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,
The amounts in the table below are calculated using the closing price of our common stock on December 31,
Our CEO pay ratio is calculated in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining the 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 For
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 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 We urge you to read the We value the feedback provided by our stockholders. At the 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 As an advisory vote, this Proposal is non-binding. Although the vote is non-binding, the Board
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.
The following table summarizes the fees charged by KPMG for services rendered to Price Group and its subsidiaries during
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.
The Audit Committee oversees Price Group’s financial reporting process on behalf of the In fulfilling our oversight responsibilities, we reviewed and discussed with management the audited financial statements prior to their issuance and publication in the We also discussed with management their evaluation of the effectiveness of Price Group’s internal controls over financial reporting as of December 31, 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,
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.
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 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.
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.
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.
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.
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
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 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 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:
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.
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.
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.
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 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 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 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 Can I find additional information on the Company’s website? Yes. Although the information contained on our website is not part of
Stockholder Proposals for the Any stockholder who wishes to submit a proposal or nominate a director for consideration at the Proposals must be received no later than November 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 Our By-Laws also require advance notice of any proposal by a stockholder to be presented at the To be properly brought before the Pursuant to Maryland law and our
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,
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
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