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CARDTRONICS PLC
| (Name of Registrant as Specified In Its Charter)
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Registrant |
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THE CHAMPIONS OF CASH...BECAUSE IT MATTERS We are a company with a purpose-driven mission to provide cash access for the communities we serve – enabling payment choice. As the world’s largest ATM operator, we are a vital part of the cash infrastructure. We take exceptional pride in the role we play in advocating for consumers and ensuring they remain connected to consistent and reliable cash wherever they need it. Among the many benefits of Cash, it is Secure, Reliable and Private.
| | (1) | Source: Kantar Consulting, Store Top Retailers 2018, US Retailers with an ATM program |
| | (2) | Ending unit counts as of December 31, 2019 |
| | | | | | | | LETTER FROM THE CHAIR OF THE BOARD OF DIRECTORS March 31, 2020 Dear Shareholder: | |
“Cardtronics strengthened its position in its largest markets and delivered across many strategic priorities, positioning the Company to continue delivering profitable growth for shareholders.” | | Cardtronics is the world’s leading owner/operator of ATMs, providing service to approximately 285,000 ATMs located in ten countries across four continents. We have premier locations and leading capabilities where we operate, including the United States and the United Kingdom, our two largest markets. The combination of our ATM footprint at major retailers and extensive financial institution relationships creates a unique value network. Our retailers benefit from our ATMs in their stores, financial institutions benefit from lower costs to provide key cash-based financial services to their customers, and consumers benefit from convenient access to ATMs. With the unprecedented change occurring in consumer financial services, Cardtronics is well positioned to deliver value for financial institutions, financial technology companies, retailers, and consumers alike. On behalf of the Board and management team, I am pleased to report that 2019 was a strong and important year for Cardtronics. During 2019, the Company returned to organic revenue growth and delivered a strong profit and cash flow performance. More importantly, we have strengthened our position in our largest markets and executed on many strategic priorities, positioning the Company to continue to deliver profitable growth for shareholders. A few of the 2019 highlights include significant new and expanded relationships with financial institutions and financial technology partners, new product delivery and continued infrastructure investment and operational improvements that will benefit the Company for years to come. These accomplishments led to strong returns for our shareholders during the year, reflecting both the tactical execution and strategic direction. We also were able to improve our capital structure as we reduced outstanding debt while also reducing our share count by approximately 4%, as we opportunistically repurchased 1.7 million shares during the year. During the year, we sought the opportunity to speak with a number of our large shareholders as a part of our investor outreach efforts. We found these investor engagements to be both informative and valuable, and they will help shape future priorities for the Board. We remain committed to a culture of strong governance, and that starts at the top with the Board, which continues to evolve to serve our shareholders over the long-term. We recognize the importance of the Board’s role in sustainability, enterprise risk management, and human capital management. Today, like all businesses across the globe, our company is being impacted by the unprecedented events taking place related to the COVID-19 virus pandemic. We are taking steps to stay ahead of this crisis, ensuring we can be flexible and adaptable to this fast-changing environment. The Board is actively engaged with the management team to help navigate this global crisis, and we are committed to the health and safety of our employees and customers. Recognizing the importance of our role in enabling convenient, secure, and reliable access to cash for citizens across regions, we have also taken additional operational measures to ensure availability of this critical service for many people. Our Board is comprised of ten professionals from highly relevant and diverse backgrounds, including three women, one of whom is the chair of our audit committee. All Board members are independent, with the exception of our CEO, who does not serve on any of the Board’s committees. As we communicated at our first investor day on March 27, 2019, Cardtronics is well positioned to leverage our leading ATM network and end-to-end capabilities for durable growth and value creation. Cash remains an important payment choice for consumers across our markets. Moreover, the ongoing evolution of payment technologies, consumer behaviors, and the financial services industry is providing growth opportunities for Cardtronics. We communicated a strategy at the investor day to enhance our unique two-sided network to drive sustainable organic growth and expand margins over the next several years. During the course of 2019, we invested in new products and technology to ensure that we continue delivering meaningful value to our financial institution, retailer, and financial technology partners. As the Chairman of Cardtronics plc, it is my pleasure to invite you on behalf of the entire Board to attend our 2020 annual meeting of shareholders, which will also be available via teleconference call this year, in light of the COVID-19 pandemic. I also ask for your voting support, welcome your input, and thank you for your investment in Cardtronics. Sincerely, | | | | | (3)
| Filing Party: | | | | | | | (4)
| Date Filed:
| | | |
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April 2, 2019
Dear Shareholder:
Over the course of our twenty five year operating history, Cardtronics has evolved into the world’s leading owner/operator of ATMs with an unrivaled position in each of its key markets. The combination of our ATM footprint at major retailers in the U.S. and extensive financial institution relationships creates a unique value network. Our retailers benefit from our ATMs in their stores, financial institutions benefit from lower costs to provide key cash-based financial services to their customers, and consumers benefit from convenient access to ATMs.
Cardtronics operates approximately 227,000 ATMs across four continents. A company of our scale is equipped to respond to and grow from changes in its customer base. In 2018, we navigated the loss of our largest partner relationship, 7-Eleven in the U.S., which accounted for 12.5% of our revenues the previous year. Despite this headwind, we delivered strong free cash flow growth when compared with the prior year and our stock price increased throughout 2018. We have a solid financial position and, as we move forward, expect our established business franchise to continue delivering strong free cash flows and organic growth.
Our succession planning successfully transitioned Edward H. West seamlessly to CEO from CFO on January 1, 2018, and our new CFO, Gary W. Ferrera, completed his first full year with the Company in 2018. We also appointed two new members to the Cardtronics Board of Directors (the “Board”):
Douglas Braunstein, founder and managing partner of Hudson Executive Capital, which, through its funds, is our largest shareholder. Mr. Braunstein brings over 30 years of experience in financial services and served in several senior leadership roles at JPMorgan Chase & Co., including as CFO.
Warren Jenson brings strong transformational experience critical to Cardtronics and has helped shape several companies at important inflection points, most notably NBC, Delta Air Lines, Amazon.com, Electronic Arts and LiveRamp (formally known as Acxiom).
In November, 2018, I succeeded Dennis Lynch as independent Board Chair, and, in keeping with our focus on good governance, the Board rotated committee assignments. The current iteration of our Board brings together nine professionals from highly relevant and diverse backgrounds, including two women, one of whom is chair of our audit committee.
As management communicated at our first investor day on March 27, 2019, Cardtronics is well-positioned to leverage our leading ATM network and end-to-end capabilities for sustainable growth and value creation. Cash remains an important payment choice for consumers across our markets. Moreover, the ongoing evolution of payment technologies, consumer behaviors and the financial services industry is providing growth opportunities for Cardtronics. We are commited to investing in new products and technology to continue delivering meaningful value to our financial institution, retailer and financial technology partners. We remain focused on utilizing our unrivaled platform to drive sustainable growth and additional transactions to the Company’s network while expanding margins.
As the Chairman of Cardtronics Plc, it is my pleasure to invite you on behalf of the entire Board to attend our 2019 annual meeting of shareholders. I also ask for your voting support, welcome your input, and thank you for your investment in Cardtronics.
Sincerely,
| | Mark Rossi | | Chair of the Board of Directors | |
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| | | | | | LETTER FROM THE CHIEF EXECUTIVE OFFICER March 31, 2020
April 2, 2019
Dear Shareholder: We cordially invite you to attend our 2019 Annual General Meeting of Shareholders. We will hold our meeting on Wednesday, May 15, 2019 at 5 p.m. BST at Weil, Gotshal & Manges LLP, 110 Fetter Lane, London EC4A 1AY, United Kingdom.
As a shareholder of Cardtronics plc, you play an important role in our company by considering and taking action on the matters set forth in the attached proxy statement. We appreciate the time and attention you invest in making thoughtful decisions.
Attached you will find a notice of meeting and proxy statement that contain further information about the items upon which you will be asked to vote and the meeting itself, including:
How to obtain admission to the meeting if you plan to attend; and
Different methods you can use to vote your proxy, including by internet, telephone and mail.
Every shareholder vote is important, and we encourage you to vote as promptly as possible. If you cannot attend the meeting in person, you may listen to the meeting via webcast. Instructions on how to access the live webcast are included in the proxy statement.
Sincerely,
| | | | We cordially invite you to attend (or listen by teleconference to) our 2020 Annual General Meeting of Shareholders. We will hold our meeting on Wednesday, May 13, 2020, at 6 p.m. BST at Building 4, Trident Place, Mosquito Way, Hatfield, Hertfordshire, AL10 9UL, United Kingdom, with satellite meetings being held at 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042, United States of America and 3201 Dallas Parkway, Suite 300, Frisco, Texas 75034, United States of America. As a shareholder of Cardtronics plc, you play an essential role in our Company by considering and taking action on the matters outlined in the attached proxy statement. We appreciate the time and attention you invest in making thoughtful decisions. Attached you will find a notice of the meeting and proxy statement that contain further information about the items upon which you will be asked to vote and the meeting itself, including: § How to obtain admission to the meeting if you plan to attend (but please see the comments below); and § Different methods you can use to vote your proxy, including by internet, telephone, and mail. Every shareholder vote is important, and we encourage you to vote as promptly as possible. If you cannot attend the meeting in person, you may listen to the meeting via webcast. Instructions on how to access the live webcast are included in the proxy statement. Due to the COVID-19 pandemic, and in line with what other companies are doing when holding their annual general meeting and in light of the current guidance from the UK Government, we are encouraging shareholders not to attend the meeting in person. Rather than attend in person at the location of the Annual General Meeting, we encourage shareholders to exercise their votes in advance of the meeting by proxy. In addition, we are proposing to organize a teleconference dial-in facility whereby shareholders will be able to dial-in and listen to the business of the meeting (details of this teleconference dial-in facility will be set out on our website in due course and prior to the date of the meeting). In light of the COVID-19 pandemic, we hope that shareholders will understand why the Board is encouraging shareholders not to attend in person. Sincerely, | | | | | | | | Edward H. West
Chief Executive Officer |
| | Chief Executive Officer |
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Cardtronics plc
2050 West Sam Houston Parkway South, Suite 1300
Houston, Texas 77042
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT
April 2, 2019
Dear Shareholder:
Notice is hereby given thatof the 20192020 Annual General Meeting of Shareholders (the “Annual Meeting”“Annual Meeting”) of Cardtronics plc, an English public limited company (“Cardtronics”Cardtronics”), will be held on Wednesday, May 15, 2019 at 5 p.m. BST at Weil, Gotshal & Manges LLP, 110 Fetter Lane, London EC4A 1AY, United Kingdom.At the Annual Meeting, you will be asked to consider and vote on the following:
| 1. | | | | | | | DATE AND TIME
Wednesday, May 13, 2020
6 p.m. BST | | LOCATION
Wednesday, May 13, 2020, at 6 p.m. BST at Building 4, Trident Place, Mosquito Way, Hatfield, Hertfordshire, AL10 9UL, United Kingdom | | WHO CAN VOTE
Shareholders of record at
the close of business on
March 18, 2020, are entitled
to receive notice of and to
vote at the Annual Meeting
or any adjournment or
postponements thereof |
Voting Items | | | | | | | | Proposals | | Board Vote Recommendation | | | | PROPOSAL 1: | To elect three Class IIII directors, Julie Gardner, Mark RossiDouglas L. Braunstein, Michelle Moore and Warren C. Jenson,G. Patrick Phillips, each by separate ordinary resolution, to our Board of Directors to serve until the 20222023 Annual General Meeting of Shareholders;Shareholders | | FOR each director nominee | | |
| 2.PROPOSAL 2: | To elect Edward H. West as aone Class II director, Rahul Gupta, by ordinary resolution, to our Board of Directors to serve until the 2021 Annual General Meeting of Shareholders;Shareholders | | FOR the director nominee | | |
| 3. | To elect Douglas L. Braunstein as a Class I director to our Board of Directors to serve until the 2020 Annual General Meeting of Shareholders; |
| 4.PROPOSAL 3: | To ratify, on an advisory basis, our Audit Committee’s selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the fiscal year ending December 31, 2019;2020 | | FOR | | |
| 5.PROPOSAL 4: | To re-appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006, to hold office until the conclusion of the next annual general meeting of shareholders at which accounts are presented to our shareholders;shareholders | | FOR | | |
| 6.PROPOSAL 5: | To authorize our Audit Committee to determine our U.K. statutory auditors’ remuneration;remuneration | | FOR | | |
| 7.PROPOSAL 6: | To approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in the proxy statement;statement | | FOR | | |
| 8. | To approve, on an advisory basis, the directors’ remuneration report (other than the directors remuneration policy) for the fiscal year ended December 31, 2018; |
| 9. | To receive our U.K. Annual Reports and Accounts for the fiscal year ended December 31, 2018, together with the reports of the auditors therein; |
| 10.PROPOSAL 7: | To approve the terms of the agreements and counterparties pursuant to which we may purchase our Class A ordinary shares; andshares | | FOR | | |
| 11.PROPOSAL 8: | To generallyapprove the Directors’ Remuneration Policy on future pay, as set out in the Annual Reports and unconditionally authorize Cardtronics, subject toAccounts | | FOR | | | | PROPOSAL 9: | To approve, on an advisory basis, the Directors’ Remuneration Report (other than the Directors' Remuneration Policy) for the fiscal year ended December 31, 2019 | | FOR | | | | PROPOSAL 10: | To receive our U.K. Annual Reports and in accordanceAccounts for the fiscal year ended December 31, 2019, together with the provisionsreports of the U.K. Companies Act 2006, to send, convey or supply all types of notices, documents or information to our shareholders by electronic means, including making such notices, documents or information available on a website.auditors therein | | FOR | | |
Please note that the location of the Annual Meeting is at Building 4, Trident Place, Mosquito Way, Hatfield, Hertfordshire, AL10 9UL, United Kingdom. Due to travel issues relating to COVID-19, please also note that the Board of Directors may not be present at this address, but may be present telephonically or at satellite meetings being held at 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042, United States of America and 3201 Dallas Parkway, Suite 300, Frisco, Texas 75034, United States of America. Resolutions in proposals 1-111-10 will be proposed during the Annual Meeting as ordinary resolutions, which means that, assuming a quorum is present, each such resolution will be approved if a simple majority of votes cast (whether in person or by proxy) for or against a resolution are cast in favor of the resolution. Further details of the proposals are set out in the proxy statement under the relevant descriptions of the proposals.
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With respect to the non-binding advisory votes in proposals 4, 7,3, 6, and 8,9, the result of the vote for each proposal will not require our Board of Directors to take any action. Our Board of Directors values the opinions of our shareholders as expressed through advisory votes and other communications. Our Board of Directors will carefully consider the outcome of the advisory vote on each proposal. During the Annual Meeting, our Board of Directors (or the chair of the annual meeting) will present to our shareholders our U.K. statutory accounts together with our U.K. statutory reports, including the directors’ report, the strategic report, the directors’ remuneration report and the auditors’ report for the fiscal year ended December 31, 20182019 (our “U.K. Annual Reports and Accounts”). Our Board of Directors will also provide an opportunity for shareholders to raise questions in relation to our U.K. Annual Reports and Accounts.Only shareholders of record at the close of business on March 18, 20192020, are entitled to receive notice of and to vote at the Annual Meeting or any adjournment or postponements thereof. A list of shareholders will be available commencing April 30, 20192020, and may be inspected at our offices during normalregular business hours prior tobefore the Annual Meeting. The list of shareholders also will be available for review at the location of the Annual Meeting.Meeting in the U.K. In the event there are not sufficient votes for a quorum at the time of the Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies. The proxy materials include this notice, the proxy statement, our U.K. Annual Reports and Accounts for the fiscal year ended December 31, 20182019, and the enclosed proxy card. The proxy statement provides information about the agenda and related matters for the Annual Meeting. It also describes how our Board of Directors operates, providesincludes information about its director candidates, and providesincludes information about the other items of business to be conducted at the Annual Meeting.
Your vote is important. Even if you plan to attend the Annual Meeting, please sign, date and return the enclosed proxy card as promptly as possible to ensure that your shares are represented. If you attend the Annual Meeting, you may withdraw any previously submitted proxy and vote in person. However, in light of the COVID-19 pandemic, please see the Letter from the Chief Executive Officer above in relation to any decision to attend the Annual Meeting in person. Sincerely, | | | Aimie Killeen
Company Secretary |
How to Vote | | | | | | | | INTERNET
www.proxyvote.com | | TELEPHONE
832-308-4000 | | MAIL
Mark, sign, date and promptly mail the enclosed proxy card in the postage-paid envelope |
| | | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY 15, 2019 13, 2020 |
| The Notice of Annual General Meeting of Shareholders, Proxy Statement for the Annual General Meeting of Shareholders and our Annual Report on Form 10-K to Shareholders for the fiscal year ended December 31, 20182019, are available at www.proxyvote.comwww.proxyvote.com | |
Forward Looking Statements and Non-GAAP Measures This document contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” or “will.” The information in this document is based upon our current expectations as of the date hereof unless otherwise noted. Our actual future business and financial performance may differ materially and adversely from our expectations expressed in any forward-looking statements. We undertake no obligation to revise or publicly update our forward-looking statements or this presentation for any reason unless required by law. Although our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. The factors that may affect our results are listed in certain of our press releases and disclosed in the Company’s most recent Form 10-K and 10-Q along with other public filings with the SEC. This document includes certain non-GAAP financial measures as defined under SEC Regulation G. We believe such measures are useful together with a reconciliation of those measures to the most directly comparable U.S. GAAP measures . TABLE OF CONTENTS TABLE OF CONTENTS1
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2: To elect one Class II director, Rahul Gupta, by ordinary resolution, to our Board of Directors to serve until the 2021 Annual General Meeting of Shareholders. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PROXY SUMMARY This summary highlights information contained elsewhere in this proxy statement. This summary does not include all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Board Highlights The following provides summary information about our directors. | 2019 PROXY STATEMENT | 6
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| | | | | | | | | | | | | | Committee Membership | | | Name and Primary Occupation | Age | Director Since | AC | CC | NGC | FC | | CLASS I | Class I Director Nominees for 2020 | | | | | | | Douglas L. Braunstein Managing Partner and Founder,
Hudson Executive Capital LP | 59 | 2018 | | | | | G. Patrick Phillips
Retired President of Premier Banking
and Investments, Bank of America | 70 | 2010 | | | | | Michelle Moore
Former Executive, Head of Digital
Banking, Bank of America | 48 | Appointed in March 2020 | | | | | | CLASS II | Class II Director Nominee for 2020 | | | | | | | Rahul Gupta
Former Executive Vice President
and Group President at Fiserv, Inc. | 60 | Appointed in March 2020 | | | | | | Continuing Directors | | | | | | | Juli C. Spottiswood
Former Senior Vice President,
Blackhawk Network Holdings Inc. | 53 | 2011 | | | | | Edward H. West
Chief Executive Officer, Cardtronics | 53 | 2018 | | | | | | CLASS III | Continuing Directors | | | | | | | Mark Rossi
Founder and Senior Managing Director,
Cornerstone Equity Investors, L.L.C. | 63 | 2010 | | | | | Julie Gardner
Retired Executive Vice President and
Chief Marketing Officer, Kohl’s Department Stores | 62 | 2013 | | | | | Warren C. Jenson
President, CFO and Executive MD of International,
LiveRamp Holdings, Inc. | 63 | 2018 | | | | |
Cardtronics plc
2050 West Sam Houston Parkway South, Suite 1300
Houston, Texas 77042
PROXY STATEMENT
These proxy materials are furnished to you in connection with the solicitation of proxies by the Board of Directors (our “Board”) of Cardtronics plc, an English public limited company (“Cardtronics”), for use at our 2019 Annual General Meeting of Shareholders and any adjournments or postponements of the meeting (the “Annual Meeting”). The Annual Meeting will be held on May 15, 2019 at 5 p.m. BST at Weil, Gotshal & Manges LLP, 110 Fetter Lane, London EC4A 1AY, United Kingdom.
On or prior to April 22, 2019, we will mail a Notice of Internet Availability to our shareholders of record and beneficial owners who owned our Class A ordinary shares at the close of business on March 18, 2019 (the “Record Date”). The Notice of Internet Availability contains information on how to access the proxy materials and vote online at www.proxyvote.com. The Notice of Annual General Meeting of Shareholders, this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 are available to you in the Investor Relations section of our website at www.cardtronics.com or, upon your request, paper versions of these materials will be delivered to you by mail.
| | | | | | AC | Audit Committee | | Chair | | CC | Compensation Committee | 2019 PROXY STATEMENT | 7 | Member | | NGC | Nominating & Governance Committee | | | | FC | Finance Committee | | |
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| | | | | | | | | | | | | | | | | | | INDEPENDENCE | TENURE | AGE | DIVERSITY | | Independent | | 8 | <3 years | | 5 | <55 years | | 3 | Female | | 3 | | Not independent | | 1 | 3-7 years | | 1 | 55-60 years | | 1 | | | | | | | | 8-10 years | | 2 | 61-65 years | | 4 | | | | | | | | | | | >65 years | | 1 | | | | | | | | | | | | | | | | |
ABOUT THE ANNUAL MEETING
SKILLS AND EXPERIENCE | | | | | | | | | | What | Accounting | | Financial Services | | | President/ Executive Group | | 3/9 | | 5/9 | | 7/9 | | Chief Executive Officer | | | Fintech/ Payments | | | Private Equity | | | 3/9 | | 5/9 | | 3/9 | | Chief Financial Officer | | Global Business | | | Sales | | 5/9 | | 4/9 | | 7/9 | | Cybersecurity and
Information Technology | | Investment Management | | Strategy | | | 2/9 | | 3/9 | | 6/9 | | Digital Business | | | Marketing and
Product Development | | | | | 6/9 | | 4/9 | | | | Disruptive Business Models | | Merger/Acquisitions | | | | | 4/9 | | 6/9 | | |
Environmental, Social, and Corporate Governance Highlights Our Board is committed to overseeing social responsibility and corporate governance practices, to promote sustainability, long-term value for shareholders, and foster a culture of transparency, trust, and accountability between the Company and our stakeholders. | | | | | • Public disclosure of annual material GHG emissions from owned and utilized assets for which the purposeCompany has operational control • Recycling programs in all Cardtronics locations | • Global head office in Houston, Texas, and a major facility in Frisco, Texas, each use natural light and energy-efficient LED lighting to reduce energy consumption and are LEED (Leadership in Energy and Environmental Design) certified for efficiency and sustainability |
| | | | | • We advocate for consumers and ensure they remain connected to secure, convenient, and reliable cash wherever they need it, including in areas serving unbanked and underbanked citizens • Purposeful alignment of human capital management and business strategies to drive pay for performance and to cultivate a culture that attracts the talent necessary for sustained success • 30% of the Board is female (3 of 10 directors), including the Chair of our Audit Committee • Board-approved policies which prohibit discrimination based on protected grounds
| • Through its Statement of Compliance with the Modern Slavery Act, 2015, Cardtronics publicly commits to preventing human trafficking and modern slavery in its business and supply chains • Support of legislation which would provide the freedom of payment choice • Continuing to develop and maintain privacy policies and procedures in line with evolving legislation, to protect the privacy and data of our customers, suppliers and employees • Cardtronics and its employees support our communities through a range of charitable giving schemes and events, and we also support employees who engage directly with local and national charities |
| | | | | • Non-executive, independent Chair of the Board • All directors are independent, other than the CEO • Board’s four committees are fully independent and meet regularly • Majority vote for directors in uncontested elections • No supermajority shareholder approval requirements • Directors must notify Nominating & Governance Committee before joining another public company Board • Strong corporate values and commitment to ethics and compliance | • Board and its committees have the authority to retain independent advisors • Shareholder right to call special meetings with 5% ownership • No dual-class capital structure • Robust share ownership and retention guidelines for directors and executive officers • Code of Business Conduct and Ethics guides on best practices and sets the expectation for employee and director conduct |
ENTERPRISE RISK MANAGEMENT | | | | | • A robust enterprise risk management strategy provides a ‘bottom-up’ review of current and potential risks which could impact the business, which is reviewed not less than quarterly by the Board | • See 'Corporate Governance', and 'Our Board and Committees' on page 25 which includes an overview of the role of each committee of the Board in risk oversight |
Financial Highlights | | | | The Proxy Statement speaks as of the date of mailing. As a result, the discussion about our financial, operational, and strategic performance relates to 2019 and has not been edited to provide any updates regarding any potential COVID-19 pandemic impacts on our business activities or performance. | |
2019 Financial Performance | | | | | | Solid revenue growth drives margin expansion and strong cash flows | Revenues of $1.35 billion, up 3% (constant-currency) from 2018 | 4% revenue growth in North America, led by bank branding, Allpoint, and managed services | Deployed nearly 1,000 deposit-taking ATMs in the U.S. enabling new revenue streams | GAAP net income of $48.3 million up from $3.7 million in 2018 | Adjusted EBITDA(1) of $308 million, up 8% constant-currency from 2018 | Adjusted Net Income per diluted Share(1) of $2.52, up 18% from 2018 | Adjusted free cash flow(1) of $150 million, up from $118 million in 2018 | Repurchased 1.7 million shares, or 4% of shares outstanding, and repaid $96 million, in debt outstanding | | Strong execution; well-positioned for continued growth |
| | (1) | Adjusted free cash flow as disclosed in our periodic SEC filings. Adjusted Free Cash Flow, Adjusted EBITDA and Adjusted Net Income per Diluted Share are non-GAAP measures. Please see our 2019 Form 10-K for a description of these measures, management’s opinion regarding the usefulness of these non-GAAP measures, along with a reconciliation to the nearest GAAP measures. |
Compensation Highlights Compensation Snapshot | | | | | | Elements | CEO | Other NEOs | Overview | | Base Salary | | | A competitive level of cash to attract and retain executive talent | | Annual Cash Incentive | | | Designed to motivate our executives to achieve annual financial goals and other business objectives Total amount paid based on achievement of Revenue, Adjusted EBITDA and Adjusted Free Cash Flow metrics, and for NEOs other than the CEO, individual performance goals | | Long-Term Incentive Plan ("LTIP") | | | Designed to motivate our executives to build long-term shareholder value | | 2019 LTIP comprised of the following: | | Performance-Based RSUs | | Earned based on cumulative Adjusted EBITDA (50%) and relative Total Shareholder Return ("TSR") (50%) metrics over a three-year performance period | | Time-Based RSUs | | Further tie the interests of our executives to shareholders and encourage a significant equity stake in the company and vest over three years | | Stock Options | |
Recent Compensation Changes and Best Practices Having successfully navigated a period of significant transition, our Compensation Committee determined that for 2019 and 2020, long-term performance-based incentives should be based on a cumulative three-year performance period, and include relative TSR and Adjusted EBITDA as equally weighted metrics. The Compensation Committee elected to include relative TSR as a critical metric to tie a considerable portion of management’s LTIP awards to the Company’s share price performance as compared to the composite share price performance of a broad group of companies with similarly-sized market capitalizations. In addition, the 2019 and 2020 LTIPs incorporate vesting over three years for time-based RSUs and stock options. | | | | | | | | | | | | What We Do | | | What We Don’t Do | • Emphasis on performance-based compensation tied to specific, pre-established financial goals and individual goals (the latter for all NEOs except the CEO), with payouts capped at 200% of the target • Compensation recoupment (“clawback”) policy • Meaningful share ownership guidelines for our executive officers and directors • Independent Compensation Committee directors and compensation consultant • Insider Trading Policy | | • No excise tax gross-ups for executive officers • No backdating or repricing of options • No hedging or pledging of Cardtronics shares per our Insider Trading Policy • No excessive perquisites for executive officers | | | | | |
Shareholder Engagement | | | | | | | | | | | We have reached out to shareholders totaling over | We are committed to ensuring that our shareholders fully understand our executive compensation programs, including how they reward the achievement of our strategic objectives and align the interests of our named executive officers with those of our shareholders. Since our 2019 Annual General Meeting of Shareholders?Shareholders, we engaged with our shareholders to seek feedback on our executive compensation program and any other subjects of interest. We focused our outreach on our top 25 shareholders, who represent over 90% of our shares outstanding. | | | | | | | We held substantive stewardship discussions with holders of approximately | In addition to meetings management held with shareholders throughout the year, we engaged in discussions with shareholders during the spring, in advance of our 2019 Annual Shareholders Meeting, and again between October and December 2019. During the latter shareholder engagement effort, which focused primarily on stewardship, executive compensation, social responsibility and strategy matters, we were able to engage in discussions with shareholders that account for approximately 64% of our shares outstanding. These discussions generally included at least one Board member, either our Board Chair or our Compensation Committee Chair, in addition to our Chief Financial Officer, our General Counsel, our head of Human Resources, and our head of Investor Relations. Key points commonly raised or discussed with shareholders included: (1) executive compensation matters; (2) governance matters and Board composition; and (3) the Board’s role in strategy and risk. We also held an investor day during 2019 and communicated throughout the year with investors through in-person meetings, conferences and conference calls. During the year, in total, we held meetings with over 80% of our shareholder base. | | |
| | | | | SHAREHOLDERS’ FEEDBACK | | Our responses: | | | | • Executive Compensation and Corporate Governance most important areas | | Our Board is fully committed to ensuring that our long-term executive incentive plans align with shareholder interests. | • Most shareholders were supportive of the Company's executive compensation structure | | While over 74% of our shareholders supported our 2018 executive compensation program, we have evaluated feedback from our shareholders during our outreach discussions and believe that we have appropriately addressed shareholders’ primary concerns in the 2019 and 2020 plans and would expect increased shareholder support for this year’s say-on-pay proposal. | • Longer performance measurement periods preferred | | Several shareholders commented on preferring performance measurement periods of 3+ years. Our 2019 and 2020 long-term incentive plans now utilize three-year plans, providing long-term alignment of management and shareholders. | • Metrics used for long-term incentive plans should vary from short-term plans | | Starting for 2019, we now use two long-term performance measures, each measured over a cumulative three-year period: 1) relative TSR and 2) Adjusted EBITDA. We believe relative TSR aligns management directly with shareholders to deliver long-term shareholder value. While we also use an Adjusted EBITDA metric in our short-term plan, we believe delivering Adjusted EBITDA growth over both the short and long-term is one of the most important drivers of shareholder value and is an area over which management has a high degree of control. | • Selection of peer groups is important | | The Committee carefully evaluates the Company's peer group annually, looking at a range of companies in similar industries and revenues generally between one-third and three times those of the Company. The Committee also uses this process to help assess the competitiveness of total compensation for each executive officer. | | | |
Pay and Performance Alignment Our executive compensation programs are designed to attract, engage, and incentivize the Annual Meeting,talent necessary to enable Cardtronics to successfully execute on strategy and increase overall value for shareholders over time. Accordingly, our compensation philosophy is to align the interests of management and shareholders, will be asked to: (1) elect three Class IIImotivate achievement of specified performance objectives, and reward performance against goals, without encouraging excessive risk-taking. Our 2019 financial results included revenue growth of 3% and Adjusted EBITDA growth of 8%, both on a constant-currency basis. In addition to the solid financial performance, we saw a 72% increase in the share price during 2019.
ELECTION OF DIRECTORS | | | | | | | PROPOSAL 1 To elect three Class I directors, Julie Gardner, Mark Rossi and Warren C. Jenson, each by separate ordinary resolution, to our Board to serve until the 2022 Annual General Meeting of Shareholders; (2) elect Edward H. West as a Class II director to our Board of Directors to serve until the 2021 Annual General Meeting of Shareholders; (3) elect Douglas L. Braunstein, Michelle Moore and G. Patrick Phillips, each by separate ordinary resolution, to our Board of Directors to serve until the 2023 Annual General Meeting of Shareholders | | Our Board recommends that shareholders vote FOR the re-election of each of the Class I Director nominees. | | | |
Our Class I Director Nominees Following the departure of J. Tim Arnoult from our Board in November 2019, our Board consisted of nine directors with one vacancy. On March 20, 2020, on the recommendation of the Nominating & Governance Committee, the Board increased its size to ten directors and appointed Michelle Moore and Rahul Gupta to the Board. Ms. Moore will serve as a Class I director, and Mr. Gupta will serve as a Class II director. As announced on March 24, 2020, Jorge Diaz has decided to ourretire from the Board of Directors to serve untiland not seek re-election at the 2020 Annual General Meeting of Shareholders; (4) ratify our Audit Committee’s selection of KPMG LLP (U.S.)and, as our U.S. independent registered public accounting firm forsuch, after the fiscal year ending December 31, 2019; (5) re-appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006, to hold office until the conclusion of the next2020 Annual General Meeting, of Shareholders at which accounts are presented to our shareholders; (6) authorize our Audit Committee to determine our U.K. statutory auditors’ remuneration; (7) approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in this proxy statement; (8) approve, on an advisory basis, the directors’ remuneration report; (9) receive our U.K. statutory accounts together with our U.K. statutory reports, including the directors’ report, the strategic report, the directors’ remuneration report and the auditors’ report for the fiscal year ended December 31, 2018 (our “U.K. Annual Reports and Accounts”); (10) approve the terms of agreements and counterparties pursuant to which we may purchase our Class A ordinary shares and authorize all or any of our Directors to enter into, complete and do all things necessary to effect the share repurchase contracts; and (11) generally and unconditionally authorize us, subject to and in accordance with the provisions of the U.K. Companies Act 2006 to send, convey or supply all types of notices, documents or information to our shareholders by electronic means, including making such notices, documents or information available on a website. Each of the above matters that will be submitted to shareholders for their approval is described in more detail herein.Resolutions in the proposals will be proposed as ordinary resolutions which means that, assuming a quorum is present, each such resolution will be approved if a simple majority of votes cast (whether in person or by proxy) for or against a resolution are cast in favor of the resolution.
With respect to the non-binding advisory votes in Proposal 4 (ratification of our Audit Committee’s selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the fiscal year ending December 31, 2019), Proposal 7 (approval, on an advisory basis, of the compensation of the Named Executive Officers as disclosed in this proxy statement) and Proposal 8 (approval, on an advisory basis, of the directors’ remuneration report), the result of the vote for each proposal will not require our Board to take any action. Our Board values the opinions of our shareholders as expressed through advisory votes and other communications and will carefully consider the outcome of the advisory vote on each proposal.
Certain proposals are items that are required to be approved by shareholders periodically in accordance with the U.K. Companies Act 2006 and may not have an analogous requirement under U.S. laws or regulations. As such, while these proposals may be familiar to shareholders accustomed to being shareholders of companies incorporated in England and Wales, other shareholders may be less familiar with these proposals and should review and consider each proposal carefully.
Who may vote at the Annual Meeting?
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Our Board has fixed March 18, 2019 as the record date for the Annual Meeting. If you are a shareholder of Cardtronics as of the close of business on the Record Date, you are qualified to receive notice of and to vote at the Annual Meeting.
As of the Record Date there were 46,307,928 shares outstanding and entitled to vote at the Annual Meeting. As of the Record Date, our directors and executive officers beneficially owned, in the aggregate, approximately 8,467,685 such shares, representing beneficial ownership of 18.3% of the outstanding shares as of that date, and these shares are included in the number of shares entitled to vote at the Annual Meeting.
A complete list of shareholders of record entitled to vote will be open to the examination of any shareholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting at our offices in Houston, Texas during ordinary business hours. Such list shall also be open to the examination of any shareholder present at the Annual Meeting.
When and where is the Annual Meeting?
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Our Annual Meeting will take place on Wednesday, May 15, 2019 at 5 p.m. BST at Weil, Gotshal & Manges LLP, 110 Fetter Lane, London EC4A 1AY, United Kingdom.
What does it mean if I receive more than one proxy card?
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If you receive more than one proxy card, then you own shares through multiple accounts with our transfer agent and/or your broker, bank or other nominee. Please sign and return all proxy cards to ensure that all of your shares are voted at the Annual Meeting.
What is the difference between holding shares as a “shareholder of record” and holding shares in “street name”?
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| • | Shareholder of Record. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered a “shareholder of record” with respect to those shares, and you are receiving these proxy materials directly from us. As the shareholder of record, you have the right to mail your proxy directly to us or to vote in person at the Annual Meeting. |
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| • | Street Name Shareholder. If your shares are held in a stock brokerage account, by a bank or other holder of record (commonly referred to as being held in “street name”), you are the “beneficial owner” with respect to those shares and these proxy materials are being forwarded to you by that custodian, which is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote and you are also invited to attend the Annual Meeting. However, since you are not the shareholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a signed proxy from the shareholder of record giving you the right to vote the shares. Your broker, bank or other nominee has provided voting instructions for you to use in directing the broker, bank or other nominee how to vote your shares. If you fail to provide sufficient instructions to your broker, bank or other nominee, the shareholder of record may be prohibited from voting your shares as discussed elsewhere in this proxy statement. |
| • | Shareholder of Record. Shares held directly in your name as the shareholder of record can be voted in person at the Annual Meeting or you can provide a proxy to be voted at the Annual Meeting by signing and dating the enclosed proxy card and returning it in the enclosed postage-paid envelope. If you plan to vote in person at the Annual Meeting, please bring proof of identification. Even if you currently plan to attend the Annual Meeting, we recommend that you also submit your proxy as described above so that your vote will be counted if you later decide not to attend the Annual Meeting. |
| • | Street Name Shareholder. If you hold your shares in “street name,” please follow the instructions provided by your broker, bank or other holder of record (the record holder). Shares held in street name may be voted in person by you at the Annual Meeting only if you obtain a signed proxy from the record holder giving you the right to vote the shares. If you hold your shares in street name and wish to simply attend the Annual Meeting, please bring proof of ownership and identification. |
A proxy is your legal designation of another person to vote the shares that you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. Our Board has appointed the individuals indicated on the enclosed proxy card (the “Proxy Holders”) to serve as proxies for the Annual Meeting.
If you are a shareholder of record and you properly complete and submit a proxy, your shares will be voted by the Proxy Holders in accordance with your instructions on this proxy. If you complete and submit a proxy, but do not indicate how you wish to vote, the Proxy Holders will vote in accordance with the recommendations of our Board as set forth after each proposal.
If you hold shares in “street name” through a broker, in some cases your shares may be voted even if you do not provide
your broker, bank or other nominee with voting instructions. At the Annual Meeting, a broker will not have discretionary authority to vote on any of the proposals in the absence of timely instructions from the beneficial owners, except for Proposal 4 (ordinary resolution to ratify our Audit Committee’s selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the fiscal year ending December 31, 2019), Proposal 5 (ordinary resolution to re-appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006), Proposal 6 (ordinary resolution to authorize our Audit Committee to determine our U.K. statutory auditors’ remuneration) and Proposal 9 (ordinary resolution to receive our U.K. Annual Reports and Accounts). See “What is the effect of abstentions and broker non-votes and what vote is required to approve each proposal discussed in this proxy statement?” below for additional information.
How many votes must be present to hold the Annual Meeting?
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There must be a quorum present for any business to be transacted at the Annual Meeting. A quorum is the presence at the Annual Meeting, in person or by proxy, of shareholders who together are entitled to cast at least the majority of the voting rights of Cardtronics as of the Record Date. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the Annual Meeting. As of the Record Date, there were 46,307,928 shares issued outstanding and entitled to vote at the Annual Meeting. Consequently, the presence of the holders of at least 23,153,964 shares, in person or by proxy, is required to establish a quorum for the Annual Meeting.
If less than a quorum is represented at the Annual Meeting, the meeting will be adjourned by the chair of the meeting, or as otherwise provided in our Articles of Association, to such other day and such other time and/or place as determined in accordance with our Articles of Association.
How many votes do I have?
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You are entitled to one vote for each share that you owned on the Record Date on all proposals considered at the Annual Meeting. Pursuant to our Articles of Association, cumulative voting rights are prohibited.
Can I change my vote after I return my proxy card?
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Yes. Even after you have returned your proxy card, you may revoke your proxy at any time before it is exercised by: (i) submitting a written notice of revocation to our Company Secretary, Aimie Killeen, by mail to Cardtronics plc, 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042 or by facsimile at (832) 308-4770 no later than May 15, 2019; (ii) mailing in a new proxy card bearing a later date, but received by us no later than May 15, 2019; or (iii) attending the Annual Meeting and voting in person, which suspends the powers of the Proxy Holders.
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If you hold your shares in “street name,” you may change your vote by submitting new voting instructions to your broker, bank or nominee in accordance with that entity’s procedures.
Could other matters be decided at the Annual Meeting?
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At the time this proxy statement was filed, we did not know of any matters to be raised at the Annual Meeting other than those proposals referenced in this proxy statement. With respect to any other matter that properly comes before the Annual Meeting, the Proxy Holders will vote the proxies as recommended by our Board or, if no recommendation is given, in their own discretion.
What is the effect of abstentions and broker non-votes and what vote is required to approve each proposal discussed in this proxy statement?
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Proposal 1. Each of the proposed directors will be elected if a simple majority of votes cast at the Annual Meeting (whether in person or by proxy) for or against a resolution are cast in favor of the proposed director as required for the uncontested election of each of the proposed directors. This means that each of the Class III director nominees must receive the simple majority of votes cast (whether in person or by proxy) for that Class III director nominee to be elected to our Board. Warren C. Jenson was appointed to our Board as a Class III director during the calendar year 2018 and is being nominated by our Board for election by the shareholders for the first time. You may vote “FOR,” “AGAINST” or “ABSTAIN” for each Class III director nominee. If you “ABSTAIN,” your votes will be counted for purposes of establishing a quorum, but will not be taken into account in determining the outcome of the proposal. This proposal is considered a non-routine matter, so if you are a street name shareholder, your broker, bank, or other nominee is not permitted to vote your shares on this proposal without your instruction (a “Broker Non-Vote”). Broker Non-Votes are not treated as entitled to cast a vote and therefore will have no impact on the proposal.
Proposal 2. Edward H. West was appointed to our Board as a Class III director during the calendar year 2018 in connection with his appointment as our Chief Executive Officer and is being nominated by our Board for election by the shareholders for the first time. In light of the currently unequal number of directors in each of the classes of our Board, Mr. West has agreed to shift from Class III to Class II (see discussion in Proposals 1 and 3 for background on this determination). This proposal will be approved if a simple majority of votes cast at the Annual Meeting (whether in person or by proxy) for or against a resolution are cast in favor of the resolution. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. If you “ABSTAIN,” your votes will be counted for purposes of establishing a quorum, but will not be taken into account in determining the outcome of the proposal. Broker Non-Votes are not treated as entitled to cast a vote and therefore will have no impact on the proposals.
nine directors.Proposal 3. Douglas L. Braunstein was appointed to our Board as a Class I director during the calendar year 2018 and is being nominated by our Board for election by the shareholders for the first time. This proposal will be approved if a simple majority of votes cast at the Annual Meeting (whether in person or by proxy) for or against a resolution are cast in favor of the resolution. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. If you “ABSTAIN,” your votes will be counted for purposes of establishing a quorum, but will not be taken into account in determining the outcome of the proposal. Broker Non-Votes are not treated as entitled to cast a vote and therefore will have no impact on the proposals.
Proposals 4, 5, 6, 8 and 9. Each proposal will be approved if a simple majority of votes cast at the Annual Meeting (whether in person or by proxy) for or against a resolution are cast in favor of the resolution. You may vote “FOR,” “AGAINST” or “ABSTAIN” on each of these proposals. If you “ABSTAIN,” your votes will be counted for purposes of establishing a quorum, but will not be taken into account in determining the outcome of the proposal. These proposals are considered “routine” matters, so if you are a street name shareholder, your broker, bank, or other nominee has discretion to vote your shares on each of these proposals even if your broker does not receive voting instructions from you.
Proposals7, 10and 11. Each proposal will be approved if a simple majority of votes cast at the Annual Meeting (whether in person or by proxy) for or against a resolution are cast in favor of the resolution. You may vote “FOR,” “AGAINST” or “ABSTAIN” on each of these proposals. If you “ABSTAIN,” your votes will be counted for purposes of establishing a quorum, but will not be taken into account in determining the outcome of the proposal. Broker Non-Votes are not treated as entitled to cast a vote and therefore will have no impact on the proposals.
Who is participating in this proxy solicitation and who will pay for its cost?
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We will bear the entire cost of soliciting proxies, including the cost of the preparation and distribution of this proxy statement, the proxy card and any additional information furnished to our shareholders. In addition to this solicitation, our directors, officers and other employees may solicit proxies by use of mail, telephone, facsimile, electronic means, in person or otherwise. These persons will not receive any additional compensation for assisting in the solicitation, but may be reimbursed for reasonable out-of-pocket expenses in connection with the solicitation.
What is “householding” and how does it affect me?
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We participate, and some brokers, banks, trustees, custodians and other nominees may be participating, in the practice of “householding” proxy materials. This procedure allows multiple shareholders residing at the same address the convenience of receiving a single proxy statement and Annual Report on Form 10-K and Notice of Internet Availability. You may request a separate copy of this proxy statement by
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calling 1-866-540-7095 or by writing us at Cardtronics plc, c/o Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
Whom should I contact with questions about the Annual Meeting?
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If you have any questions about this proxy statement or the Annual Meeting, please contact our Company Secretary, Aimie Killeen, at 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042 or by telephone at (832) 308-4518.
Where may I obtain additional information about Cardtronics plc?
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We refer you to our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019. Our Annual Report on Form 10-K, including audited financial statements, is available on our website at www.cardtronics.com.
IF YOU WOULD LIKE TO RECEIVE ADDITIONAL INFORMATION ABOUT CARDTRONICS PLEASE CONTACT OUR COMPANY SECRETARY, AIMIE KILLEEN, AT 2050 WEST SAM HOUSTON PARKWAY SOUTH, SUITE 1300, HOUSTON, TEXAS 77042.
On the following pages, we have set forth the proposals that are being submitted to the shareholders for their approval. Following each proposal is a summary of the proposal as well as our Board’s recommendation in support thereof.
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| PROPOSAL 1: | ORDINARY RESOLUTIONS TO ELECT CLASS III DIRECTORS |
Our Class III Director Nominees
In connection with the addition of two new directors to our Board in June 2018, our Board increased its size to ten. Then, following the departure of Dennis Lynch from our Board in October 2018, our Board reduced its size to nine. Accordingly, our Board is currently comprised of nine directors divided into three classes, with one class elected at each annual general meeting of shareholders to serve for a three-year term. The term of our Class IIII directors expires at the Annual Meeting, the term of our Class III directors expires at the 20202021 Annual General Meeting of Shareholders, and the term of our Class IIIII directors expires at the 20212022 Annual General Meeting of Shareholders, with each director to hold office until his or her successor is duly elected and qualified or until the earlier of his or her death, resignation, retirement or removal.
As a result of the changes to our Board in 2018 described above, the size of the classes of our Board are not as nearly equal in number as possible as required by our Articles of Association. We currently have three Class I directors: Jorge M. Diaz, G. Patrick Phillips and Douglas L. Braunstein; two Class II directors: J. Tim Arnoult and Juli C. Spottiswood; and four Class III directors: Julie Gardner, Edward H. West, Mark Rossi and Warren C. Jenson. However, Mr. West has agreed to shift from a Class III director to a Class II director (see Proposal 2 below). Therefore, following the Annual Meeting, if all director nominees are elected, each of our classes will consist of three directors, consistent with the requirements of our Articles of Association.
Accordingly, acting
Acting upon the recommendation of our Nominating & Governance Committee, our Board nominated Julie Gardner, Mark RossiDouglas L. Braunstein, Michelle Moore, and Warren C. JensonG. Patrick Phillips for election as Class IIII directors at the Annual Meeting. Each nominee is currently a director, has consented to beingbe named a nominee in this proxy statement, and has indicated a willingness to serve if elected. Class IIII directors elected at the Annual Meeting will serve for a term to expire at the 20222023 Annual General Meeting of Shareholders, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement or removal. Unless authority to vote for a particular nominee is withheld, the shares represented by the enclosed proxy will be voted FOR the election of each of Julie Gardner, Mark RossiDouglas L. Braunstein, Michelle Moore, and Warren C. JensonG. Patrick Phillips as Class IIII directors. In the event that any nominee becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as our Board may recommend in his or her place. We have no reason to believe that any nominee will be unable or unwilling to serve as a director. The names and certain information about the Class IIII director nominees, including their ages as of the Annual Meeting date, positions with Cardtronics, as well as the specific experience, qualifications, attributes and skills that led our Board to the conclusion that the director should be nominated to serve on our Board in light of our business, are set forth below:
Name
| Age
| Position
| Julie Gardner
| | 61
| | Class III Director
| Warren C. Jenson
| | 62
| | Class III Director
| Mark Rossi
| | 63
| | Class III Director
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Julie Gardner has served as a director of our Company since October 2013. Ms. Gardner has over 25 years of marketing experience in the retail industry and was cited by Forbes in 2012, as the 11th most influential Chief Marketing Officer in the world. Ms. Gardner served as the North American Chairwoman of the Bonial International Group’s Advisory Board from 2013 to 2015. Ms. Gardner retired from her retail career in 2012, after most recently serving as Executive Vice President and Chief Marketing Officer for Kohl’s Department Stores. During her 14 year tenure at Kohl’s, 887 new stores were opened and 25 new brands were launched to the portfolio of private, exclusive and national brands. She has been credited for the successful launch of numerous exclusive brands including Simply Vera Wang, Elle, Food Network, Chaps, Dana Buchman, Candies, Lauren Conrad, Jennifer Lopez and Tony Hawk. While at Kohl’s, Ms. Gardner created the Kohl’s Cares program, which raised over $200 million between 2000 and 2012 for children’s health and educational programs, and lead the funding and development of the TED educational program with the TED organization. From 1985 to 1999, Ms. Gardner served in a number of positions for Eckerd Corporation, a retail drug store company operating over 3,000 stores in the Southeast and Southwest, serving as Chief Marketing Officer from 1994 to 1999. Prior to joining Eckerd Corporation, Ms. Gardner served in Account Management with two advertising firms. Her vast success has led to numerous awards, including 20 Addy Awards, 30 RACie awards and an Emmy Award from the Arts and Sciences.
Ms. Gardner has expansive marketing and advertising experience in the retail industry and we believe her experience and her background with rapid business expansion, as well as her insights with drugstore chains, a key retailer constituent of Cardtronics, make her well-qualified to serve on our Board, our Audit Committee and our Compensation Committee.
| | |  Age: 59 Director Since: June 2018 Committees: Finance, Compensation | SKILLS AND EXPERIENCE | 2019 PROXY STATEMENT | 12 | | | BACKGROUND • Serves as a Managing Partner and Founder of Hudson Executive Capital L.P. since January 2015, which through its funds, has beneficial ownership of approximately 18% of the Company’s common stock and is our largest shareholder. • Served at JPMorgan Chase & Co., from March 1997 to January 2015, with roles as CFO, Vice Chair, member of the Operating Committee, Head of Americas Investment Banking, and Global M&A, among others. • Served as a Director of Eagle Pharmaceuticals, Inc. from March 2018 to August 2019; and Corindus Vascular Robotics, Inc. from January 2017 to November 2019. • Trustee of Cornell University; member of Cornell’s Investment Committee; and Chair of Cornell's Finance Committee. • Received his B.S. from Cornell University in 1983 and his J.D. from Harvard Law School in 1986. DIRECTOR QUALIFICATIONS Mr. Braunstein’s extensive executive experience and background in investment strategy and banking, as well as a strong financial background, makes him well-qualified to serve on our Board, Finance Committee, and Compensation Committee. | | |
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| | | G. Patrick Phillips INDEPENDENT Age: 70 Director Since: February 2010 Committees: Audit, Compensation (Chair) | SKILLS AND EXPERIENCE | | | | BACKGROUND • Retired from Bank of America in 2008, after a 35-year career, most recently serving as President of Bank of America’s Premier Banking and Investments group from August 2005 to March 2008. During his tenure, Mr. Phillips led a variety of consumer, commercial, wealth management and technology businesses. • Serves as the Chair of the Board of Directors of USAA Federal Savings Bank ("USAA FSB"), where he also previously served as Chair of the Finance and Audit Committee (until March 2018); Chair of the Compensation Committee (until March 2018); and, Chair of the Risk Committee (until January 2020). He also serves on the Board of USAA, the parent of USAA FSB. • Serves as Chair of the Board of Directors of Novant Health, a non-profit healthcare company operating in North Carolina, South Carolina, Georgia and Virginia. • Served as an adviser to the financial services practice of Bain & Company, a global management consulting firm from 2013 to 2019. • Served as a director of Visa USA and Visa International from 1990 to 2005 and 1995 to 2005, respectively. • Received a Masters of Business Administration from the Darden School of Business at the University of Virginia in 1973 and graduated from Presbyterian College in Clinton, South Carolina, in 1971. DIRECTOR QUALIFICATIONS Mr. Phillips’ extensive experience in the banking industry and the electronic payments industry makes him well-qualified to serve on our Board, our Audit Committee and as Chair of our Compensation Committee. | | |
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DIRECTORS Warren C. Jenson has served as a director of our Company since June 2018. Mr. Jenson currently serves as the President, Chief Financial Officer (“CFO”) and Executive MD of International at LiveRamp Holdings, Inc. (formerly known as Acxiom Holdings). He has served at LiveRamp since 2012. Prior to joining LiveRamp, Mr. Jenson served as COO at Silver Spring Networks. From 2002 to 2008 he was the CFO at Electronic Arts Inc. Mr. Jenson has more than 30 years of experience in strategy and operational finance as CFO of Amazon.com, NBC and Electronic Arts. Mr. Jenson also helped shape and successfully navigate digital transformations at NBC and Delta Air Lines. Mr. Jenson was twice designated one of the “Best CFOs in America” by Institutional Investor magazine, and he was also honored as Bay Area Venture CFO of the Year in 2010. Mr. Jenson’s board experience includes DigitalGlobe, Tapjoy, and the Marshall School of Business at the University of Southern California. Mr. Jenson holds a bachelor’s degree in accounting and a master of accountancy degree, both from Brigham Young University.
Mr. Jenson’s extensive experience as a CFO and in other executive positions of several successful public and private companies makes him well qualified to serve on our Board, our Compensation Committee and as Chair of our Finance Committee.
Mark Rossi has served as a director of our Company since November 2010 and Chair of our Board since October 31, 2018. Mr. Rossi is a founder and Senior Managing Director of Cornerstone Equity Investors, L.L.C. (“Cornerstone”), a Connecticut based private equity firm. The investment principals of Cornerstone have funded approximately 100 companies in a variety of industries but with a particular emphasis on technology and telecommunications, health care services and products and business services. Cornerstone and its predecessor firm have provided financing to a large number of successful companies including Dell Computer, Health Management Associates, Linear Technology, Micron Technology, Novatel Wireless, Inc. and Equitrac, Inc. Prior to the formation of Cornerstone in 1996, Mr. Rossi was President of Prudential Equity Investors, Inc., the private equity arm of Prudential Financial. Mr. Rossi’s industry focus is on business services and technology companies. After graduating with highest honors from Saint Vincent College in 1978 with a Bachelor of Arts Degree in Economics, Mr. Rossi earned a Master of Business Administration Degree from the J.L. Kellogg School of Management at Northwestern University where he was an F.C. Austin Scholar.
Mr. Rossi has extensive financial services experience, is a member of the board of directors of several companies and previously served as Chair of the board of directors of Maxwell Technologies Inc. (a publicly traded company), which makes him well-qualified to serve on our Board as Chairman, our Nominating & Governance Committee and our Finance Committee.
| | | Michelle Moore INDEPENDENT Age: 48 Director Since: March 2020 | SKILLS AND EXPERIENCE | | | | BACKGROUND • Served in a variety of positions at Bank of America from 2003 to 2018 including Checking Products Executive; Strategy and Transformation Executive; Chief Financial Officer, Real Estate Services; Chief Financial Officer, Commercial Banking; Chief Operating Officer, Commercial Banking; National Client Experience Executive; and Head of Digital Banking and Advanced Solutions, leading all digital platforms (online banking and mobile app) and transformation (including payments, user experience, transaction migration, the launch of AI chatbot) as well as large scale operations including call centers and ATM. • Served on the Bank of America management committee; was the Executive Sponsor for the Leadership Advantage Program; co-executive sponsor for the bank’s Disability Network; and served as a Bank of America Global Ambassador to Vital Voices. • Named 2017 Digital Banker of the Year by American Banker; included as 2017 Innovators to Watch: 44 Executives Shaping the Future of Banking by Bank Innovation. • Serves as Board member of HUB International. • Earned BS in Economics from Cornell University and an MBA in Finance from the University of Rochester Simon School of Business. DIRECTOR QUALIFICATIONS Ms. Moore has extensive experience in the financial services industry and led the strategy, transformation, and execution of the Bank of America’s 16,000+ ATM network. Ms. Moore’s extensive leadership experience in the financial services industry makes her well-qualified to serve on our Board. | | |
Recommendation and Required Vote Each of the Class IIII directors must be separately elected. For a director nominee to be elected, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the director nominee’s election. Our Board believes that the election or re-election of each Class IIII director nominee identified above is advisable and in the best interests of Cardtronics and our shareholders. ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RE-ELECTION
ELECTION OF EACH OF THE CLASS III DIRECTOR NOMINEES IDENTIFIED ABOVE.* * *
DIRECTORS
| | | | | | | PROPOSAL 2An Ordinary Resolution to elect one Class II director, Rahul Gupta, by ordinary resolution, to our Board of Directors to serve until the 2021 Annual General Meeting of Shareholders | 2019 PROXY STATEMENT | 13 | Our Board recommends that shareholders vote FOR the election of Rahul Gupta. |
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| PROPOSAL 2: | AN ORDINARY RESOLUTION TO ELECT NEWLY APPOINTED CLASS II DIRECTOR |
Edward H. WestRahul Gupta was appointed to our Board as a Class III director as of January 1, 2018 in connection with his promotion to Chief Executive Officer. Following certain changes in our Board’s composition during 2018 (see Proposal 1 above), Mr. West agreed to shift to a Class II director in order forMarch 2020, Acting upon the recommendation of our classes of directors to be as nearly equal in number as possibleNominating & Governance Committee and in accordance with our Articles of Association. Accordingly, Mr. WestAssociation, Rahul Gupta will stand for election at the Annual Meeting as a Class II director, rather than as a Class III director, to serve for the remaining portion of a Class II director’shis term of office until 2021. Mr. Westoffice. Rahul Gupta is currently a director, has consented to beingbe named a nominee in this proxy statement, and has indicated a willingness to serve for a term to expire at the 2021 Annual General Meeting of Shareholders if elected. He will hold office until his successor is duly elected and qualified or until his earlier death, resignation, retirement or removal.
Unless authority to vote for the election of Mr. WestRahul Gupta is withheld, the shares represented by the enclosed proxy will be voted FOR the election of Edward H. WestRahul Gupta as a Class II director. In the event thatIf he becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as our Board may recommend in his place. We have no reason to believe that Mr. WestRahul Gupta will be unable or unwilling to serve as a director. Certain information about Mr. West,Rahul Gupta, including his age as of the Annual Meeting date, positions with Cardtronics, as well as the specific experience, qualifications, attributes and skills that led our Board to the conclusion that Mr. WestRahul Gupta should be nominated to serve on our Board in light of our business, isare set forth below: Edward H. West, age 52, joined Cardtronics in January 2016 and was appointed Chief Executive Officer and Director effective January 1, 2018. Mr. West previously served as our CFO effective February 23, 2016, and also assumed the role of Chief Operations Officer effective July 2016. Prior to joining Cardtronics, Mr. West most recently served as President and Chief Executive Officer of Education Management Corporation, joining that company initially as CFO in 2006. Prior to 2006, Mr. West held various executive positions within Internet Capital Group, including serving as Chief Executive Officer of ICG Commerce, the largest subsidiary of the group from 2002-2006. Prior to his time at Internet Capital Group, Mr. West served as CFO for Delta Air Lines. Mr. West began his career at SunTrust. Mr. West holds a Bachelor of Business Administration in Finance from Emory University’s Goizueta School of Business. Mr. West received the “CFO of the Year”award from Institutional Investor Magazine in 2012 and was previously named one of the “Top 40 Under 40” by CFO Magazine.
Mr. West’s current position as our Chief Executive Officer enables him to bring invaluable operational, financial, regulatory and governance insights to our Board; and his considerable role in the management of our Company enables him to continually educate and advise our Board on our business, industry and related opportunities and challenges.
| | | Rahul GuptaINDEPENDENT Age: 60 Director Since: March 2020
| SKILLS AND EXPERIENCE | | | | BACKGROUND • Serves as board member for several privately held payments and fintech companies and as advisor to private equity funds and venture funds in the financial technology space. • Served as Chief Executive Officer of RevSpring, a private company in the financial services and healthcare space, from 2017 to 2019. • Served as Executive Vice President and Group President at Fiserv, a public banking technology and payments company, from 2006 to 2017. Before that served in various executive positions with technology companies serving the financial services industries for 20 years. • Received an MBA in Finance and Information Technology from Indiana University in 1986 and Bachelor of Commerce from Delhi University in 1978. DIRECTOR QUALIFICATIONS Mr. Gupta's extensive leadership experience in the financial services technology industry, and subsequent board and advisory experience with fintech companies and investors makes him well-qualified to serve on our board. | | |
Recommendation and Required Vote For the director nominee to be elected, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of his election. Our Board believes that the election of Edward H. WestRahul Gupta is advisable and in the best interests of Cardtronics and our shareholders. ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE
ELECTION OF EDWARD H. WEST.* * *
DIRECTORS | 2019 PROXY STATEMENT | 14
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| PROPOSAL 3: | AN ORDINARY RESOLUTION TO ELECT NEWLY APPOINTED CLASS I DIRECTOR |
Douglas L. Braunstein was appointed to our Board as a Class I director in June 2018. Acting upon the recommendation of our Nominating & Governance Committee and in accordance with our Articles of Association, Mr. Braunstein will stand for election at the Annual Meeting for the remaining portion of his term of office. Mr. BraunsteinBelow is currently a director, has consented to being named a nominee in this proxy statement, and has indicated a willingness to serve for a term to expire at the 2020 Annual General Meeting of Shareholders if elected. He will hold office until his successor is duly elected and qualified or until his earlier death, resignation, retirement or removal.
Unless authority to vote for the election of Mr. Braunstein is withheld, the shares represented by the enclosed proxy will be voted FOR the election of Douglas L. Braunstein as a Class I director. In the event that he becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as our Board may recommend in his place. We have no reason to believe that Mr. Braunstein will be unable or unwilling to serve as a director.
Certain information about Mr. Braunstein,our continuing directors including, his age as of the Annual Meeting date, positions with Cardtronics, as well as the specific experience, qualifications, attributes and skills that led our Board to the conclusion that Mr. Braunstein should be nominated to serve on our Board in light of our business, are set forth below:
Douglas L. Braunstein, age 58, has served as a director of our Company since June 2018. Mr. Braunstein has served as a Managing Partner and Founder of Hudson Executive Capital LP (“HEC”) since January 2015, which through its funds has beneficial ownership of approximately 17.6% of the Company’s common stock and is our largest shareholder. Prior to HEC, Mr. Braunstein’s service at JPMorgan Chase & Co., from March 1997 to January 2015, included roles as CFO, Vice Chair, a member of the Operating Committee, and Head of Americas Investment Banking and Global M&A, among others. Mr. Braunstein currently serves as a director of Eagle Pharmaceuticals, Inc. and Corindus Vascular Robotics, Inc. Mr. Braunstein is a trustee of Cornell University, Chair of the Finance Committee and a member of Cornell’s Investment Committee. He received his B.S. from Cornell University in 1983 and his J.D. from Harvard Law School in 1986.
Mr. Braunstein’s extensive executive experience and background in investment strategy and banking, as well as a strong financial background, makes him well-qualified to serve on our Board, our Finance Committee and our Compensation Committee.
Recommendation and Required Vote
For the director nominee to be elected, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of his election. Our Board believes that the election of Douglas L. Braunstein is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF DOUGLAS L. BRAUNSTEIN.
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CONTINUING DIRECTORS
In addition to the directors to be elected at the Annual Meeting (see Proposals 1-3 above) the directors who will continue to serve on our Board after the Annual Meeting, their ages as of the Annual Meeting date, Board class, and the specific experience, qualifications, attributes, and skills that led our Board to the conclusion that the director should serve on our Board in light of our business are set forth below:
Name
| Age
| Position
| J. Tim Arnoult
| 70
| Class II Director
| Jorge M. Diaz
| 54
| Class I Director
| G. Patrick Phillips
| 69
| Class I Director
| Juli C. Spottiswood
| 52
| Class II Director
|
skills. | 2019 PROXY STATEMENT | 15
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J. Tim Arnoult has served as a director of our Company since January 2008. Mr. Arnoult provides over 30 years of banking, payments and information technology experience to our Board. From 1979 to 2006, Mr. Arnoult served in various positions at Bank of America, N.A., including President of Global Treasury Services in 2005 and 2006, President of Global Technology and Operations from 2000 to 2005, President of Central U.S. Consumer and Commercial Banking from 1996 to 2000, and President of Private Banking from 1992 to 1996. Mr. Arnoult also serves on the board of directors of Stellus Capital Investment Corporation and AgileCraft, LLC. Mr. Arnoult is experienced in the integration of complex mergers including NationsBank and Bank of America in 1998 and Bank of America and Fleet Boston in 2004. Since 2006 Mr. Arnoult has worked as a consultant and corporate director. Mr. Arnoult holds a Bachelor of Arts and Masters of Business Administration degrees from the University of Texas at Austin.
Mr. Arnoult has experience serving as a director for public and private companies as well as significant nonprofit and industry association boards, including the board of Visa USA. We believe Mr. Arnoult’s broad financial services background, including international responsibilities, past directorship experience and active community involvement make him well-qualified to serve on our Board, on our Finance Committee and as Chair of our Nominating & Governance Committee.
Jorge M. Diaz has served as a director of our Company since December 2004. Mr. Diaz has served as Operating Partner for Platform Partners since November 2018. Prior to that, Mr. Diaz served as vice chair of strategy and business development of Fiserv from February 2017 to September 2018, where he supported the billings and payments group. He previously held the position of Division President and Chief Executive Officer of Fiserv Output Solutions, a division of Fiserv. In January 1985, Mr. Diaz co-founded National Embossing Company, which he sold to Fiserv in April 1994. Mr. Diaz currently serves as a director at Beneplace LLC and Envoy Mortgage.
Mr. Diaz’s extensive experience in the electronic funds transfer processing industry, as well as his long-standing association with our Company, makes him uniquely qualified to serve on our Board, our Audit Committee and our Nominating & Governance Committee.
G. Patrick Phillips has served as a director of our Company since February 2010. Mr. Phillips retired from Bank of America in 2008, after a 35-year career, most recently serving as President of Bank of America’s Premier Banking and Investments group from August 2005 to March 2008. During his tenure at Bank of America, Mr. Phillips led a variety of consumer, commercial, wealth management and technology businesses. Mr. Phillips also serves on the board of directors of USAA Federal Savings Bank (“USAA FSB”) where he served as Chair of the Finance and Audit Committee and Chair of the Compensation Committee through March 2018 and now serves as lead independent director and Chair of the Risk and Compliance Committees. He also is Chair of the board of Novant Health, a non-profit healthcare company operating in North Carolina, South Carolina, Georgia and Virginia. In addition, Mr. Phillips serves as an adviser to the financial services practice of Bain & Company, a global management consulting firm. Mr. Phillips previously served as a director of Visa USA and Visa International from 1990 to 2005 and 1995 to 2005, respectively. Mr. Phillips received a Masters of Business Administration from the Darden School of Business at the University of Virginia in 1973 and graduated from Presbyterian College in Clinton, South Carolina in 1971.
Mr. Phillips’s extensive experience in the banking industry and the electronic payments industry makes him uniquely qualified to serve on our Board, our Audit Committee and as Chair of our Compensation Committee.
Juli C. Spottiswood has served as a director of our Company since May 2011. From October 2014 to July 2015, Ms. Spottiswood served as Senior Vice President of Blackhawk Network Holdings Inc. (NASDAQ: HAWK), a leading prepaid and payments network (“Blackhawk”), and General Manager of Blackhawk Engagement Solutions (“BES”), a division of Blackhawk. BES provides customized engagement and incentive programs for consumers, employees and sales channels. She was previously an Independent Advisor to Blackhawk. Ms. Spottiswood was also previously President, Chief Executive Officer and a member of the board at Parago, Inc., a marketing services company, which was sold in October 2014 to Blackhawk. Ms. Spottiswood co-founded Parago in 1999, originally serving as the company’s CFO. Ms. Spottiswood also brings to our Board significant experience within the prepaid card industry; previously serving as a board member and treasurer of the Network Branded Prepaid Card Association, a nonprofit association formed to promote the use of prepaid cards as an alternative payment vehicle. In October 2017, Ms. Spottiswood joined a newly formed private equity backed holding company-Syncapay, Inc. as Chair & CEO. Syncapay’s mission is to acquire and consolidate high-growth, leading edge payments companies. In 2009, Ms. Spottiswood was the recipient of the Ernst & Young Entrepreneur of the Year award in the Southwest region. Ms. Spottiswood holds a Bachelors of Business Administration in Accounting from the University of Texas.
Ms. Spottiswood has expansive business and financial services experience, which includes experience as an accountant with Arthur Andersen. Her knowledge of the payment industry and innovation makes her a well-qualified to serve on our Board, on our Nominating & Governance Committee and as Chair of our Audit Committee.
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| 2019 PROXY STATEMENT | 16
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| PROPOSAL 4: | Mark RossiBOARD CHAIR, INDEPENDENT Age: 63 Director Since: November 2010 Committees: Finance, Nominating & Governance (Interim Chair) | SKILLS AND EXPERIENCE | | | | BACKGROUND AN ORDINARY RESOLUTION TO RATIFY THE •SELECTION OF KPMG LLP (U.S. Founder and Senior Managing Director of Cornerstone Equity Investors, L.L.C. ("Cornerstone") AS OUR , a Connecticut based private equity firm with a particular emphasis on technology and telecommunications, health care services and products, and business services.
U.S. INDEPENDENT REGISTERED PUBLIC •ACCOUNTING FIRM Served as President of Prudential Equity Investors, Inc., the private equity arm of Prudential Insurance Company of America before the formation of Cornerstone in 1996.
• Served as Chair of the Board of Directors for Maxwell Technologies, Inc. • Earned a Master of Business Administration degree from the J.L. Kellogg School of Management at Northwestern University, where he was an F.C. Austin Scholar after graduating with highest honors from Saint Vincent College in 1978 with a Bachelor of Arts degree in Economics. DIRECTOR QUALIFICATIONS Mr. Rossi's extensive financial services experience, and his industry focus on business services and technology makes him well-qualified to serve on our Board, our Finance Committee, and as Interim Chair of our Nominating & Governance Committee. | | |
Our Audit Committee has selected KPMG LLP (U.S.) as our U.S. independent registered public accounting firm to conduct our audit for the year ending December 31, 2019.
We engaged KPMG LLP (U.S.) to serve as our U.S. independent registered public accounting firm and to audit our consolidated financial statements beginning with the fiscal year ended December 31, 2001. The engagement of KPMG LLP (U.S.) for the fiscal year ending December 31, 2019 has been approved by our Audit Committee. Our Audit Committee has reviewed and discussed the consolidated financial statements included in our Annual Report on Form 10-K and has approved their inclusion therein. See “Audit Matters—Report of our Audit Committee” for more details.
Although shareholder ratification of the selection of KPMG LLP (U.S.) is not required, our Audit Committee considers it desirable for our shareholders to vote upon this selection. If the selection is not ratified, our Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, our Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it believes that such a change would be in the best interests of Cardtronics and our shareholders.
A representative of KPMG LLP (U.S.) is expected to be present at the Annual Meeting and will have an opportunity to make a statement if the representative desires to do so and will be available to respond to appropriate questions from shareholders at the Annual Meeting.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that the ratification of the selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the fiscal year ending December 31, 2019 is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE SELECTION OF KPMG LLP (U.S.) AS OUR U.S. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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| 2019 PROXY STATEMENT | 17
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| PROPOSAL 5: | Julie Gardner INDEPENDENT Age: 62 Director Since: October 2013 Committees: Audit, Compensation | SKILLS AND EXPERIENCE | | | | BACKGROUND AN ORDINARY RESOLUTION TO RE-APPOINT •KPMG LLP (U.K.) AS OUR U.K. STATUTORY Over 25 years of marketing experience in the retail industry, cited by Forbes in 2012, as the 11th most influential Chief Marketing Officer in the world.
AUDITORS UNDER THE U.K. COMPANIES •ACT 2006 Serves as the North American Chairwoman of the Bonial International Group’s Advisory Board.
• Served as Executive Vice President and Chief Marketing Officer for Kohl’s Department Stores. During her 14 year tenure at Kohl’s, 887 new stores were opened, and 25 new brands were launched to the portfolio of private, exclusive and national brands. Has been credited for the successful launch of numerous exclusive brands including Simply Vera Wang, Elle, Food Network, Chaps, Dana Buchman, Candies, Lauren Conrad, Jennifer Lopez and Tony Hawk. • Created the Kohl’s Cares program, the first philanthropic strategy for the company, which raised over $200 million between 2000 and 2012 for children’s health and educational programs, and lead the funding and development of the TED educational program with the TED organization. • Served in several positions for Eckerd Corporation, a retail drug store company operating over 3,000 stores in the Southeast and Southwest, from 1985 to 1999, serving as Chief Marketing Officer from 1994 to 1999. • Served in Account Management with two advertising firms before joining Eckerd Corporation. • Recipient of numerous awards, including 20 Addy Awards, 30 RACie awards, and an Emmy Award from the Arts and Sciences. DIRECTOR QUALIFICATIONS Ms. Gardner has expansive marketing and advertising experience in the retail industry, and we believe her experience and her background with rapid business expansion, as well as her insights with drugstore chains, a key retailer constituent of Cardtronics, make her well-qualified to serve on our Board, our Audit Committee and our Compensation Committee. | | |
In accordance with the U.K. Companies Act 2006, our U.K. statutory auditors must be re-appointed at each meeting at which the U.K. Annual Reports and Accounts are presented to our shareholders. KPMG LLP (U.K.) has served as Cardtronics’ U.K. statutory auditors since June 29, 2016.
If this proposal is not approved by our shareholders at the Annual Meeting, our Board may appoint auditors to fill the vacancy.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes, following a recommendation to this effect by our Audit Committee, that the re-appointment of KPMG LLP (U.K.) as Cardtronics’ U.K. statutory auditors is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RE-APPOINTMENT
ELECTION OF KPMG LLP (U.K.) AS OUR U.K. STATUTORY AUDITORS TO HOLD OFFICE FROM THE CONCLUSION OF THE ANNUAL MEETING UNTIL THE CONCLUSION OF THE NEXT ANNUAL GENERAL MEETING OF SHAREHOLDERS AT WHICH THE U.K. ANNUAL REPORTS AND ACCOUNTS ARE PRESENTED TO OUR SHAREHOLDERS.* * *
DIRECTORS
| 2019 PROXY STATEMENT | 18
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| PROPOSAL 6: | Warren C. Jenson INDEPENDENT Age: 63 Director Since: June 2018 Committees: Compensation, Finance (Chair) | SKILLS AND EXPERIENCE | | | | BACKGROUND AN ORDINARY RESOLUTION TO AUTHORIZE •OUR AUDIT COMMITTEE TO DETERMINE OUR Currently serves as the President, CFO, and Executive MD of International at LiveRamp Holdings, Inc. (formerly known as Acxiom Holdings). He has served at LiveRamp since 2012.
U.K. STATUTORY AUDITORS’ REMUNERATION• Served as the CFO at Electronic Arts Inc. from 2002 to 2008, then as COO of Silver Spring Networks before joining LiveRamp.
• More than 30 years of experience in strategy and operational finance as Chief Financial Officer of Amazon.com, NBC, and Electronic Arts. • Successfully shaped the digital transformations at NBC and Delta Air Lines; and substantially contributed to the growth of DigitalGlobe, Tapjoy, and the Marshall School of Business at the University of Southern California. • Twice designated one of the “Best CFOs in America” by Institutional Investor magazine, and was also honored as Bay Area Venture CFO of the Year in 2010. • Holds a Bachelor of Accounting and a Master of Accountancy degree, both from Brigham Young University. DIRECTOR QUALIFICATIONS Mr. Jenson’s extensive experience as a CFO and in other executive positions of several successful public and private companies makes him well-qualified to serve on our Board, our Compensation Committee, and as Chair of our Finance Committee. | | |
In accordance with the U.K. Companies Act 2006, the remuneration of our U.K. statutory auditors must be fixed in a general meeting of shareholders or in such manner as may be determined in a general meeting of shareholders. We are asking our shareholders to authorize our Audit Committee to determine the remuneration of KPMG LLP (U.K.) in its capacity as Cardtronics’ U.K. statutory auditors under the U.K. Companies Act 2006 in accordance with our Audit Committee’s procedures and applicable law.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that authorizing our Audit Committee to determine the remuneration of KPMG LLP (U.K.) as Cardtronics’ U.K. statutory auditors is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE AUTHORIZATION OF OUR AUDIT COMMITTEE TO DETERMINE OUR U.K. STATUTORY AUDITORS’ REMUNERATION.
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Class II Directors | 2019 PROXY STATEMENT | 19
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| PROPOSAL 7: | Juli C. SpottiswoodINDEPENDENT Age: 53 Director Since: May 2011 Committees: Nominating & Governance, Audit (Chair) | SKILLS AND EXPERIENCE | | | | BACKGROUND AN ORDINARY RESOLUTION OF A •NON-BINDING ADVISORY VOTE TO APPROVE Serves as Chair & Chief Executive Officer of Syncapay, Inc., whose mission is to acquire and consolidate high-growth, leading-edge payments companies.
NAMED EXECUTIVE OFFICER •COMPENSATION Served as Senior Vice President of Blackhawk Network Holdings Inc. (NASDAQ: HAWK), a leading prepaid and payments network (“Blackhawk”), and General Manager of Blackhawk Engagement Solutions (“BES”), a division of Blackhawk from October 2014 to July 2015. BES provides customized engagement and incentive programs for consumers, employees, and sales channels. She was previously an Independent Advisor to Blackhawk.
• Served as President, Chief Executive Officer and Board Member at Parago, Inc., a marketing services company, which she co-founded in 1999 and served as Chief Financial Officer. Parago was sold in October 2014 to Blackhawk. • Served as Board Member and Treasurer of the Network Branded Prepaid Card Association, a nonprofit association formed to promote the use of prepaid cards as an alternative payment method. • Recipient of the Ernst & Young Entrepreneur of the Year award in the Southwest region in 2009. • Holds a Bachelor of Business Administration in Accounting from the University of Texas. DIRECTOR QUALIFICATIONS Ms. Spottiswood has expansive business and financial services experience, which includes experience as an accountant with Arthur Andersen. Her knowledge of the payment industry and innovation makes her well-qualified to serve on our Board, to our Nominating & Governance Committee, and as Chair of our Audit Committee. | | |
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC.
Delivering on our Executive Compensation Program Key Objectives
The primary objectives of our executive compensation program are to attract, retain and motivate qualified individuals who are capable of leading our Company to meet its business objectives and to increase overall shareholder value.
To do so, our compensation program aligns the interests of management with those of our investors, creates incentives for, and rewards performances of, the individuals based on our overall success and the achievement of financial objectives. Specifically, our compensation program provides management with the incentive to achieve or maximize certain company-level performance measures. Based upon the expectations for that year, our Compensation Committee establishes performance metrics and targets that it believes will promote the best return for our shareholders given the then-current conditions. A number of business disruptions, which collectively had a significant impact on the projected financial performance of Cardtronics in 2018, influenced 2018 compensation program decisions, as discussed in detail in the “Compensation Discussion and Analysis” section of this proxy statement.
Overview of Compensation Program Governance Practices
We endeavor to maintain strong governance standards in the oversight of our executive compensation programs, including the following policies and practices that were in effect during 2018:
Performance-based compensation arrangements, including performance-based equity awards that use select performance measures intended to drive shareholder value represents a significant portion of the overall compensation opportunity.
No excise tax gross-ups or executive-only perquisites such as company cars, security systems or financial planning.20 CARDTRONICS
A compensation clawback policy that entitles the Board of Directors to seek recoupment of cash and equity awards for a portion of their awards if financial statements are restated resulting in a lesser payout or for their entire awards if they are involved in fraud or misconduct leading to the restatement.
Share ownership guidelines for executive officers and directors.
Prohibition on repricing of stock options and stock appreciation rights.
Annual advisory shareholder vote to approve the Company’s executive compensation.
An independent compensation consultant for the Compensation Committee, which performs no other consulting or other services for the Company.
| | | Edward H. WestAge: 53 Director Since: January 1, 2018 | SKILLS AND EXPERIENCE | 2019 PROXY STATEMENT | 20 |
| | BACKGROUND • Serves as our Chief Executive Officer since January 1, 2018. Joined Cardtronics in January 2016, became Chief Financial Officer in February 2016, and assumed the role of Chief Operations Officer in July 2016. • Served as President and Chief Executive Officer of Education Management Corporation, joining initially as Chief Financial Officer in 2006. • Served in a variety of executive positions within Internet Capital Group, including serving as Chief Executive Officer of ICG Commerce, the largest subsidiary of the group from 2002 to 2006. • Served in numerous roles and most recently as Executive Vice President & Chief Financial Officer for Delta Air Lines before his time at Internet Capital Group, and previous to that began his career at SunTrust. • Received the "CFO of the Year" award from Institutional Investor Magazine in 2012 and was previously named one of the "Top 40 under 40" by CFO Magazine. • Received a BBA in Finance from Emory University. DIRECTOR QUALIFICATIONS Mr. West’s current position as our Chief Executive Officer enables him to bring invaluable operational, financial, regulatory and governance insights to our Board; and his considerable role in the management of our company allows him to continually educate and advise our Board on our business, industry and related opportunities and challenges. | | | |
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Advisory Say on Pay Proposal
We urge shareholders to readBoard Skills and Experience
The Board considers a wide range of attributes when selecting and recruiting candidates. Our nominees and continuing Board members have experience and skills that are aligned with our business and strategy, and the “Compensation Discussion and Analysis” section of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives as well asfollowing matrix identifies the Summary Compensation Table for the year ended December 31, 2018primary skills, core competencies, and other related compensation tables and narrative discussions, which provide detailed information of the compensation of our Named Executive Officers. Our Compensation Committee believes that the policies and procedures articulatedattributes each Director brings to bear in the “Compensation Discussion and Analysis” section of this proxy statement are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this proxy statement help position us for long-term success.We are asking shareholders to adopt the following advisory resolution at the Annual Meeting:
RESOLVED, that the shareholders of Cardtronics approve, on an advisory basis, the compensation of Cardtronics’ Named Executive Officers as disclosed in the proxy statement for the 2019 Annual General Meeting of Shareholders of Cardtronics pursuanthis or her service to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion.
Although the vote is non-binding and is not meant to address any particular element of our executives’ compensation arrangements, our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that approving Named Executive Officer compensation is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION.
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| PROPOSAL 8: | AN ORDINARY RESOLUTION OF A NON-BINDING ADVISORY VOTE TO APPROVE THE DIRECTORS’ REMUNERATION REPORT | | | | | | | | | |
In accordance with Section 439 of the U.K. Companies Act 2006, shareholders are voting to approve, on an advisory basis, the directors’ remuneration report (other than the directors’ remuneration policy which was approved at the 2017 Annual Meeting). The report sets out the remuneration that has been paid to each person who has served as a director of Cardtronics at any time during the fiscal year ended December 31, 2018.
In accordance with the U.K. Companies Act 2006, the directors’ remuneration report has been approved by and signed on behalf of our Board, and the remuneration report will be delivered to the Registrar of Companies in the United Kingdom following the Annual Meeting.
We encourage shareholders to read the directors’ remuneration report as set forth in Annex A to this proxy statement.
This advisory vote is not binding on our Board or our Compensation Committee. A vote against this proposal will not overrule any decisions made by our Board or our Compensation Committee, or require our Board or our Compensation Committee to take any action with respect to the remuneration decisions set out therein. However, our Compensation Committee will take into account the outcome of the vote when considering future director compensation decisions.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that the adoption of the ordinary resolution approving the directors’ remuneration report is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE DIRECTORS’ REMUNERATION REPORT.
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| Accounting | PROPOSAL 9: | AN ORDINARY RESOLUTION TO RECEIVE OUR U.K. ANNUAL REPORTS AND ACCOUNTS |
In accordance with the U.K. Companies Act 2006, our Board is required to present our audited U.K. statutory accounts, together with the directors’ report, the strategic report, the directors’ remuneration report and the auditors’ report for the fiscal year ended December 31, 2018, to the shareholders at the Annual Meeting. We will propose an ordinary resolution for the shareholders at the Annual Meeting to receive our U.K. Annual Reports and Accounts and to ask questions of the representative of KPMG LLP (U.K.) in attendance at the Annual Meeting.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that receiving our U.K. Annual Reports and Accounts is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RECEIPT OF OUR U.K. ANNUAL REPORTS AND ACCOUNTS.
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| PROPOSAL 10: | AN ORDINARY RESOLUTION TO APPROVE THE TERMS OF THE AGREEMENTS AND COUNTERPARTIES PURSUANT TO WHICH WE MAY PURCHASE OUR CLASS A ORDINARY SHARES |
Under the U.K. Companies Act 2006, we, like other U.K. companies, are prohibited from purchasing our outstanding ordinary shares unless such purchase has been approved by a resolution of our shareholders. U.K. companies may purchase their own shares by “market” purchases or “off-market” purchases. Any purchases by a U.K. company of its own shares other than on a recognized investment exchange is considered to be an “off-market” purchase. NASDAQ, which is the only exchange on which our shares are traded, does not fall within the definition of a “recognized investment exchange” for the purposes of the U.K. Companies Act 2006. As such, we may only conduct off-market purchases pursuant to a form of share repurchase contract the terms of which have been approved by our shareholders. Shareholder authorization for share repurchases may only be for a maximum period of up to five years after the date of the relevant shareholder approval. We are permitted to seek approval more frequently.
On March 27, 2019, our Board approved a share repurchase program under which the Company is authorized to repurchase up to $50 million of its Class A ordinary shares outstanding through August 31, 2020. Our Board considers it prudent for the Company to have the flexibility to authorize a share repurchase program under which the Company would be able to effect off-market purchases of a certain number or value of our Class A ordinary shares. This share repurchase program may be implemented in conjunction with brokers for the Company and other financial institutions and may be effected through open market transactions, privately negotiated transactions or otherwise, including pursuant to agreements intended to comply with Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”). Prior to the completion of the our redomiciliation to the U.K., an ordinary resolution was passed on June 29, 2016, by our then sole shareholder, inter alia, authorizing the terms of a share repurchase contract with Barclays Capital Inc. to execute our repurchases (the “Barclays Repurchase Contract”), which approval remains in effect through June 28, 2021.
In order to ensure the effectiveness of any repurchase program that our Board may implement, and offer greater flexibility, we are seeking shareholder approval of the terms of six forms of share repurchase contracts.
Two of the share repurchase contracts for which we are seeking approval are proposed to be entered into with Goldman Sachs & Co. LLC (“Goldman Sachs”) only (the “GS Repurchase Contracts”):
One of the GS Repurchase Contracts provides that we may instruct Goldman Sachs periodically to purchase for resale to us such number of Class A Ordinary Shares and at such price(s) as we may determine, subject to the conditions and limitations specified in Rule 10b-18 under the Exchange Act. Goldman Sachs would receive a commission for any share purchases effected pursuant to this agreement. The agreement provides that Goldman Sachs will purchase our Class A Ordinary Shares as principal and sell any Class A Ordinary Shares so purchased to Cardtronics.
The other GS Repurchase Contract provides us with the ability to periodically repurchase our Class A Ordinary Shares through Goldman Sachs pursuant to a purchase agreement intended to comply with Rule 10b5-1 under the Exchange Act. Goldman Sachs may receive a commission pursuant to this agreement. The agreement provides that Goldman Sachs will purchase our Class A Ordinary Shares as principal and sell any Class A Ordinary Shares so purchased to Cardtronics.
Two of the share repurchase contracts for which we are also seeking approval are proposed to be entered into with HSBC Securities (USA) Inc. (“HSBC Securities”) only (the “HSBC Repurchase Contracts”):
One of the HSBC Repurchase Contracts provides that we may instruct HSBC Securities periodically to purchase for resale to us such number of Class A Ordinary Shares and at such price(s) as we may determine, subject to the conditions and limitations specified in Rule 10b-18 under the Exchange Act. HSBC Securities would receive a fee for any share purchases effected pursuant to this agreement. The agreement provides that HSBC Securities will purchase our Class A Ordinary Shares as principal and sell any Class A Ordinary Shares so purchased to Cardtronics.
The other HSBC Repurchase Contract provides us with the ability to periodically repurchase our Class A Ordinary Shares through HSBC Securities pursuant to a purchase agreement intended to comply with Rule 10b5-1 under the Exchange Act. HSBC Securities would receive a commission pursuant to this agreement. The agreement provides that HSBC Securities will purchase our Class A Ordinary Shares as principal and sell any Class A Ordinary Shares so purchased to Cardtronics.
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We are also seeking approval for two forms of share repurchase contracts which may be entered into with the Approved Counterparties (as defined below) (the “Approved Form Repurchase Contracts”, and together with the GS Repurchase Contracts and the HSBC Repurchase Contracts, the “Repurchase Contracts”):
One form of agreement provides that we may instruct the Approved Counterparty periodically to purchase for resale to us such number of Class A Ordinary Shares and at such price(s) as we may determine, subject to the conditions and limitations specified in Rule 10b-18 under the Exchange Act. The Approved Counterparty would receive a commission for any share purchases effected pursuant to this agreement. The agreement provides that the Approved Counterparty will purchase our Class A Ordinary Shares as principal and sell any Class A Ordinary Shares so purchased to Cardtronics.
The other form of agreement is a form of repurchase plan that provides us with the ability to periodically repurchase our Class A Ordinary Shares through the Approved Counterparty pursuant to a purchase agreement intended to comply with Rule 10b5-1 under the Exchange Act. The Approved Counterparty may receive a commission pursuant to this agreement. The agreement provides that the Approved Counterparty will purchase our Class A Ordinary Shares as principal and sell any Class A Ordinary Shares so purchased to Cardtronics.
We may only enter into the Approved Form Repurchase Contracts with counterparties approved by our shareholders. Accordingly, we are seeking approval to conduct share repurchases through the following counterparties (or their subsidiaries or affiliates from time to time) (collectively, the “Approved Counterparties”):
We are also seeking authority for all and any of our directors to enter into, complete and do all things necessary to effect each of the Repurchase Contracts for and on behalf of the Company.
Approval of the Repurchase Contracts and counterparties does not constitute the approval of any share repurchase program or the amount or timing of any share repurchase activity, which will be at the discretion of our Board. There can be no assurance as to the duration, amount or timing of any such repurchases under our authorized share repurchase program. Under the U.K. Companies Act 2006, shares repurchased may be held in treasury or may be cancelled. If the terms of the Repurchase Contracts are approved by our shareholders and shares are repurchased under such agreements, we will decide at the time of purchase whether to cancel them immediately or to hold them in treasury.
The authorization to approve the terms of the Repurchase Contracts and the counterparties thereto and to authorize our directors to enter into, complete and do all things necessary to effect each of the Repurchase Contracts, if granted, will be valid for five (5) years after the date the resolution is passed by our shareholders. If the resolution is not approved, the Board may utilize the Barclays Repurchase Contract to repurchase shares through the expiration of its authorization on June 28, 2021.
Each of the Repurchase Contracts will be made available in accordance with the U.K. Companies Act 2006 for inspection by our shareholders (i) at our registered office for not less than 15 days ending with the date of the Annual Meeting and (ii) at the Annual Meeting itself.
We are asking shareholders to adopt the following resolution at the Annual Meeting:
RESOLVED, that, (a) the terms of the share repurchase contracts produced at the meeting to be entered into between Cardtronics plc (“Cardtronics”) and Goldman Sachs & Co. LLC (the “GS Repurchase Contracts”) relating to the purchase by Cardtronics of its Class A ordinary shares of $0.01 each (“Class A Ordinary Shares”); (b) the terms of the share repurchase contracts produced at the meeting to be entered into between Cardtronics and HSBC Securities (USA) Inc. (the “HSBC Repurchase Contracts”) relating to the purchase by Cardtronics of its Class A Ordinary Shares; and (c) the terms of the share repurchase contracts produced at the meeting relating to the purchase by Cardtronics of its Class A Ordinary Shares (the “Approved Form Repurchase Contracts”), be and are hereby approved, that Cardtronics be authorized to enter into the GS Repurchase Contracts with Goldman Sachs & Co. LLC, to enter into the HSBC Repurchase Contracts with HSBC Securities (USA) Inc. and to enter into the Approved Form Repurchase Contracts with any of the counterparties set out in the proxy statement, and that the directors of Cardtronics be and are hereby authorized to enter into, complete and do all things necessary to execute the share repurchases under the GS Repurchase Contracts, the HSBC Repurchase
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Contracts and/or any Approved Form Repurchase Contract with any of the approved counterparties for and on behalf of Cardtronics. The authorities conferred by this resolution shall, unless varied, revoked or renewed prior to such time, expire five years after the date of the passing of this resolution.
Recommendation and Required Vote
For the terms of the Repurchase Contracts and the counterparties thereto to be approved, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that the terms of each of the Repurchase Contracts and the authorization to our directors to enter into, complete and do all things necessary to effect the Repurchase Contracts are advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE TERMS OF THEAGREEMENTS AND COUNTERPARTIES PURSUANT TO WHICH WE MAY PURCHASE OUR CLASS A ORDINARY SHARES.
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| PROPOSAL 11: | AN ORDINARY RESOLUTION TO GENERALLY AND UNCONDITIONALLY AUTHORIZE CARDTRONICS, SUBJECT TO AND IN ACCORDANCE WITH THE U.K. COMPANIES ACT 2006, TO SEND, CONVEY OR SUPPLY ALL TYPES OF NOTICES, DOCUMENTS OR INFORMATION TO SHAREHOLDERS BY ELECTRONIC MEANS, INCLUDING MAKING SUCH NOTICES, DOCUMENTS OR INFORMATION AVAILABLE ON A WEBSITE |
This resolution allows us to take advantage of the provisions of the U.K. Companies Act 2006 which, subject to complying with certain requirements, permit a company to send or supply documents and information to shareholders by electronic means, including making such documents and information available on a website, if they have agreed (generally or specifically) to such receipt and have not revoked that agreement. The documents and information covered by this resolution include, but is not limited to, our annual accounts and reports, notices of general meetings and any other documents that we are required to send to our shareholders under the U.K. Companies Act 2006.
Per the requirements of the U.K. Companies Act 2006, we have also sent a letter to each of our shareholders asking them to agree to receipt of documents and information by website posting. If a shareholder has not responded within 28 days of the sending of this request, we may take that as consent to receive documents and information by website posting, after which we intend to use website posting as the default position, without sending paper copies to the shareholder.
A shareholder can revoke its agreement to receipt by website posting at any time by writing to us. In addition, each shareholder can request a paper copy from us at any time.
Recommendation and Required Vote
For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that authorizing Cardtronics to send, convey or supply all types of notices, documents or information to shareholders by electronic means, including by making such notices, documents or information available on a website, is advisable and in the best interests of Cardtronics and our shareholders.
ACCORDINGLY, OUR BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE AUTHORIZATION TO SEND, CONVEY OR SUPPLY NOTICES, DOCUMENTS OR INFORMATION TO SHAREHOLDERS BY ELECTRONIC MEANS, INCLUDING BY MAKING THEM AVAILABLE ON A WEBSITE.
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CORPORATE GOVERNANCE
Our Governance Practices
Commitment to Good Corporate Governance
We are committed to good corporate governance. Our Board has adopted several governance documents, which include our Corporate Governance Principles, Code of Business Conduct and Ethics, Financial Code of Ethics, Related Persons Transactions Policy, Whistleblower Policy and charters for each standing committee of our Board. Each of these documents is available on our website at www.cardtronics.com and you may also request a copy of each document at no cost by writing or telephoning the following: Cardtronics plc, Attention: Company Secretary, 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042, or by telephone at (832) 308-4518.
Key Corporate Governance Highlights
Non-executive, independent Chair of the Board
All directors are independent, other than the CEO
Board’s four committees are fully independent and meet regularly
Executive sessions held in conjunction with each quarterly Board meeting
Majority vote for directors in uncontested elections
No supermajority shareholder approval requirements
We have two “audit committee financial experts” on our Audit Committee
Directors must notify Nominating & Governance Committee prior to joining another public company Board
Board Composition Annual Assessment of DirectorsSize, Composition, and committees have the authority to retain independent advisorsStructure Board of Directors and committees conduct performance reviews annually
Robust stock ownership and retention guidelines for directors and executive officers
22% of the Board is female (2 of 9 directors), including the Chair of our Audit Committee
Insider trading policy prohibits hedging and pledging transactions in our shares
Code of Ethics
Our Board has adopted a Code of Business Conduct and Ethics (“Code of Ethics”) for our directors, officers and employees. In addition, our Board has adopted a Financial Code of Ethics for our principal executive officer, principal financial officer, principal accounting officer, and other accounting and finance officers. We intend to disclose any amendments to or waivers of these codes on behalf of our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and persons performing similar functions, on our website at www.cardtronics.com promptly following the date of any amendment or waiver.
Recent Stockholder Engagement
Our Board and management team place great value on the opinions and feedback of our stockholders, which is why we have proactively reached out to many shareholders to hear their views on corporate governance, social responsibility and executive compensation matters. During 2018, our outreach program targeted investors representing over 75% of our outstanding common stock, soliciting input on these key areas.
Our Board
Board Composition
In connection with the addition of two new directors to our Board in June 2018, our Board increased its size to ten. Following the departure of Dennis Lynch from our Board in October 2018, our Board reduced its size to nine. Accordingly, our Board is currently comprised of nine directors divided into three classes, with one class elected at each annual general meeting of shareholders to serve for a three-year term. The term of our Class III directors expires at the Annual Meeting, the term of our Class I directors expires at the 2020 Annual General Meeting of Shareholders, and the term of our Class II directors expires at the 2021 Annual General Meeting of Shareholders, with each director to hold office until his or her successor is duly elected and qualified or until the earlier of his or her death, resignation, retirement or removal.
As a result of the changes to our Board in 2018 described above, the size of the classes of our Board are not as nearly equal in number as possible as required by our Articles of Association. We currently have three Class I directors: Jorge M. Diaz, G. Patrick Phillips and Douglas L. Braunstein; two Class II directors: J. Tim Arnoult and Juli C. Spottiswood; and four Class III directors: Julie Gardner, Edward H. West, Mark Rossi and Warren C. Jenson. In order to reconfigure our classes so that they are as nearly equal as possible, and subject to election pursuant to Proposal 2, Mr. West has agreed to shift from a Class III director to a Class II director (see Proposal 2 above). Therefore, following the Annual Meeting, if all director nominees are elected, each of our classes will consist of three directors, consistent with the requirements of our Articles of Association.
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Our Nominating & Governance Committee considers and makes recommendations to our Board concerning the appropriate size and needs of our Board and considers candidates to fill new positions created by expansion or vacancies that occur by resignation, retirement, or any other reason. Following the departure of J. Tim Arnoult from our Board in November 2019, our Board consisted of nine seats with one vacancy. On March 20, 2020, on the recommendation of the Nominating & Governance Committee, the Board increased its size to ten directors and appointed Michelle Moore and Rahul Gupta to the Board to serve until the 2020 Annual General Meeting. Ms. Moore will serve as a Class I director, and Mr. Gupta will serve as a Class II director. As announced on March 24, 2020, Jorge Diaz has decided to retire from the Board and not seek re-election at the 2020 Annual General Meeting and, as such, after the 2020 Annual General Meeting, our Board will have nine directors. The term of our Class I directors expires at the Annual Meeting, the term of our Class II directors expires at the 2021 Annual General Meeting of Shareholders, and the term of our Class III directors expires at the 2022 Annual General Meeting of Shareholders, with each director to hold office until his or her successor is duly elected and qualified or until the earlier of his or her death, resignation, retirement or removal. Director Selection and Nomination Process Our Nominating & Governance Committee is responsible for establishing criteria for selecting new directors and actively seeking individuals to become directors for recommendation to our Board. | | | | | | | | | | | In addition to having a proven track record of high business ethics and integrity, the present criteria for director qualifications include: • possessing the qualifications of an “independent” director per applicable NASDAQ listing rules; • capacity to devote sufficient time to learn and understand our marketplace and industry and to prepare for and attend our meetings; • commitment to enhancing shareholder value; • ability to develop productive working relationships with other board members and management; • demonstrated skills, background and competencies that complement and add diversity to our Board; and • possessing demonstrated experience in financial services. The Nominating & Governance Committee regularly reassess these criteria based on the needs of the Company and does not require that a successful candidate possess each qualification. | | Process for Selecting Directors | | 1 | The Nominating & Governance Committee evaluates the composition of the Board and the Committees of the Board at least once annually and recommends changes to the Board. Also, it actively seeks and identifies individuals whom it believes are qualified to become directors. | | 2 | Candidates are interviewed by several members of the Board as well as the Chief Executive Officer. | | 3 | Candidates complete and submit detailed questionnaires and undergo background checks to ensure independence under SEC and NASDAQ rules, identify any possible related party transaction and to assess committee appointments. | | 4 | The Nominating & Governance Committee makes formal appointment recommendations to the Board, and the Board votes on any Board or committee appointments. |
Our Nominating & Governance Committee may consider candidates for our Board from any reasonable source, including from a search firm engaged by our Nominating & Governance Committee or shareholder recommendations, provided that the procedures set forth above are followed. Our Nominating & Governance Committee does not intend to alter how it evaluates candidates based on the source of the recommendation. However, in assessing a candidate’s relevant business experience, our Nominating & Governance Committee may consider previous experience as a member of our Board. Our Board must extend an invitation to join our Board.
| | | COMMITMENT TO DIVERSITY Our Board values diversity as a factor in selecting nominees to serve on our Board, and believes that the diversity among our directors provides significant benefit to our Board and Cardtronics. Therefore, our Nominating & Governance Committee considers diversity as part of its criteria in selecting nominees for directors. Such considerations may include gender, race, national origin, functional background, executive or professional experience, and international business experience. | |
From time to time, our Nominating & Governance Committee may request additional information from the nominee or the nominating shareholder. Shareholder Nominations Shareholders may recommend potential candidates to our Board by sending a written request to our Company Secretary Aimie Killeen, at 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042, per our Articles of Association. The requirements and procedures for shareholder recommendations are described in the section of this proxy statement entitled “Proposals for the 2021 Annual General Meeting of Shareholders”. Our Nominating & Governance Committee assesses the independence of each director and each prospective director and recommends to the full Board for its determination of whether or not each director and each prospective director is independent. Based on the evaluation of all relevant transactions or relationships betweeninvolving each director, or any of his or her family members, and our Company, senior management, U.S. independent registered accounting firm, and U.K. statutory auditors, the Board has affirmatively determined that all of our directors are independent under the applicable standards set forth by NASDAQ and the SEC, with the exception of Mr. West, our Chief Executive Officer. In making these independence determinations, our Nominating & Governance Committee reviewed, and presented to the Board to consider, the following relationships and transactions, which the Board found did not affect the independence of the applicable directors: | • | Douglas L. Braunstein. Mr. Braunstein is the Managing Partner and Co-Founder of HEC, which currently owns approximately 17.6% of our outstanding shares. |
Douglas L. Braunstein. Mr. Braunstein is the Managing Partner and Co-Founder of HEC, which currently owns approximately 18.3% of our outstanding shares. | • | G. Patrick Phillips. G. Patrick Phillips.Mr. Phillips serves on the board of directors of USAA FSB where he served on the Finance and Audit Committees and Audit Committees. He currently serves on the Executive Committee and as Chair of the Risk Committee and USAA FSB is one of many financial institutions that brand our ATMs and is a customer of our Allpoint network. The amounts received from USAA FSB for the years ended December 31, 2016, 2017 and 2018 were not material. The Company has a managed services agreement with Bain & Company, which provides services to the Company from time to time and Mr. Phillips is an adviser to Bain & Company, but he does not provide significant services for Bain & Company. |
Board Leadership Structure
Our Board has determined that having a non-executive director serve as Chair of our Board is in the best interest of our shareholders at this time. Our Chief Executive Officer is responsible for setting our strategic direction and providing us day-to-day leadership, while the Chair of our Board provides guidance to our Chief Executive Officer and sets the agenda for Board meetings and presides over meetings of the full Board as well as the executive sessions of independent directors. We believe this structure ensures a greater role for the non-executive directors in the oversight of our Company and active participation of the non-executive directors in setting agendas and establishing priorities and procedures for the work of our Board.
On October 31, 2018, Dennis Lynch stepped down as Chair of the Risk Committee and USAA FSB is one of many financial institutions that brand our ATMs and is a customer of our Allpoint network. The Company has a managed services agreement with Bain & Company, which provides services to the Company from time to time, and Mr. Phillips was an adviser to Bain & Company, but he did not provide significant services for Bain & Company.
CORPORATE GOVERNANCE Our Board and Committees Our Commitment to Good Corporate Governance We are committed to good corporate governance and accountability to our shareholders and other important continuances, as a director. The Board appointed Mark Rossi to succeed Mr. Lynch as the independent, non-executive director. Role in Risk Oversight
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic and regulatory risks, and others, such as the impact of competition, change in consumer behavior, and technological changes. Management is responsible for the day-to-day management of risks faced by our Company, while our Board, as a whole and through its committees, has the responsibility for the oversight of risk management. In its risk oversight role, our Board is responsible for ensuring that the risk management processes designed and implemented by management are adequate and functioning as designed. Specifically, theappropriate. Our Board has regularly discussed and focused on cybersecurity risks and the effectiveness of our strategy.
Our Board believes that establishing the right “tone at the top” and that full and open communication between management and our Board are essential for effective risk management and oversight. Our Chair has regular discussions with our Chief Executive Officer and other executive officers to discuss strategy and risks facing us, and our Board is regularly updated by our management on strategic matters involving our operations.
While our Board is ultimately responsible for risk oversight, each of our Board committees assists our Board in fulfilling its oversight responsibilities in certain areas of risk. Our Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and, in accordance with NASDAQ listing standards, discusses policies with respect to risk assessment and risk management. Our Compensation Committee assists our Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs as described in more detail in “Compensation Discussion and Analysis” below. For example, a minimum performance qualifier under our cash bonus program requires that executives are required to complete a specifically assigned corporate and compliance training demonstrating our commitment to ethics and compliance at all levels of our Company. Our Nominating & Governance Committee assists our Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance. Our Finance Committee assists our Board in fulfilling its oversight responsibilities with respect to our capital structure, interest rate risk management and insurance policies and coverage.
Meetings
Meetings. Our Board held a total of six (four quarterly and two special meetings) during the year ended December 31, 2018. During 2018, each director attended at least 75% of the aggregate of the total number of meetings of our Board and the total number of meetings held by all Board committees onadopted several governance documents, which such person served.
Executive Sessions – Presiding Director. According toinclude our Corporate Governance Principles, our independent directors
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must meet in executive session at each quarterly meeting. The ChairCode of our Board presides at these meetingsBusiness Conduct and is responsibleEthics, Financial Code of Ethics, Related Persons Transactions Policy, Whistleblower Policy and charters for preparing an agenda for these executive sessions.
Annual Meeting Attendance. All of our serving directors attended our 2018 annual meeting held on May 16, 2018. We do not have a formal policy regarding director attendance at annual meetings. However, our directors are expected to attend all Board and committee meetings, as applicable, and to meet as frequently as necessary to properly discharge their responsibilities.
Limitation on Public Company Board Service
Members of our Audit Committee are prohibited from serving on audit committees of more than two other public companies. In addition, our Board monitors the number of public company boards on which each director serves and develops limitations on such service as appropriate to ensure the ability of each director to fulfill his or her duties, as required by applicable securities laws and NASDAQ listing standards.
Board and Committee Self-Evaluation
Our Board and each standing committee of our Board conduct an annual self-evaluation to determine whether they are functioning effectively. Our Nominating & Governance Committee leads our Board’s self-evaluation effort by conducting an annual evaluationBoard. Each of our Board’s performance. Similarly, each committee reviews the results of its evaluation to determine whether any changes need to be made to the committee or its procedures.
Director Selection and Nomination Process
Our Nominating & Governance Committeethese documents is responsible for establishing criteria for selecting new directors and actively seeking individuals to become directors for recommendation to our Board. In addition to having a proven track record of high business ethics and integrity, the present criteria for director qualifications include: (i) possessing the qualifications of an “independent” director in accordance with applicable NASDAQ listing rules; (ii) capacity to devote sufficient time to learn and
understand our marketplace and industry and to prepare for and attend our meetings; (iii) commitment to enhancing shareholder value; (iv) ability to develop productive working relationships with other board members and management; (v) demonstrated skills, background and competencies that complement and add diversity to our Board; and (vi) possessing demonstrated experience in international business. Our Nominating & Governance Committee does not require that a successful candidate possess each and every criteria.
Our Board values diversity as a factor in selecting nominees to serveavailable on our Board, website at www.cardtronics.com,and believes thatyou may also request a copy of each policy at no cost by writing or telephoning the diversity among our directors provides significant benefit to our Board and Cardtronics. Therefore, our Nominating & Governance Committee considers diversity as part of its criteria in selecting nominees for directors. Such considerations may include gender, race, national origin, functional background, executive or professional experience and international business experience.
Our Nominating & Governance Committee may consider candidates for our Board from any reasonable source, including from a search firm engaged by our Nominating & Governance Committee or shareholder recommendations, provided that the procedures set forth below are followed. Our Nominating & Governance Committee does not intend to alter the manner in which it evaluates candidates based on whether the candidate is recommended by a shareholder or not. However, in evaluating a candidate’s relevant business experience, our Nominating & Governance Committee may consider previous experience as a member of our Board. Any invitation to join our Board must be extended by our Board.
Shareholders may recommend potential candidates to our Board by sending a written request to ourfollowing: Cardtronics plc, Attention: Company Secretary, Aimie Killeen, at 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042, in accordance with our Articles of Association. The requirements and procedures for shareholder recommendations are described in the section of this proxy statement entitled “Proposals for the 2020 Annual General Meeting of Shareholders.”
From time to time, our Nominating & Governance Committee may request additional information from the nominee or the nominating shareholder.
by telephone at (832) 308-4518. | | | KEY CORPORATE GOVERNANCE HIGHLIGHTS • Non-executive, independent Chair of the Board • All directors are independent, other than the CEO • Board’s four committees are fully independent and meet regularly • Executive sessions held in conjunction with each quarterly Board meeting • Majority vote for directors in uncontested elections • No supermajority shareholder approval requirements • We have two “audit committee financial experts” on our Audit Committee • Directors must notify Nominating & Governance Committee before joining another public company Board • Board and committees have the authority to retain independent advisors • Board and committees conduct performance reviews annually • Robust share ownership and retention guidelines for directors and executive officers • 30% of the Board is female (3 of 10 directors), including the Chair of our Audit Committee • Shareholder right to call special meetings with 5% ownership • No dual-class capital structure • Robust investor outreach for input on governance, compensation, and social responsibility • Insider trading policy prohibits our directors, executive officers, employees, and consultants hedging or pledging our shares | |
Board Leadership Structure | | | | Our Board regularly reviews its structure and has determined that having a non-executive director serve as Chair of our Board is in the best interest of our shareholders at this time. We believe this structure ensures a greater role for the non-executive directors in the oversight of our Company and active participation of the non-executive directors in setting agendas and establishing priorities and procedures for the work of our Board. | | | | | Our Chief Executive Officeris responsible for setting our strategic direction and providing us day-to-day leadership. | The Chair of our Board provides guidance to our Chief Executive Officer and sets the agenda for Board meetings and presides over meetings of the full Board as well as the executive sessions of independent directors. | | |
Committees of Ourthe Board General
Board Committees.
Our Board currently has four standing committees: an Audit Committee, a Compensation Committee, a Nominating & Governance Committee, and a Finance Committee. Each committee is comprised of only independent directors as currently requireddefined under the applicable SEC’sSEC rules and regulations and NASDAQ listing standards, and eachstandards. Each committee is governed by a written charter approved by our Board. These charters formBoard and which forms an integral part of our corporate governance policies, and a copy of each charter is available on our website at www.cardtronics.com.www.cardtronics.com. | 2019 PROXY STATEMENT | 30
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The table below provides the current composition of each committee of our Board: | | | | | Jorge M. Diaz | Member | | | | | Julie Gardner
| | | | | Warren C. Jenson
| | | | | G. Patrick Phillips
| | | | | Mark Rossi
| | | | | Juli C. Spottiswood
| | | | | Edward H. West
| | | | Committee Chair |
Audit Committee Committee Chair
Our Audit Committee is comprised entirely of directors who satisfy the standards of independence established under the applicable SEC rules and regulations, NASDAQ listing standards, and our Corporate Governance Principles. In addition,Also, each member of our Audit Committee satisfies the financial literacy requirements of NASDAQ listing standards. Ms. Spottiswood (our Chair) and Mr. Phillips each qualify as an “audit committee financial expert” within the meaning of the SEC’s rules and regulations. Our Audit Committee is appointed by our Board to:
assist our Board in fulfilling its oversight responsibilities with respect to our accounting and financial reporting process (including management’s development and maintenance of a system of internal accounting and financial reporting controls) and audits of our financial statements;
assist our Board in overseeing the integrity of our financial statements;
assist our Board in overseeing our compliance with legal and regulatory requirements;
assist our Board in overseeing the qualifications, independence and performance of both our U.S. independent registered public accounting firm and the independent U.K. auditor firm engaged to act as Cardtronics’ U.K. statutory auditors, in each case, engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services;
assist our Board in overseeing the effectiveness and performance of our internal audit function;
in consultation with our Board, meet with management regularly regarding the Company’s key risks related to data and cybersecurity;
prepare the Annual Audit Committee Report for inclusion in our proxy statement for our annual general meeting of shareholders; and
perform such other functions as our Board may assign to our Audit Committee from time to time.
The Report of our Audit Committee is set forth under “Audit Matters — Report of our Audit Committee” below.
Our Audit Committee held eight meetings during the fiscal year ended December 31, 2018.
| | | | | MEMBERSJuli C. Spottiswood (Chair) Jorge M. Diaz Julie Gardner G. Patrick Phillips MEETINGS IN 2019: 7 The Report of our Audit Committee is set forth under “Audit Matters — Report of our Audit Committee” below. | 2019 PROXY STATEMENT | 31PRINCIPAL RESPONSIBILITIES:
Pursuant to its charter, the purposes of the Audit Committee are to, among other things: • assist our Board in fulfilling its oversight responsibilities for our accounting and financial reporting process (including management’s development and maintenance of a system of internal accounting and financial reporting controls) and audits of our financial statements; • assist our Board in overseeing the integrity of our financial statements; • assist our Board in overseeing our compliance with legal and regulatory requirements; • assist our Board in overseeing the qualifications, independence, and performance of both our U.S. independent registered public accounting firm and the independent U.K. auditor firm engaged to act as Cardtronics’ U.K. statutory auditors, in each case, engaged for preparing or issuing an audit report or performing other audit, review, or attest services; • assist our Board in overseeing the effectiveness and performance of our internal audit function; • in consultation with our Board, meet with management regularly regarding the Company’s key risks related to data and cybersecurity; • prepare the Annual Audit Committee Report for inclusion in our proxy statement for our annual general meeting of shareholders • set the overall corporate “tone” for quality financial reporting, sound business risk practices, and ethical behavior; and • perform such other functions as our Board may assign to our Audit Committee from time to time. | | |
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| Compensation Committee | Compensation Committee
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Our Compensation Committee is comprised entirely of directors who satisfy the standards of independence established under the applicable SEC rules and regulations, NASDAQ listing standards, and our Corporate Governance Principles. | | | | | MEMBERS G. Patrick Phillips (Chair) Douglas L. Braunstein Julie Gardner Warren C. Jenson MEETINGS IN 2019: 6 The Report of our Compensation Committee is set forth under “Compensation Committee Report” below. | PRINCIPAL RESPONSIBILITIES: Pursuant to its charter, the purposes of the Compensation Committee are to, among other things: • oversee the responsibilities of our Board relating to compensation of our directors and executive officers; • produce the annual Compensation Committee Report for inclusion in our proxy statement and Annual Report on Form 10-K, as applicable, per applicable rules and regulations; and • design, recommend and evaluate our director and executive compensation plans, policies, and programs. In addition, our Compensation Committee works with our executive officers, including our Chief Executive Officer, to implement and promote our executive compensation strategy. See “Compensation Discussion and Analysis” and “Executive Compensation” for additional information on our Compensation Committee’s processes and procedures for the consideration and determination of executive compensation and “Director Compensation” for further details on its review and determination of director compensation. According to its charter, our Compensation Committee has the sole authority, at our expense, to retain, terminate, and approve the fees and other retention terms of outside consultants to advise our Compensation Committee in connection with the exercise of its powers and responsibilities. | | |
Compensation Committee Interlocks and Insider Participation During 2019, Douglas L. Braunstein, Julie Gardner, Warren Jenson, and G. Patrick Phillips served on our Compensation Committee. During 2019, no member of our Compensation Committee are to:oversee the responsibilities of our Board relating to compensation of our directors andserved as an executive officers;
produce the annual Compensation Committee Report for inclusion in our proxy statement and Annual Reportofficer or employee (current or former) while serving on Form 10-K, as applicable, in accordance with applicable rules and regulations; and
design, recommend and evaluate our director and executive compensation plans, policies and programs.
In addition, our Compensation Committee worksor had any relationships with us or any of our subsidiaries requiring disclosure. Additionally, none of our executive officers including our Chief Executive Officer, to implement and promote our executive compensation strategy. See “Compensation Discussion and Analysis” and “Executive Compensation” for additional information on our Compensation Committee’s processes and procedures for the consideration and determination of executive compensation and “Director Compensation” for additional information on its consideration and determination ofhave served as a director compensation. Pursuant to its charter, our Compensation Committee has the sole authority, at our expense, to retain, terminate and approve the fees and other retention terms of outside consultants to advise our Compensation Committee in connection with the exercise of its powers and responsibilities.
The Reportor member of our Compensation Committee is set forth under “Compensationof any other entity whose executive officers served as a director or member of our Compensation Committee.
Nominating & Governance Committee Report” below.Our Compensation Committee held six meetings during the fiscal year ended December 31, 2018.
| Nominating & Governance Committee
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Our Nominating & Governance Committee identifies individuals qualified to become members of our Board, makes recommendations to our Board regarding director nominees for the next annual general meeting of shareholders, and develops and recommends corporate governance principles to our Board. Our Nominating & Governance Committee, in its business judgment, has determined that it is comprised entirely of directors who satisfy the applicable standards of independence established under the SEC’s rules and regulations, NASDAQ listing standards, and our Corporate Governance Principles. For information regarding our Nominating & Governance Committee’s policies and procedures for identifying, evaluating, and selecting director candidates, including candidates recommended by shareholders, see “Corporate Governance—Our Board—Director Selection and Nomination Process” above. The purpose of our Nominating & Governance Committee is to serve as an independent and objective body to:
assist our Board by identifying individuals qualified to become Board members and to recommend that our Board select the director nominees for election at the annual meetings of shareholders or for appointment to fill vacancies on our Board;
recommend to our Board director nominees for each committee of our Board;
advise our Board about appropriate composition of our Board and its committees;
advise our Board about and recommend to our Board appropriate corporate governance practices and to assist our Board in implementing those practices;
lead our Board in its annual review of the performance of our Board, its committees and management; and
perform such other functions as our Board may assign to our Nominating & Governance Committee from time to time.
Our Nominating & Governance Committee held five meetings during the fiscal year ended December 31, 2018.
| | | | | MEMBERSMark Rossi (Chair) Jorge M. Diaz Juli C. Spottiswood MEETINGS IN 2019: 5 | 2019 PROXY STATEMENT | 32PRINCIPAL RESPONSIBILITIES:
Pursuant to its charter, the purposes of the Nominating & Governance Committee are to, among other things: • assist our Board by identifying individuals qualified to become Board members and to recommend that our Board select the director nominees for election at the annual meetings of shareholders or for appointment to fill vacancies on our Board; • recommend to our Board director nominees for each committee of our Board; • advise our Board about appropriate composition of our Board and its committees; • advise our Board about and recommend to our Board appropriate corporate governance practices and to assist our Board in implementing those practices; • lead our Board in its annual review of the performance of our Board, its committees and management; and • perform such other functions as our Board may assign to our Nominating & Governance Committee from time to time. |
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Finance Committee Our Nominating & Governance Committee, in its business judgment, has determined that our Finance Committee is comprised entirely of directors who satisfy the applicable standards of independence established under NASDAQ listing standards and our Corporate Governance Principles. To assist our Finance Committee, our Chief Executive Officer, Chief Financial Officer, and Treasurer are invited to all meetings. | | | | | MEMBERS Warren C. Jenson (Chair) Douglas L. Braunstein Mark Rossi MEETINGS IN 2019: 6 | PRINCIPAL RESPONSIBILITIES: Pursuant to its charter, our Finance Committee, among other things: • assists our management with respect to corporate insurance programs, derivative arrangements, significant financing arrangements, and investment decisions; • evaluate and recommend policies regarding capital allocation; • reviewing and approving certain acquisitions/investments above management’s approval level; and • development and oversight of derivative instruments, comprehensive plans to mitigate interest rate and foreign currency exposure. Accordingly, our Finance Committee will review and recommend to our Board an Interest Rate Risk Management Policy and any changes thereto at least annually. | | |
Director Engagement Meetings and Attendance Our Finance Committee assists our management with respect to corporate insurance programs, derivative arrangements, significant financing arrangementsBoard held a total of nine (four quarterly and investment decisions, reviewing and approving certain acquisitions/investments above management’s approval level and the development and oversight of a comprehensive plan to mitigate interest rate exposure. Accordingly, our Finance Committee will review and recommend to our Board an Interest Rate Risk Management Policy and any changes thereto at least annually.Our Finance Committee held five meetingsspecial meetings) during the fiscal year ended December 31, 2018.
2019. During 2019, each director attended at least 75% of the aggregate of the total number of meetings of our Board and the total number of meetings held by all Board committees on which such person served.All of our serving directors attended our 2019 annual meeting held on May 15, 2019. We do not have a formal policy regarding director attendance at annual meetings. However, our directors are expected to attend all Board and committee meetings, as applicable, and to meet as frequently as necessary to discharge their responsibilities. | | | | | | | | | | Attendance at Board/Committee Meetings during 2019 | | Attendance at 2019 Shareholder Meeting | | | | |
According to our Corporate Governance Principles, our independent directors must meet in executive session at each quarterly meeting. The Chair of our Board presides at these meetings and is responsible for preparing an agenda for these executive sessions. Beyond the Boardroom The Nominating and Governance Committee develops and recommends to all directors an education plan to keep the Board updated on the latest issues, challenges, and trends. In addition, when the Board meets for in-person meetings, it often arranges for presentations to be made by counsel, advisers, regulators or other key stakeholders as part of the continuing education and professional development of the Board and to keep the Board well informed as to the latest developments in the industry. Limitation on Public Company Board Service Members of our Audit Committee are prohibited from serving on audit committees of more than two other public companies. In addition, our Board monitors the number of public company boards on which each director serves and develops limitations on such service as appropriate to ensure the ability of each director to fulfill his or her duties, as required by applicable securities laws and NASDAQ listing standards. Board and Committee Self-Evaluations Our Board and each standing committee of our Board conduct an annual self-evaluation to determine whether they are functioning effectively. Our Nominating & Governance Committee leads our Board’s self-evaluation effort by performing a yearly evaluation of our Board’s performance. Similarly, each committee reviews the results of its assessment to determine whether any changes need to be made to the committee or its procedures. The Board recognizes that a thoughtful and comprehensive Board evaluation process is an integral component of a robust corporate governance framework and an effective Board. Each year, our Board undergoes an evaluation process to determine areas of strength, as well as to identify opportunities for further development. Our Nominating & Governance Committee leads our Board’s self-evaluation effort by reviewing and recommending a process for that year. Then the Chair of Nominating & Governance reviews the results of the evaluation with the Board and the chair of each Board committee once the evaluation is completed. Generally, directors are asked to complete a written evaluation of the Board and each of its committees. The Nominating & Governance Committee reviews the results. It then discusses the results with the Board and each committee to determine whether any changes need to be made to the committee or its processes. In addition to the formal evaluation processes conducted on an annual basis, directors share perspectives, feedback, and suggestions year-round. In addition to the formal yearly Board and committee evaluation, our Board Chair speaks with each Board member from time-to-time and receives valuable input regarding Board and committee practices. The Nominating & Corporate Governance Committee reviews the self-evaluation process from time-to-time to reflect best practices. For 2020, the Nominating & Corporate Governance Committee recommended a process involving an independent third-party to complete a comprehensive analysis of the Board’s overall effectiveness.
Accordingly, we have engaged a third-party to facilitate the 2020 Board and committee self-evaluation process, which involves the following steps: | | | | | | | | | | | | | | | | | | | | | | | Interviews: Individual, confidential interviews with each director
| 2019 PROXY STATEMENT | 33 | Review Feedback: Review and analysis of feedback by third-party
| | Discussion of Results: Third-party to discuss feedback with Chair of Nominating & Corporate Governance Committee and deliver findings to the entire Board and each of its committees | | Improvements: Board considers and implements improvements based on the findings and recommendations from the evaluation process
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | We anticipate that improvements, as the Board deems necessary, will be made during 2020 based on the information gained through this self-evaluation process, which is intended to provide the Board with insight into the following key areas: | | | General Board practices, information, and resources | | Contributions by individuals directors | | | Board dynamics and culture | | Director independence | | | Board leadership | | Relationship with management | | | Board composition, skills, tenure and refreshment | | Succession planning
| | | Committee leadership and composition | | | | | | | | | | | | | | |
Board Responsibilities Risk Oversight Risk is inherent with every business, and how well a company manages risk can ultimately determine its success. We face economic and regulatory risks, in addition to risks related to cybersecurity, the impact of competition, changes in consumer behavior, and technological changes, among others. Management is responsible for the day-to-day management of risks faced by our Company. At the same time, our Board, as a whole and through its committees, has the responsibility for the oversight of risk management. Our Board believes that establishing the right “tone at the top” and that full and open communication between management and our Board are essential for effective risk management and oversight. Our Chair has regular discussions with our Chief Executive Officer and other executive officers to discuss strategy and risks facing us. Our Board is also regularly updated by our management team on strategic matters involving our operations and trends driving these risks, including related to environmental, social and governance issues and discusses these risks at meetings and in executive session, as appropriate. While our Board is ultimately responsible for risk oversight, each of our Board committees assists with oversight responsibilities in certain areas of risk.
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| | | | | | | | | | | | | BOARD • In its risk oversight role, our Board is responsible for ensuring that the risk management processes designed and implemented by management are adequate and functioning as designed. • Specifically, the Board regularly discusses and focuses on cybersecurity risks and the effectiveness of our strategy in light of such risks. • In setting and monitoring strategy, the Board, along with management, considers the risks and opportunities that impact the long-term sustainability of the Company’s business model and whether the approach is consistent with the Company’s risk appetite. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AUDIT COMMITTEE | | COMPENSATION COMMITTEE | | | NOMINATING & GOVERNANCE COMMITTEE | | FINANCE COMMITTEE | • Our Audit Committee assists our Board in fulfilling its oversight responsibilities for risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and, per NASDAQ listing standards, discusses policies concerning risk assessment and risk management. | | • Our Compensation Committee assists our Board in fulfilling its oversight responsibilities for the management of risks arising from our compensation policies and programs as described in more detail in “Compensation Discussion and Analysis” below. For example, a minimum performance qualifier under our cash bonus program requires that executives are required to complete a specifically assigned corporate and compliance training demonstrating our commitment to ethics and compliance at all levels of our Company. | | | • Our Nominating & Governance Committee assists our Board in fulfilling its oversight responsibilities for the management of risks associated with Board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance. | | • Our Finance Committee assists our Board in fulfilling its oversight responsibilities for our capital structure, capital allocation, interest rate risk management, foreign exchange risk management, tax and insurance policies, and coverage. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cardtronics maintains a Risk Management Program through which Management: • Identifies risks that may impact on strategic and business objectives • Measures the potential likelihood and severity of such risks • Ensures that risks are prioritized • Implements risk responses consistent with risk appetite • Takes a holistic view of risk • Monitors risk status on a continuing basis • Reports to the Board on risk management performance, trends and any material deviance | | | | | | | | | | | | |
| | | MODERN SLAVERY Our Board has adopted a policy on Slavery and Human Trafficking in Compliance with the Modern Slavery Act 2015 (“Modern Slavery Policy”) and a Statement of Compliance with the Modern Slavery Act 2015 (“Modern Slavery Statement”), which are reviewed on an annual basis. The Modern Slavery Policy and Modern Slavery Statement confirms Cardtronics’ commitment to detecting and preventing modern slavery throughout its supply chain, consistent with its disclosure obligations under the Modern Slavery Act 2015. Our Board has also adopted a Supplier Code of Conduct which sets out Cardtronics’ expectation that all of its contractors, suppliers and other business partners are held to the same high standards and prohibit the use of forced, compulsory or trafficked labor, or anyone held in slavery or servitude, whether adults or children. | |
| | | DATA PRIVACY Cardtronics is subject to a number of federal, state, provincial, and international privacy laws (including but not limited to the General Data Protection Regulation, the California Consumer Privacy Act, the Personal Information Protection and Electronic Documents Act), which govern how it collects, stores, uses and discloses the information it collects from certain individuals and companies. The Company continues to navigate the ever-changing regulatory landscape as it responds to current and emerging data privacy legislation across the globe. The Board maintains oversight by reviewing periodic updates on the relevant legislation, as well as actively participating in Cardtronics’ risk management program, which includes a review of Cardtronics’ current data privacy policies, procedures, and other controls. | |
| | | CLIMATE-RELATED RISK AND DISCLOSURE The Company recognizes that climate change is an area of increasing interest to long-term investors as they evaluate which businesses may be impacted as the world evolves into a lower carbon economy. While Cardtronics currently discloses certain energy-consumption related information required under the UK Companies Act, we have not yet implemented a comprehensive framework for evaluating the Company and its exposure to climate change. The Company plans to evaluate various frameworks for assessing climate change during the course of 2020. | |
Code of Ethics Our Board has adopted a Code of Business Conduct and Ethics (“Code of Ethics”) for our directors, officers, and employees. In addition, our Board has adopted a Financial Code of Ethics for our principal executive officer, principal financial officer, principal accounting officer, and other accounting and finance officers. We intend to disclose any amendments to or waivers of these codes on behalf of our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and persons performing similar functions, on our website at www.cardtronics.com promptly following the date of any amendment or waiver. Succession Planning and Talent Development A strategic priority for our Board is valuing and developing our people. To support this priority, the directors regularly discuss talent development and management succession for senior leaders with the CEO, who provides his assessment of those leaders and their potential to succeed in key roles. In executive sessions, the Board also routinely reviews CEO development and succession to maintain current long-term and emergency CEO succession plans. Our Board conducts these assessments within the context of the business strategy, with a focus on risk management. These discussions provide an opportunity for our Board to ensure management is implementing development plans and programs to enhance the skills and abilities of successor candidates for critical roles. Additionally, the Board regularly reviews candidates for senior leadership positions to ensure that qualified and diverse successor candidates are available for critical positions. Throughout the year, the Board also meets key leaders across the organization through formal presentations and informal events, both on-site at corporate facilities and at off-site venues in core corporate locations.
Human Capital Management & Culture In partnership with management, our Board believes that how we do our work at Cardtronics is just as important as what we do as a Company. Our actions demonstrate the value we place on our people. One of the Board’s most important oversight roles, therefore, is ensuring that the business strategy is aligned to the people and culture strategy, and the Company has the leadership and talent to deliver on this important goal. Our Board places high value on ensuring the leadership of the Company creates a positive, inclusive, and diverse work environment for its employees in which all have the opportunity to realize their potential as individuals and teams. It takes an active interest in ensuring all employees understand and feel connected to the purpose-driven mission, vision, and values of the organization, which management reimagined in 2018 to improve the alignment of the people, culture, and business strategies. This work directly served the management priority of engendering employee pride, highlighting the pride all connected with Cardtronics can share concerning its global role as a Champion of Cash, providing payment choice within the communities we serve. Our Company values include One Team, Trust, Excellence, Ambitious, and Innovation. Management purposefully defined these values to drive specific behaviors in the service of Cardtronics’ long-term success and the achievement of its vision. The Board regularly reviews management’s ongoing, focused efforts to embed these values in all our employees do in their day-to-day work to serve our customers best. In 2018 and 2019, this included directly linking the demonstration of values-driven behaviors to performance management and a portion of every employee’s compensation to incentivize behavior and performance in line with our desired culture. Our Board firmly believes these efforts reinforce our ability to attract, engage, and retain the talent needed for long-term success.  In sum, our Board actively takes an interest in ensuring employees are engaged. In addition to the above, our Board regularly reviews results from pulse surveys, annual employee engagement surveys, and data from other feedback platforms. This information provides the Board with input from all levels of the organization, enabling it to assess performance against inclusion and diversity goals, and to hold leaders accountable for developing talent, and cultivating a winning culture. Shareholder Engagement Our Board and management team place great value on the opinions and feedback of our shareholders. Therefore, we have proactively reached out to many shareholders to hear their views on corporate governance, social responsibility, and executive compensation matters. During 2019, our outreach program targeted investors representing over 90% of our outstanding common stock, soliciting input on these key areas. We engaged in discussions with shareholders during early May, in advance of our annual shareholder's meeting, and again between October and December. During the latter shareholder engagement effort, which focused primarily on stewardship, social responsibility, executive compensation and strategy matters, we were able to engage in discussions with shareholders that account for approximately 64% of our shares outstanding. These discussions generally included at least one Board member, either our Chairman of the Board or our Compensation Committee Chairman, in addition to our Chief Financial Officer, our General Counsel, and our head of Human Resources and Investor Relations. Key points commonly raised or discussed with shareholders included: (1) executive compensation matters; (2) governance matters and Board composition; and (3) the Board’s role in strategy, risk management, and human capital management. This active engagement with shareholders and the feedback received will be evaluated by the Board to continue to evolve and improve governance and long-term value creation. We also held an investor day during 2019 and communicated throughout the year with investors through in-person meetings, conferences and conference calls. During the year, in total, we held meetings with over 80% of our shareholder base.
Oversight of Strategy and Purpose The Board recognizes the importance of Cardtronics’ role in the communities it serves. Ultimately, long-term value creation for our shareholders will be inherently tied to providing services in a way that benefits consumers over a long period. The Board and management team recognize and embrace our role in making cost-effective, convenient, secure, reliable, and private commerce possible with cash. With Cardtronics’ leading market position as an ATM operator in many of the world’s largest economies, we increasingly recognize the importance of delivering value for the communities in which we serve. The consumer financial services industry is currently undergoing a period of unprecedented change. Emerging technology and new types of consumer-oriented financial service companies have rapidly changed the landscape. Traditional banks and financial institutions are under increasing pressure to evolve their business models to remain competitive. In spite of all the rapid changes in financial services, physical cash distribution for consumers which is at the core of what Cardtronics does, remains valuable and vital to many demographics. Our purpose is to be Champions of Cash….because it matters! Cash does matter to a significant part of the world’s population - and for varying reasons. Whether it is the only way an individual can transact or maybe because they do not have a bank account or maybe because the consumer prefers to keep their transactions private and secure, or perhaps they simply like the reliability and simplicity of cash, Cardtronics embraces its role in providing consumers a CHOICE in how they transact. During 2019, Cardtronics met with many elected officials at various levels of government across different countries to ensure that cash is protected as a consumer payment choice. Several local governments in the U.S. passed laws during 2019, protecting cash usage in their communities. We continue to work with members of state, local, and federal governments to protect this vital payment tool as a choice. While we believe that cash will endure for many years, likely decades to come, we recognize that it is essential to continue to evaluate smart ways to evolve our business over time. The Board will continue to work with management to leverage our core capabilities and competencies in convenient cash distribution but will also seek to complement our leading position with more diverse services over time. The Board recognizes that a focus on sustainability is critical to delivering long-term shareholder value and is a matter of high importance to many long-term oriented investors. While the Board has extensive frameworks in place to oversee governance, manage risk, and guide strategic direction and sustainability, we also recognize the importance of increasingly improving our processes and disclosures. The Company is evaluating its disclosures under the framework established by the Sustainability Accounting Standards Board and plans to augment its disclosures in future periods.
Communications from Shareholders and Interested Parties Our Board welcomes communications from our shareholders and other interested parties. Shareholders and any other interested parties may send communications to our Board, any committee of our Board, the Chair of our Board or any director in particular to:to c/o Cardtronics plc, 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042, Attention: Company Secretary. Our Company Secretary (or any successor to the duties thereof) will review each such communication received from shareholders and other interested parties and will forward the communication, as expeditiously as reasonably practicable, to the addressees if: (i) the communication complies with the requirements of any applicable policy adopted by us relating to the subject matter of the communication; and (ii) the communication falls within the scope of matters generally considered by our Board. To the extent the subject matter of a communication relates to matters that have been delegated to a committee of our Board to or to an executive officer, our Company Secretary may forward such communication to the executive or the chair of the committee to which such matter has been delegated. The acceptance and forwarding of communications to the members of our Board or an executive officer does not imply or create any fiduciary duty of our Board members or executive officer to the person submitting the communications. Delinquent Section 16(a) Beneficial Ownership Reporting Compliance 16 Reports Section 16(a) of the Exchange Act requires our executive officers, directors, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the SEC. Such executive officers, directors and 10% shareholders are also required by securities laws to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of copies of these reports, or written representations from reporting persons, we believe that during the year ended December 31, 2018,2019, our executive officers, directors and persons who own more than 10% of a registered class of our equity securities filed under Section 16(a) on a timely basis, except for the following late filings: Form 4 filingsfiling to report the vesting of RSUs and Options grantedfor Stuart Mackinnon on March 30, 2018July 19, 2019, were filed one day late for the following officers and directors due to an administrative error: Juli Spottiswood, Julie Gardner, G. Patrick Phillips, Mark Rossi, Dennis Lynch, Jorge M. Diaz, J. Tim Arnoult, Gary Ferrera, E. Brad Conrad, Brad Nolan, Geri House, Aimie Killeen, Brian Bailey, Stuart Mackinnon, Marc Terry, Dan Antilley and Edward West.error. Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth information as of December 31, 2018, with respect to2019, concerning the compensation plans under which our equity awards are authorized for issuance, aggregated as follows: Plan Category
| Number of Securities to be
Issued Upon Exercise of
Outstanding Options, Warrants
and Rights | Weighted- Average Exercise
Price of Outstanding Options,
Warrants and Rights | Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans(1) | Equity compensation plans approved by security holders(2) | 234,959 | $22.31 | 4,050,223 | Total | 234,959 | $22.31 | 4,050,223 |
| | | | | | | Plan Category | Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights | Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans(1) |
| Equity compensation plans approved
by security holders(2) | 380,180 | $26.01 | 3,590,168 |
| | Total | 380,180 | $26.01 | 3,590,168 |
|
| | (1) | Excluding Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights. |
| (2) | (2) | Represents our 2007 Plan. For additional information on the terms of this plan, see the “Equity“Equity Compensation Plans” Plans” section in “Compensation Discussion and Analysis” below. |
| 2019 PROXY STATEMENT | 34
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Security Ownership of Certain Beneficial Owners and Management The following table sets forth information regarding the beneficial ownership of our shares as of March 22, 201920, 2020, for: each person is known by us to beneficially own more than 5% of our shares; each of our directors and director nominees; each of our Named Executive Officers; and all directors and executive officers as a group. The number of shares and the percentages of beneficial ownership are based on 46,307,98244,454,307 shares outstanding as of March 22, 2019,20, 2020, and the number of shares owned and acquirable within 60 days of March 22, 201920, 2020, by the named person, with the exception of the amounts reported in filings on Schedule 13D and 13G, which amounts are based on holdings as of December 31, 2018,2019, or as otherwise disclosed in such filings and reported below. To our knowledge and except as indicated in the footnotes to this table and subject to applicable laws, the persons named in this table have the sole voting and investment power with respect to all shares listed as beneficially owned by them. Name and Address of
Beneficial Owners(1)(2) | Shares
Beneficially
Owned(3) | Percent of
Shares
Beneficially
Owned | 5% Shareholders:
| | | | | | | Hudson Executive Capital LP and Affiliates(4) | | 8,130,743 | | | 17.6 | % | BlackRock, Inc.(5) | | 5,500,254 | | | 11.9 | % | The Vangard Group(6) | | 5,055,401 | | | 10.9 | % | Wellington Management Group LLP(7) | | 4,336,799 | | | 9.4 | % | Van Berkom & Associates Inc.(8) | | 2,555,054 | | | 5.5 | % | The Bank of New York Mellon Corporation(9) | | 2,466,609 | | | 5.3 | % | | | | | | | | Directors and Named Executive Officers:
| | | | | | | Douglas L. Braunstein(4) | | 8,130,743 | | | 17.6 | %* | Edward H. West | | 90,008 | | | 0.2 | %* | Jorge M. Diaz | | 51,943 | | | 0.1 | %* | Mark Rossi | | 49,975 | | | 0.1 | %* | G. Patrick Phillips | | 30,463 | | | 0.1 | %* | Juli C. Spottiswood | | 25,673 | | | 0.1 | %* | Julie Gardner | | 19,298 | | | — | %* | Stuart Mackinnon | | 16,924 | | | — | %* | J. Tim Arnoult | | 16,376 | | | — | %* | Gary W. Ferrera | | 5,250 | | | — | %* | Dan Antilley | | 4,262 | | | — | %* | Warren C. Jenson | | 3,810 | | | — | %* | Marc Terry | | 3,307 | | | — | %* | | | | | | | | All directors and executive officers as a group (17 persons) | | 8,467,685 | | | 18.3 | %* |
| | | | | | | Name and Address of Beneficial Owners(1)(2) | Shares Beneficially
Owned(3) |
| Percent of Shares
Beneficially Owned |
| | | 5% Shareholders: | | | | Hudson Executive Capital LP and Affiliates(4) | 8,135,021 |
| 18.3 | % | | BlackRock, Inc.(5) | 5,493,292 |
| 12.4 | % | | The Vanguard Group(6) | 4,979,957 |
| 11.2 | % | | Wellington Management Group LLP(7) | 3,983,861 |
| 9.0 | % | | Capital World Investors(8) | 2,302,000 |
| 5.2 | % | | | | | | | | Directors and Named Executive Officers: | |
|
| | Douglas L. Braunstein(4) | 8,135,021 |
| 18.3 | % | | | Edward H. West | 290,782 |
| 0.7 | % | * | | Gary W. Ferrera | 59,924 |
| 0.1 | % | * | | Jorge M. Diaz | 56,221 |
| 0.1 | % | * | | Mark Rossi | 54,253 |
| 0.1 | % | * | | G. Patrick Phillips | 34,741 |
| 0.1 | % | * | | Stuart Mackinnon | 30,571 |
| 0.1 | % | * | | Juli C. Spottiswood | 29,951 |
| 0.1 | % | * | | Dan Antilley | 26,044 |
| 0.1 | % | * | | Julie Gardner | 23,576 |
| 0.1 | % | * | | Marc Terry | 18,950 |
| — |
| * | | Warren C. Jenson | 8,088 |
| — |
| * | | | | | | | All directors and executive officers as a group (17 persons) | 8,806,715 |
| 19.8 | % | |
| | | * | Less than 1.0% of our outstanding shares |
| | (1) | Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power of that security, including options that are currently exercisable or exercisable within 60 days of March 22, 2019,17, 2020, and RSUs that are currently vested or will be vested within 60 days of March 22, 2019.17, 2020. Shares issuable pursuant to options and RSUs are deemed outstanding for computing the percentage of the person holding such options or RSUs but are not deemed outstanding for computing the percentage of any other person. |
| 2019 PROXY STATEMENT | 35
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| | (2) | The address for each Named Executive Officer and director set forthoutlined in the table, unless otherwise indicated, is c/o Cardtronics plc, 2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas 77042. The address of Hudson Executive Capital LP is 1185570 Lexington Avenue, of the Americas, 32nd35th Floor, New York, NY 10036.10022. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. The address of Wellington Management Group LLP is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210. The address of Van Berkom & Associates Inc.Capital World Investors is 1130 Sherbrooke333 South Hope Street, West, Suite 1005, Montreal, Quebec H3A 2M8. The address of The Bank of New York Mellon Corporation is 240 Greenwich Street New York, New York 10286.Los Angeles, California 90071. |
| | (3) | Amounts shown include shares and restricted shares beneficially owned. There are 6,8744,874 RSUs that will vest within 60 days of March 22, 2019, but no17, 2020, a well as 189,228 exercisable options oroptions. No unvested options that will vest within 60 days of March 22, 2019.20, 2020. |
| | (4) | As reported on the Form Form 4, filedfiled with the SEC on March 12, 2019,11, 2020, Hudson Executive Capital LP ("Hudson Executive") has shared voting and dispositive power over 8,130,7438,135,021 shares as of March 8, 2019. ln 9, 2020. In addition to Hudson Executive,, this Form 4 was filed jointlyjointly by HECHEC Management GP LLC, a Delaware limited liability company ("Management GP"GP"), and Douglas L. Braunstein,, a citizen of the United States of America (together with Hudson Executive and Management GP, the "Reporting Persons"), each of whom has the same business address as Hudson Executive and maybe deemed to have a pecuniary interest in the securities reported on the Form 4 (the "Subject Securities"). Hudson Executive, as the investment adviser to certain affiliated investment funds, may be deemed to be the beneficial owner of the Subject Securities for purposes of Rule 16a-1(a)16a-1(a) under the Securities Exchange Act of 1934. Management GP, as the general partner of Hudson Executive, may be deemed to be the beneficial owner of the Subject Securities for purposes of Rule 16a-1(a)16a-1(a). By virtue of Mr. Braunstein's position as Managing Partner of Hudson Executive and Managing Member of Management GP, Mr. Braunstein may be deemed to be the beneficial owner of the Subject Securities for purposes of Rule 16a-1(a)16a-1(a) and Hudson Executive and Management GP may be deemed to be the beneficial owner of the Subject Securities held by Mr. Braunstein. Each of the Reporting Persons disclaims any beneficial ownership of any of the Subject Securities, except to the extent of any pecuniary interest therein. Mr. Braunstein, a member of the Cardtronics board of directors and was appointed to thatthat board as a representative of the Reporting Persons. As a result, each of those persons are directors by deputization for purposes of SectionSection 16 of the SecuritiesSecurities Exchange Act of 1934.1934. |
| | (5) | As reported on Schedule 13G,, dated as of December 31, 20182019, and filed with the SEC on January 24, 2019February 4, 2020, BlackRock, Inc. has sole voting power over 5,403,8415,418,907 shares and sole dispositive power over 5,500,2545,493,292 shares. |
| | ((6)6)
| As reported on Schedule 13G/A, dated as of December 31, 20182019, and filed with the SEC on February 11, 2019,10, 2020, the Vanguard Group, Inc. has sole voting power over 74,28969,568 shares, sole dispositive power over 4,975,4124,905,289 shares, shared dispositive power over 79,98974,668 shares and shared voting power over 10,80010,200 shares. Vanguard Fiduciary Trust Company (“VFTC” ("VFTC"), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 69,189 shares or .15% of the Common Stock outstanding of the Company as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd.(“VIA”), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 15,90064,468 shares or .14% of the Common Stock outstanding of the Company as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. ("VIA"), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 15,300 shares or .03% of the Common Stock outstanding of the Company as a result of its serving as investment manager of Australian investment offerings. |
| | (7) | As reported on Schedule 13F, dated as of December 31, 20182019, and filed with the SEC on February 14, 2019,11, 2020, by Wellington Management Group LLP (“Wellington Management”), these shares are owned by clients of Wellington Management. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. No such client is known to have such right or power with respect to more than five percent of this class of securities. Wellington Management has shared voting power over 2,080,9013,681,096 shares and shared dispositive power over 4,336,7993,983,861 shares. |
| | ((8)8)
| As reported on Schedule 13G, dated as of December 31, 20182019, and filed with the SEC on February 11, 2019 by Van Berkom & Associates Inc.14, 2020, Capital World Investors has sole voting power over 2,555,054 shares andsole dispositive power over 2,555,0542,302,000 shares. |
DIRECTOR COMPENSATION The following table provides compensation information for each non-employee director who served as a member of our Board during the year ended December 31, 2019. DIRECTOR COMPENSATION TABLE FOR 2019 | | | | | | | | | | | | Non-Employee Director | Fees Earned or
Paid in Cash |
| Stock
Awards(1) |
| Total |
| J. Tim Arnoult(2) |
| $121,514 |
|
| $135,014 |
|
| $256,528 |
| | Douglas L. Braunstein |
| $110,000 |
|
| $135,014 |
|
| $245,014 |
| | Jorge M. Diaz |
| $120,000 |
|
| $135,014 |
|
| $255,014 |
| | Julie Gardner |
| $110,000 |
|
| $135,014 |
|
| $245,014 |
| | Warren C. Jenson |
| $120,376 |
|
| $135,014 |
|
| $255,390 |
| | G. Patrick Phillips |
| $130,000 |
|
| $135,014 |
|
| $265,014 |
| | Mark Rossi |
| $205,860 |
|
| $135,014 |
|
| $340,874 |
| | Juli C. Spottiswood |
| $130,000 |
|
| $135,014 |
|
| $265,014 |
|
| | ((1)9)
| As reportedThis column shows the grant date fair value of each RSU granted in 2019, as computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in calculating these values may be found in Note 4. Share-Based Compensation footnote, to our consolidated financial statements in our Annual Report on Schedule 13G/A, dated asForm 10-K for the year ended December 31, 2019. As of December 31, 20182019, Mr. Braunstein, Mr. Diaz, Ms. Gardner, Mr. Jenson, Mr. Phillips, Mr. Rossi, and filed withMs. Spottiswood held 4,278 outstanding RSUs, and Mr. Arnoult held no outstanding RSUs. |
| | (2) | Mr. Arnoult resigned as a member of the SECBoard effective November 1, 2019. The cash portion of Mr. Arnoult’s director compensation is prorated based on February 4, 2019, The Bankthe date of New York Mellon Corporation has sole voting power over 2,719,398shares, sole dispositive power over 2,642,698 shares and shared dispositive power over 108,058 shares.such resignation. |
Only non-employee directors receive compensation for service on our Board. The 2019 compensation paid to our non-employee directors consisted of: an annual award of RSUs, valued at approximately $135,000 at the time of grant, which vests approximately 12 months from the grant date; an annual cash retainer of $70,000; a meeting fee of $10,000 for each Board meeting attended in person in the United Kingdom or other location outside of the United States, with no additional fees paid for committee or other Board meetings attended; an additional annual cash retainer of $85,000 for the Chair of our Board; an annual cash retainer of $10,000 for each committee of which the director is a member; an additional annual cash retainer of $10,000 for the chair of the Audit, Finance and Compensation Committee, and an additional annual cash retainer of $5,000 for the chair of our Nominating & Governance Committee; and reimbursement of reasonable fees related to the preparation of U.K. tax returns. Cash amounts are paid monthly. In addition, all of our directors are reimbursed for their reasonable expenses incurred in attending Board and committee meetings. The 2019 RSU awards to all non-employee directors were granted on March 13, 2019. These RSUs vested in full on March 9, 2020, except for Mr. Arnoult’s RSU award, which vested on November 1, 2019, when he resigned from the Board. The Board accelerated the vesting of his RSUs in recognition of his service to the Company in connection with his resignation. | | | | | | | ANNUAL REVIEW PROCESS AND PEER BENCHMARKINGDirector compensation is generally reviewed by the Compensation Committee on an annual basis. To assist the Committee with its review, Meridian provides competitive compensation data for the companies in the “Proxy Peer Group.” Data is provided for all elements of director pay, including annual cash retainer, Board and Committee fees (including Chair and Member retainers), annual equity awards, and Board leadership compensation. Based on its review of the data, no director pay changes were recommended for 2019. | | DIRECTOR SHARE OWNERSHIP GUIDELINES In 2019, PROXY STATEMENT | 36 the Compensation Committee increased the director shareholding requirement to five times the annual board member cash retainer amount based on consultation with Meridian relating to market benchmarks and best practices. | | | |
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Our executive officers are appointed by our Board on an annual basis and serve until removed by our Board or their successors have been duly appointed. The following table sets forth the name, age (as per the date of the Annual Meeting) and position of each person who is currently an executive officer of Cardtronics:Name
| Age
| Position
| Dan Antilley
| | 51
| | Chief Information Security Officer
| Brian Bailey
| | 47
| | Executive Vice President & Managing Director, North America
| Gary W. Ferrera
| | 56
| | Chief Financial Officer
| Paul A. Gullo
| | 53
| | Chief Accounting Officer
| Geri House
| | 43
| | Chief Human Resources Officer
| Aimie Killeen
| | 40
| | General Counsel and Secretary
| Stuart Mackinnon
| | 47
| | Executive Vice President—Technology and Operations & Chief Information Officer
| Marc Terry
| | 57
| | Managing Director—International
| Edward H. West
| | 52
| | Chief Executive Officer
|
The following biographies describe the business experience of our executive officers:
Dan Antilley has served as our Chief Information Security Officer since May 30, 2017. In this role, Mr. Antilley is responsible for leadingofficers, along with their age (as of the Company’s global information security and technology risk strategy program, focused on safeguarding Company and customer assets, and ATM user information. Mr. Antilley has more than 20 yearsdate of information security leadership experience, including retail banking industry expertise. Most recently prior to joining Cardtronics, Mr. Antilley capped a 16+ year career at Bank of America by serving as Senior Vice President and Global Information Security Operations Executive, a role in which he directed a multi-site global team of 400 information security professionals, with an emphasis on threat and vulnerability management, malware protection and cyber forensics. Earlier in his career, Mr. Antilley served in technology roles at Genuity, Check Point Software Technologiesthe Annual Meeting) and the Texas Department of Housing and Community Affairs. Earned over the course of his career, Mr. Antilley holds multiple patents for systems and methods related to information security risk assessment.
Brian Bailey has served as our Managing Director, North America, since November 2016. Prior to joining Cardtronics, Mr. Bailey served as Vice President and General Manager for NCR Corporation’s Financial Services Division, responsible for Product Management and Marketing. At NCR, Mr. Bailey held various leadership roles in sales, marketing, and product management, including assignments in NCR’s Asia Pacific and Europe regions, all focused on the financial services industry segment. Mr. Bailey holds a Bachelor of Science degree in Finance and Marketing from the University of Dayton.
Gary W. Ferrera has served as our Chief Financial Officer since November 28, 2017. In this role, Mr. Ferrera is responsible for leading all financial functions of the Company, and he provides oversight for accounting and reporting, strategic planning and analysis, treasury, tax, internal audit, risk management, investor relations and corporate development. Ferrera has more than
20 years of leadership experience in corporate finance and corporate development roles. Prior to joining Cardtronics, Mr. Ferrera was at DigitalGlobe, Inc., where he served as Chief Financial Officer since early 2015. Previously serving in that same capacity over a decade, predominantly at public companies in the leisure and media sectors, Mr. Ferrera’s career as a Chief Financial Officer is notable for overseeing periods of rapid growth, mergers and acquisitions, initial public offerings, along with cost-efficient operating and capital structures and tax efficiency. Prior to his Chief Financial Officer positions, Mr. Ferrera developed his M&A and capital markets expertise with Citigroup and Bear Stearns. Mr. Ferrera also started his commercial career as an international tax consultant with Arthur Andersen. Mr. Ferrera holds an M.B.A. from the Kellogg School of Management, Northwestern University and a B.S. in Accounting from Bentley University, magna cum laude.
Paul A. Gullo has served as our Chief Accounting Officer since May 21, 2018. Previously, Mr. Gullo, served in a number of roles at TechnipFMC plc, including as Chief Financial Officer, Technip Stone & Webster Process Technology, Inc. since August 2013, as Chief Financial Officer, Technip USA Inc. from January 2012 to August 2013 and as Vice President - Finance, Technip USA, Inc. from March 2009 to December 2011. Mr. Gullo has also held various finance and accounting positions at Friedkin Companies, Inc., Kellogg Brown & Root, Continental Airlines, Inc., and IQ 2000, Inc. and served in the Audit Practice at Ernst & Young LLP in Houston, Texas. Mr. Gullo holds a Bachelors of Business Administration in Accounting and Finance from The University of Texas and is a licensed Certified Public Accountant in the state of Texas.
Geri House has served as our Chief Human Resources Officer since February 12, 2018. In this role, Ms. House is responsible for leading the Company’s global human resources function, overseeing human resources strategy, talent acquisition, employee engagement, development and relations, along with compensation and benefits programs. Ms. House is an experienced, strategic human resources executive with a demonstrated ability to align people and culture to the
| 2019 PROXY STATEMENT | 37
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position they currently hold.corporate vision, strategies and values to drive effective execution of Company goals. Prior to joining Cardtronics, Ms. House was Executive Vice President, People & Organization, at National CineMedia, where she also previously served as Vice President and Deputy General Counsel. Earlier in her career, Ms. House was in private practice, serving as outside counsel for an array of clients of two international law firms. Ms. House holds a Juris Doctor from Harvard Law School and a Bachelor of Arts from Simon Fraser University.
Aimie Killeen has served as our General Counsel and Secretary since March 2017, leading our legal, corporate governance and compliance sections. Ms. Killeen joined Cardtronics through our acquisition of DirectCash Payments Inc. (“DCP”) in January 2017, where she served as Global General Counsel from March 2013. Prior to joining DCP, Ms. Killeen practiced for nine years at one of Australia’s premier global law firms. Her experience there included leveraged and acquisition finance, aviation finance, structured asset finance, securitization, debt capital markets, general corporate banking and restructuring. Ms. Killeen is a graduate from the University of Technology in Sydney, Australia, holds a Bachelors of Business and a Bachelors of Laws and was admitted to practice law in the Supreme Court of New South Wales.
Stuart Mackinnon has served as our Executive Vice President—Technology and Operations & Chief Information Officer since February 1, 2017. Mr. Mackinnon is responsible for the global information technology infrastructure for Cardtronics. Mr. Mackinnon directs the strategy and implementation of innovative solutions for the business focusing on efficiency and
| | | Dan Antilley Executive Vice President, Operations and Chief Information Security Officer
Age: 52 Dan Antilley has served as our Executive Vice President, Operations and Chief Information Security Officer since May 30, 2017. In January 2020, Mr. Antilley assumed oversight of global operations, in addition to his role as Chief Information Security Office. Mr. Antilley is responsible for leading the Company's global information security and technology risk strategy program, focused on safeguarding company and customer assets, and ATM user information while also leading global operations. Mr. Antilley has more than 20 years of information security leadership experience, including retail banking industry expertise. Before joining Cardtronics, Mr. Antilley capped a 16+ year career at Bank of America. He served as Senior Vice President and Global Information Security Operations Executive, a role in which he directed a multi-site global team of 400 information security professionals, with an emphasis on threat and vulnerability management, malware protection and cyber forensics. Earlier in his career, Mr. Antilley served in technology roles at Genuity, Check Point Software Technologies and the Texas Department of Housing and Community Affairs. Earned throughout his career, Mr. Antilley holds multiple patents for systems and methods related to information security risk assessment and a B.S. from Midwestern State University. | |
service. Mr. Mackinnon joined Cardtronics in 2015 through the acquisition of Columbus Data Services, the largest ATM processor in North America, where he held the position of President for five years. Prior to Columbus Data Services, Mr. Mackinnon held senior technology roles at Threshold Financial Technologies and Choice Hotels Canada.
Marc Terry
| | | Gary W. Ferrera Chief Financial Officer
Age: 57 Gary W. Ferrera has served as our Chief Financial Officer since November 28, 2017. In this role, Mr. Ferrera is responsible for leading all financial functions of the Company, and he provides oversight for accounting and reporting, strategic planning and analysis, treasury, tax, internal audit, risk management, investor relations, and corporate development. Ferrera has more than 20 years of leadership experience in corporate finance and corporate development roles. Prior to Cardtronics, Mr. Ferrera was at DigitalGlobe, Inc., where he served as Chief Financial Officer since early 2015. He served in that same capacity for Intrawest Resorts, Great Wolf Resorts, National CineMedia, and Unity Media. Mr. Ferrera’s career as a Chief Financial Officer is notable for overseeing periods of rapid growth, mergers and acquisitions, initial public offerings, along with cost-efficient operating and capital structures and tax efficiency. Before his Chief Financial Officer positions, Mr. Ferrera developed his M&A and capital markets expertise with Citigroup and Bear Stearns. Mr. Ferrera also started his commercial career as an international tax consultant with Arthur Andersen. Mr. Ferrera holds an MBA from the Kellogg School of Management, Northwestern University, and a BS in Accounting from Bentley University, magna cum laude. | |
| | | Paul A. Gullo Chief Accounting Officer
Age: 54 Paul A. Gullo has served as our Chief Accounting Officer since May 21, 2018. Previously, Mr. Gullo, served many roles at TechnipFMC plc, including as Chief Financial Officer, Technip Stone & Webster Process Technology, Inc. since August 2013, as Chief Financial Officer, Technip USA Inc. from January 2012 to August 2013 and as Vice President, Finance, Technip USA, Inc. from March 2009 to December 2011. Mr. Gullo has also held various finance and accounting positions at Friedkin Companies, Inc., Kellogg Brown & Root, Continental Airlines, Inc., and IQ 2000, Inc. and served in the Audit Practice at Ernst & Young LLP in Houston, Texas. Mr. Gullo holds a Bachelor of Business Administration degree in Accounting and Finance from The University of Texas and is a licensed Certified Public Accountant in the state of Texas. | |
has served as our Executive Vice President and Managing Director—International since September 17, 2017. In this role, Mr. Terry oversees all commercial activities for the Company in Europe, the Middle East, Africa and Australia. Mr. Terry has nearly 30 years of payments and financial services technology business and leadership experience. Prior to joining Cardtronics, Mr. Terry was Group Managing Director—EMEA at FIS, where he was responsible for all banking and payments products. Earlier in his career, Mr. Terry served as Managing Director Commercial for Vocalink, where he was responsible for all commercial activities and relationships including management of the LINK ATM network in the United Kingdom. Mr. Terry previously held roles as International Sales Director for Metavante, Managing Director—EMEA for Clear2Pay, and Vice President—International Sales for S1 UK, following a 15+ year career in multiple global leadership roles for ACI Worldwide.2020 PROXY STATEMENTEdward H. West Mr. West’s biographical information is located under “Proposal 2: An Ordinary Resolution to Elect Newly Appointed Class II Director.”39
| | | Geri House Chief Human Resources Officer
Age: 44 Geri House has served as our Chief Human Resources Officer since February 12, 2018. In this role, Ms. House is responsible for leading the Company’s global human resources function, overseeing human resources strategy, talent acquisition, employee engagement, development, and relations, along with compensation and benefits programs. Ms. House is an experienced, strategic human resources executive with a demonstrated ability to align people and culture to the corporate vision, strategies, and values to drive effective execution of company goals. Before joining Cardtronics, Ms. House was Executive Vice President, People & Organization, at National CineMedia, where she also previously served as Vice President and Deputy General Counsel. Earlier in her career, Ms. House was in private practice, serving as outside counsel for an array of clients of two international law firms. Ms. House holds a Juris Doctor degree from Harvard Law School and a Bachelor of Arts degree from Simon Fraser University. | |
| | | Carter Hunt Executive Vice President, Managing Director of North America
Age: 53 Carter Hunt is Executive Vice President and Managing Director for our business in North America. In this role, he oversees the Company's commercial activities in the United States, Canada, Mexico, and the Caribbean. Mr. Hunt has more than three decades of experience in leadership. Before joining Cardtronics, Carter led the North America organization for Western Union. His responsibilities included the ownership of revenue and profit, developing the strategy, general management, and the on-going leadership of Western Union’s overall North America business. Mr. Hunt originally joined Western Union in 2005 as the Vice President of National Accounts. Also, Mr. Hunt has held the roles of Senior Vice President of Global Key Accounts, and Senior Vice President of Commercial at Western Union. Before joining Western Union, Mr. Hunt spent 14 years with PepsiCo, Inc., where he held a variety of roles in sales management, marketing, and joint venture development. Mr. Hunt has a Bachelor of Business Administration degree from the University of Texas at Austin and a Master of Business Administration degree from Southern Methodist University’s Cox School of Business in Dallas, Texas. | |
| | | Aimie Killeen General Counsel and Secretary
Age: 41 Aimie Killeen has served as our General Counsel and Secretary since March 2017, leading our legal, corporate governance, and compliance sections. Ms. Killeen joined Cardtronics through our acquisition of DirectCash Payments Inc. (“DCP”) in January 2017, where she served as Global Corporate Counsel since March 2013. Before joining DCP, Ms. Killeen practiced for nine years at one of Australia’s premier global law firms. Her experience there included leveraged and acquisition finance, aviation finance, structured asset finance, securitization, debt capital markets, general corporate banking, and restructuring. Ms. Killeen graduated of the University of Technology in Sydney, Australia, and was admitted to practice law in the Supreme Court of New South Wales, and the High Court of Australia in 2004. | |
| | | Stuart Mackinnon Executive Vice President, Technology and Chief Information Officer
Age: 48 Stuart Mackinnon has served as our Executive Vice President, Technology and Chief Information Officer since February 1, 2017. Mr. Mackinnon is responsible for the global information technology infrastructure for Cardtronics. Mr. Mackinnon directs the strategy and implementation of innovative solutions for the business focusing on efficiency and service. Mr. Mackinnon joined Cardtronics in 2015 through the acquisition of Columbus Data Services, the largest ATM processor in North America, where he held the position of President for five years. Before Columbus Data Services, Mr. Mackinnon held senior technology roles at Threshold Financial Technologies and Choice Hotels Canada. | |
| | | Brad Nolan Executive Vice President, Allpoint Solutions
Age: 47 Brad Nolan has served as Executive Vice President, Allpoint Solutions since January 2017. In this role, he leads the design and delivery of new technology solutions, which enable financial institutions and retail brands to provide world-class financial access to their customers. Before joining Cardtronics, Mr. Nolan spent 20 years at JPMorgan Chase & Co., serving as Managing Director of Branch Systems and Innovation, where he led retail channel design and innovation for the organization. Mr. Nolan is listed as a co-designer on multiple patents focused on self-service kiosks and user interface design. Mr. Nolan holds a dual Bachelor of Business Administration degrees in Accountancy and Finance from Miami University and is a former licensed Certified Public Accountant in the state of Ohio. | |
| | | Marc Terry Executive Vice President, Managing Director of International
Age: 58 Marc Terry has served as our Executive Vice President and Managing Director of International since September 18, 2017. In this role, Mr. Terry oversees all commercial activities for the Company in Europe, the Middle East, Africa and Australia. Mr. Terry has nearly 30 years of payments and financial services technology business and leadership experience. Before joining Cardtronics, Mr. Terry was Group Managing Director, EMEA at FIS, where he was responsible for all banking and payments products. Earlier in his career, Mr. Terry served as Managing Director Commercial for Vocalink, where he was responsible for all commercial activities and relationships including management of the LINK ATM network in the United Kingdom. Mr. Terry previously held roles as International Sales Director for Metavante, Managing Director, EMEA for Clear2Pay, and Vice President, International Sales for S1 U.K., following a 15+ year career in multiple global leadership roles for ACI Worldwide. Mr. Terry holds a Bachelor of Arts degree in System Analysis from Bristol Polytechnic. | |
| | | Edward H. West Chief Executive Officer
Age: 53 Mr. West’s biographical information is located under “Continuing Directors.” | |
| | | Paul Wilmore Chief Marketing Officer
Age: 53 Paul Wilmore is the Chief Marketing Officer for Cardtronics. He joined Cardtronics on May 1, 2019 and is responsible for all aspects of our marketing, data, and analytics across our U.S. and international markets. He is also a member of the Cardtronics Executive Leadership Team. Before joining Cardtronics, Mr. Wilmore was the Chief Marketing Officer of Barclays U.S. Consumer Bank. He brings over 30 years of experience in marketing and financial services, and has a deep background in marketing metrics and data analysis to drive growth and performance. A member of the Barclaycard U.S. and Barclays U.S. Consumer Bank executive team since 2004, Mr. Wilmore led marketing operations for both the co-brand business unit and the digital consumer bank. Prior to joining Barclays, he was part of the executive team that launched Juniper Bank, a monoline credit card issuer, and a member of the founding executive team for RelianceDirect and Reliance Personal, which offered personal automobile insurance through direct distribution channels. Paul holds an MBA from the Wharton School at the University of Pennsylvania and a bachelor’s degree in Economics from Swarthmore College. | |
There are no family relationships among any of our directors or executive officers.
AUDIT MATTERS | | | | | | | PROPOSAL 3To ratify, on an advisory basis, our Audit Committee’s selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the fiscal year ending December 31, 2020 | 2019 PROXY STATEMENT | 38 | Our Board recommends that shareholders vote FOR the ratification of the selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm.
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Our Audit Committee has selected KPMG LLP (U.S.) as our U.S. independent registered public accounting firm to conduct our audit for the year ending December 31, 2020. We engaged KPMG LLP (U.S.) to serve as our U.S. independent registered public accounting firm and to audit our consolidated financial statements beginning with the fiscal year ended December 31, 2001. The engagement of KPMG LLP (U.S.) for the fiscal year ending December 31, 2020, has been approved by our Audit Committee. Our Audit Committee has reviewed and discussed the consolidated financial statements included in our Annual Report on Form 10-K and has approved their inclusion therein. See “Audit Matters—Report of our Audit Committee” for more details. Although shareholder ratification of the selection of KPMG LLP (U.S.) is not required, our Audit Committee considers it desirable for our shareholders to vote upon this selection. If the selection is not ratified, our Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, our Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it believes that such a change would be in the best interests of Cardtronics and our shareholders. A representative of KPMG LLP (U.S.) is expected to be present at the Annual Meeting and will have an opportunity to make a statement if the representative desires to do so and will be available to respond to appropriate questions from shareholders at the Annual Meeting. Recommendation and Required Vote For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that the ratification of the selection of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the fiscal year ending December 31, 2020, is advisable and in the best interests of Cardtronics and our shareholders.
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| | | | | | | PROPOSAL 4 To re-appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006, to hold office until the conclusion of the next annual general meeting of shareholders at which accounts are presented to our shareholders | | Our Board recommends that shareholders vote FOR the re-appointment of KPMG LLP (U.K.) as our U.K. statutory auditors to hold office from the conclusion of the annual meeting until the end of the next annual general meeting of shareholders at which the U.K. annual reports and accounts are presented to our shareholders. | | | |
In accordance with the U.K. Companies Act 2006, our U.K. statutory auditors must be re-appointed at each meeting at which the U.K. Annual Reports and Accounts are presented to our shareholders. KPMG LLP (U.K.) has served as Cardtronics’ U.K. statutory auditors since June 29, 2016. If this proposal is not approved by our shareholders at the Annual Meeting, our Board may appoint auditors to fill the vacancy. Recommendation and Required Vote For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes, following a recommendation to this effect by our Audit Committee, that the re-appointment of KPMG LLP (U.K.) as Cardtronics’ U.K. statutory auditors is advisable and in the best interests of Cardtronics and our shareholders. | | | | | | | PROPOSAL 5 To authorize our Audit Committee to determine our U.K. statutory auditors’ remuneration | | Our Board recommends that shareholders vote FOR the authorization of our Audit Committee to determine our U.K. statutory auditors’ remuneration. | | | |
In accordance with the U.K. Companies Act 2006, the remuneration of our U.K. statutory auditors must be fixed in a general meeting of shareholders or in such manner as may be determined in a general meeting of shareholders. We are asking our shareholders to authorize our Audit Committee to determine the remuneration of KPMG LLP (U.K.) in its capacity as Cardtronics’ U.K. statutory auditors under the U.K. Companies Act 2006 in accordance with our Audit Committee’s procedures and applicable law. Recommendation and Required Vote For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that authorizing our Audit Committee to determine the remuneration of KPMG LLP (U.K.) as Cardtronics’ U.K. statutory auditors is advisable and in the best interests of Cardtronics and our shareholders. Report of our Audit Committee Each member of our Audit Committee is an independent director as such term is defined under the current listing requirements. Our Audit Committee is governed by our Audit Committee Charter, which complies with the requirements of the Sarbanes-Oxley Act of 2002 and the corporate governance rules of NASDAQ. Our Audit Committee Charter may be further amended to comply with the rules and regulations of the SEC and NASDAQ listing standards as they continue to evolve. A copy of our Audit Committee Charter is available on our website at www.cardtronics.com. In fulfilling its responsibilities, our Audit Committee has reviewed and discussed the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019, with Cardtronics’ management and independent registered public accounting firm. Management is responsible for the consolidated financial statements and the reporting process, including the system of internal controls. The independent registered public accounting firm is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with U.S. GAAP.
Our Audit Committee discussed with the independent registered public accounting firm their independence from Cardtronics and its management including the matters in the written disclosures required by applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) regarding the independent auditors’ communications with our Audit Committee concerning independence and considered the compatibility of non-audit services with the registered public accounting firms’ independence. In addition, our Audit Committee discussed the matters required to be discussed by PCAOB Auditing Standard No. 16, as adopted by the PCAOB and approved by the SEC. In reliance on the reviews and discussions referred to above, our Audit Committee recommended to our Board, and our Board approved the inclusion of the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the SEC. Respectfully submitted by the Audit Committee of the Board of Directors of Cardtronics plc, Juli C. Spottiswood,Chair Jorge Diaz (member as of January 18, 2019) Julie Gardner (member as of January 18, 2019) Warren C. Jenson (member until January 18, 2019) G. Patrick Phillips Selection and Engagement of Independent Registered Public Accounting Firm Among its other duties, our Audit Committee is responsible for the selection and engagement of an Independent Registered Public Accounting Firm. The Audit Committee appoints, sets compensation for, and oversees the work of the independent registered public accounting firm. As indicated in Proposal 3, we engaged KPMG LLP (U.S.) to serve as our U.S. independent registered public accounting firm and to audit our consolidated financial statements beginning with the fiscal year ended December 31, 2001. The engagement of KPMG LLP (U.S.) for the fiscal year ending December 31, 2020, has been approved by our Audit Committee. Furthermore, our Audit Committee has established a policy regarding pre-approval of all audit and non-audit services provided by the independent registered public accounting firm, of which it has delegated its pre-approval authority of certain audit and non-audit services to our Audit Committee Chair. On an as-needed basis, management will communicate specific projects and categories of service for which the advance approval of our Audit Committee Chair or our Audit Committee is requested. Our Audit Committee Chair or our Audit Committee reviews these requests and advises management if the engagement of the independent registered public accounting firm is approved. On a periodic basis, management reports to our Audit Committee regarding the actual spending for such projects and services compared to the approved amounts. Our Audit Committee Chair or our Audit Committee approved all of the services provided by KPMG LLP in 2019, 2018 and 2017. Independent Registered Public Accounting Firm Fee Information Fees for professional services provided by our independent registered public accounting firm, KPMG LLP, in each of the last two fiscal years in each of the following categories were: | | | | | | | | | 2019 | | 2018 | | | (In thousands) | | Audit Fees | $2,208 | | $2,420 | | Audit-Related Fees | $1,005 | | $898 | | Tax Fees | $45 | | $123 | | All Other Fees | — |
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| | Total | $3,258 | | $3,441 |
Audit fees include fees associated with the annual audit and quarterly review of our financial statements and the separate statutory audits of several of our entities in the United Kingdom, Australia, Germany, Mexico, and South Africa. The tax fees in 2019 and 2018 relate to fees paid to KPMG LLP for general tax consulting services. Our Audit Committee considers whether the provision of these services is compatible with maintaining the registered public accounting firm’s independence and has determined such services for the fiscal year 2019 were compatible.
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Registered Public Accounting Firm Among its other duties, our Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. Our Audit Committee has established a policy regarding pre-approval of all audit and non-audit services provided by the independent registered public accounting firm, of which it has delegated its pre-approval authority of certain audit and non-audit services to our Audit Committee Chair. On an as-needed basis, management will communicate specific projects and categories of service for which the advance approval of our Audit Committee Chair or our Audit Committee is requested. Our Audit Committee Chair or our Audit Committee reviews these requests and advises management if the engagement of the independent registered public accounting firm is approved. On a periodic basis, management reports to our Audit Committee regarding the actual spending for such projects and services compared to the approved amounts. Our Audit Committee Chair or our Audit Committee approved all of the services provided by KPMG LLP in 2019 and 2018. Shareholder Requests Under Section 527 of the U.K. Companies Act 2006, Shareholders meeting the threshold requirements set out in that section have the right to require us to publish on a website a statement setting out any matter relating to (1) the audit of our accounts (including the auditors’ report and the conduct of the audit) that are to be laid before the Annual Meeting; or (2) any circumstance connected with an auditor of Cardtronics ceasing to hold office since the previous meeting at which annual accounts and reports were laid, (in each case) that our Shareholders propose to raise at the Annual Meeting. We may not require the Shareholders requesting any such website publication to pay our expenses in complying with Sections 527 or 528 of the U.K. Companies Act. Where we are required to place a statement on a website under Section 527 of the U.K. Companies Act, we must forward the statement to our auditors not later than the time when we make the statement available on the website. The business which may be dealt with at the Annual Meeting includes any statement that we have been required under Section 527 of the U.K. Companies Act to publish on a website. Certain Relationships and Related Person Transactions Transactions with our Directors and Officers There were no transactions or series of similar transactions since January 1, 2019, or any currently proposed transactions to which we are or were a party that involved an amount exceeding $120,000 and in which any of our directors, nominees for director, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest. Approval of Related Person Transactions The policies and procedures relating to the approval of related person transactions are set forth in our Related Persons Transactions Policy. Our Audit Committee is charged with the responsibility of reviewing all the material facts related to any such proposed transaction and either approving or disapproving the entry into such transaction. Our Related Persons Transactions Policy is available on our website at www.cardtronics.com.
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | PROPOSAL 6 To approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in the proxy statement | | Our Board recommends that shareholders vote FOR the approval of named executive officer compensation. | | | |
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC. We urge shareholders to read the “Compensation Discussion and Analysis” section of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives as well as the Summary Compensation Table for the year ended December 31, 2019, and other related compensation tables and narrative discussions, which provide detailed information of the compensation of our Named Executive Officers. Our Compensation Committee believes that the policies and procedures articulated in the “Compensation Discussion and Analysis” section of this proxy statement are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this proxy statement help position us for long-term success. As a part of the Company’s shareholder outreach effort during 2019, our Compensation Committee solicited input and feedback on the structure of our executive compensation programs. We are asking shareholders to adopt the following advisory resolution at the Annual Meeting: RESOLVED, that the shareholders of Cardtronics approve, on an advisory basis, the compensation of Cardtronics’ Named Executive Officers as disclosed in the proxy statement for the 2020 Annual General Meeting of Shareholders of Cardtronics pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion. Although the vote is non-binding and is not meant to address any particular element of our executives’ compensation arrangements, our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. Recommendation and Required Vote For this resolution to be passed, a simple majority of votes cast (whether in person or by proxy) at the Annual Meeting must be cast in favor of the resolution. Our Board believes that approving Named Executive Officer compensation is advisable and in the best interests of Cardtronics and our shareholders.
Letter from the Compensation Committee Dear Shareholder: As Chairman of the Compensation Committee of the Board of Directors, I am pleased to present the Compensation Discussion & Analysis for the year ended December 31, 2019. The primary principles underlying our approach to compensation are unchanged from prior years: that our pay practices are aligned with shareholders’ interests and that they incentivize and support the Company’s strategic objectives. We firmly believe that our solid financial results in 2019 demonstrate that our pay practices are accomplishing these important goals. In 2019, in order to enhance focus on long-term performance, we made changes to our executive equity awards. Beginning in 2019, performance-based Restricted Stock Units (“performance-based RSUs”) use a three-year, rather than a one-year or two-year performance period as were used in recent years (previously followed by vesting requirements). Consistent with 2018, the executive equity awards were comprised of performance-based RSUs (50%), stock option awards (25%), time-based RSUs (25%). We intend to use this plan design as the basis for future long-term incentive awards. Performance-based RSUs for 2019 are tied to two performance metrics: cumulative Adjusted EBITDA and relative Total Shareholder Return (“TSR”), comparing the Company’s TSR for the performance period against that of a group of companies in the comparator group. We selected these 2019 long-term incentive metrics because we believe they are an appropriate indicator of success and sustainable business performance over three years. They translate into increased shareholder value and tie a considerable portion of our leaders’ long-term incentive awards to the Company’s share price performance as compared to the composite share price performance of a broad group of companies with similarly-sized market capitalizations. After strong 2018 results against objectives, the Committee set 2019 Cash Incentive Plan performance goals for Revenue and Adjusted EBITDA above the 2018 results to ensure management was incentivized to show growth in both metrics year-over-year. Management executed on the established 2019 objectives, resulting in a 72 percent increase in our share price during the course of 2019. We believe this result is indicative of our executive compensation programs being aligned with shareholder value creation. We had insightful discussions throughout 2019 with many of our shareholders and valued the feedback on our executive compensation programs, along with many related topics, such as succession planning, human capital management, and peer analysis. Based on the feedback we received from many of our largest shareholders, we believe our 2019 and 2020 long-term incentive plans have been structured to align with most of our shareholders’ views and objectives. Looking to 2020, the Committee is closely monitoring the current COVID-19 virus pandemic, which our Company, like all businesses across the globe, is facing, and considering any potential impacts it may have on our compensation programs. While the performance targets for our 2020 incentive plans were set without taking any potential impacts to the business of the COVID-19 pandemic into consideration, the Committee may choose to exercise its discretion to adjust actual payouts as appropriate and allowed under the plans, in order to ensure our executive team is appropriately incentivized as they navigate this global crisis and continue to drive the Company’s strategic objectives. We thank you for your past support and welcome your feedback on our current practices. G. Patrick Phillips Chair, Compensation Committee Compensation Committee Report Our Compensation Committee has reviewed and discussed the disclosure set forth above under the heading “Compensation Discussion and Analysis” with management and, based on the review and discussions, has recommended to our Board that the “Compensation Discussion and Analysis” be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Respectfully submitted by the Compensation Committee of the Board of Cardtronics plc, G. Patrick Phillips, Chair Jorge M. Diaz (member until January 18, 2019) Douglas L. Braunstein Julie Gardner Warren C. Jenson Mark Rossi (member until January 18, 2019)
Compensation Discussion & Analysis The Compensation Discussion and Analysis (“CD&A”) set forth below provides an explanation of our compensation programs, including the objectives of such programs and the rationale for each element of compensation, for our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and the three other highestmost highly compensated executive officers serving as of December 31, 20182019 (collectively, the “Named Executive Officers” or "NEOs"). This CD&A also describes the actions and decisions of our Compensation Committee as it relates to 20182019 compensation decisions.
Our 20182019 Named Executive Officers For the year ended December 31, 2018,2019, our Named Executive Officers were as follows:
| | | Named Executive OfficerOfficers | Position | Edward H. West | Chief Executive Officer and Director | Gary W. Ferrera | Chief Financial Officer | Dan Antilley | Executive Vice President, Operations and Chief Information Security Officer | Stuart Mackinnon | Executive Vice President—President, Technology and Operations & Chief Information Officer | Marc Terry | Executive Vice President, & Managing Director—Director of International |
Executive Summary | | | | The Proxy Statement speaks as of the date of mailing. As a result, the discussion about our financial, operational, and strategic performance relates to 2019 and has not been edited to provide any updates regarding any potential COVID-19 pandemic impacts on our business activities or performance. | |
Compensation Program Philosophy and Design.Design The primary objectives of our executive compensation program are to attract, retain, and motivate qualified individuals who are capable of leading our Company to meet its business objectives and increase overall shareholder value. To achieve these objectives, our Compensation Committee’s philosophy is to implement a total compensation program that aligns the interests of management with those of our shareholders, creates incentives for the achievement of financial performance objectives, and rewards the performance of individuals based on our overall success, without encouraging excessive risk-taking. The primary components of our executive compensation program, as we discuss in further detail in this CD&A, are base salary, annual non-equity incentive plan awards (“Cash Incentive Plan”), and annual long-term incentives that include performance and time-based equity awards (“LTIP”).
Compensation Program Best Practices
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| The number of performance-based RSUs each Named Executive Officer may earn is capped at 225% of target for 2018 LTIP (200% of target for 2019 LTIP), with total equity grants subject to the Company-wide equity funding pool, as approved by our Compensation Committee;
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| We do not provide excise tax gross-ups for executive officers;
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| We do not backdate or reprice options;
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| Our annual Cash Incentive Plans are tied to specific pre-established financial performance goals as well as individual goals for the Named Executive Officers other than the CEO;
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| Payouts under our annual Cash Incentive Plan are capped at 200% of target;
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| We have a Clawback policy that applies to our annual Cash Incentive Plans as well as performance-based portion of our LTIP awards;
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| Our Compensation Committee, which is comprised solely of independent directors, reviews and approves all elements of Named Executive Officer compensation;
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| Our Compensation Committee retains an independent compensation consultant to advise on best practices relative to executive compensation matters;
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| Our executive officers and directors are subject to share ownership requirements; and
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| Our executive officers and directors are subject to our insider trading policy, which prohibits hedging and pledging.
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48 CARDTRONICS
Impact of Business Disruptions on 2018 Goal-Setting. Fiscal year 2018 marked a time of significant transition for the Company due to several business
2019 Performance and industry-related disruptions that occurred within a relatively short period. First,Key Priorities 7-Eleven, the Company’s largest retail relationship until that time, had notified Cardtronics in 2015 that it would not renew the ATM placement arrangement with the Company in the U.S. when it was scheduled to end in mid-2017. Also, ATMs located at these
| 2019 PROXY STATEMENT | 39
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stores represented 18% and 12.5% of the Company’s revenues in 2016 and 2017, respectively. In addition, the incremental profit margin on revenues attributable to 7-Eleven was higher than the company-wide average, so this relationship accounted for an even greater percentage of the Company’s gross profit. In 2018, senior management focused the business on five strategic priorities, outlined below, which were maintained in contrast, the 7-Eleven relationship in the U.S. accounted for less than 1% of consolidated revenues, and no gross profit.
In the final months of 2017, the Company also faced substantial, unexpected market-driven disruptions to its large U.K. and Australia businesses. In the U.K., the network (LINK) from which the Company derives the majority of its U.K. revenues announced plans to reduce the payments to operators of free-to-use ATMs in four annual installments of 5% each, beginning in 2018, for a total reduction of 20%. Separately and without prior notice, the four largest banks in the Australian market collectively ceased charging fees to all users of their ATMs, creating a significantly higher number of free-to-use ATMs for consumers (regardless of their banking affiliation). At this time, we expected this action to result in significantly lower customer traffic at our fee-based ATMs in Australia given the abrupt availability of a much higher number of “no fee” ATMs. As a result, the Company recorded an impairment of its Australian business unit during the third quarter of 2017.
In reaction to the anticipated cumulative impact of the 7-Eleven transition and the U.K. and Australia market events that occurred in late 2017, the Company’s stock price was substantially adversely impacted, falling 66% during 2017. As a result, management suffered a significant reduction in the value of its outstanding equity awards, which comprise a considerable portion of management’s total compensation,2019. With these key priorities as discussed in this CD&A. In fact, the performance-based equity compensation earned by management during 2016 did not commence vesting until 2018, and the portion that ultimately vested did so at a much lower value than when it was granted, representing a 31.4% drop from the grant date share price. For a specific example, based on management’s calculations, as of December 31, 2018, the value (realized and unrealized) of Mr. West’s 2016 and 2017 equity awards had diminished by a total of 28% or $1.6 million from their value as of their grant dates. Additionally, Mr. West’s payout in 2018 for the 2017 Cash Incentive Plan period was at 86.4% of target. In this way,guideposts, management was aligned with shareholders to drive performance leading to strong shareholder return. During 2019, Cardtronics returned to organic revenue growth and was highly motivated to improve business performance by focusing ondelivered a new, narrowed set of strategic prioritiesrobust profit and cash flow performance. Additionally, we strengthened our position in 2018, as further discussed below.
These collective business disruptions had a significant impact on the projected financial performance of Cardtronics for 2018, as well as the goal-setting process for the Company’s incentive plans. Due to the combined impact of these factors, asour largest markets and positioned the Company exited 2017 and commenced 2018, it was anticipated that Cardtronics would see a significant decline in Revenues and Adjusted EBITDA for 2018. In contrast, from 2011 through 2017,
the Company had experienced exceptional year-over-yearto continue delivering profitable growth in its primary incentive compensation measures. In that period, Company revenues increased from $625 millionthe future due to $1.5 billion, for a compounded annual growth rate of 16%, while Adjusted EBITDA increased from $156 million to $293 million, for a compounded annual growth rate of 11%. As a result, during that time, the Compensation Committee generally set target performance levels for our incentive plans above prior year targetssolid tactical execution and actual results. Please see our Annual Report on Form 10-K for a reconciliation of Adjusted EBITDA to Net income in the respective periods.
For 2018, as a result of the anticipated impacts of these numerous business disruptions, the Compensation Committee analyzed the circumstances and determined to set 2018 performance targets below 2017 actual performance levels. In doing so, the Compensation Committee considered all relevant factors, including: (i) the alignment of management’s interests with thatstrategic direction. The following are additional highlights of our shareholders, (ii) projected Company performance as established in the annual operating plan, (iii) the Compensation Committee’s philosophy of setting difficult but achievable performance goals for management, and (iv) the retention and engagement of the relatively new senior management team. In addition, recognizing the importance of focusing on cash flow and the return to growth following this transformational time, the Compensation Committee added a free cash flow metric to the Cash Incentive Plan design for 2018, and implemented a growth modifier to the performance-based RSUs within the 2018 LTIP, as discussed further below.
2018 Performance and Key Priorities. In order to overcome the challenges facing the business, senior management and the Board had identified and begun onboarding several new strategic executives to lead through transformation, including but not limited to a new CEO (i.e., Mr. West) and a new CFO for the Company. In late 2017 and early 2018, management identified the following key priorities to focus the business on effective execution to drive stabilization as well as growth of the business in 2018 and beyond:
Drive organic growth and durable revenue streams2019 performance.
Operational excellence & portfolio optimization
Earn “Raving Fans” status with customers
Deliver growth in free cash flow
Engender employee pride
With these key priorities as guide posts, management was aligned with shareholders and highly motivated to improve business performance.
| | | | | | Key Management Priorities: | | Performance Highlights | | Drive organic growth and durable revenue streams | | • Returned to full-year revenue growth of 3% constant-currency • North American 4% revenue growth, constant currency in 2019, PROXY STATEMENT | 40 driven by bank branding, Allpoint, and managed services • Double-digit revenue growth in Germany, Spain, and South Africa | | Operational excellence & portfolio optimization | | • Record system availability in major markets • ATM fleet optimized for profitability in the U.K. and Australia • Implemented a new global ERP system | | Earn “raving fans” status with customers | | • 80% of Allpoint customers describe their relationship as “Truly Loyal,” the highest rating by the Walker Voice-of-the-Customer Survey • Double-digit surcharge-free transaction growth at leading retailers in the U.S. | | Deliver growth in free cash flow | | • Adjusted free cash flow of $183 million in 2019 (as defined in the Cash Incentive Plan) • Repurchased approximately 1.7 million shares • Paid down outstanding debt by $96 million | | Engender employee pride | | • Continued investment in talent and development across the organization • Deployed enhanced corporate communication and collaboration tools on a global basis to drive increased collaboration throughout the organization • Utilized employee engagement survey to drive targeted program development |
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Ultimately, theThe Company’s 20182019 performance relative to established targets was strong. Although 2018 Revenue andsolid. Revenues were approximately in line with the established target for the year, coming in just short of the target. Adjusted EBITDA were down on a year-over-year basis as compared to 2017 (11% and 16%, respectively) due toexceeded the impact of the 7-Eleven transition and the market-driven disruptions in Australia and the U.K., the Company exited the year in a better financial position than where it began. This is evidencedtarget by year-over-year growth in adjusted free cash flow of $118 million, up nearly 60% from the prior year, which enabled the Company to pay down $113 million in outstanding debt during the year.1 Additionally, the Company turned its North American business from negative to positive organic revenue growth, excluding the impact of the 7-Eleven business. As discussed below, Consolidated Revenues, Adjusted EBITDA,approximately 5%, and Adjusted Free Cash Flow exceeded the established targets,target by approximately 27%. The Company strengthened its network by adding new partnerships with large financial institutions, retailers, and in the case of Adjusted EBITDA andemerging financial technology companies. The Company generated strong Adjusted Free Cash Flow actual results exceeded(as defined in the maximums setCash Incentive Plan) of $183 million for those metrics. In sum, management’sthe year, enabling the repayment of almost $100 million in outstanding debt while also investing $50 million to repurchase shares, resulting in a 4% reduction in share count.
New products were also delivered during the year, and the Company made important investments in infrastructure, security, and new software. The Company also communicated its medium-term growth strategy and performance outlook at its first investor day. During 2019, the Company operated at a high level, delivered new customer growth and expansion, and improved margins. Management’s execution relative to Company goals in 20182019 resulted in a significant increase in shareholder value during the year, with the Company’s stockshare price up 69% from the end of 2017 to the day after the Company reported its full-year 2018 results.Other Changes to 201872% in 2019.
2019 Executive Compensation Program.In 2018, the Compensation Committee approved a change in the Company’s LTIP design to include a combination of performance-based Restricted Stock Units (“performance-based RSUs”) (50% weighting), time-based Restricted Stock Units (“time-based RSUs”) (25% weighting), and stock options (new for 2018 with a 25% weighting). Also, as part of a contemplated transition to a three-year performance period for the performance-based RSUs beginning in 2019, the 2018 design utilized the following “two-step” process to determine the number of performance-based RSUs earned: | • | Step 1: The first step of the process measures actual 2018 performance relative to 2018 targets that were established based on 2018 operating plan metrics. |
| • | Step 2: The resulting number of performance-based RSUs earned under Step 1 (solely based on 2018 performance) is then modified (either up or down) based on the level of revenue and Adjusted EBITDA growth in 2019 over actual 2018 revenue and Adjusted EBITDA results. |
With this design, the Committee placed an emphasis on both (i) performance against goals for 2018, and (ii) growth in 2019 over 2018 actual performance, to incent the pursuit of growth, and to impose negative consequences in the event of two consecutive years (2018 and 2019) without it. Finally, any earned 2018 performance-based RSUs (as of the end of 2019) are subject to an additional year of time-based vesting. Time-based RSUs are subject to a two-year “cliff” vesting period (which increases to three-year graded vesting for the 2019 LTIP awards). Accordingly, the 2018 LTIP awards are effectively long-term in
Highlights nature, as their value will increase or decrease based on the Company’s improved performance and share price over time. This 2018 LTIP was transitional in nature as the Company adopted a three-year LTIP program in 2019.
2018 CEO Pay. During the course of CEO succession planning in 2017, the Compensation Committee considered external market data relative to CEO compensation arrangements (including special promotion equity awards) and concluded it would be prudent to enter into an employment agreement with Mr. West addressing the material elements of his compensation and key employment terms upon appointment to the CEO role. Due to the extraordinary events the Company was facing, and Mr. West’s leadership abilities and track record while serving as CFO for the Company and in other prior leadership roles, including previous roles as CEO, the Board believed that securing Mr. West’s services as the successor to Mr. Rathgaber was critical to successful navigation of the business through the following:
working through the loss of the 7-Eleven customer relationship (which accounted for 18% and 12.5% of the Company’s revenues in 2016 and 2017, respectively) and returning the North American business to growth;Principal Pay Mix
addressing the impact of the unexpected decision by Australia’s four largest banks to remove surcharges from transactions completed on their respective ATM networks as discussed above;
offsetting the impact of, and continuing work to stop or at least reduce the planned 20% total reduction in interchange announced by LINK in October 2017, to be implemented over four years commencing in 2018; and
effectively integrating, and achieving the intended synergies of, the Company’s largest ever acquisition (DC Payments).
Understanding the challenging environment facing the Company, the Committee approved, and the independent members of the Board ratified, a new compensation package for Mr. West, effective upon his promotion to CEO on January 1, 2018, including the following key components:
a new employment agreement with an initial three-year term;
a total direct compensation package (base salary, target annual incentive compensation award and annualized value of long-term equity grants) that was slightly below the median value for targeted total compensation of the relevant market for CEOs, as noted in the CEO Market Benchmarks, below:
| 1 | Revenue is defined as “Total Revenues” on a U.S. GAAP basis, as reported in our 2018 consolidated financial statements or as reported in the division’s financial statements, defined and reportedin the same manner as in our consolidated financial statements included in our Annual Report on Form 10-K. Adjusted EBITDA is a non-GAAP measure that excludes from Net Income depreciationexpense, amortization of intangible assets, share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses (if applicable in a particular period),certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company’s obligations for the payment of income taxes, interest expense, and otherobligations such as capital expenditures, and includes an adjustment for non-controlling interests. When the Company’s performance is reported externally, including when used in this proxystatement to reflect performance, Adjusted Free Cash Flow is a non-GAAP measure calculated as cash provided by operating activities less the impact of changes in restricted cash due to the timingof settlements and less payments for capital expenditures, including those financed through direct debt, but excluding acquisitions. For incentive plan purposes discussed herein, Adjusted Free CashFlow is simplified and calculated as Adjusted EBITDA less payments for capital expenditures as they are reported in the statement of cash flows in our Annual Report on Form 10-K. Revenue, AdjustedEBITDA and Adjusted Free Cash Flow were selected as performance metrics as we believe these three metrics are appropriate indicators of success and sustainable business performance thattranslate into increased shareholder value and are easily understandable and measurable. For a reconciliation of Net Income to Adjusted EBITDA and for other information concerning non-GAAPmeasures see pages 67-72 of our Annual Report on Form 10-K (filed with the SEC on February 28, 2019). |
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a special promotion equity award (“CEO Promotion Award”) consisting of:
| ○ | an award of $3 million in time-based RSUs subject to back-loaded vesting of 50% on December 15, 2019 and 50% on December 15, 2020 (“CEO Promotion Time-based RSUs”); and |
| ○ | an award of $2.5 million in performance-based RSUs, which are earned solely by the Company’s achievement of challenging relative total shareholder return (“TSR”) objectives over a three-year performance period ending on December 31, 2020 (“CEO Promotion Performance-based RSUs”). |
The Compensation Committee believed that awarding Mr. West a combinationhas designed the executive compensation program to reward pay-for-performance through Company and individual performance. A large percentage of promotion time-based awards and performance-based awards created the right balance between motivation and retention in his initial three-year term. In addition, the promotion equity awards were intended to: (i) induce Mr. West to serve as CEO given the challenges the Company was facing, (ii) create strong incentives for Mr. West to design, implement and deliver on fundamental growth and shareholder value creation opportunities, and (iii) provide a substantial and immediate alignment with shareholders. All of the CEO Promotion Awards are subject to multi-year vesting, with nearly half of the awards being subject to a relative TSR metric and measured over a full three-year performance period. Furthermore, to earn atotal target level payout, the Company’s relative TSR result must be above the median (i.e.,compensation is at the 55th percentile) of the peer set. The material terms of Mr. West’s 2018 compensation package include:
an annual salary of $750,000;
a targetrisk through our annual cash incentive award and Long-Term Incentive Plan, which are linked to performance measures that drive shareholder value. The mix of 100% of base salary with a maximum opportunity of 200% of the target amount; and
a target annual long-term incentive awardtotal compensation for the 2018 normal grant cycle of $3.5 million (in the years that follow 2018 the amount of any such annual long-term incentive awards2019 for our CEO and the performance criteria for any such awards are at the discretion of the Compensation Committee).
CEO Market Benchmarks | Component | Target Value | Market Percentile | Base Salary | $ | 750,000 | | 53rd percentile | Target Bonus | $ | 750,000 | | 36th percentile | Target Cash | $ | 1,500,000 | | 41st percentile | Long-Term Incentives | $ | 3,500,000 | | 46th percentile | Target Total | $ | 5,000,000 | | 41st percentile |
Cash Incentives Earned for 2018 Performance. For 2018, payments under our annual Cash Incentive Plan were reflectiveaverage of our performanceother NEOs is shown below.
CEO OTHER NEOs  Performance-Based Compensation Results and the achievement of certain performance goals, as discussed further in the “2018 Compensation Decisions—Cash Incentive Plan” section below. As a result of performance, along with other individual factors discussed below, our Compensation Committee approved actual payout amounts for our Named Executive Officers ranging from 155% to 197% of target, depending on the individual.Equity Awards Earned for 2018 Performance. As discussed above, the performance-based RSUs granted in 2018 are earned based on the two-step process. Based on the 2018 performance results, discussed in “2018 “Transition Year” Long-Term Incentive Plan” below, our Named Executive Officers earned a preliminary payout (representing “Step 1”) of 195% of the target number of performance-based RSUs granted in 2018. The preliminary results determined under Step 1 will be modified (up or down) based on the level of actual 2019 performance results as compared to actual 2018 performance results (“Step 2”). The final number of performance-based RSUs earned under the 2018 LTIP will be disclosed in the 2020 Proxy Statement, once results are finalized based on 2019 actual results. These awards will then be subject to additional time-based vesting, becoming fully vested in January 2021, subject to the Named Executive Officers’ continued employment with Cardtronics (or their qualified retirement dates, if earlier).
Prior Year Say-on-Pay Results. At the May 16, 2018 Annual Meeting of Shareholders, the “Advisory Vote on Named Executive Officer Compensation” proposal (the “say-on-pay” vote) received support from 97.4% of votes cast. Our Compensation Committee considered these results, and based on the overwhelming support from shareholders, determined that the results of the vote did not call for any significant changes to the executive compensation plans and programs in place for 2018. As discussed in this CD&A, the Compensation Committee determined to shift to a multi-year performance period for the LTIP.
Preview of 2019 Compensation Program. Having successfully navigated this period of major transition, long-term performance-based incentives for 2019 were established based on a three-year performance period, and include relative TSR and Adjusted EBITDA as equally weighted metrics. For 2019, the Committee elected to include relative TSR as a key metric to tie a considerable portion of management’s LTIP awards to the Company’s stock price performance as compared to the composite stock price performance of a broad group of companies with similarly-sized market capitalizations. In addition, the 2019 LTIP will incorporate a full three-year performance period for performance-based RSUs, and a three-year graded vesting period for time-based RSUs, along with a three-year graded vesting period for stock options, already included in the 2018 LTIP.
Payouts | | | | | Award | 2019 Payouts | Performance Link | | | | 2019 Annual Cash
Incentive Award | | Global Metrics resulted in a 150.8% payout (excluding individual performance) based on the following achievements • Revenue: achieved 99% of pre-established targets • Adjusted EBITDA: achieved 104.8% of pre-established targets • Adjusted Free Cash Flow: achieved 126.7% of pre-established targets | | | | 2018 Long-Term
Incentive Plan | | Final Payout of 205% based on: • Revenue: achieved 103.6% of 2018 pre-established targets, and 101.5% of 2019 PROXY STATEMENT | 42 pre-established targets • Adjusted EBITA: achieved 120.9% of 2018 pre-established targets, and 104.7% of 2019 pre-established targets |
Shareholder Feedback and Changes to 2019 Compensation Program TABLE OF CONTENTS
| | | | | | | We have reached out to shareholders totaling over | We are committed to ensuring that our shareholders fully understand our executive compensation programs, including how they reward the achievement of our strategic objectives and align the interests of our named executive officers with those of our shareholders. Since our 2019 Annual General Meeting of Shareholders, we engaged with our shareholders to seek feedback on our executive compensation program and any other subjects of interest. We focused our outreach on our top 25 shareholders, who represent over 90% of our shares outstanding. | | | | We held substantive stewardship discussions with holders of approximately | In addition to meetings management held with shareholders throughout the year, we engaged in discussions with shareholders during the spring, in advance of our 2019 Annual Shareholders Meeting, and again between October and December 2019. During the latter shareholder engagement effort, which focused primarily on stewardship, executive compensation, social responsibility and strategy matters, we were able to engage in discussions with shareholders that account for approximately 64% of our shares outstanding. These discussions generally included at least one Board member, either our Board Chair or our Compensation Committee Chair, in addition to our Chief Financial Officer, our General Counsel, our head of Human Resources, and our head of Investor Relations. Key points commonly raised or discussed with shareholders included: (1) executive compensation matters; (2) governance matters and Board composition; and (3) the Board’s role in strategy and risk. We also held an investor day during 2019 and communicated throughout the year with investors through in-person meetings, conferences and conference calls. During the year, in total, we held meetings with over 80% of our shareholder base. | | |
| | | | | | | | SHAREHOLDERS’ FEEDBACK | | Our responses: | • Executive Compensation and Corporate Governance most important areas | | Our Board is fully committed to ensuring that our long-term executive incentive plans align with shareholder interests. | • Most shareholders were supportive of the Company's executive compensation structure | | While over 74% of our shareholders supported our 2018 executive compensation program, we have evaluated feedback from our shareholders during our outreach discussions and believe that we have appropriately addressed shareholders’ primary concerns in the 2019 and 2020 plans and would expect increased shareholder support for this year’s say-on-pay proposal. | • Longer performance measurement periods preferred | | Several shareholders commented on preferring performance measurement periods of 3+ years. Our 2019 and 2020 long-term incentive plans now utilize three-year plans, providing long-term alignment of management and shareholders. | • Metrics used for long-term incentive plans should vary from short-term plans | | Starting for 2019, we now use two long-term performance measures, each measured over a cumulative three-year period: 1) relative Total Shareholder Return ("TSR") and 2) Adjusted EBITDA. We believe relative TSR aligns management directly with shareholders to deliver long-term shareholder value. While we also use an Adjusted EBITDA metric in our short-term plan, we believe delivering Adjusted EBITDA growth over both the short and long-term is one of the most important drivers of shareholder value and is an area over which management has a high degree of control. | • Selection of peer groups is important | | The Committee carefully evaluates the Company's peer group annually, looking at a range of companies in similar industries and revenues generally between one-third and three times those of the Company. The Committee also uses this process to help assess the competitiveness of total compensation for each executive officer. | | | |
Compensation Program Best Practices | | | | | | | | | | | | What We Do | | | What We Don’t Do | • Emphasis on performance-based compensation tied to specific, pre-established financial goals and individual goals (the latter for all NEOs except the CEO), with payouts capped at 200% of the target • Compensation recoupment (“clawback”) policy • Meaningful share ownership guidelines for our executive officers and directors • Independent Compensation Committee directors and compensation consultant • Insider Trading Policy | | • No excise tax gross-ups for executive officers • No backdating or repricing of options • No hedging or pledging of Cardtronics shares per our Insider Trading Policy • No excessive perquisites for executive officers | | | | | |
Compensation Determination Process Role of Compensation Committee, Compensation Consultant and Management Compensation Committee.Committee Our Compensation Committee is responsible for designing, recommending, and evaluating all compensation programs for our executive officers (including each of the Named Executive Officers) as well as oversight for other broad-based employee benefits programs. Our Compensation Committee receives information and advice from third-party compensation consultants as well as from our human resources department and management to assist in making decisions regarding compensation matters.
Compensation Consultant.Consultant Our Compensation Committee has sole authority to retain and terminate the services of a compensation consultant who reports to our Compensation Committee. The role of the compensation consultant is to advise our Compensation Committee in its oversight role, advise management in the executive compensation design process, and provide independent compensation data and analysis to facilitate the annual review of our compensation programs. The compensation consultant attends Compensation Committee meetings as requested by our Compensation Committee. Our Compensation Committee has retained Meridian Compensation Partners, LLC (“Meridian”) as its independent advisor. Meridian is an independent compensation consulting firm and does not provide any other services to us outside of matters pertaining toon executive officer and director compensation and related corporate governance. Meridian reports directly to our Compensation Committee, which is the sole party responsible for determining the scope of services performed by Meridian and the directions given to Meridian regarding the performance of such services. Meridian is not given a specific list of instructions, but rather is engaged to providein providing our Compensation Committee with information and advice that might assist our Compensation Committee in performing its duties. During 2018,2019, the services provided by Meridian included: updating our Compensation Committee on regulatory changes affecting our compensation program; providing information on market trends, practices, and other data; providinggiving guidance on CEO compensation;
reviewing our Peer Group (as defined in “Factors Considered in Setting Executive Pay — Peer Company Compensation Analysis”) and conducted a competitive analysis of compensation for our Named Executive Officers and our Board; assisting in reviewing and designing program elements; and providing overall guidance and advice about the efficacy of each elementcomponent of our compensation program and its fit within our Compensation Committee’s developing compensation philosophy. While the Meridian provides valuable guidance has been a valuable resourceand resources for our Compensation Committee in identifying compensation trends and determining competitive compensation packages for our executives, ourexecutives. Our Compensation Committee considers, but is not boundrequired to adhere tofollow, any particular advice or recommendations that Meridian may provide.
Our Compensation Committee considered the independence of Meridian in light of SEC rules and NASDAQ listing standards, including the following factors: (i) other services provided to us by the consultant; (ii) fees paid by us as a percentage of the consulting firm’s total revenue; (iii) policies or procedures maintained by the consulting firm that are designed to prevent a conflict of interest; (iv) any business or personal relationships between the individual consultants involved in the engagement and a member of our Compensation Committee; (v) any company stockshares owned by the individual consultants involved in the engagement; and (vi) any business or personal relationships between our executive officers and the consulting firm or the individual consultants involved in the engagement. Our Compensation Committee discussed these considerations, among other things, and concluded that the work of Meridian did not raise any conflicts of interest.
Role of the Chief Executive Officer in Executive Compensation Decisions.Decisions Our CEO works very closely with our Compensation Committee; however, except for providing a self-evaluation reportCommittee, other than with respect to our Compensation Committee, he does not make, participate in, provide input for, or make recommendations about his own compensation. Our CEO sets our strategic direction and strives to promote compensation programs that motivate employee behavior, consistent with our strategic objectives.objectives and corporate values. Under the direction of our Compensation Committee, and in coordination with the compensation consultant, our CEO coordinates the annual review of the compensation programs for the executive officers. This review includes an evaluation of each officer’s historical pay and career development, individual and corporate performance, competitive practices and trends, and various compensation-related issues. Based on the results of this review, our CEO makes recommendations to our Compensation Committee regarding each element of compensation for each of the executive officers, other than himself. Our CEO also provides our Compensation Committee with his evaluation of the performance of each executive officer other than himself during the prior year for their consideration for determining actual payouts. Our Compensation Committee also meets in executive session, independently of the CEO and other members of senior management, to review not only compensation issues related to the CEO, but those of all Named Executive Officers and other executive officers. Other than the CEO, none of our other Named Executive Officers provide direct recommendations to our Compensation Committee or participate in the executive compensation setting process; however, our CFO provides information and recommendations to our Compensation Committee when it reviews and sets incentive performance goals. | 2019 PROXY STATEMENT | 43
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Elements of Total Compensation
The table below summarizes the elements of our compensation program, the form in which each element is paid, the purpose or objective of each element, key features of the element, and any performance metrics associated with each element.
ELEMENT OF COMPENSATION
| | BASE SALARY
| FORM OF COMPENSATION
| | Cash – fixed
| PURPOSE / OBJECTIVE
| | To provide an executive officer with a fixed income stream, based upon the executive’s roles and responsibilities within our organization and relative skills and experience, consistent with market for comparable positions.
| KEY FEATURES
| | Initial salaries for executive officers are set by our Compensation Committee based on responsibilities and market data. Amounts are reviewed annually by our Compensation Committee, with adjustments made based on the executive’s individual performance and our Company’s performance for the year. Additional factors considered may include other achievements or accomplishments, any mitigating priorities that may have resulted in a change in the goals, market conditions, participation in the development of other Company employees, as well as any additional responsibilities that were assumed by the executive during the period.
| PERFORMANCE METRIC(S)
| | Not based on performance metrics
| | | | ELEMENT OF COMPENSATION
| | ANNUAL CASH INCENTIVE PLAN AWARDS
| FORM OF COMPENSATION
| | Cash – variable
| PURPOSE / OBJECTIVE
| | To reward operating results consistent with metrics set forth in the non-equity incentive compensation plan, and provide a strong motivational tool to achieve or exceed earnings and other related pre-established performance objectives.
| KEY FEATURES
| | Our Compensation Committee establishes a threshold, a target and a maximum possible payout for each executive. Amounts are paid after year end once our Compensation Committee has determined our performance and each executive’s performance relative to pre-established performance goals, which reflects our Compensation Committee’s desire that the plan pay amounts relative to actual performance and provides for substantially increased rewards when performance targets are exceeded.
| PERFORMANCE METRIC(S)
| | Performance metrics are selected on an annual basis that our Compensation Committee believes will produce the best return for our shareholders given the then-current conditions. For 2018, our Compensation Committee selected Revenue, Adjusted EBITDA and Adjusted Free Cash Flow, defined in “2018 Compensation Decisions – Cash Incentive Plan” below.
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ELEMENT OF COMPENSATION
| | LTIP AWARDS
| FORM OF COMPENSATION
| | Performance-based RSUs, time-based RSUs, and non-qualified stock options - variable
| PURPOSE / OBJECTIVE
| | To create a strong financial incentive for achieving or exceeding performance goals, tie the interests of management to the interests of shareholders, encourage a significant equity stake in our Company, and to attract and retain executives.
| KEY FEATURES
| | 2018 LTIP: Under our 2018 LTIP, the size of an award is generally based on a review of competitive market data. Equity awards granted under the 2018 LTIP were comprised of 50% performance-based RSUs, 25% time-based RSUs, and 25% non-qualified stock options.
2019 LTIP: The 2019 LTIP will incorporate a full three-year performance period for performance-based RSUs, and will add relative TSR as a metric.
| PERFORMANCE METRIC(S)
| | Performance metrics are selected on an annual basis by our Compensation Committee, with the goal of producing the best return for our shareholders given the then-current conditions. For 2018, our Compensation Committee selected Revenue, Adjusted EBITDA and Adjusted Free Cash Flow, defined in “2018 Compensation Decisions - Cash Incentive Plan” below.
| | | | ELEMENT OF COMPENSATION
| | DISCRETIONARY BONUSES
| FORM OF COMPENSATION
| | Cash – variable
| PURPOSE / OBJECTIVE
| | To reward an executive for significant contributions to a Company initiative, or when the executive has performed at a level above what was expected, or for attracting executives.
| KEY FEATURES
| | Granted at the discretion of our Compensation Committee, discretionary bonuses are not a recurring element of our executive compensation program.
| PERFORMANCE METRIC(S)
| | Varies, but typically relates to performance with respect to special projects that require significant time and effort on the part of the executive. Payments made in conjunction with significant relocation are not performance-based.
| | | | ELEMENT OF COMPENSATION
| | HEALTH, LIFE, RETIREMENT SAVINGS AND OTHER BENEFITS
| FORM OF COMPENSATION
| | Eligibility to participate in benefit plans generally available to our employees, including retirement, health, life insurance and disability plans (generally fixed).
| PURPOSE / OBJECTIVE
| | Our broad-based employee benefits programs are designed to allow us to remain competitive in the market in terms of attracting and retaining employees, and in the case of our 401(k) plan, to assist our employees in providing for their retirement.
| KEY FEATURES
| | Under our 401(k) plan, for 2018, we matched 100% of employee contributions up to 4% of the employee’s salary. Employees immediately vest in their contributions while our matching contributions vest at a rate of 20% per year. We do not provide any supplemental retirement benefits to our Named Executive Officers. For Mr. Terry, we provided retirement, health and life insurance benefits that are customarily provided to executives in the United Kingdom.
| PERFORMANCE METRIC(S)
| | Not performance-based
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Factors Considered in Setting Executive Pay Our Compensation Committee reviews “tally sheets” for the CEO and the CFO, which are prepared by management and reviewed by Meridian. The tally sheets contain information related to prior years’ compensation, outstanding equity awards (both vested and unvested) and various termination scenarios. The tally sheets enable our Compensation Committee to review and evaluate various components of the executive pay programs, understand the magnitude of potential payouts as a result of certain employment terminations, and consider changes to our plans and programs in light of emerging trends.
Other Factors.Factors In determining the level of total compensation to be set for each compensation component, our Compensation Committee considers a number of factors, including market competitiveness analysesanalysis of our compensation levels compared with those paid by comparable companies, our most recent annual performance, each individual Named Executive Officer’s performance, the desire to generally maintain internal equity and consistency among our executive officers, tally sheets (as discussed above), and any other considerations that our Compensation Committee deems to be relevant. While our Compensation Committee reviews the total compensation package we provide to each of our Named Executive Officers, our Board and our Compensation Committee view each element of our compensation program as distinct elements, each serving a specific purpose and, therefore, as distinct elements.purpose. In other words, a significant amount of compensation paid to an executive in the form offor one element will not necessarily cause us to reduce another element of the executive’s compensation. Accordingly, we have not adopted any formal or informal policy for allocating compensation between long-term and short-term, between cash and non-cash, or among the different forms of non-cash compensation.
Peer Company Compensation Analysis.Analysis To help assess the competitiveness of total compensation for each NEO, and as a reference point for 20182019 pay decisions, the Compensation Committee analyzed executive compensation data from the following two sources: (i) publicly available proxy statements of companies selected as peer companies (the “Proxy Peer Group”), and (ii) the proprietary Equilar database (the “Equilar Peer Group”). For purposes of review, the Compensation Committee utilized data from the Proxy Peer Group as the primary data source to assess the competitive positioning for the CEO and CFO target compensation. Given the limited data available from proxy statements for our Named Executive Officers other than CEO and CFO, the Compensation Committee utilized data from the Equilar Peer Group as the primary data source to assess competitive positioning for the other Named Executive Officers. Data from the Equilar Peer Group was used as a secondary data source for the CEO and CFO positions. The companies in the Proxy Peer Group and the Equilar Peer Group, identified in the tables below, were approved by the Compensation Committee following a review of companies, prepared by Meridian, that had revenues generally between one-third and three times those of the Company, and were within similar industries as the Company based on select General Industry Classification Standard (“GICS”) codes. In addition to the revenue and industry criteria, the Committee also considered market capitalization, companies with a technology services focus, and companies with which we compete for executive talent. The Equilar Peer Group is limited by the number of participating companies that submit compensation data to the Equilar database. Therefore, even though similar GICS codes and revenue parameters were used to filter the companies in the Equilar database, only a limited number of Proxy Peer Group companies participated in the Equilar database. Certain companies have subsequently merged with others or become private companies. Their most recent available compensation data was still utilized if considered current and accurate.
Proxy Peer Group
| | | | | | | | | PROXY PEER GROUP | EQUILAR PEER GROUP | ACI Worldwide, Inc. | Blackhawk Network Holdings, Inc. CSG Systems International, Inc. Euronet Worldwide, Inc. Everi Holdings Inc. Fair Isaac Corporation Global Payments, Inc. Jack Henry & Associates, Inc. | Acxiom Corporation
| Moneygram International, IncInc. | Blackhawk NetworkLiveRamp Holdings, Inc.
| Neustar, Inc.
| CSG Systems International, Inc.
| SS&C Technologies Holdings, Inc. | Earthlink Inc.
| Total System Services, Inc. | Euronet Worldwide, Inc.
| Vantiv Inc.
| Everi Holdings Inc.
| VeriFone Systems, Inc. | Fair Isaac Corp.
| WEX, Inc. | Global Payments,Worldpay, Inc.
| | | | Equilar Peer Group
| Black Knight, Inc. | Manhattan Associates, Inc.
| Blackhawk Network Holdings, Inc. Broadridge Financial Solutions, Inc. Convergys Corporation CoreLogic, Inc. Genpact Limited Global Payments Inc. Manhattan Associates, Inc. | MoneyGram International, Inc. | Broadridge Financial Solutions,Nuance Communications, Inc.
| NeuStar,Pegasystems, Inc.
Sabre Corporation TTEC Holdings, Inc. Tyler Technologies, Inc. WEX, Inc. Worldpay, Inc. | Convergys Corporation
| Nuance Communications, Inc.
| CoreLogic, Inc.
| Pegasystems, Inc.
| DST Systems, Inc.
| Sabre Corporation
| Earthlink Holdings Corp
| TeleTech Holdings, Inc.
| ExlService Holdings, Inc.
| Tyler Technologies, Inc.
| Genpact Limited
| Vantiv, Inc.
| Global Payments Inc.
| |
Our Compensation Committee also believes that using the Proxy Peer Group provides meaningful reference points for competitive design practices, types of equity awards used, and equity usage levels for the Named Executive Officers. Our Compensation Committee’s goal is to provide a target total compensation package that is competitive with prevailing practices in our industry and within the peer groups, as described above. Our Compensation Committee does not react to or structure our compensation programs on market data alone, and it has not historically utilized any true “benchmarking” techniques when making compensation decisions. Furthermore, our Compensation Committee did not use the peer groups to establish a particular range of compensation for any element of pay in 2018; rather,2019. Instead, the peer group market data werewas used as general guidelines in our Compensation Committee’s deliberations. Goal Setting Process | 2019 PROXY STATEMENT | 46
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2018 Compensation Decisions
Overview of Pay Mix for 2018: Selected Compensation in Proportion to Total Compensation.
The following table sets forth salary and sign-on bonus compensation (“fixed compensation”) and annual non-equity incentive plan and long-term equity incentive compensation (“incentive-based variable compensation”) as a percentage of total compensation, as presented in the “Total” column of the “Summary Compensation Table for 2018” below, that we paid for the year ended December 31, 2018 to each Named Executive Officer:
Named Executive Officer | Fixed
Compensation | Incentive-based
Variable
Compensation | Edward H. West | 6.3% | 93.7% | Gary W. Ferrera | 19.5% | 80.5% | Dan Antilley | 25.8% | 74.2% | Stuart Mackinnon | 33.8% | 66.2% | Marc Terry | 27.2% | 72.8% |
Base Salary. In its review of the base salary of each of our Named Executive Officers for 2018, our Compensation Committee generally considered the market data available for the aforementioned peer groups, as applicable. Our Compensation Committee evaluated the results of the market data available and the performance of the executive and made adjustments to the base salaries of certain Named Executive Officers, as deemed necessary, based on the various factors identified above under “Other Factors.”
The following table reflects annualized base salary amounts for our 2018 Named Executive Officers for 2018 and 2017:
Named Executive Officer | 2018 Annualized
Base Salary | 2017 Annualized
Base Salary | Percentage
Increase | Edward H. West | $750,000 | $600,000 | 25.0% | Gary W. Ferrera | $550,000 | $550,000 | — | Dan Antilley | $425,000 | $425,000 | — | Stuart Mackinnon | $375,000 | $335,000 | 11.9% | Marc Terry | $480,516 | — | — |
Mr. West’s salary increased effective January 1, 2018, as a result of his promotion to CEO. Mr. Mackinnon’s salary increased effective March 24, 2018, in order to align his pay with his increased responsibilities in 2018. Mr. Terry’s salary has been converted from pounds sterling to U.S. dollars using the yearly average exchange rate of approximately $1.33 for 2018.
Cash Incentive Plan. Each year, our Compensation Committee reviews and approves a non-equity incentive compensation plan (the “Cash Incentive Plan”). Under the Cash Incentive Plan, the Compensation Committee sets a threshold, a target, and a maximum payout for each of our Named Executive Officers. For the 2018 Cash Incentive Plan, the threshold, target, and maximum annual incentive payout amounts for each Named Executive Officer were as follows:
Named Executive Officer | 2018 Incentive Payout as a % of Base Salary | Threshold | Target | Maximum | Edward H. West | 50.0% | 100.0% | 200% | Gary W. Ferrera | 50.0% | 100.0% | 200% | Dan Antilley | 50.0% | 100.0% | 200% | Stuart Mackinnon | 42.5% | 85.0% | 170% | Marc Terry | 32.5% | 65.0% | 130% |
Under the 2018 Cash Incentive Plan, two components factor into whether a participant’s award will be paid, as well as what level of payout may be achieved: (i) performance qualifiers; and (ii) performance metrics, both of which are further described below. In addition to the financial goals, for fiscal 2018, all Named Executive Officers’ except for Mr. West had individual performance goals set for them by the Compensation Committee, which comprised 25% of their respective incentive cash bonuses. Mr. West’s payout achievement of this award is based solely on Company performance, subject to committee review. See “2018 Cash Incentive Plan Performance Levels” below for a discussion of the applicable individual performance standards and achievement.
Performance Qualifiers. Performance qualifiers are minimum levels of Company performance that must be attained in order for payouts under the Cash Incentive Plan to occur. Amounts of potential payouts under the Cash Incentive Plan are not adjusted based on the level of performance achieved, but rather act as absolute prerequisites that must be met before we will make payments under the Cash Incentive Plan. For 2018, the qualifiers were (i) our compliance with all material public company regulations and reporting requirements for the fiscal year and (ii) the participant’s achievement of the minimum performance standards established by his superior or our Board and completion of required corporate and compliance training as assigned. See “2018 Cash Incentive Plan Performance Levels” below for a discussion of the applicable individual performance standards and achievement.
Financial Performance Metrics. Performance metrics are key metrics designated as critical to our success. For 2018, the metrics for the Cash Incentive Plan were (i) Revenue, (ii) Adjusted EBITDA, and (iii) Adjusted Free Cash Flow. Revenue is defined as “Total Revenues” on a U.S. GAAP basis, as reported in our 2018 consolidated financial statements or as reported in the division’s financial statements, defined and reported in the same manner as in our consolidated financial statements included in our Annual Report on Form 10-K. Adjusted EBITDA is a non-GAAP measure that excludes from Net Income depreciation expense, amortization of intangible assets, share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses (if applicable in a particular period),
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certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company’s obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and includes an adjustment for non-controlling interests. Adjusted Free Cash Flow is a non-GAAP measure, which for incentive plan purposes is calculated as Adjusted EBITDA less payments for capital expenditures as reported in the statement of cash flows in our Annual Report on Form 10-K. Revenue, Adjusted EBITDA and Adjusted Free Cash Flow were selected as performance metrics as we believe these three metrics are appropriate indicators of success and sustainable business performance that translate into increased shareholder value and are easily understandable and measurable. For a reconciliation of Net Income to Adjusted EBITDA and for other information concerning non-GAAP measures see pages 67-72 of our Annual Report on Form 10-K (filed with the SEC on February 28, 2019). All Named Executive Officers incentive compensation is based on consolidated results (“Global” results), except for Mr. Terry, who also is compensated on results for our International division, which is defined as the combined Europe and Africa segment and the Australia and New Zealand segment as disclosed in our Annual Report on Form 10-K (filed with the SEC on February 28, 2019).
Individual Performance Goals. The individual performance goals set for each Named Executive Officer (other than Mr. West) were intended to align the individual officers with the Company’s business strategies and objectives in each officer’s sphere of duties and control, and varied from individual to individual and included both objective and subjective measures of performance. Examples include customer satisfaction metrics, achieving customer and new customer growth objectives, implementation of programs and systems, process and control improvements, and completion of development projects. These individual goals are key to financial and business success for Cardtronics, and thus contribute to producing income and shareholder returns over the long-term. Grading of performance on the individual performance goals for these individuals was determined as threshold, target, or maximum achievement, and were weighted for each executive based on importance. A threshold achievement resulted in no payout for that goal. The CEO provided an assessment of the achievement of these individual goals, which ranged from threshold to maximum achievement, and based on that input, the Committee determined that each of these executives achieved their individual performance above target levels.
2018 Cash Incentive Plan Performance Levels. The following table provides (i) the 2018 pre-established threshold, target and maximum performance levels for each of our financial performance metrics and (ii) our performance results for each metric, as adjusted for the effects of foreign currency exchange rate movements from target, and other minor adjustments as called for in the Cash Incentive Plan.
Performance Metric | Threshold | Target | Maximum | Performance
Results
Achieved | | (In thousands) | Global Revenue | $1,241,649 | $1,293,385 | $1,345,120 | $1,339,971 | Global Adjusted EBITDA | $249,027 | $262,134 | $283,105 | $290,045 | Global Adjusted Free Cash Flow | $136,920 | $152,134 | $176,475 | $183,371 | | | | | | International Revenue | $492,319 | $512,832 | $533,345 | $517,037 | International Adjusted EBITDA | $123,950 | $130,474 | $140,912 | $139,323 | International Adjusted Free Cash Flow | $77,692 | $86,324 | $100,136 | $92,100 |
When establishing the appropriate threshold, target and maximum performance levels for the performance measures, the Compensation Committee typically sets the target level based on a number of factors, including the Board-approved operating plan for the year, as well as reference to industry dynamics and prior performance results. The Compensation Committee’s goal for each financial performance measure is to establish a target level of performance that we are not certain to attain, so that achieving or exceeding the target level requires significant effort by our executive officers. Once the target levels are set, our Compensation Committee setsestablishes the threshold and maximum amounts. Taking a variety of business factors into account, our Compensation Committee sets the threshold at what it considers to be the lowest level of acceptable performance and the maximum at what our Compensation Committee views would be outstanding performance versus target and operating plan. As discussed above, for 2018, as a result of the anticipated impacts of the numerous business disruptions, For 2019, the Compensation Committee analyzedestablished relative TSR and Adjusted EBITDA as equally weighted metrics for the circumstancesLTIP based on a cumulative three-year performance period. For the Company’s 2019 Cash Incentive Plan, the Company established targets for Revenues, Adjusted EBITDA, and Adjusted Free Cash Flow, measured over a one-year performance period. The Compensation Committee evaluated several factors when setting performance-based award targets for 2019. Having recently repositioned the business to enhance focus on organic growth, the Committee felt that it was important to structure the 2019 LTIP and Cash Incentive Plan so that payouts at target required organic revenue and profit growth. Additionally, in the case of the LTIP, this growth is required over a multi-year period. In setting the performance metrics for both the Cash Incentive Plan and the LTIP for 2019, the Compensation Committee took into account various factors that would have an impact on the Company’s performance. To achieve target level performance in 2019 on the Cash Incentive Plan, constant currency revenue growth of 3% was required for Revenues and Adjusted EBITDA. Among other factors, the setting of these targets was informed by continued negative revenue and profit pressure from the Company’s second-largest operation, its U.K. business, which was impacted by recent reductions in the interchange rate earned on a majority of the Company’s revenues in that market. This U.K. market headwind was expected to be more than offset by growth expectations, particularly with financial institutions in the U.S., and continued expansion in Germany, Spain, and South Africa. The 2019 LTIP targets were established to require significant growth in cumulative Adjusted EBITDA over a three-year period. Additionally, for the 2019 LTIP, relative TSR was added as a performance metric. To achieve target-level payment on the relative TSR measure, the Company must perform at the 55th percentile level for select Companies in the S&P 600. Achievement on the relative TSR metric will be measured as of the end of 2021. The Compensation Committee believes these metrics have properly balanced a long-term focus for executive management with the short-term execution that will be required to deliver durable performance over time.
Risk Assessment Related to Our Compensation Structure We have reviewed our compensation policies and practices for all employees, including executive officers, and determined that our compensation policies, practices, and programs are not reasonably likely to have a material adverse effect on the Company. Moreover, we believe that several design features of our compensation programs and policies reduce the likelihood of excessive risk-taking. The program design provides a balanced mix of cash and equity, annual and long-term incentives, and performance metrics. Our 2019 Cash Incentive Plan has a cap of 200% of the target. The performance-based RSUs under our 2019 LTIP have a cap of 200% of the target. Our 2019 Cash Incentive Plan and the performance-based portion of our 2019 LTIP under the 2007 Plan are subject to our Clawback policy. Our executive officers and directors are subject to share ownership requirements. Our executive officers and directors are subject to our Insider Trading Policy, which prohibits hedging and pledging. Compliance and ethical behaviors are integral factors considered in all performance assessments. We set the proper ethical and moral expectations through our policies and procedures and provide various mechanisms for reporting issues. We maintain an internal and external audit program, which enables us to verify that our compensation policies and practices are aligned with expectations. We perform extensive financial analysis work before entering into new contracts or ventures, thus making it more difficult for individuals to act against our long-term interest by attempting to manipulate earnings results in the short term. We have determined that, for all employees, our compensation programs do not encourage excessive risk and instead encourage behaviors that support sustainable value creation.
Elements of Total Compensation Principal Elements of Total Compensation The table below summarizes the principal elements of our compensation program, the form in which each element is paid, the purpose or objective of each element, key features of the element, and any performance metrics associated with each element. | | | | | | Elements | CEO | Other NEOs | Overview | | | | | | Base Salary | | | A competitive level of cash to attract and retain executive talent | | Annual Cash Incentive | | | Designed to motivate our executives to achieve annual financial goals and other business objectives Total amount paid based on achievement of Revenue, Adjusted EBITDA and Adjusted Free Cash Flow metrics, and for NEOs other than the CEO, individual performance goals | | Long-Term Incentive Plan | | | Designed to motivate our executives to build long-term shareholder value | | | | | | 2019 LTIP comprised of the following: | | Performance-Based RSUs | | Earned based on cumulative Adjusted EBITDA (50%) and relative TSR (50%) metrics over a three-year performance period | | Time-Based RSUs | | Further tie the interests of our executives to shareholders and encourage a significant equity stake in the company and vest over three years | | Stock Options | |
Base Salary In its review of the base salary of each of our Named Executive Officers for 2019, our Compensation Committee generally considered the market data available for the aforementioned peer groups, as applicable. Our Compensation Committee evaluated the results of the market data available and the performance of the executive. It made adjustments to the base salaries of certain Named Executive Officers, as deemed necessary, based on the various factors identified above under “Other Factors.” The following table reflects annualized base salary amounts for our 2019 Named Executive Officers for 2019 and 2018: | | | | | | | | | | | Named Executive Officer | 2019 Annualized
Base Salary |
| 2018 Annualized
Base Salary |
| Percentage
Increase |
| | Edward H. West |
| $750,000 |
|
| $750,000 |
| — |
| | Gary W. Ferrera |
| $550,000 |
|
| $550,000 |
| — |
| | Dan Antilley |
| $425,000 |
|
| $425,000 |
| — |
| | Stuart Mackinnon |
| $400,000 |
|
| $375,000 |
| 6.7 | % | | Marc Terry |
| $459,669 |
|
| $480,516 |
| (4.3 | )% |
Mr. Mackinnon’s salary increased effective April 1, 2019, to align his pay with his increased responsibilities in 2019. Mr. Terry’s salary remained the same in pound sterling from 2018 to 2019, with the above-noted decrease resulting from yearly average exchange rate fluctuations. For 2019, Mr. Terry’s salary has been converted from pounds sterling to U.S. dollars using the yearly average exchange rate of approximately $1.28, compared to $1.33 for 2018. Cash Incentive Plan Each year, our Compensation Committee reviews and approves a non-equity incentive compensation plan (the “Cash Incentive Plan”). Under the Cash Incentive Plan, the Compensation Committee sets the threshold, target, and maximum payouts for each of our Named Executive Officers. These are dependent on the payouts at each level for each performance targets below 2017 actual performance levels.metric, which can vary by Named Executive Officer. Performance below the threshold for a metric will result in no incentive payout for that metric. See further details below under "2019 Cash Incentive Plan Performance Levels". For the 2019 Cash Incentive Plan, if each performance metric assigned achieved the same level, the threshold, target, and maximum annual incentive payout amounts for each Named Executive Officer would have been: | | | | | | 2019 Incentive Payout as a % of Base Salary | | Named Executive Officer | at Threshold---------------at Target__________at Maximum | | Edward H. West | | | Gary W. Ferrera | | | Dan Antilley | | | Stuart Mackinnon | | | Marc Terry | |
Components of 2019 Cash Incentive Plan Under the 2019 Cash Incentive Plan, two components factor into whether a participant’s award will be paid, as well as what level of the payout may be achieved: (i) performance qualifiers; and (ii) performance metrics (financial performance measures and, for our Named Executive Officers other than our CEO, individual performance goals). | | | | | | Component | Description | | | | | | Performance Qualifiers | Absolute prerequisites that must be met before we will make any payments under the Cash Incentive Plan. | Our compliance with all material public company regulations and reporting requirements for the fiscal year, the participant’s achievement of the minimum performance standards established by his superior or our Board, and completion of required corporate and compliance training as assigned. | | | | | | | | | | Performance Metrics | Financial Performance Metrics | Key metrics designated as critical to our success. Appropriate indicators of success and sustainable business performance that translate into increased shareholder value and are easily understandable and measurable. | 2019 Metrics: • Revenue(1) • Adjusted EBITDA(2) • Adjusted Free Cash Flow(3) | | | | | | Individual Performance Goals | Apply to our NEOs, other than our CEO, whose payout under the Cash Incentive Plan is based solely on Company performance. Intended to align the individual officers with the Company’s business strategies and objectives in each officer’s sphere of duties and control | Varied from individual to individual and include both objective and subjective measures of performance. Examples include customer satisfaction metrics, achieving customer and new customer growth objectives, implementation of programs and systems, process and control improvements, and completion of development projects. | | | | |
| | (1) | Revenue is defined as “Total Revenues” on a U.S. GAAP basis, as reported in our 2019 consolidated financial statements or as reported in the division’s financial statements, defined and reported in the same manner as in our consolidated financial statements included in our Annual Report on Form 10-K. |
| | (2) | Adjusted EBITDA is a non-GAAP measure that excludes from Net Income depreciation expense, amortization of intangible assets, share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses (if applicable in a particular period), certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company’s obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and includes an adjustment for non-controlling interests. |
| | (3) | Adjusted Free Cash Flow is a non-GAAP measure, which for incentive plan purposes is calculated as Adjusted EBITDA less payments for capital expenditures as reported in the statement of cash flows in our Annual Report on Form 10-K (filed with the SEC on March 2, 2020). |
For a reconciliation of Net Income to Adjusted EBITDA and for other information concerning non-GAAP measures, see pages 57-61 of our Annual Report on Form 10-K (filed with the SEC on March 2, 2020). All Named Executive Officers incentive compensation is based on consolidated results (“Global” results), except for Mr. Terry, who also is compensated on results for our International division, which is defined as the combined Europe and Africa segment and the Australia and New Zealand segment as disclosed in our Annual Report on Form 10-K (filed with the SEC on March 2, 2020).
2019 Cash Incentive Plan Performance Levels Financial Performance Metrics For 2019, the Compensation Committee wanted to motivate management to achieve growth over the prior year and therefore decided to add a Prior Year level of achievement for Adjusted EBITDA, which approximates 2018 Adjusted EBITDA after adjusting for exchange rates. Performance below the threshold for a metric will result in no incentive payout for that metric. After achievement of the qualifying factors, a threshold level of performance for a given metricthe Revenue and Adjusted Free Cash Flow metrics will result in 50% of the target opportunity being earned for those metrics and for the Adjusted EBITDA metrics will result in 30% of the target opportunity being earned for those metrics; performance at the Prior Year level for the Adjusted EBITDA metrics will result in 50% of the target opportunity being earned for that metric;those metrics; performance at the target level for a given metric will result in 100% of the target opportunity being earned for that metric; and performance at or above the maximum level for a given metric will result in 200% of the target opportunity being earned. The following table provides (i) the 2019 pre-established threshold, prior year (as applicable), target and maximum performance levels for each of our financial performance metrics and (ii) our performance results for each metric, as adjusted for the effects of foreign currency exchange rate movements from the target, and other minor adjustments as called for in the Cash Incentive Plan. | | | | 2019 actual performance | 2019 PROXY STATEMENT | 48 | Prior Year level of achievement for Adjusted EBITDA metric (see discussion above) |
| | | | | | Performance Metric | Threshold____________Target_____________Maximum | | (In thousands) | | Global Revenue | | | Global Adjusted EBITDA | | | Global Adjusted Free Cash Flow | | | International Revenue | | | International Adjusted EBITDA | | | International Adjusted Free Cash Flow | |
Individual Performance Goals Grading of performance on the individual performance goals for our Named Executive Officers other than our CEO was determined as threshold, target, or maximum achievement, and was weighted for each executive based on importance. A threshold achievement resulted in no payout for that goal. The CEO provided an assessment of the achievement of these individual goals, which ranged from threshold to maximum achievement, and based on that input, and the Committee determined that each of these executives achieved their individual performance goals near or above target levels.
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2019 Cash Incentive Plan Results and Payouts Our Compensation Committee also determines the relative weightingsweighting of each performance metricsmetric for each Named Executive Officer. These are presented in the following table, along with the actual total performance percentage achieved, and the amount paid to each Named Executive Officer:| Officer. The Committee further noted that the performance qualifiers noted above were achieved, and therefore the amounts awarded to each of the Named Executive Officers under our 2019 Cash Incentive Plan were paid in March 2020. | Global
| International
| Individual
Performance
| | | | Named Executive Officer
| Revenue
| Adjusted
EBITDA
| Adjusted
Free Cash
Flow
| Revenue
| Adjusted
EBITDA
| Adjusted
Free Cash
Flow
| Total
Target
| Performance
Achieved as
Percentage of
Target
| Amount
Paid
|
Edward H. West | 33.4% | 33.3% | 33.3% | 0.0% | 0.0% | 0.0% | 0.0% | 100.0% | 196.7% | $1,475,070 | Gary W. Ferrera | 25.0% | 25.0% | 25.0% | 0.0% | 0.0% | 0.0% | 25.0% | 100.0% | 183.0% | $1,006,539 | Dan Antilley | 25.0% | 25.0% | 25.0% | 0.0% | 0.0% | 0.0% | 25.0% | 100.0% | 180.0% | $ 765,030 | Stuart Mackinnon | 25.0% | 25.0% | 25.0% | 0.0% | 0.0% | 0.0% | 25.0% | 100.0% | 181.3% | $ 577,757 | Marc Terry | 8.3% | 8.3% | 8.3% | 16.7% | 16.7% | 16.7% | 25.0% | 100.0% | 154.9% | $ 483,869 |
| | | | | | | | | | | | | | | | | | | | | | | | | | Global | | International | Individual
Performance |
| Total
Target |
| Performance
Achieved as
Percentage
of Target |
| Amount
Paid |
| | Named Executive Officer | Revenue |
| Adjusted
EBITDA |
| Adjusted
Free
Cash Flow |
| | Revenue |
| Adjusted
EBITDA |
| Adjusted
Free
Cash Flow |
| | Edward H. West | 33.3 | % | 33.3 | % | 33.3 | % | | — |
| — |
| — |
| — |
| 100.0 | % | 150.8 | % |
| $1,130,979 |
| | Gary W. Ferrera | 25.0 | % | 25.0 | % | 25.0 | % | | — |
| — |
| — |
| 25.0 | % | 100.0 | % | 144.6 | % |
| $795,288 |
| | Dan Antilley | 25.0 | % | 25.0 | % | 25.0 | % | | — |
| — |
| — |
| 25.0 | % | 100.0 | % | 145.6 | % |
| $618,791 |
| | Stuart Mackinnon | 25.0 | % | 25.0 | % | 25.0 | % | | — |
| — |
| — |
| 25.0 | % | 100.0 | % | 133.1 | % |
| $452,533 |
| | Marc Terry | 8.3 | % | 8.3 | % | 8.3 | % | | 16.7 | % | 16.7 | % | 16.7 | % | 25.0 | % | 100.0 | % | 132.4 | % |
| $395,642 |
|
The Compensation Committee retains the right to make adjustments to actual performance results to take into account the occurrence of any material event, such as a material acquisition, which would impact the calculation of these performance metrics. As permitted by the 20182019 Cash Incentive Plan, the Compensation Committee adjusted the actual performance results achieved during the 20182019 year for (i) the neutralization of foreign currency exchange rate changes as compared to the annual operating plan and (ii) the exclusion of acquisition-related and restructuring costs in accordance with the terms of the 20182019 Cash Incentive Plan. See page 6959 of our Annual Report on Form 10-K (filed with the SEC on February 28, 2019)March 2, 2020) for a discussion of acquisition-related costs and restructuring costs excluded in Adjusted EBITDA. The Committee further noted that the performance qualifiers noted above were achieved, and therefore the amounts awarded to each of the Named Executive Officers under our 2018 Cash Incentive Plan were paid in March 2019. Recoupment. The 2018 Cash Incentive Plan is subject to our Clawback policy, under which, if the operating or financial results used to calculate the payout are later restated (other than as a result of new accounting pronouncements), a portion of the payouts related to performance-based awards made to participants may be required to be returned to us, if the calculated payout using restated results was lower than originally calculated. Additionally, under this provision, an executive who engages in fraud or other misconduct leading to the restatement is required to return the full payout for the period in question.
Equity Compensation Plans. We have two shareholder-approved long-term equity incentive plans: (i) the Fourth Amended and Restated 2007 Stock Incentive Plan (the “2007 Plan”); and (ii) the 2001 Stock Incentive Plan (the “2001 Plan”).
2001 Plan. In June 2001 and prior to us being a publicly traded company, our Board adopted the 2001 Plan. Various plan amendments have been approved since that time, the most recent being in November 2007. The 2001 Plan allowed for the issuance of equity-based awards in the form of nonqualified stock options and stock appreciation rights. However, as a result of the adoption of the 2007 Plan, at the direction of our Board, no
further awards will be granted under our 2001 Plan. There are no remaining awards outstanding under this plan as of December 31, 2018.
2007 Plan. In August 2007, our Board and our shareholders approved our 2007 Plan. The adoption, approval, and effectiveness of this plan were contingent upon the successful completion of our initial public offering, which occurred in December 2007. Effective July 1, 2016, Cardtronics assumed and adopted the third amendment and restatement of the 2007 Plan and, the Board approved and adopted certain amendments to the 2007 Plan on January 18, 2019, as described below. The 2007 Plan provides for incentive stock option awards intended to qualify under Section 422 of the Code, nonqualified stock options, restricted stock awards, restricted stock unit awards, annual incentive awards, performance awards, phantom stock awards, and bonus stock awards. The number of shares that may be issued under the 2007 Plan may not exceed 9,679,393 shares, subject to adjustment to reflect stock dividends, stock splits, recapitalizations and similar changes in our capital structure. The individual share limitations that any one participant can receive in any given fiscal year is 1,500,000 shares and, for awards denominated in cash amounts, the amount may not exceed $3,500,000 in a given year.
The January 18, 2019 amendment to the 2007 plan implemented various administrative changes and other clarifications, updates, and conforming revisions. The changes included removing provisions relating to performance goals and conditions previously intended to satisfy Section 162(m) of the Internal Revenue Code, as amended, revising the definition of “Corporate Change,” conforming rights and responsibilities of the plan administrator in respect to the treatment of options and stock appreciation rights in connection with a Corporate Change to similarly apply to restricted stock units, restricted stock and phantom stock awards, providing for the forfeiture or clawback of awards upon certain termination events, providing that, in a merger or other transaction, awards assumed from another company will not be counted against the share reserve, and adding the requirement for dividends and dividend equivalents to also be subject to restrictions on underlying awards.
Long-Term Incentive Programs.Programs Our Compensation Committee approves our annual LTIPs, which are subject to the terms and conditions of our Fourth Amended and Restated 2007 Stock Incentive Plan (the “2007 Plan”) and formalize specific details for the | 2019 PROXY STATEMENT | 49
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equity awards granted during the year. Our Compensation Committee has the sole authority to grant awards under the respective year’s LTIP to our Section 16 officers, as defined by the SEC, and our CEO has the authority to grant a limited number of awards (based on a pool approved each year by the Compensation Committee) to the non-Sectionother employees that are not Section 16 Officers and other employees. officers. The type and number of awards held by each of our Named Executive Officers as of December 31, 20182019 that were granted pursuant to our 2007 Plan are described below in the “Outstanding Equity Awards at Fiscal 2018 Year End”2019 Year-End” section. 2018 “Transition Year”
2019 Long-Term Incentive Plan. Prior to Following the “transition year” for the 2018 the performance-based RSU component of the long-term incentive program was designed to measure financial performance over a one-year performance period. Earned performance-based RSUs were then subject to additional time-based vesting over four years from grant year. Over the past few years, management andLTIP, as discussed below, the Compensation Committee have been committed to changeimplemented the design of the performance-based RSUs to measure performance over a cumulative three-year period, to better link long-term performance to incentive payouts for our executives. To achieve this result and begin the transition to a three-year program, the Compensation Committee developed the 2018 Long-Term Incentive program (the “2018 LTIP”) as a transitional year design that incorporates a “two-step process”, discussed further below. The 2019 Long-Term Incentive programPlan (the “2019 LTIP”) will incorporatebased on a full three-year performance period.period, and intends to use this plan design for future long-term incentive plans as appropriate. The 20182019 LTIP provided for the grant of performance-based RSUs (with a 50% weighting), time-based RSUs (with a 25% weighting), and nonqualified stock options (with a 25% weighting) to executives, including the Named Executive Officers. The performance-based RSUs are earned based on cumulative performance achievement over a two-year period followed by vesting requirements based on continued employment (or to an employee’s qualified retirement date, if earlier),three years with 100% vesting January 31, 2021following performance achievement (as described more fully below). The time-based RSUs “cliff” vest 100% January 31, 2020, and the stock options vest 33.3%one-third after 12, 24, and 36 months from January 31st31st of the grant year, subject to continued service through those vesting dates. For information regarding the fair value of these awards, see the “Stock Awards” column and the related footnotes of the “Summary Compensation Table for 2018”2019” included in “Executive Compensation” below. As noted above, performance-based RSUs are earned based on achievement of results over a two-yearthree-year performance period, which is calculated in two steps. The first step of the process measuresmeasuring actual 20182019, 2020, and 2021 cumulative performance relative to 2018 targets that were established based on 2018the 2019 long-range operating plan metrics. The resulting number of performance-based RSUs earned under Step 1 (solely based on 2018 performance) is then modified (either up or down, by up to 12.5%) based on the level of Revenue and Adjusted EBITA growth in 2019 over actual 2018 revenue and Adjusted EBITA results. For both Step 1 and Step 2, performance-basedplan. Performance-based RSUs are earned based on the achievement of a Revenuean Adjusted EBITDA performance metric and an Adjusted EBITAa relative TSR performance metric, with each metric being equally weighted. Adjusted EBITDA is a non-GAAP measure that excludes from Net Income depreciation expense, amortization of intangible assets, share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses (if applicable in a particular period), certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company’s obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and includes an adjustment for non-controlling interests. Adjusted EBITDA was selected as a performance metric as we believe it is an appropriate indicator of success and sustainable business performance that translates into increased shareholder value and is easily understandable and measurable. For a reconciliation of Net Income to Adjusted EBITDA and for other information concerning non-GAAP measures, see pages 57 - 61 of our Annual Report on Form 10-K (filed with the SEC on March 2, 2020. Relative TSR compares the Company’s TSR over the three-year performance period, to the TSR of companies in a comparator group, consisting of companies included
in the S&P 600 Index with a market capitalization between $1 billion and $5 billion as of December 31, 2018. Relative TSR was selected as a performance metric to tie a considerable portion of management’s LTIP awards to the Company’s share price performance as compared to the composite share price performance of a broad group of companies with similarly-sized market capitalizations. If we achieve our Adjusted EBITDA and relative TSR performance levels at the threshold, target, or maximum levels of performance, then 50%, 100%, or 200% of the targeted number of performance-based RSUs will be deemed earned, respectively. If we meet the threshold for one metric, but not the other, all of the performance-based RSUs associated with the metric that did not achieve threshold performance will be forfeited, resulting in a 25% overall payout. Our Compensation Committee retains the right to make certain adjustments to actual performance results, similar to the Cash Incentive Plan. Our Compensation Committee believes that providing executives with a long-term incentive opportunity that includes both time- and performance-based equity awards is competitive and allows us to attract and retain a talented executive team. In addition to serving as a retention tool, the 2019 awards were intended to incentivize the executives to focus on achieving certain levels of Adjusted EBITDA and share price performance, and therefore also align executive and shareholder interests. In March 2019, in addition to approving the annual share pool limit for total number of awards available to be granted, our Compensation Committee awarded the following target number of awards under the 2019 LTIP to our Named Executive Officers: | | | | | | Named Executive Officer | Time-based
RSUs | Performance-based
RSUs | Stock Options | | Edward H. West | 28,821 | 57,642 | 68,531 | | Gary W. Ferrera | 10,705 | 21,410 | 25,453 | | Dan Antilley | 4,375 | 8,749 | 10,401 | | Stuart Mackinnon | 4,117 | 8,235 | 9,790 | | Marc Terry | 3,276 | 6,552 | 7,788 |
The cumulative Adjusted EBITDA threshold, target, and maximum levels for the three-year performance period were set in early 2019, and will be disclosed in the 2022 Proxy Statement, once the three-year results for the 2019 LTIP are finalized. For the relative TSR metric the Committee pre-established threshold, target and maximum performance levels at the 25th, 55th, and 75th percentile of the Comparator Group. Actual results achieved will be disclosed in the 2022 Proxy Statement, once the three-year results for the 2019 LTIP are finalized. As discussed above, the performance-based RSUs vest following performance achievement. The time-based RSUs and the stock options vest one-third after 12, 24, and 36 months from January 31st of the grant year, with vesting contingent upon continued employment (or set to an employee’s qualified retirement date, if earlier). 2018 “Transition Year” Long-Term Incentive Plan The 2018 Long-Term Incentive Plan (“the 2018 LTIP”) was a transitional program to shift from one-year to three-year performance periods, at a time marked by several substantial and unrelated business and industry disruptions. These included the loss of the Company’s largest retail client relationship, which had higher than average margins, as well as unexpected negative market-driven disruptions in the United Kingdom and Australia. The design of the 2018 LTIP was effectively a two-year performance period, followed by an additional year of vesting. This design was constructed to incentivize management to deliver on strategic initiatives and grow both the Revenue and Adjusted EBITA metrics during what was a pivotal transition period for the business. For further details, see pages 50 and 51 of the proxy statement for the Company’s 2019 Annual General Meeting of Shareholders filed with the SEC on April 2, 2019 (the “2019 Proxy Statement). The performance-based RSUs granted in 2018 were earned according to a two-step analysis of the achievement of results over a two-year performance period, as described below. The plan was based on the achievement of equally-weighted Revenue and Adjusted EBITA metrics, followed by a one-year time-based vesting requirement to establish an overall three-year vesting period. Revenue is defined as “Total Revenue” on a U.S. GAAP basis, as reported in our 2018 and 2019 consolidated financial statements and calculated in the same manner as in our consolidated financial statements included in our Annual Report on Form 10-K. Adjusted EBITA is a non-GAAP measure and is defined as “Adjusted EBITA” as reported in the reconciliation of Non-GAAP Financial Measures in our Annual Report on Form 10-K. Both measures for both steps of the calculation were adjusted for changes in currency exchange rates and other adjustments as contemplated by the 2018 LTIP. These two measures were selected as we believe they are appropriate measures of sustainable business performance and drive increased shareholder value. For a reconciliation of Net Income to Adjusted EBITA, see page 6959 of our Annual Report on Form 10-K (filed with the SEC on February 28, 2019)March 2, 2020). If we achieved our
| | | | | | | STEP 1
Measurement of 2018 Performance against 2018 targets based on operating plan metrics, resulting in an initial number of performance-based RSUs earned | | STEP 2
Modification of the initial number of performance-based RSUs earned under Step 1 based on the level of each metric’s growth in 2019 (either up or down, by up to 12.5% for each metric) based on the level of Revenue and Adjusted EBITA growth in 2019 over 2018 actual Revenue and Adjusted EBITA results | | | |
Calculation of Performance-Based RSUs awarded in 2018 Under the 2018 LTIP, upon achievement of Revenue and Adjusted EBITA performance levels at the threshold, target, or maximum levels of performance, then 50%, 100%, or 225% of the targeted number of performance-based RSUs willwould be deemed earned, respectively. If we meetHowever, if threshold performance was achieved for one metric under both Step 1 and Step 2, but not the other metric, all of the performance-based RSUs associated with the metric that didn’tdid not achieve threshold willwould be forfeited, resulting in a 25% of target preliminary payout after Step 1, and a 12.5% of target final payout after Step 2. Our Compensation Committee retains As disclosed on page 51 of the right to make adjustments to actual performance results, similar to the Cash Incentive Plan, and exercised the operating discretion2019 Proxy Statement, for Step 1 of the 2018 LTIP, by adjustingwe achieved an initial performance payout of 195% of the actual performance results with the same adjustments made to the Cash Incentive Plan as described above.Our Compensation Committee believes that providing executives with a long-term incentive opportunity that includes both service- and performance-based equity awards is competitive and allows us to attract and retain a talented executive team. In addition to serving as a retention tool, the 2018 awards were intended to incentivize the executives to focus on achieving certain levels of Revenue and Adjusted EBITA.
In March 2018, in addition to approving the annual stock pool limit for total number of awards available to be granted, our Compensation Committee awarded the following target number of awards underperformance-based RSUs earned for each participant.
For Step 2, the 2018 LTIP to our Named Executive Officers:Named Executive Officer | Service-based
RSUs | Performance-
based RSUs | Stock Options | Edward H. West | 39,220 | 78,440 | 114,544 | Gary W. Ferrera | 14,568 | 29,135 | 42,544 | Dan Antilley | 5,414 | 10,829 | 15,812 | Stuart Mackinnon | 4,777 | 9,555 | 13,952 | Marc Terry | 4,366 | 8,732 | 12,751 |
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The following table provides (i) the 20182019 pre-established threshold, target and maximum performance levels for Step 1 for each of our performance metrics and (ii) actual results as adjusted for the effects of foreign currency exchange rate movements from the 2018 operating plan and other minor adjustments as called for in the plan. The two targeted amounts for Revenue and Adjusted EBITA were set in early 2018 as growth percentages over 2018 actual results based on our intermediate-term growth objectives and our Board-approved operating plan.
Performance Metric | Threshold | Target | Maximum | Performance
Results
Achieved | | (In thousands) | Revenue | $1,241,649 | $1,293,385 | $1,345,120 | $1,339,971 | Adjusted EBITA | $129,802 | $136,633 | $147,564 | $165,131 |
| | | | | | Performance Metric | Threshold____________Target__________Maximum | | (In thousands) | | Revenue | | | Adjusted EBITA | |
| | | | Positive growth over 2018 actual results |
Accordingly, for Step 12 of the 2018 LTIP, we achieved above2019 target results for Revenue and above maximum results for Adjusted EBITA of $1.34$ 1.4 billion and $165.1$181.6 million, respectively, resulting in an initiala final performance payout of 195%205% of the target number of performance-based RSUs earned for each participant. As noted above, this result will be modified based on | | | | | | | Named Executive Officers | Target
Performance-based RSUs |
| Final
Performance-based RSUs |
| | Edward H. West | 78,440 |
| 160,802 |
| | Gary W. Ferrera | 29,135 |
| 59,726 |
| | Dan Antilley | 10,829 |
| 22,199 |
| | Stuart Mackinnon | 9,555 |
| 19,587 |
| | Marc Terry | 8,732 |
| 17,900 |
|
Pursuant to the modifier applied in Step 2, in which 2019 actual results are compared against growth targets set over 2018 actual results, and can result in a reduction or increase up to 12.5%terms of each performance metric. The growth targets for 2019 were initially set in early 2018, when the 2018 goals were set, and will be disclosed inLTIP, the 2020 Proxy Statement, once results for 2019 are finalized. Theearned performance-based RSUs remain subject to the additional time-based vesting requirements, discussed above. Pursuant to the termsand 100% of the 2018 LTIP, 100%earned RSUs will vest January 31,st, 2021, with vesting contingent upon continued employment (or set to an employee’s qualified retirement date, if earlier). As discussed above, the time-based RSUs and stock options are subject to the same time-based vesting requirements applicable to the performance-based RSUs, but vest 100% January 31,
2020 for time-based RSUs, and one-third after 12, 24, and 36 months from January 31st of the grant year.Special Equity Awards Granted during 2018
In 2018, the Committee, in conjunction with his promotion to CEO, granted Mr. West a one-time award of the CEO Promotion Time-based RSUs and the CEO Promotion Performance-based RSUs. The achievement of the CEO Promotion Performance-based RSUs is based solely on the Company’s Relative TSR over the three-year performance period, in relation to that of a Comparator Group’s relative TSR, consisting of companies included in the S&P 600 Index with a market capitalization between $1 billion and $5 billion as of December 29, 2017.
Performance Level
| Payout Level (% of Target)
| Relative TSR Ranking
| Maximum
| 200%
| 75th percentile
| Target
| 100%
| 55th percentile
| Threshold
| 50%
| 30th percentile
|
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See “2018 CEO Pay” above for further discussion on the awards made to Mr. West.
Additionally, the Committee granted Mr. Terry a one-time award of 3,641 time-based RSUs, which vest 50% January 31, 2019, 25% January 31, 2020, and 25% January 31, 2021. This award was granted in recognition of extraordinary efforts on various projects since joining the Company in September 2017.
Other Compensation and Tax Matters
DISCRETIONARY BONUSES | | | | | | FORM OF COMPENSATION | Cash – variable | | | PURPOSE / OBJECTIVE
| To reward an executive for significant contributions to a Company initiative, or when the executive has performed at a level above what was expected, or for attracting new executives. | | | KEY FEATURES
| Granted at the discretion of our Compensation Committee, discretionary bonuses are not a recurring element of our executive compensation program. | | | | PERFORMANCE METRIC(S) | Varies, but typically relates to performance with respect to special projects that require significant time and effort on the part of the executive. Payments made from time to time upon hiring a new executive or, in conjunction with a significant relocation, are not performance-based. |
HEALTH, LIFE, RETIREMENT SAVINGS AND OTHER BENEFITS | | | | | | FORM OF COMPENSATION | Eligibility to participate in benefit plans generally available to our employees, including retirement, health, life insurance, and disability plans (generally fixed). | | | | PURPOSE / OBJECTIVE | Our broad-based employee benefits programs are designed to allow us to remain competitive in the market in terms of attracting and retaining employees, and in the case of our 401(k) plan, to assist our employees in providing for their retirement. | | | | KEY FEATURES | Under our 401(k) plan, for 2019, we matched 100% of employee contributions up to 4% of the employee’s salary. Employees immediately vest in their contributions while our matching contributions vest at a rate of 20% per year. We do not provide any supplemental retirement benefits to our Named Executive Officers. For Mr. Terry, we provided retirement, health, and life insurance benefits that are customarily provided to executives in the United Kingdom. | | | | PERFORMANCE METRIC(S) | Not performance-based |
Share Ownership Guidelines.Guidelines We adopted a share ownership policy (the “Ownership Policy”) for senior executives and non-employee directors in August 2018, which requires such participants to maintain a stated level of share ownership in Cardtronics in order to align the interests of our senior executives and non-employee directors with those of our shareholders. The Ownership Policy is based on market trend information regarding executive and director share ownership policies, including design approaches, types of share counted towards ownership, the time provided to participants to meet goals, and common multiples of base salary. The Ownership Policy applies to our shares acquired by the participants on or after June 1, 2011, or the participant’s hire date, excluding shares acquired in the open market. Under the terms of the Ownership Policy, as of December 31, 20182019, participants are required to attain at least the following target levels of share ownership in accordance with the terms of the Ownership Policy: Position
| |
| | Position | Target Ownership Level | | Non-employee Directors | 5xannual retainer | Non-employee Directors
Chief Executive Officer | 4x annual retainer5xbase salary
| Chief ExecutiveFinancial Officer | 5x 3xbase salary
| Chief Financial Officer
| 3x base salary
| Other Section 16 Officers | 2xbase salary |
In March 2019 the Compensation Committee approved increasing the target ownership level for Non-employee Directors to 5x the annual retainer.
Prior to attaining the above target ownership levels, a participant is prohibited from selling, gifting or otherwise transferring more than 50% of any of the shares subject to the Ownership Policy, unless those shares are tendered to us in payment of (i) a stock option exercise price or (ii) any state, federal or other income tax, payroll, social security and/or social insurance withholding obligations that arise in connection with such shares. If a participant wishes to sell unrestricted Covered Shares in excess of the allowable amount and is under the target ownership level, the individual must request an exception and have it approved by our Compensation Committee, who has complete discretion to allow or disallow any such sales.
Participants are not subject to a time period to attain their target ownership level, since this will be achieved through the retention of a specified percentage of equity grants each year through our incentive plans. If a participant’s base salary results in an increased ownership requirement, the participant’s equity grants will continue to be subject to the holding requirement until the | 2019 PROXY STATEMENT | 51
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new applicable target ownership level is attained. It is anticipated that actual levels of share ownership will fluctuate over time based on the change in pay rates and the value of the underlying shares. Accordingly, on a periodic basis, our Compensation Committee will review the target ownership levels to determine if any adjustments are appropriate. Furthermore, in response to unusual circumstances and in its sole discretion, our Compensation Committee may grant temporary relief or a waiver to individuals and/or categories of participants so as to permit them to sell unrestricted shares covered by the Ownership Policy even if such sale results in that participant falling below his or her prescribed target ownership level. All of our Named Executive Officers are currently in compliance with the Ownership Policy.
Tax Deductibility of Compensation.Compensation In general, Section 162(m) of the Internal Revenue Code (“Section 162(m)”) denies a federal income tax deduction to the Company group in the U.S. for compensation in excess of $1 million per year paid to certain employees (the “Covered Employees”). As a result of the Tax Cuts and Jobs Act, enacted on December 22, 2017, Covered Employees include any individual who served as the CEO or CFO at any time during the taxable year and the three other most highly compensated officers for the taxable year. Any individual who is a Covered Employee in any tax year beginning after December 31, 2016, will remain a Covered Employee for all future years. Prior to 2018, Section 162(m) included an exception from the deduction limitation for “qualified performance-based compensation”,compensation,” however, the Tax Cuts and Jobs Act eliminated the “qualified performance-based compensation” exception effective for tax years beginning after December 31, 2017. As a result, compensation paid to the Covered Employees in excess of $1 million is generally nondeductible in the U.S., whether or not it is performance-based. The Tax Cuts and Jobs Act includes a transition rule under which the changes to Section 162(m) will not apply to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017, and is not materially modified after that date. To the extent applicable to our existing contracts and awards, the Compensation Committee may avail itself of this transition rule. However, because of uncertainties as to the application and interpretation of the transition rule, no assurances can be given at this time that our existing contracts and awards will meet the requirements of the transition rule.
While the Committee considers tax deductibility in developing and implementing our compensation program, the Committee also believes it is important to maintain flexibility in administering compensation programs to promote varying Company goals. Therefore, amounts paid under any of our executive compensation programs may be subject to the Section 162(m) limitation on deductibility.
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COMPENSATION COMMITTEE REPORT
Our Compensation Committee has reviewed and discussed the disclosure set forth above under the heading “Compensation Discussion and Analysis” with management and, based on the review and discussions, has recommended to our Board that the “Compensation Discussion and Analysis” be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
Respectfully submitted by the Compensation Committee of the Board of Cardtronics plc,
G. Patrick Phillips, Chair
Douglas L. Braunstein (member as of June 20, 2018)
Jorge M. Diaz (member until January 18, 2019)
Julie Gardner
Warren C. Jenson (member as of January 18, 2019)
Mark Rossi (member until January 18, 2019)
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EXECUTIVE COMPENSATION TABLES Summary Compensation Table for 20182019 The following table discloses the compensation paid to or earned by our Named Executive Officers serving during the applicable period: Name & Principal Position | Year | Salary(1) | Bonus(2) | Stock
Awards(3) | Non-Equity
Incentive Plan
Compensation(4) | All Other
Compensation(5) | Total | Edward H. West
Chief Executive Officer | 2018 | $749,519 | $— | $9,823,713 | $1,475,070 | $11,594 | $12,059,896 | 2017 | $600,000 | $— | $1,884,680 | $518,585 | $11,394 | $3,014,659 | 2016 | $575,000 | $— | $3,723,904 | $797,258 | $511,145 | $5,607,307 | Gary W. Ferrera
Chief Financial Officer | 2018 | $551,763 | $— | $1,324,682 | $1,006,539 | $11,594 | $2,894,578 | 2017 | $41,954 | $100,000 | $499,994 | $44,281 | $50 | $686,279 | Dan Antilley
Chief Information Security Officer | 2018 | $426,362 | $— | $492,340 | $765,030 | $11,561 | $1,695,293 | 2017 | $243,285 | $100,000 | $1,407,641 | $425,000 | $327 | $2,176,253 | Stuart Mackinnon
Executive Vice President Technology and Operations &
Chief Information Officer | 2018 | $366,202 | $— | $434,418 | $577,757 | $11,495 | $1,389,872 | 2017 | $330,512 | $— | $1,011,665 | $243,431 | $11,237 | $1,596,845 | Marc Terry
Executive Vice President & Managing Director— International(6) | 2018 | $480,516 | $— | $491,683 | $483,869 | $16,531 | $1,472,599 |
| | | | | | | | | | | Name & Principal Position | Year | Salary(1) | Bonus(2) |
| Stock
Awards(3) | Non-Equity
Incentive Plan
Compensation(4) | All Other
Compensation(5) | Total | Edward H. West Chief Executive Officer | 2019 | $750,000 | — |
| $4,086,500 | $1,130,979 | $11,794 | $5,979,273 | | 2018 | $749,519 | — |
| $9,823,713 | $1,475,070 | $11,594 | $12,059,896 | | 2017 | $600,000 | — |
| $1,884,680 | $518,585 | $11,394 | $3,014,659 | Gary W. Ferrera Chief Financial Officer | 2019 | $550,000 | — |
| $1,517,831 | $795,288 | $11,794 | $2,874,913 | | 2018 | $551,763 | — |
| $1,324,682 | $1,006,539 | $11,594 | $2,894,578 | | 2017 | $41,954 | $100,000 | $499,994 | $44,281 | $50 | $686,279 | Dan Antilley Executive Vice President, Operations and
Chief Information Security Officer | 2019 | $425,000 | — |
| $620,255 | $618,791 | $11,761 | $1,675,807 | | 2018 | $426,362 | — |
| $492,340 | $765,030 | $11,561 | $1,695,293 | | 2017 | $243,285 | $100,000 | $1,407,641 | $425,000 | $327 | $2,176,253 | Stuart Mackinnon Executive Vice President,
Technology and Chief Information Officer | 2019 | $393,269 | — |
| $583,784 | $452,533 | $11,729 | $1,441,315 | | 2018 | $366,202 | — |
| $434,418 | $577,757 | $11,495 | $1,389,872 | | 2017 | $330,512 | — |
| $1,011,665 | $243,431 | $11,237 | $1,596,845 | Marc Terry Executive Vice President,
Managing Director of International(6) | 2019 | $459,669 | — |
| $464,478 | $395,642 | $25,802 | $1,345,591 | | 2018 | $480,516 | — |
| $491,683 | $483,869 | $16,531 | $1,472,599 |
| | (1) | The CompanyCompany underwent a pay-cycle change during 2018 for certain of our Named Executive Officers, resulting in the 2018 amounts presented in the “Salary”“Salary” column varying from the “2018 "2018 Annualized Base Salary”Salary" column presented in of the “2018“2019 Compensation Decisions —– Base Salary”Salary” section included in “Compensation“Compensation Discussion and Analysis”Analysis” above. |
| | ((2)2)
| Mr.Mr. Ferrera and Mr. Antilley were each provided $100,000 sign-on bonuses in connection with the commencement of their employment with the Company on November 28, 2017, and May 30, 2017, respectively. |
| | ((3)3)
| Amounts included in the “Stock Awards” columnscolumn represent the aggregate grant date fair value of the awards made to our Named Executive Officers, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718, disregarding any estimates for forfeitures, based upon the assumptions in Note 54 - Share-Based Compensation footnote to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018.2019. A portion of the awards made to our Named Executive Officers are time-based RSUs and stock options, for which the associated expense is recognized ratably up to four and three years, respectively. Additionally, a portionFor more information about the stock awards granted in 2019, see “Grants of the awards are performance-based RSUs that are based upon the probable outcome of certain performance conditions at the date of grant. In the case of our CEO, a portion of his CEO Promotion Award is performance-based RSU’s with a market condition.Plan-Based Awards for 2019” below. |
Additionally, a portion of the awards are performance-based RSUs that are based upon the probable outcome of certain performance conditions at the date of the grant. The grant date fair values ultimately realized by the executives upon the actual earning of the awards may be or were different tofrom the values reflected above. Performance payout for the performance-based awards granted in 20182019 has not been finalized yet, as the awards have a three-year performance periods are multi-year awards, as discussed inperiod. See the “2018 “Transition Year”“2019 Long-Term Incentive Plan” and the “Special Equity Awards Granted during 2018” sectionssection included in “Compensation Discussion and Analysis” above. for further details. The maximum valuesvalue of the 2018 performance-based RSUs granted under the 20182019 LTIP and the CEO Promotion Award if the highest level of performance conditions is achieved, willwould be as noted in the table below: Named Executive Officer
| Maximum Value of 2018 Stock
Awards That Could Be Achieved
| Edward H. West
| $6,514,569
| Gary W. Ferrera
| $1,462,504
| Dan Antilley
| $543,589
| Stuart Mackinnon
| $479,637
| Marc$4,485,124 for Mr. West, $1,665,912 for Mr. Ferrera, $680,746 for Mr. Antilley, $509,811 for Mr. Mackinnon, and $640,752 for Mr. Terry,
| $438,325
|
The amounts in the “Maximum Value of 2018 Stock Awards That Could Be Achieved” column above is based on a grant date fair value of $22.31 and a 225%200% of target maximum, for the 2018 LTIP awards, and a grant date fair value of $24.13 (calculated$31.99 for the performance-based awards with an Adjusted EBITDA metric, and $45.82 for the awards with a relative TSR metric, calculated using the Monte Carlo valuation method) and a 200% of target maximum for the CEO Promotion Award.
method. | | ((4)4)
| Represents amounts paid to each of the Named Executive Officers under our 20182019 Cash Incentive Plan in March 20192020 based on the achievement of certain performance levels discussed in the “2018“2019 Cash Incentive Plan Performance Levels” section included in “Compensation Discussion and Analysis” above. |
EXECUTIVE COMPENSATION TABLES
| | ((5)5)
| Amounts presented in the “All Other Compensation” column for 20182019 include the following: |
Named Executive Officer | Matching
401(k)
Contributions | Life
Insurance
Premiums | Other | Total | Edward H. West | $11,000 | $594 | $— | $11,594 | Gary W. Ferrera | $11,000 | $594 | $— | $11,594 | Dan Antilley | $11,000 | $561 | $— | $11,561 | Stuart Mackinnon | $11,000 | $495 | $— | $11,495 | Marc Terry | $— | $— | $16,531 | $16,531 |
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| | | | | | | | | | Named Executive Officer | Matching 401(k)
Contributions |
| Life Insurance
Premiums |
| Other |
| Total | | Edward H. West | $11,200 | $594 | — |
| $11,794 | | Gary W. Ferrera | $11,200 | $594 | — |
| $11,794 | | Dan Antilley | $11,200 | $561 | — |
| $11,761 | | Stuart Mackinnon | $11,200 | $529 | — |
| $11,729 | | Marc Terry | — |
| — |
| $25,802 | $25,802 |
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The “Other” column for Mr. Terry includes $15,483 of contribution$ 24,388 in contributions to a personal pension plan and $1,048 of$1,414 in health insurance benefits. | | ((6)6)
| The amounts presented for Mr. Terry, excluding the “Stock Awards”Awards,” have been converted from pounds sterling to U.S. dollars using the yearly average exchange rate of approximately $1.33$1.28 for 2018.2019. |
Grants of Plan-Based Awards for 20182019 The following table sets forth certain information with respect tofor the RSUs and stock options granted during the year ended December 31, 20182019, as well as the details regarding other plan-based awards granted in 20182019 to each of our Named Executive Officers: | | | Estimated Possible Payouts
Under Non-Equity
Incentive Plan Awards(1)
| Estimated Future Payouts
Under Equity Incentive Plan
Awards (Number of Units)(2)
| All Other
Stock Awards:
| All Other Option Awards:
| Exercise
Price Of
Option
Awards
| Grant
Date Fair
Value of
Stock
and
Option
Awards(5)
| Named
Executive
Officer
| Type of Incentive
Plan Award
| Grant Date
| Threshold
| Target
| Maximum
| Threshold
| Target
| Maximum
| Number of
Shares of
Stock or
Units(3)
| Number of
Stock
Option
Awards(4)
|
Edward H. West | Cash Plan | — | $375,000 | $750,000 | $1,500,000 | — | — | — | — | — | $— | $— | | LTIP Stock Options | 3/30/2018 | $— | $— | $— | — | — | — | — | 114,544 | $22.31 | $941,435 | | CEO Promotion Time-based
RSUs | 1/1/2018 | $— | $— | $— | — | — | — | 161,987 | — | $— | $2,999,999 | | LTIP Time-based RSUs | 3/30/2018 | $— | $— | $— | — | — | — | 39,220 | — | $— | $874,998 | | CEO Promotion Performance-
based RSUs | 1/1/2018 | $— | $— | $— | 67,494 | 134,989 | 269,978 | — | — | $— | $3,257,285 | | LTIP Performance-based RSUs | 3/30/2018 | $— | $— | $— | 39,220 | 78,440 | 176,490 | — | — | $— | $1,749,996 | Gary W. Ferrera | Cash Plan | — | $110,000 | $550,000 | $1,100,000 | — | — | — | — | — | $— | $— | | LTIP Stock Options | 3/30/2018 | $— | $— | $— | — | — | — | — | 42,544 | $ 22.31 | $349,668 | | LTIP Time-based RSUs | 3/30/2018 | $— | $— | $— | — | — | — | 14,568 | — | $— | $325,012 | | LTIP Performance-based RSUs | 3/30/2018 | $— | $— | $— | 14,567 | 29,135 | 65,553 | — | — | $— | $650,002 | Dan Antilley | Cash Plan | — | $212,500 | $425,000 | $850,000 | — | — | — | — | — | $— | $— | | LTIP Stock Options | 3/30/2018 | $— | $— | $— | — | — | — | — | 15,812 | $22.31 | $129,958 | | LTIP Time-based RSUs | 3/30/2018 | $— | $— | $— | — | — | — | 5,414 | — | $— | $120,786 | | LTIP Performance-based RSUs | 3/30/2018 | $— | $— | $— | 5,414 | 10,829 | 24,365 | — | — | $— | $241,595 | Stuart Mackinnon | Cash Plan | — | $159,400 | $318,800 | $637,600 | — | — | — | — | — | $— | $— | | LTIP Stock Options | 3/30/2018 | $— | $— | $— | — | — | — | — | 13,952 | $ 22.31 | $114,671 | | LTIP Time-based RSUs | 3/30/2018 | $— | $— | $— | — | — | — | 4,777 | — | $— | $106,575 | | LTIP Performance-based RSUs | 3/30/2018 | $— | $— | $— | 4,777 | 9,555 | 21,498 | — | — | $— | $213,172 | Marc Terry(6) | Cash Plan | — | $156,168 | $312,335 | $624,671 | — | — | — | — | — | $— | $— | | LTIP Stock Options | 3/30/2018 | $— | $— | $— | — | — | — | — | 12,751 | $ 22.31 | $104,800 | | LTIP Time-based RSUs | 3/30/2018 | $— | $— | $— | — | — | — | 4,366 | — | $— | $97,405 | | Discretionary RSUs | 6/4/2018 | $— | $— | $— | — | — | — | 3,641 | — | $— | $94,666 | | LTIP Performance-based RSUs | 3/30/2018 | $— | $— | $— | 4,366 | 8,732 | 19,647 | — | — | $— | $194,811 |
| | | | | | | | | | | | | | | | | | | | | | | | | | Named Executive Officer | Type of Incentive Plan Award | Grant Date | Estimated Possible Payouts
Under Non-Equity
Incentive Plan Awards(1) | | Estimated Future Payouts
Under Equity Incentive Plan
Awards (Number of Units)(2) | All Other
Stock
Awards:
Number
of Shares
of Stock or Units(3) |
| All Other
Option
Awards:
Number of
Stock
Option
Awards(4) |
| Exercise
Price Of
Option
Awards |
| Grant
Date Fair
Value of
Stock
and
Option
Awards(5) |
| | Threshold | Target | Maximum | | Threshold | Target | Maximum | | Edward H. West | Cash Plan |
| $325,500 | $750,000 | $1,500,000 | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | LTIP Stock Options | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 68,531 |
| $31.99 | $921,954 | | | LTIP Time-based RSUs | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| 28,821 |
| — |
| — |
| $921,984 | | | LTIP Performance-based RSUs | 3/14/2019 | — |
| — |
| — |
| | 28,821 |
| 57,642 |
| 115,284 |
| — |
| — |
| — |
| $2,242,562 | | Gary W. Ferrera | Cash Plan |
| $178,750 | $550,000 | $1,100,000 | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | LTIP Stock Options | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 25,453 |
| $31.99 | $342,422 | | | LTIP Time-based RSUs | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| 10,705 |
| — |
| — |
| $342,453 | | | LTIP Performance-based RSUs | 3/14/2019 | — |
| — |
| — |
| | 10,705 |
| 21,410 |
| 42,820 |
| — |
| — |
| — |
| $832,956 | | Dan Antilley | Cash Plan |
| $138,125 | $425,000 | $850,000 | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | LTIP Stock Options | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 10,401 |
| $31.99 | $139,926 | | | LTIP Time-based RSUs | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| 4,375 |
| — |
| — |
| $139,956 | | | LTIP Performance-based RSUs | 3/14/2019 | — |
| — |
| — |
| | 4,374 |
| 8,749 |
| 17,498 |
| — |
| — |
| — |
| $340,373 | | Stuart Mackinnon | Cash Plan |
| $110,500 | $340,000 | $680,000 | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | LTIP Stock Options | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 9,790 |
| $31.99 | $131,706 | | | LTIP Time-based RSUs | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| 4,117 |
| — |
| — |
| $131,703 | | LTIP Performance-based RSUs | 3/14/2019 | — |
| — |
| — |
| | 4,117 |
| 8,235 |
| 16,470 |
| — |
| — |
| — |
| $320,376 |
EXECUTIVE COMPENSATION TABLES
| | | | | | | | | | | | | | | | | | | | | | | | | | Named Executive Officer | Type of Incentive Plan Award | Grant Date | Estimated Possible Payouts
Under Non-Equity
Incentive Plan Awards(1) | | Estimated Future Payouts
Under Equity Incentive Plan
Awards (Number of Units)(2) | All Other
Stock
Awards:
Number
of Shares
of Stock or Units(3) |
| All Other
Option
Awards:
Number of
Stock
Option
Awards(4) |
| Exercise
Price Of
Option
Awards |
| Grant
Date Fair
Value of
Stock
and
Option
Awards(5) |
| | Threshold | Target | Maximum | | Threshold | Target | Maximum | Marc Terry(6) | Cash Plan |
| $97,105 | $298,785 | $597,570 | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | LTIP Stock Options | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 7,788 |
| $31.99 | $104,773 | | | LTIP Time-based RSUs | 3/14/2019 | — |
| — |
| — |
| | — |
| — |
| — |
| 3,276 |
| — |
| — |
| $104,799 | | | LTIP Performance-based RSUs | 3/14/2019 | — |
| — |
| — |
| | 3,276 |
| 6,552 |
| 13,104 |
| — |
| — |
| — |
| $254,906 |
| | (1) | Represents possible payouts under 2018the 2019 Cash Incentive Plan for those executives employed for the entirety of 2018.2019, which were earned in 2019 and paid in March 2020. See footnote 4 to the Summary Compensation Table above. |
| | (2) | Represents performance-based RSU awards under 2018 LTIP, and for Mr. West, the CEO Promotion Performance based RSUs.2019 LTIP. See the “2018 “Transition Year” "2019 Long-Term Incentive Plan” and the “Special Equity Awards Granted during 2018” sectionsPlan" section included in “Compensation the“Compensation Discussion and Analysis” above.above. |
| | (3) | Represents time-basedtime-based RSU awards under 2018 LTIP, and for Mr. West and Mr. Terry one-time time-based RSU awards.the 2019 LTIP. See the “2018 “Transition Year” "2019 Long-Term Incentive Plan” and the “Special Equity Awards Granted during 2018” sectionsPlan" section included in the “Compensation Discussion and Analysis” above.above. |
| | (4) | Represents stock option awards under 2018the 2019 LTIP. See the “2018 “Transition Year” "2019 Long-Term Incentive Plan” Plan" section included in the “Compensation Discussion and Analysis” above.above. |
| | (5) | Grant date fair value of each RSU and stock option award computed in accordance with FASB ASC Topic 718.718, excluding the effect of estimated forfeitures. |
| | (6) | Amounts presented for Mr. Terry as “Estimated"Estimated Possible Payouts Under Non-Equity Incentive Plan Awards”Awards" have been converted from pounds sterling to U.S. dollars using the yearly average exchange rate of approximately $1.33$ 1.28 for 2018.2019. |
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Outstanding Equity Awards at Fiscal 2018 Year-End 2019 Year End The following table sets forth information on our Named Executive Officers’Officers' outstanding equity awards. The equity awards reported in the Stock Option Awards columns consist of non-qualified stock options as of December 31, 2018, of which, none are exercisable stock options.2019. The equity awards reported in the Stock Awards columns consist of performance-based RSUs and time-based RSUs that have not vested as of December 31, 2018.| 2019. | | Option Awards
| Stock Awards
| Named
Executive
Officer
| Grant
Date
| Number of
Securities
Underlying
Unexercised
Options -
Unexercisable (#)
| Option
Exercise
Price ($)
| Option
Expiration
Date
| Number of
Units That
Have Not
Vested(#)
| Market Value
of Units That
Have Not
Vested($)(1)
| Equity Incentive
Plan Awards:
Number of
Unearned Units
That Have Not
Vested(#)(2)
| Equity Incentive
Plan Awards:
Market Value of
Unearned Units
That Have Not
Vested($)(1)
|
Edward H. West | | 3/30/2018 | | 114,544 | $22.31 | 3/30/2028 | 39,220(3) | 1,019,720 | 78,440 | 2,039,440 | | | 1/1/2018 | | — | — | — | 161,987(4) | 4,211,662 | 134,989 | 3,509,714 | | | 3/31/2017 | | — | — | — | 35,174(5) | 914,524 | — | — | | | 3/22/2016 | | — | — | — | 30,705(5) | 798,330 | — | — | | | 1/11/2016 | | — | — | — | 15,447(6) | 401,622 | — | — | Gary W. Ferrera | | 3/30/2018 | | 42,544 | $22.31 | 3/30/2028 | 14,568(3) | 378,768 | 29,135 | 757,510 | | | 11/28/2017 | | — | — | — | 20,822(7) | 541,372 | — | — | Dan Antilley | | 3/30/2018 | | 15,812 | $22.31 | 3/30/2028 | 5,414(3) | 140,764 | 10,829 | 281,554 | | | 5/30/2017 | | — | — | — | 32,273(8) | 839,098 | — | — | Stuart Mackinnon | | 3/30/2018 | | 13,952 | $22.31 | 46,842 | 4,777(3) | 124,202 | 9,555 | 248,430 | | | 4/19/2017 | | — | — | — | 7,500(5) | 195,000 | — | — | | | 3/31/2017 | | — | — | — | 6,546(5) | 170,196 | — | — | | | 4/15/2016 | | — | — | — | 2,987(5) | 77,662 | — | — | | | 7/20/2015 | | — | — | — | 1,778(7) | 46,228 | — | — | Marc Terry | | 6/4/2018 | | — | — | — | 3,641(5) | 94,666 | — | — | | | 3/30/2018 | | 12,751 | $22.31 | 3/30/2028 | 4,366(3) | 113,516 | 8,732 | 227,032 | | | 9/17/2018 | | — | — | — | 4,420(9) | 114,920 | — | — |
| | | | | | | | | | | | | | | | | | | | | | | | Stock Option Awards | | Stock Awards | | Named Executive Officer | Grant Date | Number of
Securities
Underlying
Unexercised
Options -
Exercisable (#) |
| Number of
Securities
Underlying
Unexercised
Options -
Unexercisable (#) |
| Option
Exercise
Price ($) |
| Option
Expiration
Date |
| | Number of
Units That
Have Not
Vested(#) |
| | Market
Value of
Units That
Have Not
Vested($)(1) | Equity
Incentive
Plan Awards:
Number of
Unearned
Units That
Have Not
Vested(#) |
| | Equity
Incentive
Plan Awards:
Market Value
of Unearned
Units That
Have Not
Vested($)(1) |
| | Edward H. West | 3/14/2019 | — |
| 68,531 |
| $31.99 | 3/14/2029 |
| | 28,821 |
| (2) | $1,286,858 | 57,642 |
| (6) | $2,573,715 | | 3/30/2018 | 38,182 |
| 76,362 |
| $22.31 | 3/30/2028 |
| | 39,220 |
| (3) | $1,751,173 | 176,490 |
| (7) | $7,880,279 | | 1/1/2018 | — |
| — |
| — |
| — |
| | 80,994 |
| (4) | $3,616,382 | 269,978 |
| (8) | $12,054,518 | | 3/31/2017 | — |
| — |
| — |
| — |
| | 17,587 |
| (5) | $785,260 | — |
| | — |
| | 3/22/2016 | — |
| — |
| — |
| — |
| | 15,352 |
| (5) | $685,467 | — |
| | — |
| | Gary W. Ferrera | 3/14/2019 | — |
| 25,453 |
| $31.99 | 3/14/2029 |
| | 10,705 |
| (2) | $477,978 | 21,410 |
| (6) | $955,957 | | 3/30/2018 | 14,182 |
| 28,362 |
| $22.31 | 3/30/2028 |
| | 14,568 |
| (3) | $650,461 | 65,554 |
| (7) | $2,926,975 | | 11/28/2017 | — |
| — |
| — |
| — |
| | 13,881 |
| (9) | $619,787 | — |
| | — |
| | Dan Antilley | 3/14/2019 | — |
| 10,401 |
| $31.99 | 3/14/2029 |
| | 4,375 |
| (2) | $195,344 | 8,749 |
| (6) | $390,643 | | 3/30/2018 | 5,271 |
| 10,541 |
| $22.31 | 3/30/2028 |
| | 5,414 |
| (3) | $241,735 | 24,365 |
| (7) | $1,087,908 | | 5/30/2017 | — |
| — |
| — |
| — |
| | 19,785 |
| (10) | $883,400 | — |
| | — |
|
EXECUTIVE COMPENSATION TABLES
| | | | | | | | | | | | | | | | | | | | | | | | Stock Option Awards | | Stock Awards | | Named Executive Officer | Grant Date | Number of
Securities
Underlying
Unexercised
Options -
Exercisable (#) |
| Number of
Securities
Underlying
Unexercised
Options -
Unexercisable (#) |
| Option
Exercise
Price ($) |
| Option
Expiration
Date |
| | Number of
Units That
Have Not
Vested(#) |
| | Market
Value of
Units That
Have Not
Vested($)(1) | Equity
Incentive
Plan Awards:
Number of
Unearned
Units That
Have Not
Vested(#) |
| | Equity
Incentive
Plan Awards:
Market Value
of Unearned
Units That
Have Not
Vested($)(1) |
| | Stuart Mackinnon | 3/14/2019 | — |
| 9,790 |
| $31.99 | 3/14/2029 |
| | 4,117 |
| (2) | $183,824 | 8,235 |
| (6) | $367,693 | | 3/30/2018 | 4,651 |
| 9,301 |
| $22.31 | 3/30/2028 |
| | 4,777 |
| (3) | $213,293 | 21,499 |
| (7) | $959,919 | | 4/19/2017 | — |
| — |
| — |
| — |
| | 3,750 |
| (11) | $167,438 | — |
| | — |
| | 3/31/2017 | — |
| — |
| — |
| — |
| | 3,273 |
| (5) | $146,139 | — |
| | — |
| | 4/15/2016 | — |
| — |
| — |
| — |
| | 1,494 |
| (5) | $66,707 | — |
| | — |
| | Marc Terry | 3/14/2019 | — |
| 7,788 |
| $31.99 | 3/14/2029 |
| | 3,276 |
| (2) | $146,273 | 6,552 |
| (6) | $292,547 | | 6/4/2018 | — |
| — |
| — |
| — |
| | 1,820 |
| (12) | $81,263 | — |
| | — |
| | 3/30/2018 | 4,251 |
| 8,500 |
| $22.31 | 3/30/2028 |
| | 4,366 |
| (3) | $194,942 | 19,647 |
| (7) | $877,239 | | 9/17/2017 | — |
| — |
| — |
| — |
| | 2,210 |
| (13) | $98,677 | — |
| | — |
|
| | (1) | The market value of awards that have not yet vested is based on the closing market price of our stockshares on December 31, 20182019, of $26.00$ 44.65 per share. |
| | (2) | Performance-based RSU awards are presented at target-level of achievement. All awards will vest January 31, 2021, except for Mr. West’s awards granted on January 1, 2018, which will vest upon the completion of the three-year performance period. See the “2018 “Transition Year” Long-Term Incentive Plan” and the “Special Equity Awards Granted during 2018 ” sections included in “Compensation Discussion and Analysis” above. |
| (3) | These RSU awards willvest 33.3% on January 31, 2020, 2021, and 2022, and were granted under the 2019 LTIP, pursuant to our 2007 Plan. |
| | (3) | These RSU awards vest 100% on January 31, 2020, and were granted under the 2018 LTIP, pursuant to our 2007 Plan. |
| | (4) | These RSU awards will vest 50% on December 15, 2019, and December 15, 2020, and were granted pursuant to our 2007 Plan. |
| | (5) | These RSU awards vest after 24, 36, and 48 months from January 31st31st of the grant year, at the rate of 50%, 25%, and 25%. RSUs were granted under each respective year’s LTIP, pursuant to our 2007 Plan. |
| | (6) | These performance-based RSU awards will vest 25%upon the completion of the three-year performance period, and were granted under the 2019 LTIP, pursuant to our 2007 Plan. Performance-based RSU awards are presented at the target-level of achievement. See the “2019 Long-Term Incentive Plan” section included in the “Compensation Discussion and Analysis” above. |
| | (7) on December 15, 2016, 2017, | These performance-based RSU awards vest January 31, 2021, and were granted under the 2018 LTIP, pursuant to our 2007 Plan. Performance-based RSU awards are presented at maximum-level of achievement. See the "2018 "Transition-Year" Long-Term Incentive Plan" section included in the “Compensation Discussion and 2019,Analysis” above. |
| | (8) | These performance-based RSU awards vest upon the completion of the three-year performance period, and were granted pursuant to our 2007 Plan. Performance-based RSU awards are presented at maximum-level of achievement. |
| | (7)(9)
| These RSU awards will vest 25% afterafter 12, 24, 36, and 48 months from the grant date,, and were granted pursuant to our 2007 Plan. |
| | (8)(10)
| These RSU awards include new hire awards that vest 25% after 12, 24, 36, and 48 months from the grant date.date. Additionally, these RSU awards include awards granted under the 2017 LTIP, which vest after 24, 36, and 48 months from January 31st31st of the grant year, at the rate of 50%, 25%, and 25%. RSUs were granted, pursuant to our 2007 Plan. |
| | (9)(11)
| These RSU awards will vest after 12, 24, and 36 months from January 31st of the grant year, at the rate of 50% on September 17, 2018,, 25%, and 25% on September 17, 2019. RSUs were granted under the 2016 LTIP, pursuant to our 2007 Plan. |
| | (12) | These RSU awards vest after 12, 24, and September 17, 2020,36 months from January 31st of the grant year, at the rate of 50%, 25%, and 25%. RSUs were granted under the 2017 LTIP, pursuant to our 2007 Plan. |
| | (13) | These RSU awards vest after 12, 24, and 36 months from the grant date, at the rate of 50%, 25%, and 25%. RSUs were granted pursuant to our 2007 Plan. |
EXECUTIVE COMPENSATION TABLES | 2019 PROXY STATEMENT | 56
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Option Exercises and Stock Vested During Fiscal Year 2018 2019 The following table sets forth information relating to each vesting of RSUs during the year ended December 31, 20182019, for each of our Named Executive Officers. No options were exercised during the year. | Stock Awards | | | Named Executive Officer | Number of Shares/Units
Acquired on Vesting | Value Realized
on Vesting($)(1) | Edward H. West | 46,153 | $1,175,086 | Gary W. Ferrera | 6,940 | $227,493 | Dan Antilley | 7,297 | $193,589 | Stuart Mackinnon | 12,267 | $304,069 | Marc Terry | 4,420 | $137,948 |
| | | | | | | Stock Awards | | Named Executive Officer | Number of
Shares/Units
Acquired on Vesting |
| Value Realized
on Vesting ($)(1) | | Edward H. West | 129,380 |
| $4,889,124 | | Gary W. Ferrera | 6,941 |
| $296,797 | | Dan Antilley | 12,488 |
| $358,190 | | Stuart Mackinnon | 10,294 |
| $280,597 | | Marc Terry | 4,031 |
| $115,815 |
| | (1) | Value realized was calculated by multiplying the market value of our shares (the closing price of our shares on the applicable vesting date) by the number of units that became vested on the applicable vesting dates. |
Currently, we do not offer, and, therefore, none of our Named Executive Officers participate in or have account balances in, qualified or nonqualified defined benefit plans sponsored by us. In the future, however, our Compensation Committee may elect to adopt qualified or nonqualified defined benefit plans if it determines that doing so is in our best interests (e.g.(e.g., in order to attract and retain employees.) employees).Nonqualified Deferred Compensation In 2015, our Compensation Committee elected to provide our officers, directors, and other employees with nonqualified deferred compensation benefits. Under our nonqualified deferred compensation program, eligible employees (including non-employee directors) had the ability to defer eligible cash and equity compensation to a trust administered by a third party. No new deferrals were allowed under the program during 20182019, and any future deferrals will be subject to the discretion of our Compensation Committee. Named Executive Officer Employment-Related Agreements In October 2018, we entered into new employment agreements with certain of our executive officers with whom we did not previously have written agreements in order to standardize terms and align the executive team. The following is a description of the material terms of the employment agreements we had with our Named Executive Officers as of December 31, 2018, including new agreements for certain of our Named Executive Officers that we entered into in October 2018.
2019. Employment Agreement with Edward H. West-ChiefWest - Chief Executive Officer and Former Chief Financial Officer/Chief Operations Officer.Officer In December 2015, we entered into an employment agreement with Mr. West, for his employment commencing January 2016, and in the role of CFO effective February 22, 2016. The agreement with Mr. West provided for an initial term of three years, subject to automatic one-year renewals thereafter unless the agreement was terminated in accordance with its terms. Under the terms of that agreement, Mr. West received a base salary of $600,000 that was subject to periodic review by our Board (or a committee thereof) , and that could be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. West was eligible to receive an annual award under a Cash Incentive Plan and an annual LTIP award. Mr. West’s agreement further entitled him to a sign-on $2,000,000 incentive award in the form of RSUs to vest over four years, and a $500,000 relocation allowance. In addition, Mr. West was entitled to receive perquisite benefits made available to other senior officers, sick leave, and paid vacation time each year. In July 2016, Mr. West’s role was expanded to also include the role of Chief Operations Officer. His employment agreement was not amended in connection with his new role. In December 2017, we entered into a new employment agreement with Mr. West, in connection with his promotion to CEO, which commenced January 1, 2018. The agreement with Mr. West provides for an initial term of three years, subject to automatic one-year renewals thereafter unless the agreement is terminated in accordance with its terms. Under the terms of his agreement, Mr. West receives a base salary of $750,000, which is subject to periodic review by our Board (or a committee thereof) and can be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. West is eligible to receive an annual award under a Cash Incentive Plan and an annual LTIP award. Mr. West’s agreement further entitles him toWest also received the CEO Promotion Time-Based RSUs and the CEO Promotion Performance-Based RSUs.RSUs pursuant to this agreement. Mr. West is entitled to certain tax equalization payments for foreign taxes incurred as a result of the performance of his | 2019 PROXY STATEMENT | 57
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services under his employment agreement and certain perquisite benefits made available to other senior officers, sick leave and paid vacation time each year.
EXECUTIVE COMPENSATION TABLES
Employment Agreement with Gary W. Ferrera-ChiefFerrera - Chief Financial Officer.Officer In November 2017, we entered into an employment agreement with Mr. Ferrera commencing November 28, 2017.2017, which was amended on July 31, 2019, in order to confirm the terms of separation payments provided under the agreement in the event of his termination and the definition of "change in control" to terms applicable to other executive officers. The agreement with Mr. Ferrera provides for an initial term of four years, subject to automatic one-year renewals thereafter unless the agreement is terminated in accordance with its terms. Under the terms of his agreement, Mr. Ferrera receives a base salary of $550,000, which is subject to periodic review by our Board (or a committee thereof) and can be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. Ferrera is eligible to receive an annual award under a Cash Incentive Plan and an annual LTIP award. Mr. Ferrera’s agreement provided for a sign-on incentive award of $500,000 in the form of RSUs vesting over four years, a $100,000 sign-on bonus, and reimbursement of certain relocation costs. In addition, Mr. Ferrera is entitled to receive perquisite benefits made available to other senior officers, sick leave, and paid vacation time each year.
Employment Agreement with Dan Antilley-ChiefAntilley - Executive Vice President, Operations and Chief Information Security Officer.Officer In May 2017, we entered into an employment agreement with Mr. Antilley, commencing May 30, 2017. The agreement with Mr. Antilley provides for an initial term of four years, subject to automatic one-year renewals thereafter unless the agreement is terminated in accordance with its terms. Under the terms of his agreement, Mr. Antilley received a base salary of $425,000, which was subject to periodic review by our Board (or a committee thereof) and could be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. Antilley was eligible to receive an annual award under a Cash Incentive Plan and an annual LTIP award. Mr. Antilley’sAntilley's agreement provided for a sign-on incentive award of $1,000,000 in the form of RSUs vesting over four years, and a $100,000 sign-on bonus. In addition, Mr. Antilley was entitled to receive perquisite benefits made available to other senior officers, sick leave, and paid vacation time each year. In October 2018, we entered into a new employment agreement with Mr. Antilley, which replacesreplaced the agreement entered into in May 2017. The new agreement with Mr. Antilley provides for an initial term of four years from May 30, 2017, the original date on which Mr. Antilley started with the Company, subject to automatic one-year renewals thereafter unless the agreement is terminated in accordance with its terms. Under the terms of his agreement, Mr. Antilley receives a base salary of $425,000, which is subject to periodic review by our Board (or a committee thereof) and can be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. Antilley is eligible to receive an annual award under a Cash Incentive Plan and an annual LTIP award. In addition, Mr. Antilley is entitled to receive perquisite benefits made available to other senior officers, sick leave, and paid vacation time each year. Employment Agreement with Stuart Mackinnon-ExecutiveMackinnon - Executive Vice President,—Technology and Operations & Chief Information Officer.Officer In October 2018, we entered into an employment agreement with Mr. Mackinnon. The agreement with Mr. Mackinnon provides for an initial term of four years from November 17, 2017, the date of his promotion to Executive Vice President-TechnologyPresident, Technology and Operations &and Chief Information Officer subject to automatic one-year renewals thereafter unless the agreement is terminated in accordance with its terms. Under the terms of his agreement, Mr. Mackinnon receives a base salary of $375,000, which is subject to periodic review by our Board (or a committee thereof) and can be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. Mackinnon is eligible to receive an annual award under a Cash Incentive Plan and an annual LTIP award. In addition, Mr. Mackinnon is entitled to receive perquisite benefits made available to other senior officers, sick leave, and paid vacation time each year.
Employment Agreement with Marc Terry-ManagingTerry - Executive Vice President, Managing Director—International. of International In September 2017, we entered into a services agreement with Mr. Terry commencing September 17, 2017.2017 (the "Terry Initial Agreement"), which was replaced by a new services agreement entered into on August 21, 2019, in order to confirm the terms of separation payments provided under the agreement in the event of his termination and the definition of "change of control" to terms applicable to other executive officers. The agreement with Mr. Terry providesterms of both agreements provide for an unlimited term unless the agreement iswas terminated in accordance with its terms. Under the terms, of his agreement, Mr. Terry receives a base salary of £360,000, which is subject to periodic review by our Board, and could be increased at any time. Additionally, subject to our achieving certain performance standards set by our Compensation Committee, Mr. Terry is eligible to receive an annual award under a Cash Incentive Planand incentive plan awards, and an annual LTIP award. Mr. Terry’s agreementThe Terry Initial Agreement provided for a sign-on $250,000 incentive award in the form of RSUs to vest over three years. Mr. Terry is entitled to a pension plan contribution by the Company equal to 6% (or such higher amount as required by law) of Mr. Terry’s base salary, and Mr. Terry is entitled to receive perquisite benefits made available to other senior officers, sick leave and paid vacation time each year. Our employment agreements with Messrs. West, Ferrera, Antilley, Mackinnon, Terry and AntilleyTerry require the executives to sign a full release within 30 days (or 45 days in some circumstances) of the executive’s termination of employment (other than Mr. Terry for which no period is specified) waiving all claims against us, our subsidiaries, and our officers, directors, employees, agents, representatives, or shareholders as a condition to receiving any severance benefits due
EXECUTIVE COMPENSATION TABLES
under the employment agreements. Further, the employment agreements with Messrs. West, Ferrera, Antilley, Mackinnon, Terry and AntilleyTerry also contain non-compete and non-solicitation restrictions for a 24-month period (12-month period for Mr. Terry), during which the executives may not: (i) directly or indirectly participate in or have significant ownership in a competing company; (ii) solicit or advise any of our employees to leave our employment; or (iii) solicit any of our customers (or(and client and suppliers in the case of Mr. Terry) either for his own interest or that of a third party, subject to materiality thresholds. Potential Payments upon a Termination or Change in Control We provide our Named Executive Officers with certain severance and change in control benefits in order to provide them with assurances against certain types of terminations. This type of protection is intended to provide the executive with a basis for keeping focus and functioning in the shareholders’ interests at all times. Our employment agreements with Messrs. West, Ferrera, Antilley, Mackinnon, and Terry that were in effect on December 31, 20182019 provide for cash severance payments based | 2019 PROXY STATEMENT | 58
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on certain terminations of employment, including for certain Named Executive Officers, additional payments or benefits in connection with a termination following a change in control. A change in control under the employment agreements with Messrs. West, Ferrera, Antilley, Mackinnon, and AntilleyTerry may occur upon any of the following events: (i) a merger, reorganization, reincorporation, amalgamation, scheme of arrangement or consolidation involving us or the sale of all or substantially all of our assets to another entity (each, a “Reorganization”) if, in each case: (a) the holders of our equity securities immediately prior to such Reorganization no longer own immediately following such Reorganization, in substantially the same proportion, equity securities of the resulting entity that are entitled to 70% or more of the votes then eligible to be cast in the election of directors generally of the resulting entity, the transferee entity or any new direct or indirect parent entity; or (b) the members of our Board immediately prior to such Reorganization no longer constitute at least a majority of the board of directors of the resulting entity, the transferee entity or any new direct or indirect parent entity immediately after such transaction or event; (ii) our dissolution or liquidation, other than a liquidation or dissolution into any entity in which the holders of our equity securities immediately prior to such liquidation or dissolution own immediately after such liquidation or dissolution, in substantially the same proportion, equity securities of the entity into which we were liquidated or dissolved that are entitled to 70% or more of the votes then eligible to be cast in the election of directors generally of such entity; (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or control (including, without limitation, power to vote) more than 30% of the combined voting power of our outstanding equity securities, other than any entity in which the holders of our equity securities immediately prior to such acquisition own immediately after such acquisition, in substantially the same proportion as such persons owned our equity securities immediately prior to such acquisition, equity securities of the acquiring entity entitled to 70% or more of the votes then eligible to be cast in the election of directors generally of the acquiring entity; or (iv) (a) in respect of Messrs.Mr. West, and Ferrera, as a result of or in connection with a contested election of directors, the members of our Board immediately before such election cease to constitute a majority of our Board; and (b) in respect of Messrs. Ferrera, Antilley, Mackinnon and Antilley,Terry, during any twelve month period, the members of our Board on the dates of the employment agreements of Messrs. Ferrera, Antilley, Mackinnon and Antilley (theTerry (such directors, the “Incumbents”), respectively, and such persons appointed or recommended by a majority of the Incumbents, cease, for any reason, to collectively constitute a majority of the Board. For the purposes of the employment agreements of Messrs. West, Ferrera, Antilley, Mackinnon, and Antilley, and Mr. Terry’s service agreement,Terry, a termination without cause means a termination of the executive’s employment other than for death, voluntary resignation, total disability, or cause (as defined in the executives’executives' respective employment agreement). Each of our Named Executive Officers has received equity awards grants pursuant to our 2007 Plan. The award agreements for equity awarded under the 2007 Plan and their respective employment agreements contain provisions permitting accelerated lapsingvesting of forfeiture restrictionsthe awards upon certain termination and corporate change (as defined in the 2007 Plan) or change in control scenarios.scenarios, respectively. The equity award treatment in the event of a termination of employment or a corporate change or change in control under the 2007 Plan and certain of the executive employmentthose agreements isare summarized in the table below. The table below reflects the amount of compensation payable to our Named Executive Officers in the event of a termination of employment or a corporate change or change in control of Cardtronics as of December 31, 2018.2019. For purposes of calculating the potential payments, we have made certain assumptions that we have determined to be reasonable and relevant to our shareholders. Upon the occurrence of any of the termination events listed, or in the event of a for-cause termination or a voluntary termination (neither of which are shown in the table below), the terminated executive would receive any base salary amount that had been earned but had not been paid at the time of termination. In the event of a without cause termination, a termination for good reason, or non-renewal of the employment agreement by the Company (save that under Mr. Terry's agreement, non-renewal is not applicable), in each case, including following a change in control, the executive would also be entitled to receive payment of any prior year amount earned under our Cash Incentive Plan (if not already paid) and a pro rata portion of the amount earned under our Cash Incentive Plan for the year in which the termination occurred. In the event of death or disability, the executive would also be entitled to receive payment of any prior year amount earned under our Cash Incentive Plan, if not already paid, but would not be entitled to any unpaid amount earned (or the target amount in certain instances based on target performance)the event such termination is within 24 months following a change in control for Messrs. Antilley and Mackinnon) under our Cash Incentive Plan for the year in which the termination occurred. However, such amounts would not be considered “termination payments” but rather would represent compensation earned by the executive for services rendered, and we, therefore, have not reflected the amount of earned but unpaid salary and non-equitynon-
EXECUTIVE COMPENSATION TABLES
equity incentive compensation awards in the table below. The executives are also entitled to receive reimbursement payments for reasonable business expenses, and we have assumed that for purposes of the calculations below, all expense reimbursements were current as of December 31, 2018.2019. The amount of compensation payable to each applicable Named Executive Officer for each situation is listed below based on the equity award agreements and/or the employment agreements in place for each executive as of December 31, 2018.2019. The amounts shown assume that such termination event was effective as of December 31, 20182019, and that the closing price of our shares on December 31, 20182019, was $26.00.$44.65. The amounts below are our best estimates as to the amounts that each executive would receive upon that particular termination event; however, exact amounts that any executive would receive could only be determined upon an actual termination of employment. | 2019 PROXY STATEMENT | 59
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Potential Payments upon a Termination or Change in Control Table Named Executive
Officer | Benefit | Termination by
Us Without
Cause or Non-Renewal of Employment Agreement, or
Good Reason Termination
By Executive | Change in
Control
(Treatment
of Equity Awards) | Termination in
Connection with a
Change in Control | Death or
Disability | Edward H. West | Base Salary | $ | 1,500,000 | (1) | $ | — | | $ | 1,500,000 | (1) | $ | — | | Non-equity incentive compensation | $ | 1,500,000 | (1) | $ | — | | $ | 1,500,000 | (1) | $ | — | | Post-employment health care | $ | 35,196 | (1) | $ | — | | $ | 35,196 | (1) | $ | — | | Equity Awards(2) | $ | 6,780,520 | (3) | $ | 2,135,521 | (4) | $ | 13,317,679 | (5) | $ | 9,958,150 | (6) | Total
| $ | 9,815,716 | | $ | 2,135,521 | | $ | 16,352,875 | | $ | 9,958,150 | | Gary W. Ferrera | Base Salary | $ | 1,100,000 | (1) | $ | — | | $ | 1,100,000 | (1) | $ | — | | Non-equity incentive compensation | $ | 1,100,000 | (1) | $ | — | | $ | 1,100,000 | (1) | $ | — | | Post-employment health care | $ | 35,196 | (1) | $ | — | | $ | 35,196 | (1) | $ | — | | Equity Awards(2) | $ | — | | $ | 156,987 | (7) | $ | 698,359 | (8) | $ | 1,455,882 | (9) | Total
| $ | 2,235,196 | | $ | 156,987 | | $ | 2,933,555 | | $ | 1,455,882 | | Dan Antilley | Base Salary | $ | 425,000 | (10) | $ | — | | $ | 850,000 | (12) | $ | — | | Non-equity incentive compensation | $ | 425,000 | (10) | $ | — | | $ | 850,000 | (12) | $ | — | | Post-employment health care | $ | 39,183 | (10) | $ | — | | $ | 39,183 | (12) | $ | — | | Equity Awards(2) | $ | 723,608 | (11) | $ | 897,444 | (4) | $ | 1,319,762 | (13) | $ | 1,178,985 | (14) | Total
| $ | 1,612,791 | | $ | 897,444 | | $ | 3,058,945 | | $ | 1,178,985 | | Stuart Mackinnon | Base Salary | $ | 375,000 | (10) | $ | — | | $ | 750,000 | (12) | $ | — | | Non-equity incentive compensation | $ | 318,800 | (10) | $ | — | | $ | 637,600 | (12) | $ | — | | Post-employment health care | $ | 35,196 | (10) | $ | — | | $ | 35,196 | (12) | $ | — | | Equity Awards(2) | $ | 284,806 | (11) | $ | 494,341 | (4) | $ | 913,201 | (13) | $ | 788,986 | (14) | Total
| $ | 1,013,802 | | $ | 494,341 | | $ | 2,335,997 | | $ | 788,986 | | Marc Terry | Base Salary | $ | 480,516 | (15) | $ | — | | $ | 480,516 | (15) | $ | — | | Non-equity incentive compensation | $ | 312,335 | (15) | $ | — | | $ | 312,335 | (15) | $ | — | | Equity Awards(2) | $ | — | | $ | 161,971 | (4) | $ | 161,971 | (16) | $ | 483,669 | (17) | Total
| $ | 792,851 | | $ | 161,971 | | $ | 954,822 | | $ | 483,669 | |
| | | | | | | | | | | | | | Named Executive Officer | Benefit | Termination by Us
Without Cause or
Non-Renewal of
Employment
Agreement,
or Good Reason
Termination
By Executive | | Change in
Control/Corporate
Change
(Treatment of
Equity Awards) |
| | Termination in
Connection with
a Change in
Control/Corporate
Change | | Death or
Disability |
| | | Edward H. West | Base Salary | $1,500,000 | (1) | — |
| | $1,500,000 | (1) | — |
| | | | Non-equity incentive compensation | $1,303,024 | (1) | — |
| | $1,303,024 | (1) | — |
| | | | Post-employment health care | $35,204 | (1) | — |
| | $35,204 | (1) | — |
| | | | Equity Awards(2) | $12,034,910 | (3) | $7,904,829 | (4) | $22,801,989 | (5) | $19,077,092 | (6) | | | Total | $14,873,138 | | $7,904,829 | | $25,640,217 | | $19,077,092 | | | Gary W. Ferrera | Base Salary | $1,100,000 | (1) | — |
| | $1,100,000 | (1) | — |
| | | | Non-equity incentive compensation | $900,913 | (1) | — |
| | $900,913 | (1) | — |
| | | | Post-employment health care | $35,204 | (1) | — |
| | $35,204 | (1) | — |
| | | | Equity Awards(2) | $3,154,648 | (7) | $2,389,777 | (4) | $4,960,902 | (8) | $4,323,598 | (9) | | | Total | $5,190,765 | | $2,389,777 | | $6,997,019 | | $4,323,598 | | | Dan Antilley | Base Salary | $425,000 | (10) | — |
| | $850,000 | (11) | — |
| | | | Non-equity incentive compensation | $425,000 | (10) | — |
| | $850,000 | (11) | — |
| | | | Post-employment health care | $39,183 | (10) | — |
| | $39,183 | (11) | — |
| | | | Equity Awards(2) | $1,719,530 | (7) | $1,836,549 | (4) | $2,561,799 | (8) | $2,301,371 | (9) | | | Total | $2,608,713 | | $1,836,549 | | $4,300,982 | | $2,301,371 | | | Stuart Mackinnon | Base Salary | $400,000 | (10) | — |
| | $800,000 | (11) | — |
| | | | Non-equity incentive compensation | $340,000 | (10) | — |
| | $680,000 | (11) | — |
| | | | Post-employment health care | $35,204 | (10) | — |
| | $35,204 | (11) | — |
| | | | Equity Awards(2) | $1,153,589 | (7) | $1,263,527 | (4) | $1,903,450 | (8) | $1,658,322 | (9) | | | Total | $1,928,793 | | $1,263,527 | | $3,418,654 | | $1,658,322 | | Marc Terry(12) | Base Salary | $459,669 | (10) | — |
| | $459,669 | (11) | — |
| | | | Non-equity incentive compensation | $298,785 | (10) | — |
| | $597,570 | (11) | — |
| | | | Equity Awards(2) | $900,702 | (7) | $825,983 | (4) | $1,492,071 | (8) | $1,297,040 | (9) | | | Total | $1,659,156 | | $825,983 | | $2,549,310 | | $1,297,040 | |
| | (1) | Pursuant to Messrs. West and Ferrera’s employment agreements, in the event of a termination of their employment by the Company without cause, resignation by the executive for good reason or non-renewal of the employment agreement by the Company, the executive would be entitled to receive |
EXECUTIVE COMPENSATION TABLES
severance pay equal to two times his then-current base salary plus two times the average amount paid to him in the two preceding calendar years under our Cash Incentive Plan. For Mr. West, if such termination is prior to payment of his 2018 bonus, the bonus component of severance is equal to two times his then-current base salary, which is the amount included in the table above. For Mr. Ferrera, if such termination is prior to the end of the second calendar year after his hire date, the bonus component of severance is equal to two times his then-current base salary, which is the amount included in the table above. Mr. West is entitled to the monthly cost of COBRA premiums multiplied by 18. In the event Mr. Ferrera elected to continue benefits coverage through our group health plan under COBRA, we would reimburse the Mr. Ferrera for the COBRA premiums for up to 18 months. The amounts payable to Mr. West would be payable in a lump sum within ten days following the effective date of the release, and the amounts payable to Mr. Ferrera would be payable in bi-monthly installments over twenty-four months. |
