UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ^ )
Filed by the Registrant ¨☐ Filed by a Party other than the Registrant ¨☐
Check the appropriate box:
Preliminary Proxy Statement |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
Definitive Proxy Statement |
Definitive Additional Materials |
Soliciting Material under §240.14a-12 |
HURON CONSULTING GROUP INC.
(Name of registrant as specified in its charter)
^
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required. |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which the transaction applies: |
^
(2) | Aggregate number of securities to which the transaction applies: |
^
(3) | Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
^
(4) | Proposed maximum aggregate value of the transaction: |
^
(5) | Total fee paid: |
^
Fee paid previously with preliminary materials. |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
^
(2) | Form, Schedule or Registration Statement No.: |
^
(3) | Filing Party: |
^
(4) | Date Filed: |
^
550 West Van Buren Street
Chicago, IL 60607
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 1, 20154, 2018
The Annual Meeting of Stockholders of Huron Consulting Group Inc. (the “Company”) will be held at the Company’s corporate headquarters located at 550 West Van Buren Street, Chicago, Illinois 60607 on May 1, 2015,4, 2018, at 11:00 a.m. Central Time, for the following purposes:
1) To elect to the board of directors the two persons nominated by the board of directors to serve as Class II Directors;
1 | To elect to the board of directors the three persons nominated by the board of directors to serve as Class II Directors; | |
2 | An advisory vote to approve the Company’s executive compensation; | |
3 | To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018; and | |
4 |
|
Only stockholders of record at the close of business on March 4, 20156, 2018 will be entitled to notice of and to vote at the meeting.
Stockholders, whether or not they expect to be present at the meeting, are requested to sign and date the enclosed proxy, which is solicited on behalf of the board of directors, and return it promptly in the envelope enclosed for that purpose. Any person giving a proxy has the power to revoke it at any time prior to the meeting, and stockholders who are present at the meeting may withdraw their proxies and vote in person.
By Order of the Board of Directors
Diane E. Ratekin
Executive Vice President, General
Counsel and Corporate Secretary
Chicago, Illinois
March 26, 2018
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May
The Proxy Statement and Annual Report to Stockholders are available atwww.edocumentview.com/HURN
|
By Order of the Board of Directors
Diane E. Ratekin
Executive Vice President, General
Counsel and Corporate Secretary
Chicago, Illinois
March 20, 2015
i
| ||||
| ||||
[LOGO]
PROXY STATEMENT
forFOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 2018
This Proxy Statement is furnished in connection with the solicitation of proxies to be voted at the 20152018 Annual Meeting of Stockholders of Huron Consulting Group Inc. (the “Company,” “Huron,” “we” or “us”). The 20152018 Annual Meeting of Stockholders (the “Annual Meeting”) will be held on Friday, May 1, 20154, 2018 at 11:00 a.m. Central Time, at the Company’s corporate headquarters located at 550 West Van Buren Street, Chicago, Illinois 60607. This Proxy Statement and the accompanying proxy card are first being mailed to stockholders on or about March 20, 2015.26, 2018.
GENERAL INFORMATION ABOUT THE MEETING
Quorum and Voting RequirementsQUORUMAND VOTING REQUIREMENTS
The Company has one class of common stock. Each share of common stock is entitled to one vote on each matter to be voted upon at the Annual Meeting. Stockholders do not have the right to cumulate votes in the election of directors. Only stockholders of record at the close of business on March 4, 20156, 2018 (the “Record Date”) will be entitled to vote at the Annual Meeting. As of the Record Date, there were 23,166,04522,417,461 shares of common stock issued and outstanding.
The accompanying proxy is solicited from the holders of record of the common stock on behalf of the board of directors of the Company and is revocable at any time by giving written notice of revocation to the Secretary of the Company prior to the Annual Meeting or by executing and delivering a later-dated proxy by mail prior to the Annual Meeting. Furthermore, the stockholders of record who are present at the Annual Meeting may revoke their proxies and vote in person.
If your shares are held in a bank or brokerage account, you will receive proxy materials from your bank or broker, which will include a voting instruction form. If you would like to revoke voting instructions given to your bank or broker, you must follow its instructions. If you would like to attend the Annual Meeting and vote these shares in person, you must obtain a proxy from your bank or broker. You must request the proxy from your bank or broker; it will not automatically supply one to you.
All shares of the Company’s common stock represented by properly executed and unrevoked proxies will be voted by the proxies in accordance with the directions given therein. Where no instructions are indicated, properly executed proxies will be voted “FOR” the proposals set forth in this Proxy Statement for consideration at the Annual Meeting.
A quorum, consisting of at leastone-third of shares of common stock issued and outstanding, must be present at the meeting for any business to be conducted. Shares of common stock entitled to vote and represented by properly executed, returned and unrevoked proxies, including shares with respect to which votes are withheld, abstentions are cast or there are brokernon-votes on some proposals but not others, will be considered present at the meeting for purposes of determining a quorum.
ELECTION OF DIRECTORS
Board of DirectorsBOARDOF DIRECTORS
The Company’s third amended and restated certificate of incorporation divides the Company’s board of directors into three classes, with each class being elected to a three-year term.
The board of directors has nominated John S. Moody, Hugh E. Sawyer and Debra Zumwalt as Class II Directors to be voted upon at the 2015 Annual Meeting. DuBose Ausley, a Class II Director, has announced his intention to retire with effect on the date of the 20152018 Annual Meeting. James D. Edwards, John McCartney and James H. Roth are Class III Directors serving terms ending at the 20162019 Annual Meeting. H. Eugene Lockhart and George E. Massaro are Class I Directors serving terms ending at the 20172020 Annual Meeting.
This Proxy Statement relates only to the solicitation of proxies from the stockholders with respect to the election of the twothree nominees as Class II Directors and the other matters described herein. The board of directors knows of no reason that Mr. Moody, Mr. Sawyer or Ms. Zumwalt might be unavailable to serve as the Class II Directors, and each has expressed an intention to serve, if elected. If Mr. Moody, Mr. Sawyer or Ms. Zumwalt is unable to serve, the shares represented by all valid proxies will be voted “FOR” the election of such substitute nominee as the board of directors may recommend. There are no arrangements or understandings between any of the persons nominated to be a Class II Director and any other person pursuant to which any of such nominees was selected.
The election of a director requires the affirmative vote of a plurality of the shares of common stock present in person or represented by proxy at the Annual Meeting that are voted, provided that a quorum is represented at the meeting. A “plurality” means that the individuals who receive the largest number of votes are elected as directors up to the maximum number of directors to be elected at the meeting. Therefore, abstentions and “brokernon-votes” will have no impact on the election of directors. Properly executed proxies submitted pursuant to this solicitation will be voted “FOR” the election of Mr. Moody, Mr. Sawyer and Ms. Zumwalt as Class II Directors, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF MR. MOODY, MR. SAWYER AND MS. ZUMWALT AS CLASS II DIRECTORS.
The tables below set forth certain information regarding the directors of the Company.
Nominees to Board of DirectorsABOUTTHE BOARD
Name | Age | Principal Occupation | Director Since | Class and Year in Which Term Expires | ||||||||||
John S. Moody | 66 | Chief Executive Officer, Parkside Capital | 2005 | Class II 2015 | ||||||||||
Debra Zumwalt | 59 | Vice President and General Counsel, Stanford University | 2014 | Class II 2015 |
Class and Year in Term Expires | Committees | |||||||||||
Name | Principal Occupation | Independent | A | C | N&CG | |||||||
John S. Moody
|
| Class
|
II 2018 | 🌑 | 🌑 | 🌑 | |||||||||
Hugh E. Sawyer
| President and Chief Executive Officer, Regis Corporation | Class II 2018 | ||||||||||
Debra Zumwalt
|
| Class II 2018 | 🌑 | 🌑c | 🌑 | |||||||
Not Standing for
|
Directors Not Standing for Election
Name | Age | Principal Occupation | Director Since | Class and Year in Which Term Expires | ||||||||||
DuBose Ausley | 77 | Attorney, Ausley McMullen, P.A. | 2004 | Class II 2015 | ||||||||||
James D. Edwards | 71 | Retired Managing Partner—Global Markets at Arthur Andersen LLP | 2004 | Class III 2016 | ||||||||||
John McCartney | 62 | Non-executive Chairman, Huron Consulting Group Inc. | 2004 | Class III 2016 | ||||||||||
James H. Roth | 57 | Chief Executive Officer and President of Huron Consulting Group Inc. and Huron Consulting Services LLC, our principal operating subsidiary | 2009 | Class III 2016 | ||||||||||
H. Eugene Lockhart | 65 | Senior Advisor, North America, General Atlantic LLC | 2006 | Class I 2017 | ||||||||||
George E. Massaro | 67 | Vice Chairman of the Board, Huron Consulting Group Inc. | 2004 | Class I 2017 |
|
James D. Edwards
|
|
Class III 2019 | 🌑 | 🌑c | ||||||||
John McCartney
|
Non-executive Chairman, Huron Consulting Group Inc. | Class III 2019 | 🌑 | 🌑 | |||||||||
James H. Roth
| Chief Executive Officer and President of Huron Consulting Group Inc. and Huron Consulting Services LLC, our principal operating subsidiary | Class III 2019 | ||||||||||
H. Eugene Lockhart Age 68, Director since | Senior Advisor, General Atlantic LLC | Class I 2020 | 🌑 | 🌑c | 🌑 | |||||||
George E. Massaro Age 70, Director since 2004 | Vice Chairman of the Board, Huron Consulting Group Inc. | Class I 2020 | 🌑 | 🌑 |
A – Audit Committee C – Chairman | ||||
C – Compensation Committee | ||||
N&CG – Nominating and Corporate Governance Committee |
Presented below is information regarding the directors of the Company.
John S. Moody Director since November 2005 Audit Committe (Member) Compensation Committe (Member) |
Professional Experience
Since January 2014, Mr. Moody has been chief executive officer of Parkside Capital, formerly known as ProTerra Realty, a fund manager investing in real estate in Houston, Texas. He had previously served as president of Parkside Capital since January 2007. From 2004 until October 2005, Mr. Moody served as president and chief executive officer of HRO Asset Management, LLC, a real estate advisory business. From 2001 to 2004, Mr. Moody served as president of Marsh & McLennan Real Estate Advisors, Inc., a business that directed the execution of real estate projects and transactions for Marsh & McLennan. From 1995 to 2000, Mr. Moody was president and chief executive officer of Cornerstone Properties, Inc., a REIT that acquired, developed and operated large-scale Class A office buildings in major markets throughout the United States and that merged into Equity Office Properties Trust.
Board Service
In November 2015, Mr. Moody was appointed chairman of the board of Four Corners Property Trust, Inc., a public real estate investment trust, where he also serves as chairman of the compensation committee. Mr. Moody joined the board of Hines Global REIT, a privately owned real estate investment, development and management company, in June 2009. He joined the board of directors of Potlatch Corp., a public real estate investment trust, in September 2006, and in January 2009, he assumed the role of vice chairman of Potlatch Corp. From 2001 to 2005, Mr. Moody served on the boards of directors of three publicly held REITs: Keystone Property Trust, CRIIMI MAE, Inc., and Equity Office Properties Trust.
Education
Mr. Moody received a B.A. in History from Stanford University and a J.D. with honors from The University of Texas School of Law.
Individual Contributions
Mr. Moody has served in executive officer roles in several real estate related businesses where he was responsible for the management of multi-billions of dollars in assets, and has also served as the managing partner of a full service commercial law firm. In addition, Mr. Moody has served on a number of boards of directors, including as chairman and vice chairman, of companies organized as real estate investment trusts and advisory firms. As such, Mr. Moody contributes a wealth of legal and financial expertise to the Huron board.
Hugh E. Sawyer Director since February 2018 |
Professional Experience
Since April 2017, Mr. Sawyer has served as the President and Chief Executive Officer of Regis Corporation, a corporation that owns, franchises and operates beauty salons worldwide. Mr. Sawyer previously served as a managing director at Huron, beginning in January 2010, and led the Operational Improvement Service Line for Huron’s Business Advisory Practice. He has more than 35 years of experience leading operational improvements, turnarounds, mergers and acquisitions and strategic transformations for both public and private companies across a diverse group of industries. While at Huron, he served as Interim President and CEO of JHT Holdings, Inc., a provider of specialized transportation and logistics services, from January 2010 to March 2012; as the Chief Administrative Officer of Fisker Automotive Inc. (now known as Fisker Inc.), a manufacturer of hybrid electric vehicles, from January 2013 to March 2013; as Chief Restructuring Officer of Fisker Automotive from March 2013 to October 2013; and as Interim President of Euramax International, Inc., a global manufacturer of building products, from February 2014 to August 2015. Including Regis, he has served as the president or chief executive officer of nine companies, including Wells Fargo Armored Service Corporation, The Cunningham Group, Inc., National Linen Service, Inc., Aegis Communications Group, Inc., Allied Holdings, Inc., and Legendary Holdings, Inc.
Board Service
Mr. Sawyer has served as a director of JHT Holdings, Inc. since 2012 and has served on the boards of numerous companies, including Energy Future Competitive Holdings Company LLC and Texas Competitive Electric Holdings Company LLC from 2013 to October 2016, and Edison Mission Energy from July 2012 to April 2014, and thereafter on the Board of Managing Trustees of the EME Reorganization Trust until December 2016.
Education
Mr. Sawyer received a B.A. in English with honors from the University of Florida.
Individual Contributions
Mr. Sawyer has a history of providing transformational leadership and support to companies in a broad range of industries, including consumer car rental, consumer retail, utilities, building materials, healthcare, transportation and logistics, equipment rental, security and guard services, graphic arts and printing, industrial laundry, CRM solutions and telecommunications, automotive OEM, automotive supply, commercial nursery operations, marine retail, real estate development, resort and hotel operations. Mr. Sawyer also has extensive governance background as a board member in businesses with sophisticated constituents facing complex circumstances, and will be able to bring this experience with him to the board.
Debra Zumwalt Director since October 2014 Compensation Committee (Chair) Nominating and Corporate Governance Committee (Member) |
Professional Experience
Since 2001, Ms. Zumwalt has been the Vice President and General Counsel of Stanford University and is in charge of the legal services provided to the University and its two affiliated hospitals with combined annual revenues of over $9 billion. Ms. Zumwalt is a member of the University Cabinet and provides governance, legal and strategic advice to the boards of the University, Stanford Health Care, Lucile Packard Children’s Hospital at Stanford and Stanford Management Company, which manages over $24 billion in assets. Ms. Zumwalt is also a member of the Board of Overseers for SLAC National Accelerator Laboratory at Stanford, and a director of SUMIT Holding International, LLC and SUMIT Insurance Company Ltd., a holding company and captive insurance company providing insurance coverage for the Stanford hospitals and physicians. From 1993 to 2001, Ms. Zumwalt was a partner at Pillsbury Winthrop LLP, where she specialized in complex civil litigation and higher education law, and for whom she served as managing partner of the Silicon Valley office and a member of the firm’s governing board. Previously, from 1987 to 1993, Ms. Zumwalt was Senior University Counsel at Stanford, responsible for advising and representing the University in connection with congressional hearings, criminal and civil investigations, negotiations and litigation matters. Prior to joining Stanford in 1987, Ms. Zumwalt worked as litigation counsel for Chevron Chemical Company and as a litigation associate for Pillsbury Winthrop LLP in San Francisco.
Board Service
Ms. Zumwalt is currently a director of Exponent, Inc., a public engineering and scientific consulting company. She is also on the boards of the American University of Afghanistan and the Academy of Art University and has served on other nonprofit boards in education and legal services.
Education
Ms. Zumwalt received a B.S. in Political Science from Arizona State University and a J.D. from Stanford Law School.
Individual Contributions
Given the many roles she serves in connection with her position as chief legal officer of a university with two affiliated hospitals, Ms. Zumwalt is uniquely qualified to share with the Huron board her experience with navigating the challenges faced by both higher education and healthcare organizations. Ms. Zumwalt also contributes to the Huron board a perspective on the law and governance through her background as a former partner of a well-renowned law firm and bar association president, as well as with her current roles as director on corporate and academic boards.
DIRECTORS NOT STANDINGFOR ELECTION
James D. Edwards Director since October 2004 Nominating and Corporate Governance Committee (Chair) |
Professional Experience
Mr. Edwards retired in 2002 as managing partner—global markets of Arthur Andersen LLP, a position he had held since 1998. Mr. Edwards first began his career with Arthur Andersen LLP and served in several positions in which he developed significant financial expertise in public accounting and provided consulting services to a broad range of industries.
Board Service
Mr. Edwards has served as a director of Crawford & Company, the world’s largest public provider of claims adjustment and risk management solutions to insurance companies and self-insured entities, since February 2005. He had previously served on the board of Cousins Properties Incorporated, a publicly held REIT, until May 2014. Mr. Edwards had also served on the board of Transcend Services, Inc., a provider of medical transcription services to the healthcare industry, until early 2012, when the company was sold. He also served on the board of IMS Health Incorporated, a global provider of information solutions to the pharmaceutical and healthcare industries, until February 2010, when the company was sold.
Education
Mr. Edwards received a B.S. in Accounting from Bob Jones University and was a long-term member of the American Institute of Certified Public Accountants.
Individual Contributions
Mr. Edwards’ experience includes a lengthy tenure with a former “Big Five” accounting firm where he served in several leadership positions, including managing partner for all operations in the United States and North America, which enables him to effectively address the challenges and opportunities presented to Huron. Mr. Edwards contributes to the Huron board his deep knowledge of accounting and financial consulting services, his many years of experience managing a large segment of a professional services firm, and an extensive network of prior clients in such fields as healthcare, pharmaceuticals and real estate.
John McCartney Director since October 2004 Non-executive Chairman of the Board (May 2010) Audit Committee (Member) |
Professional Experience
From June 1997 to March 1998, Mr. McCartney held the position of president of 3Com Corporation’s Client Access Unit. He joined the executive management team of US Robotics in March 1984 as vice president and chief financial officer and served in various executive capacities until serving as president and chief operating officer of US Robotics from January 1996 until its merger with 3Com Corporation in June 1997.
Board Service
Mr. McCartney was appointed anon-executive director of Datatec Limited, a public networking technology and services company, in July 2007, and currently serves as chairman of the remuneration committee and as a member of the nominating committee. He had previously served as vice chairman of the board of directors of Datatec from October 1998 until May 2004. Mr. McCartney has also served on the board of Transco, Inc., a Chicago-based company that provides solutions to customers in the railroad, electric utility, process and manufacturing industries, since August 2011. From March 2011 until September 2013, Mr. McCartney served as chairman of the board of Westcon Group, Inc., a specialty distributor of networking and communications equipment, whose board he joined in August 1998 and for which he previously served as chairman from January 2001 until March 2009, and where he continued to serve as a director and member of the compensation committee until September 2017. Mr. McCartney served on the board of Rice Energy Inc., an independent natural gas and oil company, from March 2015 until November 2017. From May 2009 until February 2015, he served on the board of Covance Inc., a drug development services company. Mr. McCartney had also served as chairman of the board of directors of A.M. Castle & Co., a global distributor of specialty metal and plastic products, from January 2007 until April 2010. He had served on that board from 1998 until March 2015. In addition, Mr. McCartney had served as chairman of the board of trustees of Davidson College from 2004 to 2008.
Education
Mr. McCartney received a B.A. in Philosophy from Davidson College and an MBA from The Wharton School of the University of Pennsylvania.
Individual Contributions
Mr. McCartney has served as chairman and vice chairman of the boards of a number of public and private organizations, including companies with a focus on healthcare and drug development and an institution of higher education. Mr. McCartney brings to the Huron board, and the Audit Committee in particular, his prior experience as chief financial officer and chief operating officer of a public company, which has enabled him to contribute to Huron’s development into a prominent consultancy. Mr. McCartney is based in Chicago, the location of Huron’s principal business offices.
James H. Roth Director since November 2009 Chief Executive Officer of Huron Consulting Group Inc. and Huron Consulting Services LLC (July 2009) President of Huron
|
Professional Experience
As a founding member of Huron, Mr. Roth guided and grew Huron’s Higher Education consulting practice to a position of preeminence in the industry. He has more than 35 years of consulting experience working with many of the premier research universities and academic medical centers. Under his leadership as CEO, Huron has been named one ofForbes’Best Management Consulting Firms in 2016 and 2017,Forbes’America’s Best Employers in 2015 and 2016, and byConsultingmagazine as one of the Best Firms to Work For from 2011 through 2017, and, for ten years in a row, the Healthcare practice was ranked in the top five of Huron, Mr. Roth has guided and grown Huron’s Higher Education consulting practice to a position of preeminence in the industry. He has more than 30 years of consulting experience working with many of the premier research universities and academic medical centers. Under his sound leadership, the Company has been named byConsulting magazine as one of the Best Firms to Work For in 2011, 2012, 2013 and 2014, and, for the fifth year in a row, the Huron Healthcare practice has been ranked number three onModern Healthcare’s list of Largest Healthcare Management Consulting Firms.
Board Service
Previously, he served as Vice President, Health and Education Consulting for the Company from January 2007 until July 2009. Since Huron’s inception in 2002, until he became CEO, Mr. Roth was appointed toa managing director and practice leader of the boardCompany’s Higher Education consulting practice, which he grew into one of Aviv REIT, a self-administered real estate investment trust specializing in skilled nursing facilities, in March 2013. Heour largest organically grown practices within the firm.
Board Service
Mr. Roth was appointed to the board of Shorelight Holdings LLC, a U.S.-based company focused on partnering with leading nonprofit universities to increase access and retention of international students and boost institutional growth, in November 2014. Mr. Roth was also appointed to the board of AdVenture Interactive Corp.,Keypath Education Holdings, LLC, a leading provider of comprehensive marketing and enrollment management services to colleges and universities, in November 2014. Previously, he served on the board of Aviv REIT, a self-administered real estate investment trust specializing in skilled nursing facilities, from March 2013 until April 2015.
Education
Mr. Roth received a B.A. in Political Science and Economics from Vanderbilt University and an MBA from Southern Methodist University.
Individual Contributions
Mr. Roth bringsRoth’s distinguished career as both an officer and consultant at Huron contributes to the board his deep knowledgehands-on perspective of the strategy and operations of institutions of higher education and academic medical centers, including their healthcare and research facilities. Named in 2009 and in 2011Twice named byConsultingmagazine as one of the Top 25 Most Influential Consultants, Mr. Roth contributes to the board a singularunique understanding of the Huron organization, and the consulting business, including research universities, hospitals, and academic medical centers.the businesses of our clients.
H. Eugene Lockhart
Director since December 2006 Audit Committee (Chair) Compensation Committee (Member) | ||
H. Eugene Lockhart
Mr. Lockhart has served on our board of directors since December 2006. He is the Chairman of the Audit Committee, and also serves on the Compensation Committee.
Professional Experience
In November 2013,2012, Mr. Lockhart became Senior Advisor North America, at General Atlantic LLC, a leading global growth investment firm. In October 2013,2014, he founded and became chairmanChairman and Managing Partner of MissionOG LLC, a growth stage investment firm. Since 2005, he has served as a partner and chairman, Financial Institutions, at Diamond Castle Holdings, LLC in New York, a private equity investment firm. From 2002 until 2012, Mr. Lockhart was a venture partner at Oak Investment Partners, a venture capital firm. His prior positions include president of Global Retail Bank at Bank of America, as well as president and chief executive officer of MasterCard International. Through these investment firms, Mr. Lockhart has been actively involved in overseeing the management of high growth private companies, including NetSpend, Argus Information, Metro Bank PLC, CLIP, DemystData, Factor Trust, Avant, BillDesk, and others.
Board Service
Mr. Lockhart joinedwas appointed to the board of Metro Bank PLC, a public retail bank operating in the U.K., in March 2011, where he presently serves as the Chair of the risk and audit committee. He had served on the board of Aaron’s, Inc., alease-to-own retailer of furnishings, consumer electronics and home appliances, infrom August 2014.2014 until May 2016. He is alsopreviously served as a director and audit committee chairman of RadioShack Corporation, a retail seller of consumer electronic goods and services. From February 2011services, until September 2013, Mr. Lockhart served on the board of directors of Bonds.com, a trading platform for fixed income securities.March 2015. He had served on the board of Asset Acceptance Capital Corp., a purchaser of accounts receivable portfolios, from consumer credit originators, until its June 2013 merger with Encore Capital Group, Inc., and also served on the board of IMS Health Incorporated, a global provider of information solutions to the pharmaceutical and healthcare industries, until February 2010. Mr. Lockhart has served on numerous philanthropic boards, including serving in the past as the Chair of the Thomas Jefferson Foundation (Monticello) and the Chairman of the Darden School Foundation at the University of Virginia. He is currently serving as the Chairman of Academic Affairs for the State Council of Higher Education of Virginia (SCHEV).
Education
Mr. Lockhart received a B.S. in Mechanical Engineering from the University of Virginia and an MBA from The Darden Graduate School of Business at the University of Virginia. In addition, Mr. Lockhart is a CPA, licensed in the Commonwealth of Virginia.
Individual Contributions
Mr. Lockhart brings to Huron’s board his broadconsiderable experience overseeing and growing companies in which he represents venture capital investors, his experience as chief executive officer of leading corporations, and his service on the boards of companies and foundations in such diverse fields as healthcare, education, pharmaceuticals, and financial services, healthcare and pharmaceuticals. Mr. Lockhart’s experience serving as chairman of the audit committees of public companies has prepared him to lead Huron’s Audit Committee.services. In addition, as thea former executive and chairman of some of the most recognizedvisible companies in the world, Mr. Lockhart contributes to Huron his many contacts, including those with investors.a broad array of contacts.
George E. Massaro Director since May 2004 Noaminating and Corporate Governance Committee (Member) |
Professional Experience
Mr. Massaro resumed the position ofhas served as Vice Chairman of Huron’s board insince May 2010. He2010, and had previously served in thisthe role from March 2005 until July 2009, when2009. In the interim, he assumed the role of Non-executive Chairman in order to assist the new management team upon the departure of our former chairman. Mr. Massarohad served asNon-executive Chairman of Huron’s board from July 2009 until May 2010. He has served asHuron during a director since May 2004.period of transition. Mr. Massaro joined the Company in August 2002 as a managing director, served as our Chief Operating Officer from June 2003 until March 2005, and endedceased his employment with Huron in February 2009. He serves on the Nominating and Corporate Governance Committee.
Professional Experience
Prior to joining Huron, Mr. Massaro served as the managing partner of Arthur Andersen LLP’s1,200-person New England practice from 1998 to 2002 and managing partner of the Boston office from 1995 to 1998. Mr. Massaro has served clients in the financial services and high-technology industries.
Board Service
Mr. Massaro serveshas served as a director of Charles River Laboratories, a public provider of research products and preclinical services for the biomedical community, since 2003, and currently serves as chairman of the audit committee. Mr. Massaro had served as a member of the board of trustees of Mount Auburn Hospital in Cambridge until December 2017. He had served as a member of the finance committee of the Archdiocese of Boston until December 2017. Mr. Massaro had also served on the board of directors of Eastern Bank Corporation, an independent mutual bank holding company in New England. He is also a member of the board of trustees of Mount Auburn Hospital in Cambridge. In addition, Mr. Massaro is a member of the finance committee of the Archdiocese of Boston.England, from February 2003 until December 2017.
Education
Mr. Massaro received a B.A. in Accounting and Finance from Bentley College and an MBA from Babson College.
Individual Contributions
Mr. Massaro possesses a deepcontributes to the Huron board his unique understanding of Huron’sour business and history, gained not only through his former experienceprior service as our Chief Operating Officer of Huron from 2003 to 2005. His2005, but also through his leadership of a Huron practice. Mr. Massaro’s many years of experience in public accounting, and management of a professional services practice, enableand service on the boards of healthcare and pharma-centered institutions, have enabled him to provide a broad range ofinvaluable business insights as well asalong with contacts in the business community.
The Company’s executive officers are as follows:
The Company’s executive officers are as follows:
Name | Age | Position | ||||
James H. Roth | 60 | Chief Executive Officer, President and Director | ||||
C. Mark Hussey | 57 | Executive Vice President and Chief Operating Officer | ||||
John D. Kelly | 42 | Executive Vice President, Chief Financial Officer and Treasurer | ||||
Diane E. Ratekin | 61 | Executive Vice President, General Counsel and Corporate Secretary |
James H. Roth’s biographical information is provided above under the caption “Directors Not Standing for Election.”
C. Mark Husseywas appointed Chief Operating Officer of Huron in February 2014. He has served as Executive Vice President since July 2011. He had served as Chief Financial Officer from July 2011 until January 2017. From July 2011 until February 2016, he served as Huron’s Treasurer. Prior to joining Huron, from 2002 to 2011, Mr. Hussey served as chief financial officer at Crosscom National, LLC, a privately held professional IT services organization deploying and servicingin-store technology solutions for large, national retailers. In that role, he was responsible for all finance and administrative functions for the company. Prior to that, from 2000 until 2002, he served as executive vice president and chief financial officer, North America, at Information Resources, Inc. During his career, Mr. Hussey has held senior finance, accounting and investor relations positions at entities such as EZLinks Golf, Inc., Dominick’s Finer Foods, Inc., and the Quaker Oats Company. Mr. Hussey received a B.S. in Accountancy from the University of Illinois, Urbana-Champaign and an MBA in Finance from the University of Chicago Graduate School of Business. He is a Chartered Financial Analyst, Certified Management Accountant, and Certified Public Accountant (Illinois).
John D. Kellywas appointed Executive Vice President and Chief Financial Officer of Huron in January 2017. He has served as Huron’s Treasurer since February 2016. He had served as Chief Accounting Officer of Huron from February 2015 until January 2017, and had served as Corporate Vice President from November 2012 until his appointment as Executive Vice President. Previously, Mr. Kelly had served as Controller of Huron from November 2012 until February 2015, and prior to that served as Assistant Controller from October 2009. Mr. Kelly served as Huron’s Assistant Treasurer from February 2015 until February 2016. Prior to joining Huron’s Finance and Accounting department, Mr. Kelly was a Director in the Company’s Disputes and Investigations practice for three years, serving clients in the manufacturing and services industries. Before he joined the Company in December 2006, Mr. Kelly had held several positions within Deloitte & Touche’s Assurance and Advisory Services group, most recently as a Senior Manager. He received both a B.S. and M.S. in Accounting from the University of Notre Dame. Mr. Kelly is a Certified Public Accountant (Illinois).
Diane E. Ratekinwas appointed Vice President and General Counsel of Huron in February 2011, and was named Executive Vice President in April 2011. She was appointed Corporate Secretary in December 2011. She had previously served as Huron’s Assistant Corporate Secretary since May 2009. Ms. Ratekin has been employed in Huron’s legal department since January 2005, and previously served as Deputy General Counsel. Prior to joining Huron, Ms. Ratekin was a partner in the Corporate Department of McGuireWoods LLP. Previously, she spent 17 years in the legal department of Deutsche Investment Management Americas Inc., formerly known as Zurich Scudder Investments, Inc. and Kemper Financial Services, Inc., where she was a Director and Team Leader of the Corporate and Investments Team. Before that, Ms. Ratekin was a litigator at Jenner & Block. She is a member of the American Bar Association and the Chicago Bar Association. In July 2017, Ms. Ratekin was appointed to the Metropolitan Chicago Board of Directors of the American Heart Association. She received a B.A. in English and a J.D. from the University of Iowa.
Our Corporate Governance Guidelines require that the board of directors make an annual determination regarding the independence of each of our directors. The board of directors has determined that each of Messrs. Edwards, Lockhart, Massaro, McCartney and Moody and Ms. Zumwalt is “independent” as defined in the applicable listing standards of The NASDAQ Stock Market, Inc. (“NASDAQ”). In making its determination, the board of directors considered the standards of independence set forth in the NASDAQ Corporate Governance
Listing Standards and all relevant facts and circumstances to ascertain whether there was any relationship between a director and the Company that, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director or any material relationship with the Company (either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company). In determining that Ms. Zumwalt is independent, the board of directors conducted a thorough review of payments made by Stanford University, which employs Ms. Zumwalt, to the Company for consulting services provided by the Company. After taking into consideration that Stanford University engagements comprised 0.12% of Huron’s revenues for the year 2017, 0.60% for the year 2016, and 0.25% for the year 2015, the board of directors determined that this relationship would not interfere with Ms. Zumwalt’s exercise of independent judgment in carrying out her responsibilities as a director.
BOARD COMPOSITION, LEADERSHIP STRUCTUREAND RISK OVERSIGHT
BOARD COMPOSITION
The Nominating and Corporate Governance Committee, in conjunction with the Chair and the full board, is actively evaluating the future composition of the board in light of the age, tenure and experience of its current members. This multi-year refresh process is intended to ensure that the board has the best mix of knowledge, skills and business acumen, derived from high quality professional experience, to evaluate and support the Company’s strategy going forward. The Nominating and Corporate Governance Committee believes that its current directors, several of whom have extensive experience leading and managing professional service businesses, provide significant insight into the Company and its operations and provide valuable contributions to the board. The Committee also recognizes the potential benefits of the fresh perspectives that highly qualified new directors might bring to the board.
The Nominating and Corporate Governance Committee will consider a variety of factors as it works to enhance the composition of the board, increase diversity, reduce average tenure and ensure structured and orderly board succession through a process of both board member additions and retirements. As a result, during the next several years, the board may occasionally expand or contract as the refresh process is executed. It is the expressed desire of the board that it continue to remain relatively small in number and composed principally ofnon-executive directors.
The Nominating and Corporate Governance Committee will consider as director candidates qualified individuals recommended by stockholders through the process described below and, although it has not done so in the past, may consider candidates identified by professional search firms.
BOARD LEADERSHIP
Huron formally separated the roles of chairman of the board and chief executive officer in 2010. OurNon-executive Chairman is John McCartney and our Chief Executive Officer Presidentis James H. Roth. AsNon-executive Chairman, Mr. McCartney, in consultation with Mr. Roth, develops the agendas for board meetings, determines the appropriate scheduling for board meetings, assesses the quality, quantity and Director
C. Mark Hussey
Diane E. Ratekin
The board has determined that our current board leadership structure is appropriate for the Company, as it believes the separation of powers is beneficial for our organization.
James H. Roth’sbiographical information is provided above under the caption “Directors Not Standing for Election.”
C. Mark Hussey was appointed Chief Operating Officer in February 2014. He has also served as Executive Vice President, Chief Financial Officer and Treasurer of Huron since July 2011. Prior to joining Huron, from 2002 to 2011, Mr. Hussey served as chief financial officer at Crosscom National, LLC, a privately held professional IT services organization deploying and servicing in-store technology solutions for large, national retailers. In that role, he was responsible for all finance and administrative functions for the company. Prior to that, from 2000 until 2002, he served as executive vice president and chief financial officer, North America, at Information Resources, Inc. During his career, Mr. Hussey has held senior finance, accounting and investor relations positions at entities such as EZLinks Golf, Inc., Dominick’s Finer Foods, Inc., and the Quaker Oats Company. Mr. Hussey received a B.S. in Accountancy from the University of Illinois, Urbana-Champaign and an MBA in Finance from the University of Chicago Graduate School of Business. He is a Chartered Financial Analyst, Certified Management Accountant, and Certified Public Accountant (Illinois).
Diane E. Ratekin was appointed Vice President and General Counsel of Huron in February 2011, and was named Executive Vice President in April 2011. She was appointed Corporate Secretary in December 2011. She had previously served as Huron’s Assistant Corporate Secretary since May 2009. Ms. Ratekin has been employed in Huron’s legal department since January 2005, and previously served as Deputy General Counsel. Prior to joining Huron, Ms. Ratekin was a partner in the Corporate Department of McGuireWoods LLP. Previously, she spent 17 years in the legal department of Deutsche Investment Management Americas Inc., formerly known as Zurich Scudder Investments, Inc. and Kemper Financial Services, Inc., where she was a Director and Team Leader of the Corporate and Investments Team. Before that, Ms. Ratekin was a litigator at Jenner & Block. She is a member of the American Bar Association, the Chicago Bar Association and the Association of Corporate Counsel. She received a B.A. in English and a J.D. from the University of Iowa.
Our Corporate Governance Guidelines require that the board of directors make an annual determination regarding the independence of each of our directors. The board of directors has determined that each of Messrs. Ausley, Edwards, Lockhart, Massaro, McCartney and Moody and Ms. Zumwalt is “independent” as defined in the applicable listing standards of The NASDAQ Stock Market, Inc. (“NASDAQ”). In making its determination, the board of directors considered the standards of independence set forth in the NASDAQ Corporate Governance Listing Standards and all relevant facts and circumstances to ascertain whether there was any relationship between a director and the Company that, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director or any material relationship with the Company (either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company). In determining that Ms. Zumwalt is independent, the board of directors conducted a thorough review of payments made by Stanford University, which employs Ms. Zumwalt, to the Company for consulting services provided by the Company. After taking into consideration that Stanford University engagements comprised under 0.20% of Huron’s revenues for the years 2014 and 2013 and under 0.50% for the years 2012 and 2011, the board of directors determined that this relationship would not interfere with Ms. Zumwalt’s exercise of independent judgment in carrying out her responsibilities as a director.
Board Leadership Structure and Risk Oversight
Board Leadership. Huron formally separated the roles of chairman of the board and chief executive officer in 2010. Our Non-executive Chairman is John McCartney and our Chief Executive Officer is James H. Roth. As Non-executive Chairman, Mr. McCartney, in consultation with Mr. Roth, develops the agendas for board meetings, determines the appropriate scheduling for board meetings, assesses the quality, quantity and timeliness of information provided from management to the board, assists the Nominating and Corporate Governance Committee in monitoring and implementing our Corporate Governance Guidelines and otherwise takes steps to ensure that the board is acting in the long-term best interests of the Company. Mr. McCartney also chairs executive sessions of the board. In addition, George E. Massaro serves as Vice Chairman.
The board has determined that our current board leadership structure is appropriate for the Company, as it believes the separation of powers is beneficial for our organization.
Risk Oversight. One of the board’s responsibilities is to review the adequacy of the Company’s systems for compliance with all applicable laws and regulations for safeguarding the Company’s assets and for managing the major risks it faces. The board executes its responsibility for risk management directly and through its committees. The committees oversee risk matters associated with their respective areas of responsibility. For example, in addition to receiving reports from PricewaterhouseCoopers LLP (“PwC”), Huron’s independent registered public accounting firm, regarding significant accounting and financial reporting developments, our internal control over financial reporting and other matters, the Audit Committee requires direct reports from:RISK OVERSIGHT
One of the board’s responsibilities is to review the adequacy of the Company’s systems for compliance with all applicable laws and regulations, for safeguarding the Company’s assets and for managing the major risks it faces. The board executes its responsibility for risk management directly and through its committees in a variety of ways, including the following:
The General Counsel on legal developments;
Huron’s internal auditors on internal controls and financial compliance control matters; and
The Chief Compliance Officer on whistleblower hotline and compliance related issues.
The board regularly considers potential business risks facing the Company, including those surrounding such issues as:
Security and privacy;
Revenue recognition;
Quality assurance;
Strategic planning;
Employee retention;
International compliance;
Business continuity; and
Merger integration.
In 2014, we reviewed our material compensation policies and practices and reported to the Compensation Committee that these policies and practices are considered not to entail risks reasonably likely to have a material adverse effect on the Company. The Chief Compliance Officer, the CFO, the General Counsel, the Corporate Vice President, Human Resources and the Director of Compensation reviewed the plan elements, potential risks and various controls in place with respect to Huron’s executive, managing director, employee and business developer compensation plans. After reviewing the findings made by this group, the Compensation Committee agreed with the assessment that the compensation policies and practices are considered not to entail risks reasonably likely to have a material adverse effect on the Company.
The board of directors conducts its business through meetings of the full board, actions taken by written consent in lieu of meetings, and by the actions of its committees. During 2014, the board of directors held 13 meetings.
During 2014, each board member attended at least 75% of the aggregate number of board meetings and meetings of all the committees on which the director served. Although the Company does not have a formal policy regarding director attendance at our annual meetings, we encourage directors to attend. All directors attended the 2014 Annual Meeting of Stockholders.
The board of directors operates in part through its three committees: Audit, Compensation, and Nominating and Corporate Governance. All committee members are “independent” as defined in the applicable listing standards of NASDAQ. In addition, all Compensation Committee members are “non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the “1934 Act”) and “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and all Audit Committee members meet the criteria for independence set forth in SEC Rule 10A-3(b)(1). A detailed discussion of each committee’s mission, composition and responsibilities is contained within the committee charters available in the Investor Relations section of the Company’s web site atwww.huronconsultinggroup.com.
Audit Committee. The Audit Committee responsibilities include overseeing our accounting and financial reporting processes, overseeing the audits of our financial statements and internal control over financial reporting, and retaining and discharging our auditors. The Audit Committee met eight times in 2014. The members of the Audit Committee are Messrs. Lockhart (Chairman), McCartney and Moody. The board of directors has determined that each Audit Committee member has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. The board of directors has also determined that each of Messrs. Lockhart, McCartney and Moody is an “audit committee financial expert,” as defined by the applicable securities regulations, and that each member of the Audit Committee satisfies the applicable NASDAQ listing standards for audit committee membership.
The Report of the Audit Committee for the fiscal year ended December 31, 2014 appears below under the caption “PROPOSAL 4—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM—Report of the Audit Committee.”
Compensation Committee. Pursuant to its charter, the Compensation Committee responsibilities include overseeing our compensation and benefit plans, including all compensation arrangements for executive officers and directors, each of which the Compensation Committee reviews annually and makes changes as it deems appropriate. The Compensation Committee met seven times in 2014. The members of the Compensation Committee are Messrs. Moody (Chairman), Ausley and Lockhart and Ms. Zumwalt.
Management assists the Compensation Committee in the performance of its duties as described in more detail below under “EXECUTIVE COMPENSATION—Compensation Discussion and Analysis—Role of Management.” In addition, during 2014, the CEO participated in all of the Compensation Committee’s meetings and in all of the executive sessions, except for those in which the Compensation Committee considered the CEO’s performance, compensation and incentives. The committee extended the engagement of Semler Brossy Consulting Group, LLC as its outside compensation advisor to assist the committee in the execution of its charter. The support provided by the advisor is described in more detail below under “EXECUTIVE COMPENSATION—Compensation Discussion and Analysis—Role of Compensation Advisor.” The Report of the Compensation Committee on Executive Compensation appears below under the caption “EXECUTIVE COMPENSATION—Compensation Committee Report.”
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee responsibilities include identifying and recommending to the board of directors appropriate director nominee candidates and providing oversight with respect to corporate governance matters. The Nominating and Corporate Governance Committee met five times in 2014. The members of the Nominating and Corporate Governance Committee are Messrs. Edwards (Chairman), Ausley and Massaro.
Directors may be nominated by the board of directors or by stockholders in accordance with the bylaws of the Company. The Nominating and Corporate Governance Committee will review all candidates for nomination to the board of directors, including those proposed by stockholders as provided below. The Nominating and Corporate Governance Committee reviews the person’s judgment, experience, independence, understanding of the Company’s business or other related industries, and such other factors as the Nominating and Corporate Governance Committee determines are relevant in light of the needs of the board of directors and the Company. The board of directors believes that its nominees should reflect over time a diversity of experience, gender, race, ethnicity and age, although it follows no strict criteria when making decisions. The Nominating and Corporate Governance Committee selects qualified candidates and reviews its recommendations with the board of directors, which will decide whether to invite the candidate to be a nominee for election to the board of directors.
If the Nominating and Corporate Governance Committee receives a nominee recommendation in accordance with the rules of the SEC from a stockholder or group of stockholders that has beneficially owned more than 5% of the Company’s voting common stock for at least one year as of the date of the recommendation, the name of the candidate, the name(s) of the stockholder(s) who recommended the candidate, and whether the Nominating and Corporate Governance Committee chose to nominate the candidate will be disclosed in the proxy statement, if the consent of both the stockholder and the candidate has been received.
For a stockholder to submit a candidate for consideration by the Nominating and Corporate Governance Committee, a stockholder must notify the Company’s Corporate Secretary. In addition, the Company’s bylaws permit stockholders to nominate directors at a stockholders’ meeting. To make a director nomination at the annual meeting, a stockholder must notify the Company’s Corporate Secretary within the time periods specified under “SUBMISSION OF STOCKHOLDER PROPOSALS” below. Notices should be sent to: Corporate Secretary, Huron Consulting Group Inc., 550 West Van Buren Street, 17th Floor, Chicago, Illinois 60607, orcorporatesecretary@huronconsultinggroup.com. In either case, the notice must meet all of the requirements contained in the bylaws.
The Company’s Corporate Governance Guidelines provide that in an uncontested election, any nominee for director who receives a greater number of votes “withheld” from his or her election than “for” his or her election shall promptly tender his or her resignation to the board of directors following certification of the election results, subject to acceptance by the board of directors. For purposes of this policy, (i) an “uncontested” election is one in which the number of persons properly nominated for election as directors as of the date that is ten (10) days before the record date for determining stockholders entitled to notice of or to vote at such meeting is not greater than the number of directors to be elected, and (ii) broker non-votes will not be counted as either votes “withheld” from or “for” such person’s election.
The Nominating and Corporate Governance Committee shall make a recommendation to the board of directors as to whether to accept or reject the tendered resignation, or whether other action should be taken. The board of directors shall determine whether to accept or reject the tendered resignation, or whether other action should be taken, in its sole discretion, and publicly disclose its decision regarding the tendered resignation within ninety (90) days from the date of the certification of the election results. The Nominating and Corporate Governance Committee in making its recommendation and the board of directors in making its decision may each consider any factors or other information that they consider appropriate and relevant.
If any director’s resignation is not accepted by the board of directors, such director shall continue to serve until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal. If a director’s resignation is accepted by the board of directors pursuant to this policy, then the board of directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 2 of Article III of the bylaws of the Company or may decrease the size of the board of directors pursuant to Section 1 of Article III of the bylaws of the Company.
Board of Directors • Regularly considers potential business risks facing the Company, including those surrounding security and privacy, revenue recognition, quality assurance, strategic planning, employee retention, international compliance, business continuity, merger integration and market shifts • Maintains oversight of key governance programs relating to insider trading, business conduct and ethics, export controls and other critical issues Audit Committee • Meets with and reviews reports from independent registered public accounting firm and internal auditors • Receives regular reports from the General Counsel on legal developments • Examines issues presented by the Chief Compliance Officer on whistleblower hotline and corporate compliance-related matters • Considers reports of the Enterprise Risk Management Committee on strategic, operational, financial and compliance risks that may materially affect the Company’s ability to achieve its business objectives • Evaluates controls in place to address Huron’s global FCPA risks Compensation Committee • Annually reviews a risk assessment of all Huron compensation plans • Reviews the design and goals of compensation programs in the context of potential risks to the Company • Reviews and evaluates compensation arrangements to assess the potential for undue risk taking • Leads an annual self-assessment to ensure the board and its committees are properly fulfilling their roles • Ensures board candidates possess the appropriate experience and expertise required to effectively serve on Huron’s board • Annually reviews Huron’s corporate governance guidelines to confirm they reflect best practices The board of directors conducts its business through meetings of the full board, actions taken by written consent in lieu of meetings, and by the actions of its committees. During 2017, the board of directors held 12 meetings. During 2017, each board member attended at least 75% of the aggregate number of board meetings and meetings of all the committees on which the director served. Although the Company does not have a formal policy regarding director attendance at our annual meetings, we encourage directors to attend. Six directors attended the 2017 Annual Meeting of Stockholders. The board of directors operates in part through its three committees: Audit, Compensation, and Nominating and Corporate Governance. All committee members are “independent” as defined in the applicable listing standards of NASDAQ. In addition, all Compensation Committee members are“non-employee directors” within the meaning of Rule16b-3 under the Securities Exchange Act of 1934 (the “1934 Act”) and “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and all Audit Committee members meet the criteria for independence set forth in SEC Rule10A-3(b)(1). A detailed discussion of each committee’s mission, composition and responsibilities is contained within the committee charters available in the Investor Relations section of the Company’s web site atwww.huronconsultinggroup.com.Stockholder Communications PolicyNominating and Corporate Governance Committee
Audit Committee
The Audit Committee responsibilities include overseeing our accounting and financial reporting processes, the audits of our financial statements, and the Company’s internal controls over financial reporting. The Audit Committee is also responsible for the appointment, compensation, retention, oversight and evaluation of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other services for us. As such, the Audit Committee approves audit and permittednon-audit services and applicable fees. The Audit Committee met ten times in 2017. The members of the Audit Committee are Messrs. Lockhart (Chair), McCartney and Moody. The board of directors has determined that each Audit Committee member has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. The board of directors has also determined that each of Messrs. Lockhart, McCartney and Moody is an “audit committee financial expert,” as defined by the applicable securities regulations, and that each member of the Audit Committee satisfies the applicable NASDAQ listing standards for audit committee membership.
The Report of the Audit Committee for the fiscal year ended December 31, 2017 appears below under the caption “PROPOSAL 3—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM—Report of the Audit Committee.”
Compensation Committee
Pursuant to its charter, the Compensation Committee responsibilities include overseeing our compensation and benefit plans, including all compensation arrangements for executive officers and directors, each of which the Compensation Committee reviews annually and makes changes as it deems appropriate. The Compensation Committee met seven times in 2017. The members of the Compensation Committee are Ms. Zumwalt (Chair), Mr. Lockhart and Mr. Moody.
Management assists the Compensation Committee in the performance of its duties as described in more detail below under “EXECUTIVE COMPENSATION—Compensation Discussion and Analysis—Role of Management.” In addition, during 2017, the CEO participated in all of the Compensation Committee’s meetings and in all of the executive sessions, except for those in which the Compensation Committee considered the CEO’s performance, compensation and incentives. The Committee engaged the firm of Pay Governance LLC as its outside compensation advisor to assist the Committee in the execution of its charter. The support provided by the advisor is described in more detail below under “EXECUTIVE COMPENSATION—Compensation Discussion and Analysis—Role of Compensation Advisor.” The Report of the Compensation Committee on Executive Compensation appears below under the caption “EXECUTIVE COMPENSATION—Compensation Committee Report.”
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee responsibilities include identifying and recommending to the board of directors appropriate director nominee candidates and providing oversight with respect to corporate governance matters. The Nominating and Corporate Governance Committee met four times in 2017.
The members of the Nominating and Corporate Governance Committee are Mr. Edwards (Chair), Mr. Massaro and Ms. Zumwalt.
Directors may be nominated by the board of directors or by stockholders in accordance with the bylaws of the Company. The Nominating and Corporate Governance Committee will review all candidates for nomination to the board of directors, including those proposed by stockholders as provided below. The Nominating and Corporate Governance Committee reviews the person’s judgment, experience, independence, understanding of the Company’s business or other related industries, and such other factors as the Nominating and Corporate Governance Committee determines are relevant in light of the needs of the board of directors and the Company. The board of directors believes that its nominees should reflect over time a diversity of experience, gender, race, ethnicity and age, although it follows no strict criteria when making decisions. The Nominating and Corporate Governance Committee selects qualified candidates and reviews its recommendations with the board of directors, which will decide whether to invite the candidate to be a nominee for election to the board of directors.
If the Nominating and Corporate Governance Committee receives a nominee recommendation in accordance with the rules of the SEC from a stockholder or group of stockholders that has beneficially owned more than 5%
of the Company’s voting common stock for at least one year as of the date of the recommendation, the name of the candidate, the name(s) of the stockholder(s) who recommended the candidate, and whether the Nominating and Corporate Governance Committee chose to nominate the candidate will be disclosed in the proxy statement, if the consent of both the stockholder and the candidate has been received.
For a stockholder to submit a candidate for consideration by the Nominating and Corporate Governance Committee, a stockholder must notify the Company’s Corporate Secretary. In addition, the Company’s bylaws permit stockholders to nominate directors at a stockholders’ meeting. To make a director nomination at the annual meeting, a stockholder must notify the Company’s Corporate Secretary within the time periods specified under “SUBMISSION OF STOCKHOLDER PROPOSALS” below. Notices should be sent to: Corporate Secretary, Huron Consulting Group Inc., 550 West Van Buren Street, 17th Floor, Chicago, Illinois 60607, orcorporatesecretary@huronconsultinggroup.com. In either case, the notice must meet all of the requirements contained in the bylaws.
The Company’s Corporate Governance Guidelines provide that in an uncontested election, any nominee for director who receives a greater number of votes “withheld” from his or her election than “for” his or her election shall promptly tender his or her resignation to the board of directors following certification of the election results, subject to acceptance by the board of directors. For purposes of this policy, (i) an “uncontested” election is one in which the number of persons properly nominated for election as directors as of the date that is ten (10) days before the record date for determining stockholders entitled to notice of or to vote at such meeting is not greater than the number of directors to be elected, and (ii) brokernon-votes will not be counted as either votes “withheld” from or “for” such person’s election.
The Nominating and Corporate Governance Committee shall make a recommendation to the board of directors as to whether to accept or reject the tendered resignation, or whether other action should be taken. The board of directors shall determine whether to accept or reject the tendered resignation, or whether other action should be taken, in its sole discretion, and publicly disclose its decision regarding the tendered resignation within ninety (90) days from the date of the certification of the election results. The Nominating and Corporate Governance Committee in making its recommendation and the board of directors in making its decision may each consider any factors or other information that they consider appropriate and relevant.
If any director’s resignation is not accepted by the board of directors, such director shall continue to serve until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal. If a director’s resignation is accepted by the board of directors pursuant to this policy, then the board of directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 2 of Article III of the bylaws of the Company or may decrease the size of the board of directors pursuant to Section 1 of Article III of the bylaws of the Company.
STOCKHOLDER COMMUNICATIONS POLICY
The Company’s board of directors has established a process for stockholders to send communications to the board of directors. Stockholders may communicate with any member of the board of directors, including the chairperson of any committee, an entire committee or the independent directors or all directors as a group, by sending written communications to:
Corporate Secretary
Huron Consulting Group Inc.
550 West Van Buren Street
17th Floor
Chicago, Illinois 60607
E-mail messages should be sent tocorporatesecretary@huronconsultinggroup.com.
A stockholder must include his or her name and address in any such written ore-mail communication. The communication must indicate that the sender is a Company stockholder.
Each communication intended for the board of directors and received by the Corporate Secretary that is related to the operation of the Company and is not otherwise commercial in nature will be forwarded to the specified party following its clearance through normal security procedures. If the communication is mailed as personal, it will not be opened, but rather will be forwarded unopened to the intended recipient.
Diversity of Board Skills and ExperienceDIVERSITYOF BOARD SKILLSAND EXPERIENCE
Huron does not have a formal policy on board member diversity. The Nominating and Corporate Governance Committee, in discussing board composition, has focused on diversity of experience in relation to the development of the business. The Nominating and Corporate Governance Committee seeks candidates from regions where Huron offices are located, with prior management experience and experience on public company boards and in relevant industries.
Compensation of DirectorsCOMPENSATIONOF DIRECTORS
The Huronnon-employee director compensation program is designed to enhance our ability to attract and retain highly qualified directors and to align their interests with the long-term interests of our stockholders. The program consists of both a cash component, designed to compensate independent directors for their service on the board and its committees, and an equity component, designed to align the interests of independent directors and stockholders. Mr. Roth receives no compensation for his service on the board.
The 2014Effective as of July 1, 2016, the director compensation program hadis comprised of the following elements:
Annual cash retainer:
Non-executive Chairman –- $235,000
Vice Chairman –- $85,000
Other independent directors –- $60,000
Board and committee meeting fee of $1,000 per meeting (The Chairman does not receive board or committee meeting fees.)
Annual committee chairperson retainer of:
Audit – $10,000- $15,000
Compensation – $7,500- $15,000
Nominating and Corporate Governance – $7,500- $10,000
Annual restricted stock grant of $170,000 (granted on the date of the Company’s annual meeting and priced based upon the closing stock price on the date immediately preceding the annual meeting)of grant) which vests ratably over 12 quarters. If a new independent director joins the board after the Company’s annual meeting, the award is prorated as follows:
If the new director joins within six months of the Company’s annual meeting, the new director will receive half of the annual grant.
If the new director joins over six months after the Company’s annual meeting, no grant will be made.
Stock ownership requirement – independent directors are expected to own Huron stock equal to the lesser of three times the annual cash retainer (currently $180,000) or 9,000 shares.
A new independentnon-employee director will receive an initial restricted stock grant equal to $200,000, which will vest ratably over 12 quarters.
All directors are reimbursed forout-of-pocket expenses for attending board and committee meetings.
Directors are eligible to participate in our deferred compensation plan, which is described under the caption “EXECUTIVE COMPENSATION—20142017 Nonqualified Deferred Compensation.” One director has participated since 2013, and a second director elected to participate beginning in 2015.
Director Compensation TableDIRECTOR COMPENSATION TABLE
The following table summarizes the fees paid and the aggregate grant date fair value of shares granted to each of thenon-employee directors in 2014.2017. Directors who are also officers or employees of the Company receive no compensation for duties performed as a director.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(2) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Change in Pension Nonqualified | Total ($) | ||||||||||||||||||||||||
DuBose Ausley (3) | 82,000 | 170,016 | 252,016 | |||||||||||||||||||||||||||||
James D. Edwards (3) | 81,500 | 170,016 | 251,516 | 85,000 | 169,990 | — | 254,990 | |||||||||||||||||||||||||
H. Eugene Lockhart (3) | 96,000 | 170,016 | 266,016 | 101,000 | 169,990 | — | 270,990 | |||||||||||||||||||||||||
George E. Massaro (3) | 100,000 | 170,016 | 270,016 | 101,000 | 169,990 | — | 270,990 | |||||||||||||||||||||||||
John McCartney (3) | 235,000 | 170,016 | 9,207 | 414,223 | ||||||||||||||||||||||||||||
John McCartney (3)(4) | 235,000 | 169,990 | 112,816 | 517,806 | ||||||||||||||||||||||||||||
John S. Moody (3) | 93,500 | 170,016 | 263,516 | 89,000 | 169,990 | — | 258,990 | |||||||||||||||||||||||||
Debra Zumwalt (4) | 11,902 | 284,983 | 296,885 | |||||||||||||||||||||||||||||
Debra Zumwalt (3) | 96,000 | 169,990 | 19,872 | 285,862 |
(1) | This column represents the aggregate grant date fair value of shares granted to our directors in |
(2) | The amount in this column represents investment gains in the deferred compensation plan. Huron does not offer a pension plan. The amount shown above represents that portion of the account earnings for |
(3) | At December 31, |
(4) | Mr. McCartney has access to office space at the Company’s principal business offices in Chicago. The Company does not incur any incremental costs in connection with the provision of |
(5) | Hugh E. Sawyer was appointed to the board in February 2018. He had previously served as a managing director at Huron from January 2010 until May 2017, where he led the Operational Improvement Service Line for Huron’s Business Advisory practice. All compensation paid to Mr. Sawyer in 2017, which consisted of base salary paid through his departure and payment of his 2016 bonus, was in connection with his managing director role. |
Section 16(a) Beneficial Ownership Reporting ComplianceSECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the 1934 Act, the Company’s directors, executive officers and persons who beneficially own 10% or more of our common stock (the “Section 16 Reporting Persons”) are required to report their initial ownership of common stock and subsequent changes in that ownership to the SEC. Section 16 Reporting Persons are required to furnish the Company with copies of all Section 16(a) forms that they file. Based upon our review of forms filed by the Section 16 Reporting Persons pursuant to the 1934 Act, we have not identified oneany late filingfilings in 2014 in connection with shares withheld for taxes upon the vesting of restricted shares held by John D. Kelly, Huron’s current Chief Accounting Officer and former Controller.2017.
Stock Ownership of Certain Beneficial Owners and ManagementSTOCK OWNERSHIPOF CERTAIN BENEFICIAL OWNERSAND MANAGEMENT
The following table sets forth, as of the Record Date, certain information regarding the beneficial ownership of our common stock by:
each person known by us to beneficially own 5% or more of our common stock;
each of our named executive officers;
each member of our board of directors; and
all directors and executive officers as a group.
Beneficial ownership is determined according to the rules of the Securities and Exchange Commission (the “SEC”) and generally means that a person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security and includes options that are currently exercisable or
exercisable within 60 days. Each director, officer or 5% or more stockholder, as the case may be, has furnished us with information with respect to beneficial ownership. Except as otherwise indicated, beneficial owners of common stock listed below, based on the information each of them has given to us, have sole investment and voting power with respect to their shares, except where community property laws may apply.
Beneficial Ownership | ||||||||
Name of beneficial owner (1) | Shares | % | ||||||
Beneficial owners of 5% or more: | ||||||||
FMR LLC (2) | 2,856,214 | 12.489 | ||||||
TimesSquare Capital Management, LLC (3) | 1,598,812 | 7.00 | ||||||
Wellington Management Group LLP (4) | 1,542,211 | 6.72 | ||||||
The Vanguard Group, Inc. (5) | 1,426,908 | 6.23 | ||||||
BlackRock, Inc. (6) | 1,286,528 | 5.60 | ||||||
Directors and Executive Officers: | ||||||||
DuBose Ausley (7) | 24,474 | * | ||||||
James D. Edwards (8) | 18,905 | * | ||||||
C. Mark Hussey (9) | 37,907 | * | ||||||
H. Eugene Lockhart (10) | 24,681 | * | ||||||
George E. Massaro (11) | 18,862 | * | ||||||
John McCartney (12) | 52,521 | * | ||||||
John S. Moody (13) | 24,290 | * | ||||||
Diane E. Ratekin (14) | 34,069 | * | ||||||
James H. Roth (15) | 353,740 | 1.52 | ||||||
Debra Zumwalt (16) | 4,094 | * | ||||||
All directors and executive officers as a group (10 persons) (17) | 593,543 | 2.56 |
Beneficial Ownership | ||||||||
Name of beneficial owner (1) | Shares | % | ||||||
Beneficial owners of 5% or more: | ||||||||
Wellington Management Group LLP (2) | 3,102,878 | 14.02 | ||||||
Van Berkom & Associates Inc. (3) | 1,927,915 | 8.71 | ||||||
The Vanguard Group, Inc. (4) | 1,774,571 | 8.01 | ||||||
BlackRock, Inc. (5) | 1,444,220 | 6.50 | ||||||
Dimensional Fund Advisors LP (6) | 1,393,051 | 6.30 | ||||||
Boston Partners (7) | 1,286,433 | 5.81 | ||||||
FMR LLC (8) | 1,173,291 | 5.30 | ||||||
Directors and Executive Officers: | ||||||||
James D. Edwards (9) | 21,524 | * | ||||||
C. Mark Hussey (10) | 98,945 | * | ||||||
John D. Kelly (11) | 9,386 | |||||||
H. Eugene Lockhart (12) | 22,160 | * | ||||||
George E. Massaro (13) | 17,744 | * | ||||||
John McCartney (14) | 57,155 | * | ||||||
John S. Moody (15) | 19,653 | * | ||||||
Diane E. Ratekin (16) | 39,957 | * | ||||||
James H. Roth (17) | 380,291 | 1.69 | ||||||
Hugh E. Sawyer (18) | 13,095 | * | ||||||
Debra Zumwalt (19) | 12,283 | * | ||||||
All directors and executive officers as a group (11 persons) (20) | 692,193 | 3.08 |
* | Indicates less than 1% ownership. |
(1) | The principal address for each of the stockholders, other than |
(2) |
The principal address of Wellington Management Group LLP is 280 Congress Street, Boston, Massachusetts 02210. The shares are owned by Wellington Management Group LLP and the following subsidiaries of Wellington Management Group LLP: Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP. Information regarding beneficial ownership of our common stock by Wellington Management Group LLP is included herein in reliance on a Schedule 13G/A filed with the SEC on February |
The principal address of Van Berkom & Associates Inc. is 1130 Sherbrooke Street West, Suite 1005, Montreal, Quebec H3A 2MB. Information regarding beneficial ownership of our common stock by Van Berkom & Associates Inc. is included herein in reliance on a Schedule 13G filed with the SEC on February 13, 2018. |
(4) | The principal address of The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. The shares are owned by The Vanguard Group, Inc. and the following subsidiaries of The Vanguard |
Group, Inc.: Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. Information regarding beneficial ownership of our common stock by The Vanguard Group, Inc. is included herein in reliance on a Schedule 13G/A filed with the SEC on February |
The principal address of BlackRock, Inc. is 55 East 52nd Street, New York, New York |
The principal address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746. Information regarding beneficial ownership of our common stock by Dimensional Fund Advisors LP is included herein in reliance on a Schedule 13G/A filed with the SEC on February 9, 2018. |
(7) | The principal address of Boston Partners is One Beacon Street, 30th Floor, Boston, Massachusetts 02108. Information regarding beneficial ownership of our common stock by Boston Partners is included herein in reliance on a Schedule 13G filed with the SEC on February 13, 2018. |
(8) | The principal address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. The shares are owned by FMR LLC and the following subsidiaries of FMR LLC: FIAM LLC, Fidelity (Canada) Asset Management ULC, Fidelity Institutional Asset Management Trust Company, FMR Co., Inc., and Strategic Advisers, Inc. Information regarding beneficial ownership of our common stock by FMR LLC is included herein in reliance on a Schedule 13G/A filed with the SEC on February 14, 2018. |
(9) | Includes |
Includes |
Includes |
Includes |
Includes |
(14) | Includes 4,355 shares of restricted common stock, as well as 1,259 shares held by a wholly-owned limited liability company of which Mr. McCartney is the sole owner. |
Includes |
Includes |
Includes |
Includes |
Includes 4,355 shares of restricted common stock. |
(20) | Includes an aggregate of |
Compensation Discussion and AnalysisCOMPENSATION DISCUSSIONAND ANALYSIS
The Compensation Discussion and Analysis provides information regarding the objectives and elements of our compensation program with respect to the compensation of persons who appear in the “SummarySummary Compensation Table”Table (who we refer to collectively throughout this Proxy Statement as our “named executive officers” or “NEOs”). 1
SECTION 1 — EXECUTIVE SUMMARY | ||
Huron is a global professional services firm committed to achieving sustainable results in partnership with its clients. The company brings depth of expertise in strategy, technology, operations, advisory services and analytics to drive lasting and measurable results in the healthcare, higher education, life sciences and commercial sectors. Through focus, passion and collaboration, Huron provides guidance to support organizations as they contend with the change transforming their industries and businesses. Named Executive Officers During 2017, Huron’s named executive officer team consisted of the following individuals: • Mr. Roth, Chief Executive Officer, President and Director. • Mr. Hussey, Executive Vice President and Chief Operating Officer.1 •Mr. Kelly, Executive Vice President, Chief Financial Officer and Treasurer.1 • Ms. Ratekin, Executive Vice President, General Counsel and Corporate Secretary. Huron’s named executive officers are responsible for our Company-wide business operations and setting overall strategy of the organization. Practice Leadership Each of Huron’s operating segments is led by Practice Leadership and teams of client-facing managing directors. The Practice Leaders and client-facing managing directors for each business area are responsible for the financial results of their respective business area, including revenue and EBITDA growth, while ensuring delivery of superior solutions. These leaders have the critical talent and skills that make us unique and enable us to grow our business and compete in the marketplace. It is imperative to our core business strategy that we motivate and retain our current client-facing managing directors and obtain new talent through recruiting and developing our high potential employees so that they can progress to higher level leadership roles within the Company. | ||
Business Strategy | ||
Our business strategy is to be the premier
• Specialize in • Deliver high-value, quality services to our • Broaden and strengthen our capabilities to continue to best serve our clients while maintaining and growing our strong industry expertise. • Attract, retain, and motivate top tier • Supplement organic growth by successfully identifying, executing and integrating acquisitions that expand our current market offerings and deepen our industry expertise or broaden our capabilities to best serve our clients’ needs. •
|
1 | On January 3, 2017, Mr. John Kelly was promoted to the position of Executive Vice President and Chief Financial Officer (“CFO”). Formerly, Mr. Kelly had been Corporate Vice President and Chief Accounting Officer. With Mr. Kelly assuming the CFO role, Mr. Hussey has transitioned this role and has become Executive Vice President and Chief Operating Officer. Mr. Hussey also assumed the interim role of Healthcare Practice Leader. |
Compensation Strategy | ||
• Motivate and reward performance in the long-term best interests of shareholders. • Deliver competitive total compensation generally targeted at the median of the peer group(+/-15%). • Place a substantial portion of the compensation of our named executive officers at risk; actual payouts should vary based on the Company’s financial and operational performance. The performance measures directly link into our business strategy through
We | ||
|
|
Business Results |
The Company’s financial and strategic performance during 2017 determine the majority of our NEO’s compensation. Business results were as follows2: • Our 2017 financial results came in lower than we expected, driven by further softness in our Healthcare business. The decline in Healthcare was partially offset by growth in our Education and Business Advisory segments. • Net revenues were $732.6 million in 2017, compared to $726.3 million in the prior year. • Adjusted EBITDA decreased 19.3% to $104.6 million in 2017, or 14.3% of net revenues, compared to 17.9% in the prior year. • Adjusted diluted EPS was $2.15 in 2017, a 33.0% decrease from the prior year. While we delivered results that were lower than our initial guidance, we have made significant progress in the operational turnaround of our Healthcare business positioning us to be more responsive to changing market conditions. Among other initiatives, we have enhanced the level of collaboration across all of our service lines. Our efforts have better equipped the Healthcare business to compete across a wider spectrum of engagement sizes and durations by developing more flexible delivery models. • We also completed two significant acquisitions in 2017. We acquired Innosight and Pope Woodhead in the first quarter, strategically adding to our Business Advisory segment. We believe these acquisitions strengthen our strategy capabilities and provide us with a comprehensive set of offerings to serve our clients—from strategy setting to execution. These acquisitions also strengthen our international footprint to best serve our growing, global client base. These acquisitions contributed almost $44 million in revenues during 2017 and performed largely as planned. • In 2017, we defined our new, five-year enterprise-level strategy, created a unified sense of purpose and secured the commitment of our employees through a new vision, mission, set of values and modified brand positioning all designed to align with our strategy. • We continued to align our corporate infrastructure with the evolving needs of our business to gain efficiencies and leverage our SG&A expense. |
In the |
|
|
Our NEO compensation relies heavily on performance-based pay – the annual and long-term incentive programs. The Compensation Committee establishes challenging goals that reflect the Company’s goals and business environment. The pay our NEOs ultimately earn is based on the level of achievement of these performance goals and our stock price performance.
Target total compensation for our CEO in 2017 was 80% “at risk”, meaning that it is contingent upon and based on Company performance and stock price performance, and the target total compensation for our other NEOs was on average 69% “at risk”.
NEO Pay Mix (Target)
Our performance in 2017 against the predetermined goals did not meet our expectations, which resulted in a small portion of our NEO’s target compensation that was “at risk” being earned. The pay actually earned by our CEO and other NEOs, compared to the target, is shown below.
NEO Pay Mix (Actual)
(1) |
|
(2) | The value of the |
Our pay programs create alignment between Company performance and NEO pay, as illustrated for the prior three years in the tables below. Our annual incentives yielded payouts below target in each of those years, and our long-term incentive program has only provided a payout in one year, but at a below target level.
Our executive compensation programs are very aligned with shareholder value. This is reflected in a comparison of Mr. Roth’s target and realizable compensation. The graph below illustrates the target compensation opportunity provided to Mr. Roth for 2015-2017 compared to the actual value realized, when taking into account performance achievements under our incentive programs as well as share price changes. Mr. Roth realized 56% of his target pay opportunity over the 2015-2017 period.
3-Year Aggregate CEO Pay ($000s)
(2015-2017)
(1) |
|
(2) |
|
| |
| |
SECTION 2 |
Huron’s executive compensation program is structured to align executive pay with Company performance. The strength of this alignment was recognized by our shareholders in 20142017 as Huron received over 99% approval of asupport on our shareholder advisory vote on executive compensation (commonly referred to as “Say on Pay”).
We strive to provide compensation to motivate and reward performance that is in the long-term best interests of our shareholders. We define performance as a blend of:
FinancialAchieving financial performance versus annualin comparison topre-established financial goals (Revenue and Adjusted EBITDA margin)
Attaining strategic initiatives that we believe are critical to future value creation
Delivering value to shareholders
As part of the program, we also evaluate several groups of peers depending on what we are measuring:
DeliveryFor executive compensation, we use a peer group of valuepublicly traded companies (“Executive Pay Peer Group”) where the size of the companies and the roles of the executive officers are similar to shareholders (Adjusted EPS measured annuallythose of Huron. We generally seek to target executive pay at the market median and over a three-year period)in alignment with the pay data from this peer group. This pay data may at times be supplemented with broader survey data for specific executives, as appropriate.
Achievement of annual strategic initiatives
We set a competitive target total value by using a mix ofFor compensation vehicles that allows us to attract, motivate and retain top leadership talent.
The key operational aspects of our compensation programclient-facing managing directors (“Managing Director Peer Group”), we gather data from public and private companies and focus our comparators on the type of work performed, rather than primarily on the size or public/private nature of the organizations.
In order to assess our business performance, we review our business competitors, many of which are summarizedprivate, much larger in size or are subsets of larger companies. Therefore, obtaining comparative business results can be challenging. As a result, we have chosen to set executive performance goals based on absolute rather than relative performance measures.
In addition to these objectives, we adhere to a comprehensive set of generally accepted best practices in the following table:
structuring and design of the compensation program.
Best Practice Elements: | ||||
• | ||||
Establish Competitive Compensation | Levels.We | |||
| ||||
|
| |||
• | Minimize Compensation Risks.We periodically review our compensation program to confirm that our compensation policies and practices are not encouraging excessive or inappropriate risk taking by our NEOs. | |||
• | Impose Robust Stock Ownership Guidelines.Our stock ownership guidelines require our NEOs to retain a significant equity stake in the Company. NEOs are expected to retain a number of shares equal to at least 60% of the net after tax value from the exercise of stock options or vesting of restricted shares and performance shares until these guidelines are met. | |||
• | Maintain a “Clawback” Policy. We maintain a compensation recoupment policy (commonly referred to as a “clawback policy”), which generally provides that the Company | |||
• | Retain an Independent Compensation Consultant. The Compensation Committee retains an independent consultant to assist in developing and reviewing our NEO compensation strategy and to confirm that the design and pay levels of our compensation programs are appropriately consistent with our goals and market practices. | |||
• | Consider the Impact of Tax and Accounting Rules. The Compensation Committee takes into account the effect of tax and accounting rules in structuring our NEO compensation program. The Compensation Committee reserves the right to pay compensation that may not be deductible under Section 162(m). | |||
• | Review Share Utilization. We regularly review overhang levels (the dilutive impact of equity awards on our shareholders) and consider such levels in our consideration of future equity grants. | |||
• | No Excise TaxGross-Ups. Our NEOs are not entitled to receive any“gross-up” payments related to excise taxes that may be imposed in connection with golden parachute arrangements under the Company’s change of control severance plan. | |||
• | Hedging or Pledging of Company Stock. The board | |||
• | No “Timing” of Equity Grants. We maintain a disciplined equity approval policy. We do not grant equity awards in anticipation of the release of material,non-public information. Similarly, we do not time the release of material,non-public information based on
| |||
• | ||||
No Executive Perquisites that are | ||||
SECTION 3 |
We define success through a number of measures, and in 2014 we had positive performance in many areas:
Revenue increased 13% from $720.5 million to $811.3 million.
Adjusted EBITDA increased 13% from $138.4 million to $155.7 million.
Adjusted EPS increased 16% from $2.96 to $3.42.
We maintained a strong balance sheet while generating solid cash flow and funding more than $150 million in acquisitions, share repurchases, capital expenditures and costs related to the convertible debt offering. Total debt, net of cash, increased only $26 million.
We continued to build a culture that attracts top talent. Average full-time billable consultant headcount in 2014 increased by nearly 15% compared to 2013.
We acquired three companies in 2014 to support our strategic growth strategy in three of our four operating segments:
|
|
|
Huron has been favorably recognized externally:
|
|
Received a perfect score on the 2014 Corporate Equality Index.
In 2014, we were pleased to receive a shareholder advisory vote (commonly referred to as “Say on Pay”) in excess of 99% in support of the named executive officer compensation.
Investors responded favorably to Huron’s financial and strategic performance. This response is reflected in a 9% stock price increase in 2014 following an 86% increase in 2013. Over the past three years the stock price has appreciated an average of 21% per year.
Targeting of Total Direct Compensation
The Compensation Committee generally targets total direct compensation within 10% to 15%be within+/-15% of the median of the peer groupExecutive Pay Peer Group for each named executive officer. It is the assessment of theour NEOs. The Compensation Committee thatalso reviews data from the total direct compensation levels of our named executive officers including our CEO are generally withinRadford Group Technology Survey for companies with annual revenue between $500M and $999.9M. This data informs the median of our peer group. The established targets for individual components and overall executive compensation are designed to be competitive in order to attract, motivate and retain executives necessary to drive and achieve Company objectives. In some cases, individual components may be over or under market (in order to emphasize a particular element or if individual circumstances dictate), but we believe the total direct compensation packages are market competitive.Committee’s decisions on pay adjustments.
20142017 Base Salary, Annual and Long-Term Incentive Changes
During 2017, the Compensation Committee approved changes to both the 2017 Annual and Long-Term Incentive Plans. These changes were made with the goal of continuing to evolve and improve the programs with the organizational needs of the Company, while ensuring a clear correlation between pay and performance, and effectively motivating the NEOs toout-perform expectations. The Compensation Committee approved the following changes to base salary and target annual and long-term incentive (LTI) levels for the named executive officers for 2014 compared to 2013.
Compensation Element | James H. Roth | C. Mark Hussey | Diane E. Ratekin | |||||||||
2013 | 2014 | 2013 | 2014 | 2013 | 2014 | |||||||
Base Salary | $800,000 | $900,000 | $450,000 | $550,000 | $375,000 | $400,000 | ||||||
Target AIP Payout | 110% of base salary | 110% of base salary (no change) | 80% of base salary | 90% of base salary | 50% of base salary | 50% of base salary (no change) | ||||||
Target LTI Payout | 175% of base salary | 225% of base salary | 100% of base salary | 125% of base salary | 75% of base salary | 90% of base salary |
These changes were made to reflect actual performance (Company and individual), peer group compensation data, and in the case of Mr. Hussey, to reflect his added responsibilities. Compensation for all three executives, after taking into consideration the increases provided, are within 10% to 15% of the median of the peer group. The Compensation Committee approved 20152017 compensation levels (base salary and target annual and long-term incentive) that remain unchangedin February of 2017.
Compensation Element | James H. Roth | C. Mark Hussey | John D. Kelly | Diane E. Ratekin | ||||
Base Salary | $900,000 | $750,000 | $325,000 | $400,000 | ||||
Target AIP Payout | 110% of base salary | 100% of base salary | 70% of base salary | 50% of base salary | ||||
Target LTI Payout | 300% of base salary | 175% of base salary | 100% of base salary | 115% of base salary |
For 2017, the Compensation Committee increased Mr. Hussey’s base salary to $750,000 from 2014.$600,000 to recognize his performance, his leadership role in the creation of Huron’s long-term strategy, and his increased role leading the transformation of the Healthcare practice. They also increased Mr. Roth’s target LTI to 300% from 225% and Ms. Ratekin’s target LTI to 115% from 100% to be more market competitive, and increased Mr. Kelly’s total compensation by 105% to compensate for his promotion to Chief Financial Officer from Chief Accounting Officer.
For 2018, the Compensation Committee increased Mr. Kelly’s total compensation by 32% to be more market competitive. His salary was increased from $325,000 to $400,000 and his LTI was increased from a target of 100% to 120%.
20142017 Annual Incentive
The Compensation Committee approved a performance-based Annual Incentive Plan for 2014.2017. The maximum incentive opportunity for 2017 increased from 125% to 150% of target to better align with market practice and to enhance the incentives for participants to achieve maximum performance levels. Based on the actual results on each of the performance measures, a total annual cash annual incentive payout of 97%60% of target was earned.
This amount is reflected in the Summary Compensation Table asNon-Equity Incentive Plan Compensation.
This plan has three performance criteria (withis structured as shown in the corresponding weight noted below):table below:
Performance Measure | Weighting | Threshold | Target | Maximum | Actual | |||||
Net Revenue | 40% | $729M | $759M | $829M | $733M | |||||
Adjusted EBITDA Margin | 30% | 14.3% | 15.2% | 16.0% | 14.3% | |||||
Strategic Measures* | 30% | Committee Discretion | 100% | 150% | 125% |
|
Based on these results, the overall performance payout under the Annual Incentive Plan was 97% of target.
Note: To ensure compliance with the terms of Section 162(m), aA performance threshold of $0.05 GAAPAdjusted Diluted EPS which must be exceeded prior to the payout of the 20142017 Annual Incentive Plan.Plan is designed to comply with the terms of Section 162(m). If $0.05 GAAPAdjusted EPS is exceeded, the Compensation Committee can approve a payout of up to 150% of target. The $0.05 GAAPAdjusted Diluted EPS was exceeded in 2014.2017.
The chart below shows the plan structure, the results of each performance measure and the calculation of the annual incentive award.
2014 Performance Targets ($MM) | ||||||||||||||||
Measure | Weight | 25% | 100% | 125% | Actual | % Earned | ||||||||||
Revenue | 40 | % | $765 | $805 | $825 | $791 | 73 | % | ||||||||
Adjusted EBITDA % | 30 | % | 18.5% | 18.7% | 18.9% | 19.2% | 125 | % | ||||||||
Strategic Measures | 30 | % | See above | 100 | % | |||||||||||
Total Earned: 97% |
20142017 Long-Term Equity Grants
On March 1, 2014,15, 2017, Huron grantedmade long-term equity grants that were structured as 70% performance sharesunits and 30% restricted stock.shares.
Executive | Performance Shares Granted* | Restricted Shares Granted | Performance Units | Restricted Shares | ||||||||||||
James H. Roth | 21,422 | 9,181 | 46,210 | 19,804 | ||||||||||||
C. Mark Hussey | 7,273 | 3,117 | 22,463 | 9,627 | ||||||||||||
John D. Kelly | 5,562 | 2,384 | ||||||||||||||
Diane E. Ratekin | 3,808 | 1,632 | 7,873 | 3,374 |
* | Full |
In August of 2017, the Compensation Committee awarded Mr. Hussey an award of restricted shares with a grant date fair value of $1,000,000 in order to recognize his contributions as the interim leader of the Healthcare practice during its ongoing transformation as well as his critical role to the ongoing success of the business.
Restricted Stock Awards
The restricted stock granted willto our NEOs vest 25%1/3 per year over fourthree years, based on continued service to ensure continued retention. In addition, the Company must exceed $.05 per share of$0.05 Adjusted EPS in the year of grant for vesting to occur overor the four years based on service.awards will be forfeited. This condition was added to allow the grantis designed to satisfy the conditionsprovisions of Section 162(m). This condition was met in 2014.2017.
Performance Share Awards
In 2014, the Compensation Committee revised theThe performance share plan for named executive officers.awards are tied to both three-year performance and annual performance. The performance share plan is now based on bothwas redesigned for 2017, following the completion of the initial three-year performance (2014 through 2016)cycle (2014-2016). The 2017 performance share plan maintains theone-year performance period (60% of award) and annual performance. The purpose of revising the plan to add a three-year performance period was to incent sustained(40% of award). Theone-year performance is measured 100% based on 2017 Adjusted Diluted EPS and any earned shares will vest ratably over a longer-term period. This replaces the 2013 design that was based 100 percent on annual performance.
Plan Mechanics:
A grant ofthree years. The new three-year performance share unitsperiod will be made in 2014, 2015 and in 2016measured 100% based on each NEO’s target LTI payout.
Each grant is assessed using both annual2019 Adjusted Diluted EPS, and three-year performance goals.
|
|
Atany earned shares will immediately vest on March 15, 2020, after the end of the annualthree-year performance period, performance is evaluated on the annual performance goals and all performance share units are adjusted based on performance against the annual goals.
The grant is then divided into two parts:
40%period. Payout opportunity remains 50% of the adjusted award is deemed to be earned based on the annualtarget for threshold performance and vests immediately.
The remaining 60%200% of the award will remain unearned and is subject to an additional adjustment based on three-yeartarget for maximum performance.
At the end of 2016, three-year No shares are earned for performance will be determined and applied to the 60% of the award that was deferred at the end of the annual performance periods and adjusted based on the table shown below.below threshold.
50% of the earned amount (30% of the total award) will vest at the end of 2016.
50% of the earned amount (30% of the total award) will vest at the end of 2017.
20142017 Annual Performance Measures and Results:
The Compensation Committee established Non-GAAP Adjusted Diluted EPS as the performance measure for PSUs with payouts ranging from 0% to 125%200%. Actual performance came in at 151% of target. Actual performance exceededbelow the maximum performance target;threshold; therefore, the grant of performance share units was adjusted to 125%. Please seewere not earned as presented in the chart below for the targets and actual results. Forty percent of the performance shares, after applying the 125% multiplier, were earned by each participant.below.
2014 Performance Targets(1) | Actual Performance | 2017 Performance Targets (1) | Actual Performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Measure | 0% | 25% | 100% | 125% | Actual | PSU Adjustment Percent(2) | Actual Earned Amount for 3 Yr. Avg.(3) | 0% | 25% | 100% | 150% | 200% | Actual | PSU Earned Percent | ||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Adjusted EPS | <$ | 2.83 | $ | 2.83 | $ | 3.17 | $ | 3.28 | $ | 3.39 | 125 | % | 151 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted Diluted EPS | <$ | 2.31 | $ | 2.31 | $ | 2.46 | $ | 2.76 | $ | 3.16 | $ | 2.15 | 0 | % |
(1) | Actual Adjusted Diluted EPS is calculated on a continuing operations basis and |
2018 NEO Compensation Program Design Changes
During 2017, we undertook a review of our NEO compensation program to ensure it continues to support our business and talent strategies, appropriately reflects peer practices, and aligns with shareholders in recognition of our ongoing transformation.
Based on this review, the Committee approved a number of changes to the NEO compensation program for 2018:
2018 Annual Incentive Program | ||
Changes Made: | Reasons for Change: | |
• Adding organic revenue growth as performance measure, replacing the • Adding greater specificity to and limiting the number of strategic objectives. • Widening the | • Creates enhanced emphasis on the • Provides greater clarity to performance expectations and reduces subjectivity in assessing performance. • Better reflects competitive practices while maintaining our performance focus by providing lower than typical payout for |
The 2018 annual incentive program design is summarized below:
Threshold | Target | Maximum | ||||||||||||||||||||||||||
Performance Measure | Weighting | Performance | Payout | Performance | Payout | Performance | Payout | |||||||||||||||||||||
Organic Revenue Growth | 40 | % | 95 | % | 25 | % | 100 | % | 100 | % | 111 | % | 200 | % | ||||||||||||||
Adjusted EBITDA Margin | 30 | % | 85 | % | 25 | % | 100 | % | 100 | % | 115 | % | 200 | % | ||||||||||||||
Strategic Measures* | 30 | % | 85 | % | 25 | % | 100 | % | 100 | % | 115 | % | 200 | % |
* At the beginning of 2018, the Compensation Committee approved specific strategic measures focused on further development of each practice area and further improvements in the effectiveness and efficiencies of Huron’s infrastructure. A target award would reflect full achievement of these objectives, as assessed by the Committee. The Committee applies its judgment in determining overall performance on the measure.
2018 Long-Term Incentive Program | ||
Changes Made: | Reasons for Change: | |
• Utilizing a full three-year performance • Adding a revenue growth goal to complement the | • Reflects multi-year performance rather than the • Focuses on the |
Three-Year Performance Measures:
Three-year performance will be measured using a three-year average of the earned performance from 2014, 2015 and 2016. This three-year average will use the actual earned amount from the annual performance cycles. Based on that average, a multiplier between .75 and 2.00The 2018 long-term incentive program design is applied (see chart below). For 2014, the actual performance of 151% will be used in the average.summarized below:
Multiplier for 2014 – 2016 Three-Year Average Performance(1) | ||||||||||||||
.75 | .9 | 1.0 | 1.25 | 1.5 | 1.75 | 2.0 | ||||||||
< 50% | 50% to 84% | 85% to 99% | 100% to 109% | 110% to 114% | 115% to 119% | > 120% |
Vehicles | Weighting | Performance Measure | Performance/Vesting Timeline | |||||||
Performance Units | 70 | % | 40% Adjusted Diluted EPS 30% Organic Revenue Growth | Three-Year (cliff) | ||||||
Restricted Shares | 30 | % | Continued employment | Three-Year (ratable) |
SECTION |
Executive Pay Peer Group
ElevenThe peer group developed in 2016 to inform 2017 pay decisions was modified based on the annual review of Executive Pay Peer Group criteria. The Compensation Committee elected to expand the peer group from 11 companies currently compriseto 16 companies. The Committee believes that this larger peer group will provide better insights into the compensation peer group for Huron.practices of business peers and will be less volatile due to the compensation changes made by one company. Companies were identified based on the following process:
1. | All companies were identified that met the following criteria: |
U.S.US headquartered and publicly traded.
Revenue betweenone-half to two times Huron’s trailing 12 monthsmonths’ revenue as of Huron’s 20142016 fiscalyear-end.
Global Industry Classification Standard (GICS) codes: Research and Consulting Services, Human Resource & Employment Services, Application Software, Health Care Services or Technology, or Data Processing and Outsourced Services.
2. | Companies were then screened and selected that best met the following set of factors: |
Business and/or labor market competitor to Huron.
Similar revenue per employee.
Predominantly U.S.US revenue.
Principal business was to provide value-added consulting or advisory services to companies and organizations.
As a result of the review and application of these criteria, the Compensation Committee approved the following companies:
The chart below listsAdvisory Board, Inc.
Allscripts Healthcare Solutions, Inc.
athenahealth, Inc.
CBIZ Inc.
CEB, Inc.
Dun & Bradstreet Corporation
Exponent, Inc.
FTI Consulting, Inc.
Gartner Inc.
Heidrick & Struggles International, Inc.
ICF International Inc.
Korn/Ferry International
Maximus, Inc.
Navigant Consulting Inc.
Premier, Inc.
Resources Connection, Inc.
Additional changes were made to the 2014 peer group in 2017 in advance of 2018 pay determination. Gartner acquired CEB, thus the Committee removed CEB as a peer, and each company in the Committee elected to remove Gartner and Maximus due to their larger size relative to Huron. Lastly, Acxiom Corporation and HMS Holdings Corporation were added to maintain a peer group’s trailing 12 months revenue and market capitalization asgroup of December 31, 2014.robust size.
Huron Consulting Group Peer Group ($MM)
Trailing 12 Months Revenue (1) | Market Cap 12/31/2014 | |||||||
IHS | $ | 2,231 | $ | 7,763 | ||||
MAXIMUS | $ | 1,761 | $ | 3,653 | ||||
FTI Consulting | $ | 1,747 | $ | 1,585 | ||||
ICF International | $ | 1,003 | $ | 795 | ||||
Navigant Consulting | $ | 841 | $ | 7,447 | ||||
CBIZ | $ | 719 | $ | 422 | ||||
MedAssets | $ | 692 | $ | 1,190 | ||||
Resources Connection | $ | 584 | $ | 619 | ||||
The Advisory Board | $ | 574 | $ | 1,763 | ||||
Accretive Health (2) | $ | NA | $ | 659 | ||||
EPIQ Systems | $ | 489 | $ | 620 | ||||
|
|
|
| |||||
Median | $ | 719 | $ | 795 | ||||
|
|
|
| |||||
Huron Consulting Group | $ | 791 | $ | 1,570 |
Employment Agreements with Mr. Roth, Mr. Hussey, Mr. Kelly and Ms. Ratekin
Huron has entered into agreements with each of the named executive officers that provide for benefits upon termination of employment under certain circumstances, including in connection with a change of control of the Company. Huron provides these benefits as a means of remaining competitive, retaining executive officers, focusing executive officers on shareholder interests when considering strategic alternatives, and providing income protection in the event of involuntary loss of employment. In general, these arrangements provide for severance benefits upon Huron’s termination of the executive’s employment without cause or resignation by the executive for good reason (constructive termination). In the event of a change of control of Huron, and if the executive’s employment is terminated without cause or he or she resigns for good reason, the executive will
receive enhanced severance benefits. Huron provides these enhanced severance benefits only with a so-called “double trigger” because the Company believes that the executive officers would be materially harmed in a change of control only if it results in reduced responsibilities or compensation or loss of employment for the executive. Huron isemployment agreements do not obligated underprovide for any gross-up provisions to pay for excise tax payments for the CEO and other named executive officers in the event of a change of control.gross-ups.
More information on our use of employment agreements, including the estimated payments and benefits payable to the named executive officers, is provided under the “Potential Payments Upon Termination or Change of Control” section of this Proxy Statement.
Role of Compensation Committee
The Compensation Committee is primarily responsible for administering our executive compensation program in a manner consistent with our compensation philosophy and objectives. The principal functions of the Compensation Committee are to:
set salaries and annual and long-term incentive levels for the CEO and other named executive officers;
evaluate annually the performance of the CEO (in coordination with the full board) and review the CEO evaluations of the other named executive officers;
review and approve the design and competitiveness of our compensation plans, executive benefits and perquisites;
review and approve the total cash and stock bonus pools for the organization, and approve the individual incentive payout awards for the named executive officers;
�� | review director compensation and make recommendations to the board; |
review and approve goals used for the annual and long-term incentive plans;
retain or terminate, in its sole discretion, any independent compensation consultant used to assist the Compensation Committee;
review and evaluate compensation arrangements to assess whether they could encourage undue risk taking; and
create a Compensation Committee report on executive compensation for inclusion in the proxy statement.Proxy Statement.
The Compensation Committee acts independently, and works closely with our board of directors and the executive management team, in making many of its decisions. To support its decision making, the Compensation Committee has retained the services of an independent compensation consultant, Semler Brossy Consulting Group, LLC (“Semler Brossy”).consultant. The Compensation Committee has the sole authority to amend or terminate the services of its independent consultant.
In 2014,2017, the Compensation Committee was comprised entirely of independent directors, none of whom has at any time been an officer or employee of the Company.
Role of Management
Our CEO works together with the Corporate Vice President, Chief Human Resources Officer and the Compensation Committee of our board to establish, review and evaluate compensation packages and policies for our executive officers. Our CEO reviews the performance of each named executive officer and makes recommendations to the Compensation Committee based on his review. Our CEO, COO/COO, CFO and General Counsel provide input into our strategic goals for future performance periods. The Compensation Committee carefully reviews all information before finalizing incentive goals, however, as we believe such a process is consistent with good governance. Prior to determining the size of the bonus pool for all employees other than NEOs, management reviews Company and practicepractice-level performance with the Chairman of the board so that the bonus pool and Company profitability strike the right balance between shareholder returns and retention of employees. Our CEO does not participate in any discussions related to his own compensation.
Role of Compensation Advisor
The Compensation Committee continued to retain Semler Brossy as itsretains an independent advisor for the 2014 fiscal year to assist in the ongoing assessment of our executive compensation strategy and program. Semler BrossyThe Committee’s independent advisor reports directly to the Compensation Committee and serves at its sole discretion. Semler Brossydiscretion and does not perform any other services for the Company other than those in connection with its work for the Compensation Committee. Semler Brossy served as the Compensation Committee’s independent advisor through the first half of 2017, at which time the Compensation Committee retained Pay Governance to serve as its independent advisor.
The Compensation Committee annually analyzes whether the work of Semler Brossy as a compensation consultantadvisor’s work has raised any conflict of interest. The Compensation Committee has determined, based on its analysis of NASDAQ requirements, that the work of Semler Brossy and Pay Governance and the individual compensation advisors employed by Semler Brossy and Pay Governance as compensation consultants to the Company has not created any conflict of interest.
20142017 Say on Pay Vote
In 2014,2017, we received a shareholder advisory vote (commonly referred to as “Say on Pay”) in excess of 99% in support of the named executive officer compensation. We believe this positive vote reflects the strong pay for performance relationship in our executive compensation program and supports the changes that have been made in recent years to improve the program. We continue to listen carefully to our shareholders and incorporate their feedback into our deliberations about executive compensation. ShareholdersAs in 2011, shareholders at the 20112017 Annual Meeting expressed a preference that advisory votes on executive compensation occur every year. Consistent with this preference, the Company has held and will continue to hold its advisory vote on the compensation of the Company’s named executive officers annually until the 20172023 Annual Meeting at which time shareholders will again be asked to vote on the frequency of advisory votes on named executive officer compensation.
Health and Welfare Benefits
The named executive officers are eligible for the same health and welfare benefits generally available to Huron employees.
Deferred Compensation
The Company also offers a nonqualified deferred compensation plan (the “DCP”) to all managing directors, corporate vice presidents, named executive officers and independentnon-employee directors. The DCP allows participantsmanaging directors, corporate vice presidents and executives to elect to defer up to 75% of their base salary and 100% of their annual cash incentive into a deferred compensation account and to choose from a number of investment alternatives.Non-employee directors may elect to defer up to 100% of their board fees into the DCP.
Perquisites
Huron did not provide material perquisites that are not provided widely within Huron to any named executive officer in 2014.2017. The Company provides enhanced disability and life insurance benefits to all of its managing directors, corporate vice presidents and executive officers. The CEO and Executive Vice Presidents are also offered reimbursement of the cost of an annual executive physical examination.
Clawback Provisions
In 2014, we adopted an incentive compensation recoupment policy (commonly referred to as a “clawback policy”) that provides for the potential recoupment of bonuses or awards paid to executive officers and such other individuals designated by our independent directors under our shortshort-term and long-term incentive compensation plans, where the payout or actual award received was determined based in part on the financial performance of the Company or one of its practice areas.Company. In the event of a material restatement of our quarterly or annual financial results, our independent directors will review all incentive compensation awarded to those individuals covered by the policy based upon the achievement of financial results that were the subject of the restatement. The independent directors have the authority to recoup all or a portion of the incentive compensation to the extent that the amount of such compensation would have been lower than the amount actually awarded, granted, paid, earned, deferred or vested based on the achievement of financial results that were subsequently reduced due to such restatement.
Stock Ownership Guidelines and Holding Requirements Hedging and Pledging Policies
In 2010, the Compensation Committee adopted stock ownership guidelines for Huron’s named executive officers andnon-employee directors. The guidelines, set forth below, are consistent with peer practices and designed to promote alignment with the interests of stockholders and the Company’s commitment to sound corporate governance.
Position | Stock Ownership Guideline | |
CEO | the lesser of 3x salary or 120,000 shares | |
| the lesser of 2x salary or 50,000 shares | |
Other Executive Officers | the lesser of 1x salary or 20,000 shares | |
Non-employee | the lesser of 3x annual retainer or 9,000 shares | |
Non-employee directors | the lesser of 3x annual retainer or the # of shares equivalent to 3x annual retainer/share price on day prior to annual meeting when first elected |
Until the relevant stock ownership target is achieved, executive officers andnon-employee directors are required to retain a number of shares equal to at least 60% of the net after tax proceeds from the exercise of stock options or vesting of restricted stock and performance shares. Only shares owned outright count towards ownership requirements. Unexercised stock options and unvested performance shares or unvested restricted stock do not count.
Mr. Roth and Ms. Ratekin and all All of our NEOs andnon-employee directors serving asare in compliance with the terms of the 2014 annual meeting have met the stockour share ownership guidelines. Mr. Hussey is expected to retain a number of shares equal to at least 60% of the net after tax value from the exercise of stock options or vesting of restricted stock
Hedging and performance shares until he satisfies the ownership requirements.Pledging
The Company has an insider trading policy that prohibits directors, officers, employees and contractors from entering into transactions in publicly traded puts, calls or other derivative securities with respect to Huron’s stock and requires thatprohibits any other transaction that “hedges” the ownership in Huron’s stock be pre-cleared by the General Counsel. In addition, the board has adopted a policy that requires board approval of any hedging activities by executive officers, and the board has indicated it would not approve any such hedging activities except in unusual circumstances.
The Company also has a pledging policy that in general prohibits directors, officers, employees, and contractors fromor holding Company securities in a margin account or pledging Company securities as collateral for a loan. Limited exceptions may be made by the General Counsel if the person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.
Tax Considerations
Section 162(m). Section 162(m) of the Code generally limits the deductibilitydisallows a tax deduction to public companies for federal income tax purposes of compensation paid in excess of $1 million for any fiscal year to certain specified covered employees. Under the CEOrules in effect before 2018, compensation that qualified as “performance-based compensation” under Section 162(m) was deductible without regard to this $1 million limit. The recent Tax Cuts and Jobs Act generally eliminated the performance-based compensation exception under Section 162(m), effective January 1, 2018, subject to a special rule that “grandfathers” certain awards and arrangements that were in effect on or anybefore November 2, 2017. To date, the IRS has not issued guidance interpreting the Tax Cuts and Jobs Act. While the Committee intended that certain incentive awards granted to our NEOs on or prior to November 2, 2017 be deductible as “performance-based compensation,” it cannot assure that result. The Committee has taken the potential impact of the next three most highly paid executive officers of a publicly held corporation (other than the CFO). Huron may deduct compensation exceeding $1 millionTax Cuts and Jobs Act into consideration when approving payout amounts for federal income tax purposes if the compensation is paid pursuant to a performance-based, nondiscretionary plan that is approved by stockholders. Both the Annual Incentive Plan and the equity plans are intended to comply with all the provisions of Section 162(m). The Compensation Committee reserves the right to pay compensation that may not be deductible under Section 162(m).performance periods ending on December 31, 2017.
Section 280G. Section 280G of the Code disallows a company’s tax deduction for certain payments in connection with a change of control defined as “excess parachute payments,” and Section 4999 of the Code imposes a 20% excise tax on certain persons who receive excess parachute payments. The Compensation Committee amended Senior Management Agreements in 2010 to ensure that severanceany covered payments would be reduced to the extent necessary so that no portion of such payments is subject to the excise tax.
Compensation Committee ReportCOMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the information contained under the caption “Compensation Discussion and Analysis” and, based on this review and discussion, has recommended to the board of directors that it be included in this Proxy Statement and incorporated by reference into our 20142017 Annual Report on Form10-K.
John S. Moody, Chairman
DuBose AusleyDebra Zumwalt, Chair
H. Eugene Lockhart
Debra ZumwaltJohn S. Moody
REQUIRED COMPENSATION DISCLOSURES |
2014 Summary Compensation Table2017 SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Non Equity Incentive Plan Compensation ($) | Stock Awards ($) (2) | Option Awards ($) (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4) | All Other Compensation ($) (5) | Total Compensation ($) | |||||||||||||||||||||||||||
James H. Roth President and Principal | 2014 | 900,000 | — | 960,300 | 1,316,254 | — | — | 30,634 | 3,207,188 | |||||||||||||||||||||||||||
2013 | 800,000 | 436,000 | 932,800 | 1,225,001 | 419,983 | — | 30,060 | 3,843,844 | ||||||||||||||||||||||||||||
2012 | 800,000 | 186,560 | 429,440 | 195,978 | 336,006 | — | 28,285 | 1,976,269 | ||||||||||||||||||||||||||||
C. Mark Hussey (6) Executive Vice President, Principal Operating Officer, Principal Financial Officer and Treasurer | 2014 | 550,000 | — | 480,150 | 446,846 | — | 23,173 | 30,468 | 1,530,636 | |||||||||||||||||||||||||||
2013 | 450,000 | 152,000 | 381,600 | 393,781 | 134,983 | — | 27,156 | 1,539,520 | ||||||||||||||||||||||||||||
2012 | 350,000 | 59,360 | 136,640 | 61,241 | 105,001 | — | 25,826 | 738,067 | ||||||||||||||||||||||||||||
Diane E. Ratekin | 2014 | 400,000 | — | 194,000 | 233,977 | — | 7,988 | 28,761 | 864,726 | |||||||||||||||||||||||||||
Executive Vice President, General Counsel and Corporate Secretary | 2013 | 375,000 | 93,000 | 198,750 | 246,113 | 84,367 | 18,201 | 27,570 | 1,043,001 | |||||||||||||||||||||||||||
2012 | 350,000 | 37,100 | 85,400 | 30,620 | 52,500 | 6,468 | 26,014 | 588,103 |
Name and Principal Position | Year | Salary ($) | Non Equity Incentive Plan Compensation ($) | Stock Awards ($)(1) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(2) | All Other Compensation ($)(3) | Total Compensation ($) | |||||||||||
James H. Roth | 2017 | 900,000 | 595,980 | 2,699,973 | 308,563 | 31,434 | 4,535,950 | |||||||||||
President and Principal Executive Officer | 2016 | 900,000 | 207,900 | 1,939,930 | 83,903 | 27,109 | 3,158,842 | |||||||||||
2015 | 900,000 | 594,000 | 2,662,934 | 0 | 31,134 | 4,188,068 | ||||||||||||
C. Mark Hussey | 2017 | 743,750 | 451,500 | 2,312,472 | 150,059 | 30,985 | 3,688,766 | |||||||||||
Executive Vice President and Principal Operating Officer | 2016 | 600,000 | 126,000 | 1,005,895 | 60,624 | 26,435 | 1,818,954 | |||||||||||
2015 | 550,000 | 297,000 | 904,174 | 0 | 30,905 | 1,782,079 | ||||||||||||
John D. Kelly (4) | 2017 | 323,333 | 136,955 | 344,197 | N/A | 23,113 | 827,598 | |||||||||||
Executive Vice President and Principal Financial Officer | ||||||||||||||||||
Diane E. Ratekin | 2017 | 400,000 | 120,400 | 460,003 | 18,353 | 31,719 | 1,030,475 | |||||||||||
Executive Vice President, General Counsel and Corporate Secretary | 2016 | 400,000 | 42,000 | 438,686 | 6,411 | 35,221 | 922,318 | |||||||||||
2015 | 400,000 | 120,000 | 473,415 | 0 | 30,635 | 1,024,050 | ||||||||||||
This column represents the aggregate grant date fair value of restricted stock and/or performance share unit awards. The value of the performance share units in the table is consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date |
For 2014, the grant date share price was $66.17 and 125% of the annual portion of the performance shares was earned. The remaining 60% of the performance share units granted will not be earned until the end of the 2016 performance year. Below are the details of the 2014 grants made to the executive officers shown in the Stock Awards column above.
Performance Shares | Restricted Stock | |||||||||||||||||||||||
Target # of Shares | Shares Earned (#) | Total Earned Value ($) | Shares Granted (#) | Grant Date Value ($) | Total Value ($) | |||||||||||||||||||
James H. Roth | 8,569 | 10,711 | 708,747 | 9,181 | 66.17 | 607,507 | ||||||||||||||||||
C. Mark Hussey | 2,909 | 3,636 | 240,594 | 3,117 | 66.17 | 206,252 | ||||||||||||||||||
Diane E. Ratekin | 1,523 | 1,904 | 125,988 | 1,632 | 66.17 | 107,989 |
For further details on the 2014 performance share unit plan, please refer to “Performance Share Awards” in “Section 4 - 2014 Compensation Program Details” of the “Compensation Discussion and Analysis.”
The amounts for 2013 are all performance share units. No restricted stock was granted. The amount shown represents the grant date value of the maximum of 125% of the target awards which were earned.
The amounts for 2012 are all performance share units. No restricted stock was granted. The amount shown represents the grant date value of 25% of the target awards which were earned.
The amounts in this column represent investment gains in the deferred compensation plan. Huron does not offer a pension plan. The amount shown above represents that portion of the account earnings that exceeded the SEC benchmark “market” rate equal to 120% of the long-term applicable federal rate (based on the average rate for |
All Other Compensation for |
On January 3, 2017, Mr. |
2017 All Other Compensation
Name | Executive Long- Term Disability ($) (1) | Executive $1MM Term Life Insurance ($) (2) | Company Provided 401(k) Match ($) (3) | Other Benefits and Perquisites ($) (4) | Total All Other Compensation ($) (5) | Executive Long- Term Disability ($)(1) | Executive $1MM Term Life Insurance | Company Provided 401(k) Match ($)(3) | Other Benefits and Perquisites ($)(4) | Total All Other Compensation ($) | ||||||||||||||||||||||||||||||
James H. Roth | 6,776 | 4,433 | 15,600 | 3,825 | 30,634 | 6,776 | 4,433 | 16,200 | 4,025 | 31,434 | ||||||||||||||||||||||||||||||
C. Mark Hussey | 7,028 | 3,204 | 15,600 | 4,636 | 30,468 | 7,101 | 3,204 | 16,200 | 4,480 | 30,985 | ||||||||||||||||||||||||||||||
John D. Kelly | 1,830 | 1,058 | 16,200 | 4,025 | 23,113 | |||||||||||||||||||||||||||||||||||
Diane E. Ratekin | 7,163 | 2,173 | 15,600 | 3,825 | 28,761 | 7,952 | 7,487 | 16,200 | 80 | 31,719 |
(1) | Executive Long-Term Disability is provided to all executives and managing directors. |
(2) | Executive Term Life Insurance is provided to all executives and managing directors. |
(3) | Huron provides a Company 401(k) match to all participating employees. |
(4) | Other Benefits and Perquisites includes the cost of an executive physical, which Huron pays for |
CEO Pay Ratio
As a result of the Dodd-Frank Act, beginning with our 2018 Proxy Statement, the SEC will require disclosure of the CEO to median employee pay ratio.
Mr. Roth received 2017 annual total compensation of $4,535,950 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s annual total compensation for 2017 was $118,710. As a result, we estimate that Mr. Roth’s 2017 annual total compensation was approximately 38 times that of our median employee.
2014 Grants of Plan-Based Awards2017 GRANTSOF PLAN-BASED AWARDS
The following table summarizes the grants of equity awards and annual cash incentive awards for 20142017 to each named executive officer.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Plan Awards (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Date of Compensation Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock (#) (3) | Full Grant Date Fair Value of Each Award ($) (4) | Grant Date | Date of Compensation Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock (#)(3) | Full Grant Date Fair Value of Each Award ($)(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James H. Roth | 3/1/2014 | (5) | 2/20/2014 | — | — | — | 0 | 8,569 | 10,711 | — | 567,011 | 3/15/2017 | (5) | 2/20/2017 | — | — | — | 13,863 | 27,726 | 55,452 | — | 1,133,993 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | (6) | 2/20/2014 | — | — | — | 0 | 12,853 | 32,133 | — | 850,483 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | 2/20/2014 | — | — | — | — | — | — | 9,181 | 607,507 | 3/15/2017 | (6) | 2/20/2017 | — | — | — | 9,242 | 18,484 | 36,968 | — | 755,996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 990,000 | 1,237,500 | — | — | — | — | — | 3/15/2017 | 2/20/2017 | — | — | — | — | — | — | 19,804 | 809,984 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
247,500 | 990,000 | 1,485,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. Mark Hussey | 3/1/2014 | (5) | 2/20/2014 | — | — | — | 0 | 2,909 | 3,636 | — | 192,489 | 3/15/2017 | (5) | 2/20/2017 | — | — | — | 6,739 | 13,478 | 26,956 | — | 551,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | (6) | 2/20/2014 | — | — | — | 0 | 4,364 | 10,910 | — | 288,766 | 3/15/2017 | (6) | 2/20/2017 | — | — | — | 4,493 | 8,985 | 17,970 | — | 367,487 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | 2/20/2014 | — | — | — | — | — | — | 3,117 | 206,252 | 3/15/2017 | 2/20/2017 | — | — | — | — | — | — | 9,627 | 393,744 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 495,000 | 618,750 | — | — | — | — | — | 8/21/2017 | 8/17/2017 | — | — | — | — | — | — | 32,051 | 999,991 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
187,500 | 750,000 | 1,125,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John D. Kelly | 3/1/2017 | 2/10/2017 | — | — | — | — | — | — | 442 | 19,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/15/2017 | (5) | 2/20/2017 | — | — | — | 1,669 | 3,337 | 6,674 | — | 136,483 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/15/2017 | (6) | 2/20/2017 | — | — | — | 1,113 | 2,225 | 4,450 | — | 91,003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/15/2017 | 2/20/2017 | — | — | — | — | — | — | 2,384 | 97,506 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
56,875 | 227,500 | 341,250 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diane E. Ratekin | 3/1/2014 | (5) | 2/20/2014 | — | — | — | 0 | 1,523 | 1,904 | — | 100,777 | 3/15/2017 | (5) | 2/20/2017 | — | — | — | 2,362 | 4,724 | 9,448 | — | 193,212 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | (6) | 2/20/2014 | — | — | — | 0 | 2,285 | 5,713 | — | 151,198 | 3/15/2017 | (6) | 2/20/2017 | — | — | — | 1,575 | 3,149 | 6,298 | — | 128,794 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | 2/20/2014 | — | — | — | — | — | — | 1,632 | 107,989 | 3/15/2017 | 2/20/2017 | — | — | — | — | — | — | 3,374 | 137,997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 200,000 | 250,000 | — | — | — | — | — | 50,000 | 200,000 | 300,000 | — | — | — | — | — |
(1) | For the cash award, the target, threshold and maximum represent the range of cash award that could be earned. There is no payout if a threshold level of performance is not achieved. The minimum amount that could be paid is 25% of target and maximum represents |
(2) | The |
The target award column represents the base number of shares that could be earned; the threshold column represents the minimum number of shares (0) and the maximum column represents the maximum number of shares (either 125% of target for the one-year component or 250% for the three-year component) that each named executive officer could earn. If all elements of the awards were earned at the maximum level, the maximum amount earned would be 200% of target since 40% of the award cannot be paid out at an amount higher than 125%. Based on 2014 Adjusted EPS performance, the Compensation Committee determined that the amount of the PSUs was adjusted to 125%, 40% of which would be earned and vest immediately and the remaining 60% of which would be subject to further adjustment based on 2014-2016 performance.
The following table shows the actual number of PSUs with respect to 2014 performance (which comprise the one-year component of the PSUs) that were allocated on February 24, 2015, the date on which the actual performance results were determined.
Name James H. Roth C. Mark Hussey Diane E. Ratekin Performance Share Units
Earned Performance Share Units
Vested 10,711 10,711 3,636 3,636 1,904 1,904
(3) | Restricted stock granted under the Company’s 2012 Omnibus Incentive Plan. |
(4) | The full grant date fair value of the March 1, 2017 RSA is based on the closing price of Huron stock of $43.45 on February 28, 2017. The full grant date fair values of the March |
(5) | The March |
(6) | The March |
2014 Outstanding Equity Awards at Fiscal Year-End2017 OUTSTANDING EQUITY AWARDSAT FISCAL YEAR-END
The following table sets forth certain information concerning outstanding stock and option awards as of December 31, 20142017 for each named executive officer. Market value is based on the closing price of Huron stock of $68.39$40.45 on December 31, 2014.29, 2017, the last trading day of the fiscal year.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#)(1) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested as of 12/31/2014 ($) | Equity Incentive Plan Awards: Number of Unearned Share, Units or Other Rights that Have Not Yet Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Share, Units or Other Rights that Have Not Yet Vested ($) | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of | Market Value of Shares or Stock that Have Not Vested as of 12/31/2017 ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||
James H. Roth | 5/3/2010 | 100,000 | — | 23.43 | 5/3/2020 | — | — | — | — | 5/03/2010 | 100,000 | — | 23.43 | 5/03/2020 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
3/11/2011 | 20,273 | 6,758 | 26.19 | 3/11/2021 | — | — | — | — | 3/11/2011 | 27,031 | — | 26.19 | 3/11/2021 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2012 | 9,830 | 9,830 | 38.18 | 3/1/2022 | — | — | — | — | 3/01/2012 | 19,661 | — | 38.18 | 3/01/2022 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2013 | 6,013 | 6,013 | 39.19 | 3/1/2023 | — | — | — | — | 3/01/2013 | 24,054 | — | 39.19 | 3/01/2023 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2013 | — | — | — | — | 20,839 | (3) | 1,425,179 | 3/01/2014 | — | — | — | — | 2,296 | (1) | 92,873 | |||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | — | — | — | — | — | — | 32,133 | (4) | 2,197,576 | 3/01/2015 | — | — | — | — | 4,558 | (1) | 184,371 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | — | — | — | — | 9,181 | (2) | 627,889 | — | — | 3/01/2016 | — | — | — | — | 8,207 | (1) | 331,973 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/15/2017 | — | — | — | — | 19,804 | (2) | 801,072 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. Mark Hussey | 8/1/2011 | 1,329 | 443 | 32.37 | 8/1/2021 | — | — | — | — | 8/01/2011 | 1,772 | — | 32.37 | 8/01/2021 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2012 | 3,072 | 3,072 | 38.18 | 3/1/2022 | — | — | — | — | 3/01/2012 | 6,144 | — | 38.18 | 3/01/2022 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2013 | 1,932 | 5,799 | 39.19 | 3/1/2023 | — | — | — | — | 3/01/2013 | 7,731 | — | 39.19 | 3/01/2023 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
8/1/2011 | — | — | — | — | 2,500 | (2) | 170,975 | — | — | 3/01/2014 | — | — | — | — | 780 | (1) | 31,551 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2013 | — | — | — | — | 6,699 | (3) | 458,145 | — | — | 3/01/2015 | — | — | — | — | 1,548 | (1) | 62,617 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | — | — | — | — | — | — | 10,910 | (4) | 746,135 | 3/01/2016 | — | — | — | — | 4,256 | (1) | 172,155 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | — | — | — | — | 3,117 | (2) | 213,172 | — | — | 3/15/2017 | — | — | — | — | 9,627 | (2) | 389,412 | |||||||||||||||||||||||||||||||||||||||||||||||||
8/21/2017 | — | — | — | — | 32,051 | (1) | 1,296,463 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John D. Kelly | 3/01/2014 | — | — | — | — | 142 | (1) | 5,744 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/01/2015 | — | — | — | — | 263 | (1) | 10,638 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/01/2016 | — | — | — | — | 264 | (1) | 10,679 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/01/2017 | — | — | — | — | 442 | (1) | 17,879 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/15/2017 | — | — | — | — | 2,384 | (2) | 96,433 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diane E. Ratekin | 3/11/2011 | 3,529 | 1,177 | 26.19 | 3/11/2021 | — | — | — | — | 3/01/2012 | 3,072 | — | 38.18 | 3/01/2022 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2012 | 1,536 | 1,536 | 38.18 | 3/1/2022 | — | — | — | — | 3/01/2013 | 4,832 | — | 39.19 | 3/01/2023 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2013 | 1,208 | 3,624 | 39.19 | 3/1/2023 | — | — | — | — | 3/01/2014 | — | — | — | — | 408 | (1) | 16,504 | ||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2011 | — | — | — | — | 122 | (2) | 8,344 | — | — | 3/01/2015 | — | — | — | — | 810 | (1) | 32,765 | |||||||||||||||||||||||||||||||||||||||||||||||||
4/1/2011 | — | — | — | — | 1,250 | (2) | 85,488 | — | — | 3/01/2016 | — | — | — | — | 1,621 | (1) | 65,569 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2013 | — | — | — | — | 4,187 | (3) | 286,349 | — | — | 3/15/2017 | — | — | — | — | 3,374 | (2) | 136,478 | |||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | — | — | — | — | — | — | 5,713 | (4) | 390,712 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2014 | — | — | — | — | 1,632 | (2) | 111,612 | — | — |
(1) | Consists of unvested restricted stock as of December 31, 2017 that vests 25% |
(2) | Consists of unvested restricted stock as of December 31, |
2014 Option Exercises and Stock Vested2017 OPTION EXERCISESAND STOCK VESTED
The following table sets forth certain information concerning stock option exercises and restricted stock vesting during 20142017 for each named executive officer. No stock options held by the named executive officers were exercised during 2014.
Stock Awards | Option Exercises | Stock Awards | ||||||||||||||||||||||
Name | Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Shares Acquired On Vesting (#) (1) | Value Realized On Vesting ($)(2) | ||||||||||||||||||
James H. Roth | 22,575 | 1,502,787 | 0 | 0 | 18,330 | 763,376 | ||||||||||||||||||
C. Mark Hussey | 7,206 | 478,873 | 0 | 0 | 7,392 | 307,919 | ||||||||||||||||||
John D. Kelly | 0 | 0 | 731 | 34,433 | ||||||||||||||||||||
Diane E. Ratekin | 3,811 | 257,174 | 0 | 0 | 4,387 | 184,513 |
(1) | Includes restricted stock that vested in |
(2) | The value realized on vesting equals the market value of Huron stock measured as the closing price of |
2014 Nonqualified Deferred Compensation2017 NONQUALIFIED DEFERRED COMPENSATION
The following table shows the deferred compensation activity for the named executive officers in 2014.2017.
Name | Executive Contributions in 2014 ($)(1) | Company Contributions in 2014 ($) | Aggregate Earnings in 2014 ($) | Aggregate Withdrawals/ Distributions in 2014 ($) | Aggregate Balance as of 12/31/14 ($)(2) | Executive Contributions in 2017($)(1) | Company Contributions | Aggregate Earnings in 2017($) | Aggregate Withdrawals/ Distributions in 2017 ($) | Aggregate Balance as of 12/31/17($)(2) | ||||||||||||||||||||||||||||||
James H. Roth | 480,150 | — | — | — | 480,150 | 846,807 | — | 385,248 | — | 2,816,699 | ||||||||||||||||||||||||||||||
C. Mark Hussey | 240,075 | — | 33,271 | — | 540,146 | — | — | 177,842 | — | 1,020,498 | ||||||||||||||||||||||||||||||
John D. Kelly | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Diane E. Ratekin | — | — | 11,647 | — | 108,331 | — | — | 22,149 | — | 139,427 |
(1) | Executive contributions |
(2) | The aggregate balance as of December 31, |
The Company maintains the DCP, which became effective July 1, 2006. The DCP permits managing directors, corporate vice presidents and named executive officers to elect to defer up to 75% of their base salary and 100% of their annual cash incentive into a deferred compensation account and to choose from a number of generally available investment vehicles. Earnings are credited based on earnings of the investment options selected by the participant. Huron does not match any amounts deferred or otherwise contribute to the DCP except to make restoration payments to the accounts of participants who do not receive the maximum eligible 401(k) match as a result of participation in the DCP. Deferral elections for base salary and any guaranteed bonus must be made in the calendar year prior to earning such base salary or within 30 days of becoming eligible for the plan. The Company requires that deferral elections of the annual cash incentive must be made 12 months prior to the end of the applicable performance period. Independent directors may also defer up to 100% of their retainer and meeting fees into the DCP.
Payments from the plan automatically begin upon termination of employment or separation from service as a director. Key employees, including executive officers, must wait six months after termination to receive payment from the plan. Participants may elect payment in a lump sum or annual installments for up to 15 years. Upon proof of financial hardship and approval from the Compensation Committee, a participant may be allowed an early distribution. Participants may also elect to receive payments prior to termination through a scheduled distribution.
Background
We have entered into agreements and maintain plans and arrangements that require us to pay or provide compensation and benefits to each of the named executive officers in the event of certain terminations of employment or a change of control. After a comprehensive review of the agreements in 2016, the Company entered into Amended and Restated Agreements with each of our NEOs, effective as of January 1, 2017. The provisions of these agreements, summarized below, are aligned with best practices.
Senior Management Agreements
The Company entered into an AmendedMr. Roth’s agreement covers a term beginning on January 1, 2017, and Restated Senior Management Agreement, effective ascontinues for three years from that date. Following the expiration of July 30, 2009, with James H. Roth, CEO and President of the Company (the “Roth Agreement”). Beginning on July 30, 2012 and each anniversary thereafter, the Roth Agreement isthat initial three-year term, his agreement will be automatically renewed and extended for an additionalevery year, unless Mr. Roth or the Company provides 60 days’ notice to the other that such automatic renewal shall cease. The Roth Agreementagreement may be earlier terminated earlier by Mr. Roth or the Company pursuant to its terms.
The Company entered into a Senior Management Agreement, effective as of February 25, 2014, with C. MarkMr. Hussey, EVP, COO, CFOMr. Kelly and Treasurer ofMs. Ratekin’s agreements provide that employment will continue unless either the Company (the “Hussey Agreement”). Mr. Hussey’s employment by the Company is at will until such time as either Mr. Hussey or the Company terminates the agreement pursuant to its terms.
The Company entered into a Senior Management Agreement, effective as of February 22, 2011, with Diane E. Ratekin, EVP, General Counsel and Corporate Secretary of the Company (the “Ratekin Agreement”). Beginning on January 1, 2012 and each anniversary thereafter, the Ratekin Agreement is automatically renewed and extended for an additional year unless Ms. Ratekin or the Company provides 60 days’ noticeexecutive delivers to the other that such automatic renewal shall cease. The Ratekin Agreement60 days’ advance written notice of the cessation of employment. These may be earlier terminated earlier by Ms. Ratekinthe executive or the Company pursuant to itstheir terms.
Annual Target Bonus
Each calendar year, each of Mr. Roth, Mr. Hussey and Ms. Ratekin will be eligible for an annual target bonus in an amount determined by the Compensation Committee based on each executive’s performance, Company performance and the Company’s compensation policies. Mr. Roth’s annual target bonus will not be less than 110% of his base salary.
Equity Awards
Mr. Roth, Mr. Hussey, and Ms. Ratekin will generally be eligible to participate in the Company’s equity plans, with the amount and terms of any equity awards being in the sole discretion of the Compensation Committee and based on performance and the Company’s compensation policies.
The following table summarizes how unvested equity awards will be addressed in the event of a termination.termination under the Senior Management Agreements that were in effect during 2017.
Event | Restricted Stock and Options | Performance Shares | ||
Normal Vesting | 33% annual vesting over 3 years for awards granted on or after 3/15/2017; 25% annual vesting over 4 years for those awards granted prior to 3/15/2017 and for the award granted to C. Mark Hussey on 8/21/2017 | One-Year Performance Shares: 33% of earned Three-Year Performance Shares: 100% of the earned Three-Year Performance Shares vest in | ||
Voluntary Termination | Forfeit | |||
Termination for “Cause” | Forfeit | |||
Approved Retirement
provisions) | Subject tonon-compete, vesting continues per normal course | One-Year & Three-Year Performance Shares: Earned pro rata based on actual performance. Subject tonon-compete, vesting continues per normal course | ||
Death or Disability | Full acceleration | One-Year Performance Shares: Immediately vest pro rata based on actual performance. Three-Year Performance Shares: Earned pro rata based on actual |
Event | Restricted Stock and Options | Performance Shares | ||
Involuntary/Good Reason Termination | Pro rata vesting | |||
Change of Control (“COC”), No Termination | No impact, assumed by acquirer | One-Year & Three-Year Performance If not assumed by acquirer or acquirer does not convert shares into right to receive equivalent value in shares of new entity, then 100% of earned shares will vest and one share of Company common stock will be exchanged for each performance share and such common stock will receive the consideration paid by the acquirer in the COC. | ||
Involuntary/Good Reason Termination Post-COC | One-Year Performance Shares: Shares shall immediately fully vest. Three-Year Performance Shares: Earned shares shall immediately fully vest. |
Other Benefits
Mr. Roth, Mr. Hussey, Mr. Kelly and Ms. Ratekin will be eligible to participate in the Company’s various health and welfare benefit plans for its similarly situated key management employees.
Restrictive Covenants on Termination
For the applicable restricted period set forth in each executive officer’s Senior Management Agreement, he or she may not directly or indirectly (i) hire any employees of the Company or solicit, induce or encourage any employee of the Company or any client of the Company to leave, alter or cease his or her relationship with it or (ii) provide services that are the same as or similar to those offered by the Company to any client of the Company that he or she obtained as a client for the Company, to whom he or she provided services within the 12 months preceding termination of employment, or to whom he or she submitted a proposal during the six months prior to termination of employment. The restricted period for Mr. Roth is 12 to 24 months (depending on the type of termination) following termination of employment for any reason.employment. The restricted period for Mr. Hussey, Mr. Kelly and Ms. Ratekin is 12 months following termination of employment for any reason. In addition, for a period of 12 to 24 months (depending on the type of termination) following the termination of his employment, for any reason, Mr. Roth may not, directly or indirectly, provide services that are competitive with those of the Company to any person, firm or other business entity. Executives are also subject to a confidentiality andnon-disclosure covenant.
Key Definitions
Definition of “Change of Control”
A Change of Control is defined in all three agreements as:
any person becomes a beneficial owner of 40% or more of the Company’s outstanding securities;
there is a consummation of a merger or consolidation with any person unless (a) the voting securities of the Company outstanding immediately prior to the transaction continue to represent at least 50% of the combined voting power of the securities of the Company or such other surviving entity; (b) the merger is a recapitalization in which no person other than existing security holders becomes a beneficial owner representing 50% or more of the Company’s then outstanding securities; or (c) the merger does not represent a sale of all or substantially all of the Company’s assets;
the stockholders approve a plan of complete liquidation or dissolution; or
there is a disposition or sale of all or substantially all of the Company’s assets other than a sale or disposition in which at least 50% of the combined voting power of the voting securities which are owned by shareholders of Huron.
Definition of “Good Reason”
“Good Reason”In the new Senior Management Agreements that were entered into effective January 1, 2017, the definition of “Good Reason” was harmonized across all NEOs and is now defined in the Roth Agreementall four agreements to mean a resignation following: (i) a change in Mr. Roth’s primary location of employment to a location that is more than 75 miles from Chicago, Illinois; (ii) a material breach of the Roth Agreement by the Company; (iii) a material reduction in his base salary; (iv) a material diminishment of his position, title, duties or responsibilities; or (v) the execution of a binding agreement committing the Company to a Change of Control (as defined in the Roth Agreement) without also committing legally and announcing publicly that Mr. Roth shall become the Chief Executive Officer of the surviving Company. The Roth Agreement provides the Company the right to cure prior to a resignation for Good Reason.
“Good Reason” is defined in the Hussey Agreement to mean a resignation following: (i) a change in Mr. Hussey’s primary location of employment to a location that is more than 50 miles from Chicago, Illinois; (ii) a failure to comply with any material term of the Hussey Agreementagreement by the Company;Company or (iii)��a material reduction in his base salary or benefits coverage, provided that such reduction is without his or her consent, is not warranted by the Company’s financial condition, and is not a change that applies uniformly to similarly situated Company executives. The Hussey Agreement providesagreements provide the Company the right to cure prior to a senior executive’s resignation for Good Reason.
“Good Reason” is defined in the Ratekin Agreement to mean a resignation following a change in Ms. Ratekin’s primary location of employment to a location that is more than 75 miles from Chicago, Illinois. The Ratekin Agreement provides the Company the right to cure prior to a resignation for Good Reason.
Definition of “Good Reason” in Relation to a Change of Control
Under all threefour agreements, a Change of Control Good Reason occurs if certain adverse changes occur in anticipation of, or within two years following, a Change of Control including:
(a) | any material breach of the Senior Management Agreement by the Company, |
(b) | any material adverse change in the executive’s status, responsibilities or position with the Company, |
(c) | any material reduction in his or her base salary or target bonus, other than in connection with anacross-the-board reduction in base salaries applicable in like proportions to all similarly situated executives of the Company and any direct or indirect parent of the Company, |
(d) | assignment of duties to the executive that are materially inconsistent with his or her position and responsibilities described in the Senior Management Agreement, including, specifically, assignment of a position other than as Chief Executive Officer of the surviving Company in the case of Mr. Roth, or |
(e) | requiring the executive to be principally based at any office or location that is greater than |
Termination without Cause or Resignation for Good Reason
If any of our executives with a Senior Management Agreement is terminated without Cause or resigns for Good Reason, as defined in his or her Senior Management Agreement, upon executing a general release and waiver, the Company is obligated to pay severance and continuation of benefits in varying amounts. In addition, unvested equity will accelerate on a pro rata basis upon termination without Cause or resignation for Good Reason.
The following severance benefits are payable to each of our named executive officers upon termination without Cause or resignation for Good Reason, except in the case of a Change of Control, as of December 31, 2014:2017:
Executive | Severance Benefits | |
James H. Roth | An amount in cash equal to two times the sum of his then current annual base salary and his then current target | |
C. Mark Hussey | An amount in cash equal to | |
John D. Kelly & Diane E. Ratekin | An amount in cash equal to |
In the event an executive qualifies for an approved retirement and signs anon-compete agreement, he or she would receive continued vesting of his or her stock options and restricted stock. There would be no acceleration, but the equity would continue to vest per the schedule as outlined in the grant agreements.
Termination of Employment Due to Death or Disability
If any of our executives dies or becomes disabled, his or her estate will receive payment of base salary and a pro rata bonus at target through the date of termination. The executive and/or his or her eligible dependents shall receive in the case of Mr. Roth, continuation of medical, dental and vision benefits for six months and for all other executives, continuation of medical benefits for three months. In addition, all unvested time-based equity outstanding will vest if any of our executives dies or becomes disabled.and unvested performance-based awards will vest in accordance with the applicable performance share equity agreement.
Termination of Employment Due to Termination other than for Resignation for Good Reason or Due to Cause
No severance or benefits are paid if an executive officer is terminated for Cause or resigns other than for Good Reason as defined in the executive’s Senior Management Agreement.
Termination without Cause or Resignation for Good Reason Related to a Change of Control
If any of our executives with a Senior Management Agreement is terminated without Cause or resigns for Good Reason in conjunction with a Change of Control, as defined in his or her Senior Management Agreement, upon executing a general release and waiver, the Company is obligated to pay severance and continuation of benefits in varying amounts.
The following severance benefits are payable to each of our named executive officers upon termination without Cause or resignation for Good Reason, in the case of a Change of Control, as of December 31, 2014:2017:
Executive | Severance Benefits | |
James H. Roth | An amount in cash equal to two andone-halftimes the sum of his then current annual base salary and his then current target bonus, pro rata target bonus in the year of termination, | |
C. Mark Hussey | An amount in cash equal to two times the sum of his then current annual base salary and his then current target bonus, pro rata target bonus in the year of termination, | |
John D. Kelly & Diane E. Ratekin | An amount in cash equal to one andone-half times the sum of his or her then current annual base salary and his or her then current target bonus, pro rata target bonus in the year of termination, |
Golden Parachute Cutback
All threefour Senior Management Agreements provide that, if any amount, right or benefit paid or payable to the executive under his or her Senior Management Agreement or any other plan, program or arrangement would constitute an “excess parachute payment” under Section 280G of the Code, subject to the excise tax imposed by Section 4999 of the Code, then the amount of payments payable to the executive under his or her Senior Management Agreement will be reduced to the extent necessary so that no portion of such payments is subject to such excise tax.
Potential Payments upon Termination or Change of ControlPOTENTIAL PAYMENTSUPON TERMINATIONOR CHANGEOF CONTROL
The estimated amount payable or provided to each named executive officer in each situation is summarized below. These estimates are based on the assumption that the various triggering events occurred on the last day of 2014,2017, along with other material assumptions noted below. The actual amounts that would be paid to a named executive officer upon termination or a change of control can only be determined at the time the actual triggering event occurs. The estimated amount of compensation and benefits described below does not take into account compensation and benefits that a named executive officer has earned prior to the applicable triggering event, such as equity awards that have previously vested in accordance with their terms or vested benefits otherwise payable under our compensation programs.
The following table and summary set forth potential payments we would be required to make to our named executive officers upon termination of employment or change of control. The table assumes termination of employment on December 31, 20142017 and uses a share price of $68.39,$40.45, the closing price of our stock on December 31, 2014.29, 2017, the last trading day before our fiscal year end.
Name | Benefit | Termination without Cause or Resignation for Good Reason ($) | Permanent Disability or Death ($) | Involuntary Termination Following Change of Control ($) | Benefit | Termination without cause or Resignation for Good Reason ($) | Permanent Disability or Death ($) | Involuntary Termination Following Change of Control ($) | ||||||||||||||||||||
James H. Roth | Salary | 900,000 | — | 1,800,000 | Salary | 1,800,000 | 0 | 2,250,000 | ||||||||||||||||||||
Bonus | 990,000 | — | 1,980,000 | |||||||||||||||||||||||||
Pro rata bonus (1) | 960,300 | — | 990,000 | Bonus | 1,980,000 | 0 | 2,475,000 | |||||||||||||||||||||
Equity acceleration (2) | 2,188,937 | 4,212,176 | 4,846,817 | Pro rata bonus (1) | 595,980 | 990,000 | 990,000 | |||||||||||||||||||||
Benefits continuation | 13,543 | 6,771 | 41,272 | Equity acceleration (2) | 584,730 | 2,157,967 | 2,157,967 | |||||||||||||||||||||
Cutback | — | — | — | Benefits continuation | 27,966 | 6,992 | 34,958 | |||||||||||||||||||||
Total Value | 5,052,780 | 4,218,947 | 9,658,089 | Cutback (3) | 0 | 0 | 0 | |||||||||||||||||||||
Total Value | 4,988,676 | 3,154,959 | 7,907,925 | |||||||||||||||||||||||||
C. Mark Hussey | Salary | 275,000 | — | 550,000 | Salary | 1,125,000 | 0 | 1,500,000 | ||||||||||||||||||||
Bonus | — | — | 495,000 | Bonus | 1,125,000 | 0 | 1,500,000 | |||||||||||||||||||||
Pro rata bonus | — | — | 495,000 | Pro rata bonus (1) | 451,500 | 750,000 | 750,000 | |||||||||||||||||||||
Equity acceleration (2) | 797,469 | 1,530,243 | 1,692,399 | Equity acceleration (2) | 374,133 | 2,315,649 | 2,315,649 | |||||||||||||||||||||
Benefits continuation | 6,267 | 3,386 | 17,765 | Benefits continuation | 20,975 | 6,992 | 27,966 | |||||||||||||||||||||
Cutback | — | — | -639,177 | Cutback (3) | 0 | 0 | -1,118,728 | |||||||||||||||||||||
Total Value | 1,078,736 | 1,533,629 | 2,610,987 | Total Value | 3,096,608 | 3,072,641 | 4,974,887 | |||||||||||||||||||||
John D. Kelly | Salary | 325,000 | 0 | 487,500 | ||||||||||||||||||||||||
Bonus | 227,500 | 0 | 341,250 | |||||||||||||||||||||||||
Pro rata bonus (1) | 136,955 | 227,500 | 227,500 | |||||||||||||||||||||||||
Equity acceleration (2) | 47,285 | 231,366 | 231,366 | |||||||||||||||||||||||||
Benefits continuation | 13,490 | 6,745 | 20,235 | |||||||||||||||||||||||||
Cutback (3) | 0 | 0 | -126,140 | |||||||||||||||||||||||||
Total Value | 750,230 | 465,611 | 1,181,711 | |||||||||||||||||||||||||
Diane E. Ratekin | Salary | 200,000 | — | 400,000 | Salary | 400,000 | 0 | 600,000 | ||||||||||||||||||||
Bonus | — | — | 200,000 | Bonus | 200,000 | 0 | 300,000 | |||||||||||||||||||||
Pro rata bonus | — | — | 200,000 | Pro rata bonus (1) | 120,400 | 200,000 | 200,000 | |||||||||||||||||||||
Equity acceleration (2) | 470,792 | 908,243 | 993,035 | Equity acceleration (2) | 105,365 | 378,701 | 378,701 | |||||||||||||||||||||
Benefits continuation | 6,267 | 3,320 | 19,575 | Benefits continuation | 13,490 | 6,745 | 20,235 | |||||||||||||||||||||
Cutback | — | — | — | Cutback (3) | 0 | 0 | 0 | |||||||||||||||||||||
Total Value | 677,060 | 911,563 | 1,812,610 | Total Value | 839,255 | 585,446 | 1,498,936 |
(1) | Pro rata bonus for termination without Cause or resignation for Good Reason is based on actual performance from |
(2) | The acceleration of equity varies by grant and type of termination as outlined in the preceding sections. The value |
(a) | A portion of the performance shares would continue to vest for each of the named executive officers with the number of shares determined based on an actual performance and prorated for the number of days that the executive was employed during the performance period. |
(b) | Additionally, in the event an executive qualifies for an approved retirement, they would receive continued vesting of their |
The 2014 performance share unit value included above represents treatment for termination during the annual performance period. For both Termination without Cause and Death or Disability, the awards are assumed earned using the actual performance from the annual performance period which was 125% for 2014 and then prorated for the time employed versus the time between the grant date and the various vesting dates. For Change of Control, the amount earned is also based on the actual performance of 125%.
(3) | In the event the total CIC severance exceeds the IRC 280G safe harbor amount, then the executive’s cash severance is reduced to the maximum safe harbor threshold amount as to not trigger any excise tax. |
Compensation Committee Interlocks and Insider ParticipationCOMPENSATION COMMITTEE INTERLOCKSAND INSIDER PARTICIPATION
During 2014,2017, there were no Compensation Committee interlocks and no insider participation in Compensation Committee decisions that were required to be reported under the rules and regulations of the 1934 Act.
Certain Relationships and Related TransactionsCERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS
It is the responsibility of the Audit Committee to review and approve, ratify or disapprove of proposed transactions or courses of dealings with respect to which executive officers or directors or members of their immediate families have an interest (including all transactions required to be disclosed pursuant to the SEC’s related person disclosure requirements). In addition, it is the policy of management and board members to discuss at a meeting of the board of directors, or the appropriate board committee, those transactions requiring disclosure pursuant to the SEC’s related person disclosure requirements between Huron and a board member or a principal stockholder and members of their immediate families.
On and effective February 8, 2018, the board of directors of Huron elected Hugh E. Sawyer as a Class II director of Huron, to serve until the May 2018 Annual Meeting. Mr. Sawyer will stand forre-election at the 2018 Annual Meeting. Since April 2017, Mr. Sawyer has served as the President and Chief Executive Officer, as well as a director, of Regis Corporation (“Regis”), a company that owns, franchises and operates beauty salons worldwide. Prior to that, Mr. Sawyer served as a managing director at Huron. Mr. Sawyer also serves as a member of the board of directors of JHT Holdings, Inc.
The Company has provided general business advisory and transaction advisory services to Regis beginning in 2016. The aggregate fees received by the Company from Regis were $5.6 million in 2017, and $11,000 in 2018 (through January 31, 2018).
As a director of the Company, Mr. Sawyer will receive compensation as anon-employee director in accordance with the Company’snon-employee director compensation practices described in the Company’s 2017 Annual Proxy Statement filed with the SEC on March 27, 2017. This compensation generally consists of an annual cash retainer in the amount of $60,000, $1,000 for each meeting of the board or any committee of the board that he attends, and an annual grant of restricted stock on the date of the Company’s annual meeting with a value of $170,000. Mr. Sawyer’s initial cash retainer will be prorated to reflect his appointment date. On March 1, 2018, Mr. Sawyer received a new director restricted stock award having a value equal to $200,000, vesting ratably over the following 12 calendar quarters beginning April 1, 2018. Mr. Sawyer will not receive an annual grant of restricted stock until the 2018 Annual Meeting provided he isre-elected to the board at that time.
There are no arrangements or understandings between Mr. Sawyer and any other persons pursuant to which he was elected as a director.
In addition, Huron has a Code of Business Conduct and Ethics (the “Code of Conduct”), a copy of which is posted on our web site atwww.huronconsultinggroup.com,, that applies to directors and employees and their family members. The Code of Conduct, among other things, has a policy governing conflicts of interest generally and, in particular, prohibiting certain business arrangements with the Company and clients of the Company, entering into relationships that may be perceived as impairing the ability of the individual or Huron from performing his or its duties, as the case may be, in an impartial manner, and use of corporate property for improper personal gain. Any exceptions require disclosure and approval by the Chief Compliance Officer and, in the case of officers and directors, by the Audit Committee of the board of directors. The Code of Conduct also prohibits Huron from making any personal loans or guaranteeing any personal obligations of board members and executive officers.
APPROVAL OF THE HURON CONSULTING GROUP INC.
STOCK OWNERSHIP PARTICIPATION PROGRAM
The board of directors encourages ownership of Company stock by a broad base of Company employees. Company stock ownership supports our culture and values, gives employees a vested interest in the Company’s success, and aligns employee interests with those of the Company’s shareholders.
The Company’s Stock Ownership Participation Program (the “SOPP” or “Plan”) is designed to incent and retain Huron’s employees below the managing director level who do not receive equity-based awards as part of their normal compensation plan, which includes approximately 2,600 employees. The Plan has been designed specifically with features that support share ownership. The SOPP provides eligible employees with a convenient mechanism to purchase Huron common stock.
Subject to the limitations set forth in the Plan, eligible employees may elect to have after tax payroll deductions made during an offering period equal to between 1% and 25% of their base salary and between 1% and 30% of their annual bonus. An eligible employee may also make cash contributions. The aggregate maximum contribution amount from payroll deductions and cash contributions for each employee is $20,000 per calendar year. Accumulated payroll deductions and cash contributions are used to purchase shares of the Company’s common stock on certain designated purchase dates.
Those that purchase stock under the Plan receive a 25% restricted stock match provided by the Company. Vesting of the restricted stock is subject to both a time-based vesting schedule and requirement that the purchased shares be held for a specified holding period. The terms of the matched shares, including the number of shares granted and the vesting requirements, will be set forth in a separate restricted share grant agreement. We have chosen to offer a restricted stock match instead of a more traditional discount in order to encourage participation by employees who are prepared to own Huron stock for the required holding period. We also believe that ownership of Company stock among all of Huron’s employees helps us recruit and retain the talented individuals that are so crucial to Huron’s success.
Shares subject to restricted stock awards under the SOPP that do not vest will again become available for award under the SOPP, as will any shares that are retained by us as payment of tax withholding obligations with respect to the vesting of an award.
The summary of the SOPP set forth above is qualified in its entirety by the full text of the SOPP plan document. A copy of the SOPP plan document is attached as Appendix A to this Proxy Statement.
Historically, the SOPP has operated as a facet of the Company’s 2012 Omnibus Incentive Plan. The board of directors, upon the recommendation of the Compensation Committee, approved a free-standing SOPP in order to spotlight the broad-based nature of the SOPP. The board also authorized for issuance up to 300,000 shares of our common stock to be used for the employee purchases pursuant to the SOPP’s established mechanism and the matching restricted stock awards under the SOPP. Of the shares available under the SOPP, approximately 20% will be granted to employees as restricted stock, the other 80% will be the shares the employees purchase pursuant to the Plan. Huron common stock deliverable to eligible employees pursuant to the SOPP may consist of authorized but unissued shares, treasury shares or shares purchased on the open market.
If this proposal for SOPP shares is not approved, our ability to grant additional matching restricted stock awards under the SOPP may be curtailed as both the matching share grant and the purchased shares are limited by the overall pool of shares currently remaining available for future issuance under the 2012 Omnibus Incentive Plan.
For the reasons discussed above, it is our belief that it is in the best interests of the Company, its stockholders and Huron’s employees to approve the SOPP. Accordingly, the board of directors has adopted the SOPP, subject to stockholder approval.
Tax Consequences
The following provides only a general description of the application of U.S. federal income tax laws to awards under the SOPP. This discussion is intended for the information of our stockholders considering how to vote at the Annual Meeting and not as tax guidance to participants in the SOPP. This summary does not address in any detail the effects of taxes imposed under state, local or foreign tax laws.
Purchase of Stock. The purchase of common stock pursuant to the SOPP is not a taxable event to the participant. A participant’s basis in the common stock purchased is equal to the participant’s purchase price on the date it is acquired. The Company is not entitled to an income tax deduction in connection with a participant’s purchase of common stock pursuant to the SOPP.
Restricted Stock. The recognition of income from an award of restricted stock for federal income tax purposes depends on the restrictions imposed on the shares. Generally, taxation will be deferred until the date on which the shares are no longer subject to substantial risk of forfeiture. Continued service is generally considered a substantial risk of forfeiture. At the time the restrictions lapse, the participant will recognize ordinary income equal to the then fair market value of the stock. A participant may elect to be taxed at the time of grant of restricted stock rather than upon lapse of restrictions on transferability or the risk of forfeiture, but, if the participant subsequently forfeits such shares of common stock, he or she would not be entitled to any tax deduction, including as a capital loss, for the value of shares of common stock on which he or she previously paid tax. The Company can claim an income tax deduction in an amount equal to the ordinary income recognized by the participant.
Approval Required
The approval of the SOPP requires the affirmative vote of the holders of a majority of the total shares of common stock present in person, or represented by proxy, and entitled to vote on the proposal, provided that a quorum is represented at the meeting. Abstentions will have the same effect as a vote against the proposal. Broker non-votes will not be considered shares entitled to vote with respect to approval of the proposal and will not be counted as votes for or against the proposal and will therefore have no effect on the outcome of the proposal. Executed proxies will be voted “FOR” the approval of the proposal, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE“FOR” APPROVAL OF THE COMPANY’S STOCK OWNERSHIP PARTICIPATION PROGRAM.
ADVISORY VOTE ONTO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the SEC, Huron annually is asking its stockholders to indicate their support for our named executive officer compensation, which includes the compensation discussion and analysis, the compensation tables and the related narrative disclosures, all as described in the section entitled “EXECUTIVE COMPENSATION—Compensation Discussion and Analysis.”
The vote solicited by this proposal, commonly known as “Say on Pay,” is advisory in nature and will not be binding on the board of directors, the Compensation Committee or Huron. However, the board of directors and the Compensation Committee value the opinions of our stockholders, will review the voting results and, may, to the extent determined appropriate, take into account the outcome of the vote during future deliberations on executive compensation arrangements. At the 20142017 Annual Meeting of Stockholders, in excess of 99% of the votes cast on this proposal voted to support Huron’s named executive officer compensation.
Huron believes that its executive compensation program is structured to support Huron and its business objectives. This vote is not intended to address any one specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
The affirmative vote of the holders of a majority of the total shares of common stock, present in person or represented by proxy and entitled to vote on the proposal, is required to approve the advisory vote on the compensation arrangements of our named executive officers. Abstentions will have the same effect as a vote against the proposal. Brokernon-votes will not be considered shares entitled to vote with respect to the proposal and will not be counted as votes for or against the proposal and will therefore have no effect on the outcome of the proposal. Proxies submitted pursuant to this solicitation will be voted “FOR” the approval of the advisory vote on the compensation arrangements of our named executive officers, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS SECTION AND THE ACCOMPANYING COMPENSATION TABLES AND NARRATIVE DISCUSSION IN THIS PROXY STATEMENT.
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP (“PwC”), which has been the independent registered public accounting firm for the Company since its inception, has been appointed by the Audit Committee as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending December 31, 2015.2018. This appointment is being presented to the stockholders for ratification. The ratification of the appointment of PwC as the independent registered public accounting firm requires the affirmative vote of the holders of a majority of the total shares of common stock present in person or represented by proxy and entitled to vote on the proposal, provided that a quorum is represented at the meeting. Abstentions will have the same effect as a vote against ratification. Brokernon-votes will not be considered shares entitled to vote with respect to ratification of the appointment and will not be counted as votes for or against the ratification and will therefore have no effect on the outcome of this proposal. Proxies submitted pursuant to this solicitation will be voted “FOR” the ratification of PwC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2015,2018, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2015.2018.
Representatives of PwC are expected to be present at the Annual Meeting and will be provided an opportunity to make a statement and to respond to appropriate inquiries from stockholders.
Audit and Non-Audit FeesAUDITAND NON-AUDIT FEES
The following table presents fees for professional audit services rendered by PwC for the audit of the Company’s annual financial statements for the years ended December 31, 20142017 and December 31, 2013,2016, and fees for other services rendered by PwC during those periods:
2014 | 2013 | 2017 | 2016 | |||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||
Audit Fees | $ | 1,248 | $ | 901 | $ | 1,686 | $ | 1,393 | ||||||||||||
Audit-Related Fees | 10 | 10 | $ | 53 | $ | 419 | ||||||||||||||
Tax Fees | 32 | 32 | $ | 35 | $ | 33 | ||||||||||||||
All Other Fees | 4 | 4 | $ | 3 | $ | 2 | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 1,294 | $ | 947 | $ | 1,777 | $ | 1,847 |
Audit Fees—all services, including tax services and accounting consultation, necessary to perform an audit of the consolidated financial statements of Huron; services in connection with statutory and regulatory filings or engagements, comfort letters, statutory audits, attest services and consents; and assistance with and review of documents filed with the SEC.
Audit-Related Fees—due diligence related to mergers and acquisitions; internal control reviews; attest services that are not required by statute or regulations; and consultation concerning financial accounting and reporting standards.
Tax Fees—tax compliance (review of original and amended tax returns, claims for refund and tax payment-planning services); tax planning; and other tax advice (assistance with tax audits and appeals, tax advice related to structural matters, and requests for rulings or technical advice from taxing authorities).
All Other Fees—any other work that is not audit, audit-related or a tax service.
The Audit Committee considers whether the provision of these services is compatible with maintaining the independence of the independent registered public accounting firm and has determined such services for fiscal 20142017 and 20132016 were compatible.
Policy on Audit Committee Preapproval of Audit and Non-Audit Services of Independent Registered Public Accounting FirmPOLICYON AUDIT COMMITTEE PREAPPROVALOF AUDITAND NON-AUDIT SERVICESOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. The Audit Committee has established a policy regarding preapproval of all audit andnon-audit services provided by the independent registered public accounting firm.
The Audit Committee, on a periodic basis, determines certain services that have the general preapproval of the Committee. The Audit Committee must separately preapprove any services not receiving such general preapproval. Requests for such approval must be submitted by both the independent registered public accounting firm and the CFO and must include a joint statement as to whether, in their view, the request is consistent with the SEC’s rules on auditor independence. No services are undertaken that are not preapproved. The Audit Committee will establish preapproved fee levels for all services to be provided by the independent registered public accounting firm. On a periodic basis, the CFO and the independent registered public accounting firm report to the Audit Committee regarding the actual spending for such projects and services compared to the approved amounts.
Report of the Audit CommitteeREPORTOFTHE AUDIT COMMITTEE
The primary purpose of the Audit Committee is to assist the board of directors in its general oversight of the Company’s financial reporting process. The Audit Committee conducted its oversight activities for Huron Consulting Group Inc. and subsidiaries (“Huron”) in accordance with the duties and responsibilities outlined in the Audit Committee charter.
Huron’s management is responsible for the preparation, consistency, integrity and fair presentation of the financial statements, accounting and financial reporting principles, systems of internal control and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. Huron’s independent registered public accounting firm, PwC, is responsible for performing an independent audit of Huron’s financial statements and the effectiveness of internal control over financial reporting.
The Audit Committee, with the assistance and support of the Huron finance department and management of Huron, has fulfilled its objectives, duties and responsibilities as stipulated in the Audit Committee charter and has provided adequate and appropriate independent oversight and monitoring of Huron’s systems of internal control for the fiscal year ended December 31, 2014.2017.
These activities included, but were not limited to, the following during the fiscal year ended December 31, 2014:2017:
Discussed with Huron’s internal auditors their continuing work in support of examination of internal controls and financial compliance controls.
Reviewed and discussed with management and PwC the audited financial statements and the quarterly financial statements for the year ended December 31, 2014.2017. Management has the primary responsibility for such financial statements.
Discussed with PwC the matters requiring discussion under current auditing standards.
Received the written disclosures and the letter from PwC in accordance with the applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence.
In reliance on the Committee’s review and discussions of the matters referred to above, the Audit Committee recommended to the board of directors that the audited financial statements be included in Huron’s Annual Report on Form10-K for the fiscal year ended December 31, 20142017 for filing with the Securities and Exchange Commission.
H. Eugene Lockhart, Chairman
John McCartney
John S. Moody
SUBMISSION OF STOCKHOLDER PROPOSALS
In order to be included in the Company’s proxy statement relating to its next annual meeting, stockholder proposals must be received no later than November 21, 201526, 2018 by the Corporate Secretary at the Company’s principal executive offices. Pursuant to the Company’s bylaws, stockholders who intend to present an item for business at the next annual meeting (other than a proposal submitted for inclusion in the Company’s proxy materials) must provide notice to the Corporate Secretary no earlier than January 2, 20164, 2019 and no later than February 1, 2016.3, 2019. Notice of stockholder proposals must contain the information required by the Company’s bylaws. The inclusion of any such proposal in such proxy material shall be subject to the requirements of the proxy rules adopted under the 1934 Act.
Management does not now intend to bring before the Annual Meeting any matters other than those disclosed in the Notice of Annual Meeting of Stockholders, and it does not know of any business that persons, other than management, intend to present at the meeting. Should any other matters requiring a vote of the stockholders arise, the proxies in the enclosed form confer discretionary authority on the board of directors to vote on any other matter proposed by stockholders in accordance with their best judgment. Votes against proposals or abstentions from voting on proposals will not be used to adjourn or postpone the Annual Meeting of Stockholders.
The Company will bear the cost of soliciting proxies. To the extent necessary, proxies may be solicited by directors, officers and employees of the Company in person, by telephone or through other forms of communication, but such persons will not receive any additional compensation for such solicitation. The Company will reimburse brokerage firms, banks and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of the Company’s shares. The Company will supply banks, brokers, dealers and other custodian nominees and fiduciaries with proxy materials to enable them to send a copy of such materials by mail to each beneficial owner of shares of the common stock that they hold of record and will, upon request, reimburse them for their reasonable expenses in so doing.
By Order of the Board of Directors |
Diane E. Ratekin Executive Vice President, General Counsel
|
Chicago, Illinois
March 20, 201526, 2018
APPENDIX A
HURON CONSULTING GROUP INC.
STOCK OWNERSHIP PARTICIPATION PROGRAM
“1933 Act” means the Securities Act of 1933, as amended.
“1934 Act” means the Securities Exchange Act of 1934, as amended.
“Annual Incentive Bonus” means a Participant’s annual incentive bonus.
“Base Salary” means regular earnings excluding payments for overtime, bonuses, and all other special payments, commissions, and incentive payments.
“Board of Directors” or “Board” means the board of directors of Huron Consulting Group Inc.
“Bonus Offering Date” means an annual offering of the Company’s Shares on a date selected by the Company.
“Broker” means the brokerage firm or financial institution retained to perform administrative services described in Section 11(b).
“Business Day” shall mean a day on which the NASDAQ Stock Market (“NASDAQ”) is open for trading.
“Brokerage Account” means the account in which the Purchased Shares and Matched Shares are held.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Committee” means the Compensation Committee of the Board of Directors, or the designee of the Compensation Committee.
“Company” means Huron Consulting Group Inc.
“Effective Date” means June 1, 2015.
“Employee” means any individual who is an employee of the Company or any other Participating Subsidiary for tax purposes and who is employed on a non-temporary basis. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or the Participating Subsidiary, as appropriate; provided, however, that payroll deductions pursuant to Section 5 shall cease during a Participant’s unpaid leave.
“Enrollment Date” means the first Business Day of each Offering Period and “Matched Shares” means the restricted Shares issued pursuant to Section 8 of the Plan.
“Offering Period” means the quarterly offerings of the Company’s Shares beginning on the first day of March, the first day of June, the first day of September and the first day of December, and terminating on the last day of May, the last day of August, the last day of November, and the last day of February during such period, respectively.
“Participant” means an Employee who satisfies the requirements of Sections 3 and 4 of the Plan.
“Participating Subsidiary” means a Subsidiary that has been authorized by the Committee or the Board to extend the benefits of the Plan to its Employees. The Committee or the Board may extend the Plan to a Subsidiary in the future.
“Purchase Account” means the bookkeeping account used to track a Participant’s payroll deductions and cash contributions to be applied to purchase Shares under the Plan.
“Purchase Date” generally means the next Business Day following the last payroll date in the Offering Period or Bonus Offering Date, or such other date as shall be established by the Company.
“Purchase Price” means the average price of the Shares purchased for this Plan by the Broker on a Purchase Date.
“Purchased Shares” means the full and fractional Shares added to a Participant’s Brokerage Account on a Purchase Date.
“Shares” means the common stock of the Company.
“Subsidiary” means an entity, domestic or foreign, of which not less than 50% of the voting equity is held by the Company or a Subsidiary, whether or not such entity now exists or is hereafter organized or acquired by the Company or a Subsidiary.
|
SCHEDULE A
Subsidiaries Participating in the Plan
Huron Consulting Services LLC
Huron Advisors Canada Limited / Conseillers Huron Canada Limitée
Admission Ticket |
Electronic Voting Instructions |
You can vote by Internet! | ||
Available 24 hours a day, 7 days a week! | ||
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. | ||
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. | ||
Proxies submitted by the Internet must be received by | ||
1:00 a.m., Central Time, on May | ||
Vote by Internet | ||
• Go towww.envisionreports.com/HURN | ||
• Or scan the QR code with your smartphone | ||
• Follow the steps outlined on the secure website |
Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas. |
|
q IF YOU HAVE NOT VOTED VIA THE INTERNET, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
A | Proposals — The Board recommends a voteFOR all nominees,FOR Proposals 2, 3 and 4. | Proposals — The Board recommends a voteFOR all nominees,FOR Proposals 2 and 3. | ||||||||||||||||||||||||||||||||||||||||||||||||
1. | Election of Directors: 01 - John S. Moody | For ¨ | Withhold ¨ |
02 - Debra Zumwalt | For ¨ | Withhold ¨ | + | Election of Directors:
| For
| Withhold
| For
| Withhold
| For
| Withhold
| +
| |||||||||||||||||||||||||||||||||||
01 - John S. Moody | ☐ | ☐ | 02 - Hugh E. Sawyer | ☐ | ☐ | 03 - Debra Zumwalt | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||
For Against Abstain | For | Against | Abstain | For
| Against
| Abstain
| For
| Against
| Abstain
| |||||||||||||||||||||||||||||||||||||||||
2. | To approve the Company’s Stock Ownership Participation Program.
| ¨ ¨ ¨ | 3. | Say on Pay - An advisory vote on the approval of executive compensation. | ¨ | ¨ | ¨ | An advisory vote to approve the Company’s executive compensation.
| ☐ | ☐ | ☐ | 3. | To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||
4. | To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2015.
| ¨ ¨ ¨ |
B | Non-Voting Items | |||||||||||
Change of Address — Please print your new address below. | Comments — Please print your comments below. | Meeting Attendance | ||||||||||
Mark the box to the right if you plan to attend the Annual Meeting.
| ||||||||||||
C | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below | |||||||||||
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
|
Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | ||||||||
/ / |
1 U P X | + | |||
02SFSA |
020DUB
20152018 Annual Meeting Admission Ticket
20152018 Annual Meeting of
Huron Consulting Group Inc. Stockholders
Friday, May 1, 2015,4, 2018, 11:00 a.m. Central Time
550 West Van Buren Street, 17th Floor
Chicago, Illinois 60607
Upon arrival, please present this admission ticket
and photo identification at the registration desk.
q IF YOU HAVE NOT VOTED VIA THE INTERNET, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
Proxy — Huron Consulting Group Inc.
Notice of 20152018 Annual Meeting of Stockholders
550 West Van Buren Street, 17th Floor, Chicago, Illinois 60607
Proxy Solicited by Board of Directors for Annual Meeting — Friday, May 1, 20154, 2018
James H. Roth and Diane E. Ratekin, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Huron Consulting Group Inc. to be held on May 1, 20154, 2018 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees, FOR Proposals 2 3 and 4.3.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Items to be voted appear on reverse side.)