UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x Filed by a Partyparty 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)) |
x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-12 |
FISERV, INC.
(Name of Registrant as Specified inIn Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. |
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255 Fiserv Drive
Brookfield, Wisconsin 53045
April 6, 20155, 2016
You are cordially invited to attend the annual meeting of shareholders of Fiserv, Inc. to be held at our corporate officesoffice in Brookfield, WisconsinAlpharetta, Georgia on Wednesday, May 20, 201518, 2016 at 10:00 a.m. (ET). This is an important day on the Fiserv calendar as it isprovides us with an opportunity to review our financial results and strategic progress in providing our clients, and their customers, innovative technology products and services.
Information about the meeting and the matters on which shareholders will act is set forth in the accompanying Notice of 20152016 Annual Meeting of Shareholders and Proxy Statement. Following action on these matters, we will present a report on our business activities. You can find financial and other information about Fiserv in the accompanyingour Form 10-K for the fiscal year ended December 31, 2014.2015. We welcome your comments or inquiries about our business that would be of general interest to shareholders during the meeting.
We urge you to be represented at the annual meeting, regardless of the number of shares you own or whether you are able to attend the annual meeting in person, by voting as soon as possible. Shareholders can vote their shares via the Internet, by telephone or by mailing a completed and signed proxy card (or voting instruction form if you hold your shares through a broker).
Sincerely,
Jeffery W. Yabuki
President and Chief Executive Officer
2016 Proxy Statement |
Notice of 20152016 Annual Meeting of Shareholders
Time and Date:
Wednesday, May 20, 2015,18, 2016 at 10:00 a.m. local time(ET)
Place:
Fiserv, Corporate Offices, 255 Fiserv Drive, Brookfield, Wisconsin 530452900 Westside Parkway, Alpharetta, Georgia 30004
Matters To Be Voted On:
1. | Election of |
2. | Approval, on an advisory basis, of the compensation of our named executive officers. |
3. | Ratification of appointment of Deloitte & Touche LLP as our independent registered public accounting firm for |
4. | Shareholder proposal |
Any other business as may properly come before the annual meeting or any adjournments or postponements thereof.
Any other business as may properly come before the annual meeting or any adjournments or postponements thereof. |
Who Can Vote:
Holders of Fiserv stock at the close of business on March 23, 2015.21, 2016.
Date of Mailing:
On April 6, 2015,5, 2016, we began mailing the notice of Internet availability of proxy materials, or a proxy statement, proxy card and annual report, to shareholders.
By order of the board of directors,
Lynn S. McCreary
Secretary
April 6, 20155, 2016
Important notice regarding the availability of proxy materials for the shareholder meeting to be held on May 20, 2015:18, 2016: The proxy statement, 2014 annual report2015 Annual Report on Form 10-K and the means to vote by Internet are available at http://www.proxyvote.com.
2016 Proxy Statement |
Proxy Statement Table of Contents
1 | ||||
Security Ownership of Certain Beneficial Owners and Management | ||||
Proposal 3. Ratification of the Appointment of Independent Registered Public Accounting Firm | ||||
2016 Proxy Statement |
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting.
Annual Meeting
Time and Date: | Wednesday, May | |
Place: | Fiserv | |
2900 Westside Parkway Alpharetta, Georgia 30004 | ||
Record Date: | March | |
Voting: | Shareholders as of the record date are entitled to vote by Internet at www.proxyvote.com; telephone at 1-800-690-6903; completing and returning their proxy card or voter instruction card; or in person at the annual meeting |
Proxy Statement
This proxy statement is furnished in connection with the solicitation on behalf of the board of directors of Fiserv, Inc., a Wisconsin corporation, of proxies for use at our 20152016 annual meeting of shareholders. This proxy statement is being sent and made available to our shareholders entitled to vote at the annual meeting on or about April 6, 2015.5, 2016.
Purposes of Annual Meeting
Agenda Item
| Agenda Item
| Board Vote Recommendation
| Page Reference for More Detail
| Agenda Item
| Board Vote
| Page Reference for More Detail
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1. | Election of Directors | FOR each | 10 | Election of Directors The board of directors has nominated eleven individuals for election as directors. All nominees are currently serving as directors and all, except Mr. Yabuki, our President and Chief Executive Officer, are independent. We believe that each nominee for director has the requisite experience, integrity and sound business judgment to serve as a director.
| FOR each Director Nominee | 11 | ||||||
The board of directors has nominated ten individuals for election as directors. All nominees are currently serving as directors and all, except Mr. Yabuki, our President and Chief Executive Officer, are independent. We believe that each nominee for director has the requisite experience, integrity and sound business judgment to serve as a director.
| Director Nominee | |||||||||||
2. | Advisory Vote on Named Executive Officer Compensation | FOR | 25 |
Advisory Vote on Named Executive Officer Compensation The board of directors is asking shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. Our compensation program for named executive officers is designed to create long-term shareholder value by rewarding performance as described in the Compensation Discussion and Analysis section of this proxy statement.
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FOR |
27 | ||||||
The board of directors is asking shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. Our compensation program for named executive officers is designed to create long-term shareholder value by rewarding performance as described in the Compensation Discussion and Analysis section of this proxy statement.
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3. | Ratification of Appointment of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm As a matter of good corporate governance, the audit committee of the board of directors is seeking ratification of its appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2015. | FOR | 54 |
Ratification of Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm As a matter of good corporate governance, the audit committee of the board of directors is seeking ratification of its appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2016. |
FOR |
57 |
01 | 2016 Proxy Statement |
Agenda Item
| Board Vote Recommendation
| Page Reference for More Detail
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4. | Shareholder Proposal on Executive Retention of Stock (if properly presented) We require all of our executive officers to maintain a significant amount of stock, we have a strong culture of stock ownership, and we have policies that align the interests of our executive officers with the long-term interests of our shareholders.In light of these considerations and the potential negative consequences that this proposal could have, we do not believe that this proposal is in the best interest of our shareholders.
| AGAINST | 56 |
Agenda Item
| Board Vote
| Page Reference for More Detail
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4. |
Shareholder Proposal on Proxy Access (if properly presented) After engaging with shareholders and reviewing current market practices, on February 19, 2016, our board of directors amended our by-laws to implement proxy access.Because we have already implemented proxy access, this proposal is unnecessary and not in the best interests of our shareholders.
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AGAINST |
59 |
Executing on Our Strategy
We delivered strongsolid results in 20142015 highlighted by adjusted internal revenue growth of 4% and adjusted earnings per share of $3.37,$3.87, a 13%15% increase over 2013.2014. We made progress in strategic areas that we believe will enhance our future results, and we continued to enhance our level of competitive differentiation through innovation and integration.which we believe is essential to sustaining future growth. As discussed further in the Compensation Discussion and Analysis section of this proxy statement, our named executive officer compensation for 20142015 was paid or awarded in the context of these results.
Adjusted internalInternal revenue growth and adjusted earnings per share are non-GAAP financial measures. See Appendix A to this proxy statement for information regarding these measures and a reconciliation to the most directly comparable GAAP measures.
2014 Governance Highlights
On February 19, 2016, our board of directors amended our by-laws to implement proxy access in the form that it believes is most appropriate for our company and our shareholders and is consistent with current market practices. Specifically, the by-laws provide that any shareholder or group of up to 20 shareholders that beneficially owns at least 3% of our outstanding common stock continuously for three years and that complies with the procedures set forth in our by-laws may nominate up to the greater of two individuals or 20% of the board of directors for election to the board and require us to include such nominees in our proxy materials. Our board adopted proxy access after considering various potential formulations of proxy access and engaging with a number of our shareholders who provided valuable feedback on the subject of proxy access.
In 2015, we added a new, independent director to our board of directors, representing the fourth independent director who has joined our board since 2012. We also enhanced the evaluation of our annual board, committee and individual director performance to help ensure that our board of directors and committees are comprised of directors with the necessary skills and experience to best represent our company and shareholders.
Compensation Highlights
We did not increase the base salary of our chief executive officer in 2014. WeFor 2015, we paid him a cash incentive award equalawards to 129% of hisnamed executive officers generally around target award because, although we exceeded hisour target adjusted earnings per share and, adjustedif applicable, target consolidated net operating profit performance goals, our internal revenue growth performance goals, and the value of equity compensation we granted to him was more than two times the cash compensation paid to him.
We paid cash incentive awards to other named executive officers above target levels because, among other things, we exceeded the target adjusted earnings per share and target adjusted internal revenue growth performance goals for 2014.results were below target. The other named executive officers received annual equity incentive awards in 2014 generally2015 at or above target levels reflecting performance at or above target.levels. The value of equity compensation we granted to our chief executive officer as a percentage of his total compensation remained comparable with 2014 and was three times the cash compensation paid to him. As a group, 80%85% of the compensation paid to our named executive officers was in the form of incentive awards, more than halfand three-quarters of which wasthe total incentive awards were in the form of equity. In addition, more than three-quarters of the aggregate equity awards granted to our named executive officers in 2015 were in the form of stock options,
02 | 2016 Proxy Statement |
which are inherently performance-based and havedeliver value only to the extent that the price of our stock increases.
In 2014, our board of directors adopted a policy that prohibits our directors and executive officers from hedging or pledging our stock, and our compensation committee adopted a policy not to enter into new excise tax gross-up arrangements with executive officers. In addition, in 2015, our executive officers executed amendments to their outstanding equity award agreements to revise the criteria for retirement and post-retirement treatment of such awards. These changes enable our executive officers to retain their equity awards following a qualified retirement, subject to compliance with ongoing non-competition, confidentiality and other obligations, which further alignsalign their long-term interests with those of our shareholders as they approach possible retirement. In addition, in early 2016, our compensation committee began granting performance share units to certain executive officers. These performance share units have a three-year performance period, and the number of shares issued at vesting will be based on the company’s achievement of internal revenue growth goals, subject to attaining a threshold level of adjusted income from continuing operations over such three-year period.
In 2016, we entered into amendments to the employment agreement and key executive employment and severance agreement with our chief executive officer. Under the amendments, he will continue to serve as our president and chief executive officer for at least another three-year term followed by automatic one-year renewals, and we eliminated the excise tax gross-up provisions in his agreements.
We encourage you to review the “Compensation Discussion and Analysis” section of this proxy statement as well as the tabular and narrative disclosure under “Executive Compensation.”
2016 Proxy Statement |
Compensation Practices
What We Do
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Our compensation committee strives to provide total compensation at a level comparable to the 50th percentile of our peers with an opportunity for 75th percentile compensation for superior performance. In
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We provide cash incentive awards based on achievement of annual performance goals and equity compensation that promotes long-term financial and operating performance by delivering incremental value to executive officers to the extent our stock price increases over time.
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We have a stock ownership policy that requires our executive officers to acquire and maintain a significant amount of Fiserv equity, and in 2015, we amended the terms of the equity awards granted to our executive officers to enable them to retain their awards following a qualified retirement, subject to compliance with ongoing non-competition, confidentiality and other obligations, which further
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We have a policy that prohibits our executive officers from hedging or pledging Fiserv stock.
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We have a compensation recoupment, or “clawback,” policy. |
What We Don’t Do
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In
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We don’t provide separate pension programs or a supplemental executive retirement plan
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We generally don’t provide personal-benefit perquisites to our named executive officers. |
2016 Proxy Statement |
Board Nominees
The board met five times during 20142015 and each of our directors attended 75% or more of the aggregate number of meetings of the board and the committees on which he or she served, in each case while the director was serving on our board of directors during 2014.2015. All candidates were nominated in accordance with the company’s governance guidelines. The following table provides summary information on each director nominee. For more information about each director nominee, please see pages 11–15.their full biographies beginning on page 12.
Name
| Age
| Director Since
| Principal Occupation
| Independent (Y/N)
| Current Committee Memberships
| Age
| Director
| Principal Occupation
| Independent
| Current Committee
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Daniel P. Kearney* | 75 | 1999 | Financial Consultant | Y | ||||||||||||||||||||||||||||||||||||
Daniel P. Kearney * | 76 | 1999 | Financial Consultant | |||||||||||||||||||||||||||||||||||||
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Alison Davis | 53 | 2014 | Managing Partner, Fifth Era | Y | Audit | 54 | 2014 | Advisor, Fifth Era | Audit | |||||||||||||||||||||||||||||||
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Christopher M. Flink | 43 | 2012 | Partner, IDEO | Y | Audit | 44 | 2012 | Partner, IDEO | Audit
Nominating and Corp. Governance | |||||||||||||||||||||||||||||||
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Nominating and Corp. Governance | ||||||||||||||||||||||||||||||||||||||||
Dennis F. Lynch | 66 | 2012 | Chairman, Cardtronics, Inc. | Y | Compensation | 67 | 2012 | Chairman, Cardtronics, Inc. | Compensation | |||||||||||||||||||||||||||||||
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Denis J. O’Leary | 58 | 2008 | Managing Partner, Encore Financial Partners, Inc. | Y | Audit | 59 | 2008 | Investor | Audit
Nominating and Corp. Governance | |||||||||||||||||||||||||||||||
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Nominating and Corp. Governance | ||||||||||||||||||||||||||||||||||||||||
Glenn M. Renwick + | 59 | 2001 | Chairman, President and Chief Executive Officer, The Progressive Corporation | Y | Compensation | 60 | 2001 | Chairman, President and Chief Executive Officer, The Progressive Corporation | Compensation | |||||||||||||||||||||||||||||||
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Kim M. Robak + | 59 | 2003 | Partner, Mueller Robak, LLC | Y | Nominating and Corp. Governance | 60 | 2003 | Partner, Mueller Robak, LLC | Nominating and Corp. Governance | |||||||||||||||||||||||||||||||
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JD Sherman | 50 | 2015 | President and Chief Operating Officer, HubSpot, Inc. | Audit | ||||||||||||||||||||||||||||||||||||
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Doyle R. Simons | 51 | 2007 | President and Chief Executive Officer, Weyerhaeuser Company | Y | Compensation | 52 | 2007 | President and Chief Executive Officer, Weyerhaeuser Company | Compensation | |||||||||||||||||||||||||||||||
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Thomas C. Wertheimer + | 74 | 2003 | Financial Consultant | Y | Audit | 75 | 2003 | Financial Consultant | Audit | |||||||||||||||||||||||||||||||
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Jeffery W. Yabuki | 55 | 2005 | President and Chief Executive Officer, Fiserv, Inc. | N | 56 | 2005 | President and Chief Executive Officer, Fiserv, Inc. | |||||||||||||||||||||||||||||||||
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* Chairman of the Board + Committee Chair
2016 Proxy Statement |
The board of directors of Fiserv, Inc., a Wisconsin corporation, is soliciting shareholders’ proxies in connection with our annual meeting of shareholders to be held on Wednesday, May 20, 201518, 2016 at 10:00 a.m. local time,(ET), or at any adjournment or postponement of the meeting. On or about April 6, 2015,5, 2016, we mailed the notice of Internet availability of proxy materials, or a proxy statement, proxy card and annual report, to all shareholders entitled to vote at the annual meeting.
Notice of Internet Availability of Proxy Materials
In accordance with rules and regulations adopted by the Securities and Exchange Commission, we may furnish our proxy statement and annual report to shareholders of record by providing access to those documents
Shareholders’ access to our proxy materials via the Internet allows us to reduce printing and delivery costs and lessen adverse environmental impacts. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions in the Notice for requesting those materials.
Solicitation of Proxies
We will pay the cost of soliciting proxies on behalf of the board of directors. Our directors, officers and other employees may solicit proxies by mail, personal interview, telephone or electronic communication. None of them will receive any special compensation for these efforts.
We have retained the services of Georgeson Inc. (“Georgeson”) to assist us in soliciting proxies. Georgeson may solicit proxies by personal interview, mail, telephone or electronic communications. We expect to pay Georgeson its customary fee, approximately $10,000, plus reasonable out-of-pocket expenses incurred in the process of soliciting proxies. We also have made arrangements with brokerage firms, banks, nominees and other fiduciaries to forward proxy materials to beneficial owners of shares. We will reimburse such record holders for the reasonable out-of-pocket expenses incurred by them in connection with forwarding proxy materials. | Proxies solicited hereby
Holders Entitled to Vote
The board of directors has fixed the close of business on March
All of these shares are to be voted as a single class, and you are entitled to cast one vote for each share you held as of the record date on all matters submitted to a vote of shareholders.
Voting Your Shares
You may vote:
By Internet Visit www.proxyvote.com
By telephone Dial toll-free 1-800-690-6903
By mailing your proxy card If you requested a printed copy of the proxy materials, mark your vote on the proxy card, sign and date it, and return it in the enclosed envelope.
In person If you are a shareholder of record you may join us in person at the annual |
Voting through the Internet or by telephone. You may direct your vote by proxy without attending the annual meeting. You can vote by proxy over the Internet or by telephone by following the instructions provided in the Notice. Shareholders voting via the Internet
06 | 2016 Proxy Statement |
Voting through the Internet or by telephone. You may direct your vote by proxy without attending the annual meeting. You can vote by proxy over the Internet or by telephone until 11:59 p.m. (ET) on May 17, 2016 by following the instructions provided in the Notice. Shareholders voting via the Internet or by telephone will bear any costs associated with electronic or telephone access, such as usage charges from Internet access providers and telephone companies.
Voting by proxy card. If you requested a printed copy of the proxy materials, you may vote by returning a proxy card that is properly signed and completed. The shares represented by that card will be voted as you have specified.
Banks, brokers or other nominees.Shareholders who hold shares through a bank, broker or other nominee may vote by the methods that their bank or broker makes available, in which case the bank or broker will include instructions with the Notice or this proxy statement. If you wish to vote in person at the annual meeting, you must obtain a legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the annual meeting.
401(k) savings plan.An individual who has a beneficial interest in shares of our common stock allocated to his or her account under the Fiserv, Inc. 401(k) savings plan may vote the shares of common stock allocated to his or her account. We will provide instructions to participants regarding how to vote. If no direction is provided by the participant about how to vote his or her shares by 11:59 p.m. (ET) on May 15, 2016, the trustee of the Fiserv, Inc. 401(k) savings plan will vote the shares in the same manner and in the same proportion as the shares for which voting instructions are received from other participants, except that the trustee, in the exercise of its fiduciary duties, may determine that it must vote the shares in some other manner.
Proxies
Daniel P. Kearney, Chairman of the board of directors, Jeffery W. Yabuki, President and Chief Executive Officer, and Lynn S. McCreary, Chief Legal Officer and Secretary, have been selected by the board of directors as proxy holders and will vote shares represented by valid proxies. All shares represented by valid proxies received and not
revoked before they are exercised will be voted in the manner specified in the proxies.
If nothing is specified, the proxies will be voted: to elect each of the board’s nominees for director; to approve the compensation of our named executive officers as disclosed in this proxy statement; to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm; and against the shareholder proposal relating to proxy access, if properly presented at the annual meeting.
Our board of directors is unaware of any other matters that may be presented for action at our annual meeting. If other matters do properly come before the annual meeting or any adjournments or postponements thereof, it is intended that shares represented by proxies will be voted in the discretion of the proxy holders.
You may revoke your proxy at any time before it is exercised by doing any of the following:
However, if your shares are held of record by a bank, broker or other nominee, you must obtain a proxy issued in your name from the record holder.
Quorum
The presence, in person or by proxy, of at least a majority of the outstanding shares of common stock entitled to vote at the annual meeting will constitute a quorum for the transaction of business. Holders of shares that abstain from voting or that are subject to a broker non-vote will be counted as present for the purpose of determining the presence or absence of a quorum for the transaction of business. In the event there are not sufficient votes for a quorum or to approve a proposal at the time of the annual meeting, the annual meeting may be adjourned or postponed, in our sole discretion, in order to permit the further solicitation of proxies.
2016 Proxy Statement |
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Required Vote
Proposal
| Voting Standard
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1. | Election of directors | A director will be elected if the number of shares voted “for” that director’s election exceeds the number of votes cast “withheld” with respect to that director’s election.
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2. | To approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement
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3. | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for | To be approved, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal.
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4. | To vote on a shareholder proposal relating to
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For each of these proposals, abstentions and broker non-votes will be entirely excluded from the vote and will have no effect on its outcome.
2016 Proxy Statement |
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the beneficial ownership of our common stock as of March 13, 201510, 2016 by: each current director and director nominee; each executive officer appearing in the Summary Compensation Table; all directors and executive officers as a group; and any person who is known by us to beneficially own more than 5% of the outstanding shares of our common stock based on our review of the reports regarding ownership filed with the Securities and Exchange Commission in accordance with Sections 13(d) and 13(g) of the Exchange Act.
Name and Address of Beneficial Owner(1)
| Number of Shares of Common Stock Beneficially Owned (2)
| Percent of Class (3)
| Number of Shares of
| Percent of Class(3)
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T. Rowe Price Associates, Inc.(4) | ||||||||||||||||
100 E. Pratt Street | ||||||||||||||||
Baltimore, Maryland 21202 | 33,406,191 | 14.0% | ||||||||||||||
The Vanguard Group, Inc.(5) | ||||||||||||||||
100 Vanguard Blvd. | ||||||||||||||||
Malvern, Pennsylvania 19355 | 19,051,250 | 8.0% | ||||||||||||||
BlackRock, Inc.(6) | ||||||||||||||||
55 East 52nd Street | ||||||||||||||||
New York, New York 10022 | 13,723,116 | 5.8% | ||||||||||||||
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T. Rowe Price Associates, Inc.(4) 100 E. Pratt Street Baltimore, Maryland 21202 | 31,253,227 | 14.0% | ||||||||||||||
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The Vanguard Group, Inc.(5) 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 19,906,233 | 8.9% | ||||||||||||||
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BlackRock, Inc.(6) 55 East 52nd Street New York, New York 10055 | 14,118,869 | 6.3% | ||||||||||||||
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Jeffery W. Yabuki | 2,724,364 | 1.1% | 2,703,532 | 1.2% | ||||||||||||
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Thomas J. Hirsch | 509,708 | * | 116,982 | * | ||||||||||||
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Mark A. Ernst | 318,778 | * | 399,910 | * | ||||||||||||
Rahul Gupta | 226,008 | * | ||||||||||||||
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Kevin P. Gregoire | 66,615 | * | ||||||||||||||
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Byron C. Vielehr | — | * | 56,325 | * | ||||||||||||
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Alison Davis | — | * | 2,054 | * | ||||||||||||
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Christopher M. Flink | 9,686 | * | 14,403 | * | ||||||||||||
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Daniel P. Kearney | 81,674 | * | 80,255 | * | ||||||||||||
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Dennis F. Lynch | 12,446 | * | 17,163 | * | ||||||||||||
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Denis J. O’Leary | 71,739 | * | 77,571 | * | ||||||||||||
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Glenn M. Renwick | 131,483 | * | 137,259 | * | ||||||||||||
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Kim M. Robak | 72,460 | * | 70,843 | * | ||||||||||||
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JD Sherman | — | * | ||||||||||||||
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Doyle R. Simons | 70,873 | * | 76,547 | * | ||||||||||||
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Thomas C. Wertheimer | 52,241 | * | 56,958 | * | ||||||||||||
All directors and executive officers as a group (18 people) | 4,490,418 | 1.9% | ||||||||||||||
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All directors and executive officers as a group (19 people) | 4,234,010 | 1.9% | ||||||||||||||
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* Less than 1%.
(1) Unless otherwise indicated, the address for each beneficial owner is care of Fiserv, Inc., 255 Fiserv Drive, Brookfield, Wisconsin 53045.
(2) All information with respect to beneficial ownership is based upon filings made by the respective beneficial owners with the Securities | and Exchange Commission or information provided to us by such beneficial owners. Except as indicated in the footnotes to this table, the persons named in the table have | sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws. |
Includes stock options, which, as of March |
09 | 2016 Proxy Statement |
Mr. Lynch – |
Includes shares deferred under vested restricted stock units: Mr. Hirsch – |
Also includes shares eligible for issuance pursuant to the non-employee director deferred compensation plan: Mr. Kearney – 13,448; Mr. O’Leary – |
Mr. Kearney is a trustee of the Daniel and Gloria Kearney Foundation which holds 3,400 shares of our common stock. Mr. Yabuki is a trustee of the Yabuki Family Foundation which holds |
(3) | On March | shareholder but not deemed outstanding for the purpose of calculating the percentage of any other person. |
(4) | Based on a Schedule 13G filed by T. Rowe Price Associates, Inc. (“Price Associates”) on February |
Exchange Commission, which indicates that these securities are owned by various individual and institutional investors for which Price Associates serves as investment adviser with power to direct investments and/or sole power to vote the securities. According to the Schedule 13G, Price Associates exercises sole voting power over |
(5) | Based on a Schedule 13G filed by The Vanguard Group, Inc. (“Vanguard Group”) on February 10, |
(6) | Based on a Schedule 13G filed by BlackRock, Inc. (“BlackRock”) on February |
2016 Proxy Statement |
Proposal 1. Election of Directors
All directors will be elected to hold office for a term expiring at the next annual meeting of shareholders and until their successors have been elected and qualified.
All of the nominees for election as director at the annual meeting are incumbent directors. No nominee for director has been nominated pursuant to any agreement or understanding between us and any person, and there are no family relationships among any of our directors or executive officers. These nominees have consented to serve as a director if elected, and management has no reason to believe that any nominee will be unable to serve. Unless otherwise specified, the shares of common stock represented by the proxies solicited hereby will be voted in favor of the nominees proposed by the board of directors. In the event that any director nominee becomes unavailable for re-election as a result of an unexpected occurrence, shares will be voted for the election of such substitute nominee, if any, as the board of directors may propose. The affirmative vote of a majority of votes cast is required for the election of directors.
Our by-laws provide that each director will be elected by the majority of the votes cast with respect to that director’s election at any meeting of shareholders for the election of directors, other than a contested election. A majority of the votes cast means that the number of votes cast “for” a director’s election exceeds the number of votes cast “withheld” with respect to that director’s election. In a contested election, each director will be elected by a plurality of the votes cast with respect to that director’s election. Once our chairman of the board determines that a contested election exists in accordance with our by-laws, the plurality vote standard will apply at a meeting at which a quorum is present regardless of whether a contested election continues to exist as of the date of such meeting.
Our by-laws further provide that, in an uncontested election of directors, any nominee for director who is already serving as a director and receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will promptly tender his or her resignation. The nominating and corporate governance committee of the board of directors will then promptly consider the tendered resignation, and the committee will recommend to the board whether to accept or reject it. Following the board’s decision, we will promptly file a Current Report on Form 8-K with the Securities and Exchange Commission that sets forth the board’s decision whether to accept the resignation as tendered, including a full explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation. Any director who tenders a resignation pursuant to this provision will not participate in the committee recommendation or the board consideration regarding whether to accept the tendered resignation.
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Each person listed below is nominated for election to serve as a director until the next annual meeting of shareholders and until his or her successor is elected and qualified.The board of directors recommends that you vote in favor of its nominees for director.
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Alison Davis,
• Director since 2014
• Audit Committee member
• Principal occupation: Advisor, Fifth Era
• Experience in global financial services, corporate strategy and financial management | Ms. Davis | |||||
In the past five years, in addition to Fiserv, Ms. Davis has served as a director at the following publicly traded companies: Royal Bank of Scotland Group | ||||||
The board concluded that Ms. Davis should be a director of the company because of her extensive experience in global financial services, corporate strategy and financial management.
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Christopher M. Flink,
• Director since 2012
• Audit Committee and Nominating and Corporate Governance Committee member
• Principal occupation: Partner, IDEO
• Experience with innovative technologies and helping companies innovate and grow | Mr. Flink is a partner at the innovation and design firm IDEO where he leads key client relationships, guiding portfolios of innovation projects in retail, education and consumer products. In his
In the past five years, in addition to Fiserv, Mr. Flink has served as a director of E*TRADE Financial Corporation
The board concluded that Mr. Flink should be a director of the company because of his strong understanding of innovative technologies and his over 20 years of experience helping companies of all kinds innovate and grow.
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Daniel P. Kearney,
• Chairman since 2014
• Director since 1999
• Principal occupation: Financial Consultant
• Experience in the banking, insurance and legal industries for over 40 years | Mr. Kearney is a financial consultant and served as Chief Investment Officer of Aetna, Inc. from 1991 to 1998. In 1995, he assumed the additional responsibility of President of Aetna’s annuity, pension and life insurance division, retiring in 1998. Prior to joining Aetna, Mr. Kearney was President and Chief Executive Officer of the Resolution Trust Corporation Oversight Board. Before that, he was a principal at Aldrich, Eastman and Waltch, Inc., a Boston-based pension fund advisor. From 1977 to 1988, Mr. Kearney was | |||||
In the past five years, in addition to Fiserv, Mr. Kearney has served as a director at the following publicly traded companies: non-executive Chairman of MBIA, Inc.
The board concluded that Mr. Kearney should be a director of the company because of his over 40 years of experience in the banking, insurance and legal industries.
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Dennis F. Lynch,
• Director since 2012
• Compensation Committee member
• Principal occupation: Chairman, Cardtronics, Inc.
• Experience in the payments industry for over 30 years | Mr. Lynch is Chairman of Cardtronics, Inc., a publicly traded company and the largest owner and operator of retail ATMs worldwide. He was appointed Chairman in 2010 and has served as a director of Cardtronics since 2008. Mr. Lynch
In the past five years, in addition to Fiserv, Mr. Lynch has served as a director of Cardtronics, Inc. (current). | |||||
The board concluded that Mr. Lynch should be a director of the company because he has over 30 years of experience in the payments industry and is a leader in the introduction and growth of payment solutions.
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13 | 2016 Proxy Statement |
Denis J. O’Leary,
• Director since 2008
• Audit Committee and Nominating and Corporate Governance Committee member
• Principal occupation: Investor
• Experience in the banking and information technology industries |
In the past five years, in addition to Fiserv, Mr. O’Leary has served as a director of McAfee, Inc. (former), a formerly publicly traded supplier of computer security solutions. He also currently serves as a director at CrowdStrike, Inc., a privately held computer security software company, Hamilton State Bancshares, Inc., a privately held bank holding company, and The Warranty Group, Inc., a privately held provider of extended warranty programs and related benefits.
The board concluded that Mr. O’Leary should be a director of the company because of his extensive knowledge of and experience in both the banking and information technology industries.
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Glenn M. Renwick,
• Director since 2001
• Compensation Committee chair
• Principal occupation: Chairman, President and Chief Executive Officer, The Progressive Corporation
• Experience in business leadership and information technology | Mr. Renwick is Chairman, President and Chief Executive Officer of The Progressive Corporation, a publicly traded property and casualty insurance company. Before being named Chief Executive Officer in 2001, Mr. Renwick served as Chief Executive Officer – Insurance Operations and Business Technology Process Leader from 1998 through 2000. Prior to that, he led Progressive’s consumer marketing group and served as president of various divisions within Progressive. Mr. Renwick joined Progressive in 1986 as Auto Product Manager for Florida.
In the past five years, in addition to Fiserv, Mr. Renwick has served as a director at the following publicly traded companies: The Progressive Corporation (current) and UnitedHealth Group Incorporated (current), a provider of health insurance.
The board concluded that Mr. Renwick should be a director of the company because he is an accomplished business leader with significant information technology experience.
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14 | 2016 Proxy Statement |
Kim M. Robak,
• Director since 2003
• Nominating and Corporate Governance Committee chair
• Principal occupation: Partner at Mueller Robak, LLC
• Experience in the fields of law, government and technology | Ms. Robak has been a partner at Mueller Robak, LLC, a government relations firm, since 2004. Prior to that, Ms. Robak was Vice President for External Affairs and Corporation Secretary at the University of Nebraska from 1999 to 2004. Ms. Robak served as the Lieutenant Governor of the State of Nebraska from 1993 to 1999, as Chief of Staff from 1992 to 1993, and as Legal Counsel from 1991 to 1992. Prior to 1991, Ms. Robak was a partner at the law firm Rembolt Ludtke Milligan and Berger. During her tenure in state government, she chaired the Governor’s Information Resources Cabinet and led the Information Technology Commission of Nebraska.
Ms. Robak also currently serves as a director at Ameritas Mutual Holding Company, a privately held provider of life insurance, annuities, and mutual funds, Ameritas Life Insurance Corporation, a privately held life insurance company, and Union Bank & Trust Company, a privately held financial institution.
The board concluded that Ms. Robak should be a director of the company because she is an accomplished businessperson and community leader who brings a variety of experiences to the board through her work in the fields of law, government and technology.
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JD Sherman, 50 • Director since 2015 • Audit Committee member • Principal occupation: President and Chief Operating Officer, HubSpot, Inc. • Experience in financial management and the information technology industry | Mr. Sherman has served as Chief Operating Officer of HubSpot, Inc., a provider of inbound marketing software, since 2012 and as its President since 2014. Prior to joining HubSpot, Mr. Sherman was Chief Financial Officer of Akamai Technologies, Inc., a provider of content delivery network services, from 2005 to 2012. From 1990 to 2005, Mr. Sherman served in various positions at International Business Machines Corporation, an information technology company, including as Vice President of Financial Planning and Assistant Controller of Corporate Financial Strategy and Budgets. In the past five years, in addition to Fiserv, Mr. Sherman has served as a director of Cypress Semiconductor Corporation (former), a publicly traded provider of programmable technology solutions. He also previously served as a director of 3Com Corporation, a former global enterprise networking solutions provider, and AMIS Holdings, Inc., a former designer and manufacturer of mixed-signal and digital products for the automotive, medical, industrial, military and aerospace sectors. Mr. Sherman was recommended to the nominating and corporate governance committee by a third party search firm. The board concluded that Mr. Sherman should be a director of the company because of his strong financial management experience in the information technology industry. | |||||
15 | 2016 Proxy Statement |
Doyle R. Simons,
• Director since 2007
• Compensation Committee member
• Principal occupation: President and Chief Executive Officer, Weyerhaeuser Company
• Experience in senior management, financial and legal matters | Mr. Simons is President and Chief Executive Officer of Weyerhaeuser Company, a publicly traded company focused on timberlands and forest products. Prior to joining Weyerhaeuser in 2013, Mr. Simons served in a variety of roles for Temple-Inland, Inc., a formerly publicly traded manufacturing company focused on corrugated packaging and building products which was acquired in 2012. From 2007 to early 2012, he served as the Chairman and Chief Executive Officer; from 2005 to 2007, he was Executive Vice President; from 2003 to 2005, he served as its Chief Administrative Officer; from 2000 to 2003, he was Vice President – Administration; and from 1994 to 2000, he served as Director of Investor Relations.
In the past five years, in addition to Fiserv, Mr. Simons has served as a director at the following publicly traded companies: Weyerhaeuser Company (current) and Temple-Inland, Inc. (former).
The board concluded that Mr. Simons should be a director of the company because he is an accomplished businessperson with diverse experiences in senior management and financial and legal matters.
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Thomas C. Wertheimer,
• Director since 2003
• Audit Committee chair
• Principal occupation: Financial Consultant
• Experience in accounting, auditing and financial reporting matters | Mr. Wertheimer is a Certified Public Accountant and a retired Senior Audit Partner of PricewaterhouseCoopers (“PwC”). He served as lead audit partner for a number of key multinational and national clients of PwC, including publicly held automotive manufacturing, financial services and retail companies. He also held technical accounting and audit quality positions including Director of Accounting, Auditing and SEC for the Midwest Region of Coopers & Lybrand. Mr. Wertheimer served on the Board of Partners at Coopers & Lybrand from 1995 until its merger with Price Waterhouse in 1998. From 2003 to 2007, he was a consultant to the Public Company Accounting Oversight Board, assisting in designing and executing its program of inspection of registered accounting firms.
In the past five years, in addition to Fiserv, Mr. Wertheimer has served as a director at the following publicly traded companies: Vishay Intertechnology, Inc. (current), an electronic component manufacturer, and Xinyuan Real Estate Co., Ltd. (former), a residential real estate developer in China.
The board concluded that Mr. Wertheimer should be a director of the company because of his extensive knowledge of and experience in accounting, auditing and financial reporting matters.
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16 | 2016 Proxy Statement |
Jeffery W. Yabuki,
• Director since 2005
• Principal occupation: President and Chief Executive Officer, Fiserv, Inc.
• Experience in senior management positions including as chief executive officer of the company | Mr. Yabuki has served as our President and Chief Executive Officer since 2005. Before joining Fiserv, Mr. Yabuki served as Executive Vice President and Chief Operating Officer for H&R Block, Inc., a financial services firm, from 2002 to 2005. From 2001 to 2002, he served as Executive Vice President of H&R Block and from 1999 to 2001, he served as the President of H&R Block International. From 1987 to 1999, Mr. Yabuki held various executive positions with American Express Company, a financial services firm, including President and Chief Executive Officer of American Express Tax and Business Services, Inc.
Mr. Yabuki also currently serves as a director at Ixonia Bancshares, Inc., a privately held bank holding company.
The board concluded that Mr. Yabuki should be a director of the company because he has extensive senior management experience and serves as the chief executive officer of the company.
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2016 Proxy Statement |
At a Glance
Name | Independent | Audit Committee | Compensation | Nominating and | |||||||||||||
Daniel P. Kearney Chairman of the Board | |||||||||||||||||
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Alison Davis | |||||||||||||||||
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Christopher M. Flink | |||||||||||||||||
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Dennis F. Lynch | |||||||||||||||||
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Denis J. O’Leary | |||||||||||||||||
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Glenn M. Renwick | C | ||||||||||||||||
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Kim M. Robak | C | ||||||||||||||||
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JD Sherman | |||||||||||||||||
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Doyle R. Simons | |||||||||||||||||
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Thomas C. Wertheimer | C | ||||||||||||||||
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Jeffery W. Yabuki | |||||||||||||||||
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C= Committee Chair
Director Independence
Our board of directors has determined that Alison Davis, Christopher M. Flink, Daniel P. Kearney, Dennis F. Lynch, Denis J. O’Leary, Glenn M. Renwick, Kim M. Robak, JD Sherman, Doyle R. Simons and Thomas C. Wertheimer are “independent” within the meaning of NASDAQ Marketplace Rule 5605(a)(2).
Board Meetings and Attendance
During our fiscal year ended December 31, | Directors are expected to attend each annual meeting of shareholders. All of the directors serving | on the board at the time of our
Board Leadership
We separate the roles of chief executive officer and Chairman of the board to allow our leaders to focus on their respective responsibilities. Our chief executive officer is responsible for setting our strategic direction and providing day-to-day leadership. Our Chairman provides guidance to our chief executive officer, sets the agenda for board meetings and presides over meetings of the full board. Our board recognizes the time, effort and energy that our chief executive officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our Chairman. Our board believes that having separate positions provides a clear delineation of responsibilities for each position and enhances the ability of each leader to discharge his duties effectively which, in turn, enhances our prospects for success. |
2016 Proxy Statement |
Committees of the Board of Directors
Our board of directors has three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. The directors currently serving on these committees satisfy the independence requirements contained inof the NASDAQ Marketplace Rules applicable to such committees, including the enhanced independence requirements for members of the audit committee and compensation committee. Each of these committees has the responsibilities set forth in written charters adopted by the board of directors. We make copies of each of these charters available free of charge on our website at http://investors.fiserv. com/investors.fiserv.com/documents.cfm. Other than the text of the charters, we are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this proxy statement.
Audit Committee
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Mr. Wertheimer(Chair) | ||||||
Ms. Davis Mr. Flink Mr. O’Leary Mr. Sherman Number of Meetings held in 7 | Duties: The audit committee’s primary role is to provide independent review and oversight of our financial reporting processes and financial statements, system of internal controls, audit process and results of operations and financial condition. The audit committee is directly and solely responsible for the appointment, compensation, retention, termination and oversight of our independent registered public accounting firm. Each of the members of the audit committee is independent, as defined by applicable NASDAQ and Securities and Exchange Commission rules. The board of directors has determined that Ms. Davis and Messrs. O’Leary, Sherman and Wertheimer are “audit committee financial experts,” as that term is used in Item 407(d)(5) of Regulation S-K. | |||||
Compensation Committee
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Mr. Renwick(Chair) Mr. Lynch Mr. Simons Number of Meetings held in 4 | Duties:
The compensation committee of the board of directors is responsible for overseeing executive officer compensation. The compensation committee’s responsibilities include: approval of executive officer compensation and benefits; administration of our equity incentive plans including compliance with executive stock ownership requirements; and approval of severance or similar termination payments to executive officers. Each of the members of the compensation committee is a non-employee director and “independent” as defined by applicable NASDAQ rules. Additional information regarding the compensation committee and our policies and procedures regarding executive compensation, including, among other matters, our use of compensation consultants and their role, and management’s role, in determining compensation, is provided below under the heading “Compensation Discussion and Analysis – Determining and Structuring Compensation – Determining Compensation.” | |||||
Nominating and Corporate Governance Committee
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Ms. Robak(Chair) Mr. Flink Mr. O’Leary Number of Meetings held in 5 | Duties:
The nominating and corporate governance committee assists the board of directors to identify and evaluate potential director nominees, and recommends qualified nominees to the board of directors for consideration by the shareholders. The nominating and corporate governance committee also oversees our corporate governance policies and practices. Each of the members of the nominating and corporate governance committee is independent as defined by applicable NASDAQ rules. |
Nominations of Directors
19 | 2016 Proxy Statement |
Nominations of Directors
The nominating and corporate governance committee recommends to the full board of directors the nominees to stand for election at our annual meeting of shareholders and to fill vacancies occurring on the board. In this regard, the nominating and corporate governance committee regularly assesses the appropriate size of the board of directors and whether any vacancies on the board of directors are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the committee utilizes a variety of methods to identify and evaluate director candidates. Candidates may come to the attention of the committee through current directors, professional search firms, shareholders or other persons.
The committee evaluates prospective nominees in the context of the then current constitution of the board of directors and considers all factors it believes appropriate, which include those set forth in our governance guidelines. Our governance guidelines provide that a majority of our board of directors should have diverse backgrounds with outstanding business experience, proven ability and significant accomplishments through other enterprises to enable the board of directors to represent a broad set of capabilities and viewpoints. Other than as set forth in our governance guidelines, the committee does not have a formal policy with respect to diversity. The board of directors and the nominating and corporate governance committee believe the following minimum qualifications must be met by a director nominee to be recommended by the committee:
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In addition, the nominating and corporate governance committee seeks to have at least one director who is an “audit committee financial expert” under Item 407(d)(5) of Regulation S-K under the Securities Exchange Act of 1934 (the “Exchange Act”), and we must have at least one director (who may also be an “audit committee financial expert”) who, in accordance with the NASDAQ Marketplace Rules, has past employment experience in finance or accounting, requisite professional certification in accounting or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
In making recommendations to the board of directors, the nominating and corporate governance committee examines each director candidate on a case-by-case basis regardless of who recommended the candidate. The committee will consider shareholder-recommended director candidates in accordance with the foregoing and other criteria set forth in our governance guidelines and the Nominating and Corporate Governance Committee Charter. Recommendations for consideration by the committee must be submitted in writing to the chairman of the board and/or president and the chairman of the nominating and corporate governance committee together with appropriate biographical information concerning each proposed candidate. The committee does not evaluate shareholder-recommended director candidates differently than any other director candidate.
We recently amended our by-laws to include a provision pursuant to which a shareholder, or group of up to 20 shareholders, owning continuously for at least three years shares of our stock representing an aggregate of at least 3% of our outstanding shares may nominate and include in our proxy material director nominees constituting up to 20% of our board of directors – so called “proxy access.” Alternatively, a shareholder may
2016 Proxy Statement |
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nominate director nominees under our by-laws that the shareholder does not intend to have included in our proxy materials. In either case, such shareholders must comply with the procedures set forth in our by-laws, including that the shareholders and nominees satisfy the requirements in our by-laws and our corporate Secretary receives timely written notice, in proper form, of the intent to make a nomination at an annual meeting of shareholders. The detailed requirements for nominations are set forth in our by-laws, which were attached as an exhibit to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2016. A copy of our by-laws will be provided upon written request to our corporate Secretary. Additional requirements regarding shareholder proposals and director nominations, including the dates by which notices must be received, are described below under the heading “Other Matters – Shareholder Proposals for the 2017 Annual Meeting.”
Risk Oversight
Our management is responsible for managing risk, and our board of directors is responsible for overseeing management. To discharge this responsibility, the board seeks to be informed about the risks facing the company so that it may evaluate actual and potential risks and understand how management is addressing such risks. To this end, the board, as a whole and at the committee level, regularly receives reports from management about risks faced by the company. For example, the board of directors regularly receives reports directly from our chief executive officer about, among other matters, developments in our industry so that the board may evaluate the competitive and other risks faced by the company. In addition, our chief financial officer, at each meeting of the board, presents information regarding our financial performance and condition in an effort to understand financial risks faced by the company. Furthermore, at each meeting, the board receives a cybersecurity update from our chief executive officer, chief risk officer, chief information officer or chief legal officer, or a combination of the foregoing, in each case depending on the focus of the matters under review.
As discussed above, the positions of chief executive
officer and Chairman are held by different individuals. We believe a separate Chairman position enhances the effectiveness of our board’s risk oversight
function by providing leadership to the board that is independent from those tasked with managing the risk profile of our company.
The committees of the board also play a critical role in the board’s ability to collect and assess information. The audit committee’s charter charges it with a variety of risk-related oversight duties, including:
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At each of its quarterly meetings, the audit committee receives reports from our chief audit executive regarding significant audit findings during the quarter and management’s responses thereto. In addition, the committee regularly receives reports from our chief compliance officer and chief risk officer. Our chief risk officer leads our enterprise risk and resilience group which operates Fiserv’s enterprise risk management program. The program encompasses our business continuity planning, incident management, risk assessment, operational regulatory compliance, insurance and information security across all Fiserv businesses and support functions.
Our compensation committee regularly receives reports about our compensation programs and policies to enable it to oversee management’s administration of compensation-related risks.
The nominating and corporate governance committee also works closely with our chief legal officer and the members of the board to seek to manage risks associated with director and executive officer succession, the independence of the directors, conflicts of interest and other corporate governance related matters.
21 | 2016 Proxy Statement |
Communications with the Board of Directors
Shareholders may communicate with our board of directors or individual directors by submitting communications in writing to us at 255 Fiserv Drive, Brookfield, Wisconsin 53045, Attention: Lynn S. McCreary, Chief Legal Officer and Secretary. Communications will be delivered directly to our board of directors or individual directors, as applicable.
Review, Approval or Ratification of Transactions with Related Persons
Our board of directors has adopted a written policy requiring that all related person transactions be reviewed and approved by our audit committee or, if the audit committee is not able to review the transaction for any reason, a majority of our disinterested directors. A related person transaction under our policy is one that would require disclosure under Item 404(a) of Regulation S-K under the Exchange Act. Our board ofCompensation matters regarding our executive officers or directors has adopted a written policy that requires all related person transactions be are
reviewed and approved by: the audit committee of the board of directors; or, if the audit committee is not able to review the transaction for any reason (e.g., if a majority of its members are interested in a transaction), a majority of the disinterested members of the board; or, if the transaction involves theby our compensation of an executive
officer or director, the compensation committee of the board of directors.committee. The policy also provides that, at least annually, each ongoing, previously approved related person transaction is to be reviewed by the body that originally approved the transaction: to ensure that it is being pursued in accordance with all of the understandings and commitments made at the time that it was previously approved; to ensure that the commitments being made with respect to such transaction are appropriately reviewed and documented; and to affirm the continuing desirability of and need for the related person arrangement.
The audit committee (or, as applicable, the board of directors or the compensation committee) will consider allAll relevant factors with respect to a proposed related person transaction and will only approvebe considered, and such a transaction will only be approved if the audit committee determines that the transactionit is in our and our shareholders’ best interests or, if an alternate standard of review is imposed by applicable laws, statutes, governing documents or listing standards, if such alternate standard of review is satisfied.
22 | 2016 Proxy Statement |
Objectives for Director Compensation
Quality non-employee directors are critical to our success. We believe that the two primary duties of non-employee directors are to effectively represent the long-term interests of our shareholders and to provide guidance to management. As such, our compensation program for non-employee directors is designed to meet several key objectives:
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Elements of Director Compensation
The compensation committee of the board of directors reviews non-employee director compensation every other year and considers our financial performance, general market conditions and non-employee director compensation at the peer group companies set forth below under “Compensation Discussion and Analysis – Structuring Compensation – Peer Group.” Based on such review, in 2015, we increased the cash retainer amounts and value of equity awards paid to our non-employee directors to recognize the time, effort and responsibilities expected of our directors and better align their compensation with directors at peer companies.
We believe that the following components of our director compensation program support the objectives above:
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23 | 2016 Proxy Statement |
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Non-Employee Director Deferred
Compensation Plan
Under our non-employee director deferred compensation plan, each non-employee director may defer up to 100% of his or her cash fees. Based on his or her deferral election, the director is credited with a number of share units at the time he or she would have otherwise received the portion of the fees being deferred. Share units are equivalent to shares of our common stock except that share units have no voting rights.
Upon cessation of service on the board, the director receives a share of our common stock for each share unit. Shares are received in a lump sum distribution, and any fractional share units are paid in cash. Share units credited to a director’s account are considered awards granted under the Amended and Restated Fiserv, Inc. 2007 Omnibus Incentive Plan (the “Incentive Plan”) and count against that plan’s share reserve.
Stock Ownership Requirements
Under our stock ownership policy, non-employee directors are required to accumulate and hold our common stock having a market value equal to at least six times the amount of the annual board retainer.
Non-employee directors have five years after they become subject to the policy to meet the ownership requirements provided that interim ownership milestones are achieved during the five yearfive-year period. All non-employee directors are in compliance with our stock ownership policy.
Director Compensation Program
As discussed further above under “ – Elements of Director Compensation,” in 2015, we increased the cash retainer amounts and value of equity awards paid to our non-employee directors. Our 2015 non-
Our non-employeeemployee director compensation program is summarized below:below on an annualized basis:
Element of Compensation
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Board Retainer | $ | 60,000 | $ | 78,000 | ||||||||
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Chairman’s | 100,000 | 145,000 | ||||||||||
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Audit | 12,000 | 15,000 | ||||||||||
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Compensation | 10,000 | 15,000 | ||||||||||
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Nominating and Corporate Governance | 10,000 | 15,000 | ||||||||||
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Audit | 7,500 | 10,000 | ||||||||||
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Compensation | 7,500 | 10,000 | ||||||||||
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Nominating and Corporate Governance | 7,500 | 10,000 | ||||||||||
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Stock Options | 86,000 | |||||||||||
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Restricted Stock Units | 86,000 | |||||||||||
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Board Retainer
Chairman’s Retainer(1)
Committee Retainer
Committee Chair Retainer
Equity Awards(2)
(1) The
(1) | Through June 30, the Chairman’s retainer included, and was not in addition to, the standard board retainer. Beginning July 1, the Chairman’s retainer | ||||||||
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2014 Director Compensation
Name
| Fees Earned or
| Stock Awards($)(2)
| Option Awards($)(2)
| Total ($)
| ||||||||||||||||||||
Alison Davis(3) | 18,000 | 35,885 | 35,890 | 89,775 | ||||||||||||||||||||
Christopher M. Flink(4) | 79,000 | 70,011 | 70,016 | 219,027 | ||||||||||||||||||||
Daniel P. Kearney(5) | 95,500 | 70,011 | 70,016 | 235,527 | ||||||||||||||||||||
Dennis F. Lynch(6) | 70,000 | 70,011 | 70,016 | 210,027 | ||||||||||||||||||||
Denis J. O’Leary(7) | 82,000 | 70,011 | 70,016 | 222,027 | ||||||||||||||||||||
Glenn M. Renwick(8) | 77,500 | 70,011 | 70,016 | 217,527 | ||||||||||||||||||||
Kim M. Robak(9) | 77,500 | 70,011 | 70,016 | 217,527 | ||||||||||||||||||||
Doyle R. Simons(10) | 70,000 | 70,011 | 70,016 | 210,027 | ||||||||||||||||||||
Thomas C. Wertheimer(11) | 79,500 | 70,011 | 70,016 | 219,527 | ||||||||||||||||||||
Donald F. Dillon(12) | 50,000 | — | — | 50,000 |
performance share units have a grant date fair value of approximately $12 million and vest at the Ernst, We entered into an employment agreement with each of Messrs. Ernst, retirement plans and other standard benefits as are generally made available to our executive officers. | Key Executive Employment and Severance Agreements We have entered into |
40 | 2016 Proxy Statement |
The compensation committee has reviewed and discussed the “Compensation“Compensation Discussion and Analysis”Analysis” contained in this proxy statement with management. Based on our review and the discussions with management, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2014.
2015.
Glenn M. Renwick, Chairman
Dennis F. Lynch
Doyle R. Simons
Compensation Committee Interlocks and Insider Participation
There areDuring the last fiscal year, there were no compensation committee interlocks between us and other entities involving our executive officers and directors who serve as executive officers or directors of such other entities. During the last completed fiscal year, no member of the compensation committee was a current or former officer or employee.
41 | 2016 Proxy Statement |
The following table sets forth in summary form the compensation of our chief executive officer, our chief financial officer and our next three highest paid executive officers (collectively, our “named executive officers”) for the year ended December 31, 2014.
Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | ||||||||||||||||||||||
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Jeffery W.Yabuki | 2014 | $840,000 | — | $1,078,613 | $4,722,371 | $1,622,880 | $12,053 | $8,275,917 | ||||||||||||||||||||||
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President and Chief | 2013 | 840,000 | — | 916,074 | 4,400,022 | 1,359,036 | 11,965 | 7,527,097 | ||||||||||||||||||||||
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Executive Officer | 2012 | 840,000 | — | 2,458,003 | 2,600,546 | 1,154,160 | 12,155 | 7,064,864 | ||||||||||||||||||||||
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Thomas J. Hirsch | 2014 | 500,000 | — | 650,028 | 650,004 | 644,000 | 12,427 | 2,456,459 | ||||||||||||||||||||||
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Chief Financial Officer, | 2013 | 475,000 | — | 650,039 | 650,008 | 461,102 | 12,109 | 2,248,258 | ||||||||||||||||||||||
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Treasurer and Assistant | 2012 | 475,000 | — | 600,027 | 600,124 | 391,590 | 11,867 | 2,078,608 | ||||||||||||||||||||||
Secretary | ||||||||||||||||||||||||||||||
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Mark A. Ernst | 2014 | 575,000 | — | — | 1,400,005 | 886,291 | 11,923 | 2,873,219 | ||||||||||||||||||||||
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Chief Operating Officer | 2013 | 575,000 | — | 350,033 | 1,050,003 | 715,515 | 11,985 | 2,702,536 | ||||||||||||||||||||||
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2012 | 575,000 | — | 325,045 | 975,202 | 589,807 | 14,275 | 2,479,329 | |||||||||||||||||||||||
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Rahul Gupta | 2014 | 470,000 | — | 350,024 | 350,015 | 554,055 | 12,917 | 1,737,011 | ||||||||||||||||||||||
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Group President, | 2013 | 420,000 | — | 1,150,075 | 350,018 | 441,902 | 12,644 | 2,374,639 | ||||||||||||||||||||||
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Billing and Payments | 2012 | 420,000 | — | 275,048 | 275,064 | 368,076 | 12,834 | 1,351,022 | ||||||||||||||||||||||
Group | ||||||||||||||||||||||||||||||
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Byron C. Vielehr(4) | 2014 | 470,000 | $200,000 | — | — | 645,900 | 313,257 | 1,629,157 | ||||||||||||||||||||||
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Group President, | 2013 | 39,167 | — | 2,000,290 | 2,000,186 | — | 13,245 | 4,052,888 | ||||||||||||||||||||||
Depository Institution | ||||||||||||||||||||||||||||||
Services Group | ||||||||||||||||||||||||||||||
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The material terms of the company’s agreements with Messrs. Yabuki, Ernst, Gupta and Vielehr are set forth above under the heading “Compensation Discussion and Analysis – Employment and Other Agreements with Executive Officers.” Mr. Hirsch does not have an employment agreement, other than the KEESA, which, together with the estimated possible benefits payable thereunder, is discussed below.
Grants of Plan-Based Awards in 2014
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
| All Other Stock Awards; Number of Shares of | All Other Option Awards; Number of Securities | Exercise or Base Price of Option | Grant Date Fair Value of Stock and | ||||||||||||||||||||||||||
Name
| Grant Date
| Threshold ($)
| Target ($)
| Maximum ($)
| Stock or Units (#)(1)
| Underlying Options (#)(1)
| Awards ($/Sh)
| Option Awards($)(2)
| ||||||||||||||||||||||
J. Yabuki | 630,000 | 1,260,000 | 2,520,000 | |||||||||||||||||||||||||||
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02/19/2014 | 18,933 | 1,078,613 | ||||||||||||||||||||||||||||
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02/19/2014 | 251,570 | 56.97 | 4,722,371 | |||||||||||||||||||||||||||
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T. Hirsch | 250,000 | 500,000 | 1,000,000 | |||||||||||||||||||||||||||
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02/19/2014 | 11,410 | 650,028 | ||||||||||||||||||||||||||||
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02/19/2014 | 34,627 | 56.97 | 650,004 | |||||||||||||||||||||||||||
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M. Ernst | 362,250 | 718,750 | 1,437,500 | |||||||||||||||||||||||||||
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02/19/2014 | 74,581 | 56.97 | 1,400,005 | |||||||||||||||||||||||||||
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R. Gupta | 258,500 | 517,000 | 1,034,000 | |||||||||||||||||||||||||||
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02/19/2014 | 6,144 | 350,024 | ||||||||||||||||||||||||||||
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02/19/2014 | 18,646 | 56.97 | 350,015 | |||||||||||||||||||||||||||
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B. Vielehr(3) | 258,500 | 517,000 | 1,034,000 | |||||||||||||||||||||||||||
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Name and Principal Position
| Year
| Salary
| Bonus
| Stock Awards(1)
| Option Awards(1)(2)
| Non-Equity Incentive Plan Compensation(3)
| All Other Compensation(4)
| Total
| ||||||||||||||||||||||||||||||||||||||||
Jeffery W. Yabuki | 2015 | $ | 840,000 | — | $ | 1,288,041 | $ | 6,535,501 | $ | 1,328,040 | $ | 9,737 | $ | 10,001,319 | ||||||||||||||||||||||||||||||||||
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President and Chief | 2014 | 840,000 | — | 1,078,613 | 4,722,371 | 1,622,880 | 12,053 | 8,275,917 | ||||||||||||||||||||||||||||||||||||||||
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Executive Officer | 2013 | 840,000 | — | 916,074 | 4,400,022 | 1,359,036 | 11,965 | 7,527,097 | ||||||||||||||||||||||||||||||||||||||||
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Thomas J. Hirsch(5) | 2015 | 500,000 | — | 850,025 | 1,001,972 | 579,700 | 11,348 | 2,943,045 | ||||||||||||||||||||||||||||||||||||||||
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Former Chief Financial | 2014 | 500,000 | — | 650,028 | 650,004 | 644,000 | 12,427 | 2,456,459 | ||||||||||||||||||||||||||||||||||||||||
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Officer, Treasurer and | 2013 | 475,000 | — | 650,039 | 650,008 | 461,102 | 12,109 | 2,248,258 | ||||||||||||||||||||||||||||||||||||||||
Assistant Secretary | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mark A. Ernst | 2015 | 600,000 | — | — | 1,972,804 | 824,823 | 11,267 | 3,408,894 | ||||||||||||||||||||||||||||||||||||||||
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Chief Operating Officer | 2014 | 575,000 | — | — | 1,400,005 | 886,291 | 11,923 | 2,873,219 | ||||||||||||||||||||||||||||||||||||||||
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2013 | 575,000 | — | 350,033 | 1,050,003 | 715,515 | 11,985 | 2,702,536 | |||||||||||||||||||||||||||||||||||||||||
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Kevin P. Gregoire | 2015 | 450,000 | — | 325,054 | 328,121 | 510,300 | 11,053 | 1,624,528 | ||||||||||||||||||||||||||||||||||||||||
Group President, | ||||||||||||||||||||||||||||||||||||||||||||||||
Financial Institutions Group | ||||||||||||||||||||||||||||||||||||||||||||||||
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Byron C. Vielehr(6) | 2015 | 470,000 | — | — | 1,309,042 | 515,924 | 24,914 | 2,319,880 | ||||||||||||||||||||||||||||||||||||||||
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Group President, | 2014 | 470,000 | $ | 200,000 | — | — | 645,900 | 313,257 | 1,629,157 | |||||||||||||||||||||||||||||||||||||||
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Depository Institution | 2013 | 39,167 | — | 2,000,290 | 2,000,186 | — | 13,245 | 4,052,888 | ||||||||||||||||||||||||||||||||||||||||
Services Group | ||||||||||||||||||||||||||||||||||||||||||||||||
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Outstanding Equity Awards at December 31, 2014
Option Awards(1)
| Stock Awards(1)
| |||||||||||||||||
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Name
| Number of
| Number of
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| Option
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Market
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J. Yabuki | 101,041(3) | 7,170,880 | ||||||||||||||||
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— | 251,570(4) | 56.97 | 02/19/2024 | |||||||||||||||
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83,704 | 233,484(5) | 40.35 | 02/20/2023 | |||||||||||||||
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160,900 | 80,450(6) | 32.64 | 02/22/2022 | |||||||||||||||
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329,190 | — | 30.86 | 02/23/2021 | |||||||||||||||
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388,826 | — | 23.85 | 02/24/2020 | |||||||||||||||
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543,984 | — | 16.37 | 02/26/2019 | |||||||||||||||
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51,652 | — | 27.11 | 02/27/2018 | |||||||||||||||
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190,548 | — | 27.11 | 02/27/2018 | |||||||||||||||
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248,784 | — | 27.35 | 02/23/2017 | |||||||||||||||
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450,000 | — | 23.05 | 12/01/2015 | |||||||||||||||
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290,000 | — | 23.05 | 12/01/2015 | |||||||||||||||
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T. Hirsch | 42,820(7) | 3,038,935 | ||||||||||||||||
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— | 34,627(4) | 56.97 | 02/19/2024 | |||||||||||||||
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17,246 | 34,492(5) | 40.35 | 02/20/2023 | |||||||||||||||
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37,130 | 18,566(6) | 32.64 | 02/22/2022 | |||||||||||||||
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74,068 | — | 30.86 | 02/23/2021 | |||||||||||||||
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83,320 | — | 23.85 | 02/24/2020 | |||||||||||||||
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88,248 | — | 16.37 | 02/26/2019 | |||||||||||||||
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38,740 | — | 27.11 | 02/27/2018 | |||||||||||||||
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48,424 | — | 27.11 | 02/27/2018 | |||||||||||||||
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37,500 | — | 27.35 | 02/23/2017 | |||||||||||||||
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M. Ernst | 15,316(8) | 1,086,977 | ||||||||||||||||
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— | 74,581(4) | 56.97 | 02/19/2024 | |||||||||||||||
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27,858 | 55,718(5) | 40.35 | 02/20/2023 | |||||||||||||||
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60,336 | 30,170(6) | 32.64 | 02/22/2022 | |||||||||||||||
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64,860 | 32,430(9) | 29.75 | 01/03/2021 | |||||||||||||||
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R. Gupta | 47,156(10) | 3,346,661 | ||||||||||||||||
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— | 18,646(4) | 56.97 | 02/19/2024 | |||||||||||||||
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9,286 | 18,574(5) | 40.35 | 02/20/2023 | |||||||||||||||
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17,018 | 8,510(6) | 32.64 | 02/22/2022 | |||||||||||||||
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15,364 | — | 30.86 | 02/23/2021 | |||||||||||||||
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14,444 | — | 23.85 | 02/24/2020 | |||||||||||||||
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33,848 | — | 16.37 | 02/26/2019 | |||||||||||||||
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32,282 | — | 27.11 | 02/27/2018 | |||||||||||||||
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27,672 | — | 27.11 | 02/27/2018 | |||||||||||||||
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34,850 | — | 26.53 | 03/30/2017 | |||||||||||||||
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30,000 | — | 26.25 | 12/18/2016 | |||||||||||||||
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B. Vielehr | 36,402(11) | 2,583,450 | ||||||||||||||||
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— | 116,892(12) | 54.95 | 12/01/2023 | |||||||||||||||
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Option Exercises and Stock Vested During 2014
During our fiscal year ended December 31, 2014, the named executive officers exercised options to purchase shares of our common stock and/or had restricted stock units vest as set forth below.
Option Awards
| Stock Awards
| |||||||||||||||
Number of Shares |
Value Realized |
Number of Shares |
Value Realized | |||||||||||||
Name
| Acquired on Exercise (#)
| on Exercise ($)(1)
| Acquired on Vesting (#)
| on Vesting ($)(2)
| ||||||||||||
J. Yabuki | — | — | 43,996 | 2,525,894 | ||||||||||||
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T. Hirsch | 27,500 | 1,092,175 | 12,662(3) | 727,083 | ||||||||||||
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M. Ernst | — | — | 3,320 | 190,468 | ||||||||||||
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R. Gupta | — | — | 11,508 | 700,625 | ||||||||||||
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B. Vielehr | -— | — | — | — | ||||||||||||
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(1) Reflects the grant date fair value of the awards granted in the respective years under the Incentive Plan. Information about the assumptions that we used to determine the fair value of equity awards is set forth in our Annual Report on Form 10-K in Note 7 to our Consolidated Financial Statements for the year ended December 31, 2015. (2) The amounts shown in this column include the following incremental fair values associated with the execution by our named executive officers in 2015 of amendments to their outstanding stock option award agreements to enable them to retain their equity awards following a qualified retirement, subject to compliance with ongoing obligations: Mr. Yabuki – $1,285,856; Mr. Hirsch – $151,894; Mr. Ernst – $172,637; Mr. Gregoire – $3,094; and Mr. Vielehr – $8,910. We believe this modification further aligns our named executive officers’ long-term interests with those of our shareholders as they approach possible retirement. | (3) These cash incentive payments were made pursuant to the Incentive Plan. These awards were earned in the year listed and paid in the following year. (4) The amounts shown in this column include company matching under our 401(k) savings plan; company-paid premiums for insurance; and if applicable, company contributions to a health savings account. For 2015, the amount shown for Mr. Vielehr also includes participation in our executive physical program and reimbursement for relocation-related expenses pursuant to the terms of his employment agreement. (5) Mr. Hirsch served as our Chief Financial Officer, Treasurer and Assistant Secretary until March 14, 2016. |
42 | 2016 Proxy Statement |
(6) | Mr. Vielehr joined Fiserv on December 1, 2013. On March 15, 2014, Mr. Vielehr received a $200,000 cash payment pursuant to the terms of his employment agreement to compensate him for the benefits which he forfeited upon leaving his prior employer. For 2013, Mr. Vielehr’s base salary was paid at an annualized rate of $470,000. The amount shown reflects the actual amount of base salary paid to him during 2013. We granted restricted stock units and options to Mr. Vielehr on December 1, 2013 pursuant to his employment agreement. The grant was intended to immediately and strongly align Mr. Vielehr’s interests with those of our shareholders and, in part, recognize that he was forfeiting significant benefits upon leaving his prior employer. Mr. Vielehr did not receive any equity awards during 2014. |
The material terms of the company’s agreements with Messrs. Yabuki, Ernst, Gregoire and Vielehr are set forth above under the heading “Compensation Discussion and Analysis – Employment and Other Agreements with Executive Officers.” Mr. Hirsch did not have an employment agreement with the company.
43 | 2016 Proxy Statement |
Grants of Plan-Based Awards in 2015
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
| All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option | ||||||||||||||||||||||||||||||||||||||||||
Name
| Grant Date
| Threshold ($)
| Target ($)
| Maximum ($)
| Units (#)(1)
| Options (#)(1)
| ($/Sh)
| Awards ($)(2)
| ||||||||||||||||||||||||||||||||||||||
J. Yabuki | 630,000 | 1,260,000 | 2,520,000 | |||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 16,294 | 1,288,041 | ||||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 206,496 | 79.05 | 5,249,645 | |||||||||||||||||||||||||||||||||||||||||||
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1,285,856(3) | ||||||||||||||||||||||||||||||||||||||||||||||
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T. Hirsch | 275,000 | 550,000 | 1,100,000 | |||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 10,753 | 850,025 | ||||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 33,438 | 79.05 | 850,078 | |||||||||||||||||||||||||||||||||||||||||||
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151,894(3) | ||||||||||||||||||||||||||||||||||||||||||||||
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M. Ernst | 408,000 | 810,000 | 1,620,000 | |||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 70,810 | 79.05 | 1,800,167 | |||||||||||||||||||||||||||||||||||||||||||
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172,637(3) | ||||||||||||||||||||||||||||||||||||||||||||||
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K. Gregoire | 225,000 | 450,000 | 900,000 | |||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 4,112 | 325,054 | ||||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 12,785 | 79.05 | 325,027 | |||||||||||||||||||||||||||||||||||||||||||
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3,094(3) | ||||||||||||||||||||||||||||||||||||||||||||||
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B. Vielehr | 258,500 | 517,000 | 1,034,000 | |||||||||||||||||||||||||||||||||||||||||||
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02/18/2015 | 51,141 | 79.05 | 1,300,132 | |||||||||||||||||||||||||||||||||||||||||||
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8,910(3) | ||||||||||||||||||||||||||||||||||||||||||||||
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(1) We granted all of the equity awards reported above pursuant to the Incentive Plan. One-third of the restricted stock units vest on each of the second, third and fourth anniversaries of the grant date, and one-third of the stock options vest on each anniversary of the grant date. The options have an exercise price equal to the closing price of our common stock on the grant date and expire on the 10 year anniversary of the grant date. As discussed under “Compensation Discussion and Analysis – 2015 Named Executive Officer Compensation – Equity Incentive Awards,” the mix of stock options and restricted stock units granted is determined by the compensation committee based on the expressed preference of the executive officer which is considered in the context of the committee’s overall assessment of the executive officer’s compensation. | (2) Unless otherwise noted, the amounts in the table represent the grant date fair value of the awards. Information about the assumptions that we used to determine the grant date fair value of the awards is set forth in our Annual Report on Form 10-K in Note 7 to our Consolidated Financial Statements for the year ended December 31, 2015. (3) This amount represents the incremental fair value associated with the modification of the retirement vesting provisions of outstanding stock options as described in footnote 2 to the Summary Compensation Table. |
44 | 2016 Proxy Statement |
Outstanding Equity Awards at December 31, 2015
Option Awards(1)
| Stock Awards(1)
| |||||||||||||||||||||||||||||||||
Name
| Number of Securities Underlying Unexercised Options Exercisable (#)
| Number of Securities Underlying Unexercised Options Unexercisable (#)
| Option Exercise Price ($)
| Option Expiration Date
| Number of Shares or Units of Stock that Have Not Vested (#)
| Market Value of Shares or Units of Stock that Have Not Vested ($)(2)
| ||||||||||||||||||||||||||||
J. Yabuki | 75,471(3) | 6,902,578 | ||||||||||||||||||||||||||||||||
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— | 206,496(4) | 79.05 | 02/18/2025 | |||||||||||||||||||||||||||||||
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83,856 | 167,714(5) | 56.97 | 02/19/2024 | |||||||||||||||||||||||||||||||
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200,446 | 116,742(6) | 40.35 | 02/20/2023 | |||||||||||||||||||||||||||||||
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241,350 | — | 32.64 | 02/22/2022 | |||||||||||||||||||||||||||||||
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329,190 | — | 30.86 | 02/23/2021 | |||||||||||||||||||||||||||||||
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388,826 | — | 23.85 | 02/24/2020 | |||||||||||||||||||||||||||||||
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543,984 | — | 16.37 | 02/26/2019 | |||||||||||||||||||||||||||||||
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51,652 | — | 27.11 | 02/27/2018 | |||||||||||||||||||||||||||||||
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190,548 | — | 27.11 | 02/27/2018 | |||||||||||||||||||||||||||||||
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248,784 | — | 27.35 | 02/23/2017 | |||||||||||||||||||||||||||||||
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T. Hirsch | 39,035(7) | 3,570,141 | ||||||||||||||||||||||||||||||||
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— | 33,438(4) | 79.05 | 02/18/2025 | |||||||||||||||||||||||||||||||
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11,542 | 23,085(5) | 56.97 | 02/19/2024 | |||||||||||||||||||||||||||||||
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34,492 | 17,246(6) | 40.35 | 02/20/2023 | |||||||||||||||||||||||||||||||
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55,696 | — | 32.64 | 02/22/2022 | |||||||||||||||||||||||||||||||
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74,068 | — | 30.86 | 02/23/2021 | |||||||||||||||||||||||||||||||
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M. Ernst | 9,104(8) | 832,652 | ||||||||||||||||||||||||||||||||
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— | 70,810(4) | 79.05 | 02/18/2025 | |||||||||||||||||||||||||||||||
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24,860 | 49,721(5) | 56.97 | 02/19/2024 | |||||||||||||||||||||||||||||||
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55,716 | 27,860(6) | 40.35 | 02/20/2023 | |||||||||||||||||||||||||||||||
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90,506 | — | 32.64 | 02/22/2022 | |||||||||||||||||||||||||||||||
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97,290 | — | 29.75 | 01/03/2021 | |||||||||||||||||||||||||||||||
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K. Gregoire | 27,241(9) | 2,491,462 | ||||||||||||||||||||||||||||||||
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— | 12,785(4) | 79.05 | 02/18/2025 | |||||||||||||||||||||||||||||||
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2,663 | 5,328(5) | 56.97 | 02/19/2024 | |||||||||||||||||||||||||||||||
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6,632 | 3,318(6) | 40.35 | 02/20/2023 | |||||||||||||||||||||||||||||||
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11,604 | — | 32.64 | 02/22/2022 | |||||||||||||||||||||||||||||||
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6,584 | — | 30.86 | 02/23/2021 | |||||||||||||||||||||||||||||||
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2,408 | — | 23.85 | 02/24/2020 | �� | ||||||||||||||||||||||||||||||
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5,202 | — | 27.11 | 02/27/2018 | |||||||||||||||||||||||||||||||
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B. Vielehr | 36,402(10) | 3,329,327 | ||||||||||||||||||||||||||||||||
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— | 51,141(4) | 79.05 | 02/18/2025 | |||||||||||||||||||||||||||||||
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38,964 | 77,928(11) | 54.95 | 12/01/2023 | |||||||||||||||||||||||||||||||
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45 | 2016 Proxy Statement |
(1) | In December 2013, we completed a two-for-one split of our common stock. Accordingly, all amounts are presented on a split-adjusted basis. |
(2) | The amounts in this column were calculated by multiplying the closing market price of our common stock on December 31, 2015 (the last day that NASDAQ was open for trading during our most recently completed fiscal year), $91.46, by the number of unvested shares or units. |
(3) | Includes 6,311 restricted stock units that vested on February 19, 2016, 7,568 restricted stock units that vested on February 20, 2016, and 25,106 restricted stock units that vested on February 22, 2016. The remaining restricted stock units will vest as follows: 5,431 on each of February 18, 2017 and 2018; 6,311 on each of February 19, 2017 and 2018; 7,570 on February 20, 2017; and 5,432 on February 18, 2019. |
(4) | One-third of the options vest on each anniversary of the grant date, February 18, 2015. |
(5) | One-third of the options vest on each anniversary of the grant date, February 19, 2014. |
(6) | One-third of the options vest on each anniversary of the grant date, February 20, 2013. |
(7) | Includes 3,803 restricted stock units that vested on February 19, 2016, 5,370 restricted stock units that vested on February 20, 2016, and 6,130 restricted stock units that vested on February 22, 2016. The remaining restricted stock units will vest as follows: 3,584 on each of February 18, 2017 and 2018; 3,803 on February 19, 2017; 5,372 on February 20, 2017; 3,804 on February 19, 2018; and 3,585 on February 18, 2019. |
(8) | Includes 2,892 restricted stock units that vested on February 20, 2016 and 3,320 restricted stock units that vested on February 22, 2016. The remaining 2,892 restricted stock units will vest on February 20, 2017. |
(9) | Includes 877 restricted stock units that vested on February 19, 2016, 1,034 restricted stock units that vested on February 20, 2016, 7,436 restricted stock units that vested on February 20, 2016, 1,278 restricted stock units that vested on February 22, 2016 and 1,138 restricted stock units that vested on March 28, 2016. The remaining restricted stock units will vest as follows: 1,370 on February 18, 2017; 878 on each of February 19, 2017 and 2018; 1,034 on February 20, 2017; 7,436 on February 20, 2017; 1,140 on March 28, 2017; and 1,371 on each of February 18, 2018 and 2019. |
(10) | One-half of these restricted stock units will vest on each of December 1, 2016 and 2017. |
(11) | One-third of the options vest on the second, third and fourth anniversaries of the grant date, December 1, 2013. |
46 | 2016 Proxy Statement |
Option Exercises and Stock Vested During 2015
During our fiscal year ended December 31, 2015, the named executive officers exercised options to purchase shares of our common stock and/or had restricted stock units vest as set forth below.
Option Awards
| Stock Awards
| |||||||||||||||||||||||
Name
| Number of Shares Acquired on Exercise (#)
| Value Realized on Exercise ($)(1)
| Number of Shares Acquired on Vesting (#)
| Value Realized on Vesting ($)(2)
| ||||||||||||||||||||
J. Yabuki | 740,000 | 40,011,800 | 41,864 | 3,307,144 | ||||||||||||||||||||
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T. Hirsch | 296,232 | 21,630,560 | 14,538 | 1,148,499 | ||||||||||||||||||||
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M. Ernst | — | — | 6,212 | 491,059 | ||||||||||||||||||||
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K. Gregoire | — | — | 4,396 | 369,553 | ||||||||||||||||||||
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B. Vielehr | — | — | — | — | ||||||||||||||||||||
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(1) The“Value Realized on Exercise” was calculated in accordance with SEC rules by multiplying the gross number of shares acquired on exercise times the difference between the closing price of our common stock on the exercise date and the exercise price of the option and, along with the “Number of Shares Acquired on Exercise,” does not take into account shares withheld by the company to satisfy the exercise price and tax liability incident to the exercise of stock options. | (2) The “Value Realized on Vesting” was calculated in accordance with SEC rules by multiplying the gross number of shares acquired on vesting times the closing price of our common stock on the vesting date and, along with the “Number of Shares Acquired on Vesting,” does not take into account shares withheld by the company to satisfy the tax liability incident to the vesting of restricted stock units. |
47 | 2016 Proxy Statement |
Potential Payments Upon Termination or Change in Control
In the discussion below, we describe potential payments to the named executive officers upon termination of employment or a change in control. The following descriptions are qualified in their entirety by reference to the relevant agreements. The complete definitions of cause, good reason, disability and change in control are set forth in the named executive officers’ employment agreements, KEESAs and relevant stock option and restricted stock unit award agreements, all of which we have filed with the Securities and Exchange Commission.
Terminology
“Cause” under the agreements generally refers to specified types of serious misconduct that may harm our company. In some cases, executive officers have “good reason” to terminate their employment if we change in a negative manner their working conditions or position within our organization or if we breach the terms of the agreements. “Disability” generally means physical or mental illness that causes the executive officer to become disabled to a degree as to be unable to perform substantially all of his duties for a continuous period of six months. The definitions may vary from agreement to agreement. Accordingly, the preceding summary description of the definitions is qualified by reference to the agreements themselves.
Employment Agreements
General
Our employment agreements with Messrs. Yabuki, Ernst, GuptaGregoire and Vielehr provide for potential payments on certain terminations of employment. As described above under “Compensation Discussion and Analysis – Deductibility of Compensation,” these agreements are designed to comply with Section 162(m) of the Internal Revenue Code. In addition, these agreements and our KEESAs all provide that post-termination payments and benefits are subject to a six-month delay in the event that the executive officer is considered a “specified employee” within the meaning of Section 409A of the Internal Revenue Code at the
time of a qualifying termination. The employment agreements also contain provisions that require each of the named executive officers
to maintain the confidentiality of our confidential information and proprietary data during and following his employment. In addition, each of Messrs. Yabuki, Ernst, GuptaGregoire and Vielehr agrees that during his employment and for 12 months after termination of employment, he will not compete with us or solicit our clients or our employees. Under the employment agreements, we have the ability to recover compensation previously paid to the named executive officer if he breaches these obligations.
Terms of Employment Agreement with Mr. Yabuki
We have the right to terminate Mr. Yabuki’s employment at any time. Under his employment agreement, as amended in 2016, if we terminate Mr. Yabuki’s employment or fail to renew the term of his employment other than for death, disability or cause, or Mr. Yabuki terminates his employment for good reason, he is entitled to receive: (i) a lump sum payment equal to fourfive and one-half times his current annual base salary, (ii) full vesting of all equity awards, as well as the right to exercise stock options for not less than one year, following the date of termination of his employment, but in no event longer than ten years from the date of grant, or if earlier, the latest date the option could have been exercised had Mr. Yabuki remained employed, (iii) a lump sum payment equal to any cash incentive compensation that has been allocated or awarded, but not paid, to him for any period ending prior to his termination and (iv) reimbursement for COBRA or other health insurance premiums for up to two years following the date of his termination, or until Mr. Yabuki obtains health care coverage through subsequent employment, whichever is earlier.
If Mr. Yabuki’s employment is terminated for death or disability, he or his estate, as applicable, is entitled to receive full vesting of all equity and long-term awards and a lump sum payment equal to any cash incentive compensation that has been allocated or awarded, but not paid, to him for any period ending prior to his termination.
Under hisIn 2016, we amended Mr. Yabuki’s employment agreement and KEESA Mr. Yabuki is entitled to receive aneliminate the excise tax gross-up payment so that the net amount retained by him, after deduction of all applicable taxes and any interest, penalties or additions with respect thereto, equals the total present value of the payments to which he is entitled underprovisions in his employment agreement or KEESAagreements.
48 | 2016 Proxy Statement |
|
If the benefits to Mr. Yabuki under his employment agreement are duplicative of benefits provided under his KEESA, his employment agreement provides that he will receive the most favorable benefits (determined on a benefit-by-benefit basis) under his KEESA or his employment agreement.
Terms of Employment Agreements with Messrs. Ernst, GuptaGregoire and Vielehr
We have the right to terminate their employment at any time. If we terminate Mr. Ernst’s employment other than for death, disability or cause, or if he terminates his employment for good reason, he is entitled to receive a lump sum payment equal to 1.8 times his then-current base salary. If we terminate Mr. Gupta’sGregoire’s employment other than for death, disability or cause, or if he terminates his employment because we breach his employment agreement,for good reason, he is entitled to receive: (i)receive a lump sum payment equal to 12 months of salary, (ii) the benefit of accelerated vesting for all unvested equity awards as if he had remained employed for an additional 12-month period, and (iii) reimbursement of COBRA premiums for up to 12 months following the date oftwo times his termination.then-current base salary. With respect to Mr. Vielehr, if we terminate his employment other than for death, disability or cause, he is entitled to receive: (i) a lump sum payment equal to 12 months of salary and (ii) accelerated vesting of certain equity awards granted to him pursuant to his employment agreement determined by dividing each of the total number of stock options and restricted stock units granted upon employment by two and then subtracting the number of stock options or restricted stock units, as applicable, that have vested prior to termination.
Key Executive Employment and Severance Agreements
General
Our Key Executive Employment and Severance Agreements (“KEESAs”) set forth the amounts and types of benefits that we believe will enable us to keep our executive officers’ interests aligned with those of our shareholders in the event of a
change in control by allowing them to concentrate on taking actions that are in the best interests of our shareholders without consideration of whether their actions may ultimately have an effect on the security of their employment. We also intend for the benefits to recognize past contributions by the executive officers if they are asked to leave, and to help to prevent the departure of key managers in connection with an anticipated or actual change in
control. The KEESAs fulfill these purposes by generally providing for severance in the event of a qualifying termination following a change in control and vesting of outstanding equity awards upon a change in control.
We believe these agreements provide for an equitable financial transition for an executive officer when an adverse change in his or her employment status is required as a result of certain unexpected corporate events. Because these agreements have been entered into for the specific purposes described above, these arrangements do not affect the decisions we make with respect to annual or long-term compensation.
Benefits
Pursuant to the terms of the KEESAs, upon a change in control, all stock options and restricted stock units granted prior to the change in control will become fully and immediately vested. In addition, if we terminate them other than for death, disability or cause, or they resign for good reason, within three years following a change in control, then our named executive officers will be entitled to receive:
—
—
—
—
equal to the value of such award prorated through the termination date as if the goals with respect to such award had been achieved (at the target level, if applicable), which we refer to as the “prorated bonus;” and
continuation for up to three years of life, disability, hospitalization, medical and dental insurance coverage at our expense as in effect at the termination, in addition to certain other benefits related to securing other employment.
In the event their employment is terminated for death or disability within three years following a change in control, our named executive officers will be entitled to receive the prorated bonus under their KEESAs. If, within three years following a change in control, we terminate the employment of our named executive officers for any reason, or they resign or retire, our named executive officers (or their heirs or estate, as applicable) will also be entitled to receive: any unpaid base salary through the termination date; reimbursement of business expenses incurred through the termination date; any compensation previously deferred by the named executive officer; and the sum of any bonus or incentive compensation allocated or awarded but not yet paid. The KEESAs Change in Control Defined A “change in control” under the KEESAs generally will occur if: any person becomes the beneficial owner of securities representing 20% or more of our outstanding shares of common stock or combined voting power; specified changes occur to our incumbent board of directors; our shareholders approve a merger, consolidation or share exchange with any other corporation, or approve the issuance of voting securities in connection with a merger, consolidation or share exchange; or our shareholders approve a plan of complete liquidation or dissolution or an agreement for the sale or disposition of all or substantially all of our assets. | Non-Compete Each named executive officer with a KEESA agrees that he will not, for a period of six months after the termination date, participate in the management of, be employed by or own any business enterprise at a location within the United States that substantially competes with us or our subsidiaries. In addition, during and following his employment, he will hold in confidence, and not directly or indirectly disclose, use or copy, our confidential information and proprietary data. Finally, he agrees that for a period of two years after the termination date, he will not hire or solicit for employment any person who is or was employed by us during the twelve months preceding his termination. Equity Awards Equity award agreements under the Incentive Plan provide that, on a recipient’s death or disability, 100% of any then unexercisable stock options will become exercisable by the recipient until the earlier of one year following the triggering event or the stock option expiration date. In addition, the restricted stock unit agreements generally provide for pro rata vesting in the event of death or disability. In 2015, our named executive officers executed amendments to their outstanding equity award agreements to revise the criteria for retirement and post-retirement treatment of such awards. Following a qualified retirement and subject to compliance with ongoing non-competition, confidentiality and other obligations, all unvested equity awards held by an executive officer will continue to vest on their original vesting schedule as if the executive officer had not ceased to be an employee, and vested stock options will remain exercisable until the earlier of five years following retirement or the original expiration date of the stock option. Prior to the modifications, all unvested options and a pro rata portion of restricted stock units granted to our executive officers would vest immediately upon retirement. The modifications apply to both previously granted awards and awards to be granted in the future. The compensation committee approved these changes to enable our executive officers to better align their long-term interests with those of our shareholders and to retain the potential value of their awards as they approach possible retirement. |
The equity award agreements require our named executive officers to maintain the confidentiality of our confidential information and not to compete with us or solicit our employees or clients while employed by us or during the 12 months following the termination of their employment. In the event the named executive officer breaches these obligations, we are entitled to recover the value of
any amounts previously paid or payable or any shares or the value of any shares delivered pursuant to any of our programs, plans or arrangements. Upon a change in control, the Incentive Plan provides that if a named executive officer has an employment, retention, change in control or similar agreement that addresses the effect of a change in control on his or her awards, then such agreement will control. Otherwise, the Incentive Plan provides that the successor or purchaser may assume the equity awards or provide substitute awards with similar terms and conditions; provided, that, if within 12 months following the change in control the named executive officer is terminated without cause or terminates his employment for good reason, the assumed equity award or such substitute award will become fully vested and exercisable and/or all restrictions on the award will lapse as of the time immediately prior to such termination of employment. In that case, the named executive officer will have 90 days after the termination to exercise an option award unless a longer exercise period is applicable under the agreement, and the confidentiality, non-compete and non-solicit covenants in the equity award agreement will cease to apply. If the successor or purchaser does not assume the equity award or issue a replacement award, then immediately prior to the change in control, each equity award subject to the agreements will become fully vested and exercisable and/or all restrictions on the award will lapse. Cash Incentive Awards Our Incentive Plan provides that, upon a change in control, the successor or purchaser may assume the cash incentive awards to our named executive officers or provide substitute awards with similar terms and conditions. If the successor or purchaser in the change in control does not assume the cash incentive award or issue a replacement award, then any award earned but not yet paid will be paid to the named executive officer. If the cash incentive award is not yet earned, then the award will be canceled in | exchange for a cash payment equal to the product of the amount that would have been due under the canceled award as if the performance goals measured at the time of the change in control were achieved at the same rate through the end of the performance period and a fraction, the numerator of which is the number of whole months that have elapsed from the beginning of the performance period to the date of the change in control and the denominator of which is the number of whole months in the performance period. Estimated Potential Payments In the tables below, we estimate the maximum amount of compensation payable to each of our named executive officers based on their agreements in effect at, and assuming that the triggering event or events indicated occurred on, December 31,
The amount shown in the table with respect to stock options is equal to the difference between the exercise price of the unvested options which would experience accelerated vesting and
The amount shown in the table with respect to restricted stock units is equal to the closing price of our common stock on the last trading day of the calendar year times the number of unvested restricted stock units which would experience accelerated vesting.
The prorated bonus amounts reflect the named executive officer’s target cash incentive award for
The amount shown in the “Retirement (Equity Award Agreements)” column assumes that the named executive officer who was retirement-eligible at December 31, 2015 fulfills all retirement qualifications and complies with all ongoing obligations so that all unvested equity awards held by him as of December 31, 2015 continue to vest on their original vesting schedule as if the executive officer had not ceased to be an employee.
The amount shown for “Post-Employment Benefits” on a termination without cause or resignation for good
Potential Payments on a Change in Control without Termination of Employment; Acceleration of Vesting
Potential Payment on a Termination of Employment Mr. Yabuki
Mr. Hirsch
Potential Payment on a Termination of Employment Mr. Ernst
Mr. Gregoire
Potential Payment on a Termination of Employment Mr. Vielehr
Section 16(a) Beneficial Ownership Reporting Compliance Section 16 of the Exchange Act requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. These Section 16 reporting persons are required by Securities and Exchange Commission regulations to furnish us with copies of all Section 16 forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from Section 16 reporting persons, we believe that, during our fiscal year ended December 31, 2015, all Section 16 reporting persons complied with all applicable filing requirements.
Proposal 3. Ratification of the Public Accounting Firm
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Potential Payments on a Change in Control without Termination of Employment; Acceleration of Vesting
Number of Option Shares | Number of Restricted Units | |||||||||||
Name
| Vested on Accelerated Basis (#)
| Vested on Accelerated Basis (#)
| Value Realized
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J. Yabuki | 565,504 | 101,041 | $20,925,789 | |||||||||
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T. Hirsch | 87,685 | 42,820 | $ 5,291,493 | |||||||||
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M. Ernst | 192,899 | 15,316 | $ 6,330,377 | |||||||||
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R. Gupta | 45,730 | 47,156 | $ 4,502,629 | |||||||||
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B. Vielehr | 116,892 | 36,402 | $ 4,456,060 | |||||||||
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Potential Payment on a Termination of Employment
Mr. Yabuki
Resignation For Good | Resignation For Good Reason | |||||||||||
Reason or Termination | or Termination Without | |||||||||||
Death or Disability | Without Cause | Cause Following Change in | ||||||||||
Benefits and Payments
| (Employment Agreement)
| (Employment Agreement)
| Control (KEESA)
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Compensation: | ||||||||||||
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Base Salary | — | $ 3,780,000 | $ 1,680,000 | |||||||||
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Cash Incentive Award | — | — | 2,718,072 | |||||||||
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Prorated Bonus | $ 1,260,000 | 1,260,000 | 1,260,000 | |||||||||
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Stock Options: | ||||||||||||
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Unvested and Accelerated | 13,754,909 | 13,754,909 | 13,754,909 | |||||||||
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Restricted Stock Units: | ||||||||||||
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Unvested and Accelerated | 7,170,880 | 7,170,880 | 7,170,880 | |||||||||
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Benefits: | ||||||||||||
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COBRA Reimbursement | — | 11,396 | — | |||||||||
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Post-Employment Benefits | — | — | 96,925 | |||||||||
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Outplacement Services | — | — | 84,000 | |||||||||
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Advisor Fees | — | — | 15,000 | |||||||||
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Total | $22,185,789 | $25,977,185 | $26,779,786 | |||||||||
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Mr. Hirsch | ||||||||||||
Resignation For Good Reason | ||||||||||||
Death or Disability Prior | Death or Disability | or Termination Without | ||||||||||
to Change in Control | Following Change in Control | Cause Following Change in | ||||||||||
Benefits and Payments
| (Equity Award Agreements)
| (KEESA)
| Control (KEESA)
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Compensation: | ||||||||||||
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Base Salary | — | — | $1,000,000 | |||||||||
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Cash Incentive Award | — | — | 922,204 | |||||||||
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Prorated Bonus | — | $ 500,000 | 500,000 | |||||||||
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Stock Options: | ||||||||||||
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Unvested and Accelerated | $2,252,558 | 2,252,558 | 2,252,558 | |||||||||
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Restricted Stock Units: | ||||||||||||
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Unvested and Accelerated | 557,398 | 3,038,935 | 3,038,935 | |||||||||
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Benefits: | ||||||||||||
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Post-Employment Benefits | — | — | 117,199 | |||||||||
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Outplacement Services | — | — | 50,000 | |||||||||
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Advisor Fees | — | — | 15,000 | |||||||||
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Total | $2,809,956 | $5,791,493 | $7,895,896 | |||||||||
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Potential Payment on a Termination of Employment
Mr. Ernst
Benefits and Payments
| Death or Disability
| Resignation For
| Death or Disability
| Resignation For
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Compensation: | ||||||||||||||||
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Base Salary | — | $1,035,000 | — | $1,150,000 | ||||||||||||
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Cash Incentive Award | — | — | — | 1,431,030 | ||||||||||||
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Prorated Bonus | — | — | $ 718,750 | 718,750 | ||||||||||||
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Stock Options: | ||||||||||||||||
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Unvested and Accelerated | $5,243,400 | — | 5,243,400 | 5,243,400 | ||||||||||||
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Restricted Stock Units: | ||||||||||||||||
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Unvested and Accelerated | 271,744 | — | 1,086,977 | 1,086,977 | ||||||||||||
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Benefits: | ||||||||||||||||
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Post-Employment Benefits | — | — | — | 103,106 | ||||||||||||
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Outplacement Services | — | — | — | 57,500 | ||||||||||||
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Advisor Fees | — | — | — | 15,000 | ||||||||||||
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Total | $5,515,144 | $1,035,000 | $7,049,127 | $9,805,763 | ||||||||||||
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Mr. Gupta | ||||||||||||||||
Benefits and Payments
| Death or Disability
| Breach of
| Death or Disability
| Resignation For
| ||||||||||||
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Compensation: | ||||||||||||||||
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Base Salary | — | $ 470,000 | — | $ 940,000 | ||||||||||||
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Cash Incentive Award | — | — | — | 883,804 | ||||||||||||
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Prorated Bonus | — | — | $ 517,000 | 517,000 | ||||||||||||
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Stock Options: | ||||||||||||||||
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Unvested and Accelerated | $1,155,968 | 697,536 | 1,155,968 | 1,155,968 | ||||||||||||
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Restricted Stock Units: | ||||||||||||||||
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Unvested and Accelerated | 816,439 | 893,370 | 3,346,661 | 3,346,661 | ||||||||||||
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Benefits: | ||||||||||||||||
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COBRA Reimbursement | — | 17,095 | — | — | ||||||||||||
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Post-Employment Benefits | — | — | — | 136,886 | ||||||||||||
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Outplacement Services | — | — | — | 47,000 | ||||||||||||
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Advisor Fees | — | — | — | 15,000 | ||||||||||||
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Total | $1,972,407 | $2,078,001 | $5,019,629 | $7,042,319 | ||||||||||||
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Potential Payment on a Termination of Employment
Mr. Vielehr
Benefits and Payments
| Death or Disability
| Termination
| Death or
| Resignation For
| ||||||||||||
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Compensation: | ||||||||||||||||
|
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| ||||||||
Base Salary | — | $ 470,000 | — | $ 940,000 | ||||||||||||
|
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Cash Incentive Award | — | — | — | 564,000 | ||||||||||||
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Prorated Bonus | — | — | $ 517,000 | 517,000 | ||||||||||||
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Stock Options: | ||||||||||||||||
|
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Unvested and Accelerated | $ | 1,872,610 | 936,305 | 1,872,610 | 1,872,610 | |||||||||||
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Restricted Stock Units: | ||||||||||||||||
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|
|
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Unvested and Accelerated | 645,862 | 1,291,725 | 2,583,450 | 2,583,450 | ||||||||||||
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Benefits: | ||||||||||||||||
|
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Post-Employment Benefits | — | — | — | 125,852 | ||||||||||||
|
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Outplacement Services | — | — | — | 47,000 | ||||||||||||
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Advisor Fees | — | — | — | 15,000 | ||||||||||||
|
|
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|
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| ||||||||
Total | $2,518,472 | $2,698,030 | $4,973,060 | $6,664,912 | ||||||||||||
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16 of the Exchange Act requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. These Section 16 reporting persons are required by Securities and Exchange Commission regulations to furnish us with copies of all Section 16 forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from Section 16 reporting persons, we believe that, during our fiscal year ended December 31, 2014, all Section 16 reporting persons complied with all applicable filing requirements, except that, on April 8, 2014, each of Kevin Gregoire and Rahul Gupta filed a late Form 4 to report our withholding of 735 shares and 560 shares, respectively, to satisfy the taxes incident to the vesting of restricted stock units on March 31, 2014.
Proposal 3. Ratification of the Appointment of Independent Registered Public Accounting Firm
Background
The audit committee of the board of directors is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The audit committee has appointed Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2015.2016. Deloitte has served as our independent public accounting firm since 1986. The audit committee, from time to time, evaluates the performance and independence of Deloitte to determine whether we should continue to retain the firm. To this end, at least annually, Deloitte makes a presentation to the committee regarding the services it provides, and our chief financial officer provides the committee with his assessment of the firm’s performance. The audit committee is responsible for the audit fee negotiations associated with the retention of Deloitte. In addition, in conjunction with the mandated rotation of Deloitte’s lead engagement partner, the audit committee and its chairman actively participate in the selection of a successor lead engagement partner. The members of the audit committee and the board believe that the continued retention of Deloitte to serve as our independent registered public accounting firm is in the best interests of the company and its shareholders.
A representative of Deloitte is expected to be present at the annual meeting, will have an opportunity to make a statement if he or she so desires, and will be available to respond to appropriate questions.
Reason for the Proposal
Appointment of our independent registered public accounting firm is not required to be submitted for shareholder approval, but the audit committee of our board of directors is seeking ratification of its appointment of Deloitte as a matter of good corporate practice. If our shareholders do not ratify this appointment, the audit committee of the board of directors will consider it a direction to seek to retain another independent public accounting firm. Even if the appointment is ratified, the audit committee may, in its discretion, appoint a different independent registered public accounting firm at any time if it determines that such a change would be in our shareholders’ best interests.
Vote Required and Recommendation of the Board of Directors
To ratify the appointment of Deloitte as our independent registered public accounting firm, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal. Unless otherwise specified, the proxies solicited hereby will be voted to ratify the appointment of Deloitte as our independent registered public accounting firm for 2015.
2016.
The board of directors recommends that you vote in favor of Proposal 3.
Independent Registered Public Accounting Firm and Fees
The following table presents the aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates (the “Deloitte Entities”) for services provided during 2013 and 2014.
2013
| 2014
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Audit Fees | $ | 2,830,000 | $ | 2,491,000 | ||||
Audit-Related Fees | 3,439,000 | 3,352,000 | ||||||
Tax Fees | 669,000 | 634,000 | ||||||
All Other Fees | 312,000 | 75,000 | ||||||
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Total | $ | 7,250,000 | $ | 6,552,000 | ||||
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Audit Fees. Audit fees are for professional services rendered by the Deloitte Entities in connection with the integrated audit of our annual consolidated financial statements, the review of financial statements included in our quarterly reports on Form 10-Q, other statutory audits and other regulatory filings.
Audit-Related Fees. Audit-related fees are for professional services rendered by the Deloitte Entities for service auditor reports.
Tax Fees. Tax fees are for tax consultations and tax return preparation and compliance.
All Other Fees. All other fees are for consulting and training services.
Audit Committee Pre-Approval Policy
The audit committee has established pre-approval policies and procedures that require audit committee approval of all audit and permitted non-audit services to be provided by its independent registered public accounting firm. In some cases, the audit committee pre-approves particular services, subject to certain monetary limits, after the audit committee is presented with a schedule describing the services to be approved. The audit committee’s pre-approval policies do not permit the delegation of the audit committee’s responsibilities to management. In 2014, the audit committee pre-approved all services provided by our independent registered public accounting firm.
57 | 2016 Proxy Statement |
Independent Registered Public Accounting Firm and Fees
The following table presents the aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates (the “Deloitte Entities”) for services provided during 2014 and 2015.
2014
| 2015
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Audit Fees | $ | 2,491,000 | $ | 2,818,000 | ||||||||
Audit-Related Fees | 3,352,000 | 3,413,000 | ||||||||||
Tax Fees | 634,000 | 699,000 | ||||||||||
All Other Fees | 75,000 | 247,000 | ||||||||||
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Total | $ | 6,552,000 | $ | 7,177,000 | ||||||||
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Audit Fees. Audit fees are for professional services rendered by the Deloitte Entities in connection with the integrated audit of our annual consolidated financial statements, the review of financial statements included in our quarterly reports on Form 10-Q, other statutory audits and other regulatory filings.
Audit-Related Fees. Audit-related fees are for professional services rendered by the Deloitte Entities for service auditor reports.
Tax Fees. Tax fees are for tax consultations and tax return preparation and compliance.
All Other Fees. All other fees are for consulting and training services.
Audit Committee Pre-Approval Policy
The audit committee has established pre-approval policies and procedures that require audit committee approval of all audit and permitted non-audit services to be provided by its independent registered public accounting firm. In some cases, the audit committee pre-approves particular services, subject to certain monetary limits, after the audit committee is presented with a schedule describing the services to be approved. The audit committee’s pre-approval policies do not permit the delegation of the audit committee’s responsibilities to management. In 2015, the audit committee pre-approved all services provided by our independent registered public accounting firm.
In accordance with its written charter, the audit committee provides independent review and oversight of the accounting and financial reporting processes and financial statements of Fiserv, Inc., the system of internal controls that management and the board of directors have established, the audit process and the results of operations of Fiserv, Inc. and its financial condition. Management has the responsibility for preparing the company’s financial statements and Deloitte & Touche LLP (“Deloitte”), the company’s independent registered public accounting firm, has the responsibility for examining those statements.
The audit committee has reviewed and discussed with management and Deloitte the audited financial statements of Fiserv, Inc. for the fiscal year ended December 31, 2014.2015. The audit committee has also discussed with Deloitte the matters required to be discussed by the standards of the Public Company Accounting Oversight Board. The audit committee has received the written disclosures and letter from Deloitte required by the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the audit committee concerning independence and has discussed with Deloitte its independence. The audit committee has pre-approved all services provided and fees charged by the independent registered public accounting firm to Fiserv, Inc. and has concluded that such services are compatible with Deloitte’s independence.
The audit committee also discussed with management, the internal auditors and Deloitte the quality and adequacy of the internal controls and internal audit organization, responsibilities, budget and staffing of Fiserv, Inc. The audit committee reviewed with both Deloitte and the internal auditors their respective audit plans, audit scope and identification of audit risks. Based on the above-mentioned reviews and discussions, the audit committee recommended to the board of directors that the audited financial statements of Fiserv, Inc. be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014,2015, for filing with the Securities and Exchange Commission.
Thomas C. Wertheimer, Chairman
Alison Davis
Christopher M. Flink
Denis J. O’Leary
58 | 2016 Proxy Statement |
Proposal 4. Shareholder Proposal
The following proposal was submitted by an individual shareholder and will be voted on at the annual meeting if it is properly presented.The board of directors recommends you vote AGAINST the proposal and asks you to read Fiserv’s Statement in Opposition which follows the proposal. The shareholder’s name, address, and number of shares of common stock held may be obtained upon written request therefor made to our corporate Secretary. The proposal has been included exactly as we received it in accordance with the rules of the Securities and Exchange Commission.
Proposal 4 - Executives To Retain Significant Stock
Resolved: Shareholders urge that our executive pay committee adopt a policy requiring senior executives to retain a significant percentage of stock acquired through equity pay programs until reaching normal retirement age and to report to shareholders regarding the policy before our Company’s next annual meeting. For the purpose of this policy, normal retirement age would be an age of at least 60 and be determined by our executive pay committee. Shareholders recommend a share retention percentage requirement of 75% of net after-tax shares.
This single unified policy shall prohibit hedging transactions for shares subject to this policy which are not sales but reduce the risk of loss to the executive. Otherwise our directors might be able to avoid the impact of this proposal. This policy shall supplement any other share ownership requirements that have been established for senior executives, and should be implemented without violating current company contractual obligations or the terms of any current pay or benefit plan.
Requiring senior executives to hold a significant portion of stock obtained through executive pay plans would focus our executives on our company’s long-term success. A Conference Board Task Force report stated that hold-to-retirement requirements give executives “an ever-growing incentive to focus on long-term stock price performance.”
GMI Ratings, an independent investment research firm, said unvested equity pay partially or fully accelerates upon CEO termination. Accelerated equity vesting allows executives to realize lucrative pay without necessarily having earned it through strong performance. Fiserv had not disclosed specific, quantifiable performance objectives for our CEO. Fiserv gives long-term incentive pay to executives without requiring our company to perform above the median of its peer group.
Please vote to protect shareholder value:
Executives To Retain Significant Stock - Proposal 4
Proposal 4 - Shareholder Proxy Access RESOLVED: Shareholders ask our board of directors to adopt, and present for shareholder approval, a “proxy access” bylaw as follows: Require the Company to include in proxy materials prepared for a shareholder meeting at which directors are to be elected the name, Disclosure and Statement (as defined herein) of any person nominated for election to the board by a shareholder or an unrestricted number of shareholders forming a group (the “Nominator”) that meets the criteria established below. Allow shareholders to vote on such nominee on the Company’s proxy card. The number of shareholder-nominated candidates appearing in proxy materials should not exceed one quarter of the directors then serving or two, whichever is greater. This bylaw should supplement existing rights under Company bylaws, providing that a Nominator must: a) have beneficially owned 3% or more of the Company’s outstanding common stock, including recallable loaned stock, continuously for at least three years before submitting the nomination; b) give the Company, within the time period identified in its bylaws, written notice of the information required by the bylaws and any Securities and Exchange Commission (SEC) rules about (i) the nominee, including consent to being named in proxy materials and to serving as director if elected; and (ii) the Nominator, including proof it owns the required shares (the “Disclosure”); and c) certify that (i) it will assume liability stemming from any legal or regulatory violation arising out of the Nominator’s communications with the Company shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable laws and regulations if it uses soliciting material other than the Company’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business, not to change or influence control at the Company. The Nominator may submit with the Disclosure a statement not exceeding 500 words in support of the nominee (the “Statement”). The Board should adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the priority given to multiple nominations exceeding the one-quarter limit. No additional restrictions that do not apply to other board nominees should be placed on these nominations or re-nominations. The Security and Exchange Commission’s universal proxy access Rule 14a-11 was unfortunately vacated by 2011 a court decision. Therefore, proxy access rights must be established on a company-by-company basis. Subsequently,Proxy Access in the United States: Revisiting the Proposed SEC Rule), a cost-benefit analysis by the CFA Institute (Chartered Financial Analyst), found proxy access would “benefit both the markets and corporate boardrooms, with little cost or disruption,” raising US market capitalization by up to $140 billion. Please vote to enhance shareholder value: Shareholder Proxy Access – Proposal 4
Fiserv’s Statement in Opposition The board of directors has carefully considered this proposal and recommends that you vote AGAINST
On February 19, 2016, our board of directors adopted proxy access for the benefit of all shareholders. Consistent with the
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Under our proxy access by-law provision: any beneficially owns at least 3% of our outstanding common stock continuously for 3 years may nominate up to the greater of two individuals or 20% of the for election to the
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A copy of the by-laws, as amended, was attached as an exhibit to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2016.
Our board has a strong record of being responsive to shareholder concerns. We regularly engage with and solicit the views of our shareholders on governance matters and will continue to do so. For these reasons, our board of directors believes that our company’s current shareholder proxy access right is in the best interests of our shareholders and that the approach in the shareholder proposal is not appropriate for our company.
Vote Required and Recommendation of the Board of Directors
The number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal for it to gain approval. Unless otherwise specified, the proxies solicited hereby will be voted against the shareholder proposal.
The board of directors recommends that you vote AGAINST Proposal 4.
60 | 2016 Proxy Statement |
20162017 Annual Meeting
Any proposal that a shareholder desires to include in our proxy materials for our 20162017 annual meeting of shareholders pursuant to Rule 14a-8 under the Exchange Act (“Rule 14a-8”) must be delivered no later than December 8, 20156, 2016 to the following address: 255 Fiserv Drive, Brookfield, Wisconsin 53045, Attention: Lynn S. McCreary, Chief Legal Officer and Secretary.
We recently amended our by-laws to include a proxy access provision. Under our by-laws, shareholders who meet the requirements set forth in our by-laws may under certain circumstances include a specified number of director nominees in our proxy materials. Among other matters, a shareholder must give written notice to our corporate Secretary not less than 120 days and not more than 150 days prior to the first anniversary of the date on which we first made available our proxy materials for the 2016 annual meeting. Because we commenced mailing our proxy statement for the 2016 annual meeting on April 5, 2016, we must receive notice of a shareholder’s director nomination for the 2017 annual meeting pursuant to the proxy access by-law provision no sooner than November 6, 2016 and no later than December 6, 2016. If the notice is received outside of that time frame, then we are not required to include the nominees in our proxy materials for the 2017 annual meeting.
A shareholder who intends to present business, other than a shareholder’sshareholder proposal pursuant to Rule 14a-8, or to nominate a director, other than pursuant to our proxy access by-law provision, at the 20162017 annual meeting must comply with the requirements set forth in our by-laws. Among other matters, a shareholder must give written notice to our corporate Secretary not less than 45 days and not more than 70 days prior to the first anniversary of the date on which we first mailed our proxy materials for the 20152016 annual meeting. Because we commenced mailing our proxy statement for the 20152016 annual meeting on April 6, 2015,5, 2016, we must receive notice of a shareholder’s intent to present business, other than pursuant to Rule 14a-8, or to nominate a director, other than pursuant to our proxy access by-law provision, at the 20162017 annual meeting no sooner than January 27, 2016,25, 2017, and no
later than February 21, 2016.
19, 2017. If the notice is received after February 21, 2016,outside of that time frame, then we are not required to permit the business or the nomination to be presented at the 20162017 annual meeting of shareholders because the notice will be considered untimely.meeting. Nevertheless, if our board of directors permits a matter of business submitted after February 21, 201619, 2017 to be presented at the 20162017 annual meeting, then the persons named in proxies solicited by the board of directors for the 20162017 annual meeting may exercise discretionary voting power with respect to such proposal.
Proxy Statement and Annual Report Delivery
Our Annual Report on Form 10-K for 20142015 will be made available or mailed to each shareholder on or about April 6, 2015.5, 2016. We will furnish such report, without charge, to any person requesting a copy thereof in writing and stating such person is a beneficial holder of shares of our common stock on the record date for the 20152016 annual meeting. Requests and inquiries should be sent to our corporate Secretary, Lynn S. McCreary, at the address below.
As permitted by rules of the Securities and Exchange Commission, services that deliver our communications to shareholders who hold their stock through a bank, broker or other holder of record may deliver a single copy of our Notice, Annual Reportannual report and proxy statement to multiple shareholders sharing the same address. Upon written or oral request, we will promptly deliver a separate copy of our Notice, Annual Reportannual report and/or proxy statement to any shareholder at a shared address to which a single copy of each document was delivered. Shareholders sharing an address who are currently receiving multiple copies of the Notice, Annual Reportannual report and/or proxy statement may also request delivery of a single copy. Shareholders may make a request by writing to Lynn S. McCreary, Chief Legal Officer and Secretary, Fiserv, Inc., 255 Fiserv Drive, Brookfield, Wisconsin 53045.
By Order of the Board of Directors
Lynn S. McCreary, Secretary
Brookfield, Wisconsin
April 6, 20155, 2016
61 | 2016 Proxy Statement |
Non-GAAP Financial Measures
The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We supplement our reporting of information determined in accordance with GAAP, such as revenue and earnings per share, with “adjusted revenue,” “adjusted internal“internal revenue growth” and “adjusted earnings per share.” Management believes that adjustments for certain non-cash or other items and the exclusion of certain pass-through revenue and expenses enhance our shareholders’ ability to evaluate our core business performance because such items do not reflect how we manage our operations. Therefore, we exclude these items from GAAP revenue and earnings per share to calculate these non-GAAP measures. In this proxy statement, we also disclose performance goals related to cash incentive awards based on adjusted earnings per share, adjusted internal revenue growth and consolidated net operating profit, which is another non-GAAP financial measure. Set forth below is a description of these terms:
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— Adjusted internal
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These non-GAAP measures should be considered in addition to, and not as a substitute for, revenue, earnings per share andor any other amount determined in accordance with GAAP. These non-GAAP measures reflect management’s judgment of particular items and may not be comparable to similarly titled measures reported by other companies.
62 | 2016 Proxy Statement |
Below is a reconciliation of adjusted earnings per share and internal revenue growth to the most directly comparable measure determined in accordance with GAAP:
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GAAP earnings per share from continuing operations | $ | 2.99 | $ | 2.99 | ||||||||
Adjustments – net of income taxes: | ||||||||||||
Merger, integration and other costs1 | 0.03 | 0.10 | ||||||||||
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Severance costs | 0.05 | 0.06 | ||||||||||
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Amortization of acquisition-related intangible assets | 0.52 | 0.53 | ||||||||||
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StoneRiver transactions2 | (0.20) | (0.07) | ||||||||||
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Other3 | (0.03) | 0.25 | ||||||||||
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Adjusted earnings per share from continuing operations | $ | 3.37 | $ | 3.87 | ||||||||
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Earnings per share is calculated using actual, unrounded amounts.
(1) Merger, integration and other costs include incremental expenses incurred in conjunction with the achievement of the company’s operational effectiveness objectives, including incremental costs related to data center and real estate consolidation activities such as move expenses, third party fees and non-cash impairment charges; a non-cash expense related to the modification of certain employee equity award agreements; and costs associated with the Open Solutions acquisition. | (2) Represents the company’s share of net gains associated with capital transactions at StoneRiver Group, L.P. (“StoneRiver”), a joint venture in which the company owns a 49% interest, including sales of subsidiary businesses and related expenses. (3) Includes make-whole payments and other refinancing costs related to the early extinguishment of debt in 2015 and the impact of certain discrete income tax benefits in 2014. | |||||
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Revenue | $ | 5,066 | $ | 5,254 | ||||||||
Output Solutions postage reimbursements | (327) | (313) | ||||||||||
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Open Solutions deferred revenue adjustment | 4 | 4 | ||||||||||
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Adjusted revenue | $ | 4,743 | $ | 4,945 | ||||||||
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60 Internal revenue growth is measured as the increase in adjusted revenue for the current year excluding acquired revenue, divided by adjusted revenue from the prior year excluding revenue attributable to dispositions. There was no acquired revenue for the full year 2015, and revenue in the comparable prior year attributable to dispositions was $2 million.
63 | 2016 Proxy Statement |
Below is a reconciliation of adjusted earnings per share and adjusted internal revenue growth to the most directly comparable measure determined in accordance with GAAP:
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GAAP earnings per share from continuing operations | $2.44 | $2.99 | ||||||||
Adjustments – net of income taxes: | ||||||||||
Merger and integration costs1 | 0.20 | 0.03 | ||||||||
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Severance costs | 0.03 | 0.05 | ||||||||
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Amortization of acquisition-related intangible assets | 0.51 | 0.52 | ||||||||
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StoneRiver transactions2 | (0.20) | (0.20) | ||||||||
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Tax benefit3 | — | (0.03) | ||||||||
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Adjusted earnings per share from continuing operations | $2.99 | $3.37 | ||||||||
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Earnings per share is calculated using actual, unrounded amounts.
FISERV, INC.
E06899-P75602 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Annual Meeting and Proxy Statement and Annual Report for the Year Ended December 31, are available atwww.proxyvote.com.
E06900-P75602
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