UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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TEGNA Inc.
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MARCH 18, 201611, 2019
Dear Shareholder:
On behalf of your Board of Directors and management, we cordially invite you to attend the Annual Meeting of Shareholders to be held on May 5, 2016April 25, 2019 at 10:00 a.m. ET at the Company’s headquarters located at 7950 Jones Branch Drive,Boro Station Conference Center, 1785 Greensboro Station Place, McLean, Virginia 22107.VA 22102.
At this meeting, our shareholders will vote on matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement. We also will provide a report on our Company, including an update on the Company’s performance, as we approach the one year anniversary of the separation transaction, and entertain questions of general interest to shareholders.
2015 was a pivotal year for our Company – a year in which the hard work of transforming our business to position it for success in the digital age culminated in the creation of TEGNA, a company comprised of a portfolio of high-growth, high-margin media and digital businesses that provide content that matters and brands that deliver.
At TEGNA, we continue to empower the people we serve by delivering highly relevant, usefulproduce trusted, impactful and smartinnovative content when and how people need it, to make the best decisions possible – always focusing on delivering value to our shareholders.across all platforms. As always, our foundationpurpose remains to serve the greater good of our long-standing commitment to provide outstanding journalism across our TEGNA Media stations that better serves our communities.communities through empowering stories, impactful investigations and innovative marketing services.
We are proud of the successful efforts made by our more than 10,000approximately 5,300 employees in drivingcontinuing to drive TEGNA’s continuing transformation,long-term strategy, finding new ways to engage audiences in today’s multi-platform environment and enhancing our alignment with the evolving needs of consumers, advertisers and marketers.
Thank you for your continued support.
Cordially,
Chairman of the Board |
President and Chief Executive Officer |
7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 2210722102 (703) 854-7000873-6600
Notice of Annual Meeting of Shareholders
To Our Shareholders:
The purposes:
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MEETING INFORMATION
DATE:
TIME:10:00 a.m. ET
LOCATION:
McLean, Virginia
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| to consider and act upon a proposal to elect Company’s Board of Directors to hold office until the Company’s Meeting of Shareholders; | |||
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| to consider and act upon a Company proposal to ratify the appointment of
firm for the | |||
➌ | to consider and act upon a Company proposal to approve, on an advisory basis, the compensation of our named executive officers; and | |||
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| to transact such other business, if any, as may properly come before the Annual Meeting or any adjournment or postponement of the meeting. |
The Board of Directors has set the close of business on March 7, 2016February 25, 2019 as the record date to determine the shareholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.
An admission ticket is required for attendance at the Annual Meeting. Please see page 5860 of the Proxy Statement for instructions about obtaining tickets.
By Action of the Board of Directors,
Akin S. Harrison
Senior Vice President, Associate General Counsel and Secretary
McLean,Tysons, Virginia
March 18, 201611, 2019
Your Vote Is Important. Your shares should be represented at the annual meeting whether or not you plan to attend. If you do not wish to vote in person or if you will not be attending the annual meeting, you may vote by proxy. Shareholders of record can vote by proxy over the internet or by telephone by following the instructions provided in the notice of internet availability of proxy materials that was previously mailed to you or, if you requested printed copies of the proxy materials, you can also vote by mail, by telephone or on the internet as instructed on the proxy card you received. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, please follow the instructions provided to you by that organization. You may revoke your proxy and vote in person if you decide to attend the annual meeting.
INTERNET | TELEPHONE | IN PERSON | ||||||||||||||||
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Visit | Dial the telephone number on your voter instruction form. | Send your completed and signed proxy card using the enclosed envelope | Attending the meeting |
This Notice of Annual Meeting and Proxy Statement are first being delivered to shareholders on or about March 18, 2016.11, 2019.
Contents
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PROPOSAL 1—ELECTION OF DIRECTORS | 1 | |||
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Compensation Committee Interlocks and Insider Participation; Related Transactions | ||||
PROPOSAL 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | ||||
EXECUTIVE COMPENSATION | ||||
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2018: Strong Results & Award-Winning Journalism
From our innovative content, impactful investigations and accretive acquisitions to our people, purpose and performance, we are making strong progress in diversifying our revenue and cash flow streams and creating value for our shareholders, all while continuing to serve the greater good of our communities.
2015: A Pivotal Year2018 also saw our Company achieve strong financial results. Overall company revenue increased 16 percent to $2.2 billion, driven by strong subscription revenue growth and record political advertising revenue. This growth drove adjusted EBITDA to $781 million for the year, producing anon-GAAP EPS of $1.83 per diluted share.*
In addition, we introduced several new multiplatform initiatives across our markets that were a direct result of our recurring, structured innovation process. We launched digital-first episodic investigations like “Mothers Matter,” strengthened our multiplatform news fact-checking segments like VERIFY and debuted innovative local news programs like “Get Up DC!”
2015 was a pivotal year in the history of our Company. We began the year as Gannett Co., Inc., a company primarily comprised of three distinct, leading businesses – a high margin, growing broadcasting business, a fast growing digital business and an innovative publishing business. To allow each business to focus on its specific strengths and objectives, on June 29, 2015, we spun-off our publishing business, which retained the name Gannett Co., Inc. (“Gannett”), to our shareholders (the “Spin-off”), retained the broadcasting and digital businesses and changed our name to TEGNA Inc. (the “Company”). The Spin-off has allowed us to focus on our significant opportunities for growth through our broadcasting and digital businesses.
Over the past several years, we have transformed our Company, catalyzed by our acquisitions of Belo Corp. in December 2013 and Cars.com on October 1, 2014, and culminating with the Spin-off, from a publishing and broadcasting company into a faster-growing, higher margin broadcasting and digital company. We have been a top performer in our industry as evidenced by our outstanding total shareholder returns. Our portfolio is comprised of 46 television stations covering more than 35 million households and leading edge digital businesses led by Cars.com and CareerBuilder. As a result, we believe we are well positioned to deliver strong growth into the future.
Although the Board of Directors, like the Company, underwent changes during 2015 in connection with the Spin-off, the Company was able to retain a significant amount of continuity on the Board of Directors and the Company’s leadership team:
* | Reconciliations of the followingnon-GAAP financial measures to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form10-K, filed March 1, 2019: adjusted EBITDA—page 25; andnon-GAAP EPS—page 24. |
Proposal 1—Election of Directors
The Board of Directors is currently composed of teneleven directors. The Board of Directors held ten meetings during 2015.2018. Each director attended allat least 87% of the meetings of the Board and its committees on which he or she served that were held during the period for which he or she served as a director or committee member, as applicable, during 2015.2018. All directors then serving on the Board attended the 20152018 Annual Meeting in accordance with the Company’s policy that all directors attend the Annual Meeting.
Nominees elected to our Board at the 20162019 Annual Meeting will serveone-year terms expiring at the Company’s 20172020 Annual Meeting of Shareholders. The Board, upon the recommendation of its Nominating and Public ResponsibilityGovernance Committee, has nominated the following nominees, each of whom the Board believes will be available and able to serve as a director:individuals: Gina L. Bianchini, Howard D. Elias, Stuart J. Epstein, Lidia Fonseca, Jill Greenthal, Marjorie Magner, Gracia C. Martore,David T. Lougee, Scott K. McCune, Henry W. McGee, Susan Ness, Bruce P. Nolop, Neal Shapiro and Neal Shapiro.Melinda C. Witmer. The Board believes that each of the nominees will be available and able to serve as a director. If any nominee becomes unable or unwilling to serve, the Board may do one of three things: recommend a substitute nominee, reduce the number of directors to eliminate the vacancy, or fill the vacancy later. The shares represented by all valid proxies may be voted for the election of a substitute if one is nominated.
TheUnder the Company’sBy-laws, provide that the 2019 director nominees arewill be elected by the vote of a majority of the votes cast with respect to the director at the meeting, unless the number of nominees exceeds the number of directors to be elected, in which case directors shall be elected by the vote of a plurality of the shares present and entitled to vote at the meeting. At the 2016 Annual Meeting, the number of nominees equals the number of directors to be elected so the majority vote standard shall apply. If an incumbent nominee does not receive an affirmative majority of the votes cast, he or she is required to submit a letter of resignation to the Board’s Nominating and Public ResponsibilityGovernance Committee, which would recommend to the Board the action to be taken with respect to the letter of resignation. The Board is required to act on the Committee’s recommendation and publicly disclose its decision and its rationale within 90 days after the election results are certified.
The Company’s Board of Directors unanimously recommends that you vote “FOR” the election of each of the nominees to serve as directors of the Company until the Company’s 20172020 Annual Meeting and until their successors are elected and qualified.
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PROPOSAL 1—ELECTION OF DIRECTORS
Our Board regularly reviews the Company’s Board leadership structure, how the structure is functioning and whether the structure continues to be in the best interest of our shareholders. Our Board has determined that having an independent director serve as the Chairman of the Board is currently the best leadership structure for the Company. Separating the positions of Chairman and CEO allows the CEO to focus on executing the Company’s strategic plan and managing the Company’s operations and performance and permits improved communications between the Board, the CEO and other senior leaders of the Company. Our
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PROPOSAL 1—ELECTION OF DIRECTORS
Board regularly reviews the Company’s Board leadership structure, how the structure is functioning and whether the structure continues to be in the best interest of our shareholders.Leadership Structure
The duties of the Chairman of the Board include:
presiding over all meetings of the Board and all executive sessions ofnon-management directors;
serving as liaison on Board-wide issues between the CEO and thenon-management directors, although Company policy also provides that all directors shall have direct and complete access to the CEO at any time as they deem necessary or appropriate, and vice versa;
in consultation with the CEO, reviewing and approving Board meeting agendas and materials;
in consultation with the CEO, reviewing and approving meeting schedules to assure there is sufficient time for discussion of all agenda items;
calling meetings of thenon-management directors, if desired; and
being available when appropriate for consultation and direct communication if requested by shareholders.
THE BOARD’S ROLE IN RISK OVERSIGHT
The Board believes that evaluating how senior leadership identifies, assesses, manages and monitors the various risks confronting the Company is one of its most important areas of oversight. In carrying out this critical responsibility, the Board oversees the Company’s risk management function through regular discussions with senior leadership, considering the Company’s risks in the context of the Company’s strategic plan and operations. In addition, the Company has implemented an enterprise risk management program to enhance the Board’s and management’s ability to identify, assess, manage and respond to strategic, market, operational and compliance risks facing the Company.
While the Board has primary responsibility for overseeing the Company’s risk management function, each committee of the Board also considers risk within its area of responsibility. For example, the Audit Committee is primarily responsible for reviewing risks relating to accounting and financial controls and the Executive Compensation Committee reviews risks relating to compensation matters. The Board is apprised by the committee chairs of significant risks and management’s response to those risks via periodic reports. While the Board and its committees oversee the Company’s risk management function, management is responsible for implementing day-to-day risk management processes and reporting to the Board and its committees on such matters.
With respect to risk related to compensation matters, the Executive Compensation Committee with the assistance of its independent compensation consultant has reviewed the Company’s executive compensation program and has concluded that the program does not create risks that are reasonably likely to have a material adverse effect on the Company. The Executive Compensation Committee believes that the design of the Company’s annual cash and long-term equity incentives provides an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long term profitability and shareholder value creation and does not encourage unnecessary or excessive risk taking at the expense of long-term results.
The Board of Directors has determined that, other than Gracia C. Martore, all of our current directors are, and all directors who served during the Company’s most recently completed fiscal year were, “independent” of the Company within the meaning of the rules governing NYSE-listed companies. For a director to be “independent” under the NYSE rules, the Board of Directors must affirmatively determine that the director has no material relationship with the Company, either directly or as a partner, shareholder, or officer of an
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PROPOSAL 1—ELECTION OF DIRECTORS
Director Independence
organization that has a relationship with the Company. To assist it in making these determinations, the Board has determined that the following categories of relationships between a director and the Company are not material:
In making its independence determinations, our Board considered all relationships, direct and indirect, between each director and our Company that were identified in questionnaires completed by each Board member.
Consistent with the NYSE rules, the Company’s Principles of Corporate Governance call for the Company’s non-management directors to meet in regularly scheduled executive sessions without management as they deem appropriate. The Company’s non-management directors held five executive sessions in 2015, and will meet in executive sessions as appropriate throughout 2016.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; RELATED TRANSACTIONS
Our Company has not had compensation committee interlocks with any other company, nor has our Company engaged in any material related transactions since December 29, 2014, the first day of our last fiscal year. Although no such related transactions have occurred or are anticipated, the Board will consider any other future transactions involving the Company, on the one hand, and any of its officers or directors, on the other hand, on a case-by-case basis, and any such approved transaction involving a director will be considered in assessing his or her independence.
On December 8, 2015, the Board approved a related person transaction policy that formalized procedures the Company already had in place relating to transactions with related persons by outlining the procedures that directors not involved in the transaction will follow in connection with reviewing certain transactions involving the Company and related persons. The policy takes into account the categories of transactions that the Board has determined are not material in making determinations regarding independence and requires directors and executive officers to notify the Company’s chief legal officer of any potential related person transactions.
The Board and the Company have instituted strong corporate governance practices, a number of which are described above, to ensure that the Company operates in ways that support the long-term interests of our shareholders. Other important corporate governance practices of the Company include the following:
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PROPOSAL 1—ELECTION OF DIRECTORS
Corporate Governance
Additional information regarding the Company’s corporate governance practices is included in the Company’s Principles of Corporate Governance posted on the Corporate Governance page under the “Investors” menu of the Company’s website atwww.tegna.com. See the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion of the Company’s compensation-related governance practices.
The Company is committed to the interests of its shareholders and recognizes that communicating with shareholders on a regular basis is a critical component of the Company’s corporate governance program. As part of this commitment, the Company actively engages with its shareholders in order to fully understand their viewpoints concerning the Company, to garner feedback on what we can do better and to help our shareholders better understand our performance and strategic plan. In addition to answering questions from shareholders on its quarterly earnings calls, Company management regularly engages with investors by participating in industry media conferences. Management also meets in person and by telephone with many shareholders at other times throughout the year to solicit input and answer questions on a variety of topics. Company management shares shareholder viewpoints with the Board, and the Executive Compensation Committee takes this feedback into account when it reviews the Company’s executive compensation program. We believe our regular engagement with shareholders has been productive and provides an open exchange of ideas and perspectives for both the Company and its shareholders.
In anticipation of the completion of the Spin-off, the Company held an Investor Day in June 2015 to discuss the strategy, growth opportunities, financial projections and capital structure of its post-Spin-off business. Our Board reviewed and fully supported the strategic framework for long term value creation that we articulated during our Investor Day. This strategic framework continues to be the foundation for the Company’s growth going forward. More recently, during the fourth quarter of 2015, the Company reached out to shareholders representing more than 50% of our outstanding shares in order to understand their viewpoints concerning the Company following the Spin-off, including those in relation to corporate governance and compensation matters, and to offer an opportunity to meet with our Chairman and our President and CEO. Shareholder response to our outreach program has been favorable. The Company also has a policy that all of our directors attend our Annual Meeting of Shareholders, which presents yet another opportunity for us to engage directly with our shareholders. For those who are unable to attend any of our investor meetings, transcripts of all management presentations are available on our website atwww.tegna.com. Any shareholder who has an inquiry or meeting request is invited to contact Jeff Heinz, Vice President/Investor Relations, at 703-854-6917.
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PROPOSAL 1—ELECTION OF DIRECTORS
Information About Directors
TheOur Board members of our Board have a diverse set of qualifications, skills and experiences and also reflect diversity of age, tenure and gender. The Board regularly evaluates its composition to determine if there are areas for improvement. Our recent director refreshment activities led the Board to elect two new directors during 2018, supplementing the existing skills and experience of our Board and resulting in 5 of our 10 independent directors having less than 3 years of tenure.
AGE | TENURE | GENDER | ||
DIRECTOR SKILLS
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PROPOSAL 1—ELECTION OF DIRECTORS
Information About Directors
The Nominees
The following director nominees are currently serving on the Board and have been unanimously nominated by the Board on the unanimous recommendation of the Nominating and Public ResponsibilityGovernance Committee to stand forre-election at the Company’s 20162019 Annual Meeting for aone-year term. The principal occupation and business experience of each nominee, including the reasons the Board believes each of them should bere-elected to serve another term on the Board, are described below.
The Board of Directors unanimously recommends that the shareholders of the Company vote FOR the election of the nominees to serve as directors.
Gina L. Bianchini Founder and CEO, Mighty Networks Age: 46 Director since: 2018 | Experience: Ms. Bianchini, 46, is Founder and Chief Executive Officer of Mighty Networks, a position she has held since September 2010. Ms. Bianchini served as Chief Executive Officer of Ning, Inc. from 2004 to March 2010 andCo-founder and President of Harmonic Networks from March 2000 to July 2003. Qualifications: Ms. Bianchini possesses expertise, vision and creativity in the rapidly evolving world of social networking, a deep expertise in social media and community building technology platforms and significant digital andstart-up experience. Ms. Bianchini previously served on the board of Scripps Networks Interactive, Inc. from 2012 until its acquisition by Discovery Communications in 2018. She has served as a TEGNA director since 2018. |
Howard D. Elias Chairman of TEGNA; President, Dell Technologies Services and
Age: Director since:2008 | Experience: Mr. Elias,
Qualifications: Mr. Elias has extensive management, leadership and operational expertise in cloud computing, supply chain, marketing, corporate development and managing global customer support and other service organizations, and broad global business experience in information technology and management as a result of the various senior leadership positions he has held with Dell, EMC, Hewlett-Packard Company, Compaq, Digital Equipment Corp., AST Research and Tandy Corporation. He has served as a TEGNA director since 2008. |
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PROPOSAL 1—ELECTION OF DIRECTORS
Information About Directors
Stuart J. Epstein Chief Financial Officer, DAZN Group Age: 56 Director since: 2018 | Experience: Mr. Epstein, 56, is Chief Financial Officer of DAZN Group, a position he has held since September 2018. Previously, he was Senior Advisor, Evolution Media, from October 2017 to January 2018. He served asCo-Managing Partner of Evolution Media from September 2015 to September 2017 and Executive Vice President and Chief Financial Officer of NBCUniversal from September 2011 to April 2014. Prior to that, Mr. Epstein held various senior positions during his 23 years at Morgan Stanley, including Managing Director and Global Head of the Media & Communications Group within the investment banking division. Qualifications: Mr. Epstein has extensive experience in media, technology and the capital markets and deep transactional experience as a result of the various senior leadership positions he has held with DAZN Group, Evolution Media, NBCUniversal and Morgan Stanley. He has served as a TEGNA director since 2018. |
Lidia Fonseca
Age: Director since:2014 | Experience: Ms. Fonseca,
Qualifications: Ms. Fonseca has extensive expertise in data analytics, automation, building outstanding client experiences, overseeing strategic transformations, and leading strategic information technology operations as a result of the various senior leadership positions she has held in supply chain management and information technology with Pfizer, Quest Diagnostics, LabCorp, Synarc Inc. and Philips Healthcare. She has served as a TEGNA director since 2014. |
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Age: Director since: | Experience:
Qualifications:
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PROPOSAL 1—ELECTION OF DIRECTORS
Information About Directors
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Scott K. McCune
Age: Director since: 2008 | Experience: Mr. McCune,
Qualifications: Mr. McCune has extensive expertise in all aspects of |
Henry W. McGee Senior Age: Director since: 2015 | Experience: Mr. McGee,
Qualifications: Mr. McGee |
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PROPOSAL 1—ELECTION OF DIRECTORS
Information About Directors
Susan Ness
Age: Director since: 2011 | Experience: Ms. Ness,
Qualifications: Ms. Ness has extensive experience and expertise in global and domestic communications |
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PROPOSAL 1—ELECTION OF DIRECTORS
Information About Directors
Bruce P. Nolop Retired Age: Director since:2015 | Experience: Mr. Nolop,
Qualifications: Mr. Nolop |
Neal Shapiro President and Age: Director since: 2007 | Experience: Mr. Shapiro,
Qualifications: Mr. Shapiro has extensive experience and expertise in broadcasting, news production and reporting, journalism and First Amendment issues and has successfully built and led global news organizations as a result of the various senior leadership roles that he has held with WNET and NBC. He has served as a TEGNA director since 2007. |
Melinda C. Witmer Founder, LookLeft Media; Former Executive Vice President, Chief Video & Content Officer; Time Warner Cable Age: 57 Director since: 2017 | Experience: Ms. Witmer, 57, is the Founder of LookLeft Media, a startup company focused on the development of new real estate technology and media products, a position she has held since March 2018. Prior to starting LookLeft Media, Ms. Witmer was Executive Vice President, Chief Video & Content Officer of Time Warner Cable, a position she held from January 2012 until May 2016 when Time Warner Cable was acquired by Charter Communications. Prior to that, she served as Time Warner Cable’s Executive Vice President and Chief Programming Officer from January 2007, after holding multiple senior roles with Time Warner Cable beginning in 2001. Prior to joining Time Warner Cable, Ms. Witmer was Vice President and Senior Counsel at Home Box Office, Inc. Qualifications: Ms. Witmer has significant experience in the telecommunications and media industry, a deep understanding of the changing media landscape and experience in capitalizing on market opportunities, new technologies and emerging platforms in the media space. Ms. Witmer currently serves on the Advisory Board to the Dean of S.I. Newhouse School of Public Communications at Syracuse University. She previously served on the boards of iNDemand, the New York Mets and SportsNet NY. She has served as a TEGNA director since 2017. |
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PROPOSAL 1—ELECTION OF DIRECTORS
Committees of the Board of Directors
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the Board and its fourfive committees: the Audit Committee, Executive Committee, ExecutiveLeadership Development and Compensation Committee, Public Policy and Regulation Committee and Nominating and Public ResponsibilityGovernance Committee. The following chart shows the current membershipsmembership and chairpersonschairperson of each of our Board committees and the number of committee meetings held during 2015.2018.
# of Meetings
| Bianchini | Elias | Epstein | Fonseca | McCune | McGee | Ness | Nolop | Shapiro | Witmer | ||||||||||||||||||
Audit | | 🌑 | C | |||||||||||||||||||||||||
Executive | 0 | C | 🌑 | 🌑 | 🌑 | |||||||||||||||||||||||
Leadership Development and Compensation | 6 | |||||||||||||||||||||||||||
| 🌑 | |||||||||||||||||||||||||||
Nominating and | 🌑 | 🌑 | 🌑 | C | ||||||||||||||||||||||||
Public Policy and Regulation | 4 | 🌑 |
C – Chairperson
The Audit Committee assists the Board of Directors in its oversight of financial reporting practices and the quality and integrity of the financial reports of the Company. Each member of the Audit Committee meets the independence requirements of the SEC as well as those of the NYSE. In addition, the Board has determined that each of Bruce P. Nolop and Stuart J. Epstein is an audit committee financial expert, as that term is defined under the SEC rules. This Committee met teneight times in 2015.2018.
The Executive Committee may exercise the authority of the Board between Board meetings, except as limited by Delaware law. ThisThe Executive Committee did not meet in 2015.2018.
ExecutiveLeadership Development and Compensation Committee
The ExecutiveLeadership Development and Compensation Committee discharges the Board’s responsibilities relating to the compensation of the Company’s directors and executives and has overall responsibility for the Company’s compensation plans, principles and programs. The Committee’s duties and responsibilities include reviewing and approving on an annual basis corporate goals and objectives relevant to the compensation of the Company’s CEO and other senior executives, including members of the TEGNA Leadership Team and certain other Company officers. The Committee also monitors the Company’s human resources practices, including its performance in diversity and equal employment opportunity.
The Committee also is responsible for reviewing and discussing with management the Compensation Discussion and Analysis (CD&A) disclosures contained later in the Company’sthis Proxy Statement, and for making a recommendation as to whether the CD&A disclosures should be so included and incorporated by reference into the Company’s Annual Report on Form10-K. The Board of Directors has determined that each member of the Committee meets the independence requirements of the SEC as well as those of the NYSE. This Committee met fivesix times in 2015.2018.
The Committee has primary responsibility for administering the Company’s equity incentive plans and in that role is responsible for approving equity grants to our senior executives. The Committee historically has delegated to the CEO the authority for approving equity grants to employees other than our senior executives mentioned above within the parameters of a pool of shares approved by the Committee. This provides flexibility for equity grants to be made to employees below the senior leadership level who are less familiar to the Committee.
Under its charter, the Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser. The Committee is directly responsible for the appointment, compensation and oversight of any such consultant, counsel or adviser, and the Company shall provide appropriate funding for payment of reasonable compensation to any
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PROPOSAL 1—ELECTION OF DIRECTORS
Committees of the Board of Directors
such consultant, counsel or adviser, as determined by the Committee. In selecting a consultant, counsel or adviser, the Committee evaluates its independence by considering the following six factors and any other factors the Committee deems relevant to the adviser’s independence from management:
Provision of other services to the Company by the person that employs the consultant;
Amount of fees paid by the Company to the person that employs the consultant, as a percentage of that person’s total revenue;
Policies and procedures of the person that employs the consultant regarding prevention of conflicts of interest;
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PROPOSAL 1—ELECTION OF DIRECTORS
Committees of the Board of Directors
Ownership by the consultant of the Company’s stock; and
Any business or personal relationship between the consultant, or any person that employs the consultant and any executive officer of the Company.
The Committee retains Meridian Compensation Partners, LLC (Meridian) as its consultant to advise it on executive compensation matters. After considering the six factors used by the Committee to evaluate independence, the Committee determined that Meridian is an independent compensation consultant in accordance with applicable SEC and NYSE rules.
Meridian participates in Committee meetings as requested by the chairman of the Committee and communicates directly with the chairman of the Committee outside of meetings. Meridian specifically has provided the following services to the Committee:
Consulted on various compensation plans, policies and practices, ofincluding changes to the Company;2018 long term equity award program;
Participated in Committee executive sessions without management present;
Assisted in analyzing executive compensation practices and trends the appropriate relationship between pay and performance and other relevant compensation-related matters;
Consulted with management and the Committee regarding market data used as a reference for pay decisions;
Assisted in administering the design of the Company’s Change in Control Severance Plan2018 equity award program; and its Executive Severance Plan, each of which was adopted by the Committee following the Spin-off;
Nominating and Public ResponsibilityGovernance Committee
The Nominating and Public ResponsibilityGovernance Committee is charged with identifying individuals qualified to become Board members, recommending to the Board candidates for election orre-election to the Board, and considering from time to time the Board committee structure and makeup. The Committee also monitors the Company’s human resources practices, including its performance in diversity and equal employment opportunity, monitors the Company’s performance in meeting its obligations of fairness in internal and external matters, and takes a leadership role with respect to the Company’s corporate governance practices. In 2015, the Committee focused much of its attention on continuing to identify potential director candidates for both the Company and Gannett Co., Inc. in anticipation of the Spin-off. This Committee met fivethree times in 2015.2018.
The Nominating and Public ResponsibilityGovernance Committee charter sets forth certain criteria for the Committee to consider in evaluating potential director nominees. In addition to evaluating a potential director’s independence, the Committee considers whether director candidates have relevant experience in business and industry, government, education and other areas, and monitors the mix of skills and experience of directors in order to assure that the Board has the necessary breadth and depth to perform its oversight function effectively. The charter also encourages the Committee to work to maintain a board that reflects the diversity, in terms of gender, age, race and other self-identified diversity attributes of the communities we serve. The Committee evaluates potential candidates against these requirements and objectives. For those director candidates who appear upon first consideration to meet the Committee’s criteria, the Committee will engage in further research to evaluate their candidacy.
The Nominating and Public ResponsibilityGovernance Committee periodically retains search firms to assist in the identification of potential director nominee candidates based on criteria specified by the Committee and in evaluating and pursuing individual candidates at the direction of the Committee. The Committee will also consider timely written suggestions from shareholders. Shareholders wishing to suggest a candidate for director nomination for the 20172020 Annual Meeting should mail their suggestions to TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107,22102, Attn: Secretary. Suggestions must be received by the Secretary of the Company no earlier than December 27, 2019 and no later than January 25, 2017.16, 2020. The manner in which the Committee evaluates director nominee candidates suggested by shareholders will be consistent with the manner in which the Committee evaluates candidates recommended by other sources.
TheBy-laws of the Company establish a mandatory retirement age of 7073 for directors who have not been executives of the Company and 65 for directors who have served as executives, except that the Board of Directors may extend the retirement age beyond 65 for
8 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
Committees of the Board of Directors
directors who are or have been the CEO of the Company. The Company’s Principles of Corporate Governance also provide that a director who retires from, or has a material change in responsibility or position with, the primary entity by which that director was
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PROPOSAL 1—ELECTION OF DIRECTORS
Committees of the Board of Directors
employed at the time of his or her election to the Board of Directors shall offer to submit a letter of resignation to the Nominating and Public ResponsibilityGovernance Committee for its consideration. The Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken.
In September 2018, Mr. Epstein accepted a new position when he became chief financial officer of DAZN Group and in January 2019, Ms. Fonseca accepted a new position when she became chief digital and technology officer of Pfizer Inc. In accordance with the procedures outlined in the Company’s Principles of Corporate Governance, each of Mr. Epstein and Ms. Fonseca submitted a letter of resignation to the Committee for consideration. In each case, the Committee recommended that the Board not accept the resignation and the Board accepted the Committee’s recommendation. It was the sense of the Committee, and the Board more generally, that Mr. Epstein’s new role with DAZN Group would enhance the significant media and technology experience that he brings to the Board and that Ms. Fonseca’s new role with Pfizer would enhance the substantial data analytics and information technology expertise that she contributes to the Board.
Public Policy and Regulation Committee
The Public Policy and Regulation Committee assists the Board in its oversight of risks relating to certain legal, regulatory, compliance, public policy and corporate social responsibility matters that may impact the Company’s operations, performance or reputation. The Committee’s duties and responsibilities include reviewing and providing guidance to the Board about legal, regulatory and compliance matters concerning media, antitrust and data privacy laws, rules and regulations and monitoring legislative and regulatory trends and public policy developments that may affect the Company’s operations, strategy, performance or reputation. The Public Policy and Regulation Committee also is responsible for reviewing compliance with the Company’s Ethics Policy and assuring appropriate disclosure of any waiver of or change in the Ethics Policy for executive officers, and for reviewing the Ethics Policy on a regular basis and proposing or adopting additions or amendments to the Ethics Policy as appropriate. Each member of the Committee meets the independence requirements of the SEC as well as those of the NYSE. This Committee met four times in 2018.
The written charters governing the Audit Committee, the ExecutiveLeadership Development and Compensation Committee, the Nominating and Governance Committee and the NominatingPublic Policy and Public ResponsibilityRegulation Committee, as well as the Company’s Principles of Corporate Governance, are posted on the Corporate Governance page under the “Investors” menu of the Company’s website atwww.tegna.com. under the “Investors” menu. You may also obtain a copy of any of these documents without charge by writing to: TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107,22102, Attn: Secretary.
The Board and the Company have instituted strong corporate governance practices, a number of which are described above, to ensure that the Company operates in ways that support the long-term interests of our shareholders. Other important corporate governance practices of the Company include the following:
✓ | Our Board has adopted a proxy accessby-law provision. |
✓ | All of our directors are elected annually. |
✓ | We do not have a shareholder rights plan (poison pill) in place. |
✓ | Ten of our eleven nominees are independent. |
✓ | We have a robust shareholder engagement program. |
✓ | We separate the positions of Chairman and CEO and have an independent Chairman. |
✓ | We maintain an ongoing board refreshment process, which has resulted in our adding seven (7) directors during the past five years and the transition of the chairman role during 2018. |
✓ | Approximately 93% of the votes cast at last year’s annual meeting were in favor of the Company’s Say on Pay proposal. |
9 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
Corporate Governance
✓ | We have a majority vote standard for uncontested director elections and a director resignation policy. |
✓ | We have a single class share capital structure with all shareholders entitled to vote for director nominees. |
✓ | Our directors and senior executives are subject to stock ownership guidelines. |
✓ | The Board is subject to an annual performance evaluation. |
✓ | Mergers and other business combinations involving the Company generally may be approved by a simple majority vote. |
Additional information regarding the Company’s corporate governance practices is included in the Company’s Principles of Corporate Governance posted on the Corporate Governance page under the “Investors” menu of the Company’s website atwww.tegna.com. See the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion of the Company’s compensation-related governance practices.
The Company is committed to acting in the best interests of its shareholders, and views ongoing dialogue with shareholders as a critical component of the Company’s corporate governance program. As part of this commitment, the Company actively engages with its shareholders in order to fully understand their viewpoints concerning the Company, to garner feedback on areas for improvement, and to help our shareholders better understand our performance and long-term strategic plan. We believe our regular engagement with shareholders has been productive and provides an open exchange of ideas and perspectives for both the Company and its shareholders.
Company management regularly engages with many of its investors through in person and telephonic meetings throughout the year to solicit input and answer questions on a variety of topics. Company management provides the Board with regular updates regarding its shareholder outreach efforts as well as feedback received from shareholders, which helps to influence our policies and practices. In 2018, the Company strengthened its ability to engage with and respond to its shareholders when we appointed John Janedis, who previously served as managing director and senior equity research analyst for media, cable and telecom at Jefferies LLC, to serve as our senior vice president, capital markets and investor relations.
During 2018 and early in 2019, the Company actively engaged with shareholders, reaching out to shareholders representing, in the aggregate, more than 50% of our outstanding shares in order to understand their viewpoints concerning a variety of topics, including the following:
The Company’s strategic direction, including our growth, diversification and capital allocation strategies;
The media M&A environment and the Company’s acquisition strategy;
The Company’s position and opportunities to capitalize on the changing media landscape; and
Corporate governance, executive compensation and corporate responsibility matters.
The Company also has a policy that all of our directors attend our Annual Meeting of Shareholders, which presents yet another opportunity for us to engage directly with our shareholders. All of the standing directors, and those nominated for election at the time, attended the Company’s 2018 Annual Meeting of Shareholders.
For those who are unable to attend any of our investor meetings, transcripts of all management presentations are available on our website atwww.tegna.com. Any shareholder who has an inquiry or meeting request is invited to contact John Janedis, Senior Vice President/Capital markets and Investor relations, at703-873-6222.
THE BOARD’S ROLE IN RISK OVERSIGHT
Evaluating how senior leadership identifies, assesses, manages and monitors the various risks confronting the Company is one of the most important areas of the Board’s oversight. In carrying out this critical responsibility, the Board oversees the Company’s risk management function through regular discussions with senior leadership, considering the Company’s risks in the context of the Company’s strategic plan and operations. In addition, the Company has an enterprise risk management program to enhance the Board’s and management’s ability to identify, assess, manage and respond to strategic, market, operational and compliance risks facing the Company.
10 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
The Board’s Role in Risk Oversight
While the Board has primary responsibility for overseeing the Company’s risk management function, each committee of the Board also considers risk within its area of responsibility and the Company’s management team continuously identifies and manages the Company’s risks:
Responsibilities | ||
Board | • Primary responsibility for overseeing the Company’s risk management function and reviewing the steps management has taken to monitor and control the Company’s significant business risks, including potential financial, operational, privacy, cybersecurity, business continuity, legal and regulatory, and reputational exposures. | |
Individual Board Committees | • Consider and evaluate risks within its area of responsibility. • Chairs of each committee update the Board on significant risks and management’s response to those risks via periodic reports. | |
Audit | • Reviews risks relating to accounting and financial controls. • Oversees the Company’s enterprise risk management program. • Reviews the steps management has taken to monitor and control risk exposures. | |
Leadership Development and Compensation | • Reviews risks relating to compensation matters. • Coordinates with independent compensation consultant to review the Company’s executive compensation program and determine if it creates any risks which are likely to have a material adverse effect on the Company. • Oversees and evaluates risks associated with the development of the Company’s executives and succession planning. | |
Nominating and Governance | • Oversees the Company’s risks associated with its corporate governance practices. | |
Public Policy and Regulation | • Oversees the Company’s risk exposure associated with media, antitrust and data privacy laws, rules and regulations, and public policy and corporate social responsibility matters. | |
Management | • Responsible for implementingday-to-day risk management processes. • Reports to the Board and its committees on risk management matters. |
With respect to risks relating to compensation matters, the Leadership Development and Compensation Committee, with the assistance of its independent compensation consultant, has reviewed the Company’s executive compensation program and has concluded that the program does not create risks that are reasonably likely to have a material adverse effect on the Company. The Leadership Development and Compensation Committee views the design of the Company’s annual cash and long-term equity incentives as providing an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long-term profitability and shareholder value creation and does not encourage unnecessary or excessive risk taking at the expense of long-term results.
CORPORATE SOCIAL RESPONSIBILITY
TEGNA is driven by our strongly-held purpose to serve the greater good of our communities. Our culture is defined by our values of inclusion, integrity, innovation, impact and results. Through impactful journalism, local community engagement, sustainability initiatives, diversity and inclusion efforts and workforce development, we believe we can drive business results while making a positive difference in our communities.
Our Board supports these efforts and has delegated the oversight of the Company’s corporate social responsibility efforts to its Public Policy and Regulation Committee. The Public Policy and Regulation Committee reviews and reports to our Board on a periodic basis on the Company’s corporate social responsibility and sustainability efforts, which include:
• | Ethics and Journalistic Integrity: Given the nature of our business, integrity is one aspect of corporate citizenship that is particularly relevant and central to what we do; we educate our journalists on proper ethical conduct and have adopted five core Principles of Ethical Journalism which guide our production and reporting of news. |
11 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
Corporate Social Responsibility
• | Community Engagement: Each year, TEGNA stations raise funds to support numerous local causes that are making a difference in our communities, such as WHAS in Louisville and its annual Crusade for Children Telethon, and WUSA9 in Washington, DC and its “Do More 24” fundraiser, during which the station encouraged viewers to donate and help over 850 organizations across Maryland, Virginia and DC. |
• | Diversity and Inclusion: We believe that maintaining a diverse workforce is critical to sustaining strong long-term financial results—we are committed to investing in diversity-related programs and initiatives and have been recognized for this commitment. |
• | Environmental and Sustainability: We are focused on environmental and sustainability efforts through our own operations, and the environmental and sustainability issues our stations regularly cover that affect their communities. Our Environmental Policy Statement also helps us to maintain this focus by requiring employees to participate in achievingE&S-specific goals. |
• | Workforce and Talent Development: We are dedicated to the development of our employees across the organization and creating an environment that offers professional challenges, encourages innovation and rewards results—our Executive Leadership and Mentoring programs help us accomplish this. |
We are also committed to fund nonprofit organizations and programs that promote and celebrate the diversity of the communities we serve through the TEGNA Foundation, the corporate foundation of our Company.
¡ | Through its Community Grant Program, TEGNA Foundation works with our stations to identify and help address local community needs. |
¡ | Other programs invest in the future of the media industry, encourage employee giving, and contribute to a variety of charitable causes. |
The Board of Directors has determined that, other than David T. Lougee, all of our current directors are, and all directors who served during the Company’s most recently completed fiscal year were, “independent” of the Company within the meaning of the rules governing NYSE-listed companies. For a director to be “independent” under NYSE rules, the Board of Directors must affirmatively determine that the director has no material relationship with the Company, either directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company. To assist it in making these determinations, the Board has determined that the following categories of relationships between a director and the Company are not material:
Employment of a director or a director’s immediate family member by a company or organization that made payments to, or received payments from, the Company or any of its subsidiaries for property or services in an amount which, in each of the last three fiscal years, did not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues;
A director’s position as a director with, or the direct or indirect ownership by a director or a director’s immediate family member of a 10% or greater equity interest in, a company or organization that made payments to, or received payments from, the Company or any of its subsidiaries for property or services in an amount which, in each of the last three fiscal years, did not exceed the permitted thresholds above; and
A relationship of a director or a director’s immediate family member with a charitable organization, as an executive officer, board member, trustee or otherwise, to which the Company or any of its subsidiaries has made, in any of the last three fiscal years, charitable contributions of not more than the greater of $100,000 or 2% of such charitable organization’s consolidated gross revenues.
In making its independence determinations, our Board considered all relationships, direct and indirect, between each director and our Company that were identified in questionnaires completed by each Board member.
Consistent with the NYSE rules, the Company’s Principles of Corporate Governance call for the Company’snon-management directors to meet in regularly scheduled executive sessions without management as they deem appropriate. The Company’snon-management directors held five executive sessions in 2018 and will meet in executive sessions as appropriate throughout 2019.
12 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
Annual Board Performance Evaluation
ANNUAL BOARD PERFORMANCE EVALUATION
The Company believes in continuously improving its corporate governance practices in order to support the Company’s performance. In 2018, the Board retained an independent consultant experienced in corporate governance matters to conduct anin-depth study of the Board’s effectiveness and to assist it with the annual performance evaluation process. The consultant interviewed each director to obtain his or her assessment of the effectiveness of the Board and its committees, including identifying opportunities for the Board to enhance its effectiveness. The Board then met with the consultant to discuss the consultant’s findings and recommendations for enhancing the Board’s overall operation and effectiveness. As a result of this process, the Board implemented a number of the consultant’s recommendations.
The Company has long maintained a code of conduct and ethics (the “Ethics Policy”) that sets forth the Company’s policies and expectations. The Ethics Policy, which applies to every Company director, officer and employee, addresses a number of topics, including conflicts of interest, relationships with others, corporate payments, the appearance of impropriety, disclosure policy, compliance with laws, corporate opportunities and the protection and proper use of the Company’s assets. The Ethics Policy meets the NYSE’s requirements for a code of business conduct and ethics as well as the SEC’s definition of a code of ethics applicable to the Company’s senior officers. Neither the Board of Directors nor any Board committee has ever granted a waiver of the Ethics Policy.
The Ethics Policy is available on the Corporate Governance page under the “Investors” menu of the Company’s website at www.tegna.com.www.tegna.com under the “Investors” menu. You may also obtain a copy of the Ethics Policy without charge by writing to: TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107,22102, Attn: Secretary. Any additions or amendments to the Ethics Policy, and any waivers of the Ethics Policy for executive officers or directors, will be posted on the Corporate Governance page under the “Investors” menu of the Company’s website and similarly provided to you without charge upon written request to this address.
The Company has a telephone hotline staffed by an independent third party for employees and others to submit their concerns regarding violations or suspected violations of the Company’s Ethics Policy or violations of law and for reporting any concerns regarding accounting or auditing matters on a confidential anonymous basis. Employees and others can report concerns by calling1-800-695-1704 or by emailing or writing to the addresses provided in the Company’s Ethics Violation Reporting Policy found on the Corporate Governance page of the Company’s website atwww.tegna.comunder the “Investors” menu of the Company’s website.menu. Any concerns regarding accounting or auditing matters so reported will be communicated to the Company’s Audit Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; RELATED TRANSACTIONS
Our Company has not had compensation committee interlocks with any other company, nor has our Company engaged in any material related transactions since January 1, 2018, the first day of our last fiscal year. Although no such related transactions have occurred or are anticipated, the Board will consider any other future transactions involving the Company, on the one hand, and any of its officers or directors, on the other hand, on acase-by-case basis, and any such approved transaction involving a director will be considered in assessing his or her independence.
The Company has adopted a related person transaction policy that outlines the procedures that directors not involved in the transaction will follow in connection with reviewing certain transactions involving the Company and related persons. The policy takes into account the categories of transactions that the Board has determined are not material in making determinations regarding independence and requires directors and executive officers to notify the Company’s general counsel of any potential related person transactions.
13 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
Report of the Audit Committee
The Audit Committee assists the Board of Directors in its oversight of financial reporting practices and the quality and integrity of the financial reports of the Company, including compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and the performance of the Company’s internal audit function. The Audit Committee appoints and is responsible for setting the compensation of the Company’s independent registered public accounting firm. In selecting the Company’s independent registered public accounting firm, the Audit Committee considers, among other things, historical and recent performance of the current independent audit firm, known significant legal or regulatory proceedings related to the firm, external data on audit quality and performance, industry experience, the experience and qualifications of the lead partner, firm capabilities and audit approach, and the independence of the audit firm. The Committee reviews the firm’s qualifications on an annual basis, assessing, among other things, the quality of its service, the quality of the communication and interaction with the firm, and the firm’s independence, objectivity and professional skepticism. In conducting this review, the Committee also considers the advisability and potential impact of selecting a different independent public accounting firm.
The Audit Committee also provides oversight of the Company’s internal audit function including the review of proposed audit plans and the coordination of such plans with the Company’s independent registered public accounting firm. The Audit Committee oversees the adequacy and effectiveness of the Company’s accounting and financial controls and the guidelines and policies that govern the process by which the Company undertakes financial, accounting and audit risk assessment and risk management. The Audit Committee also is responsible for reviewing compliance with the Company’s Ethics Policy and assuring appropriate disclosure of any waiver of or change in the Ethics Policy for executive officers, and for reviewing the Ethics Policy on a regular basis and proposing or adopting additions or amendments to the Ethics Policy as appropriate. In connection with the Ethics Policy, the Audit Committee has established procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting controls or auditing matters and the confidential, anonymous submission by employees of the Company of any accounting or auditing concerns. The Audit Committee operates under a formal written charter that has been adopted by the Board of Directors.
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PROPOSAL 1—ELECTION OF DIRECTORS
Report of the Audit Committee
The Audit Committee members are not professional accountants or auditors, and their role is not intended to duplicate or certify the activities of management and the independent registered public accounting firm, nor can the Committee certify that the independent registered public accounting firm is “independent” under applicable rules. The Committee serves a board-levelBoard-level oversight role, in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the basis of the information it receives, discussions with management and the independent registered public accounting firm, and the experience of the Committee’s members in business, financial and accounting matters.
During fiscal years 20142017 and 2015,2018, the Company’s independent registered public accounting firm for each of those years, Ernst & Young LLP (“EY”), billed the Company the following fees and expenses:
2014 | 2015 | |||||||
Audit Fees(1)(2) | $ | 4,809,000 | $ | 3,628,087 | ||||
Audit-Related Fees(3) | $ | 280,000 | $ | 300,000 | ||||
Audit-Related Fees – Spin-off(3) | $ | 1,000,000 | $ | 2,350,000 | ||||
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|
|
| |||||
Audit-Related Fees - Total(3) | $ | 1,280,000 | $ | 2,650,000 | ||||
Tax Fees(4) | $ | 235,000 | $ | 291,443 | ||||
All Other Fees(5) | $ | 0 | $ | 0 | ||||
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|
|
| |||||
Total(6) | $ | 6,324,000 | $ | 6,569,530 |
2017 | 2018 | |||||||||
Audit Fees(1) | $3,148,180 | $3,296,950 | ||||||||
Audit-Related Fees(2) | $ 205,000 | $ 210,403 | ||||||||
Audit-Related Fees –Spin-off(2) | $1,222,634 | $ 0 | ||||||||
Audit-Related Fees - Total(2) | $1,427,634 | $ 210,403 | ||||||||
Tax Fees(3) | $ 180,000 | $ 115,000 | ||||||||
All Other Fees(4) | $ 0 | $ 0 | ||||||||
Total(5) | $4,755,814 | $3,622,353 |
(1) | Audit Fees principally relate to professional services rendered in connection with the annual integrated audit of the Company’s consolidated financial statements and internal control over financial reporting and the review of quarterly reports on Form |
(2) | Audit-Related Fees for |
Tax Fees principally relate to tax planning services and advice in the U.S. |
No services were rendered during either |
The Audit Committee has adopted a policy for thepre-approval of services provided by the Company’s independent registered public accounting firm. Under the policy, particular services or categories of services have beenpre-approved, subject to a specific budget. Periodically, but at least annually, the Audit Committee reviews and approves the list ofpre-approved services and the maximum threshold cost of performance of each. The Audit Committee is provided with a status update on all EY services performed by the Company’s independent registered accounting firm periodically throughout the year and discusses such services with management and EY.the independent registered accounting firm. Pursuant to itspre-approval policy, the Audit Committee has delegatedpre-approval
14 | 2019 PROXY STATEMENT |
PROPOSAL 1—ELECTION OF DIRECTORS
Report of the Audit Committee
authority for services provided by EYthe Company’s independent registered accounting firm to its Chair, Bruce P. Nolop. Mr. Nolop maypre-approve up to $100,000 in services provided by EY,the independent registered accounting firm, in the aggregate at any one time, without consultation with the full Audit Committee, provided he reports such approved items to the Audit Committee at its next scheduled meeting. In determining whether a service may be provided pursuant to thepre-approval policy, consideration is given to whether the proposed service would impair the independence of the independent registered public accounting firm.
In connection with its review of the Company’s 20152018 audited financial statements, the Audit Committee received from EY written disclosures and a letter regarding EY’s independence in accordance with applicable requirements of the Public Company Accounting Oversight Board, including a detailed statement of any relationships between EY and the Company that might bear on EY’s independence, and has discussed with EY its independence. The Audit Committee considered whether the provision ofnon-audit services by EY is compatible with maintaining EY’s independence. EY stated that it believes it is in full compliance with all of the independence standards established by the various regulatory bodies. The Audit Committee also discussed with EY various matters required to be discussed by Statements on Auditing Standards No. 16, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the PCAOB in Rule 3200T, including, but not limited to, the selection of and changes in the Company’s significant accounting policies, the basis for management’s accounting estimates, EY’s conclusions regarding the reasonableness of those estimates, and the disclosures included in the financial statements.
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PROPOSAL 1—ELECTION OF DIRECTORS
Report of the Audit Committee
The Audit Committee met with management, the Company’s internal auditors and representatives of EY to review and discuss the Company’s audited financial statements for the fiscal year ended December 31, 2015.2018. Based on such review and discussion and based on the Audit Committee’s reviews and discussions with EY regarding the various matters mentioned in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’sForm 10-K for the 20152018 fiscal year, and the Board has approved that recommendation.
The Audit Committee has engaged PricewaterhouseCoopers LLP to replace EY as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2019. See “Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm” for more information.
Audit Committee
Bruce P. Nolop, Chair
Jill GreenthalStuart J. Epstein
Marjorie MagnerLidia Fonseca
Susan NessScott K. McCune
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Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors is responsible for the appointment, compensation, retention and oversight of the Company’s independent auditor. Theregistered public accounting firm.
Following a comprehensive, competitive process, on October 8, 2018, the Audit Committee has appointed Ernst & Youngof the Board of Directors approved the engagement of PricewaterhouseCoopers LLP (EY)(“PwC”) as the Company’s independent registered public accounting firm for ourthe Company’s fiscal year ending December 31, 2016.2019 and dismissed EY was first appointedeffective upon the conclusion of its audit of the Company’s independent registered public accounting firm in 2005 and weconsolidated financial statements for the year ended December 31, 2018. We believe that the retentionappointment of EYPwC is in the best interests of the Company and its shareholders. Upon the recommendation of the Audit Committee, the Board of Directors is submitting the appointment of EYPwC as the Company’s independent registered public accounting firm for shareholder ratification at the 20162019 Annual Meeting.
The Board of Directors unanimously recommends that the shareholders of the Company vote FOR the ratification of the appointment of Ernst & YoungPricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the current year.
OurBy-laws do not require that the shareholders ratify the appointment of EYPwC as our independent registered public accounting firm. We are seeking ratification because we value our shareholders’ views on the Company’s independent registered accounting firm and believe it is a good corporate governance practice. If the shareholders do not ratify the appointment, the Audit Committee will reconsider whether to retain EY,PwC, but in its discretion may choose to retain EYPwC as the Company’s independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee in its discretion may change the appointment at any time during the year if it determines that a change would be in the best interests of the Company and its shareholders.
The reports of EY on the Company’s consolidated financial statements for the years ended December 31, 2018 and 2017 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles. During the years ended December 31, 2018 and 2017, there were no disagreements with EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of EY, would have caused them to make reference thereto in their reports. During the years ended December 31, 2018 and 2017, there were no “reportable events” requiring disclosure pursuant to paragraph (a)(1)(v) of Item 304 of RegulationS-K.
During the Company’s two most recent fiscal years ended December 31, 2017 and December 31, 2018, neither the Company nor anyone on its behalf consulted PwC regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or on the type of audit opinion that might be rendered on the consolidated financial statements of the Company, and neither a written report nor oral advice was provided to the Company that PwC concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of RegulationS-K or a reportable event as described in Item 304(a)(1)(v) of RegulationS-K.
The Audit Committee believes it is important for the independent auditor to maintain its objectivity and independence. In accordance with SEC rules and EYPwC policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit services to our Company. For lead and concurring review audit partners, the maximum number of years of service in that capacity is five years. The Audit Committee and its Chairman are involved in the process for selecting the lead audit partner.
A representativeOne or more representatives of EY and PwC is expected to be present at the 20162019 Annual Meeting. The EYEach representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from shareholders.
The approval of this Proposal 2 requires the affirmative vote of a majority of the votes that could be cast by the shareholdersshares of common stock present in person or represented by proxy and entitled to vote.vote at the 2019 Annual Meeting. Your bank, broker or other intermediary may vote without your instructions on this proposal.
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COMPENSATION DISCUSSION AND ANALYSIS
In this Compensation Discussion and Analysis section, references to “the Committee” are to the ExecutiveLeadership Development and Compensation Committee of the Board of Directors. References to “NEOs” are to our Named Executive Officers, who for the 20152018 fiscal year were: Gracia C. Martore,David T. Lougee, President and Chief Executive Officer, Victoria D. Harker, Executive Vice President and Chief Financial Officer, David T. Lougee, President/TEGNA Lynn Beall (Trelstad)*, Executive Vice President and Chief Operating Officer—Media John A. (Jack) Williams, President/TEGNA Digital,Operations, and Todd A. Mayman, Executive Vice President/Chief Legal and Administrative Officer.
On June 29, 2015,As previously reported, in connection with an internal corporate reorganization, the position of Executive Vice President/Chief Legal and Administrative Officer of the Company completedhas been eliminated, resulting in the previously announced separationtermination of its publishing businessemployment without cause of Mr. Mayman. Effective as of January 1, 2019, Akin S. Harrison has been promoted to the position of Senior Vice President, General Counsel and its affiliated digital platformsSecretary, replacing Mr. Mayman in an executive officer role responsible for the Company’s legal affairs. Mr. Mayman departed from its broadcasting and digital businesses in order to create two publicly traded companies with impressive scale and financial strength. In connection with the Spin-off, Robert J. Dickey resigned from his position with the Company in order to become the President and Chief Executive Officer of Gannett Co., Inc. (Gannett). Mr. Dickey is included in certain sections of this Proxy Statement as a result of the compensation he earned prior to the Spin-off as President/U.S. Community Publishing.March 2019. When we discuss in this Compensation“Compensation Discussion and Analysis sectionAnalysis” our compensation objectives for our NEOs for 20152019 and prospectively, we are addressing only those NEOs who are continuing to serve as executive officers: Ms. Martore,Mr. Lougee, Ms. Harker Mr. Lougee, Mr. Williams and Mr. Mayman,Ms. Beall, unless otherwise noted.
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EXECUTIVE COMPENSATION
Executive Summary
This Executive Summary will provide an overview of the following key areas:Shareholder Return, Performance Highlights, Pay for Performance, Leadership Development and Compensation Committee Responsibilities, Guiding Principles, Compensation-Related Governance Practices and Say on Pay.
SHAREHOLDER RETURN
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These graphs show that our Company’s stock outperformed the S&P 500 Index and an index comprised of the Company’s 2015-2017 TSR Peer Group (“Peer Group”) over the 1-year, 3-year and 5-year periods ending December 31, 2015. (See page 25 of this Proxy Statement for a list of the companies included in the Peer Group.) The S&P 500 Index includes 500 U.S. companies in the industrial,
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EXECUTIVE COMPENSATION
Executive Summary
utilities and financial sectors and is weighted by market capitalization. The total returns of the Peer Group also are weighted by market capitalization. The 1-year, 3-year and 5-year graphs depict representative results of investing $100 in the Company’s common stock, the S&P 500 Index and Peer Group (excluding AOL Inc. and Media General Inc. due to completed and pending acquisitions) at market close on December 31 of 2014, 2012 and 2010, respectively. They assume that dividends were reinvested monthly with respect to the Company’s common stock, daily with respect to the S&P 500 Index and monthly with respect to each Peer Group company, with the Company’s post-Spin-off results calculated using the combined result of one TEGNA share and one-half Gannett share beginning June 29, 2015.
PERFORMANCE HIGHLIGHTS
TEGNA ACHIEVED
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Operating Revenues
$
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BILLION
| Adjusted EBITDA $781 MILLION | Free Cash Flow
$ MILLION
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MILLION
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Highlights of the Company’s 20152018 performance included:
Strong |
Non-GAAP EPS. The Company’snon-GAAP earnings per diluted share from continuing operations were $1.83 per diluted share. |
Strong free cash flow. The Company generated |
PAY FOR PERFORMANCE
The Committee supports compensation policies that place a heavy emphasis on pay-for-performance, and has committed that for each year at least 50% of NEO annual equity awards (based on number of shares) will be performance-based awards that are earned or paid out based on the achievement of performance targets. In 2015, the percentage of NEO annual equity awards (based on number of shares) that were performance-based ranged from approximately 58% for most NEOs, to 69% for our CEO. Based on award value, 75% of our CEO’s annual equity award and 65% of the annual equity award of each of the other NEOs was performance-based. The Company awards performance shares that may be earned based on how the Company’s total shareholder return (TSR) compares to the TSR of the Company’s Peer Group during a three-year measurement period.
* | “Beall” is Ms. Trelstad’s maiden name and the name she uses for business purposes. “Trelstad” is her married and legal name. Ms. Trelstad is referred to throughout this Proxy Statement as Ms. Beall. |
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EXECUTIVE COMPENSATION
Executive Summary
Reconciliations of the followingnon-GAAP financial measures to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form10-K, filed March 1, 2019: adjusted EBITDA—page 25;non-GAAP earnings per share—page 24; and free cash flow—page 25.
PAY FOR PERFORMANCE
The Committee supports compensation policies that place a heavy emphasis on pay for performance. Having our NEOs receive a higher proportion of their long-term awards as performance shares that may be earned, if at all, based on the Company’s achievement of performance goals established by the Committee rather than restricted stock units (which are service-based) strengthens the pay for performance aspect of the Company’s long-term incentive program. The percentage of NEO annual equity awards granted on March 1, 2018 (based on award value) that were performance-based were 65% for our CEO and 55% for each of the other NEOs.
60% OF OUR CEO’S
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The following chart compares Ms. Martore’s Adjusted Summary Compensation Table (SCT) CompensationPresident and RealizedCEO Target Pay between 2013 and 2015 in comparison to our cumulative 3-year total shareholder return relative to the Peer Group. During this period, her Realized Pay has exceeded her Adjusted SCT Compensation due to outstanding absolute and relative total shareholder returns.Mix
Ms. Martore’s Realized Pay between 2013 and 2015 consisted of:
2013 ($) | 2014 ($) | 2015 ($) | ||||||||||
Base salary received | 900,000 | 1,000,000 | 1,000,000 | |||||||||
Bonus | 2,000,000 | 2,750,000 | 2,750,000 | |||||||||
Stock option exercises | 0 | 1,292,640 | 2,385,596(1 | ) | ||||||||
RSU/Performance share vesting | 2,831,820 | 10,398,380 | 8,564,245(1 | ) | ||||||||
Total* | 5,731,820 | 15,441,020 | 14,699,841 |
The amount of pay presented for Ms. Martore and other NEOs in the Summary Compensation Table includes the grant date fair value of long-term incentive awards for accounting purposes. Based on the performance of our share price and how the Company’s total shareholder return compares to the total shareholder returns of our Peer Group, the amount of pay actually realized by our NEOs from these awards may differ significantly from their accounting value. As a result, we believe it is useful to compare Ms. Martore’s Realized Pay between 2013 and 2015 with her Adjusted SCT Compensation for the same period. For this purpose, we define:
“Adjusted SCT Compensation” as the compensation reported in the Summary Compensation Table for the applicable year, adjusted by excluding “Changes in Pension Value and Nonqualified Deferred Compensation Earnings” and “All
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EXECUTIVE COMPENSATION
Executive Summary
The preceding chart and table are not substitutes for the information required to be included in the Summary Compensation Table, but provide additional information with regard to Ms. Martore’s pay.
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LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE RESPONSIBILITIES
The Committee oversees the Company’s executive compensation program and is responsible for:
The Committee also regularly reviews other components of executive compensation, including benefits, perquisites and post-termination pay.
18 | �� | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Executive Summary
GUIDING PRINCIPLES
In making its NEO compensation decisions, the Committee is guided by the following principles:
• | Pay for performance— |
to reward future service and performance rather than past performance. As such, the value of equity award opportunities will tend to vary less from year to year. |
• | Attract, retain and motivate—We are committed to attracting and retaining superior executive talent by offering a compensation structure that motivates key employees to ensure our overall success and long-term strength. |
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EXECUTIVE COMPENSATION
Executive Summary
• | Fairness— |
• | Pay competitively—We |
• | Promote stock ownership— |
executive stock ownership are regularly reviewed by the Committee and approved by the full Board. Our senior executives are expected to increase their stock ownership until they reach a minimum guideline equal to a multiple of their annual base salary |
The following table reflects the minimum stock ownership guideline for each NEO and the progress each NEO has made towards meeting the minimum guideline as of December 31, 2015, based on the closing price of a share of Company stock on such date.continuing NEO. All of thethese NEOs have exceeded the guidelines.met or are on track to meet their minimum ownership guideline.
NAME | MINIMUM GUIDELINE MULTIPLE OF BASE |
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| 5X | |||||||
MS. HARKER | 3X | |||||||
| 2X | |||||||
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The minimum guideline is one time1X base salary for other key senior executives of the Company. The Company’s stock ownership guidelines require that executives hold allafter-tax shares they receive from the Company as compensation until they have met the stock ownership guidelines detailed above.above and if they subsequently fall below such guideline.
COMPENSATION-RELATED GOVERNANCE PRACTICES
The Board’s commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by the Committee. The Company’s compensation-related governance practices and policies of note include the following:
Performance-based pay. |
Outcome alignment. Each year we review the Company’s compensation and financial performance against internal budgets, financial results from prior years and Peer Group market data to make sure that executive compensation outcomes are aligned with the absolute and relative performance of the Company. |
Clawback. We have a recoupment policy which |
All newchange-in-control arrangements are double trigger without excise taxgross-ups. |
✓ | Double-trigger equity vesting upon a change in control. A change in control of the Company will only accelerate full vesting of equity awards granted to executives after 2015 if the awards are not continued or assumed in connection with the change in control or the recipient has a qualifying termination of employment within two years following the date of the change in control. |
19 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Executive Summary
No income taxgross-ups. We |
Good stock option practices. We have never repriced, replaced, backdated or springloaded stock options nor granted stock options with a reload feature, nor does the Company loan funds to employees to enable them to exercise stock options. |
Anti-hedging. We maintain a policy that prohibits the Company’s employees and directors from hedging or short-selling the Company’s shares. |
Anti-pledging. We maintain a policy that prohibits the Company’s executive officers and directors from pledging the Company’s shares. |
Risk evaluation. We regularly evaluate the risks associated with the Company’s executive compensation plans and programs and consider the potential relationship between compensation and risk taking. |
No unearned dividends. We do not pay dividends or dividend equivalents on unearned |
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EXECUTIVE COMPENSATION
Executive Summary
No cash buyouts. |
The Committee has further strengthened the Company’s compensation-related governance practices and policies by recently approving the following change:
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SAY ON PAY
93% OF OUR SHAREHOLDERS SUPPORTED OUR EXECUTIVE COMPENSATION PROGRAM AT THE 2018 ANNUAL MEETING |
At last year’s annual meeting of shareholders, approximately 96%93% of the votes cast were in favor of the Company’s Say on Pay proposal, indicating strong support for the Company’s executive compensation program, including the long-term incentive program described in the Company’s 20152018 Proxy Statement. The Committee will continue to consider the outcome of the Company’s Say on Pay votes when making future NEO compensation decisions.
OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM
Key Components of Annual Compensation Decisions
The Company has designed an executive compensation program that is currently comprised of several components, as more fully discussed in the pages that follow. The key components of the Company’s annual compensation decisions are described in the following table.
COMPONENT | DESCRIPTION | PERFORMANCE CONSIDERATIONS | PAY OBJECTIVE | |||||
Short Term Cash Compensation | BASE SALARY | Pay for service in executive role. | Based on the nature and responsibility of the position, achievement of key performance indicators, internal pay equity among positions and competitive market data. | Attraction and retention. Base salary adjustments also allow the Committee to reflect an individual’s performance or changed responsibilities. | ||||
ANNUAL BONUS | Short-term program providing NEOs with an annual cash bonus payment. | Based on the Committee’s assessment of each NEO’s contributions to Company-wide performance and achievement of key performance indicators. | Reward performance in attaining individual and Company performance goals. | |||||
Long-Term Equity Incentives | PERFORMANCE SHARES | Long-term program through which participants are given an opportunity to earn shares of Company common stock based upon how the Company’s | Based on the achievement of the Company’s |
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RESTRICTED STOCK UNITS | Long-term program providing for delivery of shares of common stock upon continued employment. | Based on the achievement of the Company’s financial and strategic goals and the creation of shareholder value. | Retain executives, foster stock ownership and align their interests with those of shareholders. |
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
HOW THE COMMITTEE DETERMINES NEO COMPENSATION
The Committee determines NEO compensation in its sole discretion based on its business judgment, informed by the experience of the Committee members, input from the Committee’s independent compensation consultant, market data, management’s and the Committee’s assessment of the NEOs andNEO, achievement of key performance indicators, the Company’s performance and progress towards achievement of its strategic plan. While the Committee takes management recommendations into account when determining NEO compensation, the Committee relies primarily on its collective judgment of the performance of the Companyplan and our NEOs in light of the challenges confronting our businesses and our progress toward achieving the Company’s strategic plan. business.
The Committee does not focus on any one particular objective, formula or financial metric, but rather on what it considers to be value-added quantitative and qualitative goals in furtherance of our compensation guiding principles described in the Executive Summary of this Compensation Discussion and Analysis.
Factors Considered by the CommitteeKey Performance Indicators
The Committee usesassesses the degree and extent of achievement of key performance indicators (KPIs) as itsa principal evaluation tool for making NEO compensation decisions. KPIs, set annually for each of our executive officers, consist of individually designed qualitative and quantitative goals organized around individual, operating unit and/or Company performance in the areas of revenue, profit, productthree areas:
Profit and people. Quantitative KPIsRevenue Goals, which include, whereas appropriate, revenue, adjusted EBITDA, operating income, free cash flow, digital revenue and digitalother financial goals for the Company and the respective divisions andbusinesses and/or functions over which each NEO has operational or overall responsibility. Qualitative KPIs include, whereresponsibility;
People Goals, intended to help the Committee measure the NEO’s contributions through, as appropriate, measures of leadership, innovation, collaboration, new products and programs in supportachievement of the Company’s strategic plan, diversity initiatives, First Amendment activities, and other significant qualitative objectives. For 2015, the CEO’s KPIs were heavily weighted toward the Company’s financial performance, and the execution of a strategic plan that positions the Company for the future. The KPIs for the other NEOs were heavily weighted toward the financial performance of the divisions and operations for which they are responsible. Each KPI is weighted based upon its relative importance, with revenue and adjusted EBITDA representing more than 50% of the weighting for each NEO other than Mr. Mayman, our Chief Legal and Administrative Officer.
The Committee also considers the financial performance of the Company using the following financial measures: total revenues, operating income, net income attributable to TEGNA, income from continuing operations, earnings per share, return on equity, operating cash flow, free cash flow, free cash flow per diluted share, after tax cash flow per share, operating incomeobjectives such as a percentage of sales and debt to EBITDA, although no one measure is given greater weight than the others. In assessing these financial performance measures, the Committee compares them to management budgets approved by the Board at the beginning of the year and the Company’s financial results from prior years. The Committee selected these financial measures because it considers them to be broad enough to capture the most significant financial aspects of an organization as large as ours yet also focused enough to represent the financial measures that we believe drive our financial success.
In addition, the Committee evaluates the Company’s progress toward the goals of its strategic plan, as well as the achievement of qualitative goals including leadership in defending the First Amendment, promoting an ethical Company work environment and diverse workforce and maintaining itsour reputation as a good corporate citizen of the local, national and international communities in which it does business.we do business; and
Product Goals, which include specific areas in which the NEO is asked to innovate and collaborate to adopt and implement new products and programs in support of the strategic plan.
Each NEO’s KPIs include multiple items in each of the three areas. The KPIs are intended to be challenging but realistic, with a high degree of difficulty in achieving all of the goals set for each NEO. Accordingly, the Committee’s assessment of NEO performance versus KPIs is holistic, with no particular weighting ascribed to achievement of any particular item in any area.
While the Committee takes into consideration the degree of achievement of each NEO’s KPIs and the Company performance goals and financial measures set forth above in making compensation decisions, the Committee exercises its business judgment, in its sole discretion, to set NEO compensation.
Comparative Market Data
To assist the Committee in making decisions affecting 2015 NEO compensation opportunities, Company management provided it with a report regarding, among other things, executive compensation trends and practices,data, which the Committee reviewed and used in itsyear-end compensation decisions. Management also reviewedThe report included data from the Willis Towers Watson Media Compensation Survey, the Willis Towers Watson General Industry Executive Compensation Survey, the Croner Digital Content and Technology Survey and proxy data from Equilar, a widely used source of detailed executive compensation information (collectively, “Comparative Market Data”). The Company
Through use of this data, the Committee compares its NEO salaries, bonusesbonus opportunities and equity compensation opportunities to those of companies in the media sector and other companies with comparable revenues and ratios of profits to revenues in order to get a general understanding of the compensation structures maintained by similarly situated companies and to confirm that the elements of our compensation program—program and the range of amounts we pay our executives for each element—element are appropriate in the context of the broad market reference points provided by the Comparative Market Data.that context. The CompanyCommittee does not, however, target elements of compensation to a certain range, percentage or percentile within the Comparative Market Data.
BASE SALARY
We pay our NEOs base salaries to compensate them for service in their executive role. Salaries for NEOs take into account:
the nature and responsibility of the position;
the achievement of KPIs, both historically and in the immediately prior year;
internal pay equity among positions; and
Comparative Market Data as described above, which supported the conclusion that our NEOs’ base salaries were broadly in line with the market.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
Based on these factors, and the Company’s strong 2014 performance, the Committee set 20152018 NEO base salaries at the same level as were implemented following the completion of the Cars.comSpin-off, as follows:
EXECUTIVE | 2015 BASE SALARY | 2018 BASE SALARY | |||||||
Ms. Martore | $ | 1,000,000 | |||||||
Mr. Lougee | $ | 950,000 | |||||||
Ms. Harker | $ | 670,000 | $ | 700,000 | |||||
Mr. Lougee | $ | 700,000 | |||||||
Mr. Williams | $ | 600,000 | |||||||
Ms. Beall | $ | 575,000 | |||||||
Mr. Mayman | $ | 580,000 | $ | 610,000 |
ANNUAL BONUSES
ANNUAL BONUS OPPORTUNITY
Our NEOs participate in an annual bonus program, which offers incentive opportunity linked to attainment of the Company’s annual financial and qualitative performance goals and each executive’s KPIs set at the beginning of the year.program. Bonuses are short term compensation designed to reflect the individual NEO’s contribution to overall Company results and Company performanceattainment of strategic business objectives during the past year andyear. Annual bonuses therefore can vary significantly in amount from year to year.
TheIn early 2018, the Committee, in consultation with its independent compensation consultant, considersconsidered amounts for bonus guidelinesopportunity developed by our President and CEO and Senior VP/Vice President/Chief Human Resources Officer and Vice President/Total Rewards and HR Services.Officer. These guideline amounts are calculated by multiplying the NEO’s base salary by a target percentage which takes into account:
the nature and responsibility of the position;
internal pay equity among positions; and
Comparative Market Data, (as described in more detail in the section above titled “Comparative Market Data”), which indicated that the bonus guidelines we selectedguideline amounts were generally in line with the market.
Based on these factors, management recommended, and the Committee approved the following 20152018 bonus guideline opportunities for our NEOs:
EXECUTIVE | BASE SALARY | TARGET PERCENTAGE OF BASE SALARY | BONUS GUIDELINE AMOUNT | BASE SALARY | TARGET PERCENTAGE OF BASE SALARY | BONUS GUIDELINE AMOUNT | |||||||||||||||||||||
Ms. Martore | $ | 1,000,000 | 125 | % | $ | 1,250,000 | |||||||||||||||||||||
Mr. Lougee | $ | 950,000 | 110% | $ | 1,045,000 | ||||||||||||||||||||||
Ms. Harker | $ | 670,000 | 100 | % | $ | 670,000 | $ | 700,000 | 100% | $ | 700,000 | ||||||||||||||||
Mr. Lougee | $ | 700,000 | 100 | % | $ | 700,000 | |||||||||||||||||||||
Mr. Williams | $ | 600,000 | 75 | % | $ | 450,000 | |||||||||||||||||||||
Ms. Beall | $ | 575,000 | 100% | $ | 575,000 | ||||||||||||||||||||||
Mr. Mayman | $ | 580,000 | 70 | % | $ | 406,000 | $ | 610,000 | 70% | $ | 427,000 |
For purposesANNUAL BONUS PAYOUT FOR 2018
The extent to which a bonus is earned by an NEO is determined by the Committee, informed by attainment of the amountCompany’s annual financial and qualitative performance goals, individual contributions made by the NEO during the year and each NEO’s KPIs set at the beginning of the bonuses actually paid,year.
In addition to assessing individual KPI achievement, the Committee also considers the financial performance of the Company across a variety of financial measures which, for 2018, included total revenues, operating income, net income, earnings per share, Adjusted EBITDA, EBITDA margins, subscription revenue and free cash flow as a percentage of revenue. The Committee selected these financial measures for 2018 because it considers them to be broad enough to capture the most significant financial aspects of an organization as large as ours yet also focused enough to represent the financial measures that we believe drive our financial success as a pure-play media company.
In assessing Company achievement of these financial performance measures, the Committee compares them to management budgets approved by the Board at the beginning of the year and financial results from prior years and takes into account the Company’s financial performance relative to its peer companies, as well as industry and market conditions. Finally, the Committee evaluates the performance of our executives and the roles played by each of them in achieving critically important strategic transactions.
22 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
In reaching its 2018 bonus decisions, the Committee considered the role of the management team in contributing to the Company’s progress in creating shareholder value and the achievement of the operational and financial results described in the “Executive Summary” above; and the following Company financial metrics and strategic accomplishments in reaching its bonus decisions for 2015:contributions made by each NEO versus his or her KPIs during the year:
David T. Lougee, President and Chief Executive Officer | ||||
2018 Performance Highlights and Key Accomplishments: During 2018, Mr. Lougee’s first full year as CEO, he led the Company to record financial results, continued to execute on strategic acquisitions, drove the successful negotiation of network affiliate and retransmission agreements, restructured and downsized the Company’s corporate organization, and continued to refine the Company’s investment thesis. Mr. Lougee’s annual bonus for 2018 reflected these accomplishments as well as the Committee’s assessment of the performance of his duties and his achievement of the following KPIs: | ||||
Profit and Revenue Goals | • Increased total revenues 16% to $2.2 billion, a record for the Company. • Record full year political revenue of $234 million. • Achieved adjusted EBITDA* of $781 million for the year. • Continued to manage ongoing operational efficiencies and expense savings. | |||
People Goals | • Continued to advance the Board’s understanding of our long-term strategy and the most critical aspects of the media business. • Completed the restructuring of the Corporate staff into a more efficient organization reflective of the Company’s strategic needs operating as a single business unit. • Continued to drive the cultural changes necessary to become the leading local broadcast company for employees, consumers and customers. • Continued to champion the need for a more diverse employee base reflecting the markets in which our television stations operate and to launch initiatives to promote TEGNA as a great place to work. | |||
Product Goals | • Along with Ms. Beall, successfully led the Company’s efforts to extend the Company’s ABC affiliation agreement and retransmission agreements with DISH and Verizon. • Under Mr. Lougee’s leadership, the Company continued to pursue its organic growth strategy by: ✓ Continuing the Company’s commitment to high quality, differentiated journalism through the addition of a second episodic, investigative digital team in 2018, leading to a major investigation that was the Company’s most viewed single story during the year; ✓ Growing the viewership of the innovative, multi-platform program “Daily Blast LIVE,” a30-minute news and entertainment show that focuses on content that is always live and crowdsourced in real time from viewers through social media engagement; and ✓ Continuing to transform local news through dedicated content innovation, thebuild-out of a central content team and a digital-first approach that integrates traditional and digital news content. • Led our efforts to communicate and pursue a plan to grow our media business through strategic acquisitions and investments and positioned the Company to capitalize on anticipated regulatory reforms. • Drove the KFMB acquisition, which closed in February 2018, and the negotiation of the transactions announced in August 2018 in which we acquired (on January 2, 2019) television stationsWTOL-TV, the CBS affiliated station in Toledo, Ohio, andKWES-TV, the NBC affiliated station in Midland, Texas. Through these transactions, we added three strong stations to our portfolio of big four affiliates. • Along with Ms. Harker, continued to refine the Company’s investor relations approach and tailored our messaging through a clearly articulated investment thesis that incorporated the regulatory context and the Company’s points of differentiation. |
* | Reconciliation of the followingnon-GAAP financial measure to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form10-K, filed March 1, 2019: adjusted EBITDA—page 25. |
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
Victoria D. Harker, Executive Vice President and Chief Financial Officer | ||||
2018 Performance Highlights and Key Accomplishments: Ms. Harker delivered a strong performance in 2018 during which she and her finance team supported many new initiatives, assisted in the negotiation of retransmission and OTT agreements and identified new areas of investment opportunity. Her annual bonus for 2018 reflected the Committee’s assessment of her performance, including her achievement of the following KPIs: | ||||
Profit and Revenue Goals | • Supported the achievement of the Company’s 2018 financial results. Enhanced our capital structure and led a variety of cost control programs and initiatives, resulting in the reduction of our effective tax rate, and significant expense savings that benefited 2018 results. | |||
People Goals | • Achieved employee development and diversity hiring goals, while continuing to streamline the finance function. | |||
Product Goals | • With Mr. Lougee, continued to refine the Company’s investor relations approach and tailored our messaging in response to feedback received from investors. • Achieved KPIs relating to investor outreach and outsourcing initiatives, completed an ERP implementation assessment and restructured the payroll function, while also overseeing the successful implementation of two new major accounting standards. |
Lynn Beall, Executive Vice President and Chief Operating Officer—Media Operations | ||||
2018 Performance Highlights and Key Accomplishments: In 2018, Ms. Beall continued to demonstrate leadership in overseeing one of the most geographically diverse broadcast groups in the United States as she completed her first full year as Chief Operating Officer for the Company’s Media Operations. Ms. Beall’s annual bonus for 2018 reflected the Committee’s assessment of her performance including her achievement of the following KPIs: | ||||
Profit and Revenue Goals | • Drove the Company’s Media revenue, including record political revenue, and net income for TEGNA’s media properties. | |||
People Goals | • Recruited, developed and retained station general managers; fostered greater gender, racial and ethnic diversity so our employee base more closely reflects the communities in which we operate; and realigned our digital operations by clarifying roles, responsibilities for content and sales across the streamlined Media staff. | |||
Product Goals | • Along with Mr. Lougee, successfully led the Company’s efforts to extend the Company’s ABC affiliation agreement and retransmission agreements with DISH and Verizon. • Managed a team that advanced content transformation across the Company as it became more ingrained throughout the organization; refined and standardized several processes relating to content transformation; and continued to foster an environment where exceptional journalism is a top priority. |
Todd A. Mayman, Former Executive Vice President/Chief Legal and Administrative Officer | ||||
2018 Performance Highlights and Key Accomplishments: In 2018, Mr. Mayman continued the effective management of the law department and various administrative functions. Mr. Mayman led significant headquarters-related real estate projects, including our relocation to a new corporate headquarters and the buildout of a new studio for our Houston TV station, each of which was completed in early 2019. Mr. Mayman’s annual bonus for 2018 reflected the Committee’s assessment of his performance, including his achievement of the following KPIs: | ||||
Profit and Revenue Goals | • Successfully managed the legal department’s budget, enabling it to achieve its internal department and Company-wide outside counsel fee budget for the year. | |||
People Goals | • Achieved goals relating to his development and succession planning efforts, successfully grooming and transitioning his successor to fill the role of general counsel. In addition, he restructured the Company’s legal and labor relations functions. | |||
Product Goals | • Facilitated training and compliance programming; led significant real-estate related projects; and continued to partner with internal clients to help them achieve their business goals. |
24 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
In addition,How the Committee considered the following contributions made by eachDetermines NEO in reaching its 2015 bonus decisions:Compensation
The Committee, exercising its business judgment, in 2015 being a pivotal year in the history of the Company. The completion of the Spin-off in June 2015 was the culmination of a multi-year transformation process she initiated when she became CEO in October 2011. Since that time, we have added significant scale, building, acquiringits sole discretion, and integrating high-performing broadcast and digital assets that are leaders in growing sectors, highlightedinformed by the acquisition of Belo Corp. in December 2013, several London Broadcastingforegoing individual and Company TV stations in July 2014, and full control of Cars.com in October 2014. Ms. Martore has been the architect of our Company’s transformation and led and stewarded each aspect of these changes. Her bonus for 2015 reflects these achievements as well as her continued efforts to create long-term shareholder value through the Company’s strategic plan, and creating an environment that motivates the senior leadership team to support and execute it. Her bonus also reflects the Company’s outstanding financial performance in 2015, including a record year by TEGNA Digital and strong financial results for TEGNA Media despite expected challenging political and Olympics advertising comparisons, helping to drive a 16% increase in our Adjusted EBITDA to $1.06 billion. The Committee believes the bonus award for Ms. Martore is commensurate with the Company’s success in 2015 and her role as CEO in achieving that success.
Based on the foregoing, the Committeefactors, awarded 20152018 annual bonuses to our NEOs as follows:
EXECUTIVE | BONUS | BONUS | ||||||
Ms. Martore | $ | 2,750,000 | ||||||
Mr. Lougee | $ | 1,000,000 | ||||||
Ms. Harker | $ | 750,000 | $ | 690,000 | ||||
Mr. Lougee | $ | 675,000 | ||||||
Mr. Williams | $ | 500,000 | ||||||
Ms. Beall | $ | 550,000 | ||||||
Mr. Mayman | $ | 650,000 | $ | 427,000 |
LONG-TERM INCENTIVES
We use equity-based awardsIn 2017, upon becoming a pure-play broadcasting company following the Cars.comSpin-off and the sale of CareerBuilder, the Committee, with the assistance of Meridian and Company management, engaged in a seven-month review of the Company’s long-term incentive program (the “LTI Program”). The purpose of the review was to recognizeassess the design, structure and competitiveness of the LTI Program, including to (1) evaluate whether the LTI Program continued to create appropriate incentives to motivate long-term financial and operational performance of certain executives who drive the development and execution ofin line with our business strategiesstrategy, (2) address the significant amount of M&A activity that had taken place in the media industry which had created challenges in creating a meaningful total shareholder return (“TSR”) peer group for the Company of other “pure play” broadcasters, and goals. The primary purposes(3) determine whether the LTI Program was competitive with the programs of these awards arethe Company’s peer group. (For additional information regarding such M&A activity, see “Impact of Certain Transactions on Performance Share Awards Involving 2016-2018 TSR Peer Group Members.”) Company management, on behalf of the Committee, also solicited input from the Company’s shareholders regarding the changes to align further the executive’sLTI Program it was considering.
Following this review, during which the Company received positive shareholder feedback regarding its proposed changes to the LTI Program, the Committee decided to continue the use of RSUs in the LTI Program, but determined that it was in the best interests with those of the Company’s shareholders and employees to modify the Company’s longer-term objectives, to drivePerformance Share awards as follows:
Discontinue the use of relative total shareholder return to foster executive stock ownershipof the Company versus a TSR peer group as the performance metric against which payouts were determined;
Adopt and to promote retention. We awarded both TSRimplement two new objective performance sharesmetrics, the Company’s Adjusted EBITDA (with a 2/3 weighting) and restricted stock units (RSUs) to our NEOs on January 1, 2015.
Performance Shares
The Company administersFree Cash Flow as a Performance Share Plan based on total shareholder return. UnderPercentage of Revenue (with a 1/3 weighting), that the Committee considered the most important measures of the Company’s success in managing its business as a pure play broadcasting company; and
Replace the3-year performance and vesting period of the Performance Share Plan,awards with a2-year performance cycle and a3-year vesting service period.
The Committee chose a2-year performance cycle for the Performance Shares in order to address the significant cyclical revenue increase the Company may issueexperiences in even-numbered years due to (1) political spending duringmid-term and presidential election years as a result of the Company’s strong political footprint, and (2) the summer and winter Olympic games, resulting from the Company being the largest group owner of stations affiliated with NBC, which broadcasts the Olympic games.
Performance Shares—2018 Awards
Under the revised Performance Share program, on March 1, 2018, senior executives received grants of Performance Shares representing the right to receive shares of Company common stock (Performance Shares) to senior executives followingat the completionend of a three- yearthree-year service period beginning onending February 28, 2021 (the 2018 Performance Share grant) if and to the grant date (Incentive Period)extent certain performance goals are satisfied during atwo-year performance cycle ending December 31, 2019 (the 2018-2019 performance cycle). Generally, if an executive remains in continuous employment withUnder the Company duringrevised Performance Share program, grants are made, and a newtwo-year performance cycle begins each year. At the Incentive Period,end of eachtwo-year performance cycle, the number of Performance Shares that the executive will receiveshares of Company common stock earned will be determined based upon the Company’s level of achievement versus the financial performance target or targets set by the Committee for that cycle. Any earned shares of Company common stock will not be distributed to executives until
| |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
after the completion of the three-year service period. If the Company fails to meet threshold performance against a financial performance metric at the end of any performance cycle, no Performance Shares will be earned and no payout of shares of Company common stock will be made with respect to that financial performance metric.
For the 2018 Performance Share grants, the Committee adopted two financial performance metrics that will be measured over the2018-19 performance cycle, as follows:
PERFORMANCE METRIC | WEIGHTING | DESCRIPTION | ||
Adjusted EBITDA | 2/3 | Compares, in percentage form, the sum of the actual Adjusted EBITDA generated by the Company in each of 2018 and 2019 to the sum of the target budgeted amounts of Adjusted EBITDA set by the Board in connection with its annual budgeting processes for each of 2018 and 2019. | ||
Free Cash Flow as a Percentage of Revenue | 1/3 | Compares, in percentage form, (1) the aggregate amount of Free Cash Flow generated by the Company in 2018 and 2019 measured as a percentage of the aggregate total Company revenues generated by the Company in 2018 and 2019, to (2) the weighted average of the targeted level of Free Cash Flow as a percentage of total Company revenues set by the Board in connection with its annual budgeting processes for each of 2018 and 2019. |
For purposes of the 2018 Performance Share grants:
“Adjusted EBITDA” means net income from continuing operations before (1) interest expense, (2) income taxes, (3) equity income (losses) in unconsolidated investments, net, (4) othernon-operating items, (5) severance expense, (6) facility consolidation charges, (7) impairment charges, (8) depreciation, (9) amortization, and (10) expense related to performance share long-term incentive awards. Net income from continuing operations may be further adjusted to exclude unusual ornon-recurring charges or credits to the extent and in the amount such items are separately reported or discussed in the financial statements and notes thereto or in management’s discussion and analysis of the financial statements in a periodic report filed by the Company under the Securities Exchange Act of 1934, as amended.
“Free Cash Flow” means “net cash flow from operating activities” less “purchase of property and equipment”, each as reported in the Company’s consolidated statements of cash flows, and adjusted to exclude (1) voluntary pension contributions, (2) capital expenditures required either by government regulators or due to natural disasters offset by any reimbursements of such expenditures (e.g., from the US Government or an insurance company), and (3) the same adjustments made to Adjusted EBITDA, other than income taxes and interest to the extent of their impact on Free Cash Flow.
The following table illustrates the ranges of potential payouts based on threshold, target and maximum performance levels for each financial performance metric adopted by the Committee for the2018-19 performance cycle:
Actual versus Target | Applicable Payout Percentage* | |||
Below Threshold (80%) | <80% | 0 | ||
Threshold | 80% | 65% | ||
Target | 100% | 100% | ||
Maximum | 110% | 200% | ||
Above Maximum | >110% | 200% |
* | The Applicable Payout Percentage is calculated using straight line interpolation for points between Threshold and Target and for points between Target and Maximum. |
The Company does not publicly disclose its expectations of how it will perform on a prospective basis in future periods or specific long-term incentive plan targets applicable under its compensation programs due to potential competitive harm. The target performance goals for Adjusted EBITDA and Free Cash Flow for the 2018-2019 performance cycle are designed to be appropriately challenging based on internal forecasts and the Company’s historical results, and there is a risk that payments will not be made at all or will be made at less than 100% of the target amount.
With certain exceptions for terminations due to death, disability, retirement (defined as 65 years of age or at least 55 years of age with at least 5 years of service) or a change in control of the Company, Performance Shares generally vest on the expiration of the three-year vesting service period only if the executive continues to be employed by the Company through the last day of the vesting service period.
26 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
howHow the Committee Determines NEO Compensation
Following the end of the vesting service period, each executive who has earned Performance Shares will receive the number of shares of Company common stock that the executive has earned, less withholding taxes. Dividends are not paid or accrued on Performance Shares.
A change in control of the Company will accelerate full vesting of the 2018 Performance Share grants only if the grants are not continued or assumed (e.g., the grants are not equitably converted or substituted for awards of the successor company) in connection with the change in control or the executive has a qualifying termination of employment within two years following the date of the change in control. In the event of a change in control occurring prior to the expiration of the applicable performance period, the executive will receive the target number of Performance Shares set forth in the executive award agreement for that Performance Share grant. In the event of a change in control occurring after the expiration of the applicable performance period but prior to the expiration of the applicable vesting service period, the executive will receive the number of Performance Shares earned during the applicable performance cycle.
Performance Shares—2017 and 2016 Awards
Prior to February 2018, the Company granted Performance Shares with payouts determined based on the Company’s total shareholder return (TSR) comparesmeasured relative to the TSRs of a peer group of media companies (TSR Peer Group) duringover a three-year period beginning on the grant date (the Incentive Period. By tying the payout of the Performance Shares to the Company’s TSR, a purely objective standard, the Committee is aligning executive compensation with shareholders’ interests.Period).
For each grant ofpre-2018 Performance Shares, the Company’s TSR over the applicable Incentive Period is ranked against the TSR of each company in the TSR Peer Group, overselected for that Incentive Period by the Incentive Period. The Committee, with assistance from its independent compensation consultant, selects certainof media and digital companies based on the similarity of their businesses and operations to be included inthose of the Company at the time of the awards . (In anticipation of the Cars.comSpin-off and the potential sale of CareerBuilder, the Committee selected a 2017-2019 TSR Peer Group based onconsisting solely of media companies.)
The Company’s TSR Peer Groups for the Committee’s assessment of2017-2019 and 2016-2018 Incentive Periods impacting the similar nature ofcompensation that may be realized by the peer companies’ business operations.NEOs are as follows:
20152017 – 20172019 TSR Peer Group
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Sinclair Broadcast Group, Inc. | ||||
Discovery Communications Inc. | Tribune Media Co. | |||
E.W. Scripps | ||||
Graham Holdings Co. | ||||
) |
20142016 – 20162018 TSR Peer Group
Gray Television, Inc. | Meredith | |||
Angie’s List, Inc. | ||||
Monster Worldwide Inc. | ||||
CBS Corp. | Harte Hanks, Inc. | Nexstar Broadcasting Group, Inc. | ||
Constant Contact, Inc. | IAC/Interactive Corp. | Sinclair Broadcast Group, Inc. | ||
Discovery Communications Inc. | ||||
LinkedIn Corporation | ||||
E.W. Scripps | ||||
Media General, Inc. |
2013 – 2015 TSR Peer Group
For additional information regarding the Company’s TSR Peer Groups, see “Impact of Certain Transactions on Performance Share Awards Involving 2013-20152016-2018 TSR Peer Group Members” on page 2729 of this Proxy Statement.
For purposes of thepre-2018 Performance Share Plan,awards, a company’s TSR generally equals a fraction, the numerator of which is the company’s stock price change plus the dividends paid on such stock (which are assumed to be reinvested in the stock) from the first day of the Incentive Period to the applicable measurement date, and the denominator of which is the company’s closing stock price on the business day preceding the first day of the Incentive Period.
For each Incentive Period, the Committee will calculatecalculates the number of Performance Shares earned by multiplying the target number of Performance Shares (as specified in the executive’s award agreement) by a percentage based upon the Company’s3-year TSR percentile, determined byperformance ranked against the numberTSR performance of the TSR Peer Group companies whose 3-year TSR is exceeded by the Company’s 3-year TSR during the Incentive Period.Group.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
The percentages for each Incentive Period are set forth on the following table, with percentiles between the thresholds determined by straight line interpolation:
3 YEAR TSR VS. PEER GROUP COMPANIES | RESULTING SHARES EARNED (% OF TARGET) | |
90th percentile or above | 200% | |
70th percentile | 150% | |
50th percentile | 100% | |
30th percentile | 50% | |
Less than 30th percentile | 0% |
Relative TSR performance is measured at the end of each of the last four quarters in the Incentive Period and thea hypothetical payout is calculated. The average results of these measurementspayouts are used to calculate the actual number of Performance Shares that an executive earns, so that the calculation does not solely rely upon the Company’s stock price on the first day and the last day of the Incentive Period.
WithSimilar to the 2018 Performance Shares grants, with certain exceptions for terminations due to death, disability, retirement (defined as 65 years of age or at least 55 years of age with at least 5 years of service) or a change in control,pre-2018 Performance Shares generally vest on the expiration of the Incentive Period only if the executive continues to be employed by the Company through the last day of the Incentive Period.
After the end of the Incentive Period, each participating executive who is entitled to Performance Shares based on these calculations and the satisfaction of the applicable service and performance requirements will receive the number of Performance Sharesshares of Company common stock that the executive has earned, less withholding taxes. Dividends are not paid or accrued on Performance Shares.
ForAlso as with the 2018 Performance Share awards granted on or after January 1, 2016, subject to contractual rights in effect on February 24, 2015, the date of adoption of the change in policy by the Committee,grants, a change in control of the Company will only accelerate full vesting of equitythepre-2018 Performance Share awards to executives if the awards are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company) in connection with the change in control or the recipient has a qualifying termination of employment within two years following the date of the change in control. For Performance Share awards granted before January 1, 2016, uponIn the event of a change in control, of the Company, Performance Shares will fully vest and an executive will be entitled to receive a number of Performance Shares based on the Company’s TSR relative to the TSR of each company in its TSR Peer Group for the applicable Incentive Period on the date of the change in control, unless the change in control occurs during the first 612 months of an Incentive Period, in which case the executive will receive the target number of Performance Shares set forth in the executive award agreement for that Performance Share grant.
The Performance Share Plan hasawards have additional rules that will affect calculations in the event a TSR Peer Group company is acquired, enters into a definitive agreement to be acquired or becomes involved in bankruptcy proceedings during the Incentive Period.
For Performance ShareShares awards granted for the 2013-2015 and 2014-2016 Incentive Periods, (i) TSR Peer Group companies acquired during Year 1 of the2016-2018 Incentive Period will be excluded from all calculations, and (ii) TSR Peer Group companies acquired in Years 2 or 3 of the Incentive Period will have their TSR position fixed above or below the Company’s TSR using the average closing price of both companies’ stock during the 20 consecutive trading days ending on the trading day immediately preceding the announcement of the acquisition.
If a TSR Peer Group company is involved in bankruptcy proceedings (and thus no longer traded on a national securities exchange) during the Incentive Period, it will remain in the group at a negative 100% TSR.
28 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
The number of Performance Shares granted to an executive will be reduced if the price of the shares when paid exceeds 300% of the price of the shares on the first day of the Incentive Period. The price of the shares on the first day of the Incentive Period is equal to the
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
closing price of a share of Company common stock on the last trading day prior to that date. The price of the Company’s shares of common stock on the first day of each Incentive Period areis as follows:
INCENTIVE PERIOD | PRICE OF SHARES ON THE FIRST DAY OF INCENTIVE PERIOD | |
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* | This reflects the price adjusted as a consequence of the |
Impact of Certain Transactions on Performance Share Awards Involving 2013-20152016-2018 TSR Peer Group Members
Belo Corp.Angie’s List:: Based upon the rules of the Performance Share Plan described above, as On May 1, 2017, Angie’s List Inc. entered into a definitive agreement to be acquired by IAC/InterActiveCorp. As a result of Angie’s List entering into this agreement prior to the last day of the second year of the 2016-2018 Incentive period, Angie’s List was excluded from the Company’s acquisitionTSR Peer Group companies for the 2016-2018 Incentive Period.
Constant Contact: On October 30, 2015, Constant Contact, Inc. entered into a definitive agreement to be acquired by Endurance International. As a result of BeloConstant Contact, Inc. entering into this agreement prior to the last day of the second year of the 2016-2018 Incentive Period, Constant Contact was excluded from the Company’s TSR Peer Group companies for the 2016-2018 Incentive Period.
LinkedIn Corp.: On June 13, 2016, LinkedIn Corp. entered into a definitive agreement to be acquired by Microsoft Corporation. As a result of LinkedIn Corp. entering into this agreement during Year 1 of the 2013-20152016-2018 Incentive Period, BeloLinkedIn Corp. was excluded from the Company’s TSR Peer Group companies for the 2013-20152016-2018 Incentive Period.
News Corporation: Effective June 28, 2013, News Corporation contributed certain newspaper and other businesses to a new company, “new” News Corporation, and spun-off the new company to its shareholders. Pursuant to the terms of the spin-off, a shareholder of “old” News Corporation, which was renamed Twenty-First Century Fox, received 1/4 share of “new” News Corporation for each share of “old” News Corporation the shareholder owned prior to the spin-off. Accordingly, for the 2013-2015 Incentive Period, the TSR of “old” News Corporation was calculated by assuming that a share of “old” News Corporation held as of the effective date of the spin-off was converted into one share of Twenty-First Century Fox and a 1/4 share of “new” News Corporation.
Media General, Inc.: Effective November 12, 2013,On January 27, 2016, Media General, merged with and wasInc. entered into a definitive agreement to be acquired by New YoungNexstar Broadcasting Holding Co.,Group, Inc. As a result of the transaction taking placeMedia General, Inc. entering into this agreement during Year 1 of the 2013-20152016-2018 Incentive Period, Media General, Inc. was excluded from the Company’s TSR Peer Group companies for the 2013-20152016-2018 Incentive Period.
Journal Communications,Monster Worldwide Inc.: Effective March 25, 2015, E.W. ScrippsOn August 9, 2016, Monster Worldwide Inc. entered into a definitive agreement to be acquired Journal Communications, Inc. in connection with the merger of the broadcast assets of the two companies and the spin-off of their respective newspapers to form Journal Media Group.by Randstad Holding nv. As a result of the transaction taking place afterMonster Worldwide Inc. entering into this agreement during Year 1 of the 2013-20152016-2018 Incentive Period, the TSR position of Journal CommunicationsMonster Worldwide Inc. was fixed below the TSR position of the Company/Gannett for the 2013-2015 Incentive Period.
E.W. Scripps: As noted above, E.W. Scripps spun-off its newspaper business in connection with its acquisition of Journal Communications, Inc. to form Journal Media Group. As a result, effective March 25, 2015, the TSR of E.W. Scripps was calculated by assuming that a share of pre-spin E.W. Scripps held as of the effective date of the spin-off was converted into one share of post-spin E.W. Scripps and a 1/4 share of Journal Media Group.
2013-2015 TSR Performance
The Company’s cumulative TSR for the 2013-2015 Incentive Period (including the performance of Gannett since the Spin-off) was 103%. As of December 31, 2015, comparingexcluded from the Company’s TSR to the TSR of its 2013-2015 TSR Peer Group companies atfor the end2016-2018 Incentive Period.
Tribune Media Co.: On May 8, 2017, Tribune Media Co. entered into a definitive agreement to be acquired by Sinclair Broadcast Group, Inc., which agreement was terminated on August 9, 2018. As a result of eachTribune Media Co. entering into this agreement during Year 2 of the last four quarters in2016-2018 Incentive period and the 2013-2015termination of the agreement did not take place until Year 3 of the 2016-2018 Incentive Period, resulted in an average payout percentage of 168% (atTribune Media Co. was excluded from the end of the last quarter of 2015 the combined Company/Gannett outperformed 9 of its 11 2013-2015Company’s TSR Peer Group companies). Accordingly,companies for the executives were awarded a number of2016-2018 Incentive Period.
2016-2018 TSR Performance Shares equal to 168%
Executives received 14% of the target number of Performance Sharesshares of Company common stock granted to them in connection with their 2013-20152016-2018 Performance Share awards. This payout is consistent with the Company’s pay for performance philosophy as it reflected the lagging performance of the combined Company/Cars.com TSR compared to the TSR of the 2016-2018 TSR Peer Group companies during the 2016-2018 Incentive Period. The shares were paid to the executives on January 25, 2019.
RSUs
An RSU generally represents the right to receive a share of Company stock at a specified date, provided certain service requirements are satisfied. The Company grants RSUs with four-year terms to help retain our executives over an extended period of time. The four-year term is longer than the three-year term often used by companies for RSU grants.
RSUs granted in 20142015 and before vested on a “cliff” basis, but beginning January 1, 2015, such grants will2016 generally vest in four equal annual installments with vested shares being delivered to the executive upon the earliest to occur of (1) the executive’s termination of employment, (2) a change in control of the Company and (3)(2) four years after the grant date. Executives are generally entitled to receive aA prorated portion of theirthe RSUs also vest and are paid upon retirement, (defined as 65 years of age or at least 55 years of age with at least 5 years of service), disability or death,death. These RSUs fully vest and the RSUs will vest fullyare paid upon a change in controlchange-in-control of the Company.
| Company, except that for RSUs granted in 2016 |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
For RSU awards granted on or after January 1, 2016, subject to contractual rights in effect on February 24, 2015, the date of adoption of the change in policy by the Committee, a change in control of the Company will only accelerate full vesting of equity awards to executivesand payment if the awardsRSUs are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company) in connection with the change in controlchange-in-control or the recipient has a qualifying termination of employment within two years following the date of the change in control.change-in-control.
RSU awards granted on or after January 1, 2016 will generally be subject to a minimum vesting period requiring at least one year of service; provided that
29 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee may adopt shorterDetermines NEO Compensation
RSUs granted in 2017 and 2018 generally vest and are paid in four annual installments. Executives are also entitled to receive a prorated portion of their RSUs upon retirement, disability or death. Achange-in-control of the Company will only accelerate full vesting periods or provide for accelerated vesting after less than one year: (1) in connection with terminationsand payment of employment due to death, disability, retirement or other circumstances thatthese RSUs if the Committee determines to be appropriate; (2) in connection with a change in control in which the award isRSUs are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company); (3) for grants made in connection with an acquisitionthechange-in-control or the recipient has a qualifying termination of employment within two years following the date of thechange-in-control.
Long-Term Equity Awards under the 2018 LTI Program
For the March 1, 2018 grants, the Committee considered the total long-term equity award target values developed by our President and CEO and Senior Vice President/Chief Human Resources Officer. These target values were calculated by multiplying the NEO’s base salary by a target percentage, which takes into account:
the nature and responsibility of the position;
internal pay equity among positions; and
Comparative Market Data (as described in more detail in the section above titled “Comparative Market Data”), which showed that the target values recommended by management were generally consistent with the market.
Based on these factors the Committee approved the following total long-term equity award target values for our NEOS:
EXECUTIVE | 2017 BASE SALARY | LONG TERM- AWARD TARGET PERCENTAGE | TOTAL LONG- TERM AWARD TARGET VALUE | ||||||||||||
Mr. Lougee | $ | 950,000 | 275% | $ | 2,612,500 | ||||||||||
Ms. Harker | $ | 700,000 | 200% | $ | 1,400,000 | ||||||||||
Ms. Beall | $ | 575,000 | 150% | $ | 862,500 | ||||||||||
Mr. Mayman | $ | 610,000 | 140% | $ | 854,000 |
Using these long-term equity award target value recommendations as a guideline, the Committee approved 2018 total long-term award values for each of our NEOs in February 2018 as shown in the table below. The Committee determined that these long-term equity award values were appropriate given the individual performance of each NEO against his or her KPIs, the financial performance of the Company in substitutionand the divisions and operations for pre-existing awards; (4)which they are responsible, and the Company’s progress towards the goals of its strategic plan.
EXECUTIVE | TOTAL LONG- TERM AWARD VALUE | ||||
Mr. Lougee | $2,750,000 | ||||
Ms. Harker | $1,400,000 | ||||
Ms. Beall | $862,500 | ||||
Mr. Mayman | $854,000 |
On March 1, 2018, the first day of the Incentive Period, the long-term equity award value for new hire inducement awards or off cycle awards; or (5) to comply with existing contractual rights in effecteach NEO was translated into a target award of Performance Shares and an award of RSUs based upon the Company’s closing stock price on February 28, 2018 (taking into account that dividends would not be paid on the datePerformance Shares or RSUs during the change in policy was adopted.respective vesting periods), as follows:
EXECUTIVE | PERFORMANCE SHARES (TARGET #) | RSUs | ||||||||
Mr. Lougee | 148,340 | 78,958 | ||||||||
Ms. Harker | 63,900 | 51,682 | ||||||||
Ms. Beall | 39,367 | 31,840 | ||||||||
Mr. Mayman | 38,979 | 31,526 |
30 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
Impact of Cars.comSpin-Off on Equity-BasedPre-2018 Equity Awards
Pursuant to the Employee Matters Agreement entered into by the Company in connection with the Cars.comSpin-off, as of the date of the Cars.comSpin-off, outstanding Company equity awards were adjusted to reflect the impact of the Cars.comSpin-off, as follows:
Equity AwardsPerformance Shares Granted in 20152017 and RSUs Granted in 2017 or 2016
As of June 29, 2015May 31, 2017 (the date of the Cars.comSpin-off), each outstanding Performance Share granted in 2017 and each outstanding RSU award granted in 2015 and2017 or 2016 that was held by an employee who remained employed by the Company following the Cars.comSpin-off remained denominated in shares of Company common stock, provided that the number of shares subject to the award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original award by multiplying the number of shares by a conversion ratio based upon the volume weighted average per share price of Company common stock during the five (5) trading days immediately preceding and immediately following the date of the Cars.comSpin-off. TSR Performanceperformance goals were adjusted to reflect the Cars.comSpin-off, with performance based on the performance of the Company prior to and after the Cars.comSpin-off. In addition, for purposes of calculating the Company’s TSR, the price of a share of Company stock on the first day of the 2015-20172017-2019 Incentive Period was adjusted to reflect the Cars.comSpin-off, by dividing the price by the same conversion ratio referenced above.
Equity AwardsPerformance Shares Granted Prior to 20152017 and RSUs Granted Prior to 2016
As of the Cars.comSpin-off date, each outstanding Performance Share and RSU award granted prior to 20152017 and each outstanding RSU granted prior to 2016 was converted into an award of both shares of Company common stock and shares of GannettCars.com common stock. The number of shares of Company common stock subject to each award was equal to the number of shares subject to the award prior to the Cars.comSpin-off, while the number of shares of GannettCars.com common stock subject to the award was determined by multiplying the number of shares of Company common stock subject to each award by the “Distribution Ratio”—the number of shares of GannettCars.com common stock distributed per Company share in theSpin-off. The Distribution Ratio was 0.5.equal toone-third.
TSR performance goals for pre-2015pre-2017 Performance Share awards will be measured following the Cars.comSpin-off by aggregating both Company performance and GannettCars.com performance applying the following rules:
The value of dividends taken into account for purposes of the calculation of total shareholder return shall be equal to the sum of (A) the value of any cash dividends paid on Company shares during the Incentive Period, and (B) the product obtained by multiplying (1) the value of any cash dividends paid on GannettCars.com shares during the portion of the Incentive Period occurring after the Effective Time by (2) the Distribution Ratio.
The stock price at the end of the performance period used to determine total shareholder return shall be the sum of (A) the closing price of a share of Company common stock on the relevant measurement date, and (B) the product obtained by multiplying (1) the closing price of a share of GannettCars.com common stock on the relevant measurement date by (2) the Distribution Ratio.
Stock Options
Although the Company does not currently award stock options, as of the Cars.comSpin-off date, each outstanding stock option award was converted intoheld by an award of options to purchase bothemployee who remained employed by the Company following the Cars.comSpin-off remained denominated in shares of Company common stock, and shares of Gannett common stock. Theprovided that the number of shares and the exercise prices of each option award were adjusted in a manner intended to preserve the aggregate intrinsic value of the original stock option as measured immediately before and immediately after the Spin-off.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
Long-Term Equity Awards under the 2015 Program
For the January 1, 2015 grants, the Committee considered the total long-term equity award target values developed by our President and CEO, Senior VP/Chief Human Resources Officer and Vice President/Total Rewards and HR Services. These target values were calculated by multiplying the NEO’s base salary by a target percentage, which takes into account:
Based on these factors, management recommended the following total long-term equity award target values for our NEOS:
EXECUTIVE | 2014 BASE SALARY | LONG TERM AWARD TARGET PERCENTAGE | TOTAL LONG TERM AWARD TARGET VALUE | |||||||
Ms. Martore | $ | 1,000,000 | 400% | $ | 4,000,000 | |||||
Ms. Harker | $ | 655,000 | 200% | $ | 1,310,000 | |||||
Mr. Lougee | $ | 650,000 | 200% | $ | 1,300,000 | |||||
Mr. Williams | $ | 540,000 | 200% | $ | 1,080,000 | |||||
Mr. Mayman | $ | 560,000 | 140% | $ | 784,000 |
Using these long-term equity award target value recommendations as a guideline, the Committee approved 2015 total long-term award values for each of our NEOs in December 2014 as shown in the table below. The Committee determined that these long-term equity award values were appropriate given the individual performance of each NEO against their KPIs, the financial performance of the Company and the divisions and operations for which they are responsible, and the Company’s progress towards the goals of its strategic plan.
EXECUTIVE | TOTAL LONG VALUE | |||
Ms. Martore | $ | 5,000,000 | ||
Ms. Harker | $ | 1,310,000 | ||
Mr. Lougee | $ | 1,400,000 | ||
Mr. Williams | $ | 1,175,000 | ||
Mr. Mayman | $ | 850,000 |
The Committee also considered management’s recommendations as to the appropriate allocation of the total target award value for each NEO between Performance Shares and RSUs. The Committee and management believe that having our NEOs receive a higher proportion of their long-term awards as Performance Shares (which are performance-based) rather than RSUs (which are time-based) strengthens the pay for performance aspect of the Company’s long-term incentive program. The Committee determined that 75% of the value of Ms. Martore’s long-term award should be in Performance Shares, reflecting the importance of her leadership role in creating and overseeing the execution of the Company’s strategic plan, and set allocations for the other NEOs that provided for Performance Share awards of up to 65% of the value of the NEO’s overall long-term equity award.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
On January 1, 2015, the first day of the 2015-2017 Incentive Period, the long-term equity award value for each NEO was translated into a target award of Performance Shares based on the present value per share of the expected payout as calculated using the Monte Carlo valuation method and an award of RSUs based upon the Company’s closing stock price on December 31, 2014, as follows:
EXECUTIVE | PERFORMANCE SHARES | RSUs | ||
Ms. Martore | 95,009 | 43,358 | ||
Ms. Harker | 21,573 | 15,904 | ||
Mr. Lougee | 23,055 | 16,996 | ||
Mr. Williams | 19,350 | 14,265 | ||
Mr. Mayman | 12,921 | 11,793 |
As described above, pursuant to the Employee Matters Agreement and the Performance Share and RSU award agreements, these awards were converted into the following awards denominated in shares of Company stock as a consequence of the Spin-off:
EXECUTIVE | PERFORMANCE SHARES | RSUs | ||
Ms. Martore | 112,031 | 51,126 | ||
Ms. Harker | 25,438 | 18,753 | ||
Mr. Lougee | 27,186 | 20,041 | ||
Mr. Williams | 22,817 | 16,821 | ||
Mr. Mayman | 15,236 | 13,906 |
In addition to the awards described above, in July 2015 each of Ms. Harker and Mr. Mayman received an award of 9,612 RSUs in connection with their respective promotions to Executive Vice President.
BENEFITS AND PERQUISITES
The Company’s NEOs are provided a limited number of personal benefits and perquisites (described in footnote 5 to the Summary Compensation Table). The Committee’s objectives in providing these benefits are to provide insurance protection for our NEOs and their families, to enable the Company to attract and retain superior management talent in a competitive marketplace, to complement other compensation components, and to help minimize distractions from our executives’ attention to important Company initiatives.
The personal benefits and perquisites the Company provides to our NEOs, including medical, life insurance and disability plans, are generally the same as those offered to other similarly situated senior executives. For additional information about these and other post-employment benefits, see the “Other Potential Post-Employment Payments” section of this Proxy Statement.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
POST-TERMINATION PAY
The Company sponsors post-termination pay plans which assist the Company in recruiting and retaining employees and in providing leadership stability and long-term commitment.
TEGNA Retirement Plan (TRP)
Prior to the Spin-off,spin-off of Gannett in June 2015 (the “GannettSpin-off”), eligible Company employees generally had earned benefits under the Gannett Retirement Plan (GRP). In connection with the GannettSpin-off, the Company adopted the TEGNA Retirement Plan (TRP), atax-qualified defined benefit retirement plan which assumed the GRP pension liabilities relating to Company employees. Accordingly, the TRP generally provides retirement income to certain of the Company’s U.S.-based employees who were employed before their benefits were frozen on August 1, 2008, at which time most participants, including each of the NEOs (other than Ms. Harker, who did not participate in the GRP and does not participate in the TRP), ceased to earn additional benefits for compensation or service earned on or after that date. The TRP provides benefits for employees based upon years of credited service, and the highest consecutive five-year average of an employee’s compensation out of the final ten years of credited service, referred to as final average earnings, or FAE. Subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, andpre-tax contributions to the Company’s
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
benefit plans other than the TEGNA Deferred Compensation Plan (DCP). Until benefits commence, participants’ frozen benefits are periodically adjusted to reflect increases in a specifiedcost-of-living index (i.e., the consumer price index for all urban consumers published by the U.S. Department of Labor Bureau of Statistics for U.S. all items less food and energy).
Effective January 1, 1998, the Company made a significant change to the GRP for service after that date. Certain employees who were either retirement-eligible or had a significant number of years of service with the Company were “grandfathered” in the plan provisions applicable to them prior to the change (pre-1998(pre-1998 plan provisions). Other employees were transitioned to the post-1997 plan provisions under the GRP.
Thepre-1998 plan provisions provide for a benefit that is expressed as a monthly annuity at normal retirement equal to a gross benefit reduced by a portion of the participant’s Social Security benefit. Generally, a participant’s annual gross benefit is calculated by multiplying the participant’s years of credited service by specified percentages (generally 2% for each of a participant’s first 25 years of credited service and 0.7% for years of credited service in excess of 25) and multiplying such amount by the participant’s FAE. Benefits under thepre-1998 plan provisions are paid in the form of monthly annuity payments for the life of the participant and, if applicable, the participant’s designated beneficiary. Thepre-1998 plan provisions provide for early retirement subsidies for participants who terminate employment after attaining age 55 and completing five years of service and elect to commence benefits before age 65. Under these provisions, a participant’s gross benefit that would otherwise be paid at age 65 is reduced by 4% for each year the participant retires before age 65. If a participant terminates employment after attaining age 60 with 25 years of service, the participant’s gross benefit that would otherwise be paid at age 65 is reduced by 2.5% for each year the participant retires before age 65.
The post-1997 plan provisions provide for a benefit under a pension equity formula, which generally expresses a participant’s benefit as a current lump sum value based on the sum of annual percentages credited to each participating employee. The percentages increase with years of service, and, in some circumstances, with age. Upon termination or retirement, the total percentages are applied to a participant’s FAE resulting in a lump sum benefit value. The pension equity benefit can be paid as either a lifetime annuity or a lump sum.
As noted above, in connection with the GannettSpin-off, the TRP assumed the GRP pension liabilities of the NEOs who had accrued a benefit under the GRP. The TRP benefit for each of our participating NEOs is calculated under the post-1997 plan provisions. However, as noted below, the SERP benefit for each of Ms. Martore and Mr. WilliamsBeall is calculated under thepre-1998 plan provisions. Each of the NEOs who participates in the TRP is fully vested in his or her TRP benefit.
In connection with its acquisition of Belo Corp. (Belo), the Company assumed the legacy Belo pension plan (Belo Plan), which was merged into the TRP. Since Mr. Lougee earned a pension benefit while employed by Belo, the total TRP benefit for Mr. Lougee is calculated based on his accruals under both the post-1997 TRP plan provisions and the Belo Plan provisions, in which benefits he is also fully vested. Under the Belo Plan, which was frozen to new benefits as of March 31, 2007, Mr. Lougee will be entitled to monthly annuity payments for his life commencing at age 65 calculated by multiplying his Belo credited service (including any additional service credits provided when the plan was frozen) by his monthly FAE, in each case earned at Belo as of March 31, 2007, and further multiplied by specified percentages (generally 1.1% plus 0.35% for average earnings in excess of covered compensation). If Mr. Lougee were to terminate employment and elect to commence receiving benefits prior to age 65, his benefit that would otherwise be paid at age 65 would be reduced as follows: 3.33% per year for each year of such early retirement prior to age 61 and 6.67% per year for each year of such early retirement between ages 61 and 65.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
TEGNA Supplemental Retirement Plan (SERP)
The SERP is a nonqualified retirement plan that provides eligible employees with retirement benefits that cannot be provided under the TRP due to the Internal Revenue Code, which limits the compensation that can be recognized under qualified retirement plans and imposes limits on the amount of benefits which can be paid. For some participants, including Ms. Martore and Mr. Williams,Beall, the SERP also provides a benefit equal to the difference between the benefits calculated under thepre-1998 formula, without regard to theIRS-imposed limits on pay and benefits, and the amount they will receive from the TRP under the post-1997 formula. The SERP benefits for Mr. Lougee and Mr. Mayman are calculated under the post-1997 formula without regard to theIRS-imposed limits on pay and benefits. For all SERP participants, the benefit calculated under the applicable SERP formula is reduced by benefits payable from the TRP. Ms. Harker does not participate in the SERP.
In conjunction with the Company’s decision to freeze benefits under the GRP, the Company also decided to make changes to benefits under the SERP. Generally, until December 31, 2017, SERP participants whose SERP benefits were calculated under thepre-1998 formula will continuecontinued to accrue benefits under the SERP. However, their benefits for credited service after August 1, 2008 arewere calculated at a rate that isone-third less than thepre-August 1, 2008 rate. NEOsMs. Beall is the only NEO who was affected by this change arechange. Ms. Martore and Mr. Williams. Ms. Martore and Mr. Williams each areBeall is currently eligible for early retirement under thepre-1998 formula that applies to themher under the SERP.
Effective December 31, 2017, SERP participants whose SERP benefits were calculated under thepre-1998 formula had their SERP benefits frozen such that they ceased to earn additional benefits for earnings, credited service, cost of living adjustments or any other factor or reason after that date. Ms. Beall is the only NEO who was affected by this change.
Effective August 1, 2008, SERP participants whose SERP benefits were not calculated under thepre-1998 formula had their SERP benefits frozen such that they ceased to earn additional benefits for compensation or service earned on or after that date. Until benefits commence, such participants’ frozen benefits are periodically adjusted to reflect increases in a specifiedcost-of-living index (i.e., the consumer price index for all urban consumers published by the U.S. Department of Labor Bureau of Statistics for U.S. all items less food and energy). Mr. Lougee and Mr. Mayman are the only NEOs who were affected by this change.
SERP benefits are generally paid in the form of a lump sum amount when a participant separates from service or, if later, the date the participant attains age 55, except that payment is accelerated in the event that the Company undergoes a change in control. In order to comply with federal tax laws, an NEO’s SERP benefit cannot be paid within the first six months after the participant’s separation from service with the Company. Ms. Martore, Mr. Lougee, Mr. WilliamsMs. Beall and Mr. Mayman each are fully vested in their SERP benefits.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
TEGNA 401(k) Savings Plan (401(k) Plan)
Prior to the Spin-off, Company employees generally participated in the Gannett Co., Inc. 401(k) Savings Plan (Gannett 401(k) Plan), a defined contribution 401(k) retirement plan. In connection with the Spin-off, the account balances of Company employees who had participated in the Gannett 401(k) Plan were transferred to the TEGNA 401(k) Savings Plan (401(k) Plan), Company employees commenced participating in the 401(k) Plan and Gannett assumed sponsorship of the Gannett 401(k) Plan. The 401(k) Plan generally mirrors benefits provided under the Gannett 401(k) Plan immediately prior to the Spin-off.
Most of the Company’s employees based in the United States may participate in the TEGNA 401(k) Savings Plan (“401(k) Plan”), which permits eligible participants to makepre-tax contributions and provides for matching and other employer contributions. Effective August 1, 2008, new participants as well as participants whose benefits have been frozen under the TRP and, if applicable, the SERP, commenced receiving higher matching contributions under the 401(k) Plan. At that time, the matching contribution rate generally increased from 50% of the first 6% of compensation that an employee elects to contribute to the plan to 100% of the first 5% of compensation. Mr. Lougee, Ms. Harker Mr. Lougee and Mr. Mayman receive matching contributions under the newhigher match formula, and Ms. Martore and Mr. WilliamsBeall receives matching contributions under the old formula. Beginning in 2018, Ms. Beall became eligible to receive matching contributions under the old formula.higher matching formula due to her SERP benefit being frozen effective as of December 31, 2017. The Company also makes additional employer contributions to the 401(k) Plan on behalf of certain employees,employees; Mr. Mayman has been eligible for such a contribution equal to 1.5% of his cash compensation. Beginning in 2017, these additional contributions are being made to the TEGNA Deferred Compensation Plan for certain participants who are eligible to receive this additional contribution, including Mr. Mayman. For purposes of the 401(k) Plan and subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, andpre-tax contributions to the Company’s benefit plans. Company contributions under the 401(k) Plan vest 25% after one year of service, 50% after two years of service and 100% after three years of service. As of the date of this Proxy Statement, Company contributions are 100% vested for each of the NEOs. Effective January 1, 2018, the matching contribution rate was changed to 100% of the first 4% of compensation that an employee elects to contribute to the plan and such Company contributions are immediately vested when they are made, without regard to years of service.
TEGNA Deferred Compensation Plan (DCP)
Each NEO who participates in the DCP may elect to defer all or a portion of his or her compensation under the DCP, provided that the minimum deferral must be $5,000 for each form of compensation (base salary and bonus) for the year of deferral. The amounts deferred by each NEO are vested and will be deemed invested in the fund or funds designated by such NEO from among a number of funds selected byoffered under the Committee.DCP.
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
The DCP provides for Company contributions on behalf of certain employees whose benefits under the 401(k) Plan are capped by Internal Revenue Code rules that limit the amount of compensation that can be taken into account when calculating benefits under a qualified plan. Generally, Company contributions to the DCP are calculated by applying the same formula that applies to an employee’s matching and additional employer contributions under the 401(k) Plan to the employee’s compensation in excess of the Internal Revenue Code compensation limit. However, participantsAdditional employer contributions that would normally be made to the 401(k) Plan are instead made to the DCP to comply with IRS testing requirements that apply to the 401(k) Plan. Participants are not required to make elective contributions to the DCP to receive an employer contribution under the DCP. CompanyThe same vesting rules that apply under the 401(k) Plan apply to contributions under the DCP, vest 25% after one year of service, 50% after two years of service and 100% after three years of service.except that amounts under the DCP become vested upon a change in control. Mr. Lougee, Ms. Harker, Mr. LougeeMs. Beall and Mr. Mayman each has been credited with Company contributions to the DCP based on his or her respective 2015 compensation in excess of the Internal Revenue Code compensation limit.DCP. Each of Mr. Lougee, Ms. Harker, Mr. LougeeMs. Beall and Mr. Mayman was immediately vested in his or her Company contribution when it was made. Executives who continueBeginning in 2018, Ms. Beall became eligible to accrue reduced benefits under the SERP after August 1, 2008, including Ms. Martore and Mr. Williams, do not receive Company contributions under the DCP.DCP due to her SERP benefit being frozen effective as of December 31, 2017, and she is vested in such contributions.
Amounts that a participant elects to defer into the DCP are generally paid at the time and in the form elected by the participant, provided that if the participant terminates employment before attaining age 55 and completing five years of service, benefits are paid in a lump sum amount upon such termination (although forpre-2005 deferrals the Committee may pay such deferrals in five annual installments). The DCP permits participants to receivein-service withdrawals of participant contributions for unforeseeable emergencies and certain other circumstances. Prior to when the deferrals are made, a participant may make a special election as to the time and form of payment for benefits that become payable due to the participant’s death or disability if payments have not already commenced, and deferrals will be paid in accordance with such elections under those circumstances. Company contributions to the DCP are generally paid in the form of a lump sum amount when a participant separates from service. The payment of post-2004 Company and participant DCP contributions is accelerated in the event that the Company undergoes a change in control.
TEGNA Transitional Compensation Plan (TCP)
The TCP is a legacy plan that provides severance pay for some of our NEOs and other key executives upon a change in control of the Company. Ms. Harker, Ms. Beall and Mr. Mayman participate in the TCP. Ms. Harker first participated in the TCP after April 15, 2010. Although Mr. Lougee first participated in the TCP before April 15, 2010, following the completion of the Cars.comSpin-off, Mr. Lougee ceased participation in the TCP and became a participant in the CIC Severance Plan.
On December 8, 2015, the Company, consistent with its practice of updating its plans and programs from time to time in light of evolving market trends, froze participation in the TCP and, effective December 15, 2016, additional service credit accruals for existing participants.
The TCP assures the Company that it would have the continued dedication of, and the availability of objective advice and counsel from, key executives notwithstanding the possibility, threat or occurrence of a change in control. As a result, we believe the TCP helps promote the retention and continuity of certain key executives for at least one year after a change in control. The Board believes it is imperative that the Company and the Board be able to rely upon key executives to continue in their positions and be available for advice, if requested, in connection with any proposal relating to a change in control without concern that those individuals might be distracted by the personal
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
uncertainties and risks created by such a proposal. Change in control arrangements also facilitate the Company’s ability to attract and retain management as the Company competes for talented employees in a marketplace where such protections are common.
With those goals in mind, the TCP provides that participants including the NEOs, would be entitled to compensation following a change in control if (1) within two years from the date of the change in control the participant’s employment is terminated by the Company other than for “cause,” or by the employee for “good reason”, or (2) in the case of executives participating in the TCP before April 15, 2010 (but not those who first participate in the TCP on or after that date), within a30-day window period beginning on the first anniversary of the change in control, the executive terminates his or her employment voluntarily. Ms. Harker first participated in the TCP after April 15, 2010.
Following is a summary of several key terms of the TCP:
“change in control” means the first to occur of: (1) the acquisition of 20% or more of our then-outstanding shares of common stock or the combined voting power of our then-outstanding voting securities; (2) our incumbent directors cease to constitute at least a majority of the Board, except in connection with the election of directors approved by a vote of at least a majority of the directors then comprising the incumbent Board; (3) consummation of our sale in a merger or similar transaction or sale or other disposition of all or substantially all of our assets; or (4) approval by our shareholders of the Company’s complete liquidation or dissolution.
34 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
“cause” means (1) any material misappropriation of Company funds or property; (2) the executive’s unreasonable and persistent neglect or refusal to perform his or her duties which is not remedied in a reasonable period of time following notice from the Company; or (3) conviction of a felony involving moral turpitude.
“good reason” means the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (1) a material diminution of an executive’s duties or responsibilities; (2) a reduction in, or failure to pay timely, the executive’s compensation and/or other benefits or perquisites; (3) the relocation of the executive’s office outside the Washington, D.C. metropolitan area or away from the Company’s headquarters; (4) the failure of the Company or any successor to assume and agree to perform the TCP; or (5) any purported termination of the executive’s employment other than in accordance with the TCP. Any good faith determination of “good reason” made by the executive shall be conclusive.
“severance period” means a number of whole months equal to the participant’s months of continuous service with the Company or its affiliates divided by 3.33; provided, however, that in no event shall the participant’s severance period be less than 24 months or more than 36 months, regardless of the participant’s actual length of service. As of December 31, 2015,2018, the severance periods for Ms. Martore,Harker, Ms. Harker, Mr. Lougee, Mr. WilliamsBeall and Mr. Mayman are 36, 24, 30.3, 36 and 36 months, respectively.
A NEO entitled to compensation under the TCP would receive:
• | Pension. In addition to their vested TRP and SERP benefits, upon their termination of employment, TCP participants are entitled to a lump sum payment equal to the difference between (1) the amount that would have been paid under the SERP had the executive remained in the employ of the Company for the severance period and received the same level of base salary and bonus which the executive received with respect to the fiscal year immediately preceding the date of the change in control or the termination date, whichever is higher, and (2) the amount payable under the SERP as of the later of the date of the change in control or the termination date, whichever is higher. The SERP |
• | Payments. Upon a TCP participant’s qualifying termination of employment, the participant is entitled to receive a lump sum amount equal to the sum of (i) any unpaid base salary through the date of termination at the higher of the base salary in effect immediately prior to change in control or on the termination date; and (ii) an amount equal to the highest annual bonus paid in the three preceding years which is prorated to reflect the portion of the fiscal year in which the participant was employed prior to termination. Additionally, TCP participants are paid a lump sum cash severance payment equal to the participant’s severance period divided by twelve multiplied by the sum of (1) the executive’s highest base salary during the12-month period prior to the termination date or, if higher, during the12-month period prior to the change in control (plus certain other compensation items paid to the participant during the12-month period prior to the date of termination), and (2) the greater of (a) the highest annual bonus earned by the executive in the three fiscal years immediately prior to the year of the change in control or (b) the highest annual bonus earned by the executive with respect to any fiscal year during the period between the change in control and the date of termination. |
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EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
• | Excise TaxGross-Ups. Executives participating in the TCP before April 15, 2010 (but not those who first participated in the TCP on or after that date) would be entitled to receive payment of an amount sufficient to make them whole for any excise tax imposed on the payment under Section 4999 of the Internal Revenue Code. The effects of Section 4999 generally are unpredictable and can have widely divergent and unexpected effects based on an executive’s personal compensation history. Therefore, to provide an equal level of benefit across individuals without regard to the effect of the excise tax, the Company has determined that excise taxgross-up payments are appropriate for certain TCP participants. Executives, such as Ms. Harker, who first participated in the TCP on or after April 15, 2010, will not receive a Section 4999 excise taxgross-up payment. |
• | Medical and Life Insurance. For purposes of determining a TCP participant’s eligibility for retiree life insurance and medical benefits, the participant is considered to have attained the age and service credit that the participant would have attained had the participant remained employed until the end of the severance period. Additionally, each TCP participant receives life and medical insurance benefits for the severance period in amounts no less than those that would have been provided had the participant not been terminated. |
35 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
TEGNA 2015 Change in Control Severance Plan
On December 8, 2015, the Company consistent with its practice of updating its plans and programs from time to timeadopted the TEGNA 2015 Change in light of evolving market trends, froze participation in the TCP and, effective December 15, 2016, additional service credit accrualsControl Severance Plan (CIC Severance Plan). The CIC Severance Plan provides severance pay for existing participants. The Spin-off did not constitutecertain key executives, including Mr. Lougee, upon a change in control of the Company in order to assure the Company that it will have the continued dedication of, and the availability of objective advice and counsel from, key executives notwithstanding the possibility, threat or occurrence of a change in control. The Board believes it is imperative that the Company and the Board be able to rely upon key executives to continue in their positions and be available for advice, if requested, in connection with any proposal relating to a change in control without concern that those individuals might be distracted by the personal uncertainties and risks created by such a proposal. Change in control arrangements also facilitate the Company’s ability to attract and retain management as the Company competes for talented employees in a marketplace where such protections are common.
With those goals in mind, the CIC Severance Plan provides that a participant would be entitled to compensation if the participant is terminated prior to and in connection with a change in control or if within two years from the date of the change in control the participant’s employment is terminated by the Company other than for “cause,” or by the participant for “good reason”.
Following is a summary of several key terms of the CIC Severance Plan:
“change in control” means the first to occur of: (1) the acquisition of 20% or more of the Company’s outstanding shares of common stock or the combined voting power of the Company’s outstanding voting securities; (2) the Company’s incumbent directors ceasing to constitute at least a majority of the Board, except in connection with the election of directors approved by a vote of at least a majority of the directors then comprising the incumbent Board; (3) consummation of a sale of the Company in a merger or similar transaction, or sale or other disposition of all or substantially all of the Company’s assets; or (4) approval by the Company’s shareholders of the Company’s complete liquidation or dissolution.
“cause” means (1) the participant’s material misappropriation of Company funds or property; (2) the participant’s unreasonable and persistent neglect or refusal to perform his or her duties which is not remedied within 30 days following notice from the Company; or (3) the participant’s conviction, including a plea of guilty or of nolo contendere, of a securities law violation or a felony.
“good reason” means the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (1) a material diminution of the participant’s duties, authorities or responsibilities; (2) a reduction in the participant’s base salary or target bonus opportunity; (3) a failure to provide the participant with an annual long-term incentive opportunity whose grant date value is equivalent to or greater in value than participant’s regular annual long-term incentive opportunity in effect on the date of the change in control; (4) the relocation of the participant’s office from the location at which the participant is principally employed immediately prior to the date of the change in control to a location 35 or more miles farther from the participant’s residence immediately prior to the change in control, or the Company’s requiring the participant to be based anywhere other than the Company’s offices, except for required travel on the Company’s business to an extent substantially consistent with the participant’s business travel obligations prior to the change in control; (5) the failure by the Company to pay any compensation or benefits due to the participant; (6) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform the CIC Severance Plan; or (7) any purported termination of the participant’s employment that is not effected pursuant to the CIC Severance Plan.
“multiplier” means 3.0 for the Company’s CEO as of the date of the change in control; 2.0 for a participant who on the date of the change in control is a member of the Company’s executive leadership team and reports directly to the Company’s CEO; and 1.0 for other participants. Mr. Lougee’s multiplier is 3.0.
A NEO entitled to compensation under the TCP.CIC Severance Plan would receive:
• | Payments. Upon a participant’s qualifying termination of employment, the participant is entitled to receive a lump sum amount equal to the sum of (1) any unpaid base salary or bonus through the date of termination; and (2) a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination date in an amount equal to the average annual bonus the participant earned with respect to three fiscal years immediately prior to the fiscal year in which the termination date occurs prorated for the portion of the fiscal year elapsed prior to the termination date. Additionally, participants are paid a lump sum cash severance payment equal to a “multiplier” that is designated for the participant times the sum of (1) the participant’s annual base salary at the highest rate of salary during the12-month period immediately prior to the termination date or, if higher, during the12-month period immediately prior to the change in control (in each case, as determined without regard for any reduction for deferred compensation, 401(k) plan contributions and similar items), and (2) the greater of (A) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the change in control occurs; and (B) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the termination occurs. |
36 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
• | COBRA Benefit. A participant will receive an amount equal to the monthly COBRA cost of the participant’s medical and dental coverage in effect as of the date of termination multiplied by the lesser of (1) 18; or (2) 24 minus the number of full months between the date of the change in control and the date of termination. |
Benefits are subject to the participant executing a release and agreeing to certain restrictive covenants.
TEGNA Executive Severance Plan (TESP)
On December 8, 2015, the Company adopted the TEGNA Inc. Executive Severance Plan (TESP). Each of the NEOs participates in the TESP. The plan provides severance payments to each of the NEOs (other than Ms. Martore) and other executives of the Company approved by the Committee in the event of certain involuntary terminations of employment. Under the TESP, a participant who experiences an involuntary termination of employment without cause would receive alump-sum cash severance payment equal to the product of (a) a severance multiple; and (b) the sum of the participant’s (1) annual base salary and (2) average annual bonus earned for the three fiscal years immediately preceding the termination. The severance multiple is 2.0 for a participant who is the Company’s Chief Executive Officer, 1.5 for a participant who is a member of the Company’s executive leadership team who reports directly to the Company’s Chief Executive Officer, including Ms. Harker, Mr. Lougee, Mr. Williams and Mr. Mayman, and 1.0 for all other participating executives. In addition, participating executives would receive a lump sum amount equal to the sum of (1) any unpaid base salary or bonus through the date of termination; and (2) a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination. The severance payment is contingent upon the participant’s execution of a separation agreement containing a release of claims in favor of the Company and its affiliates and covenants restricting the participant’s competition, solicitation of employees, disparagement of the Company and its affiliates, and disclosure of confidential information. The separation agreement also contains a release of claims by the Company and its affiliates in favor of the participant and a covenant restricting the Company’s disparagement of the participant. The severance multiples for Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Mayman are 2.0, 1.5, 1.5 and 1.5, respectively.
In May 2017, the event thatCompany entered into a participant is eligibleletter agreement with Ms. Harker pursuant to receive a benefit underwhich she was entitled participation in the TESP and the TLT-TSP, the participant’s severance benefit under the TESPor a plan that provides substantially similar benefits through February 28, 2018. Following that date, Ms. Harker is reduced by the participant’s severance amount under the TLT-TSP (but not below zero).
TEGNA Leadership Team Transition Severance Plan (TLT-TSP)
On August 4, 2014, the Company adopted the TEGNA Leadership Team Transition Severance Plan, formerly known as the Gannett Leadership Team Transition Severance Plan (TLT-TSP),permitted to promote certainty and minimize disruption for certain senior executives, other than Ms. Martore, in connection with the Spin-off. The plan provides severance payments to members of the TEGNA Leadership Team (other than the CEO) in the event of an involuntary termination without “cause” in connection with the Spin-off that takes place prior to the first anniversary of the Spin-off. Under the TLT-TSP, an executive would be entitled to receive the following post-termination severance benefit in addition to the benefits he or she would receive upon early retirement in the event of his orterminate her retirement/voluntary termination: the former executive would be entitled to a severance payment payable in one lump sum cash payment in an amount equal to the product of (a) a severance multiple and (b) the sum of the participant’s annual base salary and annual bonus earned for the most recent fiscal year of the Company preceding the termination (or, if greater, the average annual bonuses earned by the participant over the three fiscal years of the Company preceding the termination). The severance multiple is 1.0 for participants with less than 15 years of continuous serviceemployment with the Company voluntarily and receive the benefits contemplated by the TESP or such other severance plan, subject to her compliance with certain notice requirements and the terms of such plan (including Ms. Harker and Mr. Lougee), and 1.5 for participants with 15 or more yearsthe execution of continuous service (including Mr. Williams and Mr. Mayman). Receipt of severance benefits would be conditioned on the participant signing a separation agreement that includes a release of claims in favor ofclaims) and provided that circumstances have not arisen entitling the Company Gannett and their respective affiliates and contains customary post-employment restrictive covenants. Into terminate her employment for cause.
Additional information regarding severance benefits for the event that a participantCompany’s NEOs is eligible to receive a benefit underset forth in the TESP and the TLT-TSP, the participant’s severance benefit under the TESP is reduced by the participant’s severance amount under the TLT-TSP (but not below zero). The TLT-TSP expires on June 29, 2016, the one year anniversarysection of the Spin-off.
|
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
this Proxy Statement entitled “Other Potential Post-Employment Payments.”
Other Compensation Policies
RECOUPMENT POLICY
The Company has adopted a recoupment or “clawback” policy that applies to cash-based and equity-based incentive compensation awards granted to the Company’s employees, including the NEOs. Under the policy, to the extent permitted by applicable law and subject to the approval of the Committee, the Company may seek to recoup any incentive based compensation awarded to any employee subject to the policy, if (1) the Company is required to prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws, (2) the fraud or intentional misconduct of an employee subject to the policy contributed to the noncompliance that resulted in the obligation to restate, and (3) a lower award of incentive-based compensation would have been made to the covered employee had it been based upon the restated financial results. In December 2018, the Company amended its recoupment policy to permit the Committee to recoup up to three years of an employee’s incentive compensation if that employee’s gross negligence or intentional misconduct caused the Company material harm (financial, competitive, reputational or otherwise). The policy is in addition to any other remedies the Company may have, including those available under Section 304 of the Sarbanes-Oxley Act of 2002, as amended.
HEDGING, SHORT-SELLING AND PLEDGING POLICY
The Company has adopted a policy that prohibits the Company’s employees and directors from purchasing financial instruments that are designed to hedge or offset any fluctuations in the market value of the Company’s equity securities they hold, purchasing the Company’s shares on margin and selling any securities of the Company “short.” The policy also prohibits the Company’s directors and executive officers from borrowing against any account in which the Company’s equity securities are held or pledging the Company’s equity securities as collateral for a loan. These prohibitions apply whether or not such equity securities were acquired through the Company’s equity compensation programs.
37 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
How the Committee Determines NEO Compensation
Tax Considerations
Effective January 1, 2018, Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid to aan individual who was the company’s CEO, and itsCFO or one of the company’s next three other most highly compensated executive officers other than the CFO forin any fiscal year. However,year after 2016 (“covered employee”). Prior to January 1, 2018, Section 162(m) exemptsprovided for an exception to the deduction limit for qualifying performance-based compensation fromif specified requirements were met, and the deduction limit if specified requirementsdid not apply to the CFO or an individual who was not the company’s CEO or one of the company’s next three most highly compensated employees as of the last day of the fiscal year. The Tax Cuts and Jobs Act of 2017 amended Section 162(m) by eliminating the performance-based exception and expanding the individuals who are met. The Committee has structured, and intends to continue to structure, performance-based compensation, including Performance Shares and annual bonuses, to executive officers who may betreated as covered employees.
After 2017, subject to Section 162(m)limited transition relief for certain written binding contracts in effect on November 2, 2017, the Company will generally not be able to obtain a manner that is intendedtax deduction for compensation paid to satisfy those requirements.a covered employee in excess of $1,000,000. For example, in February 2015, the Committee established a limit on 2015 NEO annual bonuses based on a percentage2018, $1,516,174 of the Company’s adjusted EBITDA for the purpose of preserving their deductibility under Section 162(m). However, the Committee reserves the authoritycompensation paid to award non-deductible compensation in circumstances as it deems appropriate. Because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, no assurance can be given, notwithstanding our efforts, that compensation intended by the Company to satisfy the requirements for deductibility under Section 162(m) does in fact do so. For 2015, $49,344Mr. Lougee, $316,735 of the compensation paid to Ms. MartoreHarker, $335,475 of the compensation paid to Ms. Beall and $510,900 of the compensation paid to Mr. Mayman was not deductible under Section 162(m). As was true for years prior to 2018, the Committee reserves the right to awardnon-deductible compensation as it deems appropriate.
EXECUTIVELEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE REPORT
The ExecutiveLeadership Development and Compensation Committee met with management to review and discuss the Compensation Discussion and Analysis disclosures included in this Proxy Statement. Based on such review and discussion, on February 23, 201618, 2019 the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Form10-K for its 20152018 fiscal year, and the Board has approved that recommendation.
ExecutiveLeadership Development and Compensation Committee
Scott K. McCune, Chair
Howard D. Elias Chair
Lidia Fonseca
Marjorie Magner
Scott K. McCuneMelinda C. Witmer
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EXECUTIVE COMPENSATION
Summary Compensation Table
NAME AND PRINCIPAL POSITION | YEAR | SALARY ($)(1) | BONUS ($)(2) | STOCK AWARDS ($)(3) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($)(4) | ALL OTHER COMPENSATION ($)(5) | TOTAL ($) | |||||||||||||||||||||
Gracia C. Martore (President and CEO) | 2015 | 1,000,000 | 2,750,000 | 5,000,701 | 2,660,677 | 112,425 | 11,523,803 | |||||||||||||||||||||
2014 | 1,000,000 | 2,750,000 | 3,999,983 | 4,541,323 | 116,032 | 12,407,338 | ||||||||||||||||||||||
2013 | 900,000 | 2,000,000 | 3,199,993 | 1,678,497 | 134,966 | 7,913,456 | ||||||||||||||||||||||
Victoria D. Harker (Executive Vice President and Chief Financial Officer) | 2015 | 670,000 | 750,000 | 1,610,157 | 0 | 72,244 | 3,102,401 | |||||||||||||||||||||
2014 | 655,000 | 750,000 | 1,275,018 | 0 | 66,759 | 2,746,777 | ||||||||||||||||||||||
2013 | 635,000 | 710,000 | 1,250,002 | 0 | 47,207 | 2,642,209 | ||||||||||||||||||||||
David T. Lougee (President/TEGNA Media) | 2015 | 700,027 | 675,000 | 1,400,181 | 2,674 | 154,779 | 2,932,661 | |||||||||||||||||||||
2014 | 650,025 | 675,000 | 1,000,027 | 2,441 | 160,187 | 2,487,680 | ||||||||||||||||||||||
2013 | 600,023 | 725,000 | 950,009 | 3,826 | 143,944 | 2,422,802 | ||||||||||||||||||||||
John A. (Jack) Williams (President/TEGNA Digital) | 2015 | 600,000 | 500,000 | 1,175,179 | 269,610 | 121,974 | 2,666,763 | |||||||||||||||||||||
2014 | 540,000 | 575,000 | 765,029 | 929,683 | 103,687 | 2,913,399 | ||||||||||||||||||||||
Todd A. Mayman (Executive Vice President/Chief Legal and Administrative Officer) | 2015 | 580,000 | 650,000 | 1,150,096 | 6,445 | 162,388 | 2,548,929 | |||||||||||||||||||||
Robert J. Dickey(6) (Former President/USCP) | 2015 | 375,000 | 0 | 2,000,021 | 83,641 | 53,115 | 2,511,777 | |||||||||||||||||||||
2014 | 675,000 | 750,000 | 1,299,989 | 1,164,316 | 109,022 | 3,998,327 | ||||||||||||||||||||||
2013 | 675,000 | 600,000 | 1,374,995 | 0 | 109,115 | 2,759,110 |
NAME AND PRINCIPAL POSITION | YEAR | SALARY ($) | BONUS ($)(1) | STOCK AWARDS ($)(2) | NON-EQUITY PLAN ($)(3) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($)(4) | ALL OTHER COMPENSATION ($)(5) | TOTAL ($) | ||||||||||||||||||||||||||||||||
David T. Lougee (President and CEO) | 2018 | 950,000 | 1,000,000 | 2,749,995 | 0 | 0 | 185,365 | 4,885,360 | ||||||||||||||||||||||||||||||||
2017 | 908,333 | 1,000,000 | 2,650,003 | 0 | 48,645 | 191,401 | 4,798,382 | |||||||||||||||||||||||||||||||||
2016 | 720,000 | 775,000 | 1,449,995 | 0 | 41,461 | 165,452 | 3,151,908 | |||||||||||||||||||||||||||||||||
Victoria D. Harker (Executive Vice President and Chief Financial Officer) | 2018 | 700,000 | 690,000 | 1,399,999 | 300,000 | 0 | 70,737 | 3,160,736 | ||||||||||||||||||||||||||||||||
2017 | 700,000 | 675,000 | 1,399,982 | 700,000 | 0 | 84,314 | 3,559,297 | |||||||||||||||||||||||||||||||||
2016 | 687,500 | 650,000 | 1,375,002 | 0 | 0 | 78,689 | 2,791,191 | |||||||||||||||||||||||||||||||||
Lynn Beall (Executive Vice President and COO—Media Operations) | 2018 | 575,000 | 550,000 | 862,502 | 0 | 0 | 109,741 | 2,097,243 | ||||||||||||||||||||||||||||||||
2017 | 554,167 | 562,019 | 714,999 | 0 | 826,662 | 61,398 | 2,719,245 | |||||||||||||||||||||||||||||||||
Todd A. Mayman (Executive Vice President/ Chief Legal and Administrative Officer) (through December 31, 2018) | 2018 | 610,000 | 427,000 | 853,999 | 0 | 6,679 | 152,029 | 2,049,707 | ||||||||||||||||||||||||||||||||
2017 | 610,000 | 410,000 | 875,005 | 0 | 7,905 | 162,733 | 2,065,643 | |||||||||||||||||||||||||||||||||
2016 | 600,000 | 435,000 | 875,020 | 0 | 6,924 | 173,664 | 2,090,608 | |||||||||||||||||||||||||||||||||
(1) |
See the “Compensation Discussion and Analysis” section for a discussion of how the |
Amounts in this column represent the aggregate grant date fair value of Performance Share and RSU awards computed in accordance with Accounting Standards Codification 718, Compensation—Stock Compensation (“ASC 718”) based on the assumptions set forth in note 9 to the Company’s |
(3) | The amount reported in this column for |
(4) | Amounts in this column represent the aggregate increase, if any, of the accumulated benefit liability relating to the NEO under the TRP and the SERP in the applicable fiscal year. Amounts are calculated by comparing values as of the pension plan measurement date used for the Company’s financial statements for the applicable fiscal years. This includes the value of any additional service accrued, the impact of any compensation increases received, the impact of any plan amendments made during the period, and growth attributable to interest, if applicable. The Company uses the same assumptions it uses for financial reporting under generally accepted accounting principles with the exception of retirement age,pre-retirement mortality and probability of terminating employment prior to retirement. The assumed retirement age for the above values is the earliest age at which an executive could retire without any benefit reduction due to age. The above values are calculated assuming each NEO survives to the assumed retirement age. The amounts reported in this column shown for |
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EXECUTIVE COMPENSATION
Summary Compensation Table
(5) | Amounts for |
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EXECUTIVE COMPENSATION
Grants of Plan-based Awards
The following table summarizes grants of plan-based awards at the time of grant. The awards made prior to June 29, 2015, the effective date of the Spin-off, were converted in connection with the Spin-off as described in the section of this Proxy Statement entitled “Impact of Spin-off on Equity-Based Awards” beginning on page 28.2018. See the table entitled “Outstanding Equity Awards at Fiscal Year End” for the number of plan-based awards outstanding on December 31, 2015.2018.
NAME | GRANT DATE (1) | COMMITTEE MEETING DATE | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (#)(3) | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS ($)(4) | GRANT DATE (1) | COMMITTEE MEETING DATE | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | ALL OTHER OR UNITS (#)(3) | GRANT AWARDS ($)(4) | ||||||||||||||||||||||||||||||||||||||||||||||
THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Martore | 1/1/15 | 12/8/14 | 56,016 | 112,031 | 224,062 | 3,750,520 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lougee | 3/1/18 | 2/22/18 | 96,421 | 148,340 | 296,680 | 1,787,497 | ||||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/8/14 | 51,126 | 1,250,180 | 3/1/18 | 2/22/18 | 78,958 | 962,498 | |||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Harker | 1/1/15 | 12/8/14 | 12,719 | 25,438 | 50,876 | 851,601 | 3/1/18 | 2/22/18 | 41,535 | 63,900 | 127,800 | 769,995 | ||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/8/14 | 18,753 | 458,566 | 3/1/18 | 2/22/18 | 51,682 | 630,004 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/1/15 | * | 6/24/15 | 9,612 | * | 299,991 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lougee | 1/1/15 | 12/8/14 | 13,593 | 27,186 | 54,372 | 910,120 | ||||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/8/14 | 20,041 | 490,061 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Williams | 1/1/15 | 12/8/14 | 11,409 | 22,817 | 45,634 | 763,857 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Beall | 3/1/18 | 2/22/18 | 25,589 | 39,367 | 78,734 | 474,372 | ||||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/8/14 | 16,821 | 411,323 | 3/1/18 | 2/22/18 | 31,840 | 388,130 | |||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Mayman | 1/1/15 | 12/8/14 | 7,618 | 15,236 | 30,472 | 510,064 | 3/1/18 | 2/22/18 | 25,336 | 38,979 | 77,958 | 469,697 | ||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/8/14 | 13,906 | 340,042 | 3/1/18 | 2/22/18 | 31,526 | 384,302 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/1/15 | * | 6/24/15 | 9,612 | * | 299,991 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Dickey(5) | 1/1/15 | 12/8/14 | 46,836 | 93,672 | 187,344 | 1,300,012 | ||||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/8/14 | 69,054 | 700,009 |
(1) | See the “Compensation Discussion and Analysis” section for a discussion of the timing of various pay decisions. |
(2) | These share numbers represent the threshold, target and maximum payouts which may be earned under the 2018 Performance Share |
(3) | The RSU grants reported in this column generally vest in four equal annual installments |
(4) | The full grant date fair value of the awards was computed in accordance with ASC 718, based on the assumptions set forth in note 9 to the Company’s |
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EXECUTIVE COMPENSATION
Additional Information Regarding the Summary Compensation Table and the Grants of Plan-based Awards Table
ADDITIONAL INFORMATION REGARDING THE SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS TABLE
Ms. MartoreHarker
In February 2007,May 2017, the Company entered into an employment contracta letter agreement with Ms. Martore. The contract provides forHarker pursuant to which she was entitled to participate in the TESP or a rolling three-year termplan that provided substantially similar benefits until such time as eitherFebruary 28, 2018. Following that date, Ms. Martore orHarker is permitted to terminate her employment with the Company provides notice of non-extension, in which casevoluntarily and receive the term ofbenefits contemplated by the contract would expire on December 31 of the second year following the effective time of the notice. During her employment, Ms. Martore will receive an annual base salary of $700,000TESP or such greater amount as the Committee determines, and an annual bonus at the discretion of the Committee. Ms. Martore’s current base salary is $1 million; however, she voluntarily reduced it to $900,000 from 2010 through 2013. Ms. Martore declined a salary increase in connection with her promotion to President and COO in February 2010 and again when she was promoted to President and CEO in October 2011. Her benefits under her employment agreement, the SERP, the TCP, the Performance Share Plan and certain other plans have been calculated assuming that she did not voluntarily reduce her base salary. All stock options (“SOs”) and RSUs granted to Ms. Martore will vest fully within four years from the grant date, will vest immediately upon termination of employment (other than by the Company for “good cause”) and, in the case of SOs, upon any such termination, will remain exercisable for the lesser of the remaining term or three years. Ms. Martore will not forfeit Performance Shares previously grantedseverance plan, subject to her upon a termination of her employment. The number of Performance Shares that will be paid to Ms. Martore will be calculated in accordancecompliance with certain notice requirements and the terms of such plan (including the Performance Share Plan, assumingexecution of a release of claims) and provided that Ms. Martore was continuously employed bycircumstances have not arisen entitling the Company through the last day of each of the applicable Performance Share Incentive Periods.to terminate her employment for cause. See also the “Other Potential Post-Employment Payments” section of this Proxy Statement for more information about Ms. Martore’sHarker’s post-employment benefits.
Mr. Dickey
Mr. Dickey separated from employment with the Company on June 28, 2015 in order to assume the role of President and Chief Executive Officer of Gannett in connection with the Spin-off. His base salary for 2015 and the long-term incentives he received on January 1, 2015 were determined by the Committee in recognition of his role with the Company and the expectation that the Spin-off would occur during 2015. Mr. Dickey was not awarded a cash bonus award by the Company for 2015, nor did he receive any severance pay from the Company upon his departure. As a result of Mr. Dickey’s separation from employment with the Company as a result of the Spin-off:
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EXECUTIVE COMPENSATION
Outstanding Equity Awards at FiscalYear-end
OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||
NAME | NUMBER OF SECURITIES UNDERLYING UNEXER- CISED OPTIONS (#) EXERCI- SABLE (1) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXER- CISABLE | OPTION EXER- CISE PRICE ($) (1) | 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 ($) | EQUITY NOT VESTED | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) | ||||||||||||||||||||||
Ms. Martore | 60,554 | 26.93 | 2/26/2016 | |||||||||||||||||||||||||||
97,669 | 12.79 | 12/11/2017 | ||||||||||||||||||||||||||||
293,007 | 12.73 | 2/23/2018 | ||||||||||||||||||||||||||||
179,711 | 13.77 | 2/22/2019 | ||||||||||||||||||||||||||||
53,872 | (2) | 1,374,813 | ||||||||||||||||||||||||||||
37,750 | (3) | 963,380 | ||||||||||||||||||||||||||||
38,345 | (4) | 978,564 | ||||||||||||||||||||||||||||
80,407 | (5) | 2,051,987 | ||||||||||||||||||||||||||||
112,031 | (6) | 2,859,031 | ||||||||||||||||||||||||||||
Ms. Harker | 29,461 | (2) | 751,845 | |||||||||||||||||||||||||||
16,846 | (3) | 429,910 | ||||||||||||||||||||||||||||
21,274 | (4) | 542,912 | ||||||||||||||||||||||||||||
22,213 | (5) | 566,876 | ||||||||||||||||||||||||||||
25,438 | (6) | 649,178 | ||||||||||||||||||||||||||||
Mr. Lougee | 24,417 | 26.93 | 2/26/2016 | |||||||||||||||||||||||||||
16,847 | 13.77 | 2/22/2019 | ||||||||||||||||||||||||||||
22,391 | (2) | 571,418 | ||||||||||||||||||||||||||||
13,213 | (3) | 337,196 | ||||||||||||||||||||||||||||
15,031 | (4) | 383,591 | ||||||||||||||||||||||||||||
17,422 | (5) | 444,609 | ||||||||||||||||||||||||||||
27,186 | (6) | 693,787 | ||||||||||||||||||||||||||||
Mr. Williams | 16,115 | 26.93 | 2/26/2016 | |||||||||||||||||||||||||||
13,185 | 13.77 | 2/22/2019 | ||||||||||||||||||||||||||||
16,710 | (2) | 426,439 | ||||||||||||||||||||||||||||
10,108 | (3) | 257,956 | ||||||||||||||||||||||||||||
12,616 | (4) | 321,960 | ||||||||||||||||||||||||||||
13,328 | (5) | 340,131 | ||||||||||||||||||||||||||||
22,817 | (6) | 582,290 | ||||||||||||||||||||||||||||
Mr. Mayman | 13,429 | 12.73 | 2/23/2018 | |||||||||||||||||||||||||||
26,859 | 13.77 | 2/22/2019 | ||||||||||||||||||||||||||||
18,909 | (2) | 482,558 | ||||||||||||||||||||||||||||
11,703 | (3) | 298,661 | ||||||||||||||||||||||||||||
17,639 | (4) | 450,147 | ||||||||||||||||||||||||||||
12,463 | (5) | 318,056 | ||||||||||||||||||||||||||||
15,236 | (6) | 388,823 |
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EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-end
OPTION AWARDS | STOCK AWARDS | STOCK AWARDS | ||||||||||||||||||||||||||||||||||||||||||||
NAME | NUMBER OF SECURITIES UNDERLYING UNEXER- CISED OPTIONS (#) EXERCI- SABLE (1) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXER- CISABLE | OPTION EXER- CISE PRICE ($) (1) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY NOT VESTED | EQUITY SHARES, | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT (#) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) | ||||||||||||||||||||||||||||||||||
Mr. Dickey | 19,533 | 26.93 | 2/26/2016 | |||||||||||||||||||||||||||||||||||||||||||
Mr. Lougee | 8,618 | (1) | 93,678 | |||||||||||||||||||||||||||||||||||||||||||
39,067 | 12.73 | 2/23/2018 | 35,916 | (2) | 390,407 | |||||||||||||||||||||||||||||||||||||||||
102,552 | 13.77 | 2/22/2019 | 78,958 | (3) | 858,273 | |||||||||||||||||||||||||||||||||||||||||
32,407 | (2) | 827,027 | 113,329 | (4) | 1,231,886 | |||||||||||||||||||||||||||||||||||||||||
17,176 | (3) | 438,332 | 148,340 | (5) | 1,612,456 | |||||||||||||||||||||||||||||||||||||||||
Ms. Harker | 8,172 | (1) | 88,830 | |||||||||||||||||||||||||||||||||||||||||||
22,648 | (5) | 577,977 | 19,391 | (2) | 210,780 | |||||||||||||||||||||||||||||||||||||||||
51,682 | (3) | 561,783 | ||||||||||||||||||||||||||||||||||||||||||||
60,309 | (4) | 655,559 | ||||||||||||||||||||||||||||||||||||||||||||
63,900 | (5) | 694,593 | ||||||||||||||||||||||||||||||||||||||||||||
Ms. Beall | 3,125 | (1) | 33,969 | |||||||||||||||||||||||||||||||||||||||||||
15,733 | (2) | 171,018 | ||||||||||||||||||||||||||||||||||||||||||||
31,840 | (3) | 346,101 | ||||||||||||||||||||||||||||||||||||||||||||
19,883 | (4) | 216,128 | ||||||||||||||||||||||||||||||||||||||||||||
39,367 | (5) | 427,919 | ||||||||||||||||||||||||||||||||||||||||||||
Mr. Mayman | 5,944 | (1) | 64,611 | |||||||||||||||||||||||||||||||||||||||||||
12,120 | (2) | 131,744 | ||||||||||||||||||||||||||||||||||||||||||||
31,526 | (3) | 342,688 | ||||||||||||||||||||||||||||||||||||||||||||
37,693 | (4) | 409,723 | ||||||||||||||||||||||||||||||||||||||||||||
38,979 | (5) | 423,702 |
(1) |
These RSUs will vest on December 31, |
These RSUs will vest in two equal annual installments ending on December 31, |
These RSUs will vest in |
These share numbers represent the target Performance Share awards under the Performance Share |
These share numbers represent the target Performance Share awards under the Performance Share |
|
|
| |
EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-end
|
|
|
|
OPTION EXERCISES AND STOCK VESTED
OPTION AWARDS (1) | STOCK AWARDS (2)(3) | OPTION AWARDS | STOCK AWARDS(1)(2) | |||||||||||||||||||||||||||||||||
NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE EXERCISE ($) | NUMBER OF SHARES ACQUIRED ON VESTING (#)(4) | VALUE REALIZED ON VESTING ($)(5) | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | NUMBER OF SHARES ACQUIRED ON VESTING (#)(3) | VALUE REALIZED ON VESTING ($)(4) | ||||||||||||||||||||||||||||
Gracia C. Martore | 0 | 0 | 269,275 | 6,615,380 | ||||||||||||||||||||||||||||||||
David T. Lougee | 26,707 | 79,053 | 36,071 | 396,755 | ||||||||||||||||||||||||||||||||
Victoria D. Harker | 0 | 0 | 102,317 | 2,524,308 | 0 | 0 | 29,211 | 321,946 | ||||||||||||||||||||||||||||
David T. Lougee | 0 | 0 | 79,477 | 1,962,258 | ||||||||||||||||||||||||||||||||
John A. (Jack) Williams | 0 | 0 | 61,664 | 1,524,427 | ||||||||||||||||||||||||||||||||
Lynn Beall | 0 | 0 | 14,042 | 154,002 | ||||||||||||||||||||||||||||||||
Todd A. Mayman | 0 | 0 | 61,990 | 1,536,984 | 63,867 | 425,779 | 20,381 | 224,139 | ||||||||||||||||||||||||||||
Robert J. Dickey | 17,580 | 49,839 | 107,350 | 2,644,056 |
(1) |
In addition to the amounts shown in the above table, each of the NEOs also vested in RSUs on December 31, |
In addition to the amounts shown in the above table, each of the NEOs also received |
These share amounts include (a) 25% of the Company’s RSU awards granted on January 1, 2017 which vested on December 31, 2018 (which RSUs were paid to the NEOs by the Company shortly after the vesting date); (b) 25% of the Company’s RSU awards granted on January 1, 2016 which vested on December 31, 2018 (which RSUs will not be paid by the Company until the earliest to occur of (i) December 31, 2019, (ii) the executive’s termination of employment, and (iii) certain changes in control of the Company); (c) 25% of the Company RSU awards granted on January 1, 2015 which vested on December 31, |
For each of the NEOs, these amounts equal the product of the aggregate number of vested Company RSU shares multiplied by |
| |
EXECUTIVE COMPENSATION
Pension Benefits
PENSIONBENEFITSPENSION BENEFITS
The table below shows the actuarial present value as of December 31, 20152018 of accumulated benefits payable to each of the NEOs, including the number of years of service credited to each, under each of the TEGNA Retirement Plan, or TRP, and the TEGNA Supplemental Retirement Plan, or SERP, in each case determined using assumptions consistent with those used in the Company’s financial statements, except with respect topre-retirement mortality, probability of turnover prior to retirement and retirement age. The table below reflects an assumed retirement age of 65 for Ms. Martore (with the pension amount taking into account only pay and service earned through December 31, 2015 for Ms. Martore) and an immediate retirement for Mr. Lougee, Mr. Williams and Mr. Mayman under the SERP, and an immediate retirement for all NEOs who participate with respect to the TRP.TRP and the SERP. The amounts reported in the table reflect payment at the earliest point in time at which benefits are available without any reduction for age. Information regarding the TRP and SERP can be found in the “Compensation Discussion and Analysis” section under the heading “Post-Termination Pay.” Ms. Harker does not participate in the TRP or the SERP. No amounts are shown for Mr. Dickey as he was not participating in the TRP or SERP at December 31, 2015. Gannett assumed all liabilities relating to Mr. Dickey’s pension benefits in connection with the Spin-off, and Mr. Dickey did not receive a payout of his pension benefits from the Company.
NAME | PLAN NAME | NUMBER OF YEARS CREDITED SERVICE (#) | PRESENT VALUE OF ACCUMULATED BENEFIT ($) | PAYMENTS DURING LAST FISCAL YEAR ($) | ||||||||||
Ms. Martore | TRP | 23.25 | (1) | 568,731 | 0 | |||||||||
SERP | 30.67 | 18,647,842 | 0 | |||||||||||
Mr. Lougee | TRP | 6.58 | 104,672 | 0 | ||||||||||
SERP | 6.58 | 45,685 | 0 | |||||||||||
Mr. Williams | TRP | 13.25 | (1) | 237,050 | 0 | |||||||||
SERP | 20.67 | 4,070,254 | 0 | |||||||||||
Mr. Mayman | TRP | 15.17 | 234,945 | 0 | ||||||||||
SERP | 15.17 | 127,558 | 0 |
NAME | PLAN NAME | NUMBER OF YEARS CREDITED SERVICE (#) | PRESENT VALUE OF ACCUMULATED BENEFIT ($) | PAYMENTS DURING LAST FISCAL YEAR ($) | |||||||||||||
Mr. Lougee(1) | TRP | 20.12 | 513,038 | 0 | |||||||||||||
SERP | 6.58 | 42,512 | 0 | ||||||||||||||
Ms. Beall(2) | TRP | 20.17 | 315,371 | 0 | |||||||||||||
SERP | 29.58 | 3,241,339 | 0 | ||||||||||||||
Mr. Mayman | TRP | 15.17 | 248,885 | 0 | |||||||||||||
SERP | 15.17 | 135,126 | 0 |
(1) | The TRP amount shown for Mr. Lougee includes the accumulated benefit related to his legacy Belo Corp. pension benefit. The number of years of credited service shown for Mr. Lougee include 13.5 years of service under the Belo Corp. Pension Plan, which was acquired by the Company. The Company has not granted Mr. Lougee any additional credited service under the pension plans. The present values of Mr. Lougee’s accumulated TRP and legacy Belo Corp. pension benefits are $116,768 and $396,270, respectively. |
(2) | Ms. |
| |
EXECUTIVE COMPENSATION
Non-qualifiedNon-Qualified Deferred Compensation
NON-QUALIFIED DEFERRED COMPENSATION
The TEGNA Deferred Compensation Plan, or DCP, is anon-qualified plan that allows Company executives to defer all or a portion of their compensation. Participant contributions that are not treated as if invested in the Company’s stock are generally distributed in cash and amounts that are treated as if invested in the Company’s stock are generally distributed in shares of stock or cash, at the Company’s election. Effective August 1, 2008, the DCP also provides for Company contributions for certain participants. Additional information regarding the DCP can be found in the “Compensation Discussion and Analysis” section under the heading “Post-Termination Pay.” No amounts are shown for Mr. Dickey as he was not participating in the DCP as of December 31, 2015 and did not participate in the DCP prior to his separation of employment from the Company in connection with the Spin-off.
NAME | EXECUTIVE CONTRIBUTIONS IN LAST FY ($) | REGISTRANT CONTRIBUTIONS IN LAST FY ($)(1) | AGGREGATE EARNINGS IN LAST FY ($) | AGGREGATE IN LAST FY | AGGREGATE BALANCE AT LAST FYE ($) | EXECUTIVE CONTRIBUTIONS IN LAST FY ($) | REGISTRANT CONTRIBUTIONS IN LAST FY ($)(1) | AGGREGATE EARNINGS IN LAST FY ($) | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN LAST FY ($) | AGGREGATE BALANCE AT LAST FYE ($) | |||||||||||||||||||||||||||||||||||
Ms. Martore | 0 | 0 | 2,614 | 0 | 2,822,963 | ||||||||||||||||||||||||||||||||||||||||
Mr. Lougee | 0 | 65,538 | (70,847 | ) | 0 | 647,145 | |||||||||||||||||||||||||||||||||||||||
Ms. Harker | 0 | 57,750 | 7,490 | 0 | 152,193 | 0 | 42,923 | (42,466 | ) | 0 | 255,715 | ||||||||||||||||||||||||||||||||||
Mr. Lougee | 0 | 55,501 | (3,312 | ) | 0 | 434,192 | |||||||||||||||||||||||||||||||||||||||
Mr. Williams | 0 | 0 | (6,798 | ) | 0 | 951,085 | |||||||||||||||||||||||||||||||||||||||
Ms. Beall | 0 | 33,515 | 0 | 0 | 33,515 | ||||||||||||||||||||||||||||||||||||||||
Mr. Mayman | 0 | 55,200 | 38,567 | 0 | 552,403 | 0 | 43,810 | (16,005 | ) | 0 | 691,837 |
(1) | For 2018, the Company |
| |
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS
The Company’s employee benefit programs provide the NEOs with post-termination benefits in a variety of circumstances. The amount of compensation payable may vary depending on the nature of the termination, whether as a result of retirement/voluntary termination, involuntarynot-for-cause termination, termination following a change in control or termination in the event of the disability or death of the executive. The following table describes payments the NEOs generally may receive under the Company’s employee benefits programs following termination in connection with certain events. Benefits provided to an NEO pursuant to a particular agreement or other arrangement between the Company and the NEO including Ms. Martore’s employment agreement, are not described in the table below. Any such benefits are described in the footnotes to the “Potential Payments to NEOs Upon Termination” table foundbeginning on page 4749 of this Proxy Statement.
In addition, following the disclosure relating to the post-employment payments that our continuing NEOs may receive, we describe the post-employment payments applicable to Mr. DickeyMayman, who ceased to serve as an executive officer on December 31, 2018 and whose employment with the Company in connection with the Spin-off, did not receive any severance in connection with his cessation of employment and did not receive any payout of his pension or equity awards in connection with his cessation of employment. In connection with the Spin-off, Gannett assumed responsibility for all of Mr. Dickey’s post-employment benefits (other than equity awards payable in Company stock which are reported elsewhere in this Proxy Statement). Accordingly, no disclosures are provided for Mr. Dickey in this section.ended March 1, 2019.
Benefit | Retirement/Voluntary Termination | Death | Disability | Change in Control | Involuntary Termination without Cause | |||||
Pension | Vested portion of:
(i) TRP
(2) SERP | Vested portion of:
(1) TRP
(2) SERP | Vested portion of:
(i) TRP
(2) SERP | In addition to their vested TRP and SERP benefits, NEOs who actively participate in the SERP are entitled to receive a lump sum payment in an amount determined based upon the SERP payment the NEO would have received if the NEO had remained employed by the Company during the applicable severance period. | Vested portion of:
(i) TRP
(2) SERP | |||||
Restricted Stock Units | Vested RSUs are payable at the date of termination and if termination occurs after age 65 (or after attaining 55 with 5 years or more of service), the NEO is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant. | The NEO’s estate is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant. | The NEO is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant. | RSUs granted in 2015 and earlier vest in full upon a change in control. RSUs granted after 2015 only provide for accelerated vesting if the awards are not continued or assumed upon a change in control or there is a qualifying termination within 2 years of the change in control. | Vested RSUs are payable at the date of termination and if termination occurs after age 65 (or after attaining 55 with 5 or more years of service), the NEO is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant. |
| |
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
Benefit | Retirement/Voluntary Termination | Death | Disability | Change in Control | Involuntary Termination without Cause | |||||
Performance Shares | Performance shares are forfeited unless termination occurs after age 65 (or after attaining 55 with 5 years or more of service), in which case the NEO is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period. | The NEO’s estate is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period. | The NEO is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period. | Performance Shares 2018 Performance Share award payouts made as a result of a change in control occurring prior to the expiration of thetwo-year performance cycle will be made at target; if the change in control occurs after the performance cycle is completed, payouts will be determined based on the Company’s achievement of the applicable performance metrics during the performance cycle. | Performance shares are forfeited unless termination occurs after age 65 (or after attaining 55 with 5 or more years of service), in which case the NEO is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period. |
47 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
Benefit | Retirement/Voluntary Termination | Death | Disability | Change in Control | Involuntary Termination without Cause | |||||
Life and Disability Insurance Benefits | None. | NEOs are generally entitled to receive death benefits under individual policies maintained by the Company and owned by the NEO or pursuant to the Company’s group life insurance program applicable to all employees. | NEOs are generally entitled to receive disability benefits under the Company’s disability plans applicable to all employees, but only if their condition qualifies them for such benefits. |
| None. | |||||
Excise TaxGross-up | None. | None. | None. | Payment of an amount sufficient to make each NEO who participated in the TCP prior to April 15, 2010 whole for any excise tax imposed on the payment under Section 4999 of the Internal Revenue Code. | None. | |||||
Severance Pay | None. | None. | None. | Lump sum payment calculated in accordance with the | Lump sum payment calculated in accordance with the TESP for the NEOs who participate in the plan. |
48 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
The table below discloses the varying amounts payable to each continuing NEO in each of the noted situations. It assumes, in each case, that the executive’s termination was effective as of December 31, 2015.2018. In presenting this disclosure, we describe amounts earned through December 31, 2015,2018, taking into account, where applicable, bonuses paid in 20162019 but earned as a result of 20152018 performance and, in those cases where the actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company, our estimates of the amounts which would have been paid out to the executives upon their termination had it occurred on December 31, 2015.2018. Some payments would be automatically delayed or modified if required under Section 409A of the Internal
|
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
Revenue Code. In addition, receipt of severance benefits under the TESP generally would be conditioned on the executive signing a separation agreement that includes a release of claims in favor of the Company and its respective affiliates, and agreement to adhere to customary post-employment restrictive covenants. The amounts shown in the Change in Control column represent the estimated incremental payments and benefits that would be payable to each NEO upon a change in control of the Company, assuming that the triggering event and a qualifying termination occurred atyear-end 2015, 2018, in excess of the compensation and benefit entitlements that are payable to an NEO upon Retirement/Voluntary Termination.
Amounts shown for Ms. Martore reflect the terms of her employment agreement, described in the “Additional Information Regarding the Summary Compensation Table and the Grants of Plan-Based Awards Table” section and in the footnotes to the table.
Potential Payments to NEOs Upon Termination
Retirement/ Voluntary ($) | Death ($) | Disability ($) | Change in Control (8)(10)(11) ($) | Involuntary ($) | ||||||||||||||||
Gracia C. Martore | ||||||||||||||||||||
Pension | 19,319,166 | 19,319,166 | 19,319,166 | 6,731,108 | 19,319,166 | |||||||||||||||
Restricted Stock Units(1) | 3,316,745 | 3,316,745 | 3,316,745 | 0 | 3,316,745 | |||||||||||||||
Performance Shares(2)(3) | 4,911,018 | 4,911,018 | 4,911,018 | 1,851,855 | 4,911,018 | |||||||||||||||
Life and Disability Insurance Benefits(4) | 0 | 11,930,112 | (5) | 10,012,234 | (7) | 0 | 0 | |||||||||||||
Severance Pay | 0 | 0 | 0 | 11,250,000 | 7,500,000 | (12) | ||||||||||||||
Excise Tax Gross-up | 0 | 0 | 0 | 8,526,852 | (9) | 0 | ||||||||||||||
Total: | 27,546,929 | 39,477,041 | 37,559,163 | 28,359,815 | 35,046,929 | |||||||||||||||
Victoria D. Harker | ||||||||||||||||||||
Pension(6) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Restricted Stock Units(1) | 0 | 778,839 | 778,839 | 1,724,661 | 0 | |||||||||||||||
Performance Shares(2)(3) | 0 | 594,310 | 594,310 | 1,737,488 | 0 | |||||||||||||||
Life and Disability Insurance Benefits(4) | 0 | 1,420,000 | (5) | 3,626,821 | (7) | 0 | 0 | |||||||||||||
Severance Pay | 0 | 0 | 0 | 2,840,000 | 2,110,000 | (12) | ||||||||||||||
Excise Tax Gross-up | 0 | 0 | 0 | 0 | (9) | 0 | ||||||||||||||
Total: | 0 | 2,793,149 | 4,999,970 | 6,302,149 | 2,110,000 | |||||||||||||||
David T. Lougee | ||||||||||||||||||||
Pension | 150,357 | 150,357 | 150,357 | 2,557 | 150,357 | |||||||||||||||
Restricted Stock Units(1) | 597,162 | 597,162 | 597,162 | 695,036 | 597,162 | |||||||||||||||
Performance Shares(2)(3) | 527,668 | 527,668 | 527,668 | 1,006,772 | 527,668 | |||||||||||||||
Life and Disability Insurance Benefits(4) | 0 | 3,062,792 | (5) | 5,712,505 | (7) | 0 | 0 | |||||||||||||
Severance Pay | 0 | 0 | 0 | 3,598,193 | 2,087,541 | (12) | ||||||||||||||
Excise Tax Gross-up | 0 | 0 | 0 | 0 | (9) | 0 | ||||||||||||||
Total: | 1,275,187 | 4,337,979 | 6,987,692 | 5,302,558 | 3,362,728 | |||||||||||||||
John A. (Jack) Williams | ||||||||||||||||||||
Pension | 4,307,304 | 4,307,304 | 4,307,304 | 1,320,768 | 4,307,304 | |||||||||||||||
Restricted Stock Units(1) | 448,807 | 448,807 | 448,807 | 557,542 | 448,807 | |||||||||||||||
Performance Shares(2)(3) | 420,851 | 420,851 | 420,851 | 800,941 | 420,851 | |||||||||||||||
Life and Disability Insurance Benefits(4) | 0 | 500,000 | (5) | 746,408 | (7) | 0 | 0 | |||||||||||||
Severance Pay | 0 | 0 | 0 | 3,525,000 | 1,612,500 | (12) | ||||||||||||||
Excise Tax Gross-up | 0 | 0 | 0 | 2,162,031 | (9) | 0 | ||||||||||||||
Total: | 5,176,962 | 5,676,962 | 5,923,370 | 8,366,282 | 6,789,462 |
|
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
Retirement/ Voluntary ($) | Death ($) | Disability ($) | Change in Control (8)(10)(11) ($) | Involuntary ($) | ||||||||||||||||
Todd A. Mayman | ||||||||||||||||||||
Pension | 362,503 | 362,503 | 362,503 | 8,605 | 362,503 | |||||||||||||||
Restricted Stock Units(1) | 511,249 | 511,249 | 511,249 | 720,104 | 511,249 | |||||||||||||||
Performance Shares(2)(3) | 341,645 | 341,645 | 341,645 | 656,072 | 341,645 | |||||||||||||||
Life and Disability Insurance Benefits(4) | 0 | 0 | (5) | 4,228,655 | (7) | 0 | 0 | |||||||||||||
Severance Pay | 0 | 0 | 0 | 3,690,000 | 1,647,500 | (12) | ||||||||||||||
Excise Tax Gross-up | 0 | 0 | 0 | 1,753,867 | (9) | 0 | ||||||||||||||
Total: | 1,215,397 | 1,215,397 | 5,444,052 | 6,828,648 | 2,862,897 |
Retirement/ Voluntary Termination (2) ($) | Death ($) | Disability ($) | Change in (6)(8)(9) ($) | Involuntary Termination without Cause ($) | |||||||||||||||||||||
David T. Lougee | |||||||||||||||||||||||||
Pension | 531,684 | 342,594 | 531,684 | 0 | 531,684 | ||||||||||||||||||||
Restricted Stock Units | 459,834 | 459,834 | 459,834 | 1,163,547 | 459,834 | ||||||||||||||||||||
Performance Shares(1) | 447,909 | 447,909 | 447,909 | 1,164,547 | 447,909 | ||||||||||||||||||||
Life and Disability Insurance Benefits | 0 | 0 | (3) | 5,368,571 | (5) | 0 | 0 | ||||||||||||||||||
Severance Pay | 0 | 0 | 0 | 5,625,000 | 3,750,000 | (10) | |||||||||||||||||||
Excise TaxGross-up | 0 | 0 | 0 | 0 | (7) | 0 | |||||||||||||||||||
Total: | 1,439,427 | 1,250,337 | 6,807,998 | 7,953,094 | 5,189,427 | ||||||||||||||||||||
Victoria D. Harker | |||||||||||||||||||||||||
Pension(4) | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Restricted Stock Units | 266,478 | 383,516 | 383,516 | 861,393 | 266,478 | ||||||||||||||||||||
Performance Shares(1) | 0 | 192,943 | 192,943 | 694,593 | 0 | ||||||||||||||||||||
Life and Disability Insurance Benefits | 0 | 1,250,000 | (3) | 5,908,479 | (5) | 0 | 0 | ||||||||||||||||||
Severance Pay | 2,057,500 | 0 | 0 | 722,500 | 2,057,500 | (10) | |||||||||||||||||||
Excise TaxGross-up | 0 | 0 | 0 | 0 | (7) | 0 | |||||||||||||||||||
Total: | 2,323,978 | 1,826,459 | 6,484,938 | 2,278,486 | 2,323,978 | ||||||||||||||||||||
Lynn Beall | |||||||||||||||||||||||||
Pension | 3,857,328 | 3,857,328 | 3,857,328 | 902,633 | 3,857,328 | ||||||||||||||||||||
Restricted Stock Units | 173,974 | 173,974 | 173,974 | 478,987 | 173,974 | ||||||||||||||||||||
Performance Shares(1) | 118,863 | 118,863 | 118,863 | 309,056 | 118,863 | ||||||||||||||||||||
Life and Disability Insurance Benefits | 0 | 0 | (3) | 2,403,320 | (5) | 0 | 0 | ||||||||||||||||||
Severance Pay | 0 | 0 | 0 | 3,405,000 | 1,602,500 | (10) | |||||||||||||||||||
Excise TaxGross-up | 0 | 0 | 0 | 1,918,072 | (7) | 0 | |||||||||||||||||||
Total: | 4,150,165 | 4,150,165 | 6,553,485 | 7,013,747 | 5,752,665 |
(1) |
The amounts shown in |
| |
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
the target amounts for the grants made in connection with the Company’s 2018-2020 Incentive Period, in each case without proration, and a per share stock value of $10.87, the closing price of a share of Company stock on December 31, 2018. Notwithstanding the assumptions set forth above, in the case of Retirement/Voluntary Termination, Death, Disability or Involuntary Termination without Cause, Performance Shares will be paid out on the normal payout cycle (following the end of the applicable Incentive Period) based on the Company’s performance as measured under the applicable Performance Share award. |
(2) | In addition to the amounts reported in this column, Mr. Lougee and Ms. Beall will receive the following post-retirement benefits and perquisites if they terminate employment after attaining at least 55 years of age and completing at least five years of service: (i) legal and financial counseling services on the same basis as available to an active executive at the time his or her employment terminates, until April 15 of the year of retirement or the year following retirement; (ii) the ability to purchase the Company-owned car provided to the executive at the time of termination at fair market value; (iii) supplemental medical insurance coverage for the executive and his or her family; and (iv) generally continue to be permitted to recommend TEGNA Foundation grants to eligible charities up to $15,000 annually for a period of three years after retirement. If the executive is asked to represent the Company at a function or event, the executive is provided travel accident insurance. During the first year, we estimate the expected incremental cost to the Company for these post-retirement benefits would be approximately $51,000 for each NEO who is eligible to receive them. During the second and third years following retirement, we estimate the expected incremental cost to the Company would be approximately $34,000 for each NEO who is eligible to receive them. Thereafter, we estimate the expected incremental cost to the Company would be $19,000 for each NEO who is eligible to receive these post-retirement benefits and perquisites. The Company reserves the right, in its sole discretion, to amend or terminate the post-retirement perquisites from time to time. |
(3) | In connection with the Company’s life insurance programs: |
Under the KELIP, the face amount of the policy is determined once, at the beginning of the executive’s participation in the program and is equal to the sum of (i) two times the sum of the participant’s base salary and last bonus (in each case, at the time of underwriting) increased four percent annually for the lesser of ten years or until the executive reaches age 65, and (ii) $200,000. The participant’s future pay increases have no impact on the face amount of the policy and the coverage level is stepped down to $500,000 upon the earlier of the participant reaching age 65 or the participant’s retirement. |
Under the ELIP, the face amount of the policy is determined at each policy anniversary. The executive’s death benefit under this frozen plan is equal to the sum of (i) two times the sum of the participant’s base salary and last bonus, and (ii) $200,000. The participant’s future pay increases, subject to a 10% guarantee issue increase limit, have a direct impact on the face amount of the policy. Upon the participant reaching age 65, the coverage level is reduced by 10% each year until it reaches $350,000. |
The Company pays premiums on the above-referenced individually-owned life insurance policies, which premiums are expected to range between approximately$14,000-$45,000 per participant in 2019. Subject to the terms of his or her participation agreement, the participant’s right to receive future annual premium payments may become vested if the participant’s employment terminates after attaining both five years of service with the Company and age 55. As of December 31, 2018, Mr. Lougee and Ms. Beall have the right to receive these benefits. |
Death benefits are payable under individual universal life insurance policies maintained by the Company and owned by Ms. Martore, Mr. Lougee and Ms. Beall, respectively. The obligation to pay death benefits to the beneficiary(ies) designated by Mr. Williams in the amounts shown. Included in the table,Lougee and Ms. Beall, respectively, pursuant to these insurance policies is that of the insurance company; the Company only pays the insurance premiums on behalf of the NEOs. In 2018, the Company paid insurance premiums on behalf of Mr. Lougee and Ms. Martore’s employment contract, uponBeall. The life insurance proceeds that would have been payable (by the insurance company) to the beneficiary(ies) designated by Mr. Lougee and Ms. Beall, respectively, if a termination of employment as a result of death, her estate would be entitled to a lump sum cash payment in an amount equal to two times the sum of (a) her base salarytriggering event had occurred as of the date of deathDecember 31, 2018 are: Mr. Lougee: $3,062,792 and (b) the greater of (i) her most recent annual bonus as of the date of death, or (ii) the average of her three most recent annual bonuses as of the date of death.Ms. Beall: $2,147,750.
Ms. Harker continues to participate in the Company’s group life insurance program applicable to all employees (which provides for a benefit equal to the sum of one timesher base salary and last annual bonus).
In addition to the reported amount, the Company would continue to provide supplemental medical insurance coverage for thetheir eligible dependents in the event of Ms. Martore,the deaths of Mr. Lougee Mr. Williams and Mr. Mayman in addition to the regular post-retirement medical insurance coverage available to them on the same terms as provided to Company retirees generally,or Ms. Beall, for the duration of the life of the eligible dependents. We estimate annual incremental costs to the Company for this benefit of approximately $10,000$12,500 for each of Ms. Martore, Mr. Lougee Mr. Williams and Mr. Mayman.$6,000 for Ms. Beall. Ms. Harker is not eligible to receive this benefit.
The amounts shown for Ms. Harker reflect the fact that she does not participate in the TRP or the SERP. |
In connection with the Company’s disability benefits programs: |
Each NEO is entitled to a Company-paid monthly disability benefit. The amounts set forth above represent the present value of the disability benefit applying the following assumptions: (i) the NEO incurred a qualifying disability on December 31, 2015,2018, and the NEO remains eligible to receive disability benefits for the maximum period provided under the plan; (ii) the disability benefits are reduced by certain offsets provided for under the plan (e.g., a portion of the NEO’s SERP benefits)benefits, if any); and(iii) IRS-prescribed mortality and interest rate assumptions are used to calculate the present value of such benefits.
50 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
eligible, the executive must have enrolled in thenon-executive long-term disability coverage and elected the supplementalbuy-up option which provides 60% income protection on annual earnings up to $500,000, defined as base salary, annual bonus and commissions. The executive disability coverage provides similar benefits on the earnings above the $500,000 limit. Mr. Lougee and Ms. Beall have each elected to participate in the executive long-term disability plan and the amounts set forth in this column reflect the additional coverage. Disability benefits are subject to certain conditions, limitations and offsets, and generally continue for the duration of the disability, but not beyond age 65. For those who become disabled near or after age 65, benefits may continue for a specified time beyond age 65 under the terms of the plan. |
(6) | The amounts |
This amount represents the excise taxgross-up amount an NEO would receive in connection with a change in control of the Company. The amounts shown for Ms. Beall reflect the fact that the compensation she would have received |
|
EXECUTIVE COMPENSATION
Other Potential Post-employment Payments
receive an excise taxgross-up under the TCP. In the event that Mr. Lougee or Ms. Harker |
In addition to the amounts reported in this column, each NEO in the TCP (Ms. Harker and Ms. Beall) would receive life and medical insurance benefits for the severance period in amounts no less than those that would have been provided had the executive not been terminated. Mr. Lougee, as a participant in the CIC Severance Plan, would also receive a lump sum COBRA benefit. We estimate incremental costs to the Company for these benefits as follows: |
In addition to the benefits afforded under the TCP and the CIC Severance Plan, our NEOs also would receive other benefits under the SERP and the DCP upon a change in control that qualifies as a change in control under Code Section 409A, including: |
• | SERP. All SERP benefits become immediately vested and benefits accrued up to the date of the change in control are paid out in the form of a lump sum distribution shortly after the change in control. |
• | DCP. All post-2004 DCP benefits accrued up to the date of the change in control are paid in the form of a lump sum distribution shortly after the change in control. |
These amounts represent payments NEOs may be entitled to receive under the TEGNA Inc. Executive Severance Plan (TESP), which provides severance payments to the NEOs |
Post-Termination Payments to Mr. Mayman
Mr. Mayman will receive the below post-employment benefits in connection with the elimination of his position with the Company. Mr. Mayman’s payments will be delayed for six months from the date of his separation from the Company if and to the extent necessary to comply with applicable U.S. federal income tax rules under Section 409A of the Internal Revenue Code.
• | Severance Payment. Under the |
• | TRP and SERP Payments. Mr. Mayman will be entitled to receive payments of his accumulated benefits under the |
• | Restricted Stock Units. A prorated portion (based on the number of full months Mr. Mayman worked during the term of the applicable grant) of all Company restricted stock units granted to Mr. Mayman vested in full as of his date of termination. The aggregate value of the vested Company restricted stock units on the date of his separation was $601,229. |
• | Performance Shares. A prorated portion (based on the number of full months Mr. Mayman worked during the term of the applicable grant) of all Company Performance Shares granted to Mr. Mayman vested in full as of the date of |
• | 2019 Annual Bonus. Under the TESP, Mr. Mayman will be entitled to receive a prorated annual bonus for the portion of |
51 | 2019 PROXY STATEMENT |
EXECUTIVE COMPENSATION
CEO Pay Ratio
Other Potential Post-Termination PaymentsCEO PAY RATIO
We are providing the following information to Ms. Martore under her Employment Contract.comply with Item 402(u) of RegulationS-K:
The Company may terminate2018 total compensation of our CEO was $4,885,360.
During 2018, there were no changes to our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio calculations and disclosure. Accordingly, consistent with SEC regulations, we have calculated and presented the employment of Ms. MartoreCEO pay ratio for “good cause.” “Good cause” means (1) an intentional, non-incidental, misappropriation of funds or property2018, below, on the basis of the Company by the executive; (2) unreasonable and persistent neglect or refusal by Ms. Martore to perform the duties describedsame median employee identified as of December 31, 2017. As previously reported in her employment contract, which she does not remedy within 30 days after receipt of written notice; (3) the material breach by Ms. Martore of certain provisions of her employment contract, which she does not remedy within 30 days after receipt of written notice; or (4) conviction of Ms. Martore of a felony. In the event of termination of employment for good cause, Ms. Martore would not receive any post-termination payments or benefits, with the exception of vested pension benefits, which would be payable at times and in amounts as described in thisour 2018 Proxy Statement, certain other vested rights (e.g., 401(k) Planto determine the median employee, we first identified five possible median employees as of December 31, 2017 using our entire workforce of approximately 5,300 full, part-time and DCP benefits)temporary employees and her RSUsbase salary, bonus, commissions and Performance Shares.
Ms. Martore may terminate her employmentsales incentives for “good reason.” “Good reason” would be deemed to exist if: (1) Ms. Martore is not elected or retained in her current positions (orthe prior12-month period. We then calculated 2017 total compensation for the five possible median employees based on the proxy rules for determining the annual compensation of NEOs and selected the median employee based on such other senior executive position as she may agree to serve in); (2) the Company acts to materially reduce the duties and responsibilities described in Ms. Martore’s employment contract; (3) the Company materially breaches the applicable agreement with Ms. Martore, or (4) the Company changes the principal geographic locationcalculations. The 2018 total compensation of the performancemedian employee so selected, including base salary, overtime and 401(k) matching contributions, was $58,144.
The resulting ratio of Ms. Martore’s duties away from the Washington, D.C. metropolitan area. In the event of termination of employment by Ms. Martore for “good reason” or by the Company without “good cause,” the Company would provide certain post-termination benefits in additionour CEO’s 2018 total compensation to the benefits afforded2018 total compensation of the median employee was 84 to Ms. Martore upon early retirement, which currently include cash severance payments equivalent1. This pay ratio is a reasonable estimate calculated in amount to those payable to her estate, as described in the footnotes to the “Potential Payments to NEOs Upon Termination” table.a manner consistent with Item 402(u) of RegulationS-K.
| |
Proposal 3—Approval, on an Advisory Basis, of the Compensation of Our Named Executive Officers
As required by the Dodd-Frank ActConsistent with our practice since 2011, we are asking shareholders to approve, on an advisory basis, the compensation of the Company’s named executive officers (NEOs) as described in the “Compensation Discussion and Analysis” and the related executive compensation tables, notes and narrative included on pages 15-5017-52 of this Proxy Statement.
As described above in the “Compensation Discussion and Analysis” section of this Proxy Statement, the ExecutiveLeadership Development and Compensation Committee oversees the Company’s executive compensation programs and supports compensation policies that place a heavy emphasis on pay for performance. The ExecutiveLeadership Development and Compensation Committee also recognizes the importance of competitive compensation programs that are essential to recruiting and retaining the key executive talent needed to drive shareholder value.
We believe our executive compensation plans, principles and programs, as currently structured and as implemented for 2015,2018, strongly align the interests of our NEOs with those of our shareholders and also permit the Company to attract, retain and motivate talented executives. We urge you to read the “Compensation Discussion and Analysis” beginning on page 1517 of this Proxy Statement, which describes in more detail the principles that guide the Committee’s compensation decisions and the components of our executive compensation plans and programs, as well as the Summary Compensation and other related executive compensation tables and narrative, beginning on page 3639 of this Proxy Statement, which provide detailed information on the compensation of our NEOs.
The Board of Directors unanimously recommends that the shareholders of the Company vote FOR adoption of the following resolution:
“RESOLVED, that the shareholders of TEGNA Inc. approve the compensation of the Company’s named executive officers as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, the compensation tables and the related discussion.”
The approval of this Proposal 3 on an advisory basis requires the affirmative vote of a majority of the votes that could be cast by the shareholders present in person or represented by proxy and entitled to vote at the Annual Meeting. While the advisory vote we are asking you to cast isnon-binding, the Company’s ExecutiveLeadership Development and Compensation Committee and the Board value the views of our shareholders and will take the outcome into account when considering future compensation decisions affecting our NEOs.
At least once every six years, we are required by the Dodd-Frank Act to provide shareholders with an opportunity to cast a non-binding, advisory vote on the frequency of future advisory votes on executive compensation. At our 2011 annual meeting, our shareholders voted in favor of holding such advisory votes on an annual basis. Accordingly, at that time, the Board determined that the Company’s policy will be to include an advisory vote on executive compensation in the Company’s annual meeting proxy materials every year until the next required frequency vote is held in 2017.
| |
The compensation year fornon-employee directors begins at each Annual Meeting of shareholders and ends at the following Annual Meeting of shareholders. The Company paid its directors the following compensation for the 2015-20162018-2019 director compensation year:
an annual retainer of $100,000, payable in cash quarterly, which retainer may be deferred under the DCP;$100,000;
an additional annual retainer fee of $20,000 to committee chairs (other than the chair of the Executive Committee) and an additional annual retainer fee of $120,000 to the independent Chairman of the Board;
an annual equity grant in the form of restricted stock units with a grant date value equal to $125,000;$125,000, which grant may be deferred under the DCP;
travel accident insurance of $1,000,000; and
a match from the TEGNA Foundation of charitable gifts made by directors up to a maximum of $10,000 each year.
All cash retainers are payable in cash quarterly and may be deferred under the DCP.
The annual equity grant is made to directors on the first day of the compensation year for directors. These awards of restricted stock units vest at a rate of 1/4th of the shares per quarter after the grant date, receive dividends or, if deferred, dividend equivalent rights and, once fully vested, shall notwill be paid out but are to be held by the Company for the benefit of the director until the director leaves the Board and shall be delivered to the director on that date. the first anniversary of the grant date (unless the director has elected to defer his or her restricted stock units under the DCP), subject to the Company’s stock ownership guidelines for directors described below.
Restricted stock units will fully vest if anon-employee director leaves the Board due to death or disability. Restricted stock units that are not vested on the date the director leaves will be forfeited.
If a non-employee director retires from the Board due to the age of service limitations set forth in the Company’sBy-laws all or if the director leaves the Board because of the director’s restricted shares and restricted stock units shall fully vest upon such retirement, and any SOs held by a director who has served at least three years shall fully vest upon such retirement.death or disability. Restricted stock units restricted shares and SOs also automatically vest upon a change ofin control of the Company. When anon-employee director leaves the Board for any other reason, the director’s unvested restricted stock units restricted shares and unvested SOs are forfeited, except that, if the director leaves after having completed (i) at least three full years of service on the Board, the director’s SOs will vest for one additional year and the director will have that extra year to exercise any vested SOs, (ii) at least six full years of service on the Board, the director’s SOs will vest for two additional years of added vesting and exercise time, and (iii) nine or more full years of service on the Board, the director’s SOs will vest for three additional years and exercise time. All unvested SOs will continue to vest during such post-termination exercise period in accordance with the original vesting schedule.forfeited.
Directors may elect to defer their cash retainer and/or annual equity grant under the Company’s Deferred Compensation Plan (“DCP”), which for cash fee deferrals provides for the same investment choices, including mutual funds and a TEGNA stock fund, made available to other DCP participants. Fees paid as restricted stock units andAnnual equity grants deferred at the election of the director must be invested in the TEGNA stock fund of the DCP.
The Committee amended the Company’s Principles of Corporate Governance, effective as of December 9, 2014, to eliminate a prior requirement that new directors purchase at least 1,000 shares of Company stock upon joining the Board of Directors. Instead, the Company’s stock ownership guidelines encourage directors to own, directly, beneficially, or through the DCP, a number of shares having an aggregate value of at least three times the value of the director’s cash retainer. Directors are expected to hold all shares received from the Company as compensation until they meet their stock ownership guideline. All of ournon-employee directors have either met or are on track to meet their stock ownership guideline.
The following table shows the compensation paid to our independent directors for the fiscal year ended December 31, 2015.2018. Ms. Martore received noMagner left the Board of Directors during 2018; therefore, her compensation is for a partial year. Mr. Lougee did not receive separate compensation for herhis service as a director and therefore is not included in the following table.tables.
NAME | FEES EARNED OR PAID IN CASH | STOCK AWARDS ($)(1) | ALL OTHER COMPENSATION ($)(2) | TOTAL ($) | ||||||||||||
John E. Cody(3)(5) | 49,167 | 125,000 | 0 | 174,167 | ||||||||||||
Howard D. Elias(3) | 85,000 | 125,000 | 10,000 | 220,000 | ||||||||||||
Lidia Fonseca | 66,667 | 125,000 | 0 | 191,667 | ||||||||||||
Jill Greenthal(4) | 50,000 | 104,163 | 10,000 | 164,163 | ||||||||||||
John Jeffry Louis(5) | 20,000 | 125,000 | 0 | 145,000 | ||||||||||||
Marjorie Magner | 209,167 | 125,000 | 10,000 | 344,167 | ||||||||||||
Scott K. McCune | 95,833 | 125,000 | 0 | 220,833 | ||||||||||||
Henry W. McGee(3)(4) | 50,000 | 104,163 | 0 | 154,163 | ||||||||||||
Susan Ness | 95,833 | 125,000 | 2,450 | 223,283 | ||||||||||||
Bruce P. Nolop(4) | 76,667 | 125,000 | 3,000 | 204,667 | ||||||||||||
Tony A. Prophet(3)(5) | 16,667 | 125,000 | 0 | 141,667 | ||||||||||||
Neal Shapiro(3) | 109,167 | 125,000 | 10,000 | 244,167 |
NAME | FEES EARNED PAID IN CASH ($)(1) | STOCK AWARDS ($)(2) | ALL OTHER COMPENSATION ($)(3) | TOTAL ($) | ||||||||||||||||
Gina L. Bianchini | 84,645 | 145,668 | 0 | 230,313 | ||||||||||||||||
Howard D. Elias(4) | 186,667 | 125,000 | 10,000 | 321,667 | ||||||||||||||||
Stuart J. Epstein | 85,769 | 147,059 | 0 | 232,828 | ||||||||||||||||
Lidia Fonseca | 100,000 | 125,000 | 3,500 | 228,500 | ||||||||||||||||
Marge Magner | 73,333 | 0 | 0 | 73,333 | ||||||||||||||||
Scott K. McCune | 113,333 | 125,000 | 8,076 | 246,410 | ||||||||||||||||
Henry W. McGee(4) | 100,000 | 125,000 | 10,000 | 235,000 | ||||||||||||||||
Susan Ness(4) | 117,153 | 125,000 | 5,000 | 247,153 | ||||||||||||||||
Bruce P. Nolop | 120,000 | 125,000 | 10,000 | 255,000 | ||||||||||||||||
Neal Shapiro(4) | 120,000 | 125,000 | 10,000 | 255,000 | ||||||||||||||||
Melinda C. Witmer(4) | 100,000 | 125,000 | 0 | 225,000 |
(1) | Amounts shown in this column reflect the cash compensation earned by each director for 2018 based upon the form in which the director elected to receive his or her retainer fees during the 2017-2018 and 2018-2019 director compensation periods. |
| |
DIRECTOR COMPENSATION
Amounts shown in |
Represents charitable gifts matched by the TEGNA Foundation pursuant to the TEGNAMatch program. The TEGNAMatch program matches eligible gifts made by Company employees and directors up to an aggregate of $10,000 a year. Gifts must be made to eligible organizations, including tax exempt charitable organizations, tax exempt hospitals or medical centers, and |
For the |
Director Compensation and Ownership Guidelines for 2016-2017
In December 2015, the Executive Compensation Committee modified the compensation plan for the directors, effective as of the 2016 Annual Meeting, to (1) permit directors to defer their annual equity grants under the DCP, and (2) pay out directors’ restricted stock units upon vesting (unless the director has elected to defer his or her restricted stock units under the DCP), discontinuing the Company’s policy of requiring that directors’ vested restricted stock units and restricted shares be held by the Company for the benefit of the director until the director leaves the Board.
Outstanding Director Equity Awards at FiscalYear-End
NAME | RESTRICTED STOCK AWARDS (VESTED/ UNVESTED) (#) | STOCK OPTION AWARDS (#) (EXERCISABLE/ UNEXERCISABLE) | ||
Gina L. Bianchini | 5,909/5,703 | 0/0 | ||
Howard D. Elias | ||||
Stuart J. Epstein | 5,909/5,703 | 0/0 | ||
Lidia Fonseca | ||||
| ||||
| 0/0 | |||
Scott K. McCune | ||||
Henry W. McGee | 0/0 | |||
Susan Ness | 0/0 | |||
Bruce P. Nolop | 0/0 | |||
Neal Shapiro | ||||
Melinda C. Witmer | 9,544/5,703 | 00 |
| |
Equity Compensation Plan Information
The table below sets forth the following information as of the end of the Company’s 20152018 fiscal year for (i) compensation plans previously approved by the Company’s shareholders and (ii) compensation plans not previously approved by the Company’s shareholders: (1) the number of securities to be issued upon the exercise of outstanding SOs, warrants and rights; (2) the weighted-average exercise price of such outstanding SOs, warrants and rights; and (3) other than securities to be issued upon the exercise of such outstanding SOs, warrants and rights, the number of securities remaining available for future issuance under the plans.
PLAN CATEGORY | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF (a) | WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (b) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN(A)) (C) | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (a) | WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (b) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN(A)) (c) | |||||||||||||||||||
Equity compensation plans approved by shareholders(1) | 5,629,057 | $14.09(2) | 33,076,862 | 4,450,518 | $8.56(2) | 31,838,237 | |||||||||||||||||||
Equity compensation plans not approved by shareholders(3) | 220,992 | 4,641,379 | 274,182 | 4,518,887 | |||||||||||||||||||||
Total | 5,850,049 | 37,718,241 | 4,724,700 | 36,357,124 |
(1) | The equity compensation plan approved by the Company’s shareholders is the TEGNA Inc. 2001 Omnibus Incentive Compensation Plan (amended and restated as of May 4, 2010), as amended (the “2010 Plan”). The number in column (a) includes |
(2) | Represents the weighted-average exercise price of the outstanding SOs granted under the 2010 Plan. |
(3) | The TEGNA Deferred Compensation Plan, or DCP, is anon-qualified plan that provides benefits to directors and key executives of the Company. The DCP has not been approved by the Company’s shareholders. The amounts elected to be deferred by each participant are credited to such participant’s account in the DCP, and the Company credits these accounts with earnings as if the amounts deferred were invested in the Company’s stock or other selected investment funds as directed by the participant. Amounts that are not treated as if invested in the Company’s stock are distributed in cash and amounts that are treated as if invested in the Company’s stock are generally distributed in shares of stock or cash, at the Company’s election. However, deferrals by directors of restricted stock or restricted stock unit grants are required to be distributed in stock under the terms of the DCP. The number in column (a) represents the number of shares credited to participants’ accounts in the DCP. The DCP does not currently include any shares to be issued upon the exercise of outstanding SOs, warrants and rights as a result of deferrals of grants made under the 2010 Plan. The table above does not include any shares that may in the future be credited to participants’ accounts in the DCP as a result of salary deferrals or transfers of other funds held in the plan. Participants in the DCP are general unsecured creditors of the Company with respect to their benefits under the plan. |
| |
Securities Beneficially Owned by Directors,
Executive Officers and Principal Shareholders
The information presented below regarding beneficial ownership of common stock has been presented in accordance with SEC rules and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership of common stock includes any shares as to which a person, directly or indirectly, has or shares voting power or investment power and any shares as to which a person has the right to acquire such voting or investment power within 60 days through the exercise of any SO or other right.
The following table presents, as of the Record Date, information based on the Company’s records and filings with the SEC regarding beneficial ownership of each person who is known to be the beneficial owner of more than five percent of the Company’s common stock, each current director and each nominee for election to the Board of Directors, the Company’s NEOs in 2015,2018, and all directors and executive officers of the Company as a group. None of the shares owned by the Company’s directors or executive officers wereare pledged.
NAME OF BENEFICIAL OWNER(1) | SHARES OWNED(2) | PERCENT OF CLASS | SHARES OWNED(2) | PERCENT OF CLASS | ||||||||||||
The Vanguard Group, Inc (3) | 18,561,220 | 8.37 | % | |||||||||||||
BlackRock, Inc. (4) | 12,609,129 | 5.7 | % | |||||||||||||
Gracia C. Martore | 761,422 | * | ||||||||||||||
BlackRock, Inc. (3)
|
| 25,426,490
|
|
| 11.8
| %
| ||||||||||
The Vanguard Group, Inc. (4)
|
| 21,312,619
|
|
| 9.9
| %
| ||||||||||
Fairpointe Capital LLC (5)
|
| 11,148,126
|
|
| 5.1
| %
| ||||||||||
David T. Lougee
|
| 253,539
|
|
| *
|
| ||||||||||
Victoria D. Harker | 101,257 | * |
| 224,849
|
|
| *
|
| ||||||||
David T. Lougee | 133,316 | * | ||||||||||||||
John A. (Jack) Williams | 118,743 | * | ||||||||||||||
Lynn Beall
|
| 61,529
|
|
| *
|
| ||||||||||
Todd A. Mayman | 108,492 | * |
| 100,013
|
|
| *
|
| ||||||||
Gina L. Bianchini
|
| 13,122
|
|
| *
|
| ||||||||||
Howard D. Elias | 42,607 | * |
| 50,099
|
|
| *
|
| ||||||||
Stuart J. Epstein
|
| 13,197
|
|
| *
|
| ||||||||||
Lidia Fonseca | 7,688 | * |
| 35,788
|
|
| *
|
| ||||||||
Jill Greenthal | 3,566 | * | ||||||||||||||
Marjorie Magner | 31,830 | * | ||||||||||||||
Scott K. McCune | 31,583 | * |
| 55,346
|
|
| *
|
| ||||||||
Henry W. McGee | 3,566 | * |
| 3,863
|
|
| *
|
| ||||||||
Susan Ness | 14,770 | * |
| 41,857
|
|
| *
|
| ||||||||
Bruce P. Nolop | 4,285 | * |
| 29,982
|
|
| *
|
| ||||||||
Neal Shapiro | 57,316 | * |
| 76,283
|
|
| *
|
| ||||||||
All directors and executive officers as a group (18 persons including those named above) | 1,487,518 | * | ||||||||||||||
Melinda C. Witmer
|
| 0
|
|
| *
|
| ||||||||||
All directors and executive officers as a group (16 persons including those named above)
|
| 1,028,264
|
|
| *
|
|
* | Less than one percent. |
(1) | Except as otherwise noted below, the address of each person listed in the table is: c/o TEGNA Inc., |
(2) | The following shares of common stock are included in the table because they may be acquired pursuant to (a) |
(3) | Based upon information as of December 31, |
(4) | Based upon information as of December 31, 2018, contained in a Schedule 13G/A filed with the SEC on February 13, 2019 by The Vanguard Group, reporting, in the aggregate, sole voting power over 216,124 shares, shared voting power over 25,200 shares, sole dispositive power over 21,094,512 shares and shared dispositive power over 218,107 shares. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
(5) | Based upon information as of December 31, 2018, contained in a Schedule 13G/A filed with the SEC on January 30, 2019 by Fairpointe Capital, LLC, reporting, in the aggregate, sole voting power over 10,722,175 shares, shared voting power over 129,216 shares, and sole dispositive power over 11,148,126 shares. The address for Fairpointe Capital LLC is One North Franklin, Suite 3300, Chicago, IL 60606. |
| |
Investment in TEGNA Stock by Directors and Executive Officers
The following table presents, as of the Record Date, the total investment position in the Company’s stock of its directors and executive officers, based on the Company’s records and filings with the SEC.
Name of Officer or Director | Title | Share Investment | |||||
| President and CEO, Director | ||||||
Victoria D. Harker | Executive Vice President and CFO | ||||||
|
| ||||||
64,501
|
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Todd A. Mayman | Former EVP/Chief Legal and Administrative Officer | 108,150 | |||||
Gina L. Bianchini | Director | 13,122 | |||||
Howard D. Elias | Director | 119,334 | |||||
Stuart J. Epstein | Director | 13,197 | |||||
Lidia Fonseca |
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| Director | ||||||
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Scott K. McCune | Director | ||||||
Henry W. McGee | Director | ||||||
Susan Ness | Director | ||||||
Bruce P. Nolop | Director | ||||||
Neal Shapiro | Director | 130,618 | |||||
Melinda C. Witmer | Director | 15,343 | |||||
All directors and executive officers as a group |
This table reflects the same information as the table in the preceding section, but it also includes shares of the Company’s stock that each person holds through the Company’s Deferred Compensation Plan. As of the Record Date, fully vested shares of the Company’s stock in the following amounts were deemed to be credited to the accounts of the Company’s directors and executive officers under the Company’s Deferred Compensation Plan: Mr. Lougee—19,568; Ms. Martore-20,709;Harker—15,905; Ms. Harker-5,205;Beall—2,971; Mr. Lougee-5,722;Mayman—8,137; Mr. Williams-1,105;Elias—69,235; Mr. Mayman-16,973;McCune—5,836; Mr. Elias-46,770;McGee—25,706; Ms. Magner-26,838;Ness—8,250; Mr. Shapiro-25,194;Shapiro—54,335; Ms. Witmer—15,343; and all directors and executive officers as a group-149,895.group-231,200. These shares are not deemed to be “beneficially owned” under SEC rules and are therefore not included in the table in the preceding section.
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The cost of soliciting proxies will be borne by the Company. In addition to the solicitation of proxies by mail, certain of the officers and employees of the Company, without extra compensation, may solicit proxies personally, by telephone or other means. The Company also will request that brokerage houses, nominees, custodians and fiduciaries forward soliciting materials to the beneficial owners of stock held of record and will reimburse them for forwarding the materials. In addition, the Company has retained Innisfree M&A Incorporated, New York, New York (“Innisfree”), to aid in the solicitation of proxies at a fee of $15,000, plus out of pocket expenses. The Company has agreed to indemnify and hold harmless Innisfree and certain related persons against certain liabilities arising out of or in connection with the engagement.
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Why am I receiving these proxy materials?
These proxy materials are being furnished to you in connection with the solicitation of proxies by our Board of Directors for the 20162019 Annual Meeting of Shareholders to be held on May 5, 2016April 25, 2019 at 10:00 a.m. ET at the Company’s headquarters located at 7950 Jones Branch Drive,Boro Station Conference Center, 1785 Greensboro Station Place, McLean, Virginia. This Proxy Statement furnishes you with the information you need in order to vote, whether or not you attend the Annual Meeting.
On what proposals am I being asked to vote and how does the Board recommend that I vote?
You are being asked to vote on the Proposals below, and the Board recommends that you vote as follows:
Proposal 1—FOR the election of the teneleven director nominees nominated by the Board of Directors, each to hold office until the Company’s 20172020 Annual Meeting of Shareholders;
Proposal 2—FOR the ratification of the appointment of Ernst & YoungPricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2016;2019; and
Proposal 3—FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis section and accompanying compensation tables and related discussion contained in this Proxy Statement.
In addition, if you grant a proxy, your shares will be voted in the discretion of the proxy holder on any Proposal for which you do not register a vote and any other business that properly comes before the Annual Meeting or any adjournment or postponement thereof.
Will there be any other items of business addressed at the Annual Meeting?
As of the date of this Proxy Statement, we are not aware of any other matter to be presented at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is intended that the holders of the proxies will act in accordance with their best judgment.
What must I do if I want to attend the Annual Meeting in person?
Admission to the Annual Meeting is by ticket only. We will provide each shareholder with one admission ticket upon request. Either you or your proxy may use your ticket. If you are a shareholder of record and plan to attend the Annual Meeting, please call the Company’s shareholder services department at(703) 854-6677873-6677 to request a ticket. If you hold shares through an intermediary, such as a bank or broker, and you plan to attend the Annual Meeting, please send a written request for a ticket, along with proof of share ownership, such as a bank or brokerage firm account statement or a letter from the intermediary holding your shares, confirming ownership to: Secretary, TEGNA Inc., 7950 Jones Branch Drive, McLean, VA 22107.8350 Broad Street, Suite 2000, Tysons, Virginia 22102. Requests for admission tickets will be processed in the order in which they are received and must be received no later than April 28, 2016.18, 2019. To obtain directions to attend the Annual Meeting, please call the Company’s shareholder services department at(703) 854-6677.873-6677.
Who may vote at the Annual Meeting?
If you owned Company stock at the close of business on March 7, 2016,February 25, 2019, which is the record date for the Annual Meeting (the “Record Date”), then you may attend and vote at the meeting. Please bring proof of your common stock ownership, such as a current brokerage statement, and photo identification. If you hold shares through a bank, broker, or other intermediary, you must obtain a valid legal proxy, executed in your favor, from the holder of record if you wish to vote those shares at the meeting.
At the close of business on the Record Date, we had approximately 218,617,344216,092,557 shares of common stock outstanding and entitled to vote. Each share is entitled to one vote on each proposal.
What constitutes a quorum for the Annual Meeting?
The presence, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the Record Date will constitute a quorum to conduct business. Shares held by an intermediary, such as a banker or a broker, that are voted by the intermediary on any or all matters will be treated as shares present for purposes of determining the presence of a quorum. Abstentions and brokernon-votes (defined below) will be counted for the purpose of determining the existence of a quorum.
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GENERAL INFORMATION
Why did I receive aone-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to Securities and Exchange Commission (the “SEC”(“SEC”) rules, we are permitted to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.
Choosing to receive your proxy materials electronically will save us the cost of printing and mailing documents to you and will reduce the impact of our annual shareholders’ meetings on the environment. If you choose to receive future proxy materials electronically, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials electronically will remain in effect until you terminate it.
How can I get electronic access to the proxy materials?
This Proxy Statement and the Company’s 20152018 Annual Report may be viewed online on the Company’s investor relations page of the Company’s website at investors.tegna.com.www.tegna.com under the “Investors” menu. You can also elect to receive an email that will provide an electronic link to future annual reportsAnnual Reports and Proxy Statements rather than receiving paper copies of these documents. Choosing to receive your proxy materials electronically will save us the cost of printing and mailing documents to you. You can choose to receive future proxy materials electronically by visiting ourthe investor relations page of the Company’s website at investors.tegna.com.www.tegna.com under the “Investors” menu. If you choose to receive future proxy materials electronically, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your choice to receive proxy materials electronically will remain in effect until you terminate it.
What is the difference between holding shares as a shareholder of record and as a beneficial owner of shares held in street name?
Shareholder of Record. If your shares are registered directly in your name with our transfer agent, Wells Fargo Shareowner Services,Computershare, you are considered the shareholder of record with respect to those shares, and the Notice was sent directly to you by the Company.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice was forwarded to you by your bank, broker or other intermediary. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.
If I am a shareholder of record of Company shares, how do I vote?
If you are a shareholder of record, you may vote in person at the Annual Meeting. We will give you a ballot when you arrive.
If you do not wish to vote in person or if you will not be attending the Annual Meeting, you may vote by proxy. You can vote by proxy via the Internet or by telephone by following the instructions provided in the Notice of Internet Availability of Proxy Materials or, if you request printed copies of the proxy materials by mail, you can also vote by mail, by telephone or via the Internet.
If I am a beneficial owner of shares held in street name, how do I vote?
If you are a beneficial owner of shares held in street name and you wish to vote in person at the Annual Meeting, you must obtain a valid legal proxy from the organization that holds your shares.
If you do not wish to vote in person or you will not be attending the Annual Meeting, you may vote by proxy. Follow the instructions provided to you by your bank, broker or other intermediary.
What happens if I do not give specific voting instructions?
Shareholders of Record. If you are a shareholder of record and you:
Indicate when voting via the Internet or by telephone that you wish to vote as recommended by our Board of Directors; or
Sign and return a proxy card without giving specific voting instructions,
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GENERAL INFORMATION
then the proxy holders will vote your shares in the manner recommended by our Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.
Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the New York Stock Exchange (“NYSE”) rules, the organization that holds your shares may generally vote on routine matters (including Proposal 2 to ratify our appointment of Ernst & YoungPricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2016)2019) but cannot vote onnon-routine matters (including the uncontested director election described in Proposal 1 and thenon-binding advisory vote described in Proposal 3). If the organization that holds your shares does not receive instructions from you on how to vote your shares on anon-routine matter, the organization that holds your shares will inform our Inspector of Election that it does not have the authority to vote on this matter with respect to your shares and your shares will not be voted. This is generally referred to as a “brokernon-vote.” When our Inspector of Election tabulates the votes for any particular matter, brokernon-votes will be counted for purposes of determining whether a quorum is present but will not otherwise be counted. We encourage you to provide voting instructions to the organization that holds your shares.
Can I change or revoke my vote?
Yes. If you deliver a proxy by mail, by telephone or via the Internet, you have the right to revoke your proxy in writing (by mailing another proxy bearing a later date), by phone (by another call at a later time), via the Internet (by voting online at a later time), by attending the Annual Meeting and voting in person, or by notifying the Company before the Annual Meeting that you want to revoke your proxy. Submitting your vote by mail, telephone or via the Internet will not affect your right to vote in person if you decide to attend the Annual Meeting.
What are the votes required to adopt the proposals?
Each share of our common stock outstanding on the Record Date is entitled to one vote on each of the director nominees and one vote on each other matter. To be elected, directors must receive a majority of the votes cast with respect to that director (the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee). Ratification of the selection of our independent registered public accounting firm and thenon-binding advisory vote to adopt the resolution to approve the Company’s executive compensation program described in this Proxy Statement each require the affirmative vote of the majority of the shares of common stock present or represented by proxy and entitled to vote at the meeting. Abstentions, if any, will have no effect on the election of any director, but will have the same effect as votes “against” each of the other two proposals.
How do I vote my shares in the Company’s Dividend ReinvestmentDirect Stock Purchase and 401(k) Plans?
If you participate in the Company’s Dividend Reinvestment Plan, the TEGNA 401(k) SavingsDirect Stock Purchase Plan or in the Gannett Co., Inc.TEGNA 401(k) Savings Plan, your shares of stock in those plans can be voted in the same manner as shares held of record. If you do not give instructions, your shares held in the Dividend ReinvestmentDirect Stock Purchase Plan will not be voted. All shares in the TEGNA 401(k) Savings Plan for which no instructions are received will be voted in the same proportion as instructions provided to the trustee by other TEGNA 401(k) Savings Plan participants. All shares in the Gannett 401(k) Plan for which no instructions are received will be voted in the same proportion as instructions provided to the trustee by other Gannett 401(k) Plan participants.
How do I submit a shareholder proposal or nominate a director for election at the 20172020 Annual Meeting?
To be eligible for inclusion in the proxy materials for the Company’s 20172020 Annual Meeting, a shareholder proposal must be submitted in writing to TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107,22102, Attn: Secretary and must be received by November 18, 2016.12, 2019. A shareholder who wishes to present a proposal or nomination at the Company’s 20172020 Annual Meeting, but who does not request that the Company solicit proxies for the proposal or nomination, must submit the proposal or nomination to the Company at the same address no earlier than January 5, 2017December 27, 2019 and no later than January 25, 2017.16, 2020. The Company’sBy-laws require that any proposal or nomination must contain specific information in order to be validly submitted for consideration.
Can shareholders and other interested parties communicate directly with our Board?
Yes. The Company invites shareholders and other interested parties to communicate directly and confidentially with the full Board of Directors, the Chairman of the Board or thenon-management directors as a group by writing to the Board of Directors, the Chairman or theNon-Management Directors, TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107,22102, Attn: Secretary. The Secretary will forward such communications to the intended recipient and will retain copies for the Company’s records.
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GENERAL INFORMATION
How can I obtain a shareholder list?
A list of shareholders entitled to vote at the 20162019 Annual Meeting will be open to examination by any shareholder, for any purpose germane to the 20162019 Annual Meeting, during normal business hours, for a period of ten days before the 20162019 Annual Meeting and during the 20162019 Annual Meeting at the Company’s offices at 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107.22102.
What is “householding”?
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, shareholders of record who have the same address and last name who have elected to receive paper copies of our proxy materials will receive only one copy of our 20152018 Annual Report and this Proxy Statement unless one or more of these shareholders notifies us that they wish to continue receiving multiple copies. This procedure will reduce our printing costs and postage fees. However, if any shareholder residing at such an address wishes to receive a separate copy of this Proxy Statement or the Company’s 20152018 Annual Report, he or she may contact the Company’s Secretary at TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 2210722102 or by calling the Secretary at(703) 854-7000.873-6600. Any such shareholder may also contact the Secretary using the above contact information if he or she would like to receive separate Proxy Statements and Annual Reports in the future. If you are receiving multiple copies of the Company’s Annual Report and Proxy Statement, you may request householding in the future by contacting the Secretary.
How may I obtain a copy of the Company’s 20152018 Annual Report?
A copy of our 20152018 Annual Report, which includes the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2015,2018, is being provided or made available to all shareholders of record on the Record Date. As permitted by the SEC, the Company is sending a Notice of Internet Availability of Proxy Materials to all shareholders.
If you hold your shares of record on the Record Date, you may request email or paper copies of our 20152018 Annual Report over the Internet, atwww.investorelections.com/tgnawww.envisonreports.com/TGNA, by toll-free telephone call (in the U.S. and Canada) to 1-866-870-3684,1-866-641-4276, or by email at paper@investorelections.com.investorvote@computershare.com. Please put “TGNAsend an email with “Proxy Materials Request”TEGNA Inc.” in the subject lineline. Include your full name and includeaddress, plus the 11-digit control number presentedlocated in the shaded bar on the Notice.reverse side, and state that you want a paper copy of the meeting materials.
If you hold your shares on the Record Date in “street name” through a bank, broker or other intermediary, you also may have the opportunity to receive copies of our 20152018 Annual Report electronically. Please check the information in the proxy materials provided by your bank, broker or other intermediary.
You may also obtain a copy without charge by writing to: TEGNA Inc., 7950 Jones Branch Drive, McLean,8350 Broad Street, Suite 2000, Tysons, Virginia 22107,22102, Attn: Secretary. Our 20152018 Annual Report and 20152018 Form10-K are also available through the Company’s website atwww.tegna.com. The Company’s Annual Report and Form10-K are not proxy soliciting materials.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe that all of our current and former directors and executive officers reported on a timely basis all transactions required to be reported by Section 16(a) of the Securities Exchange Act of 1934.
To the extent that this Proxy Statement is incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, the sections of this Proxy Statement entitled “Executive“Leadership Development and Compensation Committee Report” and “Report of the Audit Committee” (to the extent permitted by SEC rules) will not be deemed incorporated, unless specifically provided otherwise in such filing.
March 18, 201611, 2019
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002CSN9D08
Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. | ||||||||||
Votes submitted electronically must be received by 11:59 p.m., Eastern, on April 24, 2019. | ||||||||||
Online Go towww.envisionreports.com/TGNA or scan the QR code – login details are located in the shaded bar below. | ||||||||||
| Phone Call toll free1-800-652-VOTE (8683) within the USA, US territories and Canada | |||||||||
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. | Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/TGNA |
2019 Annual Meeting Proxy Card | ||||
Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 Address Change? Mark box, sign, and indicate changes below: TO VOTEq IF VOTING BY INTERNET OR TELEPHONE, SEE REVERSE SIDE OF THIS PROXY CARD.MAIL, SIGN, DETACH AND RETURN THE BOARD RECOMMENDS A VOTE “FOR” ALLBOTTOM PORTION IN THE NOMINEES LISTED AND “FOR” PROPOSALS 2 AND 3. 1. ELECTION OF DIRECTORS: The Board’s Nominees are: FOR AGAINST ABSTAIN 1a. Howard D. Elias 1b. Lidia Fonseca FOR AGAINST ABSTAIN 1f. Scott K. McCune 1g. Henry W. McGee Please fold here – Do not separate 1c. Jill Greenthal 1d. Marjorie Magner 1e. Gracia C. Martore 1h. Susan Ness 1i. Bruce P. Nolop 1j. Neal Shapiro 2. COMPANY PROPOSAL TO RATIFY the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2016 fiscal year. 3. COMPANY PROPOSAL TO APPROVE, ON AN ADVISORY BASIS, the compensation of the Company’s named executive officers. For Against Abstain For Against Abstain THE PROXIES are authorized to vote in their discretion upon such other business, if any, as may properly come before the Annual Meeting or any adjournment thereof. Date Signature(s) in Box ENCLOSED ENVELOPE.q
A | Proposals – The Board of Directors recommend a voteFOR all the nominees listed andFOR Proposals 2 – 3. |
1. Election of Directors: |
For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | ||||||||||||||
01 - Gina L. Bianchini | ☐ | ☐ | ☐ | 02 - Howard D. Elias | ☐ | ☐ | ☐ | 03 - Stuart J. Epstein | ☐ | ☐ | ☐ | |||||||||||
04 - Lidia Fonseca | ☐ | ☐ | ☐ | 05 - David T. Lougee | ☐ | ☐ | ☐ | 06 - Scott K. McCune | ☐ | ☐ | ☐ | |||||||||||
07 - Henry W. McGee | ☐ | ☐ | ☐ | 08 - Susan Ness | ☐ | ☐ | ☐ | 09 - Bruce P. Nolop | ☐ | ☐ | ☐ | |||||||||||
10 - Neal Shapiro | ☐ | ☐ | ☐ | 11 - Melinda C. Witmer | ☐ | ☐ | ☐ |
For | Against | Abstain | For | Against | Abstain | |||||||||
2. To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2019 fiscal year. The proxies are authorized to vote in their discretion upon such other business, if any, as may properly come before the annual meeting or any adjournment thereof. | ☐ | ☐ | ☐ | 3. To approve, on an advisory basis, the compensation of our named executive officers. | ☐ | ☐ | ☐ |
B | Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. |
Please sign EXACTLYexactly as your namename(s) appears at the left.hereon. Joint owners should each should sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or guardian,custodian, please give full related title.
Date (mm/dd/yyyy) – Please print date below. | Signature 1 – Please keep signature within the box. | Signature 2 – Please keep signature within the box. |
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1 P C F |
0301JE
TEGNA Inc.
TEGNA INC. ANNUAL MEETING OF SHAREHOLDERS Annual Meeting of Shareholders
Thursday, May 5, 2016 April 25, 2019
10:00 a.m. TEGNA Inc. 7950 Jones Branch Drive
Boro Station Conference Center
1785 Greensboro Station Place, McLean, VA 22107 TEGNA Inc. 7950 Jones Branch Drive McLean,22102
Small steps make an impact. | ||||||||
Help the environment by consenting to receive electronic | ||||||||
delivery, sign up at www.envisionreports.com/TGNA |
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
TEGNA Inc. |
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8350 Broad Street, Suite 2000
Tysons, VA 22107 Proxy TEGNA 22102
This Proxy is Solicited on Behalf of the Board of Directors
Annual Meeting of Shareholders — May 5, 2016 - April 25, 2019
The undersigned hereby appoints Gracia C. MartoreDavid T. Lougee and Todd A. Mayman,Akin S. Harrison, or either of them, attorneys and proxies each with power of substitution to represent the undersigned at the Annual Meeting of Shareholders of the Company to be held on May 5, 2016April 25, 2019 and at any adjournment or adjournments thereof, with all the power that the undersigned would possess if personally present, and to vote all shares of stock that the undersigned may be entitled to vote at said Annual Meeting, as designated on the reverse, and in accordance with their best judgment in connection with such other business as may come before the Annual Meeting. Please cast your votes on the reverse side, by telephone or online as described on the reverse side. The Board of Directors recommends a vote FOR Proposals 1, 2 and 3. To vote in accordance with the Board of Directors’ recommendations, just sign the reverse side; no boxes need to be checked. Unless marked otherwise, this proxy will be voted in accordance with the Board of Directors’ recommendations. Voting Instructions For TEGNA Inc.’s 2016 Annual Meeting of Shareholders TEGNA Inc. shareholders of record on March 7, 2016 may vote their shares for matters to be covered at the Company’s 2016 Annual Meeting of Shareholders using a toll-free telephone number, via the Internet or using the attached proxy card. Your telephone or Internet vote authorizes the Named Proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Below are voting instructions for all three options. Vote By Phone — 1-866-883-3382 Use any touch tone telephone to vote your shares at any time 24 hours a day, 7 days a week, until 11:59 p.m. (Central Time) on May 4, 2016. Have your proxy card in hand when you call. You will be provided with simple voting instructions. Vote by the Internet — www.proxypush.com/tgna Use the Internet to vote your shares at any time 24 hours a day, 7 days a week, until 11:59 p.m. (Central Time) on May 4, 2016. Have your proxy card in hand. You will be provided with simple voting instructions. Vote By Mail Mark, sign and date the attached proxy card and return it in the enclosed postage-paid envelope by May 4, 2016.
If you are a current or former employee of TEGNA Inc. and own shares of TEGNA common stock through the TEGNA 401(k) Savings Plan, or the Gannett Co., Inc. 401(k) Savings Plan, we must receive your completed and executed proxy card or your submission of an Internet or telephone vote by 11:59 p.m. (Central Time)8:00 a.m. (Eastern) on April 30, 2016.22, 2019. If your vote by proxy card, Internet or telephone is not received by 11:59 p.m. (Central Time)8:00 a.m. (Eastern) on April 30, 2016,22, 2019, the plan shares credited to your 401(k) account will be voted in the same proportions as the proxy votes which were timely and properly submitted by other plan participants. If you vote by phone or the Internet, please do not mail your proxy card. THANK YOU FOR VOTING.
C | Non-Voting Items |
Change of Address – Please print new address below. | Comments – Please print your comments below. | |||
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