UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ☒ Definitive Proxy Statement ☐ Definitive Additional Materials ☐ Soliciting Material under §240.14a-12 | ||
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Heidrick & Struggles International, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ No fee required ☐ Fee paid previously with preliminary materials ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | ||||
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NOTICE OF
LETTER TO STOCKHOLDERS
ANNUAL MEETING OF STOCKHOLDERSApril 15, 2022
ANDDear Fellow Stockholders,
PROXY STATEMENTLast year was an extraordinary year for Heidrick & Struggles. We maintained a laser focus on our growth initiatives as we continued to transform our business, and we delivered exceptional results and an important financial milestone in 2021 – more than $1 billion in net revenue – with impressively higher profitability.
Our record performance demonstrated that our differentiated growth strategy is working well. We continue to grow our core businesses, while we further expand our services and offerings, and invest in and develop new innovative digital capabilities for the future. In 2021, we created long-term value for our stockholders and clients by concentrating on four key areas:
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April 22, 2016Expanding our geographic scope and driving aggressive growth in Executive Search across all of our regions, winning and closing more searches than at any other time in our history and with unprecedented productivity levels from our consultants; we also made strong progress on the diversity front: 51% of our total U.S. placements were diverse, and 73% of our U.S. Board of Director placements were diverse.
Delivering value-add services in Heidrick Consulting across three primary areas: Leadership Assessment and Development to help shape future-ready leaders; Culture Assessments and Culture Shaping with companies navigating hybrid and return-to-work environments; and DE&I (Diversity, Equity & Inclusion), working with clients to define their diversity strategies and create equitable and inclusive cultures.
Driving significant revenue growth from the addition of our newest business segment, On-Demand Talent, following our acquisition of Business Talent Group in 2021, helping companies quickly find executive talent to fill interim leadership gaps or provide expertise on specific issues, transactions or transformation initiatives.
Initiating a partnership with a leader in creating AI-driven talent development platforms and making our first moves in developing new tech-enabled digital offerings.
In addition to our outstanding business and financial results, we made important strides in our ESG (Environmental, Social and Governance) efforts, publishing our first-ever ESG report and providing an in-depth look into our sustainability activities, while also outlining a firm commitment to substantially offset our carbon impact.
On the macro front, 2021 was a revolutionary year for leadership and human capital. Around the world, the ways in which we led our organizations and how we did our work were forever changed. Today, companies across all industries and regions are facing complex talent and human capital challenges and opportunities, including: developing boards and leaders of the future; maintaining inclusive cultures amidst new hybrid work models; exploring new ways of working, such as with independent talent on an on-demand basis for interim executive roles or project-based assignments; and using insights and AI to enable more agile, future-focused leadership and talent development. With our deliberate, strategic focus on growth and diversification and the incredible agility, resiliency and professionalism of our team, we are well positioned to serve and empower our clients to develop high-performing leaders, teams and organizations globally. As we look ahead to the future, our firm is on its front foot, moving forward, and we see tremendous opportunity for Heidrick & Struggles.
In closing, I am pleasedwant to invite youthank our colleagues around the world for their hard work and remarkable dedication to serving our clients and supporting each other in all that we do. I also want to thank our clients and stockholders for the trust they have placed in our firm and our purpose-driven work – to help our clients change the world one leadership team at a time. Finally, I want to take this opportunity to thank Laszlo Bock, who as previously announced, will not stand for reelection as a director this year. Laszlo provided valuable leadership and counsel to me and our Board of Directors on a wide range of topics, including our technology transformation and managing through the COVID-19 pandemic, as we worked closely with our clients to help them continue developing high-performing teams and thriving cultures.
This year we will conduct our Annual Meeting in a virtual format. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You can attend the 20162022 Annual Meeting by visiting www.virtualshareholdermeeting.com/HSII2022 where you will be able to listen to the meeting live, submit questions and vote. Information about attending the 2022 Annual Meeting and voting your shares may be found in the Notice of 2022 Annual Meeting of Stockholders and proxy statement. The Notice of Heidrick & Struggles International, Inc.
Enclosed you will find a notice detailing the items2022 Annual Meeting of Stockholders and proxy statement contain details of the business expected to come before the meeting, our Proxy Statement, a form of Proxy Card and a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The meeting will be held on May 26, 2016 at 9:00 a.m. Eastern Daylight Timeconducted at the Law Offices of Simpson Thacher & Bartlett LLP located at 425 Lexington Avenue, New York, NY 10017-3954.upcoming Annual Meeting.
Your vote is very important to us. Whether or not you plan to attend the meeting in person,2022 Annual Meeting online, we encourage you to vote promptly. You can vote via the internet, by telephone, by mail or by attending and voting online during the Annual Meeting. We hope that you vote your shares, are representedwhich in turn helps us ensure that our corporate governance practices, decisions and voted atstrategy all remain aligned with the Annual Meeting.
Thank you for your investment in and continued supportpriorities of our company. I am optimistic aboutstockholders and other stakeholders. Regular, transparent interaction with our future and proud to be part of an organization that has talented and dedicated people thoroughly committed to the successstockholders is a cornerstone of our clients, our company and your investment. I look forward to welcoming many of you to our Annual Meeting.corporate governance practices.
Sincerely,
Tracy R. Wolstencroft
President and Chief Executive Officer
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
233 South Wacker Drive, Suite 4900
Chicago, Illinois 60606-6303
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
| ![]() | Sincerely, Krishnan Rajagopalan President and Chief Executive Officer |
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS OF HEIDRICK & STRUGGLES INTERNATIONAL, INC.
May 26, 2022 8:00 a.m., Central Time Online check-in will be available beginning at 7:45 a.m. Central Time. Please allow ample time for the online check-in process. Place* The Annual Meeting will be held entirely online at: www.virtualshareholdermeeting.com/HSII2022. * In light of the ongoing pandemic, for the safety of all of our people, including our stockholders, and taking into account federal, state and local guidance that has been issued, we have determined that the 2022 Annual Meeting will be held in a virtual meeting format only, via the internet, with no physical in-person meeting. If you plan to participate in the virtual meeting, please see “Questions and Answers About the Proxy Materials and the Annual Meeting.” Stockholders will be able to attend, vote and submit questions (both before, and for a portion of, the meeting) from any location via the internet. | ||||||
Items of |
1. Election to our Board of Directors of the
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Record | The Distribution of Materials This Notice, the proxy statement, the accompanying proxy card and our Form 10-K for the year ended December 31, 2021 are being distributed to stockholders beginning on or about April 20, 2022. These documents are also available on our website at https://investors.heidrick.com/financial-information/proxy-materials. | On behalf of the Board of Directors, Tracey Heaton Chief Legal Officer & Corporate Secretary |
TABLE OF CONTENTS
PROXY STATEMENT | Proxy Statement Summary | 1 | ||||||
SUMMARY AND | Who We Are | 5 | ||||||
GOVERNANCE | Environmental Stewardship, Social and Governance (ESG) Issues | 6 | ||||||
Board Structure | 10 | |||||||
PROPOSAL 1 – Election Of Directors | 17 | |||||||
Director Biographies | 21 | |||||||
Executive Officer Biographies | 27 | |||||||
EXECUTIVE COMPENSATION | PROPOSAL 2 – Advisory Vote to Approve Named Executive Officer Compensation | 30 | ||||||
Compensation Discussion & Analysis (CD&A) – HRCC Report | 31 | |||||||
Compensation Tables And Narrative Disclosures | 46 | |||||||
| Audit & Finance Committee Report | 57 | ||||||
Fees Paid to Auditor | 58 | |||||||
PROPOSAL 3 – Ratification Of Appointment Of Auditor | 59 | |||||||
ADDITIONAL
| Stock Ownership Information | 60 | ||||||
Principal Stockholders | 61 | |||||||
Q&A About The Proxy Materials and the
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A stockholder list will be available at our principal executive offices located at 233 South Wacker Drive, Suite 4900, Chicago, Illinois 60606-6303, beginning May 13, 2016 during normal business hours, for examination
PROXY STATEMENT
We are providing the enclosed proxy materials to you in connection with the solicitation by any stockholder registered on our stock ledger asthe board of March 31, 2016, for any purpose germane to the Annual Meeting.
If you plan to attend the Annual Meeting, please bring proof of your ownershipdirectors (the “Board”) of Heidrick & Struggles common stockInternational, Inc. (“Heidrick & Struggles,” “Heidrick,” the “firm” or the “Company”) of proxies to be voted at the Annual Meeting of Stockholders to be held on May 26, 2022 (the “Annual Meeting”), or any adjournment or postponement thereof. The Annual Meeting will be held entirely online at www.virtualshareholdermeeting.com/HSII2022. We began distributing these proxy materials to our stockholders on or about April 20, 2022.
This proxy statement contains forward-looking statements within the meaning of the federal securities laws. The forward-looking statements are based on current expectations, estimates, forecasts, and projections about the industry in which we operate and management’s beliefs and assumptions. Forward-looking statements may be identified by the use of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “outlook,” “projects,” “forecasts,” and similar expressions. Forward-looking statements are not guarantees of March 31, 2016future performance, rely on a number of assumptions, and valid picture identification.
Enclosed please findinvolve certain known and unknown risks and uncertainties that are difficult to predict, many of which are beyond our Proxy Statement, Proxy Cardcontrol. For more information on these risks, uncertainties and a copy ofother factors, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2021, under the heading “Risk Factors” in Item 1A, as updated in Part II of our subsequent Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. The forward-looking statements contained in this proxy statement speak only as of the date of this proxy statement. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. For more complete information regarding the Company’s 2021 performance, please review the Company’s Form 10-K for the year ended December 31, 2021.
Sincerely,PROXY STATEMENT SUMMARY
2021 BUSINESS HIGHLIGHTS
2021 was an exciting year of geographic expansion and industry-leading productivity in Executive Search, increased demand for our broad array of leadership, organizational effectiveness and culture shaping offerings from Heidrick Consulting, the addition of our high-growth On-Demand Talent business segment and the initiation of a partnership for future digital innovation. Our record results demonstrate that our differentiated strategy is working. As a result, Heidrick ended 2021 with:
Full year consolidated net revenue of $1,003.0 million, an important financial milestone
A strong balance sheet with $545.2 million in cash and cash equivalents and marketable securities
Adjusted Net Income was $83.5M with adjusted diluted earnings per share of $4.11
Adjusted operating income more than doubled to $113.4M with an adjusted operating margin of 11.3%
Increased market share and geographic scope in Executive Search, with 12 month productivity of $2.4 million per consultant in 2021
2021 ENVIRONMENTAL STEWARDSHIP, SOCIAL RESPONSIBILITY AND GOVERNANCE (“ESG”) HIGHLIGHTS
In addition to record-breaking financial results, in 2021 we also made important strides in ESG. We published our first-ever ESG report, which provides an in-depth look into our ESG initiatives, outlines a firm commitment to expand our efforts to reduce our carbon footprint and begin to substantially offset our carbon impact, and highlights our continued efforts internally and with our clients globally to build more effective and representative organizations. We are proud to share the progress we have been making on our ESG initiatives through the work and investments we have undertaken to lessen our impact on the environment, advance diversity and inclusion and innovate across our business to drive an increasingly sustainable business model for the future. At Heidrick & Struggles, we hold ourselves to the highest standards, and as a premier provider of leadership advisory services, people are at the center of all we do. Using our culture as a differentiator to attract, develop and retain the highest-performing talent and build a more diverse and inclusive firm is a strategic priority.
As trusted advisors in boardrooms around the globe, one of the most consequential conversations taking place and that we have the privilege of helping to shape is around sustainability and ESG issues.
Stephen W. Beard
Secretary | GOVERNANCE 1
Important Notice Regarding
Some highlights from our 2021 ESG efforts include:
At the AvailabilityBoard of Proxy MaterialsDirector level, 73% of our U.S. placements were diverse and 68% globally, exceeding our Board Diversity Pledge.
Maintaining our own commitment to diversity, 37.5% of our own Board are women, and 25% are ethnically diverse.
Women represented 64% of our overall workforce. Women represented 69% of our new hires and 65% of our promotions. Professionals of color represented 26% of our U.S. workforce. In 2021, professionals of color accounted for 35% of our new hires and 21% of our promotions in the U.S.
We continued to take steps to support our employees and help ensure their safety and wellbeing during the ongoing pandemic, including monitoring guidance from the U.S. Centers for Disease Control and Prevention, World Health Organization and other relevant health authorities and sharing such guidance with our employees. We have provided various benefits and resources related to the pandemic, including mental health resources and additional support, and recognizing World Mental Health Day.
We formalized new hybrid workplace guidance globally. As we plan for the Annual Meetingfuture of Stockholderswork, we continue providing our employees with flexibility in how and where we work, while maintaining our culture of mentorship, collaboration and community.
We began purchasing verified carbon offset credits, which are expected to Be Held on May 26, 2016increase through the coming years, and are expected to offset at least 45% of our 2019 (pre-pandemic) carbon emissions by 2023.
The Proxy Statement and the Company Annual Report are available at:http://www.heidrick.com/proxy.2021 COMPENSATION HIGHLIGHTS
Heidrick’s compensation program is guided by a YOUR VOTE IS IMPORTANT. Whether or not you attendpay-for-performance philosophy. We expect the meeting, we encourage youCompany’s Executive Officers to considerinitiate and carry out sustainable growth strategies and to create long-term value for both the matters presented inCompany and its stockholders.
We also believe that Heidrick’s compensation program strikes the Proxy Statementappropriate balance between offering incentives needed to attract and voteretain the best talent, as soonwell as possible through any of the methods referenced above.driving and rewarding both short-term goals and long-term stockholder value.
2021 Compensation Best Practices
2 GOVERNANCE |
Key Elements of 2021 Executive Compensation Program
2021 Target Compensation Mix: CEO | 2021 Target Compensation Mix: Other NEOs |
2021 CORPORATE GOVERNANCE HIGHLIGHTS
We are committed to regularly monitoring and evaluating best practices and new developments in corporate governance against our current practices to promote long-term value and strengthen Board and management’s accountability to our stockholders, clients and other stakeholders. Highlights of our corporate governance framework, include the following:
| Board and committee oversight of human capital management and other ESG programs and disclosures | ||||||||||
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ABOUT2022 DIRECTOR NOMINEES HIGHLIGHTS
PROPOSALS SUBMITTED TO VOTE AT THE ANNUAL MEETING AND VOTING
This Proxy Statement contains information about the matters to be voted on at our 2016 Annual Meeting of Stockholders (Annual Meeting) as well as other information about Heidrick & Struggles International, Inc. (Heidrick, or our Company) and our corporate governance. Enclosed with this Proxy Statement you also will find a: RECOMMENDATIONS
Proxy card (Proxy Card) explaining how you can cast your vote with regard to each matter to be voted on at our Annual Meeting; and;
Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (2015 Annual Report) containing important information regarding our Company’s recent performance.
Item | Description | Recommendation | Page | |||||
Election of Directors | ||||||||
Elizabeth L. Axelrod | Krishnan Rajagopalan | |||||||
1 | Mary E. G. Bear | Stacey Rauch | ||||||
Lyle Logan | Adam Warby | |||||||
T. Willem Mesdag | For Each Nominee | 17 | ||||||
2 | Advisory Vote to Approve Named Executive Officer Compensation | For | 30 | |||||
3 | Ratification of Independent Public Accounting Firm | For | 59 |
We encourage you to carefully read this Proxy Statement in its entiretywill also act upon any other business as may properly come before voting. The approximate date on which this Proxy Statement and accompanying materials are first being sent to holders of our common stock (Common Stock) is April 22, 2016.
Time, Date and Place of Annual Meeting
The meeting will be held on May 26, 2016 at 9:00 a.m. Eastern Daylight Time at the Law Offices of Simpson Thacher & Bartlett LLP located at 425 Lexington Avenue, New York, NY 10017-3954. Only common stockholders and their duly appointed legal proxies who present the required identification and proof of stock ownership as of the record date will be admitted to the meeting. If you need directions to the Annual Meeting, please contact Heidrick’s Investor Relations Officer at 1-312-496-1200.
This Proxy Statement
Heidrick’s Board of Directors (Board) is furnishing you with this Proxy Statement in order to solicit your proxy for the Annual Meeting and at any adjournment thereof. Aadjournments or postponements of that meeting. The Board or proxy is your direction to another person to vote your shares. When you sign the enclosed Proxy Card, youholders will appoint certain members of our management to vote your sharesuse their discretion on other matters that may arise at the Annual Meeting in the manner you instruct. Even if you plan to attend the Annual Meeting, you should complete, sign and return your Proxy Card in advance.Meeting.
The Company has retained Alliance Advisors, L.L.C. (Alliance) to aid in the solicitation of proxies. We will pay Alliance $9,000 as compensation for its services and will reimburse it for its reasonable out-of-pocket expenses. If the Company requests banks, brokers or other stockholder nominees to solicit proxies from beneficial owners of shares held in “street name” (as described below), the Company will reimburse them for their reasonable out-of-pocket expenses. We may also use our officers and other employees to solicit proxies from stockholders and will pay all costs associated with the solicitation.
Matters to Be Voted on at the Annual Meeting4 GOVERNANCE |
The following are the matters to be voted on at our Annual Meeting, along with the voting recommendation of our Board and the page in this Proxy Statement where you can find additional information regarding the matter.
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At our core, we help boards and leadership teams be successful. We place importance on building strong partnerships with our clients to | ||||
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EXECUTIVE SEARCH
If you returnWe partner with our clients – respected organizations across the globe – to help them build and complete your proxy by indicating how you would like your sharessustain the best leadership teams in the world, with a special focus on placing top-level senior executives. Through our unique relationship-based, data-driven approach, we help our clients find the right leaders, set them up for success and accelerate the performance of themselves, as well as their teams and organizations.
We form cross-sector consultant search teams for each client to be votedoffer geographical knowledge, industry insights or expertise based on the particular role the client is looking to fill. By taking advantage of our global presence in this way, we believe we are able provide our clients with best-in-class market intelligence and service.
Our Executive Search consultants work at the Annual Meeting, your shares will be votedtop and specialize in accordance with your instructions. If you return your proxy but do not indicate how you would like your shares voted, your shares will be voted in accordance withsearches for Boards of Directors and the Board’s recommendations above. Stephen W. Beard,C-suite, including roles such as Chief Executive Vice President, Chief Administrative Officer, General Counsel and Secretary and Richard W. Pehlke, Executive Vice President and Chief Financial Officer, will be attorneys-in-fact for all returned proxies.
Voting on Annual Meeting Matters
You are entitled to vote or direct the voting of your shares at the Annual Meeting if you were a stockholder of record at the close of business on March 31, 2016, the record date (Record Date) for the Annual Meeting. On that date, there were approximately 18,550,858 shares of Heidrick Common Stock outstanding, each of which is entitled to one vote for each matter to be voted on at the Annual Meeting, held by approximately 3,848 stockholders of record.
If you are astockholder of record you may cast your vote in one of the following ways:
Via the Internet—Visit the website listed on your Proxy Card.
By Telephone—Call the telephone number listed on your Proxy Card.
By Mail—Sign, dateChief Operating Officer, Chief Digital Officer and return your Proxy Card in the enclosed envelope.
In Person—By attending the meeting.
If you attend the Annual Meeting, you may vote in person even if you have previously submitted your proxy by mail, telephone or via the Internet. A list of the shareholders of record as of March 31, 2016 will be available for inspection during ordinary business hours at our principal executive office at 233 South Wacker Drive, Suite 4900, Chicago, Illinois 60606-6303, from May 13, 2016 to May 25, 2016,Chief Human Resources Officer, as well as at our Annual Meeting.for functional officers in areas like Information and Technology, Legal, Risk, Compliance and Government Affairs, Marketing, Sales and Strategy and Supply Chain and Operations. We also see growing demand for executive searches related to Diversity, Equity and Inclusion, Sustainability, Social Impact, Biopharmaceuticals, Disruptive Healthcare, Medical Technology and Private Equity.
“Stockholders of Record” and Beneficial Owners of Shares held by Brokers in “Street Name”
If you hold Common Stock that is registered in your name through our transfer agent (Computershare Trust Company NA) as of the Record Date, you are a “stockholder of record”. However, if you hold shares of our Common Stock indirectly through a broker, bank or similar institution, you are not a stockholder of record. Rather, you are a stockholder whose shares are held in “street name.” Your broker, bank, or other nominee is considered the stockholder of record, and you are considered the “beneficial owner” of the shares.HEIDRICK CONSULTING
We sent copiespartner with organizations through Heidrick Consulting to unlock the power of their people. Our tools and experts use data and technology to bring science to the art of human capital development and organizational design. Our services allow our proxy materials directlyclients to all stockholdersaccelerate their strategies and the effectiveness of record. If you areindividual leaders, teams and organizations as a beneficial owner whose shares are held in “street name”, these materials were sentwhole.
Heidrick Consulting offers our clients groundbreaking approaches to you byhuman capital development through a myriad of solutions, ranging from leadership assessment and development, team and organization acceleration, digital acceleration and innovation, diversity and inclusion advisory services and culture shaping. Applying our deep understanding of the bank, broker or similar institution throughbehaviors and attributes of leaders across many of the world’s premier companies, we guide our clients as they build a thriving culture of future-ready leadership. These premium services and offerings, which you hold your shares. As the beneficial owner, you can direct your institution ascomplement our Executive Search expertise, significantly contribute to how you would like your shares voted at the Annual Meeting.our ability to deliver a full-service human capital consulting solution to our clients.
Voting of Shares held | GOVERNANCE 5
ON-DEMAND TALENT
In April 2021, we acquired Business Talent Group, LLC (“BTG”), a market-leader in “Street Name”sourcing high-end, on-demand independent talent. Our on-demand services provide clients seamless on-demand access to top independent talent, including professionals with deep industry and functional expertise for interim leadership roles and critical, project-based initiatives. We believe our unique model delivers the right independent talent on demand by blending proprietary data and technology with a dedicated Talent Solutions team.
If you are a beneficial owner whose shares are held in “street name” you must obtain a “legal proxy” from your bank or broker to vote at the Annual Meeting. Or you must give the institution that holds your shares instructions on how you would like your shares voted. If that organization does not receive voting instructions from you, how your shares will be voted (if at all) will depend on the type of proposal. Institutions are not authorized to vote your “street name” shares for Items 1 or 2 (uncontested elections of directors and advisory vote to approve executive compensation) without instructions from you. Institutions may vote your “street name” shares for Item 3 (ratification of independent auditors) at their discretion even if you do not provide voting instructions.
If you do not provide specific instructions to your institution as to how to vote your “street name” shares for Items 1 and 2 your institution will not be able to vote those shares and a “broker non-vote” will occur.ENVIRONMENTAL STEWARDSHIP, SOCIAL AND GOVERNANCE (“ESG”)
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Required VoteHOW WE CHAMPION ESG
At Heidrick, we are on the same ESG journey as our clients. In April 2021, we launched our inaugural ESG Report to outline our efforts and disclose progress across ESG initiatives. In tandem, we announced our partnership with Indigo Ag, to work closely together to begin addressing our carbon emissions, further strengthening our commitment to developing a sustainable business model and setting a plan for Annual Meeting Mattersour carbon removal efforts. As part of our ongoing partnership, Heidrick began purchasing verified carbon offset credits, which are expected to increase through the coming years and offset at least 45% of our 2019 carbon emissions by 2023.
Referencing both Global Reporting Initiative (“GRI”) and the Value Reporting Foundation Sustainability Accounting Standards Board (“SASB”) frameworks, our ESG Report delves, in-depth, into Heidrick’s commitment to serving client needs, leading on diversity and inclusion, supporting our employees and communities where we work and prioritizing environmental sustainability.
A quorumFor our complete ESG story, the Company’s latest ESG Report can be found here: https://investors.heidrick.com/static-files/518a94ad-8473-4268-8cd2-a6665ac4d731. The information contained in the Company’s ESG Report, or otherwise on or connected to the Company’s website, is required to transact business atnot incorporated by reference into this proxy statement and should not be considered part of this or any other report filed with the Annual Meeting. The holders of a majoritySEC.
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SERVING CLIENTS: FINDING LEADERSHIP SOLUTIONS FOR SUSTAINABLE, DIVERSE AND INCLUSIVE BUSINESSES
Since 2017, we have conducted over 1,000 ESG related executive search and consulting assignments – representing one of the outstanding sharesfastest growing segments of Common Stockour business. In 2021, we completed approximately 270 ESG related assignments, partnering with our clients, candidates, employees and communities to make the world a better place. Our Sustainability Practice focuses on sustainability officer roles, board placements focused on sustainability, sustainable product or service businesses, businesses working to embed sustainability into their strategy, sustainable assets managers, private equity funds, not-for-profit and philanthropic organizations, development banks and others.
Our Diversity, Equity & Inclusion (“DE&I”) consulting practice has a proven track record of accelerating our clients’ performance by increasing diversity, addressing equity and promoting inclusion. As the Record Date, present in person or represented by proxyindustry’s authority on leadership and entitledhuman capital, we take a business-focused, data-driven, and leader-led approach where DE&I not only fosters positive change, but also drives performance and growth. Our DE&I offerings provide strategic advisory services through data-driven insights designed to vote, will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes are treated as present for quorum purposes. The following table summarizes the votes required for passage of each matter requiring stockholder action at the Annual Meeting.accelerate performance.
DRIVING CHANGE WITHIN OUR FIRM: OUR OWN DE&I JOURNEY
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RepresentativesDE&I is embedded in everything we do and believe in as a firm. We are committed to fostering an inclusive workforce, where diverse backgrounds are represented, engaged and empowered to make meaningful contributions. Our firm values differences in ability, ethnicity, perspectives, gender, geography and sexual orientation. At Heidrick, diversity is not just a politically or socially responsible goal for our firm, it is a business imperative. As a result, we proactively recruit, develop and work to retain diverse talent across all levels of Broadridge Financial Solutions, Inc.our firm.
At Heidrick, we have created affinity groups to help nurture an inclusive and collaborative culture that enables everyone to reach their potential and fully contribute to our success as one firm. These affinity groups, called Employee Resource Groups (“ERGs”), are internal networks of employees who work to provide professional development and business insights around a common interest in order to improve the employee experience. Each group has its own global or regional representation. Each of our ERGs are fully independent in order to create a trusting and safe environment for other members. Our current ERGs include:
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PEOPLE: WINNING TEAMS COME FROM AN EXTRAORDINARY CULTURE
As leaders in helping clients attract, develop and retain great talent, we are constantly learning and promoting management best practices, which we also seek to incorporate into our own firm. We therefore strive to create an open, inclusive and committed culture where our employees find fulfillment through their jobs and can deliver their best because they feel safe bringing their whole selves to work. This work begins by implementing policies and programs that support our employees’ success by creating a welcoming environment that is free from harassment, and provides growth opportunities, as well as health and wellness benefits.
Our organization is governed according to our values and ethics by our Board of Directors and management team. Through its committee meetings and regular interactions with senior leadership, our Board of Directors provides strategic direction to our Executive Search, Heidrick Consulting and On-Demand Talent operations while encouraging the development of new initiatives to ensure we continuously strive to meet stakeholder needs and set industry standards.
We are committed to the professional development of our employees and promoting a continuous learning culture within our firm. Our learning and development programs have been created with the goal of providing our employees with resources on business development, account management, client service and strengthening leadership skills. In addition to building personal and professional capabilities, these programs set a standard for the behaviors that will tabulatehelp us realize our business goals and strategies.
In 2021, our Learning & Development team delivered over 12,800 hours of aggregate live training to our colleagues globally throughout the votes castyear across all programs. We continued with a virtual format due to the COVID-19 pandemic. Our learning catalog outlines dozens of live, virtual programs and thousands of eLearning courses designed to help build and enhance employee leadership, business acumen and business development skills. These programs are continually updated to reflect best practices and feedback received from employees.
COMMUNITY: LENDING A HAND TO OUR NEIGHBORS
We strongly believe that the benefits of our success and scale should enrich all of our stakeholders, especially the communities in which we operate. We are committed to being responsible global and corporate citizens by positively contributing to the communities in which we work and live. In 2021:
We donated to charities and completed pro-bono assignments for several nonprofits, and select for-profit organizations around the world, that meet our criteria to receive assistance.
On our Global Day of Service in October 2021, 442 employees gave back to local communities around the world, supporting 38 non-profit organizations.
We formalized our global Heidrick & Struggles Pro Bono Assignment Program which provides an opportunity to support the execution of executive searches free of charge to our clients, for select organizations and roles that support our firm’s values and commitment to our communities.
ENVIRONMENTAL SUSTAINABILITY: SHRINKING OUR CARBON FOOTPRINT
As one of the world’s largest executive recruiting and leadership advisory firms, we recognize the impact our offices and operations have on the planet, and we acknowledge our responsibility to reduce our environmental impact where possible. We care about our communities – local and global – and we are committed to measuring our impact on the world, creating transparency around our activities and pursuing environmental sustainability initiatives.
In 2019 we began studying our carbon footprint which shrank considerably in 2020 and 2021 as we transitioned to serving clients virtually due to the pandemic. In 2020, as most of our employees began working remotely under our newly formalized hybrid workplace philosophy, we began to reassess our total real estate footprint. We entered 2020 with 441,084 rentable square feet. Since 2020, we have successfully reduced our square footage to roughly 330,000, a 111,084 reduction in square footage or roughly 26% of our real estate footprint. With office shrinkages occurring, it has also given us the opportunity to recycle furniture throughout our various offices.
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Currently, Heidrick serves clients through a network of 49 offices in 28 countries. We lease space in over 20 green buildings across the globe, including many LEED buildings in the U.S. We pursue environmental sustainability initiatives when building and maintaining our offices globally. When assessing our lease renewals and moves, we take into consideration the type of green or LEED certified building and how it impacts our carbon footprint. When building or renovating our offices, we prioritize working with vendors and suppliers who produce eco-friendly products, and we are constantly looking to add natural greenery into our offices around the world.
In addition to reducing our footprint through office square footage and reductions in business travel due to the pandemic, we have proactively addressed our carbon emissions by purchasing verified carbon offset credits, which will increase through the coming years to further offset our carbon emissions.
STAKEHOLDER ENGAGEMENT: REACHING BEYOND OUR FOUR WALLS
We aspire to create deeper partnerships with organizations to drive and advance our purpose and our values throughout the world. As a result, we engage with the following stakeholders:
Clients and Potential Clients
Candidates and Potential Candidates
Participants in our Consulting Services
Stockholders and Potential Stockholders
Employees and Potential Employees
Vendors/Suppliers
We additionally have relationships with a broad array of respected global organizations that guide us in our journey including: The Economist Intelligence Unit, Fortune Magazine, The Executive Leadership Council, the National Association of Corporate Directors, Nasdaq, the Hispanic Association on Corporate Responsibility, the World Economic Forum, Stanford University, the Latino Corporate Directors Association, the World Bank, INSEAD, the New World Alliance, the University of Oxford, Paradigm for Parity, ION and Catalyst.
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Governance
Heidrick understands that corporate governance is not static, and as a result, we regularly monitor and evaluate best practices and new developments in corporate governance against our current practices. The value proposition of good governance extends beyond our own internal practices, as we serve as a trusted advisor to boards and C-suites on myriad issues. Heidrick offers its clients an integrated suite of services and advisory expertise at the CEO and board level, ranging from the acquisition of talent to longer-term Succession Planning, Board Dynamics and Culture Shaping.
Heidrick has built its reputation over the course of several decades on its core value of always acting with integrity. Our commitment to the highest levels of integrity and transparency in our Annual Meeting,business allows our investors to better assess risk and the value of our Company. Internally, Heidrick’s governance requires oversight at all levels. Heidrick invests in its people who are responsible for keeping careful watch over the Company’s assets – whether they are monetary in value, confidential data assets or other assets entrusted to the Company.
Heidrick is committed to translating our values and strategy into measurable results in order to improve our own performance on ESG issues that are material to our stockholders, the clients we serve, the candidates and participants with whom we interact and engage, and others with whom we work every day.
The current members of the Board of Directors are: Elizabeth L. Axelrod, Laszlo Bock, Mary E. G. Bear, Lyle Logan, T. Willem Mesdag, Krishnan Rajagopalan, Stacey Rauch and Adam Warby. Mr. Bock will act asnot be standing for reelection to the independent inspector of election forBoard at the Annual Meeting. We expect to announceAs a result, following the preliminary voting results at our Annual Meeting. The final voting results will be reported in a Current Report on Form 8-K that will be posted on our website.
Revoking a Proxy
You can revoke your proxy at any time before it is voted at our Annual Meeting, subject toour Board will have seven members. Proxies cannot be voted for a greater number than the voting deadlines that are described on the Proxy Card or voting instruction form, as applicable. You can revoke your vote:
By voting again by Internet or by telephone (only your last Internet or telephone proxy submitted prior to the meeting will be counted);
By signing and returning a new Proxy Card with a later date; or
By attending our Annual Meeting and voting in person.
You may also revoke your proxy by giving written noticenumber of revocation to our General Counsel and Secretary, Stephen W. Beard, at Heidrick & Struggles International, Inc., 233 South Wacker Drive, Suite 4900, Chicago, Illinois 60606-6303, if received no later than 5:00 p.m., Eastern Time, on May 25, 2016.
If your shares are held in street name, we also recommend that you contact your broker, bank or other nominee for instructions on how to change or revoke your vote.
Our Stock and Stockholdersnominees named.
The Company’s AmendedBoard met six times during 2021. Each current member of our Board of Directors (individually, “director”, and Restated Certificatetogether, “directors”) attended at least 75% of Incorporation provides for its authorized capital stock to consistall of 100,000,000 sharesthe meetings of Common Stock, $0.01 par value per share, of which 18,550,858 shares were issued and outstanding on March 31, 2016, and 10,000,000 shares of preferred stock, $0.01 par value per share, none of which have been issued. The Company’s Common Stock is listed on the Nasdaq Stock Market under the symbol “HSII.” Each stockholder is entitled to one vote per share on all matters to be voted upon by the stockholders. Holders of Common Stock do not have cumulative voting rights. Holders of Common Stock are entitled to receive dividends if and when dividends are declared by the Board and out of funds legally available, after the required dividends are paidcommittee(s) on outstanding preferred stock, if any.
On September 19, 2007, the Board approved the initiation of a quarterly cash dividendwhich they served. Pursuant to our Director Attendance at Annual Meetings Policy contained in the amount of $0.13 per share and the dividend has been reauthorized by the Board for each succeeding fiscal quarter up to the present. In the event of the Company’s liquidation, dissolution or winding up, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities, accrued but unpaid dividends and liquidation preferences on any outstanding preferred stock. The shares of Common Stock have no preemptive or conversion rights and are not subject to the Company’s further calls or assessment. There are no redemption or sinking fund provisions applicable to the Common Stock.
Corporate Governance Information
A copy of our 2015 Annual Report accompanies this Proxy Statement. You may obtain, free of charge, an additional copy of our 2015 Annual Report or our Corporate Governance Guidelines, Code of Business Conduct and Ethics (Code), Director Independence Standards andall directors are expected to make every effort to attend the charters for our Audit and Finance, Human Resources and Compensation, and Nominating and Board Governance Committees by writing to: Heidrick & Struggles International, Inc., 233 South Wacker Drive, Suite 4900, Chicago, Illinois, 60606-6303, Attn: Investor Relations Officer, telephone: 1-312-496-1200 or e-mail:InvestorRelations@heidrick.com. These documents are also available on our website at:http://www.heidrick.com/Who-We-Are/Our-Leadership.
Our Board currently consists of eleven directors, including our current President and Chief Executive Officer and ten independent directors. At our 2015Company’s annual meeting the Company’sof stockholders, adopted amendments to the Company’s Certificate of Incorporation to declassify the Board effective at this year’s Annual Meeting. Therefore, beginning with this year’s Annual Meetingand all of our directors will standthem did so in 2021. The Company believes that annual meetings provide an opportunity for election on an annual basis.
Nomineesstockholders to communicate with directors.
Since December 2015, our Board has appointed four new directors. Our new directors bring a wideBOARD DIVERSITY MATRIX
The below matrix outlines the gender and demographic diversity of skills and experiences to the Board, including experience in capital markets, talent and leadership development, and investor relations. Mr. Lyle Logan was appointed to the Board effective December 15, 2015; Ms. Elizabeth Axelrod and Mr. Willem Mesdag were appointed to the Board effective February 5, 2016; and Ms. Clare Chapman was appointed to the Board effective February 23, 2016. These four directors, along with our other currently serving directors, will stand for election to the Board at this year’s Annual Meeting.
Two directors leftcurrent members of our Board, in 2015. Mr. Robert Knowling resigned fromaccordance with Nasdaq’s board diversity disclosure rules.
Board Diversity Matrix (As of April 15, 2022) | ||||
Female | Male | |||
Total Number of Directors: 8 | ||||
Part I: Gender Identity | ||||
Directors | 3 | 5 | ||
Part II: Demographic Background | ||||
African American or Black | 1 | |||
Asian | 1 | |||
White | 3 | 3 |
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BOARD LEADERSHIP
The Board does not have a fixed policy regarding the separation of the offices of Chairman of the Board (the “Chairman”) and CEO and believes that it should maintain the flexibility to select the Chairman and its Board leadership structure, from time to time, based on July 3, 2015. Mr. Robert Kaplan resigned from the Board effective August 20, 2015 upon his appointment as the President and Chief Executive Officer of the Federal Reserve Bank of Dallas. Neither resignation involved any dispute or conflict with management or the Board.
This year, upon the recommendation of our Nominating and Board Governance Committee, our Board nominated Elizabeth L. Axelrod, Richard I. Beattie, Clare M. Chapman, John A. Fazio, Mark Foster, Jill Kanin-Lovers, Gary E. Knell, Jr., Lyle Logan, Willem Mesdag, V. Paul Unruh, and Tracy R. Wolstencroft.
Each of the nominees for 2016 has informed us that they are willing to serve as a director. If any nominee ceases to be a candidate for election for any reason, the Proxy will be voted for a substitute nominee designated by the Company’s Board. The Board currently has no reason to believe that any nominee will not remain a candidate for election as a director or will be unwilling to serve as a director if elected.
Nomination Process
In evaluating, identifying and recommending nominees for the Board, our Nominating and Board Governance Committee considers, among other qualificationscriteria that it deems appropriate, the following:
The potential candidate’s principal employment, occupation or association involving an active leadership role.
The potential candidate’s expertise or experience relevant to the Company’s business that would not be otherwise readily available to the Board.
The potential candidate’s ability to bring diversity to the Board, including whether the potential candidate brings complementary skills and viewpoints.
The potential candidate’s time commitments, particularly the number of other boards on which the potential candidate may serve.
The potential candidate’s independence and absence of conflicts of interest as determined by our Director Independence Standards, the Nasdaq rules and other applicable laws, regulations and rules.
The potential candidate’s financial literacy and expertise.
The potential candidate’s personal qualities including strength of character, maturity of thought process and judgment, values and ability to work collegially.
We do not set specific, minimum qualifications that nominees must meet in order to be recommended to the Board. Each nominee is evaluated based on his or her individual merits, taking into account the needs of the Company and the composition of the Board.
The Nominating and Board Governance Committee discusses and evaluates possible candidates in detail and the Company’s consultants are sometimes employed to help identify potential candidates. When determining whether to recommend a director for re-election, the Nominating and Board Governance Committee considers the director’s past participation in and contributions to Board activities.
Board Diversity
Our Board believes that diversity is an important attribute of a well-functioning board. The Nominating and Board Governance Committee considers diversity (among other factors it deems appropriate) in light of the overall needs and composition of the Board and the best interests of the Company and itsour stockholders. In considering nominee diversity, the event that circumstances facing the Company change, a different leadership structure may be in the best interests of the Company and our stockholders. For this reason, our Board evaluates skills, experience,issues that may be relevant to our leadership structure as part of our annual Board evaluation process.
Mr. Adam Warby has served as our independent Chairman since June 6, 2019. The Chairman’s duties include coordinating the activities of the independent directors, coordinating the agenda for and backgroundmoderating sessions of the Board’s independent directors, and facilitating communications among the other members of the Board. This structure also allows the CEO to focus his energies on the management of the Company. We believe this structure provides strong independent leadership and oversight for our Company and our Board, while positioning our CEO as the leader of the Company for our investors, counterparties, employees and other stakeholders.
Every director on our Board, other than our CEO, is independent. We believe that would complement the existing Board.
Over time, the Board has nominated and currently consistsnumber of independent, experienced directors that generally reflect the diversemake up our Board benefits our Company and expansive global footprint of the Company’s business operations, including a wide range of experiences, as well as diversity of age, gender, race and national origin. Diversity is an important factor that the Nominating and Board Governance Committee will continue to consider when evaluating candidates for nomination to the full Board.our stockholders.
Stockholder Recommendations for NominationsDIRECTOR INDEPENDENCE
Stockholders who wish to recommend individuals for consideration by the Nominating and Board Governance Committee to be nominees for election to the Board may do so by notifying the Company’s Secretary. In addition, the Company’s Amended and Restated Bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting, provided that the appropriate requirements for prior notice to the Company have been satisfied in advance, as described further under “Stockholder Proposals for Next Year’s Annual Meeting.”
Director Independence
Our Board determinesWe determine the independence of all non-employee directors in accordance with the “independence”independence requirements of our Corporate Governance Guidelines, our Director Independence Standards, our Related Party Transaction Policy and the rules of the Nasdaq stock market (“Nasdaq Rules”). Our Corporate Governance Guidelines, our Director Independence Standards and Related Party Transaction Policy can be found at https://investors.heidrick.com/corporate-governance.
Pursuant to the Nasdaq Stock Market listing standards (Nasdaq Rules). Accordingly, each year the Boardpolicies listed above, we affirmatively determinesassess whether each non-employee director has a relationship that would interfere with the exercise of independent judgment in carrying outpursuant to these policies and corporate governance best practices.
In addition to the responsibilities of a director. Annually, each non-employee director is required to complete a questionnaire that provides information about relationships that might affect the determination of independence. Management then providesNominating and Board Governance Committee’s review, the Board with relevant factsconducts an annual review of director independence, during which the Board also considers transactions, relationships and circumstances of any relationship bearing on the independence of aarrangements between each director or nomineean immediate family member of the director and each of the Company and our executive officers.
The Board has determined that are outsideeach of the relationships prohibitedfollowing non-employee directors who served during the last completed fiscal year qualifies as “independent” in accordance with the above listed guidelines, standards and rules: Elizabeth L. Axelrod, Laszlo Bock, Mary E. G. Bear, Clare M. Chapman, Lyle Logan, T. Willem Mesdag, Stacey Rauch, and Adam Warby. As Krishnan Rajagopalan is employed by Nasdaq Rules.
BOARD COMMITTEES
Based onThe Board has three standing committees: the reviewAudit & Finance Committee (“AFC”), the Human Resources and recommendation byCompensation Committee (“HRCC”) and the Nominating and Board Governance Committee the Board analyzed the independence of(“NGC”). We have reviewed and determined that each of the Company’s directors who served at any time during fiscal 2015 and eachmembers of the Company’s current director nominees, and determined that the following directors meet the standards of “independence” under our Corporate Governance Guidelines and the Nasdaq Rules: Robert E. Knowling, Jr. (who resigned effective July 3, 2015), Robert S. Kaplan (who resigned effective August 20, 2015), Elizabeth L. Axelrod, Richard I. Beattie, Clare M. Chapman, John A. Fazio, Mark Foster, Jill Kanin-Lovers, Gary E. Knell, Jr., Lyle Logan, Willem Mesdag, and V. Paul Unruh. Our Board also determined that Tracy R. Wolstencroft, the Company’s current President and Chief Executive Officerstanding committees is not “independent”independent under the standardsprovisions of our Corporate Governance Guidelines, our Director Independence Standards, our Related Party Transaction Policy and Nasdaq Rules. The Board has approved a written charter for each standing committee, which we review annually and revise as appropriate. The charters define each committees’ roles and responsibilities. The charters are available on our website at: https://investors.heidrick.com/corporate-governance.
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The table below outlines membership and the frequency of meetings for each Board committee in 2021.
Name | AFC | HRCC | NGC | |||
Elizabeth L. Axelrod | ![]() | Chair | ||||
Laszlo Bock | Chair | |||||
Mary E. G. Bear | ![]() | |||||
Lyle Logan | ![]() | ![]() | ||||
T. Willem Mesdag | Chair | ![]() | ||||
Krishnan Rajagopalan (CEO) | ||||||
Stacey Rauch | ![]() | ![]() | ||||
Adam Warby (Chairman) | Ex Officio | |||||
Number of Meetings in 2021 | 7 | 4 | 4 |
The Chairman is an ex officio member of the respective committees but is excluded from discussions regarding Chairman compensation. Additionally, the CEO is permitted to attend committee meetings only at the invitation of the respective committee. Accordingly, the CEO is not permitted to attend committee meetings when the independent directors meet in executive session, such as when independent directors conduct performance evaluations or discuss the compensation of the CEO, or any other portion of any committee meeting that the independent directors deem appropriate to conduct outside of the CEO’s presence for any reason.
![]() | AUDIT & FINANCE COMMITTEE (“AFC”) The AFC serves as an independent committee to assist in Board oversight of: |
AFC | ||
The integrity of the Company’s financial statements | ![]() | |
The Company’s compliance with legal and regulatory requirements | ![]() | |
The independent registered public accounting firm’s appointment, retention, qualifications and independence | ![]() | |
The Company’s risk, compliance and internal audit functions | ![]() | |
The review and recommendation to the Board concerning the payment of dividends | ![]() | |
The review of all related party transactions reported to the AFC by the NGC for appropriate financial statement disclosure | ![]() |
In addition, our Board determined that:
the AFC consults with the NGC on the adequacy of the Code of Ethics, reviews the Company’s procedures for detecting violations of and ensuring compliance with the Code of Ethics and reviews violations and waivers of the Code of Ethics. Each member of the Audit and Finance CommitteeAFC is able to read and understand fundamental financial statements (as required under Nasdaq Rules) and meets the heightened standards of independence for audit committee members pursuant to the rules and regulations of the SEC (SEC Rules)(the “SEC Rules”).
John A. Fazio, Lyle Logan Messrs. Mesdag and V. Paul UnruhLogan each qualify as an “audit committee financial expert” within the meaning of the SEC Rules, and both are presumed to be financially sophisticated for purposes of the Nasdaq rules.Rules.
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![]() | NOMINATING AND BOARD GOVERNANCE COMMITTEE (“NGC”) The NGC serves as an independent committee to assist the Board in determining: |
NGC | ||
The criteria for directors and the recommendation of nominees for election to the Board | ![]() | |
Committee membership recommendations | ![]() | |
The independence of directors and committee members under applicable standards | ![]() | |
The Company’s corporate governance policies, including the Corporate Governance Guidelines and Code of Ethics | ![]() | |
The form and amount of director compensation | ![]() | |
Oversight of other board memberships/limits on directorships | ![]() | |
CEO Succession | ![]() | |
The Company’s ESG programs and disclosures | ![]() |
In addition, the NGC coordinates and assists the directors, the Board and its Committees with their annual evaluations. The NGC also reviews and approves related party transactions in consultation with the AFC. All of the members of the NGC are independent within the meaning of the Nasdaq Rules and the Company’s Corporate Governance Guidelines, Director Independence Standards, and Related Party Transaction Policy, which can be found at https://investors.heidrick.com/corporate-governance.
![]() | HUMAN RESOURCES AND COMPENSATION COMMITTEE (“HRCC”) The HRCC serves as an independent committee to assist in Board oversight of: |
HRCC | ||
Administering, recommending and approving all elements of compensation for the CEO and other Executive Officers | ![]() | |
Adopting, administering and approving equity-related incentives and awards under the Company’s equity compensation plans | ![]() | |
Reviewing and approving terms of employment, severance or other compensation-related agreements for any Executive Officer or key employee | ![]() | |
Approving the peer group used for the executive compensation benchmarking purposes | ![]() | |
Providing oversight and risk assessments in connection with Company-wide compensation programs | ![]() | |
Providing guidance on strategically critical human capital matters | ![]() | |
Review annually, in consultation with senior management, the Company’s diversity and inclusion practices, key metrics, and talent pipelines, including succession plans for the CEO’s direct reports | ![]() |
Each member of the Human Resources and Compensation CommitteeHRCC meets the heightened standards of independencequalifications for compensation committee members pursuant to the Nasdaq rulesRules and is a “non-employee“non-employee director” within the meaning of SEC Rule 16b-3,16b-3.
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BOARD OVERSIGHT OF CORPORATE STRATEGY
Our Board takes an active role with management to formulate and review our long-term corporate strategy, including major business and organizational initiatives, growth opportunities and capital allocation priorities. On a quarterly basis the Board is provided a strategic update and management and the Board conduct an “outside director” within the meaningin-depth review of Section 162(m)different aspects of the Internal Revenue Code.corporate strategy. Additionally, on an annual basis the Board and management conduct an in-depth, comprehensive review of the progress made against our strategic goals for the short and long-term.
As highly accomplished individuals in theirBOARD OVERSIGHT OF RISK
Management is responsible for the day-to-day management and assessment of risk at the Company, including communication of the most material risks to the Board and its committees. The Board provides oversight over the risk management practices implemented by management, except for the oversight of risks that have been specifically delegated to a committee of the Board. Even when the oversight of a specific area of risk has been delegated to a committee, the full Board maintains oversight over such risks through the receipt of reports from the respective industries, fieldscommittee chair to the full Board at each regularly scheduled full Board meeting. In addition, if a particular risk is material or where otherwise appropriate, the full Board may assume oversight over a particular risk, even if the risk was initially overseen by a committee.
In its risk oversight role, the Board assesses whether the risk management processes and communities, our directorspolicies designed and implemented by management are affiliated with numerous corporations, educational institutions,adequate and charities,functioning as designed. The Board performs its risk oversight function primarily through its committees as well as civic organizationsreports the Board receives directly from management.
ENTERPRISE RISK
Management undertakes a regular review of a broad set of enterprise risks across the Company’s business and operations to identify, assess, prioritize and manage potential issues. Specific emphasis is placed on identifying those risks that could have the highest impact to the Company and its operations, and the highest likelihood of risk occurrence. Management’s risk assessment also takes into account input from the internal audit function which reports regularly to the AFC, and the Board receives ongoing updates from risk professionals on trends in risk management and in new risks facing the business.
The AFC is responsible for assisting the Board in its responsibility to oversee our enterprise-level risk profile, monitor the processes and systems of enterprise risk management, and mitigate enterprise-wide risks facing the Company, including but not limited to financial, economic, cybersecurity, technology, legal and compliance, operational, reputational, strategic and competitive, talent and ESG related risks.
The directors have direct access to risk professionals. As part of management’s risk identification and mitigation efforts, along with the annual plans for managing and, where appropriate, mitigating significant Company risks that the Board receives, management has created an Incident Response Plan (“IRP”) framework for review and discussion with the Board. The IRP framework articulates the reporting obligations for management to inform the Board of significant incidents and, where appropriate and possible, describe and delineate the Board and/or committee obligations with respect to such incidents, including identifying incidents requiring immediate Board oversight and input.
COMPENSATION RISK
The Company completes an inventory of its executive and non-executive compensation programs globally, with particular emphasis on incentive compensation plans and programs. Based on this inventory, the Company evaluates the primary components of its compensation plans and practices to identify whether those components, either alone or in combination, properly balance compensation opportunities and risk. Based on the Company’s assessments, the Company has determined that none of its compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
Moreover, the HRCC at least annually conducts a risk assessment to determine whether the Company’s incentive compensation plans encourage excessive or inappropriate risk taking, and whether the risks arising from the Company’s compensation plans policies and programs for its employees are reasonably likely to have a material adverse effect on the Company. The Company believes that its overall cash versus equity pay mix, variable versus fixed pay elements, balance of shorter-term versus longer-term performance-focused and revenue-focused (versus profit-focused) performance measures, stock ownership guidelines and use of
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compensation “claw-backs” work together to provide its employees and executives with incentives to deliver outstanding performance to build long-term stockholder value, while taking only necessary and prudent risks.
CODE OF ETHICS
The Board has adopted a Code of Ethics (the “Code”) that applies to all of the Company’s employees, officers and directors, as well as independent contractors working on behalf of the Company. Through our Code, we establish clear ethical and professional associations, manyguidelines, and work though several mechanisms to hold the Company collectively to the highest professional ethical standards.
The Code meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K, and also meets the requirements of a “code of business conduct and ethics” under Nasdaq Rules. All employees generally are required to certify that they have reviewed and are familiar with the Code annually. The Code can be located in its entirety on the Company’s website at https://investors.heidrick.com/corporate-governance.
ETHICSLINE
The Board also has established the Heidrick & Struggles EthicsLine (the “EthicsLine”), a service that provides a mechanism for reporting to the Company alleged breaches of any legal or regulatory obligations, financial fraud, including accounting, internal controls and auditing, or any alleged violation of the Code or corporate policies. The EthicsLine is a web-based and telephonic reporting hotline available to all Company employees, contractors, vendors, stockholders, clients or other interested parties. The EthicsLine is administered by an independent third party that is separate from Heidrick and specializes in running whistleblower hotline programs for multinational companies. Calls are not recorded and callers may remain anonymous. The EthicsLine is operational 24 hours a day, seven days a week. To contact the EthicsLine, you may dial 800-735-0589 toll-free in the U.S. or 704-731-7242 outside the U.S. or by visiting www.Heidrick.ethicspoint.com. All such communications received through the EthicsLine are handled in accordance with the procedures established by the AFC.
DATA PRIVACY
Data is critical to our business. Trust in how we handle that data is essential. We continue to build awareness and expertise around data ethics as we develop new and innovative ways of working with data and focus on a privacy by design approach globally, with our core values of integrity and respect being central to our approach.
Our clients, candidates and participants have growing expectations and interest in how data is handled, and we have responded by equipping our staff with the knowledge, resources and subject matter experts to ensure we can meet those needs. We continue to integrate data ethics training and awareness across the business, in addition to mandatory annual security training for all staff. It is important that all our staff understand and take responsibility for their actions when handling data. We also continue to evolve our approach to data governance, working across multiple functions to build a consolidated and systematic approach to data protection. As a proud leader in our industry, we strive to set an example of best data privacy practices.
Heidrick is privileged to interact with hundreds of thousands of individuals as they go on a professional journey of assessment, development and potentially new roles. This is something we do not take for granted. We are subject to federal, state, and foreign laws regarding privacy and protection of people’s data, including the EU’s and UK’s General Data Protection Regulation (“GDPR”). We have a global privacy program to facilitate our ongoing efforts to comply with global privacy regulations, including GDPR and other rapidly emerging privacy and data protection laws in countries such as China and the UK, or states in the U.S. such as California, Virginia and Colorado.
As an international business, we focus on staying apprised of local developments for privacy and data protection laws across the globe. As part of our response to new laws enacted in China in 2021, we introduced a Withdrawal of Consent option for residents in China. Additionally, we will introduce new standard contractual clauses in response to changes in EU law. As part of our data governance processes, we periodically assess our data privacy compliance program with external experts to review and focus our future plans. We will continue our efforts to make our dealings in relation to personal data transparent, empowering individuals to make informed choices in the process.
We maintain a Data Subject Rights Hotline designed to enable our data subjects to easily submit a Data Subject Rights request. The Data Subject Rights Hotline is a telephonic reporting hotline administered by a third party that is separate and independent of
| GOVERNANCE 15
Heidrick and specializes in running compliance hotline programs for companies throughout the U.S. The Data Subject Rights Hotline is operational 24 hours a day, seven days a week. Data subject rights requests may be submitted by visiting www.heidrickdsr.ethicspoint.com, or by calling our U.S. and Canada toll-free number: 1-844-916-1329. Country specific privacy email contacts have also been set up for China and our Data Protection Representative in Europe, in addition to our global privacy email contact, all of which may be located on our website: https://www.heidrick.com/en/privacy/privacy-notice-english.
INFORMATION SECURITY AND CYBERSECURITY
Confidentiality and information security are core to our corporate vision and values. It takes a combination of people, technical safeguards and processes to protect information for which we are responsible. Our security program, policies, standards, processes, tools and talent are aligned with the purpose of preventing and mitigating any potential data leakage. We also continually evaluate operating effectiveness of our security measures. Some key safeguards we have business, charitable undertaken include, but are not limited to:
Information security policies based on the ISO 27001 framework
Well documented processes to provide and remove access, security incident response, IT change control, and software development lifecycle
Regular patch & vulnerability management and penetration testing
Access provided on a “need to know” basis applied with “least privilege” principle
Remote access using multi-factor authentication for employees
Use of data centers protected by physical and environmental controls
Encrypted data transmission
Our key SaaS providers undergo regular, independent SOC1/SOC2 audits
Third party information risk management processes
Regular security awareness training, including annual online security awareness training required for all users of our systems. This interactive training covers topics like phishing, social engineering, mobile & device security and protection of sensitive information
24/7/365 security monitoring
The AFC, comprised entirely of independent directors, assists the Board in its responsibilities of overseeing that the Company has established, documented, maintained and periodically reevaluates its processes with respect to cybersecurity. Management briefs the AFC on cybersecurity matters no less than once per year, and in 2021 Management provided cybersecurity updates to the AFC and/or other relationshipsBoard four times during the course of the year. Further, the Company’s enterprise level IT general controls are audited annually by the Company’s internal audit function and the Company’s independent registered public accounting firm, RSM US LLP.
The Company also maintains a cyber enterprise risk management insurance policy, which would potentially defray some of the costs associated with each other or our Company. a breach. In the last three years, the Company has not experienced an information security breach, and as a result, the Company’s net expenses associated with information security breaches have not impacted total revenue.
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Election of Directors
The Board consideredrecommends a vote “FOR” each of thesethe director nominees named below. We have refreshed our Board over the past five years, as five highly-qualified directors have been added since 2017. We believe that the Board possesses the appropriate mix of diversity in terms of gender, age, race, national origin, skills, experience, viewpoints and service on our Board and the boards of other organizations.
DIRECTOR NOMINEES
There are seven nominees to be considered for election to our Board: Elizabeth L. Axelrod, Mary E. G. Bear, Lyle Logan, T. Willem Mesdag, Krishnan Rajagopalan, Stacey Rauch and Adam Warby. All of the nominees currently serve as directors on the Board, and with the exception of Ms. Bear, were elected to the Board by the stockholders at the 2021 annual stockholders meeting. Ms. Bear was recommended to our NGC as a potential nominee by our internal board search professionals. Each director nominee has agreed to be named in this proxy statement. As discussed above, Mr. Bock has decided not to stand for reelection at the Annual Meeting.The Company acknowledges and appreciates Mr. Bock’s years of service and contributions to Heidrick.
The Board Matrix below under “Criteria for Considering Director Nominees” summarizes key qualifications, skills and attributes relevant to the decision to nominate each candidate for service on the Board.
The nominees’ biographies below describe each candidate’s background and relevant experience in more detail. The nominees are identified and discussed in the paragraphs below for election at this year’s Annual Meeting and to each serve a one-year term expiring at the 2023 annual stockholders’ meeting. Each director will hold office until their successor has been elected and qualified or until the director’s earlier resignation or removal.
CRITERIA FOR CONSIDERING DIRECTOR NOMINEES
In considering potential candidates for election to the Board, including with respect to incumbent directors and stockholder recommended candidates, the NGC shall consider, among other qualifications that it deems appropriate, the following:
Potential Criteria | ||
The potential candidate’s principal employment, occupation or association involving an active leadership role. | The potential candidate’s expertise or experience relevant to the Company’s business that would not be otherwise readily available to the Board. | |
The potential candidate’s personal qualities including strength of character, maturity of thought process and judgment, values and ability to work collegially. | The potential candidate’s time commitments, particularly the number of other boards on which the potential candidate may serve. | |
The potential candidate’s independence and absence of conflicts of interest as determined pursuant to the Director Independence Standards, the Nasdaq rules and other applicable laws, regulations and rules. | The potential candidate’s ability to bring diversity to the Board, including whether the potential candidate brings complementary skills, experience, viewpoints and/or self-identified diversity characteristics, including gender, age, ethnicity, and national origin. | |
The potential candidate’s financial literacy and expertise. |
| GOVERNANCE 17
Consistent with our company-wide priorities of diversity and inclusion, one of the criteria the NGC takes into account when considering potential candidates for election to the Board is the potential candidate’s ability to bring diversity to the Board. The NGC considers the self-identified diversity characteristics of each director or potential director candidate, including gender, age, ethnicity, skills, experience, viewpoints and service on our Board. Additional information about each nominee can be found below in the Board Matrix and in each of the Director Biographies below.
Stockholders who would like the NGC to consider their recommendations for director nominees should submit their recommendations to the Secretary of the Company at: Heidrick & Struggles International, Inc., Attn: Corporate Secretary, 233 S. Wacker Drive, Suite 4900, Chicago, Illinois 60606. Properly submitted director nominee recommendations by stockholders will receive the same consideration by the NGC as other suggested nominees.
DIRECTOR QUALIFICATIONS
The Board, acting through the NGC, considers its members, including those directors being nominated for reelection to the Board at the Annual Meeting, to be highly qualified for service on the Board. Generally, the Board seeks individuals with broad-based experience and the background, judgment, independence, and integrity to represent the stockholders in overseeing the Company’s management in their operation of the business.
The NGC reviewed, updated and evaluated the Board’s skill and experience matrix and evaluated each of the directors’ qualifications against the Company’s long-term strategic plans. Within this framework, specific items relevant to the Board’s determination for each director are listed in each director’s biographical information beginning on page 21. The directors’ ages are shown as of April 1, 2022. There are no family relationships among our directors or executive officers.
18 GOVERNANCE |
BOARD MATRIX
Listed below are certain skills, qualifications and experience that we consider important for our director nominees in light of our independence standardscurrent business strategy and determined that none of these relationships conflict with the interests of the Company, or would impair anystructure. The directors’ biographies note each director’s independence or judgment.
In makingrelevant experience, qualifications, and skills relative to this determination the Board considered material relationships among the directors and the Company, including the circumstances resulting from the concurrent service to the National Geographic Society (Society) of the Company’s President and Chief Executive Officer, Tracy R. Wolstencroft, and Chair of the Board’s Nominating and Board Governance Committee, Gary E. Knell. Mr. Knell serves on the board of trustees of the Society, and he became president and CEO of the Society on January 6, 2014. Mr. Wolstencroft also serves on the board of trustees of the Society, but does not serve, and has not served, on the compensation committee of the Society. The Board determined that these circumstances do not present either a conflict of interest or a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director on the part of either Mr. Wolstencroft or Mr. Knell.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR THE ELECTION OF EACH OF THE DIRECTORS LISTED BELOW.
The tables that follow contain certain information about each member of the Board, along with his or her principal occupation for at least the previous five years and other professional experience and achievements. Each director has been identified as possessing the requisite skills, experience and attributes that qualify him or her to serve as a member of the Company’s Board. There are no family relations among any directors, executive officers, or persons nominated to become a director.
NOMINEES FOR ELECTION AS DIRECTORSlist.
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EXPERIENCE | Axelrod | Bear | Logan | Mesdag | Rajagopalan | Rauch | Warby | ||||||||||||||
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PUBLIC COMPANY BOARD EXPERIENCE | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
| GOVERNANCE 19
20 GOVERNANCE |
Elizabeth L. Axelrod Elizabeth L. Axelrod, 59, served as the Global Head of Employee Experience for Airbnb (travel and hospitality service) until her retirement in August 2021. Previously, she served as the Senior Vice President, Human Resources for eBay Inc. (ecommerce corporation that facilitates consumer to-consumer and business-to-consumer sales through its website) from March 2005 to July 2015. Prior to her tenure at eBay, Ms. Axelrod served as the Chief Talent Officer for WPP PLC, a global communications services group where she was also an Executive Director, and as a partner at McKinsey & Company. She is co-author of The War for Talent, published by Harvard Business School Press in 2001. Ms. Axelrod is a proven human resources executive with a professional services background. She is also a thought leader in talent management which is core to | ||||||||||
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Mary E. G. Bear Mary E. G. Bear (“Meg”), 50, has been a Product and Engineering leader for SAP (enterprise management software) since 2019, and Chief Product Officer for SAP SuccessFactors since July 2021. Previously, she was SVP of product, data and engineering at Juvo (mobile data analytics) from 2018 to 2019. Ms. Bear provided digital transformation and Ms. Bear specializes in strategic, and operational leadership that fuels growth and profitability. A product innovator that delivers disruptive global technology solutions at scale, she has extensive experience across a broad spectrum of technical and business domains, specializing in technology driven growth strategies. Ms. Bear is a patent holder, keynote speaker, TEDx host, change agent and startup advisor and investor. Her expertise is identifying, developing and scaling technology solutions from concept to profit encompassing business strategy, product management, product development, mergers and acquisitions, and market acceleration. |
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| GOVERNANCE 21
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Lyle Logan
| Mr. Logan has also In addition to his financial acumen and deep understanding of capital markets, Mr. Logan also brings significant experience as a client-facing leader in the financial services industry. | Director Since: December 15, 2015 Board Committees: Audit & Finance, Nominating and Board Governance |
T. Willem Mesdag
| T. Willem Mesdag, 68, is the Heidrick’s Board benefits from Mr. Mesdag’s extensive experience in capital markets, corporate strategy and | Director Since: February 23, 2016 Board Committees: Audit & Finance (Chair), Human Resources and Compensation |
22 GOVERNANCE |
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| Mr. Through his day-to-day management of the Company as President and | Director Since: July 6, 2017 |
Our governance structure and processes are based on a number of important governance documents including our Code, Certificate of Incorporation, Bylaws, Corporate Governance Guidelines and our Board Committee Charters. Our governance documents are designed to ensure that our Board has practices in place to review and evaluate our business operations and to make decisions that are independent of management. Our corporate governance documents are reviewed periodically and updated as necessary to reflect changes in regulatory requirements and evolving corporate governance practices.
Stacey Rauch Stacey Rauch, 64, is a Director (Senior Partner) Emeritus of McKinsey & Company from which she retired in September 2010. She was a leader in McKinsey’s Retail and Consumer Goods Practices, served as the head of the North American Retail and Apparel Practice, and acted as the Global Retail Practice Convener. A 24-year veteran of McKinsey, Ms. Rauch led engagements for a wide range of retailers, apparel wholesalers, and consumer goods manufacturers in the U.S. and internationally. Ms. Rauch was a co-founder of McKinsey’s New Jersey office, and was the first woman at McKinsey appointed as an industry practice leader. She also served on a number of McKinsey’s global personnel committees. Ms. Rauch is currently the Chairman of the Board of the Fiesta Restaurant Group (owner and operator of quick-casual restaurants), where she chairs the Corporate Governance and Nominating Committee and sits on the Remuneration Committee. She was formerly a member of the boards of Land Securities Group, PLC, Ascena Retail Group, CEB, Inc., Ann, Inc. and the Tops Holding Corporation. Ms. Rauch’s strategic leadership and consulting expertise, coupled with her deep experience as an international business leader, adds important perspectives and diverse insights to the Board. | Director Since: February 1, 2019 Board Committees: Audit & Finance; Nominating and Board Governance Committee and if elected as a director, Ms. Rauch would serve as its Chair |
Our Board is committed to maintaining strong corporate governance principles and practices. The following is a summary of our corporate governance structure and documents. If you would like copies of our governance documents, or additional information about our corporate governance practices, please visit our website at:http://www.heidrick.com/Who-We-Are/Our-Leadership. | GOVERNANCE 23
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines to help it fulfill its responsibilities to the stockholders in overseeing the work of management and the Company’s business results. Among other things, the Corporate Governance Guidelines establish the practices the Board follows with respect to Board composition, practices and selection, as well as Board meetings, conflicts of interest and the criteria for considering director nominees. In addition, the Corporate Governance Guidelines are intended to align the interests of directors and management with those of the Company’s stockholders.
Code of Business Conduct
Adam Warby, Chairman Adam Warby, 61, served as Chief Executive Officer of Avanade Inc., a leading global provider of professional services for Microsoft digital, cloud and business solutions, from September 2008 to September 2019. Mr. Warby joined Avanade Inc. from Microsoft Corporation as a founding member of this joint venture created by Accenture LLP and Microsoft in April 2000, and was instrumental in managing and growing global business operations, as well as shaping the culture of a diverse team of more than 35,000 digitally connected people across 24 countries. A true global citizen, including living in the United States for seven years, he served as General Manager and Executive Vice President for Avanade’s North American and European operations during his tenure. As Chief Executive Officer of Avanade, Mr. Warby led both organic and inorganic growth, including six acquisitions across Asia, Europe and North America, resulting in annual sales in excess of $3 billion, an amount that more than doubled under his leadership. Mr. Warby also serves on the board of SimCorp A/S and Software ONE Holding AG. He also sits as a Senior Advisor on KKR’s European Private Equity Portfolio Management Committee and is Chairman of the Board of Junior Achievement Europe. Through over 31 years of strategic leadership and consulting experience, spanning his time at IBM, Microsoft and Avanade, Mr. Warby brings a unique understanding and experience of applying technology in both innovative and practical ways to address the opportunities and challenges faced by the digital transformations Heidrick’s clients are facing today. | Director Since: January 1, 2018 Board Committees:Ex Officio member of all committees |
The Board has adopted a Code of Business Conduct & Ethics (Code) that applies to all of the Company’s employees, officers and directors, as well as independent contractors working on behalf of the Company. Our Code meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K, and also meets the requirements of a “code of business conduct and ethics” under Nasdaq Rules. All employees generally are required to certify that they have reviewed and are familiar with the Code annually.
Ethics Line
The Board also has establishedrecommends a vote “FOR” each of the Heidrick & Struggles EthicsLine (EthicsLine),foregoing nominees.
24 GOVERNANCE |
NON-EMPLOYEE DIRECTOR COMPENSATION
We compensate non-employee directors for their service on the Board with a servicecombination of cash and equity awards that provideswe believe are commensurate with their role and involvement, and consistent with peer company practices. We intend to compensate our non-employee directors in a mechanism for reportingway that is competitive, attracts and retains a high caliber of directors, and aligns their interests to our stakeholders. The NGC annually reviews and makes recommendations to the Company alleged breachesBoard regarding the level and form of any legal or regulatory obligations, financial fraud,compensation paid to non-employee directors, including accounting, internal controlsour director compensation program’s underlying principles. As part of this analysis, the independent compensation consultant also provides guidance to the NGC with respect to director compensation trends and auditing, or any alleged violationdata from peer companies. Pursuant to the review, and in consideration of the Code or corporate policies. The EthicsLineindependent compensation consultant’s advice, the NGC recommended no changes to the non-employee director compensation program for 2021. Mr. Rajagopalan, who is a telephonic reporting hotline (toll freedirector and is also our President and CEO, does not receive any additional compensation for his service on our Board.
Directors may elect to defer up to one hundred percent of their cash compensation per year pursuant to our Voluntary Deferred Compensation Plan (the “VDC Plan”). All directors are reimbursed for their out-of-pocket expenses incurred in connection with their duties as directors.
Each non-employee director receives an annual equity award of either restricted stock units (“RSUs”) or shares of common stock with a value of approximately $115,000, awarded on the date of each annual meeting of stockholders. The RSUs remain unvested until the director retires from the Board. Additionally, non-employee directors receive a cash retainer of $75,000 each per year, payable quarterly in arrears. In addition, the Board chairperson and committee chairpersons and members receive compensation for their service as outlined below.
Role | Cash Retainer | ||||
AFC Member | $ | 10,000 | |||
AFC Chair (in addition to the AFC member retainer) | $ | 30,000 | |||
HRCC Chair | $ | 30,000 | |||
NGC Chair | $ | 10,000 | |||
Chairman of the Board of Directors | $ | 100,000 |
| GOVERNANCE 25
The compensation of our non-employee directors, including all RSUs or shares of common stock, for the 2021 fiscal year is set forth in the U.S.) availabletable below and described in the accompanying footnotes.
Name | Fees Earned or ($)1 | Stock Award ($)2 | All Other Compensation ($) | Total ($) | ||||||||||||||||
Elizabeth L. Axelrod | $ | 85,000 | 3 | $ | 115,019 | 11 | $ | 0 | $ | 200,019 | ||||||||||
Mary E. G. Bear | $ | 20,380 | 4 | $ | 0 | $ | 0 | $ | 20,380 | |||||||||||
Laszlo Bock | $ | 92,885 | 5 | $ | 115,019 | 12 | $ | 0 | $ | 207,904 | ||||||||||
Clare M. Chapman | $ | 42,693 | 6 | $ | 0 | $ | 0 | $ | 42,693 | |||||||||||
Lyle Logan | $ | 85,000 | 7 | $ | 115,019 | 11 | $ | 0 | $ | 200,019 | ||||||||||
T. Willem Mesdag | $ | 115,000 | 8 | $ | 115,019 | 12 | $ | 0 | $ | 230,019 | ||||||||||
Stacey Rauch | $ | 85,000 | 9 | $ | 115,019 | 11 | $ | 0 | $ | 200,019 | ||||||||||
Adam Warby | $ | 175,000 | 10 | $ | 115,019 | 12 | $ | 0 | $ | 290,019 |
1 | Reflects cash compensation earned by each director in 2021 and includes any amounts deferred at the director’s election under our VDC Plan, described above. |
2 | Reflects the grant date fair value for financial reporting purposes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“ASC Topic 718”) for shares of common stock or RSUs granted under the Third Amended and Restated Heidrick & Struggles 2012 GlobalShare Plan (the “GlobalShare Plan”). |
3 | Ms. Axelrod earned an additional cash retainer of $10,000 as Chair of the NGC. |
4 | Ms. Bear was appointed to the Board on September 23, 2021. This amount reflects the prorated cash retainer Ms. Bear earned as a member of the Board. |
5 | Mr. Bock was appointed Chair of the HRCC, effective May 27, 2021. Mr. Bock earned an additional prorated cash retainer of $17,885 as Chair of the HRCC. All of Mr. Bock’s fees were deferred pursuant to our VDC Plan. |
6 | Ms. Chapman retired from the Board on May 27, 2021. This amount includes the prorated cash retainer Ms. Chapman earned as a member of the Board. Ms. Chapman earned an additional prorated cash retainer of $12,198 as the Chair of the HRCC. |
7 | Mr. Logan earned an additional cash retainer of $10,000 as a member of the AFC. |
8 | Mr. Mesdag earned an additional cash retainer of $30,000 as Chair of the AFC and $10,000 as a member of the AFC. All of Mr. Mesdag’s fees were deferred pursuant to our VDC Plan. |
9 | Ms. Rauch earned an additional cash retainer of $10,000 for being a member of the AFC. |
10 | Mr. Warby earned an additional cash retainer of $100,000 as Chairman of the Board. All of the $175,000 in fees earned were paid to Warby Ltd., a company in which Mr. Warby is the controlling shareholder. |
11 | The amount reflects the aggregate grant date fair value of shares of common stock granted on May 27, 2021 (the date of the 2021 annual stockholders’ meeting). The award was equal to the annual equity retainer of $115,000 divided by the closing stock price on the date of grant of $43.85 rounded to nearest whole share, resulting in 2,623 shares of common stock. |
12 | The amount reflects an award of RSUs granted on May 27, 2021 (the date of the 2021 annual stockholder meeting) with the same value as the award of common stock described in footnote 11 above. The amount reflects the aggregate grant date fair value of RSUs granted on May 27, 2021, calculated in accordance with ASC Topic 718. The value of the award was $115,000 divided by the closing stock price on the date of grant of $43.85 rounded to nearest whole share, resulting in 2,623 RSUs. As of December 31, 2021, the aggregate RSUs granted and outstanding were as follows: 7,623 for Mr. Bock, 0 for Ms. Bear, 25,343 for Mr. Mesdag, and 14,144 for Mr. Warby. |
The Company’s stock ownership guidelines for directors require each non-employee director to allown three times their annual cash retainer in Company employees, contractors, vendors, stockholders, clients or other interested parties. The EthicsLine is administered by a third party that is separate and independentcommon stock within three years of Heidrick and specializes in running whistleblower hotline programs for companies throughoutjoining the U.S. Calls are not recorded and callers may remain anonymous. The EthicsLine is operational 24 hours a day, seven days a week and may be reached at1-800-735-0589 or, if calling from outside the United States, at1-704-731-7242.
Board Leadership and Structure
The Board does not have a fixed policy regarding the separationBoard. As of March 31, 2022, each of the officesnon-employee directors has either satisfied the stock ownership guidelines or is on track to do so in compliance with the guidelines.
26 �� GOVERNANCE |
All of Chairmanthe Executive Officers have been appointed by and serve at the pleasure of the Board (Chairman)of Directors. Below is the name, age, present title, principal occupation and certain biographical information for each of the Company’s Executive Officers as of April 1, 2022.
Krishnan | Mr. Rajagopalan, 62, has been our President and Chief Executive Officer since July 6, 2017. He served as acting President and CEO from April 3, 2017 until July 6, 2017. Prior to becoming President and CEO, Mr. Rajagopalan served as Executive Vice President and Managing Partner – Executive Search since January 2016. Previously, he served as Head of Global Practices beginning in April 2014 and was appointed an Executive Vice President on January 1, 2015. Mr. Rajagopalan has served in other leadership roles with Heidrick, including Global Practice Managing Partner, Technology & Services from 2010 to 2014 and Global Practice Managing Partner, Business/Professional Services from 2007 to 2010. Mr. Rajagopalan joined the firm in 2001 in executive search. He has served on the Board of the Company since July 6, 2017. | |
Michael Cullen | Mr. Cullen, 56, was appointed Chief Operating Officer on January 1, 2019. Mr. Cullen joined Heidrick in April 2008 and served as the Managing Partner – Americas Technology & Services through April 2014. Mr. Cullen then served as Global Practice Managing Partner – Technology and Services from April 2014 through December 2017. From January 2018 to January 2019 he was Group Chief Operating Officer. In his current role as Chief Operating Officer, he is responsible for global field operations, client operations, and practice management, across all lines of business and all industry practices. His team has full P&L responsibility and all field resources under their management. He also oversees information technology and shared services. Prior to joining Heidrick, Mr. Cullen was the Head of the Office of Executive Talent at EMC Corporation (now Dell EMC). | |
Mark Harris | Mr. Harris, 51, was appointed Chief Financial Officer of the Company on March 19, 2018. He had been serving as the Deputy Chief Financial Officer of the Company since February 2018. Before then, since 2015, Mr. Harris had been CFO at Hercules Capital, Inc. a publicly traded business development company, where he was responsible for finance, accounting, operations, legal and investor relations, as well as a voting member of the Investment Committee. Prior to that, Mr. Harris worked at Avenue Capital Group for over nine years, where he served as their Senior Managing Director/Head of Asia, in which he led the entire Asian investment strategy and before that, their Chief Financial Officer. Prior to working at Avenue Capital Group, from 2004 to 2006 Mr. Harris served as Corporate Financial Controller and Chief Accounting Officer at Hutchinson Telecommunications, a publicly traded telecommunications company based in Hong Kong. Prior to Hutchinson Telecommunications, Mr. Harris was a Manager at PricewaterhouseCoopers in their Global Capital Markets Group. |
| GOVERNANCE 27
Sarah Payne | Ms. Payne, 51, was appointed Chief Human Resources Officer on January 1, 2019. She is responsible for working closely with leaders within the firm and in setting and executing a global talent strategy that supports the near and long-term business objectives for Heidrick. Ms. Payne joined Heidrick in 2015, serving as Vice President – Global Compensation and Human Resources, America until 2017 when she led global total rewards strategy and design, in addition to leading HR for the Americas Region. From 2017 until her appointment as CHRO in 2019, Ms. Payne served as Vice President – Human Resources, Global Executive Search where she served as a business partner to Heidrick’s global Executive Search leaders. Prior to joining Heidrick, Sarah held human resources leadership positions within Executive Compensation, Total Rewards, Talent Acquisition and as a Human Resources Director within global agribusiness and satellite communications firms. | |
Tracey Heaton | Ms. Heaton, 52, was appointed Chief Legal Officer and Corporate Secretary on November 15, 2021. Most recently, from February 2015 to July 2020 Tracey served as Senior Vice President and Chief Corporate Counsel for Visa Inc. and was a key member of the company’s senior legal leadership team. She advised Visa’s board of directors and C-suite executives and managed a team of more than 20 lawyers and legal professionals. Under her leadership, her team provided legal support for a wide variety of commercial and corporate areas, including: mergers, acquisitions and strategic venture investments; securities and public company reporting; ESG; treasury and finance; marketing and sponsorships; trademark portfolio and global entity management; and employment and executive compensation. Previously, Tracey served as Executive Vice President and Deputy General Counsel at NYSE Euronext Inc. and as Associate General Counsel at United Technologies Corporation. Tracey also held roles as an associate in the corporate group of Milbank, Tweed, Hadley & McCloy, LLP, while based in New York and Hong Kong, and in the corporate department of Dechert LLP. |
Each of our Executive Officers has entered into an employment agreement with the Company, which contain customary restrictive covenants in favor of the Company. Each Executive Officer also participates in the Company’s MIP, CIC Plan, Severance Plan, equity programs and vacation and benefit plans at the same level as other senior executives, as outlined below in further detail.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Various Company policies and procedures and annual questionnaires completed by all Company directors and Executive Officers require disclosure of transactions or relationships that may constitute conflict of interest or otherwise require disclosure under applicable SEC and Nasdaq Rules. Pursuant to the Related Party Transaction Policy and committee charters, the NGC—in consultation with the AFC—reviews and approves related party transactions.
The process for reviewing certain relationships and related party transactions are outlined in the Company’s Related Party Transaction Policy, Director Independence Standards and Policy on Resolution of Conflicts of Interest for Directors and Executive Officers. Depending on the particular transaction or relationship, the Company’s review processes vary. When such a transaction or relationship is identified at the Chief Executive Officer or Board level, the NGC and/or its Chair, or in the instance of a potential conflict with the Chair of the NGC, the Board as whole, evaluates the transaction or relationship and believes thatapproves or ratifies it should maintain(without the flexibility to select the Chairman and its Board leadership structure, from time to time, based on the criteria thatvote of any interested person) only if it deemsis judged to be fair and in the best interests of the Company and its stockholders.Company.
At this time, the position of Chairman is held by Richard I. Beattie and the position of President and Chief Executive Officer is held by Tracy R. Wolstencroft. The Board has determined that, under current circumstances,
the separation of the offices of Chairman and Chief Executive Officer will enhance oversight of management and Board function. This separation is designed to allow Mr. Wolstencroft the ability to focus on his responsibilities of running the Company, enhancing shareholder value and expanding and strengthening the Company’s business. Concurrently, Mr. Beattie, as Chairman can focus on leadership for the Board as it provides advice to and independent oversight of management. The Chairman also is responsible for setting the agendas and presiding over meetings of the Board (including executive sessions of the independent directors) and providing feedback and counsel to the Chief Executive Officer. The Board currently believes that this leadership structure is in the best interests of the Company’s stockholders at this time.
Risk Oversight
Risk is inherent with every business and management is responsible for the day-to-day management of the risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes and policies designed and implemented by management are adequate and functioning as designed. The Board performs its risk oversight function primarily through its committees as well as reports directly from management.
Enterprise Risk. Our management has implemented an Enterprise Risk Management assessment process to identify, assess, prioritize and manage a broad set of risks across our business and operations. The assessment process includes a thorough survey of senior leaders and a select group of directors to identify the material risks to the Company. Specific emphasis is placed on identifying those risks that could have the highest impact to our Company and operations, and the highest likelihood of occurrence for those risks. Our survey process also takes into account input from our internal audit function that reports regularly to our Audit and Finance Committee. Our Audit and Finance Committee and Board each received an annual report containing an overview of top risks identified by the survey, along with plans for managing and, where appropriate, mitigating them. The material elements of oversight of the risks identified by the survey are delegated to the committees of the Board, and all risks are reviewed within those committees and discussed with the entire Board in the ordinary course.
Compensation Risk. The Company periodically completes an inventory of its executive and non-executive compensation programs globally, with particular emphasis on incentive compensation plans and programs. Based on this inventory, the Company evaluates the primary components of its compensation plans and practices to identify whether those components, either alone or in combination, properly balance compensation opportunities and risk. Based on the Company’s periodic assessments, the Company has determined that none of its compensation policies and practices is reasonably likely to have a material adverse effect on the Company. The Company believes that the Company’s overall cash versus equity pay mix, variable versus fixed pay elements, balance of shorter-term versus longer-term performance focus and revenue-focused versus profit-focused performance measures, stock ownership guidelines, and use of “claw-backs” work together to provide its employees and executives with incentives to deliver outstanding performance to build long-term stockholder value, while taking only necessary and prudent risks.
Board Committees
Our Board has three standing committees, our Audit and Finance Committee, Human Resources and Compensation Committee and Nominating and Board Governance Committee. Each standing committee has a written charter, and the Board has determined that each of the members of our standing committees is “independent” under the provisions of our Corporate Governance Guidelines,Related Party Transaction Policy, Director Independence Standards and Nasdaq RulesPolicy on Resolution of Conflicts of Interest for Directors and that eachExecutive Officers can be found at: https://investors.heidrick.com/corporate-governance. In addition, it is the practice of the membersNGC, although not part of a written policy, to review each transaction specifically disclosed as a potential related party transaction in connection with its review of the Auditproxy statement for the annual meetings of stockholders, to the extent any such transaction has not previously been reviewed, applying the same standard.
Pursuant to our Related Party Transaction Policy, on a semi-annual basis, as requested by the NGC or the Company’s Chief Legal Office, each director and Finance CommitteeExecutive Officer is “independent” underrequired to disclose in writing to the heightened standards of the SEC Rules for audit committee members and that each of the members of the Human Resources and Compensation Committee is “independent” under the heightened standards of the Nasdaq rules for compensation committee members.
Meetings
Our BoardCompany all pertinent information regarding their related parties and each standing Committee holds regularly scheduled quarterly meetings. Typically, our Audit and Finance Committee and Human Resources and Compensation Committee meetings occur the day prior to the meetingscharitable or non-profit organization for which such director or Executive Officer (or any of the Nominating and Board Governance Committee and the Board. At least oncehis or her related parties) is actively involved in fundraising or otherwise serves as a year, the Board devotes additional time to presentations and discussions with senior management about the Company’s long-term strategy, which is then supplemented, updated and discussed further at the Board’s quarterly meetings. In addition to the quarterly meetings, typically there are special meetings each year.director, trustee or in a similar capacity.
We expect our directors to attend all Board and committee meetings for those committees on which they serve. Directors are also expected to attend each annual stockholders meeting. During 2015, the Board and the Nominating and Board Governance Committee each met four times, the Audit and Finance Committee met eight times and the Human Resources and Compensation Committee met six times. Generally, the independent directors met in executive session during a portion of all regularly scheduled quarterly Board meetings without management present. Each of the directors attended at least 75 percent of the meetings of the Board and the committees of which he or she was a member. All of the Company’s directors whoThere were directors at that time attended the 2015 Annual Meeting of Stockholders in person.
Audit and Finance Committee
The Audit and Finance Committee of the Board currently consists of five independent directors, Messrs. Fazio, Logan, Mesdag, and Unruh and Ms. Kanin-Lovers. Mr. Fazio is the Chair of the Audit and Finance Committee. The Board has determined that Messrs. Fazio, Logan, and Unruh are “audit committee financial experts” as defined by SEC Rules and are presumed to be financially sophisticated for purposes of the Nasdaq rules. Among other things, the Audit and Finance Committee appoints an independent registered public accounting firm annually to audit the Company’s books and records; meets with and reviews the activities and the reports of the Company’s independent registered public accounting firm; and reports the results of the review to the Board. The Audit and Finance Committee also periodically reviews the adequacy of the Company’s internal controls, pre-approves all services to be provided by the Company’s independent registered public accounting firm, oversees management’s risk policies and discusses the Company’s key risk exposures with management. These and other aspects of the Audit and Finance Committee’s authority are more particularly described in the Audit and Finance Committee Charter.
Nominating and Board Governance Committee
The Nominating and Board Governance Committee currently consists of four independent directors, Messrs. Beattie, Knell, and Logan, and Ms. Chapman. Mr. Knell is the Chair of the Nominating and Board Governance Committee. The Nominating and Board Governance Committee makes recommendations to the Board concerning candidates for nomination to the Board, the membership on committees of the Board, compensation of the Board and other corporate governance matters. The Nominating and Board Governance Committee also reviews and approvesno related party transactions. These and other aspects of the Nominating and Board Governance Committee’s authority are more particularly described in the Nominating and Board Governance Committee Charter.
Human Resources and Compensation Committee
The Human Resources and Compensation Committee currently consists of five independent directors, Mmes. Kanin-Lovers, Axelrod, and Chapman, and Messrs. Foster and Unruh. Ms. Kanin-Lovers is the Chair of the Human Resources and Compensation Committee. Each member also qualifies as a “non-employee director” for purposes of Section 16 of the Securities Exchange Act of 1934 and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code.
The Human Resources and Compensation Committee reviews and approves employment and compensation matters involving the Company’s executive officers, as well as those of other key employeestransactions since January 1, 2021 that the Human Resources and Compensation Committee deems material. Specifically, the Human Resources and Compensation Committee’s responsibilities include:
Reviewing and approving the Chief Executive Officer’s compensation and evaluating the Chief Executive Officer’s performance against pre-established metrics;
Reviewing and approving individual executive officer compensation recommendations made by the Chief Executive Officer for his direct reports;
Reviewing and approving terms of employment, severance or other compensation-related agreements to be entered into, or amended, for any executive officer or key employee;
Adopting, administering and approving equity-related incentives and awardsrequired approval under the Company’s equity compensation plans;policies and
Reviewing procedures or the Company’s incentiverules and employee benefit and retirement plans, including any equity compensation plans and recommending to the Board (and stockholders where necessary) any amendments or material changes to the plans.
The agenda for each meetingregulations of the Human Resources and Compensation Committee is determined by its Chair with the assistance of the Company’s Secretary and Chief Administrative Officer. The Chief Executive Officer regularly attends Human Resources and Compensation Committee meetings. The Human Resources and Compensation Committee also meets in executive session as appropriate. The Chair of the Human Resources and Compensation Committee reports the Committee’s recommendations on executive compensation and other matters to the Board. Outside advisors and the Company’s Human Resources Department support the Human Resources and Compensation Committee in its duties and the Committee may delegate authority to fulfill certain administrative duties regarding the compensation programs to members of senior management as it deems appropriate. The Human Resources and Compensation Committee has authority under its charter to retain advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities.SEC.
Independent Compensation Consultant28 GOVERNANCE |
The Human Resources and Compensation Committee has retained Pay Governance LLC as its independent compensation consultant. Pay Governance reports directly to the Human Resources and Compensation Committee and does no other work for management. During 2015, Pay Governance representatives generally participated in all of the Human Resources and Compensation Committee’s meetings and provided guidance to the Human Resources and Compensation Committee with respect to executive compensation; comparative peer group data; director compensation; annual incentive compensation; and consultant pay programs. In supporting the Human Resources and Compensation Committee, Pay Governance provides the Human Resources and Compensation Committee with an independent assessment of management’s recommendations for compensation; reviews and confirms the peer group used by the Company to prepare market compensation data; and provides ad hoc support to the Human Resources and Compensation Committee, including discussing executive compensation and related corporate governance trends. As discussed on page 26, the Human Resources and Compensation Committee reviews the independence of Pay Governance on an annual basis.
ADDITIONAL GOVERNANCE MATTERS
Other Corporate Governance Highlights
Our Board, together with our Nominating and Board Governance Committee, works to maintain an effective and sound governance structure that appropriately balances and aligns the interest of the Company’s most important stakeholders, including our stockholders, clients and employees. As a result, in addition to the structure and operation of our Board and committees discussed in this section, the Company maintains a variety of other corporate governance practices outlined in the following table that the Board believes promotes sound governance and the operation of the Company in an atmosphere of candor and collaboration with its stakeholders.
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Stockholder Communications with BoardCOMMUNICATION WITH THE BOARD
Stockholders may communicate directly with the Board. All communications should be directed to:
Corporate Secretary
Heidrick & Struggles International, Inc.,
233 South Wacker Drive, Suite 4900
Chicago, Illinois 60606-6303. 60606
Any such communication should prominently indicate on the outside of the envelope that it is intended for the Board or a particular committee, or director. EachAll appropriate communication intended for the Board or a particular committee or director and received by the Corporate Secretary will be forwarded to the specified party following its clearance through normal security procedures.
| GOVERNANCE 29
Executive Compensation
DIRECTOR COMPENSATIONPROPOSAL 2
We provide compensationAdvisory Vote to non-employee directors that is competitive with other similarly sized publicly traded companies in order to attract and retain qualified directors.Approve Named Executive Officer Compensation is paid in a mix of cash and equity to ensure directors are aligned with the interests of the stockholders and our long-term strategy. Additional compensation is also provided to: (i) our Chairman of the Board; (ii) any director who serves as chair of a
The Board and HRCC value the views of our stockholders, and currently conduct an annual advisory vote to approve the compensation of our Named Executive Officers. The Say-on-Pay vote is advisory, and therefore not binding on the Company, the HRCC or our Board. | Pursuant to Section 14A of the Securities Exchange Act, the Company seeks your advisory vote on our executive compensation programs. The Company asks that you support the compensation of our Named Executive Officers as disclosed in the Compensation Discussion & Analysis (“CD&A”) section and the accompanying executive compensation tables and narratives contained in this proxy statement. The CD&A section of this proxy statement discusses our executive compensation philosophy, policies and structure during the most recently completed fiscal year. The HRCC and the Board believe that these policies and procedures are effective in implementing our executive compensation philosophy and in achieving its goals. As an advisory vote, your vote will not be binding on the Company or the Board. However, our Board and our HRCC, which is responsible for designing and administering the Company’s executive compensation program, value the opinions of our stockholders and to the extent there is any significant vote against the compensation paid to our Named Executive Officers, we will consider our stockholders’ concerns and the HRCC will evaluate whether any actions are necessary to address those concerns. |
The Board Committee; and (iii) members of our Audit and Finance Committee to reflect the additional time, risk and skill-level required to fulfill these roles. As noted below, we pay our directors’ annual retainer approximately 36 percent in cash and approximately 64 percent in equity. Prior to 2015, the retainer was paid 25 percent in cash and 75 percent in equity. For 2015, we increased the portion paid in cash due to the fact that the Board’s overall compensation level was below the median of peers, and the cash component was belowHRCC recommend that our stockholders vote “FOR” the 25th percentile of peers.
Cash Compensation. For 2015, each director receivedapproval, on an annual cash retainer of $62,500 which represents approximately 36 percent of the total compensation earned by each director for serving as a member of the Board, exclusive of any committee or chair board service. All cash retainers are payable on a quarterlyadvisory basis, in arrears. In addition, we reimburse the directors for any out-of-pocket expenses associated with their Board service. For 2015 we increased the cash component of our director compensation by $25,000 for the reasons noted above.
Additional Board Service Fees. The Audit and Finance Committee Chair receives an additional cash retainer of $30,000 and each member of the Audit and Finance Committee (including the Chair) receives an additional cash retainer of $10,000. The Human Resources and Compensation Committee Chair receives an additional cash retainer of $30,000. The Nominating and Board Governance Committee Chair receives an additional cash retainer of $10,000. The Chairman receives an additional cash retainer of $75,000.
Equity Compensation. For 2015, each director received an annual equity retainer of $112,500 payable in the form of restricted stock units (RSUs) awarded as of the date of our Annual Meeting of Stockholders which represents 64 percent of the total compensation earned by each director for serving as a member of the Board, exclusive of any committee or board or committee chair service. The RSUs vest and are payable on the date a director ceases to serve on the Board. See theVoting Securities of Certain Beneficial Owners and Management Table on page 18 for information regarding the RSUs owned by our directors. A director may elect to receive payment of the annual equity retainer in shares of Common Stock in lieu of the RSUs described above. For a director who joins the Board after our Annual Meeting of Stockholders, a pro-rata equity award may be made on the date of his or her appointment to the Board. No pro-rata equity awards were granted upon the appointment of Mmes. Axelrod and Chapman or Messrs. Logan and Mesdag. We no longer grant awards of stock options to our directors.
Non-Employee Directors Voluntary Deferred Compensation Plan. Pursuant to our Non-Employee Directors Voluntary Deferred Compensation (VDC) Plan, directors may defer up to 100 percent of their cash compensation per year. To enroll in our VDC Plan, a director needs to complete an election form in a timely manner and choose from investment funds offered by the VDC Plan Administrator. A participant is not able to invest deferred amounts in Company stock. The Administrator calculates the earnings for the funds selected by each director. The election remains in effect for all subsequent years until a director makes a different election. The distributions are payable in a lump sum on the date a director ceases to serve on the Board.
Stock Ownership Guidelines. We have adopted stock ownership guidelines for the directors. Each director has three years to achieve and maintain a stock ownership level equal to three times the annual cash retainer ($187,500 for 2015). Stock included for determining the satisfaction of the guidelines includes direct stock ownership and RSUs. Each of our directors either has satisfied the stock ownership guidelines or is on track to do so within the required three-year period.
2015 Director Compensation Table
The table below summarizes the compensation paid byto our Named Executive Officers, as disclosed in this proxy statement, including the Company to non-employee directors forfollowing CD&A section, the fiscal year ended December 31, 2015. The table excludes Ms. Axelrodexecutive compensation tables, and Mr. Mesdag who were appointed to the Board effective February 5, 2016; Ms. Chapman who was appointed torelated narrative discussion, and adopt the Board effective February 23, 2016; and Mr. Wolstencroft, our President and Chief Executive Officer who does not receive additional compensation for his service as a director. Mr. Wolstencroft’s compensation for President and CEO is included infollowing resolution at the Summary Compensation TableAnnual Meeting: “RESOLVED, that approval, on page 37.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total $ | |||||||||
Richard I. Beattie | 137,500 | (3) | 112,490 | (12) | 249,990 | |||||||
John A. Fazio | 102,500 | (4) | 112,490 | (12) | 214,990 | |||||||
Mark Foster | 62,500 | 112,490 | (11) | 174,990 | ||||||||
Jill Kanin-Lovers | 102,500 | (5) | 112,490 | (11) | 214,990 | |||||||
Robert Kaplan | 39,912 | (6) | 112,490 | (11) | 152,402 | |||||||
Gary E. Knell | 72,500 | (7) | 112,490 | (12) | 184,990 | |||||||
Lyle Logan | 2,604 | (8) | — | 2,604 | ||||||||
Robert E. Knowling, Jr. | 36,841 | (9) | 112,490 | (12) | 149,331 | |||||||
V. Paul Unruh | 72,500 | (10) | 112,490 | (11) | 184,990 |
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownershipan advisory basis, of the Company’s Common Stock, which is the only outstanding class of voting securities or other equity securities of the Company, as of March 31, 2016 (except where otherwise noted) for: (i) each of the Company’s directors; (ii) each of thecompensation paid to our named executive officers serving the Company as of March 31, 2016; (iii) each person known to us to be the beneficial owner of five percent or more of the outstanding shares of Common Stock; and (iv) all of the directors and executive officers as a group. On March 31, 2016, there were 18,550,858 shares of Common Stock outstanding.
The information provideddisclosed in the tablethis proxy statement is based on the Company’s records, information filed with the SEC and information provided to Heidrick, except where otherwise noted.
The number of shares beneficially owned by each entity or individual is determined under SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the entity or individual has sole or shared voting power or investment power and also any shares that the entity or individual has the right to acquire within 60 days of March 31, 2016 (May 31, 2016) through the exercise of any stock options and through the vesting of stock units payable in shares. Beneficial ownership excludes options or stock units vesting after May 31, 2016. Unless otherwise indicated, each person has sole voting and investment power with respect to the shares set forth in the following table.hereby RATIFIED.”.
Names (1)(2)(3) | Shares of Common Stock Beneficially Owned (3) | Percent | ||||||
Elizabeth L. Axelrod | 0 | * | ||||||
Richard I. Beattie | 38,351 | * | ||||||
Clare M. Chapman | 0 | * | ||||||
John A. Fazio | 42,112 | * | ||||||
Mark Foster | 19,976 | * | ||||||
Jill Kanin-Lovers | 38,643 | * | ||||||
Gary E. Knell | 35,154 | * | ||||||
Lyle Logan | 0 | * | ||||||
Willem Mesdag | 0 | * | ||||||
V. Paul Unruh | 38,543 | * | ||||||
Tracy R. Wolstencroft | 89,759 | * | ||||||
Krishnan Rajagopalan | 12,736 | * | ||||||
Jory J. Marino | 23,669 | * | ||||||
Richard W. Pehlke | 50,649 | * | ||||||
Stephen W. Beard | 56,626 | * | ||||||
On March 31, 2016, the shares beneficially owned by all executive officers and directors as a group (18 persons) were: | 451,523 | 2.4 | ||||||
Heartland Advisors, Inc. (4)(10) | 1,772,211 | 9.6 | ||||||
BlackRock, Inc. (5)(10) | 1,720,058 | 9.3 | ||||||
Franklin Resources, Inc. (6)(10) | 1,283,083 | 6.9 | ||||||
Paradice Investment Management Pty Ltd (7)(10) | 1,244,672 | 6.7 | ||||||
Dimensional Fund Advisors LP (8)(10) | 1,023,304 | 5.5 | ||||||
The Vanguard Group (9)(10) | 947,048 | 5.1 |
30 EXECUTIVE COMPENSATION |
COMPENSATION DISCUSSION AND ANALYSISINTRODUCTION
Heidrick & Struggles International, Inc. is a leadership advisory firm, providing executive search, culture shaping and leadership consulting services. We assist organizationsassisting a broad range of clients across the globe in achieving their long-term business objectives by helping them to improve the effectiveness of their leadership teams. We provide ourMore specifically, the Company provides executive search, leadership consulting and on-demand talent services to a broad range of clients through the expertise of ourits experienced consultants located in major cities around the world. In recent years, we have expanded our service capabilities in response to our clients’ request for comprehensive leadership advisory services. The Human Resources and Compensation Committee (HRCC) of the Board of Directors(“HRCC”) seeks to ensure that ourthe Company’s executive compensation programs attract, retainprogram attracts, retains and rewardrewards the best talent, while at the same time maintainmaintaining a strong link between pay and performance and alignaligning the interests of ourthe Company’s executives and stockholders. OurHeidrick’s executive compensation philosophy emphasizes and rewards both Company and individual performance, which we believeperformance. The Company believes this approach promotes sustained long-term performance by rewarding not only the achievement of financial and operational goals, but also the accomplishment of individual strategic objectives that enable growth.objectives. Further, this approach enables profitable growth and advances our high-performance organization by using culture as a strategic differentiator to attract, develop, and retain the highest-performing talent, and to build a more diverse and inclusive Company.
ThisCompensation DiscussionThrough our HRCC, the Company has implemented strong governance practices for considering and Analysis describesmaking decisions with respect to the philosophycompensation of the Company’s Named Executive Officers. Management, the HRCC and objectives of ourthe full Board all play active roles in executive compensation programs for our named executive officers. For 2015 our named executive officers were:decisions.
Tracy R. Wolstencroft, President and Chief Executive Officer
Krishnan Rajagopalan, Executive Vice President, Global Practices
Jory J. Marino, Executive Vice President, Global Markets
Richard W. Pehlke, Executive Vice President and Chief Financial Officer
Stephen W. Beard, Executive Vice President, General Counsel, Chief Administrative Officer and Secretary
2015 Year in Review
2015 was an important year of strategic, operational and financial accomplishments. During 2015, we continued to implement initiatives to strengthen and invest in our Company which allowed us to continue to meet the growing needs of our clients, manage our costs more effectively, and better position the Company to deliver results to our stockholders.
We delivered improvements in profitability. We strengthened our core search business while investing in the growth of our Leadership Consulting business, advancing our strategy to bring to market a distinctive set of capabilities that permit us to engage senior executives and boards around the world. We acquired a London-based advisory firm specializing in accelerating organizational performance and with that transaction gained a new leader for our Leadership Consulting business, Colin Price.
We made meaningful progress in attracting, developing and retaining the very best talent in the industry, and ended 2015 with 334 consultants, up 9 percent year over year. Our voluntary turnover was the lowest in 7 years. These are strong indicators that Heidrick & Struggles is once again an attractive destination for the most talented professionals in our field. We confirmed 7 percent more searches in 2015, delivering on our purpose, which is: “We help our clients change the world, one leadership team at a time.” The important work we are executing around the world at some of the most well-known and respected organizations is elevating and strengthening the power of Heidrick & Struggles’ brand.
Our efforts achieved the positive results detailed below. Along with our dedicated and experienced consultants and staff located in major cities around the world, our named executive officers Messrs. Wolstencroft, Rajagopalan, Marino, Pehlke, and Beard each led and played an important role in the achievement of these results for the Company and its stockholders.
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describes and explains the Company’s compensation philosophy and executive compensation program, as well as compensation awarded to and earned by the following persons who were our Named Executive Officers1 (“Executive Officers” or “NEOs”) for 2021: | Name | |||||
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Michael Cullen | Chief Operating Officer | |||||
Mark Harris | Chief Financial Officer | |||||
Sarah Payne | Chief Human Resources Officer | |||||
Tracey Heaton | Chief Legal Officer & Corporate Secretary2 | |||||
Kamau Coar | Former Chief Legal Officer & Chief Inclusion Officer3 |
THE CD&A IS ORGANIZED INTO FOUR SECTIONS:
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2015 Performance Based Compensation Highlights
Our HRCC continued to utilize a performance-based compensation structure for 2015 for our named executive officers consisting of both short and long-term incentive programs. These programs were based on individual, financial, and operational metrics.
The Company’s 2015 financial and operational performance met or exceeded target levels for three of the five Company performance metrics. Two Company performance metrics (Improved Operating Margin and EBITDA Margin) were slightly below target, but well exceeded the minimum. See, Annual Incentiveson page 30. Our HRCC considered both quantitative and qualitative individual, financial and operational factors when determining named executive officer compensation for the year. Those considerations, along with the operation of the Company’s compensation policies, resulted in the following key compensation highlights for 2015:
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3. | 2021 |
4. | Other |
1 | This term does not include Mr. Kamau Coar other than when referring to the named executive officers |
2 | Ms. Heaton was appointed as the Company’s Chief Legal Officer and Corporate Secretary on |
3 | Mr. Coar’s employment |
Overall | EXECUTIVE COMPENSATION 31
The CD&A is followed by the Compensation PhilosophyTables and Narrative Disclosures, which report and describe the compensation and benefit amounts paid to the NEOs for 2021.
2021 YEAR IN REVIEW
Our2021 was a record year for revenues and profitability.
Consolidated net revenue was $1,003.0 million compared to $621.6 million in 2020, an increase of 61.4%
Operating income in 2021 was $98.3 million and operating margin was 9.8%
Adjusted operating income in 2021 was $113.4 million and adjusted operating margin was 11.3%
General and administrative expenses in 2021 declined to 13.0% of net revenues, from 18.8% in 2020
Diluted earnings per share were $3.58 compared to a loss per share of ($1.95) in 2020
Adjusted diluted earnings per share were $4.11 compared to $1.77 in 2020
32 EXECUTIVE COMPENSATION |
Adjusted Operating Income and Adjusted Diluted Earnings Per Share are Non-GAAP financial measures and include adjustments to Operating Income and Earnings Per Diluted Share in 2017 to exclude expense associated with the settlement with Her Majesty’s Revenue and Customs related to the taxation of a legacy U.K. benefit trust obligation in Q1 2017, impairment charges, and restructuring charges. 2016 and 2019 also included restructuring-related adjustments. The adjustments in 2020 excluded expense associated with goodwill impairment charges and restructuring charges. The adjustments in 2021 exclude restructuring charges and one-time expenses for increases to earnout payouts related to the Business Talent Group (“BTG”) acquisition in April 2021. BTG is a market leader in providing clients access to on-demand top independent talent for leadership roles and critical projects. Adjusted Operating Margin refers to Adjusted Operating Income as a percentage of Net Revenue.
Total Shareholder Return is the value of $100 invested in shares of our common stock on December 31, 2016, assuming the reinvestment of dividends during the following five-year period. The stock price performance depicted in the above graph is not necessarily indicative of future price performance. This graph will not be deemed to be filed as part of this proxy statement, and will not be deemed to be incorporated by reference by any general statement incorporating this proxy statement into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this information by reference. The annualized return represents the compounded annual growth rate of the Total Shareholder Return for the period beginning on December 31, 2016 and ending December 31, 2021.
A reconciliation of these Non-GAAP financial measures to the most directly comparable GAAP financial measures can be found on Annexes A and B.
EXECUTIVE COMPENSATION PHILOSOPHY
The HRCC strives to establishdesign compensation programs for ourthe Company’s executives and employees that are market competitive with firms in the executive search, leadership consulting and management consulting space, both public and private, with whom we competewhich the Company competes for executive talent. At the heart of our
This discussion explains: | ||
The objectives of the Company’s compensation program for its NEOs. | How the Company determines the amount to pay for each compensation element. | |
What the compensation program is designed to reward, each element of compensation within the program and why the Company chooses to pay each element. | How each compensation element and the Company’s decisions regarding that element fit into the Company’s overall compensation objectives and affect decisions regarding other elements. |
Pay-for-performance guides executive compensation programs is a pay-for-performance philosophy. We expect our executive officersfor Heidrick. The Company expects its NEOs to initiate and carry out sustainable growth strategies and to create long-term value and growth for both the Company and its stockholders. We link various aspects of our business strategies with our compensation program design. Company performance, is a
| EXECUTIVE COMPENSATION 33
incentives and retention are the primary factorfactors in most elements of our executive incentive compensation program design. When measuring Company performance, we may considerthe HRCC considers both qualitative and quantitative factors and achievements relating to ourthe Company’s business strategies and objectives. In assessing the individual performance of named executive officers, ourthe NEOs, the HRCC may consider,considers, among other things, the officer’s accomplishmentsNEO’s achievement of priorities,individual and shared performance objectives, contributions to the Company’s strategic initiatives and execution ofdemonstrated leadership objectives.qualities.
OurThe HRCC regularly reviews ourthe compensation programsprogram for ourthe Company’s executives and employees to ensure that the programs continueprogram continues to meet the needs of the business, is competitive in the executive search and alignleadership consulting industry, and aligns the long-term interests of ourthe Company’s executives with those of ourthe Company’s stockholders. OurThe Company’s executive compensation programsprogram may change from time to time based on the review and input of the HRCC.
Compensation Best Practices
The Company’s compensation policies and practices include: |
Independent HRCC. All of the members of the HRCC are independent. |
Independent Compensation Consultant. The HRCC receives objective advice from an independent compensation consultant. |
Annual Assessment. The HRCC conducts an annual assessment of compensation policies to ensure that they are aligned with the Company’s performance objectives, are competitive in the executive search and leadership consulting industry, and do not encourage undue risk. |
Stock Ownership Guidelines. The CEO is required to own five times his or her annual base salary in Company common stock, and all other NEOs are required to own two times their annual base salary. Effective February 2022, the HRCC approved revisions to the stock ownership guidelines which added share retention requirements, whereby the CEO or other NEO must retain ownership of Company shares in an amount equal to 50% of the net after-tax value of any newly-vested RSUs, performance shares and/or PSUs until the applicable multiple requirement is met, as further described on page 44. |
Reward for Performance. A majority of each Executive Officer’s total direct compensation is tied to the achievement of certain Company and individual performance goals. |
Annual Payout Limits. The potential annual payout on incentive compensation elements is limited to 200% of target, further described on page 38. |
Long-Term Vesting. The Company encourages retention and long-term value creation by providing for equity awards that vest over three years, commencing on the grant date anniversary. |
No Excise Tax Gross-Ups. The Company does not provide excise tax gross-ups to the Executive Officers. |
Strong Governance Practices Utilized in Determining Executive Compensation Program Principles
OurRole of the HRCC. With respect to the Company’s NEOs, the HRCC engages in a rigorous process in determining total compensation. This process involves setting Company performance and strategic and operational goals for the NEOs at the beginning of each year and evaluating the performance of the Company and NEOs against those pre-established goals. The HRCC considers various additional factors in making its decisions regarding each NEO’s target total compensation opportunity. The specific factors include:
Company performance and relative stockholder return;
Individual performance against pre-set goals and objectives for the year;
An individual’s experience and expertise;
An individual’s position and scope of responsibilities;
Retention considerations;
34 EXECUTIVE COMPENSATION |
An individual’s compensation relative to other NEOs;
The value of similar awards to NEOs at peer companies;
An individual’s future potential with the Company; and
The new total compensation that would result from any change and how the new total compensation compares to market data and impacts the Company’s compensation expense.
The HRCC determines and approves the compensation of the NEOs based on this evaluation. In making its decisions, the HRCC does not apply formulaic weighting to any of the above factors.
To assist in evaluating the NEOs’ compensation, the HRCC has retained the services of an independent compensation consultant, Pay Governance LLC, and considers recommendations from the CEO. The CEO does not provide such input as to his own compensation. The HRCC assesses the information it receives in accordance with its business judgment. The HRCC is also guided by its independent compensation consultant with respect to compensation decisions.
Role of the Board. The HRCC, with input from the full Board, independently reviews the CEO’s performance and recommends the CEO’s compensation to the Board. Based upon the recommendation of the HRCC, the full Board considers and determines the compensation of the CEO.
Role of the CEO. The CEO annually reviews the performance of each of the NEOs other than himself. Following these performance reviews, the CEO presents compensation recommendations to the HRCC for consideration. The HRCC has full discretion to adopt, modify or reject any such recommendations.
Role of the Independent Consultant. The HRCC has retained an independent compensation consultant which reports directly to the HRCC and does no other work for management. During 2021, the independent compensation consultant’s representatives participated in the HRCC meetings and provided guidance to the HRCC with respect to executive compensation, comparative peer group data, annual incentive compensation and consultant pay programs. In supporting the HRCC, the independent compensation consultant provides the HRCC with an independent assessment of the CEO’s recommendations for compensation, reviews and confirms the peer group used by the Company to prepare market compensation data, and provides ad hoc support to the HRCC, including discussing executive compensation and related corporate governance trends. In 2021, the HRCC determined that its compensation consulting firm was independent and without conflicts of interest. This determination was reached after reviewing the independence factors set out in the Nasdaq Rules.
Use of a Peer Group. The HRCC evaluates the Company’s executive compensation programs in comparison to those of a selected peer group, which in 2021 consisted of 12 similarly-sized public professional services companies. The HRCC reviews and approves peer group composition each year. Navigant Consulting was removed from the 2021 peer group, as it was acquired by another company. TrueBlue, Inc. was added to the peer group in 2021, as a comparable company in the staffing and recruiting industry. The HRCC uses the peer group to compare total direct compensation and each of the compensation elements for each NEO against those for positions at peer group companies with similar responsibilities. The HRCC also uses the peer group to review executive pay programs and practices at those companies.
For 2021, the peer group consisted of the following principles to implement our executive compensation philosophy:companies:
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Barrett Business Services, Inc. |
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CBIZ, Inc. |
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CRA International, Inc. | Korn/Ferry International | |
| Resources Connection, Inc. | |
FTI Consulting, Inc. | TrueBlue, Inc. | |
| Volt Information Sciences, Inc. |
Applying these principles results
| EXECUTIVE COMPENSATION 35
In determining compensation, the HRCC considers the peer group companies with which the Company directly competes for executive talent. However, most of the Company’s executive search and leadership advisory competitors, from which executive talent is often recruited, are privately held and are not included in the above list of publicly traded companies. The HRCC therefore also relies on its general knowledge of executive compensation levels and practices in the executive search and leadership consulting industry.
The Company does not set a specific, relative percentile positioning for total direct compensation, or the elements of total direct compensation, as a target for NEO pay packages wherelevels. Rather, the Company reviews the total direct compensation range for each position and the mix of elements to ensure that compensation is adequate to attract and retain key executive talent. To ensure that compensation is linked to performance, the NEO compensation program is designed to deliver at least 65% of total target compensation through variable pay. The NEO compensation program is also designed to ensure that a significant portionproportion of NEO compensation is put “at risk,”delivered in the form of performance-basedequity and thus aligns compensation with the interests of the Company’s stockholders.
Stockholder Vote and Engagement on Executive Compensation
The Company held its annual and long-term incentives. We believe our executive pay packages support our commitment to sound corporate governance and reflect common “best practices”, including:
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Stockholder Feedback and Say-on-Pay Vote Results
At our 2015 Annual Meeting of Stockholders, we held our annual non-binding stockholder advisory vote to approve executive compensation (“say-on-pay”say-on-pay”). Our at the 2021 Annual Meeting of Stockholders. The stockholders approvedindicated their strong support for our fiscal 20142020 executive compensation, with nearly 81 percentapproximately 96.6% of voting stockholders casting their vote in favor of the say-on-pay resolution.
The HRCC took this support level as an indication that stockholders were supportive of our pay design and decisions in fiscal 2014.
WeCompany had regular and active discussions with ourits major stockholders during 2015 on various topics throughout the year,2021 and, during those conversations, westockholders did not hear ofraise any specific issues relating to the design of ourthe Company’s executive compensation program. Therefore, we haveThe Company did not mademake any changes to ourthe executive compensation programsprogram as a result of the 2015 2021 say-on-pay vote or our shareholderits stockholder outreach efforts during 2015. Our2021. The HRCC is dedicated to continuous improvement of the existing executive compensation program to reflect an appropriate alignment of pay and performance, and will continue to seek and review stockholder perspectives when designing and implementing the Company’s executive compensation program.
Setting Executive Compensation2021 COMPENSATION PROGRAM
Oversight2021 Executive Total Target Direct Compensation Mix
The majority of Compensation Programs. Our HRCC is responsible for overseeing our executivetotal target direct compensation programs. See pages 13-14 of this proxy statement for more information on the role and responsibilities of our HRCC concerning executive compensation and related corporate governance, and page 12 of this proxy statement for a discussion of the Company’s assessment of risk related to its compensation programs.
Role of the Independent Consultant. As disclosed on page 14 of this proxy statement, our HRCC utilized the services of Pay Governance LLC (Pay Governance), an independent compensation consulting firm, to advise it on executive compensation, equity plan design, and related corporate governance matters. Our HRCC determined that Pay Governance was independent and without conflicts of interest for 2015. This determination was reached after reviewing the six independence factors set out in the Nasdaq Rules: (i) whether Pay Governance provides any other services to the Company; (ii) the amount of fees paid relative to the total revenue of the firm; (iii) policies in place to prevent conflicts of interest; (iv) any personal or business relationships with members of our HRCC; (v) ownership of Company stock; and (vi) any personal or business relationships with named executive officers.
Role of Executive Officers in Compensation Decisions. Our HRCC approves all compensation decisions for our named executive officers. The Chief Executive Officer annually reviews the performance of each of the named executive officers other than himself. Following the performance reviews, the Chief Executive Officer presents compensation recommendations to our HRCC for consideration. Our HRCC, with input from the full Board, reviews the Chief Executive Officer’s performance. Our HRCC has full discretion to approve, modify or reject any recommended compensation adjustments or awards made to the named executive officers.
Role of our Human Resources and Compensation Committee. Our HRCC engages in a rigorous process in determining the total compensation of our named executive officers. This process involves setting Company performance and strategic and operational goals for the named executive officers near the beginning of each fiscal year and evaluating the performance of the named executive officers against those pre-established goals. Our HRCC determines and approves the compensation of the named executive officers based on this evaluation. In evaluating named executive officer compensation, our HRCC, as noted above, has retained the services of Pay Governance and considers recommendations from the Chief Executive Officer with respect to goals and compensation of the other named executive officers, but our Chief Executive Officer does not provide such input as to his ownNEOs was variable compensation. Our HRCC assesses the information it receives in accordance with its business judgment.
Use of a Peer Group. Our HRCC evaluates our executive compensation programs in comparison to those of a select peer group, which in 2015 consisted of 15 similarly-sized public professional services companies. Our HRCC uses the peer group to compare total direct compensation and the mix of compensation elements for each named executive officer against positions at peer group companies with similar responsibilities. Our HRCC also uses the peer group to review executive pay programs and practices at those companies.
For 2015 the peer group consisted of the following companies:
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For 2016, our HRCC has removed TrueBlue, Inc. from the peer group due to the fact that it now exceeds the top end of
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Consistent with the Company’s peer group range becausepay-for-performance philosophy, the majority of the completion of two acquisitions during the year. The HRCC has replaced TrueBlue, Inc. with CDI Corp.
In setting compensation, the HRCC considers the peer group companies with which we directly compete for executive talent and stockholder investment. Our HRCC also relies on its general knowledge of executive
compensation levels and practices. Most of the Company’s executive search and leadership advisory competitors, from which executive talent is often recruited, are privately held and therefore not included in the above list of our public peer group companies as information on their compensation practices is difficult to obtain.
We do not set a specific, relative percentile positioning for total direct compensation orfor the elements of total directNEOs is variable. Our NEO compensation as a target for named executive officer pay levels. Rather, we review the total direct compensation range for each position and the mix of elements to ensure that compensation is adequate to attract and retain key named executive officers. To ensure that compensation is linked to performance, our named executive officer compensation program is designed to deliver at least 65% of total direct compensation through variable pay. Our named executive officer compensation program is also designed to ensure that a significant proportion of the named executive officer’s compensation is delivered in equity and thus aligned with the interests of our stockholders.
Named Executive Officer Compensation Components
Alignment with our executive compensation philosophy is achieved through the executive compensation components for our named executive officers outlined below. Messrs. Wolstencroft, Rajagopalan, Marino, Pehlke, and Beard each participated in these programs during 2015.generally split into three principal components:
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CEO Compensation
Under the direction of our CEO, the Company achieved significant strategic and financial accomplishments in 2015. The following table illustrates the three components and corresponding amounts of Mr. Wolstencroft’s total compensation for 2015.
Mr. Wolstencroft’s short-term cash bonus opportunity (displayed in the following table asAnnual Incentive Earned) is variable, meaning the final payout amount is based solely on the achievement of specific performance
goals over a one-year period that include both Company performance metrics (weighted at 75%) and individual performance factors (weighted at 25%). For 2015, the Company performance was calculated at 99% of target. The HRCC determined that Mr. Wolstencroft’s individual performance during 2015 warranted an award calculation of 150% for the individual component of his 2015 award.
Half of Mr. Wolstencroft’s long-term equity incentive opportunity (displayed in the following table asLTI Award Granted) also is variable, meaning the number of shares actually paid to our CEO (if any) depends upon and is subject to the achievement of certain performance measures over a three-year vesting period, and is based on a graduated scale ranging from 0 to 200% of the initial target amount. The other half of the award consists of time-vesting RSUs that will vest in three equal installments. (SeeLong Term Incentives on pages 31-33).
The Board and the HRCC view these compensation measures as prudent investments for the Company’s future. They are consistent with market practices for executives in the business consulting industry and the companies with which we compete for clients and executive talent.
As reported in the Summary Compensation Table on page 37, Mr. Wolstencroft’s total compensation decreased nearly 50 percent on a year over year basis. The decrease is solely attributable to the one-time recruitment awards made in February 2014 that were included in Mr. Wolstencroft’s compensation package in 2014 as an inducement for Mr. Wolstencroft to join Heidrick, and to establish an immediate and significant link between performance and shareholder interests and to create an immediate financial stake in our Company, as disclosed in detail in our 2014 proxy statement.
Compensation Mix – Variable vs. Fixed
Our HRCC believes that our named executive officers should be rewarded for the achievement of financial and non-financial objectives that either influence or contribute to stockholder value creation. Consistent with our “pay for performance” philosophy, our HRCC established elements of fixed and variable compensation for the named executive officers who served in fiscal 2015.
Key principles considered by our HRCC for determining the mix and level of fixed and variable pay for our named executive officers, were our ability to attract, retain and motivate the most talented executives available in light of competitive market practices, our position among companies with which we compete for executive talent, alignment of interests with those of our stockholders, our goals for pay for performance,and the market level of total cash and non-cash compensation we pay to our named executive officers.
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Base Salary
Our HRCC has established base salaries for our named executive officers that, in its judgment, are competitive. For each named executive officer, base salaries are reviewed against levels for positions with similar responsibilities at the peer group companies, using the comparative data prepared by our HRCC’s compensation consultant. Our HRCC then considers individual performance, internal pay equity, functional expertise, experience, and scope of responsibilities in approving any changes to the base salary. For 2015, the Company did not increase the base salary for any of our named executive officers.
Annual Incentives
OurManagement(Cash Compensation)
Long-Term Incentive Plan orMIP is the short-term cash incentive vehicle through which we reward our named executive officers with an annual cash bonus for achieving specificEquity Compensation
As discussed in greater detail below, total target direct compensation for each NEO in 2021 was as follows:
Name | Base Salary ($) | Annual Incentives MIP Target (% of Base Salary) | Long-Term Equity Target ($) | ||||||||||||
Krishnan Rajagopalan | $ | 850,000 | 150 | % | $ | 1,600,000 | |||||||||
Michael Cullen | $ | 650,000 | 100 | % | $ | 800,000 | |||||||||
Mark Harris | $ | 450,000 | 100 | % | $ | 750,000 | |||||||||
Sarah Payne | $ | 300,000 | 75 | % | $ | 300,000 | |||||||||
Tracey Heaton | $ | 400,000 | (1 | ) | (1 | ) | |||||||||
Kamau Coar | $ | 350,000 | 75 | % | $ | 300,000 |
1 | Ms. Heaton was appointed as the Company’s Chief Legal Officer and Corporate Secretary on November 15, 2021 and was not eligible for a |
| EXECUTIVE COMPENSATION 37
Base Salary
Base salaries are reviewed annually by the HRCC against levels for positions with similar responsibilities at peer companies, using the comparative data prepared by the HRCC’s independent compensation consultant. The HRCC then considers individual performance, internal pay equity, functional expertise, experience and scope of responsibilities. In 2021, Ms. Payne’s base salary increased from $275,000 to $300,000 and Mr. Coar’s base salary increased from $275,000 to $350,000. Both were increased to reflect a better alignment to the external market for their respective roles.
Annual Incentives
The Management Incentive Plan (“MIP”) is the vehicle through which NEOs are rewarded with an annual cash bonus for achieving specific short-term performance goals over a one-year period. The MIP rewards our NEOs for achieving key annual non-GAAP financial metrics and personal objectives.
The HRCC sets Company and individual performance goals for the NEOs during each year. These goals consist of both quantitative and qualitative performance objectives. The HRCC considers the reviews conducted by the CEO of the other NEOs and conducts its own review of the CEO’s performance against those pre-established performance objectives, as well as Company performance milestones achieved during the year. With respect to the CFO, the HRCC also considers input from the AFC Chair.
Historically, 15% of the NEOs’ earned annual bonus amounts were deferred each year and paid out equally over the following three years. A review of competitive data for the Company and its peer group confirmed the deferral feature was not competitive market practice, nor was it deemed to be retentive. As a result, the HRCC approved the removal of this element of the MIP effective in 2021 and on a go-forward basis, such that all of the NEOs’ earned annual bonus amounts are paid after the end of the fiscal year in which they were earned.
2021 MIP Metrics
The MIP metrics and targets that the HRCC selected for 2021 tie directly to our operational and strategic goals. Under the MIP, determination of the payout level (if any) for each NEO award is based upon the achievement of a combination of Company performance metrics (weighted at 70%) and non-financial, strategic performance factors (weighted at 30%). For the latter, there is a combination of shared and individual objectives. The objectives and rationale for selecting the MIP performance metrics for the year ended December 31, 2021, and the relative weight of each metric were as follows:
Performance Metric | Rationale for Using Performance Metric | Weight | |||||
Adjusted Operating Income | Measures the ability of the | 30 | % | ||||
Search Net Revenues | Coupled with profitability (above), focuses the NEOs on growing the top line revenues of the Company while managing profitability. | 30 | % | ||||
Non-Search Net Revenues | Aligns the NEOs to critical strategic objectives of diversifying the Company’s revenues. | 10 | % | ||||
Non-Financial Strategic Goals | Measures achievement of | 30 | % | ||||
TOTAL | 100 | % |
In 2021, after a review of competitive data for the Company and its peer group, the HRCC increased the maximum payouts available under the plan from 150% to 200% of target to better align with the external market. The performance required to achieve maximum payouts was increased to be commensurate with the payout.
Payout amounts under the MIP were set for each metric based on “Minimum,” “Target” and “Maximum” performance levels and corresponding award levels based on the Company’s business plan and other operational and environmental factors, specifically: Adjusted Operating Income, Search Net Revenues, Non-Search Net Revenues, and non-financial strategic goals. “Target”
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performance is the level at which a participant will earn 100% of his or her target award. Depending upon the relationship of the Company’s actual financial performance and the individual’s annual evaluation, final payouts under the MIP may be as little as zero (at or below “Minimum” performance) and as high as 200% of Target (at “Maximum” performance). The HRCC has discretion to modify any payouts (upwards or downwards) under the MIP as appropriate to ensure plan objectives are met, taking into consideration a variety of Company specific or environmental factors.
These financial metrics were set taking into account the Company’s strategic initiatives, historical financial performance, internal budgeting for the relevant year, external guidance and expected market conditions. In 2021, multi-year investments were expected to adversely affect operating income. Further, emergence from 2020 economic conditions and the Company’s restructuring announced in August 2020 presented additional reasons for conservative targets. Consequently, the Adjusted Operating Income target for 2021 was lower than the 2020 actual and 2020 target Adjusted Operating Income. As discussed above, the maximum bonus opportunity was increased to 200% of target in 2021. The performance required to achieve maximum performance for Adjusted Operating Income, Search Net Revenues and Non-Search Revenues was 180%, 110% and 116% of target, respectively. In 2020, the comparable maximum performance required was 115%, 105% and 110% of target for these measures.
As demonstrated on page 32, the Company’s actual 2021 financial results were very strong, with a record year in terms of profitability (Operating Income: $98.3M; Net Income: $72.6M) and revenues ($1.0B).
Each NEO also had non-financial strategic goals that were reviewed and approved by the HRCC in early 2021, and were aimed at focusing each NEO’s attention in areas where they have the most potential for impacting the Company’s performance. Minimum, Target and Maximum Performance Levels for 2021, as well as the actual performance results for both Company performance metrics and non-financial strategic metrics, are set forth below:
Adjusted Operating Income | Search Net Revenue | Non-Search Revenues | Non-Financial Strategic Goals | Total | |||||||||||||||||
Performance Minimum Target Maximum | $17.2 million $28.6 million $51.4 million | $537.7 million $566.0 million $622.6 million | $56.0 million $61.0 million $71.0 million | ||||||||||||||||||
Target | ![]() | ||||||||||||||||||||
Actual | $121.6 million1 425% of Target | $867.7 million 153% of Target | $67.6 million 111% of Target | See below | |||||||||||||||||
Bonus Result | 200% x 30% weight 60% | 200% x 30% weight 60% | 166% x 10% weight 16.6% | 200% x 30% weight 60% | 196.6% | ||||||||||||||||
Results: All | ![]() |
1 | For purposes of the MIP, Adjusted Operating Income includes adjustments of $23.3M to the Operating Income of $98.3M, which the HRCC reviewed and approved. The adjustments are as |
| EXECUTIVE COMPENSATION 39
NEO NON-FINANCIAL PERFORMANCE
As discussed above, for 2021, 30% of MIP performance was contingent on achieving non-financial strategic goals. These goals include a combination of shared and individual objectives. Results for the objectives are quantified and reviewed with the HRCC. However, due to the nature of the objectives, all results are not publicly disclosed for competitive market reasons.
In 2022, the HRCC reviewed each NEO’s achievements relative to their non-financial strategic objectives and, in its discretion, determined that such accomplishments exceeded expectations, resulting in a payout of 200% of target with respect to the non-financial portion of the bonus for each of the NEOs. Certain considerations of the HRCC when reviewing 2021 non-financial performance follows.
2021 was a unique year that presented new and unexpected challenges. The Company emerged from 2020 with expectations of a moderated market and slow recovery, but instead experienced a year of unprecedented growth in financial performance. Notably, the Company achieved 61% growth in revenues and record consultant productivity, with average revenue per executive search consultant increasing from $1.5M in 2020 to $2.4M in 2021. The NEO team balanced year two of the global pandemic, which included another round of adjustments and adaptations to remote work and virtual delivery of its services, as dictated by the COVID-19 pandemic. The team continued to lead with employee safety and well-being as the guiding principle. During this period of unexpected demand and growth, the team continued to drive the Company’s transformation strategy and growth in all segments of the business, which included the acquisition of a new on-demand talent business and acquisitions within other geographies.
As a team, and in addition to the goals set in March 2021, the NEOs built on the foundations laid in 2020 with the following highlights:
Completed the acquisition of and many facets of integration with BTG, our newly acquired, on-demand talent business;
Built a new growth markets segment which included expanding and opening new markets in the Nordic region and Israel, and pursuing growth through inorganic M&A opportunities;
Re-envisioned office space which included reducing real estate footprint and redesigning space in multiple offices to support the future of work;
Extended and expanded credit facility from $175M to $200M in July 2021 for an extended term with a maturity in 2026;
Expanded key internal reporting and connectivity on key financial dashboards across multiple service lines;
Built new talent acquisition teams to support a record number of new hires in 2021, as a result of business demand and growth;
In a mainly remote environment, developed and deployed multiple learning and development frameworks to support skills and action planning essential to support future business growth and development across multiple roles and functions;
Advanced operational and policy-related decisions to support our new hybrid workplace model;
Continued to keep safety of employees front and center when developing actions and policies around return to office, actions to support employee well-being and psychological safety in year two of the global pandemic and in a year of record productivity within our Executive Search business; and
Continued to advance internal and external philanthropic efforts and ESG internally and externally through client work.
2021 Shared Objectives and Accomplishments for all NEOs
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Strengthened a high performance, |
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Drove internal organizational understanding of the |
3 | Ms. Heaton and
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KRISHNAN RAJAGOPALAN’S INDIVIDUAL PERFORMANCE
2021 Accomplishments |
Created and |
Enabled and refined Heidrick Consulting’s go-to-market strategy and revenue growth. |
Implemented broad organizational and leadership changes in support of the strategic plan and go to market strategy. Continued to enhance the Company brand and build market presence and differentiation. |
MICHAEL CULLEN’S INDIVIDUAL PERFORMANCE
2021 Accomplishments |
Achieved revenue growth and profitability in selected geographical regions. Implemented a new leader of Growth Markets to expand markets in Poland, Israel, Russia and Ukraine (deals exited in 2022 due to current crisis and war); continued to build out our Nordics region with acquisitions in Finland and building in Sweden. |
Continued growth and expansion of shared service model. Expansion of shared services center across service lines and with key focus of on-boarding Project Administrators to support Principals, Partners and other |
Improved margin within Europe and Heidrick Consulting. |
MARK HARRIS’ INDIVIDUAL PERFORMANCE
2021 Accomplishments |
Completed inorganic expansion within Finland and new On-Demand business segment. |
Continued engagement and growth of stockholder base. |
Created and implemented a real estate strategy to both reduce operating costs and to support our hybrid workplace strategy with fluid office space and more spaces for teams to collaborate. |
Enhanced tools and efficiency within financial reporting and operating processes. Built infrastructure to support new segments and growth. |
SARAH PAYNE’S INDIVIDUAL PERFORMANCE
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Evolved talent acquisition strategies across regions and service lines to support record hiring and growth in 2021 in alignment with our diversity, equity and inclusion aspirations. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advanced talent and internal development capabilities by creating and implementing a new talent review process and by introducing a number of key new learning and development offerings to support account growth and development within multiple business segments and roles in support of employee development, diversity, equity and inclusion goals, and overall employee engagement. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive review of,
The table below details the resulting payout under the MIP compared to target for each of our continuing NEOs other than Ms. Heaton, who was not eligible for a 2021 performance bonus. Mr. Coar did not receive a 2021 bonus due to his departure from the Company in 2021: Long-Term Incentives Long-term incentives (“LTIs”) are the vehicle through which NEOs are awarded the Company’s common stock for continued service and for achieving specific performance goals over a three-year period. These awards vest over a three-year period after the grant date. LTIs are designed to focus the NEOs on the strategic goals necessary to increase stockholder value and further position the Company to succeed in a changing environment. The LTI award targets are based on the HRCC’s review of publicly disclosed data for the Company’s applicable peer group for each NEO position and internal pay equity considerations, as well as the CEO’s recommendations (other than with respect to himself) and a review of individual performance and potential. LTI awards issued to the NEOs in 2021 consist of:
Restricted Stock Units (“RSUs”) | RSUs are service-based and vest in three equal installments (specifically, on the |
When issuing LTI awards, the Company calculates the number of RSUs and PSUs awarded to the NEOs by dividing the total dollar value of the LTI award by the closing price of the Company’s common stock on the grant date (usually in March of the grant year). All outstanding RSUs and PSUs are credited with dividend equivalents that are payable in cash when and if the related units vest. The primary purpose of crediting dividend equivalents on LTI awards is to align the participant with the value of being a stockholder over the course of the vesting period, but only to the extent the award vests.
In March 2021, LTI awards were issued to Messrs. Rajagopalan, Cullen, Harris and Coar and Ms. Payne, with 50% of the target value issued as PSUs and 50% of the target value issued as RSUs. See the 2021 Grants of Plan-Based Awards Table on page 47 for more details on the equity grants that the HRCC approved.
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The following is a summary of the LTI awards issued in 2021:
NEO | PSUs (Target) | RSUs | Award Value1 | ||||||||||||
Award Date | 3/30/2021 | 3/9/2021 | |||||||||||||
Award Price | $ | 35.15 | $ | 36.95 | |||||||||||
Krishnan Rajagopalan | 26,316 | 25,034 | $ | 1,850,014 | |||||||||||
Michael Cullen | 11,380 | 10,825 | (2) | $ | 799,991 | ||||||||||
Mark Harris | 11,380 | 10,825 | $ | 799,991 | |||||||||||
Sarah Payne | 4,979 | 4,736 | $ | 350,007 | |||||||||||
Kamau Coar | 4,979 | 4,736 | $ | 350,007 |
1 | Value based upon number of |
2 | Mr. Cullen received an additional award |
2019, 2020 and 2021 PSU Awards.The 2019 PSU awards for the performance period 2019 – 2021, the 2020 PSU awards for the performance period 2020 – 2022 and the 2021 PSU awards for the performance period 2021 – 2023 were issued to Messrs. Rajagopalan, Cullen, Harris, and Coar and Ms. Payne. The awards are subject to target goals for the Company’s three-year Adjusted Operating Margin, as established by the HRCC at the beginning of the three-year PSU performance period, and three-year Relative Total Shareholder Return (“R-TSR”) for the 2019 – 2021, 2020– 2022 and 2021 – 2023 performance periods, respectively. Vesting for the awards will be weighted equally based upon the outcome of Adjusted Operating Margin and R-TSR. The peer group for the R-TSR metric consists of the constituents of the S&P Human Resources and Employment Services Index. The HRCC will review the performance for the 2020 and 2021 PSU awards, and the vesting of the awards will be determined in early 2023 and 2024, respectively. The 2019 PSU vesting outcome is as follows.
2019 PSU Awards. The table below illustrates the structure of the 2019 – 2021 PSU awards with an equal weighting placed on each of the performance targets. For the three-year performance period of 2019 – 2021, the Adjusted Operating Margin was 11.4% ($257.3M of Adjusted Operating Income, $2,261.4M of Adjusted Revenues) and the three-year R-TSR performance placed the Company at the 46th percentile of the applicable peer group. As a result of the performance achieved, the HRCC approved a vesting percentage of 139% of the target number of PSUs.
Performance Target 3-year Adjusted Operating Margin | Performance Target Relative TSR | Percentage of Target PSUs Vesting | |||||||||||||
Maximum | >12.0% | >75th %ile | 200% | ||||||||||||
Target | 8.0% | 50th %ile | 100% | ||||||||||||
Threshold | 4.0% | 25th %ile | 50% | ||||||||||||
<4.0% | <25th %ile | 0% |
| EXECUTIVE COMPENSATION 43
The PSUs issued to Messrs. Rajagopalan, Cullen and Harris and Ms. Payne in 2019 vested in 2022 at 139% of target as follows. Mr. Coar’s employment terminated in 2021 and he accordingly forfeited his 2019 award of PSUs.
Name | Target PSUs | PSUs Vested | ||||||||
Krishnan Rajagopalan | 23,455 | 32,602 | ||||||||
Michael Cullen | 9,964 | 13,850 | ||||||||
Mark Harris | 9,198 | 12,785 | ||||||||
Sarah Payne | 2,529 | 3,515 |
Special RSU Award to Mr. Cullen.In March 2021, Mr. Cullen was awarded a special, one-time RSU award with a grant date value of $1,000,000. The award will vest ratably on an annual basis over a three-year period. The award was provided to recognize Mr. Cullen’s contributions to continued improvements in the Company’s operating structure, commercial contributions within the market, and to further align Mr. Cullen with interests of the Company’s stockholders.
Ms. Heaton’s Sign-On Awards. In connection with the commencement of her employment with the Company in November 2021, Ms. Heaton received a sign-on bonus of $125,000 and an RSU award with a grant date fair value of $125,000, which vests in three equal installments on each of the first three anniversaries of the grant date for the RSUs. In the event that Ms. Heaton resigns from the Company for any reason or is terminated for cause (as defined in her employment agreement), within two years of the sign-on award payment dates, Ms. Heaton will be required to reimburse the Company the amount of such payment, reduced on a pro-rated basis by one twenty fourth (1/24th) per full month from the date of payment within 30 business days following the termination date.
Mr. Coar’s Separation Agreement. In connection with his employment terminating in June 2021, Mr. Coar and the Company entered into a Separation Agreement and General Release (the “Coar Separation Agreement”), pursuant to which he received a cash payment in the amount of $87,500, representing three months’ base salary, and three months of continued health coverage at active employee rates. These payments and benefits are included in the “All Other Compensation” column of the 2021 Summary Compensation Table below.
OTHER COMPENSATION POLICIES AND INFORMATION
Stock Ownership Guidelines
To enhance the alignment of NEOs’ interests with those of stockholders, the Company maintains stock ownership guidelines. The CEO is required to own five times his annual base salary in Company common stock, and all other NEOs are required to own two times their annual base salary. Effective February 2022, the HRCC approved revisions to the stock ownership guidelines which added share retention requirements, and removed the previously required five-year timeframe for meeting the ownership requirement. To the extent a covered employee becomes subject to these stock ownership guidelines and at that time does not own qualifying shares in an amount equal to or in excess of the relevant ownership multiple requirement, or falls below the relevant ownership multiple requirement, the employee must retain ownership of Company common stock issued upon the vesting of Company RSUs or performance shares/PSUs, in an amount equal to 50% of the net after-tax value of the newly vested RSUs, performance shares and/or PSUs until the applicable multiple requirement is met.
Equity interests that count toward the satisfaction of the ownership guidelines include HSII shares owned outright by the employee, HSII shares jointly owned, vested or unvested restricted HSII shares, and unvested RSUs payable in HSII shares. Outstanding HSII stock options and performance shares/PSUs are not counted toward the guidelines. As of December 31, 2021, the NEOs all were on target to meet their ownership guidelines within five years of appointment to their roles.
Hedging and Pledging Policy
Since 2013, the Company has had policies prohibiting hedging or pledging of Heidrick stock. Pursuant to our Insider Trading Policy, our officers, directors, and employees shall not hold Heidrick securities in a margin account, pledge Heidrick securities as collateral
44 EXECUTIVE COMPENSATION |
for a loan, purchase financial instruments or otherwise engage in transactions that either hedge or offset any decrease in value of Heidrick securities. The full text of our Insider Trading Policy, which includes details on our restrictions on hedging and pledging of Heidrick securities can be located on our website at: https://investors.heidrick.com/corporate-governance.
Clawback Policy
In December 2021 the Company amended its Clawback Policy whereby the HRCC on behalf of the Company may seek the recoupment of any incentive awards (cash or equity) given to: (1) any executive officer in the event of a financial restatement and/or (2) any incentive plan participant in situations of fraud, bribery, or other intentional, illegal misconduct impacting the Company or which results in a breach of the Company’s Code of Ethics or knowing failure to report such acts of any employee over whom such person had direct supervisory authority during the three-year period preceding the date the restatement is filed with the SEC or the date the HRCC determines a clawback is appropriate for misconduct. The full text of our Clawback Policy can be found at: https://investors.heidrick.com/corporate-governance.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code (“Section 162(m)”) limits the federal income tax deduction for annual individual compensation to $1 million for the current or former covered employees. In the past, Section 162(m)’s deduction limit included an exception for “performance-based” compensation. This exception for “performance-based” compensation was eliminated in 2018. Although tax deductibility is one of many factors the Company considers when determining executive compensation, the Company believes that the tax deduction limitation should not compromise its ability to design and maintain executive compensation arrangements that will attract and retain executive talent to compete successfully.
2013-2015 Performance Stock Units. In March 2013, we granted PSUs to Messrs. Pehlke and Beard who were our named executive officers at the time. The 2013 PSUs vested over a three-year period and were subject to target goals for the Company’s average operating income over the 2013 though 2015 fiscal years, and were paid in 2016 at 134.6% of the initial target amount. The Company exceeded its operating income goals for 2013, 2014 and 2015. Consequently, this resulted in the pay-out in excess of the initial target amount. Mr. Wolstencroft was not employed by the Company at the time of the 2013 PSU grant. Neither Mr. Rajagopalan nor Mr. Marino were named executive officers at the time of the 2013 PSU grant.
Stock Ownership Guidelines. To enhance the alignment of named executive officers’ interests with that of stockholders, we maintain stock ownership guidelines. Each new executive officer has five years from the date he or she first becomes subject to the guidelines to achieve a stock ownership level equal to a multiple of base salary. In 2015, we increased the stock ownership guidelines for our CEO from three times base salary to five times base salary. The stock ownership guidelines for our named executive officers are as follows:
Chief Executive Officer: five times base salary
Other Named Executive Officers: two times base salary
In determining compliance with these guidelines, we include both direct stock ownership and RSU grants, but do not consider PSUs. Each of the named executive officers subject to the policy either satisfied the stock ownership guidelines or is on track to do so within the requisite five-year period.
Perquisites and Other Personal Benefits
We provide our named executive officersHeidrick provides its NEOs with the same benefits that are provided to all employees generally, including medical, dental and vision benefits, group term life insurance and participation in oura 401(k) plan. The named executive officersNEOs are also reimbursed for expenses incurred for an annual physical examination, for financial planning services (maximum reimbursement for financial planning is $1,080 per year, or $3,150 if expenses are incurred for the first time), and approved business club memberships. All business club memberships are offered to executives on the same scale and terms as those for our executive search consultants.
Other Executive CompensationSeverance Arrangements
We haveThe Company has adopted other executive compensation arrangements, including oura Change in Control Severance Plan (CIC Plan),(as described below) designed to retain executives in the event of a periodchange of uncertainty; ourownership of the Company and a Management Severance Pay Plan (Severance Plan), designed to provide financial assistance to executives following termination of employment; and employment agreements with each named executive officer.employment. The material terms and conditions of these plans and agreements are summarized below.
“Double-Trigger” CIC Plan. We maintain a CIC Plan for certain of our executives, including the named executive officers. The CIC Plan provides severance benefits to the executive if his or her employment is terminated by us without “cause”, or if he or she terminates employment with us for “good reason” (each term as defined in the Plan), within two years after a change in control of the Company (or within six months prior to a change in control of the Company if such termination is effected prior to, but in anticipation of, the change in control). The severance benefits payable to the named executive officers under the CIC Plan, as well as other material terms and conditions, are described in detail under the section entitledContingent“Potential Payments on page 45.
We believe that the protection and benefits provided by the CIC Plan motivate our executives to act in the best interests of our stockholders by removing the distraction of post-change of control uncertainties faced by the executive officers with regard to their continued employment and compensation. Upon Termination or a Change in control protection for executives is also prevalent in the competitive environment in which we operate. The CIC Plan also contains restrictive covenants that prohibit the executives from competing and soliciting clients and employees for a certain period of time following a termination of employment.
Severance Plan. The Severance Plan provides severance benefits to select employees, including the named executive officers. Benefits are paid to an eligible employee who is involuntarily terminated by us for other than cause (as defined in the Plan). Benefits are not available if the termination is due to voluntary resignation, leave of absence, retirement, death or disability. If the termination is due to the employee’s transfer to an unaffiliated business, the sale of the stock or assets of the Company or the outsourcing of a division, department, business unit or function, severance benefits will be provided only if the employee has not been offered employment with the successor entity. The severance benefits payable to the named executive officers under the Severance Plan, as well as other material terms and conditions, are described in detail under theControl” section entitledContingent Payments on page 45.below.
Employment Agreements
Below is a summaryEach of the material terms and conditions of the employment agreements we have in place with our named executive officers as of December 31, 2015.
Tracy R. Wolstencroft. In February 2014, the Companycontinuing NEOs has entered into an employment agreement with our President and Chief Executive Officer, Tracy R. Wolstencroft, underthe Company, which he will receive:
An annualcontains general employment terms (including base salary of $850,000 per year subjectand eligibility to annual review but no decrease.
An annual cash bonus target opportunity under our MIP equal to 125% of his base salary, subject to the attainment of certain performance goals established annually by the HRCC.
An annual equity award target opportunity equal to 200% of his base salary, issued as a combination of PSUsparticipate in various incentive and RSUs, subject to the attainment of certain performance goals established annually by the HRCC.
Mr. Wolstencroft participates in the MIP at the Tier I level, the CIC Planbenefit plans) and Severance Plan at the Tier I level and our equity programs and our benefit plans at the same level as other senior executives. The agreement provides for severance payable upon termination without cause or resignation for good reason, as well as customary restrictive covenants in favor of the Company. The agreement also contains one-year post-termination non-solicitationThese restrictive covenants contain non-competition and non-competition restrictions.
Krishnan Rajagopalan. In April 2015, the Company entered into annon-solicitation restrictions for a period of 12 months after certain terminations of employment. Severance protection for our NEOs is generally covered by our Management Severance Pay Plan and our Change in Control Severance Plan (described below) instead of by their employment agreements. However, our CEO’s employment agreement with Mr. Rajagopalan in connection with his service as Head of Global Practices. Under this agreementdoes provide for the Companyfollowing enhanced benefits: (i) if he is entitled to receive severance payments under the Management Severance Pay Plan, he will pay Mr. Rajagopalan a base salary of $650,000 per year. He also will be entitled to participationa pro-rata bonus for the year of termination and (ii) he will receive the benefits described in the MIP at Tier I withManagement Severance Pay Plan upon his resignation of employment for Good Reason (as defined in his employment agreement) instead of only upon a target bonus opportunity equal to 100% of base salary fortermination by the fiscal year, participation in the CIC Plan and Severance Plan at the Tier I level, participation in our equity programs, and participation in our benefit plans at the same level as other senior executives. The agreement also contains one-year post-termination non-solicitation and non-competition restrictions.Company without Cause.
| EXECUTIVE COMPENSATION 45
COMPENSATION TABLES AND NARRATIVE DISCLOSURES
Jory J. Marino.(1) In February 2015, the Company entered into an employment agreement with Jory J. Marino in connection with his service as Head of Global Markets. Under this agreement the Company will pay Mr. Marino a base salary of $650,000 per year. He also will be entitled to participation in the MIP at Tier I with a target bonus opportunity equal to 100% of base salary for the fiscal year, participation in the CIC Plan and Severance Plan at the Tier I level, participation in our equity programs, and participation in our benefit plans at the same level as other senior executives. The agreement also contains one-year post-termination non-solicitation and non-competition restrictions.
Richard W. Pehlke. On August 15, 2011, Mr. Pehlke was appointed as our Executive Vice President and Chief Financial Officer. Mr. Pehlke’s letter agreement provides that he is eligible to receive an annual base salary of $400,000 for 2015, participation in the MIP at Tier I with a target bonus opportunity equal to 100% of base salary for the fiscal year, participation in the CIC Plan and Severance Plan at the Tier I level, participation in our equity programs, and participation in our benefit plans at the same level as other senior executives. The agreement also contains one-year post-termination non-solicitation and non-competition restrictions.
Stephen W. Beard. On February 11, 2011, we entered into an employment agreement with Mr. Beard, our Executive Vice President, General Counsel, Secretary and Chief Administrative Officer. This agreement was amended and restated on May 18, 2011. Under this agreement Mr. Beard’s annual base salary for 2015 was $375,000. His salary is subject to annual review (but no decrease), participation in the MIP at Tier I with a target bonus opportunity equal to 100% of base salary for the fiscal year, participation in the CIC Plan and Severance Plan at the Tier I level, participation in our equity programs, and participation in our benefit plans at the same level as other senior executives. The agreement also contains one-year post-termination non-solicitation and non-competition restrictions.
Claw-back Policy
We have a Claw-back Policy which is intended to comply with the SEC’s rules regarding the recoupment of executive compensation (i.e., claw-backs) under the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the Sarbanes-Oxley Act of 2002 requirements. This policy will be applied to all applicable incentive compensation for our named executive officers and will enable the Company to take the steps necessary to recoup executive compensation when warranted.
Deductibility of Executive Compensation
Section 162(m) of the Code limits the deduction that a publicly held corporation is allowed for compensation paid to the chief executive officer and the other three most highly compensated executive officers other than the chief financial officer. Amounts in excess of $1 million paid to a covered executive, other than performance-based compensation, cannot be deducted. We consider ways to maximize the deductibility of executive compensation but reserve the right to compensate executive officers in a manner commensurate with performance and the competitive environment for executive talent. As a result, some portion of executive compensation paid to an executive officer whose compensation is subject to the deduction limits described above may not be deductible in the United States. We have taken appropriate steps, including obtaining stockholder approval, with the intention of enabling stock options and performance-based awards made pursuant to the 2012 GlobalShare Plan and annual incentives under the MIP to be fully deductible where consistent with our compensation strategy.
2021 SUMMARY COMPENSATION TABLE
The table below summarizes the total direct compensation paid or earned by each of the named executive officersNEOs for the last three fiscal years, and only reflects information for those years in which the officer served as a “named executive”NEO was determined to be an NEO of the Company. The amounts in the Stock Awards column indicate the fair value on the grant date associated with all grants awarded in the corresponding year and may not correspond with the amounts that the NEO will eventually realize with respect to these awards. The benefit, if any, actually received from these awards will depend upon the future value of our common stock.
Name & Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards ($) (3) (4) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) (5) | All Other Compensation ($) (6) | Total ($) | ||||||||||||||||||||||||
Tracy R. Wolstencroft | 2015 | 850,000 | — | 1,700,000 | — | 1,187,344 | — | 3,737,344 | ||||||||||||||||||||||||
President & Chief Executive Officer | 2014 | 779,167 | — | 5,692,500 | — | 1,005,612 | — | 7,477,279 | ||||||||||||||||||||||||
Krishnan Rajagopalan | 2015 | 650,000 | 20,000 | 162,502 | — | 726,375 | — | 1,558,877 | ||||||||||||||||||||||||
EVP, Global Practices | ||||||||||||||||||||||||||||||||
Jory J. Marino | 2015 | 643,750 | 125,000 | 162,502 | — | 653,250 | — | 1,584,502 | ||||||||||||||||||||||||
EVP, Global Markets | 2014 | 715,598 | 812,188 | 294,750 | — | 173,875 | 15,306 | 2,011,717 | ||||||||||||||||||||||||
2013 | 850,000 | 887,671 | — | — | 27,195 | 1,764,866 | ||||||||||||||||||||||||||
Richard W. Pehlke | 2015 | 400,000 | — | 399,988 | — | 447,000 | 13,234 | 1,260,222 | ||||||||||||||||||||||||
Chief Financial Officer | 2014 | 400,000 | — | 375,000 | — | 428,000 | — | 1,203,000 | ||||||||||||||||||||||||
2013 | 375,000 | — | 375,002 | — | 378,751 | — | 1,128,753 | |||||||||||||||||||||||||
Stephen W. Beard | 2015 | 375,000 | — | 374,978 | — | 419,063 | 13,034 | 1,182,075 | ||||||||||||||||||||||||
General Counsel, Chief | 2014 | 375,000 | — | 350,006 | — | 401,250 | — | 1,126,256 | ||||||||||||||||||||||||
Administrative Officer and Secretary | 2013 | 350,000 | — | 350,000 | — | 353,500 | 12,283 | 1,065,783 |
Name & Principal Position | Year | Salary ($)1 | Bonus ($)2 | Stock ($)3 | Non-Equity Incentive Plan Compensation4 | All Other Compensation5 | Total ($) | ||||||||||||||||||||||||||||
Krishnan Rajagopalan President & Chief Executive Officer | | 2021 2020 2019 | | 850,000 850,000 850,000 | | — — — | | 2,144,226 2,171,252 2,197,147 | | 2,506,650 1,105,808 1,243,125 | | 17,400 17,100 16,800 | | 5,518,276 4,144,160 4,307,072 | |||||||||||||||||||||
Michael Cullen Chief Operating Officer | | 2021 2020 2019 | | 650,000 650,000 650,000 | | — — — | | 1,927,234 1,021,760 933,377 | | 1,277,900 563,745 633,750 | | 17,400 17,100 16,800 | | 3,872,534 2,252,605 2,233,927 | |||||||||||||||||||||
Mark Harris Chief Financial Officer | | 2021 2020 2019 | | 450,000 450,000 450,000 | | — — — | | 927,219 851,466 861,622 | | 884,700 390,285 438,750 | | 17,400 17,100 16,800 | | 2,279,319 1,708,851 1,767,172 | |||||||||||||||||||||
Sarah Payne Chief Human Resources Officer | | 2021 2020 2019 | | 300,000 275,000 275,000 | | — — — | | 405,672 340,587 236,904 | | 442,350 178,881 201,094 | | 17,103 11,000 15,125 | | 1,165,125 805,468 728,123 | |||||||||||||||||||||
Tracey Heaton Chief Legal Officer and Corporate Secretary 6 | 2021 | 51,795 | 125,000 | 125,021 | 0 | 2,000 | 303,816 | ||||||||||||||||||||||||||||
Kamau Coar Former Chief Legal Officer & Chief Inclusion Officer 7 | | 2021 2020 2019 | | 175,000 275,000 275,000 | | — — — | | 405,672 340,587 236,904 | | 0 178,881 201,094 | | 87,500 17,100 16,800 | | 668,172 811,568 729,798 |
Amounts reflect base salary paid in the year pursuant to employment agreements. |
The amount reported in this column for Ms. Heaton represents a |
Amounts reflect annual LTI awards granted under the GlobalShare Plan in a combination of PSUs and RSUs. The grant date fair value of RSUs and PSUs was calculated in accordance with ASC Topic 718. The fair values of the RSUs |
The |
The amounts reported in the All Other Compensation column |
6 | Ms. Heaton was appointed as the Company’s Chief Legal Officer and |
7 | Mr. Coar served as Chief Legal Officer & Chief Inclusion Officer until his employment terminated in |
46 EXECUTIVE COMPENSATION |
20152021 GRANTS OF PLAN-BASED AWARDS TABLE
The table below sets forth certain information with respect to awards that were granted during the fiscal year ended December 31, 20152021 for each named executive officer.NEO.
Name & Principal Position | Grant Date | Date of HRCC Action |
Estimated Possible | Estimated Future Payouts Under Equity Incentive Plan Awards (4) | All Other Stock Awards: Number of Shares of Stock or Units (#) (5) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) (6) | ||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||
Tracy R. Wolstencroft | 9-Mar-15(1) | 531,250 | 1,062,500 | 1,593,750 | 0 | — | — | — | — | — | 850,000 | |||||||||||||||||||||||||||||||||||
President and Chief Executive Officer | 9-Mar-15(2) | 9-Feb-15 | — | — | — | 0 | 35,956 | 71,912 | 35,956 | — | — | 850,000 | ||||||||||||||||||||||||||||||||||
Krishnan Rajagopalan | 9-Mar-15(1) | 9-Feb-15 | 325,000 | 650,000 | 975,000 | 81,251 | ||||||||||||||||||||||||||||||||||||||||
Executive Vice President, Global Practices | 9-Mar-15(2) | — | — | — | 0 | 3,437 | 6,894 | 3,437 | — | — | 81,251 | |||||||||||||||||||||||||||||||||||
Jory J. Marino | 9-Mar-15(1) | 9-Feb-15 | 325,000 | 650,000 | 975,000 | — | — | — | — | — | — | 81,251 | ||||||||||||||||||||||||||||||||||
Executive Vice President, Global Markets | 9-Mar-15(2) | — | — | — | 0 | 3,437 | 6,874 | 3,437 | — | — | 81,251 | |||||||||||||||||||||||||||||||||||
Richard W. Pehlke | 9-Mar-15(1) | 9-Feb-15 | 200,000 | 400,000 | 600,000 | — | — | — | — | — | — | 199,994 | ||||||||||||||||||||||||||||||||||
Chief Financial Officer | 9-Mar-15(2) | — | — | — | 0 | 8,460 | 16,920 | 8,460 | — | — | 199,994 | |||||||||||||||||||||||||||||||||||
Stephen W. Beard | 9-Mar-15(1) | 9-Feb-15 | 187,500 | 375,000 | 562,500 | — | — | — | — | — | — | 187,489 | ||||||||||||||||||||||||||||||||||
General Counsel, Chief Administrative Officer & Secretary | 9-Mar-15(2) | — | — | — | 0 | 7,931 | 15,862 | 7,931 | — | — | 187,489 |
Name & Principal Position | Grant Date | Date of HRCC Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards3 | Estimated Future Payouts Under Equity Incentive Plan Awards4 | All Other Stock Awards: Number of Shares of Stock or Units (#)5 | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant ($)6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Krishnan President & Chief Executive Officer | 1 3/9/212 | 2/3/21 2/3/21 2/3/21 | 637,500 — — | 1,275,000 — — | 2,550,000 — — | — — | — — | — — | — 25,034 — | — — — | — — — | 0 925,006 1,219,220 | ||||||||||||||||||||||||||||||||||||||||||||||||
Michael Cullen Chief Operating Officer | 1 3/9/212 | 2/3/21 2/3/21 | 325,000 — — | 650,000 — — | 1,300,000 — — | — — 5,690 | — — 11,380 | — — 22,760 | — 37,889 — | — — — | — — — | 0 1,399,999 527,235 | ||||||||||||||||||||||||||||||||||||||||||||||||
Mark Harris Chief Financial Officer | 1 3/9/212 | 2/3/21 2/3/21 2/3/21 | 225,000 — — | 450,000 — — | 900,000 — — | — — 5,690 | — — 11,380 | — — 22,760 | — 10,825 — | — — — | — — — | 0 399,984 527,235 | ||||||||||||||||||||||||||||||||||||||||||||||||
Sarah Payne Chief Human Resources Officer | 1 3/9/212 3/30/212 | 2/3/21 2/3/21 2/3/21 | 112,500 — — | 225,000 — — | 450,000 — — | — — 2,490 | — — 4,979 | — — 9,958 | — 4,736 — | — — — | — — — | 0 174,995 230,677 | ||||||||||||||||||||||||||||||||||||||||||||||||
Tracey Heaton Chief Legal Officer and Corporate Secretary | 12/21/217 | 11/3/21 | — — — | — — — | — — — | — — — | — — — | — — — | 2,894 — — | — — — | — — — | 125,021 0 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Kamau Coar Former Chief Legal Officer & Chief Inclusion Officer 8 | 1 3/9/212 | 2/3/21 2/3/21 2/3/21 | 131,250 — — | 262,500 — — | 525,000 — — | — — | — — | — — | — 4,736 — | — — — | — — — | 0 174,995 230,677 |
1 | The amounts in this row reflect (i) aNon-Equity Incentive Plan Award representing our annual Short-Term Incentive MIP awards for |
The amounts in this row include awards granted on March 9, |
With respect to ourNon-Equity Incentive Plan Awards representing our annual Short-Term Incentive MIP awards, the performance goals were established by the HRCC |
With respect to ourEquity Incentive Plan Awards representing our annual |
With respect to ourAll Other Stock Awards representing our annual |
Reflects the grant date fair value of RSUs and PSUs calculated in accordance with ASC Topic 718. The grant date fair value of RSUs and PSUs was calculated in accordance with ASC Topic 718. The fair values of the RSUs |
7 | Upon joining the Company, Ms. Heaton received an award of 2,894 RSUs, which vests in three equal installments on each of the first three anniversaries of the grant |
8 | Mr. Coar served as Chief Legal Officer & Chief Inclusion Officer until his employment terminated in June 2021. Outstanding, unvested RSUs and |
| EXECUTIVE COMPENSATION 47
20152021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-ENDYEAR END TABLE
The table below includes certain information with respect to restricted stock unitsRSUs and performance stock unitsPSUs previously awarded under our GlobalShare Plan to the named executive officersNEOs that were outstanding as of December 31, 2015.2021. The market value of each award was determined using our closing stock price on December 31, 20152021 (the last trading day of 2015)2021), $27.22.of $43.73. No stock options were outstanding as of December 31, 2015.2021.
Name and Principal Position | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) (1) | Equity Incentive Plan Awards; Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) (2) | ||||||||||||
Tracy R. Wolstencroft | 125,000 | (3) | 3,402,500 | 125,000 | (8) | 3,402,500 | ||||||||||
President and Chief | 28,838 | (4) | 784,970 | 43,257 | (9) | 1,177,456 | ||||||||||
Executive Officer | 35,956 | (5) | 978,722 | 35,956 | (10) | 978,722 | ||||||||||
Krishnan Rajagopalan | 3,437 | (5) | 93,555 | 3,437 | (10) | 93,555 | ||||||||||
EVP, Global Practices | ||||||||||||||||
Jory J. Marino | 10,000 | (6) | 272,200 | 3,437 | (10) | 93,555 | ||||||||||
EVP, Global Markets | 3,437 | (5) | 93,555 | |||||||||||||
Richard W. Pehlke | 4,500 | (7) | 122,490 | 13,499 | (11) | 367,443 | ||||||||||
Chief Financial Officer | 6,362 | (4) | 173,174 | 9,542 | (9) | 259,733 | ||||||||||
8,460 | (5) | 230,281 | 8,460 | (10) | 230,281 | |||||||||||
Stephen W. Beard | 4,200 | (7) | 114,324 | 12,599 | (11) | 342,945 | ||||||||||
General Counsel, Chief | 5,938 | (4) | 161,632 | 8,906 | (9) | 242,421 | ||||||||||
Administrative Officer and Secretary | 7,931 | (5) | 215,882 | 7,931 | (10) | 215,882 |
Name & Principal Position | Number of Shares or (#) | Market Value of Shares ($)1 | Equity Incentive Plan (#) | Equity Incentive Plan ($)1 | ||||||||||||||||
Krishnan Rajagopalan President & Chief Executive Officer | | 7,819 27,209 25,034 | 2 3 4 | | 341,925 1,189,850 1,094,737 | | 32,602 81,626 52,632 | 5 6 7 | | 1,425,685 3,569,505 2,301,597 | ||||||||||
Michael Cullen Chief Operating Officer | | 3,322 12,804 37,889 | 2 3 4 | | 145,271 559,919 1,656,886 | | 13,850 38,412 22,760 | 5 6 7 | | 605,661 1,679,757 995,295 | ||||||||||
Mark Harris Chief Financial Officer | | 3,066 10,670 10,825 | 2 3 4 | | 134,076 466,599 473,377 | | 12,785 32,010 22,760 | 5 6 7 | | 559,088 1,399,797 995,295 | ||||||||||
Sarah Payne Chief Human Resources Officer | | 843 4,268 4,736 | 2 3 4 | | 36,864 186,640 207,105 | | 3,515 12,804 9,958 | 5 6 7 | | 153,725 559,919 435,463 | ||||||||||
Tracey Heaton Chief Legal Officer & Corporate Secretary | 2,894 | 8 | 126,555 | 0 | 0 | |||||||||||||||
Kamau Coar Former Chief Legal Officer & Chief Inclusion Officer 9 | 0 | 0 | 0 | 0 |
The market value of the stock awards |
Consists of RSUs granted on March |
Consists of RSUs granted on March 9, |
Consists of RSUs granted on March |
|
Consists of the unvested portion of PSUs granted on March |
Consists of the unvested portion of PSUs granted on March 9, |
Consists of the unvested portion of |
8 | Consists of the unvested portion of RSUs relating to the award of 2,894 RSUs provided to Ms. Heaton in December 2021 upon joining the Company and which vest ratably on December 21, 2022, December 21, 2023 and December 21, 2024. |
9 | Mr. Coar forfeited his outstanding equity awards in connection with the termination of his employment in June 2021. |
48 EXECUTIVE COMPENSATION |
20152021 OPTION EXERCISES AND STOCK VESTED TABLE
The table below includes certain information with respect to the vesting of restricted stock unitsRSUs and PSUs for the named executive officersNEOs during the fiscal year ended December 31, 2015.2021. There are no outstanding stock options for our named executive officers.NEOs. The Company has not issued stock options since September 2008. The options granted in September 2008 had a ten-year term and have expired.
Stock Awards | ||||||||
Name & Principal Position | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | ||||||
Tracy R. Wolstencroft | 14,419 | 340,865 | ||||||
President and Chief Executive Officer | ||||||||
Krishnan Rajagopalan | — | — | ||||||
Executive Vice President, Global Practices | ||||||||
Jory J. Marino | 5,000 | 118,200 | ||||||
Executive Vice President, Global Markets | ||||||||
Richard W. Pehlke | 18,154 | 429,161 | ||||||
Chief Financial Officer | ||||||||
Stephen W. Beard | 15,547 | 367,531 | ||||||
General Counsel, Chief Administrative Officer and Secretary |
Stock Awards | ||||||||||
Name & Principal Position | # of Shares Acquired (#)1 | Value Realized on ($)2 | ||||||||
Krishnan Rajagopalan Chief Executive Officer & President | 73,413 | 2,629,929 | ||||||||
Michael Cullen Chief Operating Officer | 25,397 | 941,773 | ||||||||
Mark Harris Chief Financial Officer | 25,307 | 907,813 | ||||||||
Sarah Payne Chief Human Resources Officer | 4,015 | 149,206 | ||||||||
Tracey Heaton Chief Legal Officer & Corporate Secretary | 0 | 0 | ||||||||
Kamau Coar Former Chief Legal Officer & Chief Inclusion Officer | 8,106 | 291,154 |
The amounts reflect the number of |
The amounts reflect the pre-tax value of the number of RSUs and PSUs vesting multiplied by the closing market price of our stock on the date of vesting. In those cases where the date of vesting falls on a weekend or holiday, the closing market price of the stock on the next business day is used. |
Pension benefits are not provided to any of our named executive officers.the NEOs.
NONQUALIFIED DEFERRED COMPENSATION
Pursuant to ourHeidrick’s U.S. Employee Deferred Compensation (EDC) Plan (the “EDC Plan”), each named executive officerNEO (based in the U.S. only) may defer up to 25% of his or her base salary not to exceed $500,000 per year and up to 25% of his or her cash incentive compensation not to exceed $500,000 per year. The purpose of the EDC Plan is to facilitate future wealth creation and individual financial planning by deferring payments earned today to the future.
A participant completes an election form at the time he or she enrolls in ourthe EDC Plan and chooses from investment funds offered by the EDC Plan Administrator. We doThe Company does not contribute to the amount deferred nor do wedoes it provide above market rates on the investment funds. The Administrator calculates the earnings for the funds selected for each participant’s account. A participant makes distribution elections on the enrollment form and can elect to receive his or her distributions on either a date specified in the future (as long as it is at least three years from the effective date that contributions begin) or upon termination. A participant can also elect to receive his or her distributions in either a lump sum or in installments (over five, ten or fifteen years) paid quarterly and/or on a declining balance approach.
| EXECUTIVE COMPENSATION 49
In 2015,2021, the only named executive officerNEO who participated in, or had an account balance under, ourthe EDC Plan was Mr. Marino.Cullen.
Nonqualified Deferred Compensation for 2015 | ||||||||||||||||||||
Name & Principal Position | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) (1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||
Jory J. Marino | 0 | 0 | 2,045 | 0 | 663,726 | |||||||||||||||
EVP, Global Markets |
Nonqualified Deferred Compensation for 2021 | |||||||||||||||||||||||||
Name & Principal Position | Executive ($) | Registrant ($) | Aggregate Earnings in Last FY ($)1 | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | ||||||||||||||||||||
Michael Cullen Chief Operating Officer | 0 | 0 | 273,043 | 0 | 2,059,232 |
Aggregate earnings were not included in the 2021 Summary Compensation Table. There are no above-market or preferential earnings provided. |
POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL
We provideHeidrick provides certain benefits to eligible employees upon certain types of termination of employment, including a termination of employment following a change in control of the Company. Certain benefits are in addition to the benefits to which the employee would be entitled upon a termination of employment generally (i.e., vested retirement benefits accrued as of the date of termination, equity-based awards that are vested as of the date of termination, and the right to continued medical coverage pursuant to COBRA). These incremental benefits as they pertain to the named executive officerscontinuing NEOs are described below.
CHANGE IN CONTROL SEVERANCE PLAN (“CIC PlanPLAN”)
All named executive officers who are officers subject to Section 16 of the Securities Exchange Act of 1934continuing NEOs are participants under the CIC Plan. The CIC Plan provides severance benefits to the executive if he or she isthey are terminated by usthe Company without cause,“Cause,” or if the executive terminates his or hertheir employment with us for good reason,“Good Reason,” within two years of a change“Change in controlControl” of the Company (or within six months prior to a changeChange in controlControl of the Company if such termination is effected prior to, but in anticipation of, the changeChange in control)Control). The following benefits are to be provided under the CIC Plan to a participant upon a qualifying termination of employment:
Salary and other compensation earned but not paid as of the termination date, including any unpaid bonus and earned but unused vacation time.
A prorated bonus payment equal to the participant’s annual target bonus under the MIP as of the date immediately prior to the changeChange in controlControl (the “bonus amount”“bonus amount”).
A lump sum payment equal to the sum of the participant’s base salary (the highest annual rate during the preceding 12 months) and annual target bonus amount multiplied by a factor of:
2.5 for the Chief Executive Officer.CEO.
2.0 for any participant in a Tier I position, which includes all other named executive officers.continuing NEOs.
Double trigger accelerated vesting of unvested stock awards (PSUs vest at the greater of target level or the number that would be achieved based on performance)performance as of the date of the Change of Control) after a changeChange in controlControl if the CIC Plan participant’s employment is terminated for certain reasons within the two-year period beginning on the date of a changeChange in control.Control.
Continuation of health, dental and/or vision benefits for up to one year at no additional cost to the participant with the same terms in effect immediately prior to the termination date.
Reimbursement of reasonable legal fees incurred by the participant in enforcing in good faith his or her rights under the CIC Plan (unless the participant was terminated for cause)Cause).
The CIC Plan does not provide an excise tax gross-up, but instead permits all participants to either elect to have their parachute payments reduced to ensure no excise tax liability or to receive the full amount of parachute payments and be responsible for paying all related excise taxes, interest and penalties.
The CIC Plan contains restrictive covenants that prohibit the participant, for a period of time, from working on the accounts of certain clients, with respect to which he or she had significant involvement, providing services to competitors, or soliciting or hiring employees or employee candidates of the Company. In order to receive benefits under the CIC Plan, the participant must waive his or her right to receive any severance benefits he or she is entitled to receive under any other Company severance plan or employment agreement to which we are a party.
50 EXECUTIVE COMPENSATION |
For purposes of the CIC Plan:
“Cause” means the executive’s (i) willful and continued failure to substantially perform his or her duties that is not cured after notice from us (other than a failure due to a physical or mental condition), or (ii) willful misconduct that is materially injurious to us.
“Good reason”Reason” means the occurrence of one of the following events without the executive’s written consent: (i) the assignment to the executive of duties inconsistent with, or a reduction in his or her responsibilities or functions associated with, his or her position immediately prior to the change in control; (ii) a reduction in the executive’s base salary or any failure to pay the executive any compensation within seven days of the due date for such payment; (iii) a change by 50 miles or more of the executive’s principal work location; (iv) a substantial change in the executive’s required business travel; (v) our failure to continue substantially similar benefits under itsour welfare and fringe benefit plans, its taking any action that adversely affects or reduces the executive’s benefits under such plans, or itsour failure to provide the executive with his or her accrued vacation days in accordance with our policy in effect immediately prior to the change in control; (vi) the failure to provide the executive with the bonus and long term incentive opportunity available immediately prior to the change in control; (vii) a material increase in the executive’s working hours; or (viii) the failure of any successor to the Company to assume the obligations under the CIC Plan.
• | “Change in |
Severance PlanMANAGEMENT SEVERANCE PAY PLAN (THE “SEVERANCE PLAN”)
The Severance Plan provides severance benefits to select employees. Benefits are available if an employee is terminated without Cause as defined in the Severance Plan (and, in the case of Mr. Rajagopalan, upon his resignation for Good Reason per the terms of and as defined in his employment agreement). Benefits are not available if the termination is for Cause or due to voluntary resignation, leave of absence, retirement, death or disability. If the termination is due to the employee’s transfer to an unaffiliated business, the sale of the stock or assets of the Company or the outsourcing of a division, department, business unit or function, severance benefits will be provided only if the employee has not been offered employment with the successor entity. An employee’s receipt of severance benefits is conditioned on his or her execution of a release. The severance benefit payable to a participant is equal to the sum of the participant’s base salary rate in effect on the date of termination and target bonus amount multiplied by a factor of:
2.0 for the Chief Executive Officer;CEO;
1.5 for any Tier I MIP participant (other thanother continuing NEOs.
As per the Chief Executive Officer),terms of his employment agreement and consistent with the Company’s discretion to award the same under the Severance Plan, Mr. Rajagopalan is also entitled to receive a pro-rata annual bonus for the year during which includes each of the other named executive officers.
his employment is terminated. The severance benefits will be paid to the participant in equal installments over the severance period in accordance with applicable payroll procedures, beginning no later than 30 days after the participant delivers an executed release. In addition,Until the earliest of one year following the participant’s termination of employment, the end of the applicable severance period, or the date on which the participant becomes employed and covered under another employer’s benefit plan, Heidrick shall maintain and pay the full cost of the participant’s health benefits. The Company may, in its discretion, pay to the employee an amount equal to the employee’s target bonus amount for the performance period in which the termination occurs, subject to any ordinary course adjustments applicable to all participants in the applicable bonus plan. Finally, the Severance Plan includes six-month non-solicitation and non-competenon-competition provisions that apply to the extent the participant is not already subject to such restrictions pursuant to another agreement with us.
Bonus, Restricted Stock Unit | EXECUTIVE COMPENSATION 51
In April 2022, after a review of competitive data for the Company and Bonus Cash Deferral Retirement Policyits peer group, the Board approved an amendment to the Severance Plan which provides for the partial acceleration of a prorated portion of unvested RSUs upon a termination without cause for the CEO and other NEOs. Additionally, the six-month non-solicitation and non-competition provisions of the Severance Plan were increased from six to 12 months for the CEO and NEOs, which aligns with the restrictive covenants contained in their pre-existing employment agreements.
BONUS, RSU, PSU AND BONUS CASH DEFERRAL RETIREMENT POLICY (“RETIREMENT POLICY”)
We maintain a Bonus, Restricted Stock Unit and Bonus Cash Deferral Retirement Policy (Retirement Policy). Under the Retirement Policy that was in effect during 2021, an employee iswas eligible for retirement if all three of the following criteria have beenwere met:
Age 55 or older on the date of retirement, provided they are age 50 or older as of March 23, 2018, or alternatively age 62 on the date of retirement;
Combined age and years of service add up to at least 70 on the date of retirement; and
• | Notification of the intent to retire is made no later than October 15thof the |
OurThe Company’s Retirement Policy allows for the continued vesting of RSUs, and bonus cash deferrals,PSUs and the payment of the annual incentive, if any, that would have been payable in the year of retirement even if the employee retires prior to the actual date of payment.
For PSUs granted after March 22, 2019, an employee is eligible to receive continued vesting of the PSUs, subject to performance, prorated based on the percentage of the three-year performance period worked. The award will be forfeited for those with greater than two years remaining in the vesting period and prorated for all others. Restrictive covenants will extend to the end of the vesting period for all equity awards upon retirement. Mr. Marino is the only named executive officer whoRajagopalan was eligible for retirement under the Retirement Policy as of December 31, 2015.
2012 GlobalShare Plan
All employees are eligible2021. In March 2022, after a review of competitive data for the Company and its peer group, the HRCC approved an amendment to receive awards under our 2012 GlobalShare Plan. For purposesthe Retirement Policy which provides for continued vesting of PSUs upon retirement, provided the NEO has met the “Career Vesting” provisions of the Plan,Retirement Policy, which require the definitionNEO to be 62 years of age and have a change in control is the same as included in our CIC Plan.
All agreements with respect to awardsminimum of stock options, RSUs and PSUs granted under the2012 GlobalShare Plan provide for immediate vestingfive years of all outstanding awards in the event of a termination by reason of death or disability as defined under the Program. In such events, the PSUs would vest at target upon death or disability. The award agreements were amended in 2011 to provide that (i) after a change in control and an executive officer’s termination of employment for certain reasons within the two-year period beginningtenure on the date of a change in control, the unvested awards immediately vest; and (ii) awards under agreements are subject to the Company’s Claw-Back Policy.retirement.
Bonus Deferrals
Management Incentive Plan. As previously discussed under the section headingAnnual Incentives above, 15 percent of each named executive officer’s earned MIP bonus for a particular year is mandatorily deferred and the deferred amount is then paid out equally over the following three years. In the event of a change in control, death or disability, such amounts would vest and be paid out in a single lump sum within 30 days. If an executive officer leaves prior to payment of any deferred MIP bonus amount, such amounts are forfeited.
Fee and Source of Business Plan (FSOB Plan). Our consultants also must defer 15 percent of the annual bonus amounts earned under the Company’s FSOB Plan which is our compensation plan that covers all partners in a consultant role and provides a tiered payout based on the revenue credits earned by the consultant for both origination of new business and for execution of client service engagements. The deferred amount is then paid out equally over the following three years. If an executive officer leaves prior to payment of any deferred FSOB bonus amount, such amounts are forfeited.
The named executive officers had the following deferred amounts outstanding at December 31, 2015 under either our MIP or FSOB Plan:
Outstanding Amount of Deferred Bonus Payout for: | ||||||||||||||||
Executive | 2012 | 2013 | 2014 | Total | ||||||||||||
Tracy R. Wolstencroft | — | — | $ | 150,842 | $ | 150,842 | ||||||||||
Krishnan Rajagopalan | $ | 62,101 | $ | 185,028 | $ | 312,945 | $ | 560,074 | ||||||||
Jory J. Marino | $ | — | $ | 88,678 | $ | 66,159 | $ | 154,927 | ||||||||
Richard W. Pehlke | $ | 10,080 | $ | 37,876 | $ | 64,200 | $ | 112,156 | ||||||||
Stephen W. Beard | $ | 8,063 | $ | 35,350 | $ | 60,187 | $ | 103,600 |
Contingent PaymentsCONTINGENT PAYMENTS
The tables below show the additional benefits and payments to be made to each of our continuing NEOs in the event of a termination by usthe Company without cause, resignation by the executive for good reason (applicable only to Mr. Rajagopalan), termination by reason of death or long-term disability, or termination following a change in control of the Company, on December 31, 2015 (the last business day2021. The tables assume the exercise of discretion under the Severance Plan to pay out bonus amounts in fiscal 2015) for eachrespect of Tracy R. Wolstencroft, Krishnan Rajagopalan, Jory J. Marino, Richard W. Pehlke,the year of termination. As described above, Mr. Coar and Stephen W. Beard.
Tracy R. Wolstencroftthe Company entered into the Coar Separation Agreement in connection with his termination of employment in June 2021, pursuant to which he received a cash payment in the amount of $87,500, representing three months’ base salary, and three months of continued health coverage at active employee rates.
Involuntary Termination Without Cause (1) | Death or Long-Term Disability (3) | Termination following a Change in Control (4) | ||||||||||
Base salary | $ | 1,700,000 | — | $ | 2,125,000 | |||||||
Management bonus | $ | 2,125,000 | — | $ | 2,656,250 | |||||||
Prorated bonus | — | — | $ | 1,062,500 | ||||||||
Continued health coverage | $ | 24,875 | (2) | — | $ | 18,479 | (5) | |||||
Vesting of unexercisable stock options | — | — | — | |||||||||
Vesting of outstanding RSUs and PSUs | — | $ | 10,724,871 | $ | 10,724,871 | |||||||
Vesting of deferred Fee/SOB Bonuses | — | — | — | |||||||||
Vesting of deferred MIP Bonuses (7) | $ | 150,842 | $ | 150,842 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 3,849,875 | $ | 10,875,713 | $ | 16,737,942 | ||||||
|
|
|
|
|
|
52 EXECUTIVE COMPENSATION |
Krishnan Rajagopalan
Involuntary Termination Without Cause (1) | Death or Long-Term Disability (3) | Termination following a Change in Control (4) | ||||||||||
Base salary | $ | 975,000 | — | $ | 1,300,000 | |||||||
Management bonus | $ | 975,000 | — | $ | 1,300,000 | |||||||
Prorated bonus | — | — | $ | 650,000 | ||||||||
Continued health coverage | $ | 24,819 | (2) | — | $ | 18,447 | (5) | |||||
Vesting of unexercisable stock options | — | — | — | |||||||||
Vesting of outstanding RSUs and PSUs | — | $ | 187,110 | $ | 187,110 | |||||||
Vesting of deferred Fee/SOB Bonuses | — | $ | 506,125 | $ | 506,125 | |||||||
Vesting of deferred MIP Bonuses (7) | $ | 53,949 | $ | 53,949 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,974,819 | $ | 747,184 | $ | 4,015,631 | ||||||
|
|
|
|
|
|
Involuntary Termination ($)1 | Resignation for Good Reason | Death or Long-Term Disability ($) | Termination in Control ($)2 | |||||||||||||||||
Base Salary | 1,700,000 | 1,700,000 | — | 2,125,000 | ||||||||||||||||
Management Bonus | 2,550,000 | 2,550,000 | — | 3,187,500 | ||||||||||||||||
Prorated Bonus | 1,275,000 | 1,275,000 | — | 1,275,000 | ||||||||||||||||
Continued Health Coverage3 | 21,469 | 21,469 | — | 17,097 | ||||||||||||||||
Vesting of Unexercisable Stock Options | — | — | — | — | ||||||||||||||||
Vesting of Outstanding RSUs and PSUs4 | — | — | 6,587,750 | 5,225,633 | ||||||||||||||||
Vesting of Deferred Bonus | — | — | 385,809 | 385,809 | ||||||||||||||||
Total | 5,546,469 | 5,546,469 | 6,973,559 | 12,216,039 |
Jory J. MarinoMichael Cullen
Involuntary Termination Without Cause (1) | Death or Long-Term Disability (3) | Termination following a Change in Control (4) | ||||||||||
Base salary | $ | 975,000 | — | $ | 1,300,000 | |||||||
Management bonus | $ | 975,000 | — | $ | 1,300,000 | |||||||
Prorated bonus | — | — | $ | 650,000 | ||||||||
Continued health coverage | $ | 16,781 | (2) | — | $ | 12,521 | (5) | |||||
Vesting of unexercisable stock options | — | — | — | |||||||||
Vesting of outstanding RSUs and PSUs | — | $ | 459,310 | $ | 459,310 | |||||||
Vesting of deferred Fee/SOB Bonuses | — | $ | 65,154 | $ | 65,154 | |||||||
Vesting of deferred MIP Bonuses (7) | $ | 89,773 | $ | 89,773 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,966,781 | $ | 614,237 | $ | 3,876,758 | ||||||
|
|
|
|
|
|
Involuntary Termination ($)1 | Death or Long-Term Disability ($) | Termination Following a Change in Control | |||||||||||||
Base Salary | 975,000 | — | 1,300,000 | ||||||||||||
Management Bonus | 975,000 | — | 1,300,000 | ||||||||||||
Prorated Bonus | — | — | 650,000 | ||||||||||||
Discretionary Severance Bonus | 650,000 | — | — | ||||||||||||
Continued Health Coverage3 | 12,600 | — | 8,688 | ||||||||||||
Vesting of Unexercisable Stock Options | — | — | — | ||||||||||||
Vesting of Outstanding RSUs and PSUs4 | — | 4,135,327 | 3,523,603 | ||||||||||||
Vesting of Deferred Bonus | — | 189,264 | 189,264 | ||||||||||||
Total | 2,612,600 | 4,324,591 | 6,971,555 |
Richard W. Pehlke | EXECUTIVE COMPENSATION 53
Mark Harris
Involuntary Termination Without Cause (4) | Death or Long-Term Disability (3) | Termination following a Change in Control (4) | ||||||||||
Base salary | $ | 600,000 | — | $ | 800,000 | |||||||
Management bonus | $ | 600,000 | — | $ | 800,000 | |||||||
Prorated bonus | — | — | $ | 400,000 | ||||||||
Continued health coverage | $ | 16,781 | (2) | — | $ | 12,521 | (5) | |||||
Vesting of unexercisable stock options | — | — | — | |||||||||
Vesting of outstanding RSUs and PSUs (6) | — | $ | 1,383,402 | $ | 1,383,402 | |||||||
Vesting of deferred MIP Bonus (7) | — | $ | 112,156 | $ | 112,156 | |||||||
|
|
|
|
|
| |||||||
Total | $ | 1,216,781 | $ | 1,495,558 | $ | 3,508,079 | ||||||
|
|
|
|
|
|
Involuntary Termination ($)1 | Death or Long-Term Disability ($) | Termination Following a Change in Control | |||||||||||||
Base Salary | 675,000 | — | 900,000 | ||||||||||||
Management Bonus | 675,000 | — | 900,000 | ||||||||||||
Prorated Bonus | — | — | 450,000 | ||||||||||||
Discretionary Severance Bonus | 450,000 | — | — | ||||||||||||
Continued Health Coverage3 | 35,254 | — | 25,777 | ||||||||||||
Vesting of Unexercisable Stock Options | — | — | — | ||||||||||||
Vesting of Outstanding RSUs and PSUs4 | — | 2,673,827 | 2,108,763 | ||||||||||||
Vesting of Deferred Bonus | — | 133,356 | 133,356 | ||||||||||||
Total | 1,835,254 | 2,807,183 | 4,517,895 |
Stephen W. BeardSarah Payne
Involuntary Termination Without Cause (4) | Death or Long-Term Disability (3) | Termination following a Change in Control (4) | ||||||||||
Base salary | $ | 562,500 | — | $ | 750,000 | |||||||
Management bonus | $ | 562,500 | — | $ | 750,000 | |||||||
Prorated bonus | — | — | $ | 375,000 | ||||||||
Continued health coverage | $ | 24,819 | (2) | — | $ | 18,447 | (5) | |||||
Vesting of unexercisable stock options | — | — | — | |||||||||
Vesting of outstanding RSUs and PSUs (6) | — | $ | 1,293,086 | $ | 1,293,086 | |||||||
Vesting of deferred MIP Bonuses (7) | — | $ | 103,600 | $ | 103,600 | |||||||
|
|
|
|
|
| |||||||
Total | $ | 1,149,819 | $ | 1,396,686 | $ | 3,290,133 | ||||||
|
|
|
|
|
|
Involuntary Termination ($)1 | Death or Long-Term ($) | Termination Following a Change in Control | |||||||||||||
Base Salary | 450,000 | — | 600,000 | ||||||||||||
Management Bonus | 337,500 | — | 450,000 | ||||||||||||
Prorated Bonus | 225,000 | ||||||||||||||
Discretionary Severance Bonus | 225,000 | — | — | ||||||||||||
Continued Health Coverage3 | 35,254 | — | 25,777 | ||||||||||||
Vesting of Unexercisable Stock Options | — | — | — | ||||||||||||
Vesting of Outstanding RSUs and PSUs4 | — | 1,038,894 | 800,419 | ||||||||||||
Vesting of Deferred Bonus | — | 46,942 | 46,942 | ||||||||||||
Total | 1,047,754 | 1,085,836 | 2,148,138 |
54 EXECUTIVE COMPENSATION |
Tracey Heaton
Involuntary Termination ($)1 | Death or Long-Term Disability ($) | Termination Following a Change in Control | |||||||||||||
Base Salary | 600,000 | — | 800,000 | ||||||||||||
Management Bonus | 450,000 | — | 600,000 | ||||||||||||
Prorated Bonus | — | — | 300,000 | ||||||||||||
Discretionary Severance Bonus | 300,000 | — | — | ||||||||||||
Continued Health Coverage3 | 35,254 | — | 25,777 | ||||||||||||
Vesting of Unexercisable Stock Options | — | — | — | ||||||||||||
Vesting of Outstanding RSUs and PSUs4 | — | 126,555 | 126,555 | ||||||||||||
Vesting of Deferred Bonus | — | — | — | ||||||||||||
Total | 1,385,254 | 126,555 | 1,852,331 |
Reflects amounts payable under the Severance Plan. |
As per the terms of the CIC Plan and the GlobalShare Plan. |
3 | Under the Severance Plan, the costs of continuation of coverage are fully covered by the Company. Reflects both the individual and |
As per the terms of the GlobalShare Plan. Values calculated using the closing stock price on December 31, |
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company is providing the following information about the relationship of the annual total compensation of its employees and the annual total compensation of Mr. Krishnan Rajagopalan, President and CEO.
For our 2021 fiscal year:
the annual total compensation of the median employee (defined below) was $117,138 (the individual with such median compensation, the “median employee”); and
the annual total compensation of the CEO was $5,518,276, which is the same amount reported for 2021 as total compensation in the 2021 Summary Compensation Table.
Based on this information, for 2021, the ratio of the annual total compensation of Mr. Rajagopalan, the Chief Executive Officer, to the median employee was estimated to be 47:1.
The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on payroll and employment records and the method described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allows companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices.
The Company re-identified the median employee in 2021 by examining the 2021 compensation for all individuals, excluding the CEO, who were employed by the Company on December 31, 2021, the last day of the payroll year. For this purpose, compensation included base salary, cash bonus, overtime wages, and long-term incentives awarded in 2021. The Company included all employees, whether employed on a full-time or part-time basis. The Company annualized the base compensation for full-time employees that were not employed by the Company for all of 2021.
The Company calculated the median employee’s total annual compensation using the same methodology it uses for its NEOs as set forth in the 2021 Summary Compensation Table in this proxy statement.
REPORT OF THE HRCC
The Human Resources and Compensation Committee of the CompanyHRCC has reviewed and discussed the Compensation Discussion and AnalysisCD&A as required by Item 402(b) of Regulation S-K with managementManagement and, based on such review and discussions,discussion, the Human Resources and Compensation CommitteeHRCC recommended to the Board of Directors that the Compensation Discussion and AnalysisCD&A be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20152021, and this Proxy Statement.proxy statement.
THE HUMAN RESOURCES AND COMPENSATION COMMITTEE
Jill Kanin-Lovers (Chair)Laszlo Bock, Chair
Elizabeth L. Axelrod
Clare M. ChapmanMary E. G. Bear
Mark FosterT. Willem Mesdag
V. Paul Unruh
Pursuant to Section 14A of the Securities Exchange Act of 1934, the Company is required to submit to stockholders a resolution subject to an advisory vote to approve the compensation of the Company’s named executive officers.
Audit Matters
The Board encourages stockholders to carefully review the Executive Compensation section of this Proxy Statement, including the Compensation Discussion and Analysis, for a thorough discussion of the Company’s compensation program for named executive officers. The Company’s executive compensation objectives are to: (i) link pay with performance; (ii) be aligned with stockholder interests; (iii) support the execution of our business strategy; and (iv) attract, retain, and reward the best talent. To achieve these goals, our executive compensation programs are designed to:
Link compensation to stockholder value creation and the long-term profitable growth of the Company;
Be market competitive with the executive search, leadership advisory and other consulting firms, both public and private, with which we compete for executive talent;
Support our key business strategies, as well as our revenue and operating income growth objectives;
Be internally fair and equitable between executives;
Reflect an executive’s individual performance and career potential; and
Encourage Company stock ownership.
Accordingly, the following resolution is submitted for an advisory stockholder vote at the annual meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Disclosure and Analysis, compensation tables and narrative discussion, is hereby approved.”
As this is an advisory vote, the result will not be binding on the Company, the Board or the Human Resources and Compensation Committee, although the Board and the Human Resources and Compensation Committee will carefully consider the outcome of the vote when evaluating the Company’s compensation program.
The current frequency of our stockholder advisory vote to approve executive compensation is annually, and the next such vote will be held at our 2017 Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTEFOR THE APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.
REPORT OF THE AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS
The Audit and Finance Committee of the Board of DirectorsAFC is responsible for providing general oversight of the Company’s financial accounting and reporting processes, selection of critical accounting policies, and the Company’s system of internal controls.
The AFC is directly responsible for the appointment, compensation and oversight of our independent registered public accounting firm, RSM US LLP (“RSM”); approval of the engagement letter describing the scope of the annual audit; approval of fees for audit and non-audit services; providing an open avenue of communication among the independent registered public accounting firm, the risk and Internal Audit functions, management and Financethe Board; and preparing the Audit Committee Report required by the SEC and included in this proxy statement below. These and other aspects of the AFC’s authority are more particularly described in the AFC Charter which can be accessed at: https://investors.heidrick.com/corporate-governance.
The AFC is presentlycurrently comprised of fivethree directors, Messrs. Fazio, Logan, Mesdag and UnruhLogan, and Ms. Kanin-Lovers,Rauch, each of whom is independent within the meaning of the Company’s Corporate Governance Guidelines, Director Independence Standards and the applicable Nasdaq Rules. Additionally, Mr. Warby, who is also independent within the meaning of the Company’s Corporate Governance Guidelines, Director Independence Standards and applicable Nasdaq Rules is an ex officio member of the AFC based on his status as Chairman of the Board. The Board of Directors has determined that John A. Fazio, LyleMessrs. Logan and V. Paul UnruhMesdag are “audit committee financial experts” as defined in the SEC Rules. During 2015,2021, the Audit and Finance CommitteeAFC met eightseven times.
AUDIT & FINANCE COMMITTEE REPORT
As part of its oversight of the Company’s financial statements, the Audit and Finance CommitteeAFC reviews and discusses with both management and its independent registered public accounting firm, KPMG LLP,RSM all annual and quarterly financial statements prior to their issuance. The Audit and Finance CommitteeAFC reviews key initiatives and programs aimed at strengthening the effectiveness of the Company’s disclosure control structures;structures, including its internal controls, as well as providingand provides oversight of the Company’s risk management protocols.
The Audit and Finance CommitteeAFC reviewed and discussed with KPMG LLPRSM the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (PCAOB)(“PCAOB”) and approved by the SEC. The Audit and Finance CommitteeAFC has also received the written disclosures and the letter from KPMG LLP,RSM, required by applicable requirements of the PCAOB, regarding KPMG LLP’sRSM’s communications with the Audit and Finance CommitteeAFC concerning independence, and has discussed with KPMG LLPRSM the firm’s independence from the Company.
The Audit and Finance Committee’sAFC’s meetings generally included executive sessions with KPMG LLPRSM and with the Company’s Internal Audit function which(which has been partially outsourced to PricewaterhouseCoopers since March 2013,PricewaterhouseCoopers), in each case without the presence of management to raiseduring which members of the AFC raised and discussdiscussed any issues they may have had about the financial statements and the adequacy and proper functioning of the Company’s internal and disclosure control systems and procedures.
In performing these functions, the Audit and Finance CommitteeAFC acted and continues to act only in an oversight capacity on behalf of the Board of Directors.Board. Management has primary responsibility for the Company’s financial statements and the overall reporting process, including its systems of internal and disclosure controls. In its oversight role, the Audit and Finance CommitteeAFC necessarily relies on the procedures, work and assurances of management. KPMG LLPRSM has audited the annual financial statements prepared by management,Management, expressed an opinion as to whether those financial statements fairly present the Company’s financial position, results of operation and cash flows in conformity with generally accepted accounting principles in the U.S., and discussed any issues they believe should be raised with the Audit and Finance Committee.AFC.
During 2015,2021, management documented, tested and evaluated the Company’s internal controls pursuant to the requirements of the Sarbanes-Oxley Act of 2002 and the criteria established inInternal Control - Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Commission. Management and KPMG LLPRSM kept the Audit and Finance CommitteeAFC apprised of the Company’s progress at each regularly scheduled Audit and Finance CommitteeAFC meeting. Management and KPMG LLPRSM have each provided the Audit and Finance CommitteeAFC with a report on the effectiveness of the Company’s internal controls. The Audit and Finance CommitteeAFC has reviewed management’s and KPMG LLP’sRSM’s assessment of the effectiveness of the Company’s internal controls included in the Annual Report on Form 10-K for the year ended December 31, 2015.2021.
Based on the above mentioned reviews and discussions with managementManagement and its independent registered public accounting firm,RSM, the undersigned Audit and Finance CommitteeAFC members recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2015.2021. The Audit and Finance CommitteeAFC has also appointed KPMG LLPRSM as the Company’s independent registered public accounting firm for 2016.2022.
| AUDIT MATTERS 57
THE AUDIT AND& FINANCE COMMITTEE
John A. Fazio (Chair)
Jill Kanin-LoversT. Willem Mesdag, Chair
Lyle Logan
Willem MesdagStacey Rauch
V. Paul Unruh
AUDIT FEES& FINANCE COMMITTEE POLICY AND PROCEDURES
The Audit and Finance CommitteeAFC has established a policy governing the engagement of the Company’s independent auditorsregistered public accounting firm for audit and non-audit services. Under this policy, the Audit and Finance CommitteeAFC is required to pre-approve all audit and non-audit services performed by the Company’s independent auditors to assure that the provision of such services does not impair the auditor’s independence. The Audit and Finance CommitteeAFC has delegated the authority to evaluate and approve audit and permissible non-audit fees and engagements up to $100,000 to the Audit and Finance CommitteeAFC Chair. In this event, the Chair then presents a summary of the fees and services to the CommitteeAFC at its next meeting. The independent auditorregistered public accounting firm may not perform any non-audit service which independent auditors are prohibited from performing under the SEC Rules or the rules of the PCAOB. KPMG LLPRSM did not perform any non-audit services in 2015.2021.
At the beginning of each fiscal year, the Audit and Finance CommitteeAFC reviews with managementManagement and the independent auditorregistered public accounting firm the types of services that are likely to be required throughout the year. For each proposed service, the independent auditor provides documentation regarding the specific services to be provided. At that time, the Audit and Finance Committee AFC pre-approves a list of specific audit relatedaudit-related services that may be provided and sets fee limits for each specific service or project. Management is then authorized to engage the independent auditor to perform the pre-approved services as needed throughout the year, subject to providing the Audit and Finance CommitteeAFC with regular updates. The Audit and Finance CommitteeAFC must review and approve in advance, on a case-by-case basis, all other projects, services and fees to be performed by or paid to the independent auditor. The Audit and Finance CommitteeAFC also must approve in advance any fees for pre-approved services that exceed the pre-established limits, as described above.
All services provided by KPMG LLPRSM were approved in 2015 were, and allaccordance with the AFC’s policy in 2021.
The aggregate fees billed for services approved to be provided by KPMG LLPRSM, the Company’s independent registered public accounting firm, in 2016 will be, permissible under applicable laws2021 and regulations.2020 are as follows:
Fee Category | 2015* | 2014 | 2021 | 2020 | ||||||||||||||
Audit Fees (1) | $ | 2,400,789 | $ | 2,208,798 | ||||||||||||||
Audit-Related Fees (2) | — | $ | 30,000 | |||||||||||||||
Audit Fees1 | $ | 1,318,600 | $ | 1,250,000 | ||||||||||||||
Audit-Related Fees | — | — | ||||||||||||||||
Tax Fees | — | — | — | — | ||||||||||||||
All Other Fees | — | — | ||||||||||||||||
All Other Fees2,3 | $ | 66,700 | $ | 280,000 | ||||||||||||||
|
| |||||||||||||||||
Total Fees | $ | 2,400,789 | $ | 2,238,798 | $ | 1,385,300 | $ | 1,530,000 | ||||||||||
|
|
Fees for professional services rendered for the audit of the Company’s annual consolidated financial statements, reviews of the consolidated financial statements included in its Quarterly Reports on Form 10-Q, statutory audits required internationally, and the audit of the Company’s internal |
For year 2021, all other fees related to due diligence in connection with the |
For year 2020, all other fees related to |
58 AUDIT MATTERS |
ITEM 3—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPROPOSAL 3
Ratification of Appointment of Auditor
The Board and the AFC recommend a vote “FOR” ratification of the appointment of RSM US LLP (“RSM”) as our independent registered public accountants for the 2022 fiscal year.
The AuditAFC appointed RSM, an independent registered public accounting firm, as the auditor to audit and Finance Committeereport to stockholders on the consolidated financial statements for the Company and its subsidiaries for the fiscal year ending December 31, 2022. Although stockholder approval is not required for the appointment of RSM, the Board and the AFC has appointed KPMG LLPdetermined that it would be desirable as a good corporate governance practice to request stockholder ratification of the appointment of RSM as the Company’s independent registered public accounting firm forfirm.
The AFC has concluded that the current fiscal year ending December 31, 2016, and has further directed that management submitcontinued retention of RSM is in the appointmentbest interests of the independent registered public accounting firm for ratification by theCompany and its stockholders at the Annual Meeting. KPMG LLP was the independent registered public accounting firm for the Company for the fiscal year ended December 31, 2015, and has been the independent registered public accounting firm for the Company since 2002. We are asking the stockholders to ratify the appointment of KPMG LLPappointed RSM as the Company’s independent registered public accounting firmaccountants for the fiscal year 2016.
Representatives of KPMG LLPending December 31, 2022. Services provided to the Company by RSM in fiscal 2021 are expecteddescribed in the Fees Paid to attendAuditor section above. The AFC evaluates the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate stockholder questions.
The Company’s Amended and Restated Bylaws or other applicable legal requirements do not require stockholder ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm. However,accountant’s qualifications, performance, audit plan and independence each year. In addition to assuring regular rotation of the Board is submittinglead audit partner every five years as required by the SEC Rules, one or more of the members of the AFC will meet with candidates for the lead audit partner and the committee will discuss the appointment before the rotation occurs.
We are asking our stockholders to ratify the selection of KPMG LLP toRSM as our independent registered public accountants for the stockholders for ratification as a matter of good corporate governance.fiscal year ending December 31, 2022. In the event stockholders fail to ratify the appointment, the Board may reconsider this appointment. Even if the appointment is ratified, the Board, in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Board determines that such a change would be in the Company’s and stockholders’ best interests.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR THE 2016 FISCAL YEAR.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Various Company policies and procedures, including the Code (applicable to all executive officers and non-employee directors) and annual questionnaires completed by all Company directors and executive officers, require disclosureRepresentatives of transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable SEC and Nasdaq Rules. Pursuant to its charter, the Nominating and Board Governance Committee of the Board—in consultation with the Audit and Finance Committee—reviews and approves related party transactions. Although the Company’s processes vary with the particular transaction or relationship, when such a transaction or relationship is identified, the Nominating and Board Governance Committee evaluates the transaction or relationship and approves or ratifies it (without the vote of any interested person) only if it is judged to be fair and in the best interests of the Company. In addition, it is the practice of the Nominating and Board Governance Committee, although not part of a written policy, to review each transaction specifically disclosed as a potential related party transaction in connection with its review of the proxy statement forRSM will attend the Annual Meeting virtually and be given an opportunity to make a statement and/or respond to appropriate questions.
The Board and the AFC recommend that the stockholders ratify the appointment of Stockholders,RSM and adopt the following resolution at the Annual Meeting: “RESOLVED, that the appointment of RSM as the independent auditor of this Company for the fiscal year 2022 is hereby RATIFIED.”
In the event the stockholders do not ratify the appointment of RSM, the AFC will consider whether it should appoint an alternative firm.
| AUDIT MATTERS 59
Additional Matters
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding beneficial ownership of Company common stock by each director, each NEO, and the Directors and Executive Officers as a group, all as of March 31, 2022. Unless otherwise indicated, each person has sole voting and investment power with respect to the extentshares set forth in the following table.
Name1 | Shares of Common Stock Beneficially Owned2,3 | % | ||||||||
Elizabeth L. Axelrod | 25,343 | * | ||||||||
Mary E. G. Bear | 0 | * | ||||||||
Laszlo Bock | 7,623 | * | ||||||||
Lyle Logan | 25,343 | * | ||||||||
T. Willem Mesdag | 35,343 | * | ||||||||
Stacey Rauch | 11,248 | * | ||||||||
Adam Warby | 19,144 | * | ||||||||
Krishnan Rajagopalan | 151,092 | * | ||||||||
Michael Cullen | 25,503 | * | ||||||||
Mark Harris | 26,881 | * | ||||||||
Tracey Heaton | 0 | * | ||||||||
Sarah Payne | 6,691 | * | ||||||||
Kamau Coar | 3,155 | * | ||||||||
All Directors and Executive Officers as a group | 334,211 | 1.69 | % |
* | Represents holdings of less than 1%. |
1 | The mailing address for each NEO and Director of the Company is 233 South Wacker Drive, Suite 4900, Chicago, Illinois 60606. |
2 | In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of fully owned or earned Company common stock and RSUs as well as shares of Company common stock issued pursuant to RSUs and stock options that are exercisable on March 31, 2022, or which will become exercisable within 60 days following that date or upon termination of a director’s service to the Board, are deemed issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing the percentage ownership of any other stockholder. |
3 | The calculation of shares of Company common stock beneficially owned by the Directors includes Company common stock equivalents in the form of fully-earned RSUs that are owned by the Director for which full consideration has been received by the Company and for which there are no additional outstanding conditions. All RSUs will be converted into shares of Company common stock upon the Director’s termination of service to the Board. This includes 7,623 RSUs owned by Mr. Bock; 25,343 RSUs owned by Mr. Mesdag; and 14,144 RSUs owned by Mr. Warby. |
60 ADDITIONAL MATTERS |
Set forth in the table below is information about the number of shares held by persons the Company knows to be the beneficial owners of more than 5% of the issued and outstanding Company common stock as of March 31, 2022.
Name and Address | Shares of Common Stock Beneficially Owned | % of Class1 | ||||||||
BlackRock, Inc.2 55 East 52nd Street New York, New York 10055 | 3,217,782 | 16.32 | % | |||||||
The Vanguard Group3 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 1,446,987 | 7.34 | % | |||||||
Renaissance Technologies LLC4 800 Third Avenue New York, New York 10022 | 1,241,802 | 6.30 | % | |||||||
Dimensional Fund Advisors LP5 Building One 6300 Bee Cave Road Austin, Texas 78746 | 1,190,438 | 6.04 | % | |||||||
Royce & Associates, LP6 745 Fifth Avenue New York, NY 10151 | 1,025,868 | 5.20 | % |
1 | The ownership percentages set forth in this column are based on the assumption that each of the principal stockholders continued to own the number of shares reflected in the table above on March 31, 2022. Percentages are calculated using the shares outstanding on the Record Date. |
2 | The information is based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 7, 2022 reporting beneficial ownership as of December 31, 2021. BlackRock, Inc. reported that it has sole dispositive power over 3,217,782 shares and sole voting power over 3,167,223 shares. |
3 | The information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 10, 2022 reporting beneficial ownership as of December 31, 2021. The Vanguard Group reported that it has sole dispositive power over 1,403,308 shares; shared dispositive power over 43,679 shares; and shared voting power over 32,434 shares. |
4 | The information is based on a Schedule 13G/A filed by Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation with the SEC on February 11, 2022 reporting beneficial ownership as of December 31, 2021. Renaissance Technologies LLC reported that it has sole dispositive power over 1,241,802 shares and sole voting power over 1,198,500 shares. |
5 | The information is based on a Schedule 13G/A filed by Dimensional Fund Advisors LP with the SEC on February 8, 2022 reporting beneficial ownership as of December 31, 2021. Dimensional Fund Advisors LP reported that it has sole dispositive power over 1,190,438 shares and sole voting power over 1,163,814 shares. |
6 | The information is based on a Schedule 13G/A filed by Royce & Associates, LP with the SEC on January 21, 2022 reporting beneficial ownership as of December 31, 2021. Royce & Associates, LP reported that it has sole voting power over 1,025,868 shares; and sole dispositive power over 1,025,868 shares. |
| ADDITIONAL MATTERS 61
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
WHO IS ASKING FOR MY VOTE AND WHY?
The Board is soliciting proxies for use at the Company’s Annual Meeting to be held on May 26, 2022, or any such transactionadjournment or postponement of the meeting.
The Annual Meeting will be held entirely online at www.virtualshareholdermeeting.com/HSII2022 due to the continued health and safety concerns surrounding COVID-19, and to support the health and well-being of our employees, directors and stockholders. The Board encourages you to vote before the meeting to ensure that your shares are represented at the Annual Meeting. This proxy statement provides you with information related to the matters upon which you are asked to vote as a stockholder to assist you in voting your shares.
WHAT DOES IT MEAN TO VOTE BY PROXY?
It means that you give someone else the right to vote your shares in accordance with your instructions. The Company is asking you to give your proxy to Tracey Heaton, Chief Legal Officer & Corporate Secretary. This way, you ensure that your vote will be counted even if you are unable to attend the Annual Meeting online.
If you sign and submit your proxy or voting instruction form without giving specific instructions on how to vote your shares, in accordance with the recommendation of the Board, Ms. Heaton will vote your shares in the following manner:
FOR the election of each of the nominees for director;
FOR the advisory vote approving our executive compensation; and
FOR the ratification of the appointment of RSM US LLP as our independent registered public accountants for the 2022 fiscal year.
WHAT HAPPENS IF OTHER MATTERS ARE PRESENTED AT THE ANNUAL MEETING?
If other matters are properly presented at the Annual Meeting, Ms. Heaton will have discretion to vote your shares for you on those matters in accordance with their best judgment if you have granted a proxy. However, the Company has not previously been reviewed, applyingreceived timely notice from any stockholder of any other matter to be presented at the same standard.Annual Meeting.
There were no related party transactionsHOW DO I ATTEND THE ANNUAL MEETING?
To join the Annual Meeting, log in 2015 that required approval underat www.virtualshareholdermeeting.com/HSII2022. You will need the Company’s policies16-digit control number included on your proxy card or on any additional voting instructions accompanying these proxy materials.
The Annual Meeting will begin at 8:00 a.m. Central Time. Online check-in will be available beginning at 7:45 a.m. Central Time to allow time for stockholders to log in and procedures ortest the rules and regulationscomputer audio system.
Please allow ample time for the online check-in process. A replay of the SEC.Annual Meeting will also be posted on our website at https://investors.heidrick.com/investor-overview for at least thirty (30) days after the meeting concludes.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEWHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
Section 16(a) of the Exchange Act requires that the Company’s officers and directors, and persons who own ten percent (10%) or more of a registered classHolders of the Company’s equity securities, file reports of ownership on Form 3 and changes in ownership on Forms 4 or 5 with the SEC. These officers, directors and persons holding ten percent (10%) or morecommon stock as of the outstanding sharesclose of Company Common Stockbusiness on March 31, 2022 (the “Record Date”), are also required by SEC rules to furnish the Company with copies of all forms they file.
Based solely on a review of the copies of the forms and written representations from certain reporting persons, the Company believes that, during 2015, all forms required under Section 16(a) applicable to its officers, directors, and persons holding ten percent (10%) or more of the outstanding shares of Company Common Stock were filed on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2015, Ms. Kanin-Lovers and Messrs. Foster, Kaplan, and Unruh served on the Human Resources and Compensation Committee. No member of the Human Resources and Compensation Committee was, during 2015, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K. During 2015, none of the Company’s executive officers served on the board of directors or the compensation committee of any other entity, any officers of which served either on the Company’s board of directors or its Human Resource and Compensation Committee.
STOCKHOLDER PROPOSALS FOR NEXT YEAR’S ANNUAL MEETING
Advance Notice Procedures. Under the Company’s Amended and Restated Bylaws, no business may be brought before the 2017 Annual Meeting of Stockholders unless it is specified in the notice of the meeting or is otherwise brought before the meeting by or at the direction of the Board or by a stockholder entitled to vote at the Annual Meeting.
HOW MANY VOTES IS EACH SHARE OF COMMON STOCK ENTITLED TO?
Each share of Company common stock outstanding as of the Record Date is entitled to one vote. As of the Record Date, there were 19,722,202 shares of common stock outstanding.
62 ADDITIONAL MATTERS |
WHO CAN ATTEND THE ANNUAL MEETING ONLINE?
Stockholders as of the Record Date are entitled to attend and participate in the Annual Meeting. Others are able to access the Annual Meeting as a guest through the virtual meeting who has delivered advance noticewebsite, but are not able to ask questions or vote during the meeting.
HOW DO I SUBMIT A QUESTION AT THE ANNUAL MEETING?
You may submit a question during the meeting via our virtual stockholder meeting website, www.virtualshareholdermeeting.com/HSII2022. If your question is properly submitted, we intend to respond to your question during the Annual Meeting as time permits. Questions on similar topics will be combined and answered together.
A replay of the Annual Meeting, including the Q&A session, will also be posted on our website at https://investors.heidrick.com/investor-overview under “Proxy Materials” for at least thirty (30) days after the meeting concludes. Rules of Conduct for the meeting will be posted on the virtual meeting website and our website and will provide additional details regarding our procedures for answering questions.
WHAT IF THE COMPANY OR I ENCOUNTER TECHNICAL DIFFICULTIES DURING THE ANNUAL MEETING?
If we experience technical difficulties during the Annual Meeting (e.g., a temporary or prolonged power outage), our Chairman will determine whether the meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any situation, we will promptly notify stockholders of the decision via www.virtualshareholdermeeting.com/HSII2022.
If you encounter technical difficulties accessing our Annual Meeting or asking questions during the Annual Meeting, a support line will be available on the login page of the virtual stockholder meeting website: www.virtualshareholdermeeting.com/HSII2022.
WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND AS A BENEFICIAL OWNER?
If your shares are registered directly in your name with the Company’s transfer agent (Computershare Trust Company, N.A.), you are considered a stockholder of record with respect to those shares. If your shares are held in a bank or brokerage account, you are considered a “beneficial owner” of those shares.
HOW DO I VOTE MY SHARES?
Beneficial Stockholders – If you own shares through a broker, bank or other holder of record, you must instruct the holder of record how to vote your shares, or you can vote during the Annual Meeting. In order to provide voting instructions to the Company. The advance noticeholder of record of your shares, please refer to the materials forwarded by your broker, bank, or other holder of record. Proxies submitted by internet or telephone must contain certain information specifiedbe received by 11:59 p.m. Eastern Time, on May 25, 2022. You are also invited to attend the Annual Meeting online at www.virtualshareholdermeeting.com/HSII2022. To participate in the Company’s AmendedAnnual Meeting, you will need the 16-digit control number included on your proxy card or on any additional voting instructions accompanying these proxy materials. Even if you plan to attend the Annual Meeting, we encourage you to submit your voting instructions to your broker, bank or other holder of record in advance of the Annual Meeting.
Registered Stockholders – If you own shares that are registered in your name, you may vote by proxy before the Annual Meeting by internet at www.proxyvote.com, by calling 1-800-690-6903 or by signing and Restated Bylawsreturning your proxy card by mail. To vote by internet or telephone, you will need your 16-digit voting control number, which can be found on your proxy card. Proxies submitted by internet or telephone must be received by 11:59 p.m. Eastern Time, on May 25, 2022. If you return a signed proxy card but do not provide voting instructions for some or all of the matters to be voted on, your shares will be voted on all uninstructed matters in accordance with the recommendations of the Board of Directors. You may also vote at the Annual Meeting by attending the Annual Meeting online and be deliveredfollowing the instructions posted at www.virtualshareholdermeeting.com/HSII2022, or you may vote by proxy. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on any additional voting instructions accompanying these proxy materials. Even if you plan to attend the Annual Meeting, we encourage you to submit your proxy in advance of the Annual Meeting.
| ADDITIONAL MATTERS 63
MAY I REVOKE A PROXY OR CHANGE MY VOTE?
Beneficial Stockholders – Beneficial stockholders should contact their broker, bank or other holder of record for instructions on how to revoke their proxies or change their vote. You may also revoke your proxy or previously submitted voting instructions by attending the Annual Meeting online and voting during the meeting.
Registered Stockholders – Registered stockholders may revoke their proxies or change their voting instructions at any time before 11:59 p.m. Eastern Time, on May 25, 2022, by submitting a proxy via internet, telephone or mail that is dated later than the original proxy or by delivering written notice of revocation to the Corporate Secretary at the Company’s principal executive offices (233 SouthHeidrick & Struggles International, Inc., Attn: Corporate Secretary, 233 S. Wacker Drive, Suite 4900, Chicago, Illinois 60606-6303)60606-6303. You may also revoke your proxy by attending the Annual Meeting online and voting during the meeting. Your attendance at the Annual Meeting online will not, by itself, constitute revocation of your proxy.
HOW MANY VOTES MUST BE PRESENT IN ORDER TO HOLD THE ANNUAL MEETING?
A quorum must be present to transact business at the Annual Meeting. A quorum consists of the holders of a majority of the outstanding shares of common stock entitled to vote at the meeting.
Shares of Heidrick & Struggles stock present in person or duly authorized by proxy (including any abstentions and “broker non-votes”) will be counted for purposes of establishing a quorum at the meeting. Attendance at our Annual Meeting online constitutes presence in person for purposes of quorum at the meeting.
WHAT ARE BROKER NON-VOTES?
If a broker or other financial institution holds your shares in its name and you do not provide voting instructions, that firm may only vote your shares on routine matters. Proposal 3, the ratification of the appointment of our independent auditor for 2022, is the only matter for consideration deemed to be routine. For all matters other than Proposal 3, you must submit voting instructions to the firm that holds your shares if you want your vote to count. When a firm votes a client’s shares on some but not all of the proposals, the missing votes on the non-routine proposals are referred to as “broker non-votes.”
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
Election of Directors (Item 1)
A plurality of the voting power present in person or represented by proxy and entitled to vote is required for the election of directors. This means that the seven director nominees receiving the highest number of votes cast “FOR” will be elected. Only votes “FOR” will affect the outcome. Broker non-votes are not counted for purposes of the election of directors.
Pursuant to our Corporate Governance Guidelines, in an uncontested election of directors (i.e. an election in which the only nominees are those recommended by the Board), any nominee for director who receives a greater number of votes “WITHHELD” from his or her election than votes “FOR” his or her election will tender his or her resignation to the Chair of the NGC following certification of the stockholder vote. The NGC will consider the tendered resignation and recommend to the Board whether to accept or reject the tendered resignation no later than 60 days following the date of the stockholders’ meeting at which the election occurred. The Board will act on the NGC’s recommendation no later than 120 days following the stockholders’ meeting. The Company will publicly disclose the Board’s decision whether to accept the resignation as tendered (providing an explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation).
Brokers holding shares beneficially owned by their clients do not have the ability to cast votes with respect to the election of directors unless they have received instructions from the beneficial owner of the shares. It is therefore important that you provide instructions to your broker if your shares are held by a broker so that your vote with respect to directors is counted.
All Other Proposals (Items 2 and 3)
Stockholders may vote “FOR” or “AGAINST” each of the other proposals, or may abstain from voting. Heidrick’s Amended and Restated By-laws require the affirmative vote of a majority in voting power of the stock present in person or by proxy and entitled to vote on the matter for the approval of Proposals 2 and 3. A stockholder who signs and submits a proxy is “present,” so an abstention will have the same effect as a vote “Against” Proposals 2 and 3. “Broker non-votes,” if any, will have no effect on Proposals 2 and 3.
64 ADDITIONAL MATTERS |
WHO COUNTS THE VOTES?
Representatives of Broadridge Financial Solutions, Inc. will count the votes and will act as the independent inspector of election for the Annual Meeting.
WHEN WILL THE COMPANY ANNOUNCE THE VOTING RESULTS?
The Company will announce the preliminary voting results at the Annual Meeting and will report the final results on the Company’s website and in a Current Report on Form 8-K filed with the SEC after the Annual Meeting in accordance with SEC Rules.
HOW ARE PROXIES SOLICITED, AND WHAT IS THE COST?
The Company will bear the entire cost of the proxy solicitation. Heidrick has engaged Alliance Advisors, L.L.C. to assist with the solicitation of proxies for an estimated fee of $11,000 plus expenses. The Company will reimburse brokers, fiduciaries and custodians for their costs in forwarding proxy materials to beneficial owners of common stock. The Company’s officers and employees may also solicit proxies. They will not receive any additional compensation for these activities.
WILL THE COMPANY MAKE A LIST OF STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING AVAILABLE?
Yes. A stockholder list will be available for inspection electronically by stockholders for any purpose germane to the meeting, upon request, starting May 16, 2022 by contacting the Company’s Investor Relations Department via email at InvestorRelations@heidrick.com. In addition, a stockholder list will be posted on the virtual stockholder meeting website during the Annual Meeting.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE SET OF PRINTED PROXY MATERIALS?
If you hold your shares in more than one account, you may receive a separate set of printed proxy materials, including a separate proxy card or voting instruction card, for each account. To ensure that all of your shares are voted, please vote by telephone or internet or sign, date, and return a proxy card or voting card for each account.
MORE THAN ONE STOCKHOLDER LIVES AT MY ADDRESS. WHY DID WE RECEIVE ONLY ONE SET OF PROXY MATERIALS?
The Company delivers only one Annual Report and one proxy statement to multiple stockholders sharing the same address unless it has received different instructions from one or more of them. This method of delivery is known as “householding”. Householding reduces the number of mailings you receive, saves on printing and postage costs and helps the environment. The Company will, upon written or oral request, promptly deliver a separate copy of the Annual Report or proxy statement to a stockholder at a shared address. If you would like to change your householding election, request that a single copy of this or future proxy materials be sent to your address, or request a separate copy of this or future proxy materials, you should submit this request by writing Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717 or calling 1-866-540-7095.
OTHER MATTERS
Management is not aware of any other matters that will be presented at the Annual Meeting. If any other matter that requires a vote is properly presented at the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their best judgment.
STOCKHOLDER PROPOSALS – 2023 ANNUAL MEETING OF STOCKHOLDERS
If you wish to submit a proposal for inclusion in Heidrick’s proxy statement for its 2023 annual stockholders’ meeting, you must follow the procedures set forth in Rule 14a-8 of the Securities Exchange Act of 1934. To be eligible for inclusion, the Company must receive your proposal at the address below no later than December 16, 2022. Under Heidrick’s Amended and Restated By-laws, other proposals and director nominations by stockholders that are not included in the 2023 proxy statement may be eligible for presentation at the 2023 annual stockholders’ meeting only if they are received by the Company in the form of a written notice, directed to the attention of Heidrick’s Corporate Secretary at the address below, no earlier than February 24, 201725, 2023 and no later than March 27, 2017. These2023. The notice must contain the information required by the Amended and Restated By-laws and must otherwise comply with the requirements are separate from the SEC’s requirements that a stockholder must meet in order to have a stockholder proposal includedspecified in the Amended and Restated By-laws.
| ADDITIONAL MATTERS 65
In addition to satisfying the foregoing requirements under Heidrick’s Amended and Restated By-laws, to comply with the universal proxy statement forrules (once effective), stockholders who intend to solicit proxies in support of director nominees other than Heidrick’s nominees must provide notice that sets forth the 2017 Annual Meeting of Stockholders pursuant toinformation required by Rule 14a-814a-19 under the Securities Exchange Act of 1934, (“SEC Rule 14a-8”).as amended, no later than March 27, 2023.
Stockholder Proposals to be Included in the Proxy Statement. Proposals of the Company’s stockholders intended to be included in the proxy materials for the 2017 Annual Meeting of Stockholders must be received by the Secretary at the Company’s principal executive offices by December 21, 2016. Stockholders interested in submitting a proposal for inclusion in the proxy materials for the 2017 Annual Meeting of Stockholders may do so by following the procedures prescribed in SEC Rule 14a-8. A proposal that does not comply with the applicable requirements of SEC Rule 14a-8 will not be included in the Company’s proxy materials for the 2017 Annual Meeting of Stockholders.WHERE TO SEND ALL PROPOSALS AND NOMINATIONS:
As of the date of this Proxy Statement, the above is the only business the Company is aware of that is to be acted upon at the Annual Meeting. If, however, other matters should properly come before the Company at the Annual Meeting, the persons named in the proxy will vote on those matters according to their best judgment.
By the order of the Board of Directors,
Stephen W. Beard
Secretary
Chicago, Illinois
April 22, 2016
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES WILL SAVE US THE EXPENSE OF FURTHER REQUESTS FOR PROXIES. PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
Heidrick & Struggles International, Inc.
Attn: Corporate Secretary
233 S. Wacker Drive, Suite 4900
Chicago, Illinois 60606-6303
66 ADDITIONAL MATTERS |
ANNEX A
Heidrick & Struggles International, Inc.
Reconciliation of Net Income and Operating Income (GAAP) to
(Loss) and Adjusted EBITDA Operating Income (Non-GAAP)
(In thousands)
(Unaudited)
Twelve Months Ended December 31, | ||||||||
2015 | 2014 | |||||||
Revenue before reimbursements (net revenue) | $ | 531,139 | $ | 494,292 | ||||
Net income | 17,132 | 6,797 | ||||||
Interest, net | (122 | ) | (358 | ) | ||||
Other, net | (2,386 | ) | (2,108 | ) | ||||
Provision for income taxes | 14,422 | 17,390 | ||||||
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Operating income | 34,062 | 26,653 | ||||||
Adjustments | ||||||||
Salaries and employee benefits | ||||||||
Stock-based compensation expense | 4,616 | 3,128 | ||||||
Senn Delaney retention awards | 2,167 | 2,000 | ||||||
General and administrative expenses | ||||||||
Depreciation | 8,788 | 9,802 | ||||||
Intangible amortization | 4,908 | 5,510 | ||||||
Earnout accretion | 1,294 | 1,854 | ||||||
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Total adjustments | 21,173 | 22,294 | ||||||
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Adjusted EBITDA | $ | 55,835 | $ | 48,947 | ||||
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Adjusted EBITDA Margin | 10.5 | % | 9.9 | % |
Year Ended December 31, | |||||||||||||||
2021 | 2020 | ||||||||||||||
Revenue before reimbursements (net revenue) | $ | 1,003,001 | $ | 621,615 | |||||||||||
Operating income (loss) | 98,264 | (35,529 | ) | ||||||||||||
Adjustments | |||||||||||||||
Earnout obligation fair value adjustments1 | 11,368 | — | |||||||||||||
Impairment charges2 | — | 32,970 | |||||||||||||
Restructuring charges3 | 3,792 | 52,372 | |||||||||||||
Total adjustments | 15,160 | 85,342 | |||||||||||||
Adjusted operating income | $ | 113,424 | $ | 49,813 | |||||||||||
Operating margin | 9.8 | % | (5.7 | )% | |||||||||||
Adjusted operating margin | 11.3 | % | 8.0 | % |
These measures are presented because management uses this information to monitor
1 | The Company incurred a one-time earnout obligation adjustment of $11.4 million for the three months and year ended December 31, 2021 in the On-Demand Talent operating segment. |
2 | The Company incurred goodwill impairment charges of approximately $33.0 million in the Europe and Asia Pacific operating segments for the year ended December 31, 2020. |
3 | The Company incurred restructuring charges of $4.3 million for the three months ended December 31, 2020. The Company incurred restructuring charges of $3.8 million and $52.4 million for the years ended December 31, 2021 and 2020, respectively. |
| ANNEX A A-1
Heidrick & Struggles International, Inc.
Reconciliation of Net Income (Loss) and evaluate financial resultsAdjusted Net Income (Non-GAAP)
(In thousands, except per share amounts)
(Unaudited)
Year Ended December 31, | |||||||||||||||
2021 | 2020 | ||||||||||||||
Net income (loss) | $ | 72,572 | $ | (37,707) | |||||||||||
Adjustments | |||||||||||||||
Earnout obligation fair value adjustments1 | 8,282 | — | |||||||||||||
Impairment charges, net of tax2 | — | 32,970 | |||||||||||||
Restructuring charges, net of tax3 | 2,642 | 39,956 | |||||||||||||
Total adjustments | 10,924 | 72,926 | |||||||||||||
Adjusted net income | $ | 83,496 | $ | 35,219 | |||||||||||
Weighted-average common shares outstanding | |||||||||||||||
Basic | 19,515 | 19,301 | |||||||||||||
Diluted | 20,296 | 19,893 | |||||||||||||
Earnings (loss) per common share | |||||||||||||||
Basic | $ | 3.72 | $ | (1.95 | ) | ||||||||||
Diluted | $ | 3.58 | $ | (1.95 | ) | ||||||||||
Adjusted earnings per common share | |||||||||||||||
Basic | $ | 4.28 | $ | 1.82 | |||||||||||
Diluted | $ | 4.11 | $ | 1.77 |
1 | The Company incurred a one-time earnout obligation adjustment of $11.4 million for the three months and year ended December 31, 2021 in the On-Demand Talent operating segment. |
2 | The Company incurred goodwill impairment charges of approximately $33.0 million in the Europe and Asia Pacific operating segments for the year ended December 31, 2020. |
3 | The Company incurred restructuring charges of $4.3 million for the three months ended December 31, 2020. The Company incurred restructuring charges of $3.8 million and $52.4 million for the years ended December 31, 2021 and 2020, respectively. |
A-2 ANNEX A |
ANNEX B
Heidrick & Struggles International, Inc.
Reconciliation of Net Income (Loss) and trends. Management also believes this information is useful for investors.
Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
Year Ended December 31, | |||||||||||||||
2021 | 2020 | ||||||||||||||
Revenue before reimbursements (net revenue) | $ | 1,003,001 | $ | 621,615 | |||||||||||
Net income (loss) | 72,572 | (37,707 | ) | ||||||||||||
Interest, net | (302 | ) | (204 | ) | |||||||||||
Other, net | (7,463 | ) | (3,927 | ) | |||||||||||
Provision for (benefit from) income taxes | 33,457 | 6,309 | |||||||||||||
Operating income (loss) | 98,264 | (35,529 | ) | ||||||||||||
Adjustments | |||||||||||||||
Stock-based compensation expense | 12,325 | 9,679 | |||||||||||||
Depreciation | 7,150 | 8,100 | |||||||||||||
Intangible amortization | 2,898 | 738 | |||||||||||||
Earnout accretion | 486 | — | |||||||||||||
Earnout obligation fair value adjustments | 11,368 | — | |||||||||||||
Acquisition contingent consideration | 1,973 | 1,942 | |||||||||||||
Restructuring charges | 3,792 | 52,372 | |||||||||||||
Impairment charges | — | 32,970 | |||||||||||||
Deferred compensation plan | 3,057 | 4,495 | |||||||||||||
Total adjustments | 43,049 | 110,296 | |||||||||||||
Adjusted EBITDA | $ | 141,313 | $ | 74,767 | |||||||||||
Adjusted EBITDA margin | 14.1 | % | 12.0 | % |
| ANNEX B B-1
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HEIDRICK & STRUGGLES INTERNATIONAL, INC. 233 S. WACKER DR., SUITE 4900 CHICAGO, IL 60606 |
| VOTE BY INTERNET- www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During the Meeting - Go to www.virtualshareholdermeeting.com/HSII2022
VOTE BY PHONE-1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
For | For All | To withhold authority to vote for any | ||||||||||||||||||||||||||||
All | All | Except | individual nominee(s), mark “For All | |||||||||||||||||||||||||||
Except” and write the number(s) of the | ||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR | nominee(s) on the line below. | |||||||||||||||||||||||||||||
the following: | ||||||||||||||||||||||||||||||
☐ | ☐ | ☐ |
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Nominees |
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01) |
| 02) Mary E.G. Bear | 03) Lyle Logan | 04) T. Willem Mesdag | 05) Krishnan Rajagopalan | ||||||
06) | Stacey Rauch | 07) Adam Warby |
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The Board of Directors recommends you vote FOR proposals 2 and 3. | For | Against | Abstain | ||||||||||||||||||||||||||
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2. | Advisory vote to approve |
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3. | Ratification of the appointment of |
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NOTE:Such other business as may properly come before the Annual Meeting or any adjournment thereof. |
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Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. | |||||||||||||||||||||||||||||||||||||
All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com
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![]() | HEIDRICK & STRUGGLES INTERNATIONAL, INC. Annual Meeting of Stockholders May 26,
Via live webcast at www.virtualshareholdermeeting.com/HSII2022 This proxy is solicited by the Board of Directors | ||||||||||||
The undersigned hereby appoints
This proxy, when properly executed, will be voted in the manner directed by you. If you sign and return this proxy but do not give any direction, this proxy will be voted “FOR” the election of all nominees for directors listed on the reverse side; “FOR” Proposals
Unless otherwise specified, in order for your vote to be submitted by proxy, you must (i) properly complete the Internet or telephone voting instructions or (ii) properly complete and return this proxy in order that, in either case, your vote is received no later than 11:59
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Continued and to be signed on reverse side | |||||||||||||