PROXY STATEMENT AND NOTICE OF
20182019 ANNUAL MEETING OF SHAREHOLDERS
April 27, 201825, 2019
As filed with the Securities and Exchange Commission on March 16, 201813, 2019
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, For Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |
| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant toSection 240.14a-12 | |
GLOBAL PAYMENTS INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ☒ | No fee required. | ||||
| ☐ | Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11. | ||||
| 1) | Title of each class of securities to which transaction applies:
| ||||
| 2) | Aggregate number of securities to which transaction applies:
| ||||
| 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
| ||||
| 4) | Proposed maximum aggregate value of transaction:
| ||||
| 5) | Total fee paid:
| ||||
| ☐ | Fee paid previously with preliminary materials. | ||||
| ☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | ||||
| 1) | Amount previously paid:
| ||||
| 2) | Form, Schedule or Registration Statement No.:
| ||||
| 3) | Filing Party:
| ||||
| 4) | Date Filed:
| ||||
PROXY STATEMENT AND NOTICE OF
20182019 ANNUAL MEETING OF SHAREHOLDERS
April 27, 201825, 2019
3550 Lenox Road
Atlanta, Georgia 30326
(770)829-8991829-8000
March 16, 201813, 2019
Dear Shareholder:
The board of directors and officers of Global Payments Inc. join me in extending to you a cordial invitation to attend our 20182019 Annual Meeting of Shareholders. The meeting will be held on Friday,Thursday, April 27, 2018,25, 2019, at 9:30 a.m. Eastern Daylight Time, at our offices at 3550 Lenox Road, Atlanta, GA 30326. At the annual meeting, shareholders will be asked to vote on three proposals set forth in the Notice of 20182019 Annual Meeting of Shareholders and the proxy statement following this letter.
Whether or not you plan to attend the annual meeting, it is important that your shares are represented and voted regardless of the size of your holdings. We urge you to vote promptly and submit your proxy via the internet, by telephone or by signing, dating and returning the enclosed proxy card in the enclosed envelope. If you decide to attend the annual meeting, you will be able to vote in person, even if you have submitted your proxy previously.
If you have any questions concerning the annual meeting and you are the shareholder of record of your shares, please contact our Investor Relations department at Investor.Relations@globalpay.com or (770)829-8478. If your shares are held by a broker or other nominee (that is, in “street name”), please contact your broker or other nominee for questions concerning the annual meeting.
We look forward to seeing you on April 27.25.
Sincerely,
| ||
|
| |
| Jeffrey S. Sloan | William I Jacobs | |
| Chief Executive Officer | Chairman of the Board |
| NOTICE OF | ||
April 9:30 a.m. Eastern Daylight Time | 3550 Lenox Road Atlanta, Georgia 30326 | |
Items of Business
| 1. | To elect the |
| 2. | To approve, on an advisory basis, the compensation of our named executive |
| 3. | To ratify the reappointment of Deloitte & Touche LLP, or Deloitte, as the Company’s independent public accounting firm for the year ending December 31, |
The shareholders may also transact any other business that may properly come before the annual meeting or any adjournments or postponements thereof.
Record Date
Close of business on March 5, 2018.4, 2019.
On March 16, 2018,13, 2019, we mailed a notice of electronic availability of proxy materials to our shareholders. Only shareholders of record at the close of business on March 5, 20184, 2019 are entitled to receive notice of, and to vote at, the annual meeting or any adjournment or postponement thereof. If you do not attend the annual meeting, you may vote your shares via the internet or by telephone, as instructed in the Notice of Electronic Availability of Proxy Materials, or if you received your proxy materials by mail, you may also vote by mail.
YOUR VOTE IS IMPORTANT
Submitting your proxy does not affect your right to vote in person if you attend the annual meeting. Instead, it benefits us by reducing the expenses of additional proxy solicitation. Therefore, we urge you to submit your proxy as soon as possible, regardless of whether or not you expect to attend the annual meeting. You may revoke your proxy at any time before its exercise by (i) delivering written notice of revocation to our Corporate Secretary, David L. Green, at 3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326, (ii) submitting to us a duly executed proxy card bearing a later date, (iii) voting via the internet or by telephone at a later date, or (iv) appearing at the annual meeting and voting in person; provided, however, that no such revocation under clause (i) or (ii) shall be effective until written notice of revocation or a later dated proxy card is received by the Corporate Secretary at or before the annual meeting, and no such revocation under clause (iii) shall be effective unless received on or before 11:59 p.m., Eastern Daylight Time, on April 26, 2018.24, 2019.
When you submit your proxy, you authorize Jeffrey S. Sloan and David L. Green, or either one of them, each with full power of substitution, to vote your shares at the annual meeting in accordance with your instructions or, if no instructions are given, for the election of the director nominees; for the approval, on an advisory basis, of the compensation of our named executive officers; and for the ratification of the reappointment of Deloitte as the Company’s independent public accounting firm. The proxies, in their discretion, are further authorized to vote on any adjournments or postponements of the annual meeting, for the election of one or more persons to the board of directors if any of the nominees becomes unable to serve or for good cause will not serve, on matters which the board does not know a reasonable time before making the proxy solicitations will be presented at the annual meeting, or any other matters which may properly come before the annual meeting and any postponements or adjournments thereto.
By Order of the Board of Directors,
|
|
David L. Green Executive Vice President, General Counsel and Corporate Secretary |
| 1 | ||||
| 1 | ||||
| 1 | ||||
| 1 | ||||
| 2 | ||||
| 3 | ||||
| 5 | ||||
| 5 | |||
| 5 | ||||
| 6 | ||||
| 8 | ||||
Questions and Answers About Our Annual Meeting and this Proxy Statement | ||||
Nominees for Election as Directors with Terms Expiring in | ||||
| 19 | ||||
Board and Committee Membership — Director Attendance at Meetings | ||||
| 29 | ||||
| 32 | ||||
Proposal Two: Advisory Vote to Approve the 2018 Compensation of Our Named Executive Officers | ||||
| 37 | ||||
Potential Payments Upon Termination, Retirement or Change in Control | ||||
This summary highlights information contained elsewhere in this proxy statement, but does not contain all of the information you should consider before voting your shares. For complete information regarding the 20182019 Annual Meeting of Shareholders, which we refer to as the “annual meeting,” the proposals to be voted on at the annual meeting, and our performance during the year ended December 31, 2017,2018, please review the entire proxy statement and our 20172018 Annual Report on Form10-K, or the Annual Report on Form10-K. In this proxy statement, the “Company,” “we,” “our” and “us” refer to Global Payments Inc. and its consolidated subsidiaries, unless the context requires otherwise.
Information About Our 20182019 Annual Meeting
| Date and Time: | ||
| Place: | Our offices at 3550 Lenox Road, Atlanta, Georgia, 30326 | |
| Record Date: | March | |
| Voting: | Holders of our common stock as of the close of business on the record date may vote at the annual meeting. Each shareholder is entitled to one vote per share for each director nominee and one vote per share for each of the other proposals described below. | |
Proposals and Voting Recommendations
| Proposal | Board Vote Recommendation | Page Number | ||||||||
1 – Election of | FOR each nominee | |||||||||
2 – Advisory Vote on Compensation of Our Named Executive Officers (“say-on-pay” vote) | FOR | |||||||||
3 – Ratification of the Reappointment of Our Independent Public Accounting Firm | FOR | |||||||||
We are a leading worldwide provider of payment technology and software solutions delivering innovative services to our customers globally. Our technologies, services and employee expertise enable us to provide a broad range of solutions that allow our customers to accept various payment types and operate their businesses more efficiently. We distribute our services across a variety of channels to customers in 3032 countries throughout North America, Europe, the Asia-Pacific region and Brazil and operate in three reportable segments: North America, Europe and Asia-Pacific.
Our servicespayment technology solutions are similar around the world in that we enable our customers to accept card, electronic, check and digital-based payments at the point of sale.payments. We offer high touch services that provide our customers with reliable and secure payment solutions coupled with high quality and responsive support services.
We seek to leverage the adoption of, and transition to, card, electronic and digital-based payments by expanding share in our existing markets through our distribution channels and service innovation, as well as through acquisitions to improve our offerings and scale, whilescale. We also seekingseek to enter new markets through acquisitions, alliances and joint ventures around the world. We intend to continue to invest in and leverage our technology infrastructure and our people to increase our penetration in existing markets.
OurThe key objectivestenets of our strategy include the following:
Grow and control our direct distribution by adding new channels and partners, including expanding our ownership of additional enterprise software solutions in select vertical markets;
Deliver innovative services by developing value-added applications, enhancing existing services and developing new systems and services to blend technology with customer needs;
Leverage technology and operational advantages throughout our global footprint;
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 1
Continue to develop seamless multinational solutions for leading global customers;
Provide customer service at levels that exceed our competition, while investing in technology, training and enhancements to our service offerings; and
Pursue potential domestic and international acquisitions of, investments in and alliances with companies that have high growth potential, significant market presence, sustainable distribution platforms and/or key technological capabilities.
Our board and its committees provide support and oversight to management in the operation of our business and strategy, as further described in this proxy.
20172018 Performance Highlights
We experienced strong business and financial performance around the world during the year ended December 31, 2017.2018. Highlights related to our financial condition and results of operations as of December 31, 20172018 and for the year then ended include the following:
Consolidated revenues were $3,366.4 million and $3,975.2 million for the years ended December 31, 2018 and 2017, respectively. Consolidated revenues without the effect of ASC 606, the new revenue accounting standard which became effective for the Company on January 1, 2018, increased by 17.9%12.6% to $3,975.2$4.475.6 million for the year ended December 31, 2017 from $3,371.02018 compared to $3,975.2 million for 2016.2017.
Consolidated operating income was $558.9$737.1 million for the year ended December 31, 20172018 compared to $356.3$558.9 million for 2016.2017. Our operating margin for the year ended December 31, 20172018 was 14.1%21.9%. Without the effect of the new revenue accounting standard, our operating margin for the year ended December 31, 2018 was 15.6% compared to 10.6%14.1% for 2016.2017.
Net income attributable to Global Payments was $468.4$452.1 million for the year ended December 31, 20172018 compared to $201.8$468.4 million for 2016,2017, and diluted earnings per share was $3.01$2.84 for the year ended December 31, 20172018 compared to $1.37$3.01 for 2016.2017.
Over the12-month period from January 1, 20172018 through December 31, 2017,2018, our stock price increased by 42%.3.6%, compared to a decline of approximately 7.1% in the S&P 500 index. Our stock price from January 1, 20132014 through December 31, 20172018 relative to the performance of our peer group and the S&P 500 index, which we joined in April 2016, is shown in the graph below.
The following graph compares the cumulative shareholder returns of $100 invested in the S&P 500 Index, our Company and the average of our performance peer group from January 1, 20132014 through December 31, 2017,2018, assuming reinvestment of dividends.
The graph excludes peer group performance for Sabre Corporation, PayPal, Inc. and First Data Corp., because these companies were not publicly traded for the full period presented above.
2 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Board and Corporate Governance Highlights (Page 18)19)
We have adopted leading governance practices that establish strong independent leadership in our boardroom and provide our shareholders with meaningful rights. Highlights include:
☑ Independent Chairman ☑ Eight of nine directors arenon-employee directors ☑ Fully independent Audit, Compensation, and Governance and Nominating Committees ☑ Annual board and committee self-evaluations ☑ Proxy access for shareholders | ☑ Majority voting for directors in uncontested elections ☑ Minimum stock ownership requirements for NEOs and directors ☑ ☑ Greater than 75% attendance at meetings ☑Non-employee directors meet without management present ☑ Code of business conduct and ethics for directors | |
The board has taken a thoughtful and deliberate approach to board composition to ensure that our directors have backgrounds that collectively add significant value to the strategic decisions made by the Company and enable them to provide oversight of management to ensure accountability to our shareholders. The composition of our board consists of:
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 3
The board has identified the following key qualifications and experience that are important to be represented on the board as a whole in light of our current business strategy and expected needs. The charts below indicate how these qualifications are represented on our board based on information provided by our directors. Information regarding each director’s skills and qualifications can be found within their individual biographies on pages13-17.14-18.
 |  |  |
 |  |
 |  |  |
 | indicates board representation of the qualification |
4 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Shareholder Outreach (Page 25)27)
We believe in providing transparent and timely information to our investors. Each year we routinely engage shareholders and analysts in various forums, which may include industry conferences, road-shows, meetings at our offices or at our shareholders’ offices, conference calls and Investor Dayinvestor day events. Throughout the year, we held meetings with many of our top institutional investors. In our meetings, we discussed a variety of topics that are important to investors, including industry trends, corporate governance, Company performance and operations and short and long-term strategic direction. We hosted our 2018 investor day on March 1, 2018, which provided an opportunity for shareholders and analysts to hear directly from management on the Company’s long-term strategy and ask questions of the management team. In 2018, we again engaged directly across the spectrum of our active shareholder base on the Company’s performance, operations and strategic direction.
Recent Corporate Governance Developments
As a result of engaging with our shareholders and keeping abreast of leading practices, we have taken actions with respect to corporate governance matters, including the following:
Updated our Corporate Governance Guidelines to limit the Chief Executive Officer’s public company board service – other than the Company – to one, and outside directors’ public company board service – other than the Company – to three.
Enhanced proxy disclosure with respect to our Audit Committee’s meetings and agenda throughout the year.
Established a number of diversity initiatives to increase representation of diverse individuals in the Company and support and elevate our diverse employees, and enhanced our proxy disclosure with respect to such practices.
Adopted proxy access provisions in our bylaws.
Our Company has always prided itself on inclusiveness and embraces the diversity of its employees in all of our geographies. We currently do business in nearly 60 countries around the world, with employees living and working in 32 of them. We have always believed, and continue to believe, that our business is strengthened by a diverse workforce that reflects the communities in which we operate.
In 2017, after thoughtful discussions with shareholders2018, we built on our history of diversity and consideringinclusion by formally launching a diversity and inclusion initiative. As part of this initiative, we became a signatory to the viewpoints of governance expertsCEO Action for Diversity and advisors, we adopted a bylaw allowing shareholdersInclusion™, which is the largestCEO-driven business commitment to nominate directorsadvance diversity and to have such nominees includedinclusion in the proxy statement.workplace.
In 2018, we also:
established a Diversity and Inclusion Advisory Council, which is chaired by our Chief Financial Officer and will consist of a representative group of our employees worldwide who will provide insight and input on our diversity and inclusion initiatives, including our strategy to increase representation of women and minorities at leadership levels in the Company;
continued to support our women’s employee resource group which implements diversity initiatives related to women, including networking and training opportunities, and also recently launched a LGBTQ+ employee resource group, to be chaired by our General Counsel;
committed to providing unconscious bias training beginning in 2019 to all of our executives and managers, recognizing that all employees have unconscious biases which may impact how they make decisions about and interact with other employees; and
developed a career website and job postings which seek to attract and recruit employees of diverse characteristics and backgrounds by highlighting our commitment to diversity and inclusion.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 5
In addition to the above initiatives, we augmented the existing diversity and inclusion components of our talent management program to ensure that diversity and inclusion is integrated into every aspect of our programs including talent acquisition, performance management, leadership training and development, and succession planning.
We will continue to measure our progress to ensure our initiatives and programs continue to support our diversity and inclusion goals.
Compensation Philosophy and Highlights (Page 33)36)
| We Do: | We Do Not: | |||||
| ☑ | Tie pay to financial and share price performance | ☒ | Provide for excise taxgross-ups | |||
| ☑ | Retain an independent compensation consultant | ☒ | Permit hedging or pledging of our stock | |||
| ☑ | Benchmark against our peer group | ☒ | Re-price or discount stock options or SARs | |||
| ☑ | Conduct an annualsay-on-pay vote | ☒
☒ | Permit liberal share recycling or “net share counting” upon exercise of stock options or SARs Pay dividend equivalent rights on restricted stock units | |||
☑ | Adjust performance goals under our short-term incentive plan to reflect acquisition impacts | |||||
☑ | Require Compensation Committee certification of performance results for purposes of | |||||
| ☑ | Employ “double-trigger”change-in-control compensation | |||||
| ☑ | Have a clawback policy | |||||
| ☑ | Impose minimum stock ownership thresholds and holding periods until such thresholds are met | |||||
6 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 5
Core Component | Objective/Features | Page | ||||||||
 |
Base Salary |
Base salaries are intended to provide compensation consistent with our
| 40 | |||||||
 | Annual Cash Incentives | Our annual performance plan rewards short-term Company performance, while aligning the interests of our
| 40 | |||||||
 |
Performance Units |
In 2018, the Compensation Committee modified the performance
|
|
|
| |||||
Stock Options |
Stock options
|
|
|
| ||||||
Restricted Stock |
|
|
|
| ||||||
6 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 7
The following charts show the mix of total target compensation in 2018 (excluding restricted stock awards granted in June 2018) for our Chief Executive Officer and forthe average of all the other NEOs (excluding David Mangum, our former President and Chief Operating Officer who, as a group, based on a weighted average,of August 27, 2018, no longer served in this position and subsequently left the Company, effective September 15, 2018), as well as the portion of that compensation that is subject to forfeiture (“at risk”) or performance-based.
CEO TOTAL TARGET COMPENSATION | OTHER NEOs TOTAL TARGET COMPENSATION | |
|
|
Director Nominees (Page 12)14)
| Name | Tenure (Years) | Principal Occupation | Non- Employee | Audit Committee | Compensation Committee | Governance and Nominating Committee | Risk Oversight Committee | Technology Committee | |||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|  | | ||||||||||||||||||||||||||||||||||||||||||||||||
|
| Yes
| 
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| 12 | Former President – Americas, Master Card | Yes |
| |  |
| ||||||||||||||||||||||||||||||||||||||||||||||||
|
| * | Our board of directors has determined that this director is independent. |
Named Executive Officers (page 30)37)
Beginning on page 31,37, we provide specific data about the compensation of our NEOs as defined by rules promulgated by the Securities and Exchange Commission, or the SEC, for 2017.2018. Our NEOs includefor the following individuals:year ended December 31, 2018 were:
Jeffrey S. Sloan, Chief Executive Officer
David E. Mangum, Former President and Chief Operating Officer (as of August 27, 2018, Mr. Mangum no longer served in this position and subsequently left the Company, effective September 15, 2018)
Cameron M. Bready, Senior Executive Vice President and Chief Financial Officer
Dr. Guido F. Sacchi, Senior Executive Vice President and Chief Information Officer
David L. Green, Executive Vice President, General Counsel and Corporate Secretary
8 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 7
Questions and Answers About Our Annual Meeting and this Proxy Statement
1. Why did I receive these materials?
This proxy statement is being furnished to solicit proxies on behalf of the board of directors of our Company for use at the 20182019 annual meeting of shareholders and at any adjournments or postponements thereof. The annual meeting will be held at our offices at 3550 Lenox Road, Atlanta, Georgia, 30326 on Friday,Thursday, April 27, 201825, 2019 at 9:30 a.m., Eastern Daylight Time.
2. What am I voting on and how does the board of directors recommend that I vote?
Our board of directors recommends that you voteFOR each of the following three proposals scheduled to be voted on at the meeting:
| • | Proposal 1: Election of the |
| • | Proposal 2: Approval, on an advisory basis, of the compensation of |
| • | Proposal 3: Ratification of the reappointment of Deloitte as our independent public accounting firm for the year ending December 31, |
3. Could other matters be decided at the annual meeting?
Yes. The shareholders may transact any other business that may properly come before the annual meeting or any adjournments or postponements thereof. If any other matter properly comes before the meeting and you have submitted your proxy, the proxy holders will vote as recommended by the board or, if no recommendation is made, in their own discretion.
4. Why did I receive a mailed notice of internet availability of proxy materials instead of a full set of proxy materials?
As permitted by the SEC, we are making this proxy statement and our Annual Report on Form10-K available to our shareholders electronically via the internet. The notice contains instructions on how to access this proxy statement and our Annual Report on Form10-K and how to vote online or submit your proxy over the internet or by telephone. You will not receive a printed copy of the proxy materials in the mail unless you request one, which you may do by following the instructions contained in the notice. We encourage you to take advantage of the electronic availability of proxy materials to help reduce the cost and environmental impact of the annual meeting.
5. How do I vote?
If you received a notice of electronic availability, that notice provides instructions on how to vote by internet, by telephone or by requesting and returning a paper proxy card. You may submit your proxy voting instructions via the internet or telephone by following the instructions provided in the notice. The internet and telephone voting procedures are designed to authenticate your identity, to allow you to vote your shares, and to confirm that your voting instructions are properly recorded. If your shares are held in the name of a bank or a broker, the availability of internet and telephone voting will depend on the voting processes of the bank or broker. Therefore, we recommend that you follow the instructions on the form you receive. If you received a printed version of the proxy materials by mail, you may vote by following the instructions provided with your proxy materials and on your proxy card.
8 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 9
6. What if I change my mind after I vote?
Your submission of a proxy via the internet, by telephone or by mail does not affect your right to attend the annual meeting in person. You may revoke your proxy at any time before it is exercised in any of the following ways:
Deliver written notice of revocation to our Corporate Secretary at 3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326, or submit to us a duly executed proxy card bearing a later date. To be effective, your notice of revocation or new proxy card must be received by our Corporate Secretary, David L. Green, at or before the annual meeting.
Change your vote via the internet or by telephone at a later date. To be effective, your vote must be received before 11:59 p.m., Eastern Daylight Time, on April 26, 2018,24, 2019, the day before the annual meeting.
Appear at the annual meeting and vote in person, regardless of whether you previously submitted a notice of revocation.
7. Who is entitled to vote?
All shareholders who owned shares of our common stock at the close of business on March 5, 20184, 2019 are entitled to vote at the annual meeting. On that date, there were 159,517,602157,850,344 shares of common stock issued and outstanding, held by approximately 3,0052,089 shareholders of record. Shareholders are entitled to one vote per share.
8. How many votes must be present to hold the annual meeting?
In order for any business to be conducted, the holders of a majority of the shares entitled to vote at the annual meeting must be present, either in person or by proxy. This is referred to as a “quorum.” Abstentions and brokernon-votes (described below) will be treated as present for purposes of establishing a quorum. If a quorum is not present, the annual meeting may be adjourned by the holders of a majority of the shares represented at the annual meeting. The annual meeting may be rescheduled at the time of the adjournment with no further notice of the reconvened meeting if the date, time and place of the reconvened meeting are announced at the adjourned meeting before its adjournment; provided, however, that if a new record date is or must be fixed, notice of the reconvened meeting must be given to the shareholders of record as of the new record date. An adjournment will have no effect on the business to be conducted at the meeting.
9. What are the voting standards for the proposals?
Each of the three scheduled proposals willmust be approved by the affirmative vote of a majority of the votes cast. This means that a proposal is approved if the number of shares voted “for” the proposal exceeds the number of shares voted “against” the proposal.
10. What is the difference between a “shareholder of record” and a “beneficial owner of shares held in street name?”
Shareholders of record. If your shares are registered directly in your name with our transfer agent, Computershare, you are the shareholder of record with respect to those shares, and we sent the notice of electronic availability directly to you. If you request copies of the proxy materials by mail, you will receive a proxy card.
Beneficial owners of shares held in street name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the beneficial owner of shares held in “street name,” and the notice of electronic availability was forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. If you request copies of the proxy materials by mail, you will receive a voting instruction form.
10 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 9
11. What happens if I do not return a proxy or do not give specific voting instructions?
Shareholders of record. If you are a shareholder of record and you do not vote via the internet, by telephone or by mail, your shares will not be voted unless you attend the annual meeting to vote them in person. If you are a shareholder of record and you sign and return a proxy card without giving specific voting instructions, then your shares will be voted in the manner recommended by the board of directors on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting.
Beneficial owners of shares held in street name. If you hold your shares in street name and do not provide voting instructions to your broker, your broker will have the discretionary authority to vote your shares only on proposals that are considered “routine.” The only proposal at the annual meeting that is considered routine is the ratification of the reappointment of our independent auditor. All of the other proposals are considered“non-routine,” which means that your broker will not have the discretionary authority to vote your shares with respect to such proposals. Shares for which you do not provide voting instructions and a broker lacks discretionary voting authority are referred to as “brokernon-votes.” Brokernon-votes are counted as present for the purpose of establishing a quorum, but whether they are counted for purpose of voting on proposals depends on the voting standard for the particular proposal. Since each of the scheduled proposals requires approval by a majority of votes cast, abstentions and brokernon-votes will not be counted as votes “for” or “against” the proposal. As a result, although abstentions and brokernon-votes may be counted for the purpose of establishing a quorum for the meeting, they have no effect on the voting results.
12. What should I do if I receive more than one proxy or voting instruction card?
Shareholders may receive more than one set of voting materials, including multiple copies of the notice of electronic availability, these proxy materials and proxy cards or voting instruction cards. For example, shareholders who hold shares in more than one brokerage account may receive separate notices for each brokerage account in which shares are held. Shareholders of record whose shares are registered in more than one name will receive more than one notice. You should vote in accordance with all of the notices you receive to ensure that all of your shares are counted.
13. Who pays the cost of proxy solicitation?
The cost of soliciting proxies will be borne by us. However, shareholders voting electronically (via phone or the internet) should understand that there may be costs associated with electronic access, such as usage charges from internet service providers or telephone companies. In addition to solicitation of shareholders of record by mail, telephone or personal contact, arrangements will be made with brokerage houses to furnish proxy materials to their principals, and we may reimburse them for mailing expenses. Custodians and fiduciaries will be supplied with proxy materials to forward to beneficial owners of common stock.
14. May I propose actions for consideration at next year’s annual shareholder meeting?
Proposals for Inclusion in Next Year’s Proxy Statement (Rule14a-8): SEC rules permit shareholders to submit proposals for inclusion in our proxy statement if the shareholder and the proposal meet the requirements specified in Rule14a-8 of the Exchange Act. Proposals submitted in accordance with Rule14a-8 for inclusion in our proxy statement for the 20192020 annual shareholder meeting must be received by our Corporate Secretary no earlier than October 16, 201815, 2019 and no later than November 16, 2018,14, 2019, which is 120 days before the one year anniversary of the mailing of this proxy statement.
Director Nominees for Inclusion in Next Year’s Proxy Statement (Proxy Access):Our bylaws permit a shareholder (or a group of no more than 20 shareholders) owning three percent3% or more of our common stock continuously for at least three years to nominate up to an aggregate limit of two candidates or 20 percent20% of our board (whichever is greater) for inclusion in our proxy statement. Notice of such nominees must be received no earlier than October 16, 201815, 2019 and no later than close of business on November 16, 2018.14, 2019.
10 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 11
Other Business Proposals/Director Nominees: Our bylaws also set forth the procedures that a shareholder must follow to nominate a candidate for election as a director or to propose other business for consideration at shareholder meetings, in each case, not submitted for inclusion in next year’s proxy statement (either under proxy access or Rule14a-8), but instead to be presented directly at shareholder meetings. In each case, director nominations or proposals for other business for consideration at the 20192020 annual shareholder meeting submitted under these bylaw provisions must be received by our Corporate Secretary between October 16, 201815, 2019 and November 16, 2018.14, 2019. Special notice provisions apply under the bylaws if the date of the annual meeting is more than 30 days before or 60 days after the anniversary date.
Our Corporate Secretary address is: 3550 Lenox Road, Suite 3000, Atlanta, GA 30326. Notice must include the information required by our bylaws, which are available without charge upon written request to our Corporate Secretary.
Cautionary Note Regarding Forward-Looking Statements
This proxy statement contains forward-looking statements as defined in the Exchange Act and is subject to the safe harbors created therein. The forward-looking statements contained herein are generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “committed,” “ensure,” or the negative of these terms or other similar expressions. Forward-looking statements are based on the beliefs and assumptions of our management and on currently available information. Accordingly, our future plans and expectations may not be achieved and our results could differ materially from those anticipated in our forward-looking statements as a result of many known and unknown factors, many of which are beyond our ability to predict or control. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our Annual Report on Form10-K. We undertake no responsibility to publicly update or revise any forward-looking statement.statement, except as required by law.
12 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 11
Proposal One: Election of Directors
Our board of directors, upon the recommendation of the Governance and Nominating Committee, has nominated directors William I Jacobs, Robert H.B. BaldwinMitchell L. Hollin and Alan M. Silberstein,Ruth Ann Marshall, each a Class IIII director, to be elected to serve until the 20212022 annual meeting of shareholders and until their successors are duly elected and qualified. Each nominee has agreed to serve as a director if elected. For information on the factors the board considers when evaluating candidates for nomination, see “Board and Corporate Governance — Board Membership Criteria” on page 19.20.
Our board of directors currently consists of nine members who are divided into three classes, with the term of office of each class ending in successive years. Each class of directors serves staggered three-year terms. OurOf the Class I directors, the board has determined to nominate only Mr. Hollin and Ms. Marshall for re-election at the 2019 annual meeting of shareholders. At the annual meeting, proxies cannot be voted for a greater number of individuals than the two nominees named in this proxy statement.
The Company has a majority voting standard to elect directors in uncontested elections of directors, such as this election. Under the majority voting standard, if the votes cast “against” a director exceed the number of votes cast “for” the director, the director is not elected. Under Georgia law, to ensure that a board’s power to act continues uninterrupted, the failure to receive the required number of votes forre-election would not automatically result in a vacancy. Instead, the director who failed to receive the required number of votes would continue to serve as director until his or her successor is elected and qualified or until his or her earlier resignation, retirement, disqualification, removal from office, or death. Such a director is referred to as a “holdover” director. If one of the Company’s directors fails to receive the required number of votes for reelection, the Company’s Corporate Governance Guidelines provide that directors mayrequire the director to promptly tender his or her written resignation to the board following certification of the shareholder vote. If the tendered resignation does not stand for election after their 75th birthday withoutexpressly require acceptance by the approval of our board, of directors. Ourthe resignation will become effective immediately, or on the date set forth in the resignation, and there will be a vacancy on the board of directors, upon the recommendationeffective date of the resignation. If the tendered resignation specifies that it is not effective until accepted by the board, the board has the discretion to accept or reject the resignation. In such a case, the Governance and Nominating Committee will promptly consider the tendered resignation and, based on any factors deemed relevant by the members of the Governance and Nominating Committee, has determined that it is in the best interest of our Company to waive the retirement age for Mr. Jacobs to serve an additional term so that our Company can continue to benefit from his business expertise, leadership and institutional experience with the Company. In reaching this determination, the board considered Mr. Jacobs’ significant contributionsrecommend to the board including his service aswhether to accept or reject the Chairmantendered resignation.
In considering the Governance and Nominating Committee’s recommendation, the board may consider any factors deemed relevant by the members of the board. If the board does not accept the resignation, the director will continue to serve until his qualificationsor her successor is elected and experience,qualified or until his levelor her earlier resignation, retirement, disqualification, removal from office, or death. The Company will publicly disclose the board’s decision within 90 days from the date of involvement with the Companycertification of the election results. To the extent that one or more directors’ resignations are accepted by the board, the Governance and his ongoing devotionNominating Committee will recommend to the board whether to fill such vacancy or vacancies or to reduce the size of time and effort to his service as a director.the board.
The composition of our board of directors is currently as follows:
Class III | Class I | Class II | ||||||||
| Name | Term Expiration | Name | Term Expiration | Name | Term Expiration | |||||
William I Jacobs* | 2018 | Mitchell L. Hollin* | 2019 | John G. Bruno* | 2020 | |||||
Robert H.B. Baldwin, Jr. | 2018 | Ruth Ann Marshall* | 2019 | Jeffrey S. Sloan | 2020 | |||||
Alan M. Silberstein* | 2018 | John M. Partridge* | 2019 | William B. Plummer* | 2020 | |||||
Class I | Class II | Class III | ||||||||
| Name | Term Expiration | Name | Term Expiration | Name | Term Expiration | |||||
Mitchell L. Hollin | 2019 | John G. Bruno* | 2020 | Robert H.B. Baldwin, Jr. | 2021 | |||||
Ruth Ann Marshall* | 2019 | William B. Plummer* | 2020 | William I Jacobs* | 2021 | |||||
John M. Partridge* | 2019 | Jeffrey S. Sloan | 2020 | Alan M. Silberstein* | 2021 | |||||
| * | Our board of directors has determined that this director is independent. |
In each case, the director nominee, if elected, will serve a shorter term in the event of his or her resignation, retirement, disqualification, or removal from office or death. In the event that any of the nominees is unable to serve (which is not anticipated), the persons designated as proxies will cast votes for such other person(s) as they may select. The affirmative vote of at least a majority of the votes cast with respect to the director nominee at the annual meeting at which a quorum is present is required for the election of each of the nominees. If a choice is specified on the proxy card by a shareholder, the shares will be voted as specified. If no specification is made, the shares will be voted “FOR” each of the threetwo nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR.
12 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 13
Nominees for Election as Directors with Terms Expiring in 20212022
Biographical and other information about each director nominated for election is set forth below:
• Class
•
|
| |||
• If elected, term expires in
• Risk Oversight Committee
• Technology Committee
• Age
|
Skills and
|
GLOBAL PAYMENTS INC. |2018 Proxy StatementQualifications:– 13
|
|
Biographical information with respect to our other directors is set forth below:
|
|
14 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
|
| |||
|
Mr. Hollin has served as Managing Partner, LLR Management, L.P., an independent private equity investment firm (since 2000); Founder and Managing Director, Advanta Partners LP, a private equity firm affiliated with Advanta Corporation (1994 — 2000); Director, Heartland (2001 — April 2016); Lead Independent Director, Heartland (January 2011 — April 2016).
| |||
Ruth Ann Marshall • Class I • Independent director since 2006 • If elected, term expires in 2022 • Risk Oversight Committee (Chair) • Governance and Nominating Committee • Age 64 | Skills and Qualifications: Ms. Marshall’s qualifications to serve on the board include her deep knowledge of our business and industry, having served, among other roles, as President, Americas for Mastercard International, as well as her experience with the issues, opportunities and challenges facing our Company, which our board believes will continue to make her an invaluable member of our board. Moreover, Ms. Marshall’s longevity as a director gives her a unique perspective on the history and the direction of the Company. Ms. Marshall has served as President, Americas for Mastercard International (2000 — 2006), a publicly-traded financial services provider; Senior Executive Vice President, Concord EFS, Inc., a public provider of processing services that merged with First Data Corporation in 2004 (1995 — 1999); Director, Regions Financial Corporation, a publicly-traded financial institution (since 2011) and ConAgra, Inc., a publicly-traded packaged food company (since 2007). |
14 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 15
Biographical information with respect to our other directors is set forth below:
John M. Partridge • Class I • Independent director since November 2013 • Term expires in 2019 • Audit Committee • Age 69 |
Mr. Partridge has served as Chairman and Chief Executive Officer of Velo Payments, a data network for business disbursements (January 2017 — present); Advisor to Visa Inc. (April 2013 to December 2013); President, Visa Inc. (2009 — 2013); Chief Operating Officer, Visa Inc. (2007 — 2009); President and Chief Executive Officer, Inovant, a subsidiary of Visa Inc. (2000 — 2007); Interim President of VISA USA (2007); Director, Cigna Corporation, a publicly-traded health insurance company (since 2009); Advisory Board Member, Corsair Capital, a private equity firm (since November 2013). |
John G. Bruno
• Class II
• Independent director since June 2014
• Term expires in 2020
• Compensation Committee (Chair)
• Technology Committee
• Age |
Skills and Qualifications: Mr. Bruno’s qualifications to serve on the board include his extensive executive leadership experience with technology, cyber-security and payments-related matters within the financial services industry through his prior position as Chief Information Officer, and current position as Chief Operations Officer, of Aon, plc, and his service in executive roles at NCR Corporation and Symbol Technologies, Inc.
Mr. Bruno has served as Chief Operations Officer and member of the Executive Committee of Aon, plc, a publicly-traded global risk management service provider (since April 2017); Executive Vice President of Enterprise Innovation and Chief Information Officer, Aon plc (September |
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 15
Jeffrey S. Sloan
• Class II
• Director since January 2014
• Term expires in 2020
• No committees
• Age |
Skills and
Mr. Sloan has served as Chief Executive Officer of the Company (since October 2013); President of the Company (June 2010 — June 2014); Partner, Goldman Sachs Group, Inc. (2004 — May 2010), where Mr. Sloan led the Financial Technology Group in New York and focused on mergers, acquisitions and corporate finance; Managing Director, Goldman Sachs Group, Inc. (2001 — 2004); Vice President, Goldman Sachs Group, Inc. (1998 — 2001); Director, FleetCor Technologies, Inc., a publicly-traded provider of fuel cards and workforce payment products and services (since July 2013). |
16 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
William B. Plummer
• Class II
• Independent director since March 2017
• Term expires in 2020
• Audit Committee (Chair)
• Audit Committee Financial Expert •
• Age
|
Skills and
Mr. Plummer |
16 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
William I Jacobs • Chairman of the Board since 2014 • Class III • Independent director since 2001 • Lead director from 2003-2014 • Term expires in 2021 • Compensation Committee • Governance and Nominating Committee • Age 77 | Skills and Qualifications:Mr. Jacobs’ qualifications to serve on the board include his extensive executive management experience, leadership skills demonstrated throughout his16-year tenure as our Chairman of the board or lead director, board expertise and legal training. The Board believes Mr. Jacobs will continue to provide leadership and consensus building skills on matters of strategic importance. Through his tenure on our board, Mr. Jacobs has acquired an unmatchable breadth of knowledge and understanding of our business, which allows him to offer a unique perspective on the Company’s strategies and operations. Mr. Jacobs has served as Chairman of the Company’s board of directors (since June 2014); Lead Director of the Company’s board of directors (2003 — May 2014); Business Advisor (since August 2002); Managing Director and Chief Financial Officer of The New Power Company (2000 — 2002); Senior Executive Vice President, Strategic Ventures for MasterCard International (1999 — 2000); Executive Vice President, Global Resources for MasterCard International (1995 — 1999); Executive Vice President, Chief Operating Officer, Financial Security Assurance, Inc., a bond insurance company (1984 — 1994); member of the board of directors of Green Dot Corporation, a publicly-traded financial services company (since April 2016) and Chairman of its board (since June 2016); Director, Asset Acceptance Capital Corp., a publicly-traded debt collection company that merged with Encore Capital Group, Inc. in June 2013 (2004 — June 2013). | |
Robert H.B. Baldwin, Jr. • Class III • Non-employee director since April 2016 • Term expires in 2021 • Risk Oversight Committee • Technology Committee (Chair) • Age 64 | Skills and Qualifications:Mr. Baldwin’s qualifications to serve on the board include his financial and industry experience, andin-depth knowledge of our business gained from his 16 years of service as a member of Heartland’s executive management team, as well as his many contributions to the growth and success of Heartland during his tenure. Mr. Baldwin has served as Vice Chairman (an executive office), Heartland (June 2012 — April 2016); Interim Chief Financial Officer, Heartland (October 2013 — April 2014); President, Heartland (2007 — June 2012); Chief Financial Officer, Heartland and its predecessor, Heartland Payment Systems LLC (2000 — 2011); Chief Financial Officer, COMFORCE Corp., a publicly-traded staffing company (1998 — 2000); Managing Director, financial institutions advisory business of Smith Barney (1985 — 1998); Vice President, Citicorp (1980 — 1985). |
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 17
Alan M. Silberstein • Class III • Independent director since 2003 • Term expires in 2021 • Governance and Nominating Committee (Chair) • Audit Committee • Age 71 | Skills and Qualifications: Mr. Silberstein’s qualifications to serve on the board include his financial and accounting experience specifically in the financial services industry gained through serving as a former divisional controller and director of profit planning, his broader experience managing several diverse companies, and thein-depth knowledge about our Company gained from his lengthy tenure as a director. Mr. Silberstein has served as President, Allston Associates LLP (previously Silco Associates Inc.), a private management services firm (since 2004); President and Chief Operating Officer, Debt Resolve, Inc., a public online collections services provider (2003 — 2004); President and Chief Executive Officer, Western Union, formerly a subsidiary of First Data Corporation (2000 — 2001); Chairman and Chief Executive Officer, Claim Services, Travelers Property Casualty Insurance (1996 — 1997); Executive Vice President, Retail Banking, Midlantic Corporation (1992 — 1995); Director, Green Bancorp, Inc., a publicly-traded bank holding company (2010 — 2018). Mr. Silberstein also previously served as a director of CAN Capital (formerly Capital Access Network, Inc.), a privatenon-bank alternative capital provider. |
There is no family relationship between any of our executive officersNEOs or directors. There are no arrangements or understandings between any of our directors and any other person pursuant to which any of them was elected as a director, other than arrangements or understandings with the directors solely in their capacities as such.
18 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 17
Board and Corporate Governance
As a result of engaging with our shareholders and keeping abreast of leading practices, we have taken actions with respect to corporate governance matters, including the following:
Our board of directors is chaired by Mr. Jacobs, one of our independent directors. Our board believes that Mr. Jacobs’ service as Chairman enhances the independent oversight of management, while continuing to provide the decisive leadership necessary for an effective Chairman. From his17-year18-year tenure as a member of our board and15-year16-year tenure as either Chairman of the board or lead director, Mr. Jacobs has acquired a deep knowledge of our history and culture as well as the issues, opportunities and challenges facing our business. As a result, our board believes that Mr. Jacobs is well-positioned to ensure that the board’s time and attention is focused on the most critical matters.
Our Corporate Governance Guidelines do not express a formal policy on whether the same person should serve as the Chairman of the board and the Chief Executive Officer. Although our Chairman of the board is an independent director, if in the future anon-independent director serves as Chairman of the board, the board will appoint a lead director to fulfill many of the responsibilities of the Chairman listed below.
Chairman of the Board Duties
| ✓ | Presides at all meetings of the board (including all executive sessions); |
| ✓ | Serves as the liaison between the Chief Executive Officer and the independent andnon-employee directors; |
| ✓ | Establishes the agenda and presides at executive sessions of the independent andnon-employee |
| ✓ | Generally approves information provided to the board, board meeting agendas and meeting schedules to ensure there is sufficient time for discussion of all agenda items; and |
| ✓ | In conjunction with the Compensation Committee, reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives, determines and approves the Chief Executive Officer’s compensation based upon such evaluation, and communicates with the Chief Executive Officer regarding the foregoing. |
Our Corporate Governance Guidelines provide that directors may not stand for election after their 75th birthday without the approval of our board of directors. Our board of directors has determined that it is in the best interest of our Company to waive the retirement age for Mr. Jacobs to serve an additional term so that our Company can continue to benefit from his business expertise, leadership and institutional experience with the Company. In reaching this determination, the board considered Mr. Jacobs’ significant contributions to the board, including his service as the Chairman of the board, his qualifications and experience, his level of involvement with the Company and his ongoing devotion of time and effort to his service as a director.
18 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
At least a majority of our directors, and all of the members of our Audit Committee, Compensation Committee and Governance and Nominating Committee, must be “independent” based on the listing standards of the New York Stock Exchange, or the NYSE. Each year, our board of directors reviews the independence of our directors and considers, among other things, relationships and transactions during the past three years between each director or any member of his or her immediate family, on the one hand, and our Company and our subsidiaries and affiliates, on the other hand.
The purpose of the review is to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent as defined under the NYSE listing standards.
The NYSE listing standards provide that to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, our board of directors must affirmatively determine that a director has no material relationship with our Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with our Company). Additional independence requirements established by the SEC and the NYSE apply to members of the Audit Committee and the Compensation Committee.
Using these standards for determining the independence of its members, the board determined that the following directors are independent:
| William I Jacobs | Alan M. Silberstein | |
| John G. Bruno | Ruth Ann Marshall | |
| William B. Plummer | John M. Partridge | |
In addition, each member of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee is independent.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 19
Our board currently consists of nine directors divided into three equal classes, who each serve a three-year term.
The Governance and Nominating Committee believes that diversity is an important factor in determining the composition of the board and considers it in making nominee recommendations, although it does not have a formal diversity policy. The Governance and Nominating Committee considers candidates for director who are recommended by other members of the board of directors and by management, as well as those identified by any outside consultants who are periodically retained by the committee to assist in identifying possible candidates. The committee will evaluate potential nominees for open board positions suggested by shareholders in accordance with our policies for shareholder proposals and on the same basis as all other potential nominees. See “Questions and Answers About Our Annual Meeting and this Proxy Statement — May I Propose Actions for Consideration at Next Year’s Annual Shareholder Meeting?” for additional information about our policies for shareholder proposals.
Key factors the Governance and Nominating Committee considers when determining whether to appoint directors include:
• Experience — Particular skills and leadership experience that are relevant to the Company’s strategic vision
• Diversity — Diversity of background, race, gender, qualifications, attributes and skills
• Age and Tenure — The age and board tenure of each incumbent director
• Board Size — The committee periodically evaluates whether a larger or smaller board would be preferable, depending on the board’s needs and the availability of qualified candidates
• Board Independence — Independence of candidates for director nominees, including the appearance of any conflict in serving as a director
• Board Contribution— Integrity, business judgment and commitment
|
20 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 19
The board has identified the following key qualifications and experience that are important to be represented on theour board as a whole in light of our current business strategy and expected needs. The charts below indicate how these qualifications are represented on our board based on information provided by our directors. Information regarding each director’s skills and qualifications can be found within their individual biographies on pages13-17.14-18.
| | |
| |
| | |
| indicates board representation of the qualification |
We are committed to periodically reviewingreview our board’s composition to ensure that we continue to have the right mix of skills, background and tenure. The board currently believes that an appropriate size is seven to twelve members, allowing, however, for changing circumstances that may warrant a higher or a lower number. The Governance and Nominating Committee considers director candidates suggested by members of the committee, other directors, shareholders and management, and has engaged the services of third party firms to assist in identifying and evaluating director candidates.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 21
As a result of healthy refreshment over recent years, 62%as of the date of this proxy statement, 50% of ournon-employee board members have joined the board in the last five years, and 38% of our members joined the board in the last twothree years. The background and skills of these directors contribute meaningfully to the Company’s strategy for future growth and long-term value creation.
In addition, we amended our bylaws in May 2017 to permit a shareholder (or a group of up to 20 shareholders) who has owned at least 3% of our stock continuously for at least three years to submit director nominees for the greater of two individuals or 20% of the board for inclusion in our proxy statement if the shareholder(s) and nominee(s) meet the requirements of the bylaws.
The board also believes that directors develop an understanding of the Company and an ability to work effectively as a group over time that provides substantial value, and therefore a significant degree of continuity year-over-year is beneficial to shareholders and generally should be expected.
20 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
The current tenure, independence and diversity composition of our board is as follows:
Board and Committee Membership — Director Attendance at Meetings
Our full board of directors met sixfive times during 2017.2018. All of our directors attended at least 75% of the meetings of the board during 2017,2018, including meetings of the committees of which they were members. Pursuant to our Corporate Governance Guidelines, all of our directors are expected to attend the annual meeting of shareholders, and all of our directors attended the 20172018 annual meeting.
Our board of directors has established five standing committees, which include the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, the Risk Oversight Committee and the Technology Committee, all of which are comprised exclusively ofnon-employee directors. The Audit Committee, the Compensation Committee, and the Governance and Nominating Committee are comprised exclusively of independentnon-employee directors.
22 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 21
Our board has adopted written charters for each of these committees. The chartersEach committee charter and our corporate governance guidelines are available in the investor relations section of our website,www.globalpaymentsinc.com. The following table summarizes the primary responsibilities of the committees:
|
| |
Audit |
The Audit Committee helps ensure (i) the integrity of our financial statements, (ii) our compliance with certain legal and regulatory requirements; (iii) the qualifications and independence of our independent auditor, (iv) the performance of our internal audit function and independent auditor; and (v) the effectiveness of our disclosure controls and procedures and internal control over financial reporting. In addition, the Audit Committee is responsible for reviewing and approving or ratifying all related-party transactions that would require disclosure under applicable legal requirements. The Audit Committee also prepares a report that is included in this proxy statement.
| |
Compensation |
The Compensation Committee reviews levels of compensation, benefits and performance criteria for our
| |
Governance and Nominating |
The Governance and Nominating Committee is responsible for (i) developing and recommending to the board of directors a set of corporate governance principles, (ii) evaluating and making recommendations regarding the structure of the board and its committees and (iii) identifying, discussing and proposing nominees (including incumbent directors) for open seats on the board of directors, based primarily on the criteria described under “Board and Corporate Governance — Board Membership Criteria” on page
| |
Risk Oversight |
The Risk Oversight Committee oversees the identification, assessment and management of the key risks facing our Company, which it carries out primarily through its oversight of our enterprise risk management program, as further described below under “Board and Corporate Governance — Board Oversight of Risk Management.” In addition, the Risk Oversight Committee oversees our business continuity, disaster recovery and pandemic plans, our insurance program and our vendor management program and serves as a liaison between the full board and management with respect to these matters.
| |
Technology |
The Technology Committee provides board-level oversight with regard to our technology and information security practices and cyber risk profile, and serves as a liaison between our board of directors and management with regard to such matters. The Technology Committee reviews all of our key initiatives and practices relating to technology,
| |
22 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 23
The following table provides information about current committee membership and number of meetings held during 2017:2018:
Chair 
Member 
Financial Expert(1)
| * | Independent director. |
| 1 | The term “financial expert” refers to an “audit committee financial expert,” as that term is defined under SEC rules. |
24 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
Board Oversight of Risk Management
Our board of directors views the oversight of risk management as one of its key functions, regularly engaging with management to maintain a risk-aware culture where risk management is deeply and pervasively embedded in all of our activities worldwide. Through its oversight of our enterprise risk management program, our board takes a multi-layered approach to this oversight role. The full board engages directly with management to set high level policypolicy. At least annually, the board discusses with management the appropriate level of risk relative to our strategy and receiveobjectives and reviews with management our existing risk management processes and their effectiveness. In addition, the board receives periodic reports on risk management activities from each committee chairman and directly from management,chair while relying on each of its five standing committees to provide morein-depth oversight of specific key risk exposures.
The Board’s Role in Risk Oversight
Our board has delegated to the Risk Oversight Committee the responsibility to directly oversee our enterprise risk management program. Specifically, subject to oversight by the full board of directors, the Risk Oversight Committee is responsible for overseeing the process for identifying, assessing and managing the key risks our Company faces, receiving recommendations from management with respect to such risks, and making recommendations to the full board of directors. The committee’s responsibilities related to oversight of the enterprise risk management program are process-oriented, meaning the committee takes steps to ensure that an effective process is in place to identify and manage key risk exposures, develop a risk mitigation plan and ensure proper reporting on compliance with such plan.
Under the direction of the Risk Oversight Committee, we established a management risk committee comprised primarily of executive management that is responsible for identifying, assessing, prioritizing and developing action plans to mitigate key risks. The management risk committee reports to the full board or appropriate board committee periodically and more frequently as needed.
Risk oversight responsibilities related to the substance of each identified key risk exposure, such as the application of the board’s risk tolerance in a particular area, are in some cases carried out by the full board without any delegation to a committee. For example, the full board directly oversees our risk management
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 25
activities with respect to risks associated with our strategic direction. More frequently, oversight of defined risk exposures is carried out by the board committee with the most relevant subject-matter expertise. In these cases,
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 23
the relevant board committee carries out these responsibilities utilizing the process established by the Risk Oversight Committee, with reporting obligations to the full board. Our board has delegated risk oversight responsibilities for certain key risk exposures to its committees as follows:
| • | Audit Committee. The Audit Committee oversees our risk management activities with respect to our financial reporting and disclosure obligations as well as our financial management and liquidity risks. |
| • | Compensation Committee. The Compensation Committee oversees our risk management activities with respect to our compensation policies and practices for our |
| • | Governance and Nominating Committee. The Governance and Nominating Committee oversees our risk management activities with respect to our corporate governance structure at the board and senior management level. At the board level, functions of the Governance and Nominating Committee are intended to ensure that our full board and its other committees continue to operate functionally and with an appropriate degree of independence from management. At the senior management level, the Governance and Nominating Committee promotes a risk-aware culture by, for example, periodically reviewing our employee business code of conduct and ethics. |
| • | Risk Oversight Committee. In addition to the process-oriented risk management activities outlined above, the Risk Oversight Committee directly oversees our risk management activities with respect to enterprise risk management, business continuity and disaster recovery, regulatory and industry compliance, geopolitical risk and privacy. |
| • | Technology Committee. The Technology Committee oversees our risk management activities with respect to information security and cyber-security and our technological infrastructure. |
The Board’s Role in Overseeing Cyber Risk
We employ multiple methods and technologies to secure the Company’s computing environment and ensure the confidentiality, integrity and availability of our information assets. As noted above, technology and cyber-security qualifications and experience is one of the key factors that our Governance and Nominating Committee considers in its assessment of the board membership criteria.
Our board has delegated to the Technology Committee the responsibility to oversee the Company’s Information Security Program and cyber-security risk. Specifically, subject to oversight by the full board of directors, the Technology Committee periodically receives reports from the Company’s Chief Information Security Officer, or CISO, on the Company’s cyber risk profile and information security initiatives. The Company’s Information Security Program is administered by the CISO, who maintains a direct reporting line to both the Technology Committee and the board. At least annually, the Technology Committee receives a formal, enterprise-wide information technology and cyber-security risk assessment and reviews and recommends the Company’s information security program supporting policies to the full board for evaluation and approval. The Technology Committee regularly reviews and discusses the Company’s technology strategy with the Chief Information Officer and recommends the Company’s technology strategic plan to the full board for evaluation and approval.
In addition, the board and the Risk Committee regularly receive information about these topics from the Chair of the Technology Committee, the CISO and management and are apprised directly of incidents exceeding certain risk tolerances.
Evaluation of Board and Committee Effectiveness
Each year, our board and its committees conduct self-evaluations to ensure they are performing effectively and to identify opportunities to improve board and committee performance. The written self-assessment is conducted under the oversight of the Governance and Nominating Committee. Anonymous evaluation responses are reviewed and assessed during board and committee executive sessions and where appropriate, addressed with management. As part of the board’s self-assessment process, directors consider various topics related to
24 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
board composition, structure, effectiveness and responsibilities, as well as the overall mix of director skills, experience, diversity and backgrounds.
The Company values the input and insights of its shareholders and is committed to continued engagement with investors on a wide variety of topics that are important to investors, including Company performance and operations and strategic direction.investors. Our senior management, including our Chief Executive Officer and Chief Financial Officer, routinely provide information to and receive feedback from our investors in a wide variety of formats, including in our quarterly SEC filings, quarterly earnings conference calls, our Annual Report and proxy statement, regular investor conferences and road-shows, and meetings with individual investors. We have a staff of professionals in our Investor Relations department who are dedicated full time to respond to questions from shareholders and other investors about the Company and its performance.
We hosted our 2018 investor day on March 1, 2018, which provided an opportunity for shareholders and analysts to hear directly from management on the Company’s long-term strategy and ask questions of the management team. In 2018, we again engaged directly across the spectrum of our active shareholder base on the Company’s performance, operations and strategic direction.
In 2017, after thoughtful discussions with shareholders and considering the viewpoints of governance experts and advisors, we adopted a bylaw allowing shareholders to nominate directors and to have such nominees included in the proxy statement. Consistent with market practice and many other S&P 500 companies, our bylaws now permit a shareholder or a group of up to twenty (20) shareholders owning three percent (3%) or more of the Company’s voting stock continuously for at least three (3) years to nominate and include in the Company’s proxy materials for an annual meeting of shareholders director candidates constituting up to the greater of two directors or 20% of the board; provided that the shareholder (or group) and each nominee satisfy the requirements for proxy access as specified in the bylaws. We believe these parameters balance the benefit to our shareholders with the challenges related to possible proxy contests, turnover in board seats and the challenges of integrating new qualified directors.
Ournon-employee director compensation plan is designed to attract, retain and compensate highly-qualified directors by providing them with competitive compensation and an equity interest in our Company to align their interests with those of our shareholders. In lieu ofper-meeting fees, we pay ournon-employee directors annual cash and stock retainers, which are payable in advance on the first business day after each annual meeting of shareholders (prorated for partial periods for new directors). We do not pay additional compensation to directors who are also our employees for their service as a director.
Our Governance and Nominating Committee periodically reviews ournon-employee director compensation plan and makes recommendations as necessary to our full board of directors. WeThe annual cash and stock retainers we pay ournon-employee directors the annual cash and stock retainersare as set forth below:
Director
| Annual
| Annual
| Annual Stock Retainer
| ||||||||||||
Non-Employee Chairman(1)
| $
| 100,000
|
| $
| 95,000
|
| $
| 195,000
|
| ||||||
Lead Director(2)
| $
| 100,000
|
| $
| 65,000
|
| $
| 195,000
|
| ||||||
Chair of Audit Committee
| $
| 100,000
|
| $
| 22,500
|
| $
| 155,000
|
| ||||||
Chair of Compensation Committee
| $
| 100,000
|
| $
| 20,000
|
| $
| 155,000
|
| ||||||
Chair of Other Committees
| $
| 100,000
|
| $
| 17,500
|
| $
| 155,000
|
| ||||||
All OtherNon-Employee Directors
| $
| 100,000
|
|
| N/A
|
| $
| 155,000
|
| ||||||
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 27
| (1) | These retainers are payable only if the Chairman of the board is anon-employee director. Mr. Jacobs, our Chairman of the board, is anon-employee director and, therefore, receives these retainers. See “Board and Corporate Governance — Board Leadership” beginning on page |
| (2) | Our board will appoint a lead director only if the Chairman of the board is an employee of the Company. Since our Chairman of the board is anon-employee, our board has not appointed a lead director and these retainers are not applicable. See “Board and Corporate Governance — Board Leadership” beginning on page |
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 25
The number of fully-vested shares of our common stock granted as the annual stock retainer is based on the market price of our common stock on the grant date. As a result, on May 4, 2017,April 30, 2018, Mr. Jacobs received 2,2641,725 shares of common stock, and each of the othernon-employee directors received 1,8001,372 shares of common stock. Directors are also reimbursed for theirout-of-pocket expenses incurred in connection with attendance at board and committee meetings.
All of thenon-employee directors are eligible to participate in ourNon-Qualified Deferred Compensation Plan described under “Board and Corporate Governance — Director Compensation —Non-Qualified Deferred Compensation Plan” below. During 2017,2018, only Ms. Marshall and Mr. PlummerSilberstein participated, and they did not receive any interest on deferred compensation at an above-market rate of interest.
20172018 Director Compensation Table
The Governance and Nominating Committee periodically reviews the compensation of thenon-employee directors and recommends any changes to the board. The following table summarizes the compensation of ournon-employee directors during 2017.2018.
Name
| Fees
| Stock Awards ($)(2)
| Total ($)
| Fees
| Stock Awards ($)(2)
| Total ($)
| ||||||||||||||||||||||||
Robert H.B. Baldwin, Jr.
| $
| 100,000
|
| $
| 155,000
|
| $
| 255,000
|
| |||||||||||||||||||||
Robert H.B. Baldwin, Jr.(3)
| $
| 109,110
|
| $
| 155,000
|
| $
| 264,110
|
| |||||||||||||||||||||
John G. Bruno
| $
| 117,500
|
| $
| 155,000
|
| $
| 272,500
|
| |||||||||||||||||||||
John G. Bruno(4)
| $
| 118,801
|
| $
| 155,000
|
| $
| 273,801
|
| |||||||||||||||||||||
Mitchell L. Hollin
| $
| 120,000
|
| $
| 155,000
|
| $
| 275,000
|
| $
| 120,000
|
| $
| 155,000
|
| $
| 275,000
|
| ||||||||||||
William I Jacobs
| $
| 195,000
|
| $
| 195,000
|
| $
| 390,000
|
| $
| 195,000
|
| $
| 195,000
|
| $
| 390,000
|
| ||||||||||||
Ruth Ann Marshall
| $
| 117,500
|
| $
| 155,000
|
| $
| 272,500
|
| $
| 117,500
|
| $
| 155,000
|
| $
| 272,500
|
| ||||||||||||
John M. Partridge
| $
| 100,000
|
| $
| 155,000
|
| $
| 255,000
|
| $
| 100,000
|
| $
| 155,000
|
| $
| 255,000
|
| ||||||||||||
William B. Plummer
| $
| 138,390
|
| $
| 180,879
|
| $
| 319,269
|
| $
| 122,500
|
| $
| 155,000
|
| $
| 277,500
|
| ||||||||||||
Alan M. Silberstein
| $
| 117,500
|
| $
| 155,000
|
| $
| 272,500
|
| $
| 117,500
|
| $
| 155,000
|
| $
| 272,500
|
| ||||||||||||
| (1) | Represents basic and supplemental cash retainers earned during |
| (2) | Represents the aggregate grant date fair value of awards of stock granted on |
28 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
Non-Employee Directors
| Options Outstanding as of December 31,
| ||||
Robert H.B. Baldwin, Jr.
|
| —
|
| ||
John G. Bruno
|
| —
|
| ||
Mitchell L. Hollin
|
| —
|
| ||
William I Jacobs
|
|
|
| ||
Ruth Ann Marshall
|
|
|
| ||
John M. Partridge
|
| —
|
| ||
William B. Plummer
|
| —
|
| ||
Alan M. Silberstein
|
|
|
| ||
| (3) | Mr. Baldwin received additional fees in connection with becoming the Chair of the Technology Committee in October 2018, prorated for the time he served in such position during the twelve months ending on the date of the 2019 shareholder meeting. |
| (4) | Mr. Bruno received additional fees in connection with becoming the Chair of the Compensation Committee in October 2018, prorated for the time he served in such position during the twelve months ending on the date of the 2019 shareholder meeting. |
26 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
Non-Qualified Deferred Compensation Plan
Thenon-employee directors are eligible to participate in ournon-qualified deferred compensation plan, or the deferred compensation plan. Ms. Marshall and Mr. PlummerSilberstein are the only two directors who participated in the deferred compensation plan during 2017.2018. Pursuant to the deferred compensation plan,non-employee directors are permitted to elect to defer up to 100% of their annual cash retainer. Participant accounts are credited with earnings based on the participant’s investment allocation among a menu of investment options selected by the deferred compensation plan administrator. Participants are 100% vested in the participant deferrals and related earnings. We do not make contributions to the deferred compensation plan and do not guarantee any return on participant account balances. Participants may allocate their plan accounts intosub-accounts that are payable upon separation from service or on designated specified dates. Except in the case of death or disability, participants may elect in advance to have their various account balances pay out in a single lump sum or in installments over a period of two to ten years. In the event a participant separates from service by reason of death or disability, the participant or his or her designated beneficiary will receive the undistributed portion of his or her account balances in alump-sum payment. Subject to approval by the deferred compensation plan administrator, in the event of an unforeseen financial emergency beyond the participant’s control, a participant may request a withdrawal from an account up to the amount necessary to satisfy the emergency (provided the participant does not have the financial resources to otherwise meet the hardship).
Target Stock Ownership Guidelines
Our board of directors has implemented stock ownership guidelines for our directors in order to foster equity ownership and align the interests of our directors with our shareholders. Within five years of becoming a director, each director is expected to beneficially own a number of shares of our common stock at least equal in value to 500% of the director’s annual cash retainer.
Contacting Our Board of Directors
Any interested party may contact any individual director, ournon-employee or independent directors as a group, or all of our directors by directing such communications to the applicable directors in care of the Corporate Secretary at our address at 3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326. Any correspondence received by the Corporate Secretary in accordance with the foregoing will be forwarded to the applicable director or directors.
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 2729
Common Stock Ownership by Management
The following table sets forth information as of February 14, 20182019 with respect to the beneficial ownership of our common stock by (i) each of our directors, (ii) each of our NEOs, and (iii) the 1312 persons, as a group, who were directors or executive officersNEOs of our Company on February 14, 2018.2019.
| Name and Address of Beneficial Owner(1) | Shares Beneficially Owned(2) | Shares Issuable Upon Exercise of | Total | Percentage of Class | Shares Beneficially Owned(2) | Shares Issuable Upon Exercise of | Total | Percentage of Class | ||||||||||||||||||||||||||||||||
Named Executive Officers: | ||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | 397,698 | (4) | 213,496 | 611,194 | * | 468,173 | (4) | 288,383 | 756,556 | * | ||||||||||||||||||||||||||||||
David E. Mangum | 172,180 | 72,724 | 244,904 | * | ||||||||||||||||||||||||||||||||||||
Cameron M. Bready | 120,109 | 58,701 | 178,810 | * | 121,834 | 41,441 | 163,275 | * | ||||||||||||||||||||||||||||||||
Guido F. Sacchi | 44,511 | 5,692 | 50,203 | * | 49,295 | 18,930 | 68,225 | * | ||||||||||||||||||||||||||||||||
David L. Green | 59,044 | 30,609 | 89,653 | * | 58,688 | 39,997 | 98,685 | * | ||||||||||||||||||||||||||||||||
Non-Employee Director and Director Nominees: | ||||||||||||||||||||||||||||||||||||||||
William I Jacobs | 37,075 | 30,704 | 62,779 | * | 32,200 | 18,204 | 50,404 | * | ||||||||||||||||||||||||||||||||
Robert H.B. Baldwin, Jr. | 132,433 | (5) | — | 132,443 | * | 79,755 | (5) | — | 79,755 | * | ||||||||||||||||||||||||||||||
John G. Bruno | 10,087 | — | 10,087 | * | 11,464 | — | 11,464 | * | ||||||||||||||||||||||||||||||||
Mitchell L. Hollin | 33,975 | — | 33,975 | * | 35,363 | — | 35,363 | * | ||||||||||||||||||||||||||||||||
Ruth Ann Marshall | 36,074 | 30,704 | 66,778 | * | 37,457 | 18,204 | 55,661 | * | ||||||||||||||||||||||||||||||||
John M. Partridge | 12,784 | — | 12,784 | * | 14,156 | — | 14,156 | * | ||||||||||||||||||||||||||||||||
William B. Plummer | 2,122 | — | 2,122 | * | 3,494 | — | 3,494 | * | ||||||||||||||||||||||||||||||||
Alan M. Silberstein | 44,293 | 30,704 | 74,779 | * | 40,769 | 18,204 | 58,973 | * | ||||||||||||||||||||||||||||||||
All Directors and Executive Officers as a Group | 1,111,856 | 473,334 | 1,570,511 | * | 952,648 | 443,363 | 1,396,011 | * | ||||||||||||||||||||||||||||||||
| * | Less than one percent. |
| (1) | The address of each of the directors and officers listed is c/o Global Payments Inc., 3550 Lenox Road, Atlanta, Georgia 30326. |
| (2) | Includes the number of shares of common stock the person “beneficially owns,” as determined by SEC rules, other than shares issuable upon the exercise of options that are currently vested or that will vest within 60 days of February 14, |
| (3) | Includes the number of shares that the person had a right to acquire as of, or within 60 days after, February 14, |
| (4) | Includes |
| (5) | Includes |
2830 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Common Stock Ownership byNon-Management Shareholders
The following table sets forth information as of February 14, 20182019 with respect to the only persons who are known by us, based exclusively on such persons’ filings with the SEC under Sections 13(d) and 13(g) of the Exchange Act, to be the beneficial owners of more than 5% of the outstanding shares of our common stock.
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Shares(1) | ||||||||
FMR LLC(2) | 9,046,311 | 5.68 | % | |||||||
Wellington Management Group LLP(3) | 15,154,459 | 9.52 | % | |||||||
The Vanguard Group(4) | 16,217,226 | 10.19 | % | |||||||
BlackRock, Inc.(5) | 11,037,401 | 6.9 | % | |||||||
T. Rowe Price Associates, Inc.(6) | 16,426,684 | 10.3 | % | |||||||
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Shares(1) | ||||||||
BlackRock, Inc.(2) |
| 10,625,044 |
| 6.7 | % | |||||
Wellington Management Group LLP(3) |
| 12,077,666 |
| 7.6 | % | |||||
T. Rowe Price Associates, Inc.(4) |
| 16,276,698 |
| 10.2 | % | |||||
The Vanguard Group(5) |
| 16,847,196 |
| 10.6 | % | |||||
| (1) | Percentages calculated based on number of shares outstanding as of February 14, |
| (2) | This information is contained in a Schedule 13G/A filed by |
| (3) | This information is contained in a Schedule 13G/A filed by Wellington Management Group LLP with the SEC on February |
| (4) |
| This information is contained in a Schedule 13G/A filed by T. Rowe Price Associates, Inc. with the SEC on February |
| (5) | This information is contained in a Schedule 13G/A filed by The Vanguard Group with the SEC on February 11, 2019. The Vanguard Group reported sole dispositive power for 16,617,595 shares, shared dispositive power for 229,601 shares, sole voting power for 195,331 shares, and shared voting power for 39,686 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 2931
Biographical Information About Our Named Executive Officers
Biographical and other information about each of our current executive officersNEOs is set forth below, except for Mr. Sloan, our Chief Executive Officer, whose biographical information is provided above under “Other Directors” beginning on page 14.16.
Name | Age | Current Position | Position with Global Payments and Other Principal Business Affiliations | ||||||
Cameron M. Bready | 47 | Senior Executive Vice President and Chief Financial Officer | |||||||
| Senior Executive Vice President and Chief Financial Officer (since March 2017); Executive Vice President and Chief Financial Officer (June 2014-February 2017); Executive Vice President and Chief Financial Officer, ITC Holdings Corp., or ITC, a publicly-traded independent electric transmission company (February 2012 — June 2014); Executive Vice President, Treasurer and Chief Financial Officer, ITC (January 2011 — February 2012); Senior Vice President, Treasurer and Chief Financial Officer, ITC (2009 — January 2011). | ||||||||
Dr. Guido F. Sacchi | 55 | Senior Executive Vice President and Chief Information Officer | Senior Executive Vice President and Chief Information Officer (since | ||||||
David L. Green | 51 | Executive Vice President, General Counsel and Corporate Secretary | Executive Vice President, General Counsel and Corporate Secretary (since November 2013); Senior Vice President and Division General Counsel of the Company (November 2011 — November 2013); Vice President and Division General Counsel of the Company (2007 — November 2011). | ||||||
There are no arrangements or understandings between any of our executive officersNEOs and any other person pursuant to which any of them was appointed an officer, other than arrangements or understandings with our officers acting solely in their capacities as such.
The Company has adopted a Code of Ethics for Senior Financial Officers that is applicable to the Chief Executive Officer and the Chief Financial Officer, and an Employee Code of Conduct and Ethics that is applicable to all employees. The codes deter wrongdoing and promote honest and ethical conduct, compliance with laws, rules and regulations and internal reporting of possible legal or ethics violations. In addition, the Company has adopted a Code of Conduct and Ethics applicable to directors. The Code of Ethics for Senior Financial Officers, the Employees Code of Conduct and Ethics and the Director Code of Conduct and Ethics are available on the Company’s website at:https://investors.globalpaymentsinc.com/corporate-governance.
3032 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Proposal Two: Advisory Vote to Approve the 2018 Compensation of Our Named Executive Officers
In accordance with Section 14A of the Exchange Act, our board of directors is asking shareholders to approve an advisory resolution on executive compensation. The advisory vote is anon-binding vote to approve the compensation of our NEOs.NEOs in 2018. The vote, which is known as a“say-on-pay” vote, is intended to give our shareholders the opportunity to express their views on our NEOs’ compensation. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. At last year’s annual meeting of shareholders, approximately 98% of the votes cast were cast in support of the compensation of our NEOs. The text of the resolution is as follows:
Resolved, that the Company’s shareholders APPROVE, on an advisory basis, the compensation of the Company’s NEOs as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the summary compensation table and related compensation tables and narrative discussion.
We urge you to read the Compensation Discussion and Analysis in this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. You should also read the summary compensation table and other related compensation tables and narrative disclosure which provide additional details about the compensation of our NEOs in 2017.2018. We have designed our compensation and benefits program and philosophy to attract, retain and motivate talented, qualified and committed executive officers who share our philosophy and desire to work toward our goals. We believe that for 2017,2018, our executive compensation program aligned individual compensation with the short-term and long-term performance of our Company in ways such as the following:
Pay opportunities were appropriate to the size of our Company when compared to peer companies.
Our compensation program was heavily performance-based, using multiple measures for short-term incentives and a simple, single measure for long-term incentives, as described in this proxy statement.incentives.
Performance metrics under our short-term incentive plan are adjusted to reflect acquisitions that we make.make during the year.
Long-term incentives were linked to shareholder value through performance units, stock options and time-based restricted stock that change in value as share price fluctuates.
Performance units will result in an either increased or decreased payout multiple based on our total shareholder return performance rank relative to the S&P 500 index.
Perquisites are a minor part of our compensation program.
Excise taxgross-ups are not provided to any of our executive officers.NEOs.
Pursuant to our clawback policy, we may recoup the value of any annual or long-term incentive awards provided to any executive officersNEOs in the event that our financial statements are restated due to material noncompliance with any financial reporting requirement.
Change-in-control severance provisions in employment agreements are double trigger.
The Compensation Committee engages independent compensation consultants.
The Compensation Committee certifies performance results for purposes of executive compensation.
We do notre-price or backdate stock options or issue discounted stock options.
We do not pay dividend equivalent rights with respect to restricted stock units.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 33
The vote regarding the compensation of ourthe NEOs described in this Proposal No. 2 is advisory, and therefore, is not binding on us or our board. Althoughnon-binding, our board values the opinions that shareholders express in their votes and will review the voting results and take them into consideration as it deems appropriate when
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 31
making future decisions regarding our executive compensation programs. Our board of directors has adopted a policy providing for an annualsay-on-pay vote. Unless our board of directors modifies this policy, the nextsay-on-pay vote will be held at our next annual shareholder meeting.meeting in 2020.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
“FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE 2018 COMPENSATION OF OUR
NEOs, AS DISCLOSED IN THIS PROXY STATEMENT.
3234 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Compensation Discussion and Analysis
20172018 Performance Highlights
We experienced strong business and financial performance around the world during the year ended December 31, 2017.2018. Highlights related to our financial condition and results of operations as of December 31, 20172018 and for the year then ended include the following:
Consolidated revenues were $3,366.4 million and $3,975.2 million for the years ended December 31, 2018 and 2017, respectively. Consolidated revenues without the effect of ASC 606, the new revenue accounting standard effective for the Company as of January 1, 2018, increased by 17.9%12.6% to $3,975.2$4.475.6 million for the year ended December 31, 2017 from $3,371.02018 compared to $3,975.2 million for 2016.2017.
Consolidated operating income was $558.9$737.1 million for the year ended December 31, 20172018 compared to $356.3$558.9 million for 2016.2017. Our operating margin for the year ended December 31, 20172018 was 14.1%21.9%. Without the effect of the new revenue accounting standard, our operating margin for the year ended December 31, 2018 was 15.6% compared to 10.6%14.1% for 2016.2017.
Net income attributable to Global Payments was $468.4$452.1 million for the year ended December 31, 20172018 compared to $201.8$468.4 million for 2016,2017, and diluted earnings per share was $3.01$2.84 for the year ended December 31, 20172018 compared to $1.37$3.01 for 2016.2017.
Over the12-month period from January 1, 20172018 through December 31, 2017,2018, our stock price increased by 42%.3.6%, compared to a decline of approximately 7.1% in the S&P 500 index. Our stock price from January 1, 20132014 through December 31, 20172018 relative to the performance of our peer group and the S&P 500 index, which we joined in April 2016, is shown in the graph below.
The following graph compares the cumulative shareholder returns of $100 invested in the S&P 500 Index, our Company and the average of our performance peer group from January 1, 20132014 through December 31, 2017,2018, assuming reinvestment of dividends.
The graph excludes peer group performance for Sabre Corporation, PayPal, Inc. and First Data Corp., because these companies were not publicly traded for the full period presented above.
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 3335
Named Executive Officer Compensation HighlightsDesign, Elements and Pay Mix
The following charts show the mix of total target compensation in 2018 (excluding the restricted stock awards granted in June 2018) for our Chief Executive Officer and forthe average of all the other NEOs (excluding David Mangum, our former President and Chief Operating Officer who, as a group, based on a weighted average,of August 27, 2018, no longer served in this position and subsequently left the Company, effective September 15, 2018), as well as the portion of that compensation that is subject to forfeiture (“at risk”) or performance-based.
CEO TOTAL TARGET COMPENSATION | OTHER NEOs TOTAL TARGET COMPENSATION | |
|
|
Our compensation program is aligned with short- and long-term Company performance and reflects best practices to ensure sound corporate governance. As illustrated above, with the exception of base salary and time-based restricted stock awards, all target compensation is performance-based. ExecutivesNEOs are also subject to stock ownership guidelines, and the securities they are required to hold under those guidelines will continue to fluctuate with our share price.
2018 Compensation Highlights
The short-term cash incentives awarded under our annual performance plan incent and reward our executivesNEOs for achievement of short-term goals aligned with our 20172018 operating plan. The long-term incentive plan incents and rewards our executivesNEOs for achievement of long-term goals measured over a multi-year period. Together, these plans support our strategy of facilitating the adoption of, and transition to, card, electronic and digital-based payments by expanding our share in existing markets through our distribution channels, new products and services and acquisitions to improve our scale of offerings, while simultaneously seeking expansion into new markets through acquisitions around the world.
Short-Term Cash Incentives
The short-term cash incentives awarded under our annual performance plan are 100% based on achievement of Company performance goals, equally weighted betweenamong adjusted earnings per share, which we refer to as “adjustedadjusted EPS,” adjusted net revenue plus network fees and adjusted operating margin. For 2017,2018, each of our NEOs (identified below) earned 131%129% of his target under the annual performance plan. These performance goals are discussed below under “Compensation Discussion and Analysis — Short-Term Incentive Plan” beginning on page 38.40.
Long-Term Incentive Plan Awards
The Compensation Committee grants equity-based compensation to our NEOs to provide long-term incentives and align management and shareholder interests.
Performance Units. Awards under our long-term incentive plan include performance-based restricted stock units, which we refer to as “performance units,” stock options and time-based restricted stock. PerformanceFor 2018, the Compensation Committee, after consultation with its independent compensation consultant, Frederick W. Cook & Co., or FWC, modified the design under which performance units are earned to enhance the alignment between executive rewards and long-term gains for the Company and its shareholders by tying the achievement of the NEOs’ compensation to both business objectives and shareholder return. Under the new design,
36 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
performance units are earned based on the achievement of an annual adjusted EPS growth target each year averaged over a three-year performance period, modified up or down by the Company’s total shareholder return performance rank relative to the S&P 500 index, or the TSR modifier, over the three-year performance period. The maximum possible payout is four times the target number of the performance units and the minimum payout is zero. To the extent earned, performance units convert into unrestricted shares after performance results for the three-year performance period are certified by the Compensation Committee.
Stock Options and Restricted Stock. Stock options and restricted stock vest in equal installments on each of the first three anniversaries of theirthe respective grant dates. The value of each of thelong-term incentive awards changes as our share price changes, thereby aligning the interests of our executivesNEOs with those of our shareholders. Awards under our long-term incentive plan for 20172018 are discussed below under “Compensation Discussion and Analysis — Long-Term Incentive Plan” beginning on page 39.42.
The following individuals are identified as NEOs pursuant to SEC rules for the purpose of describing our compensation for 2017:2018:
Jeffrey S. Sloan, Chief Executive Officer;
David E. Mangum, Former President and Chief Operating Officer;Officer (as of August 27, 2018, Mr. Mangum no longer served in this position and subsequently left the Company, effective September 15, 2018);
Cameron M. Bready, Senior Executive Vice President and Chief Financial Officer;
34 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
David L. Green, Executive Vice President, General Counsel and Corporate Secretary.
The discussion below explains the detailed information provided in the tables contained in this section and places that information within the context of our overall compensation program. See “Compensation of Named Executive Officers” below for a series of tables containing specific information about the compensation earned or paid in 2017 to ourthe NEOs.
How Compensation Decisions Are Made
Objectives of Compensation Policies
Our Compensation Committee designs and at least annually reviews our compensation program with a view to retaining and attracting executive leadership of a caliber and level of experience necessary to manage our complex, growth-oriented and global businesses. Our objective is to maintain a compensation program that will allow us to:
support the financial and business objectives of our organization;
attract, motivate and retain highly qualified executives;
create an environment where performance is expected and rewarded;
deliver an externally competitive and transparent total compensation structure; and
align the interests of our executivesNEOs with our shareholders.
In order to achieve these results, our Compensation Committee believes our program must:
provide our executivesNEOs with total compensation opportunities at levels that are competitive for comparable positions in a highly competitive industry;
provide variable,at-risk incentive award opportunities that are payable only if specific goals are achieved;
provide significant upside opportunities for outstanding performance;
align our executives’NEOs’ interests with those of our shareholders by making stock-based incentives a core element of our executives’NEOs’ compensation; and
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 37
protect our competitive position by prohibiting our executive officersNEOs from competing with our Company for a specified period of time following termination of employment.
Our Compensation Committee also considers and assesses potential risk and risk mitigation factors and potential risk aggravators in our compensation program. For 2017,2018, our Compensation Committee concluded that our compensation practices are balanced, do not encourage excessive risk taking by our employees,NEOs, and are not reasonably likely to have a material adverse effect on our Company.
Role of the Independent Compensation Consultant
Our Compensation Committee retained Frederic W. Cook & Co., Inc., or FWC as its independent compensation consultant. The Compensation Committee assessed the independence of FWC and whether its work raised any conflict of interest, taking into consideration the independence factors set forth in applicable SEC and NYSE rules, and determined that FWC is independent. FWC took guidance from and reported directly to the Compensation Committee. FWC advised the Compensation Committee on current and future trends and issues in executive compensation and on the competitiveness of the compensation structure and levels of our executives, including our NEOs.NEOs during 2018. At the request of the Compensation Committee and to provide context for the Compensation Committee’s compensation decisions made for 2017,2018, FWC performed the following services:
Conducted a market review and analysis for our NEOs to determine whether their total targeted compensation opportunities were competitive with positions of a similar scope in similarly sized companies in similar industries;
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 35
All services performed for us by FWC during 20172018 were related to executive andnon-employee director compensation.
Market Data
Our Compensation Committee considers the compensation programs and practices and resulting NEO compensation opportunities and levels of selected other companies to assist it in setting our executiveNEOs’ compensation to ensure that it remains competitive. For 2017, our Compensation Committee requested that FWC review2018, our peer group and suggest potential revisions. The Compensation Committee reviewed and discussedremained the analysis and approved the following peer group for compensation benchmarking purposes, removing Euronet Worldwide, VeriFone Systems and DST Systems fromsame as the peer group usedselected in 2017. The companies in the prior year and adding FleetCor Technologies, Inc., Gartner, Inc., Sabre Corporation and Verisk Analytics, Inc. The peer group was updated and the companies were chosen because (i) each company in the peer group is in the transaction processing or data services business,business; (ii) each company in the peer group is publicly traded,traded; (iii) at the time the peer group was constructed, our revenues were near the median of the group as a whole,whole; and (iv) we compete for talent with many of these companies.
For 2017,2018, our peer group included the following companies:
• Alliance Data Systems Corporation
• Automatic Data Processing, Inc.
• Broadridge Financial Solutions, Inc.
• Equifax Inc.
• Fidelity National Information Services, Inc.
• First Data Corporation
• Fiserv, Inc.
• FleetCor Technologies, Inc. | • Gartner, Inc.
• Paychex, Inc.
• PayPal Holdings, Inc.
• Total System Services, Inc.
• Worldpay, Inc.
• Sabre Corporation
• Verisk Analytics, Inc.
• The Western Union Company |
BeforeIn connection with the Compensation Committee setsetting the NEO compensation for 2017,2018, FWC collected and analyzed comprehensive market data for the Committee’s use.committee. FWC presented market figures representing competitive ranges for base salary, target short-term incentive opportunity, and long-term incentive opportunity.
38 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
Role of Named Executive Officers
At the beginning of 2017,In 2018, our Chief Executive Officer with the assistance of our human resources department, developed compensation recommendations for the executive officers who reported directly to him (including our NEOs)NEOs based on market data supplied by FWC, our Company’s performance relative to goals approved by the Compensation Committee and other individual contributions to our performance. The FWC report examined market data from our peer group and analyzed compensation for comparable positions forto our NEOs. The Compensation Committee considered the Chief Executive Officer’s recommendations, in conjunction with the counsel of FWC and the market data, in determining the compensation elements for these NEOs. In considering the FWC report, the Compensation Committee primarily considered and reviewed the median level of compensation within the peer group. In setting actual compensation levels for our NEOs, however, the Compensation Committee did not target any element of compensation at a particular percentile or percentile range of the peer group data. Rather, the Compensation Committee uses this information as one input in its decision-making process. The Compensation Committee determined all aspects of Mr. Sloan’s compensation as Chief Executive Officer in consultation with FWC. Mr. Sloan did not participate in the Compensation Committee’s determination of his compensation.
36 – GLOBAL PAYMENTS INC. |As of August 27, 2018, Proxy StatementMr. Mangum no longer served in his position as the Company’s President and Chief Operating Officer, and subsequently left the Company, effective September 15, 2018. See “Potential Payments upon Termination or Change in Control” on page 59 for a discussion of his separation arrangements.
ShareholderSay-on-Pay Vote for the 2016 Fiscal Transition Period2017 and Compensation Actions Taken
At last year’s annual meeting of shareholders, approximately 98% of the votes cast were cast in support of the compensation of our NEOs. The Compensation Committee considered this a positive result and concluded that the shareholders support the compensation paid to our executive officersNEOs and our overall pay practices. In light of this support, the Compensation Committee decided to retain the overall design of our executive compensation program.program, subject to, as described above, the restructuring of the design by which performance units are earned in order to enhance the alignment between executive rewards and long-term gains for the Company and its shareholders.
The Compensation Committee will continue to monitor best practices, future advisory votes on executive compensation and other shareholder feedback to guide it in evaluating our executiveNEOs compensation program. The Compensation Committee invites our shareholders to communicate any concerns or opinions on executive pay directly to our board of directors. Please refer to “Board and Corporate Governance — Contacting Our Board of Directors” on page 2729 for information about communicating with the board of directors.
Elements of Executive Compensation Program
Our Compensation Committee, with guidance from FWC, reviewed the market data for each of our NEOs and allocated, on an individual basis, the major elements of our compensation, including base salary, short-term incentives and long-term incentives, taking into consideration factors such as the individual’s peer group market position, as well as the individual’s performance, retention, internal equity, individual development and succession planning. The following executive pay at target levels was set by the Compensation Committee for 2017:2018:
| Name | Base Salary | % of Total | Target Short-Term Cash | % of Total | Target Long-Term | % of Total | Total | Base Salary
| % of
|
Target Short-Term Cash
| % of
| Target Long-Term
| % of
| Total
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | $ | 1,000,000 | 12 | % | $ | 1,600,000 | 18 | % | $ | 6,000,000 | 70 | % | $ | 8,600,000 | $
| 1,000,000
|
|
| 7
| %
| $
| 1,600,000
|
|
| 12
| %
| $
| 11,000,000
|
|
| 81
| %
| $
| 13,600,000
|
| |||||||||||||||||||||||||||||||||||
David E. Mangum | $ | 620,000 | 20 | % | $ | 620,000 | 20 | % | $ | 1,895,000 | 60 | % | $ | 3,135,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Mangum*
| $
| 650,000
|
|
| 13
| %
| $
| 780,000
|
|
| 16
| %
| $
| 3,520,000
|
|
| 71
| %
| $
| 4,950,000
|
| |||||||||||||||||||||||||||||||||||||||||||||||||
Cameron M. Bready | $ | 565,000 | 22 | % | $ | 508,500 | 19 | % | $ | 1,541,000 | 59 | % | $ | 2,614,500 | $
| 585,000
|
|
| 15
| %
| $
| 585,000
|
|
| 15
| %
| $
| 2,750,000
|
|
| 70
| %
| $
| 3,920,000
|
| |||||||||||||||||||||||||||||||||||
Guido F. Sacchi | $ | 485,000 | 25 | % | $ | 436,500 | 23 | % | $ | 1,013,000 | 52 | % | $ | 1,934,500 | $
| 500,000
|
|
| 19
| %
| $
| 475,000
|
|
| 18
| %
| $
| 1,650,000
|
|
| 63
| %
| $
| 2,625,000
|
| |||||||||||||||||||||||||||||||||||
David L. Green | $ | 450,000 | 26 | % | $ | 382,500 | 22 | % | $ | 892,000 | 52 | % | $ | 1,724,500 | $
| 500,000
|
|
| 23
| %
| $
| 450,000
|
|
| 20
| %
| $
| 1,275,000
|
|
| 57
| %
| $
| 2,225,000
|
| |||||||||||||||||||||||||||||||||||
| * | As of August 27, 2018, Mr. Mangum no longer served as our President and Chief Operating Officer, and subsequently left the Company effective September 15, 2018. |
| (1) | Total Long-Term Equity Incentives includes (i) performance units reflected at target; (ii) restricted stock awards, including the additional restricted stock awards granted to our NEOs in June 2018; and (iii) stock options. |
The annual compensation program also includes other benefits, including limited perquisites and a nonqualifiednon-qualified deferred compensation plan.
From time to time, our Compensation Committee also may approve certain supplemental awards. No supplemental awards were granted during 2017.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 39
Base salary provides our executive officersNEOs with a level of compensation consistent with their skills, responsibilities, experience and performance in relation to comparable positions in the marketplace. Base salary represented 12%7% of our Chief Executive Officer’s total compensation target and 23%18% of the total compensation target for our other NEOs (based on a weighted average)(on an average basis). It is the one component of compensation that does not fluctuate with either our Company’s performance and/or the value of our stock. The Compensation Committee reviews the base salaries of our executive officersNEOs annually. After an evaluation by the Compensation Committee of the factors described above under “Compensation Discussion and Analysis — How Decisions Are Made — Market Data” on page 35,38, Messrs. Mangum, Bready and Green and Dr. Sacchi received increases in their base salaries for 20172018 as compared to the 2016 fiscal transition period.2017.
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 37
The base salaries for our NEOs for 2017,2018, compared to their base salaries in effect at the end of 2016,2017, are set forth below:
Name
| 2017
| TP 2016 (annualized)
| % Change
| 2018
| 2017
| % Change
| ||||||||||||||||||||||||
Jeffrey S. Sloan
| $
| 1,000,000
|
| $
| 1,000,000
|
| —
| $
| 1,000,000
|
| $
| 1,000,000
|
| —
| ||||||||||||||||
David E. Mangum
| $
| 620,000
|
| $
| 600,000
|
| 3%
| |||||||||||||||||||||||
David E. Mangum*
| $
| 650,000
|
| $
| 620,000
|
| 5%
| |||||||||||||||||||||||
Cameron M. Bready
| $
| 565,000
|
| $
| 550,000
|
| 3%
| $
| 585,000
|
| $
| 565,000
|
| 4%
| ||||||||||||||||
Guido F. Sacchi
| $
| 485,000
|
| $
| 470,000
|
| 3%
| $
| 500,000
|
| $
| 485,000
|
| 3%
| ||||||||||||||||
David L. Green
| $
| 450,000
|
| $
| 435,000
|
| 3%
| $
| 500,000
|
| $
| 450,000
|
| 11%
| ||||||||||||||||
The Compensation Committee considers adjustments to base salary for our NEOs on an annual basis and may do so more frequently upon a change in circumstances. The Compensation Committee determined to increase the salaries of Messrs. Mangum, Bready and Green and Dr. Sacchi for 20172018 after considering, among other inputs, the market data on comparable positions from our peer group set forth in the FWC report, including but not limited to the median level of compensation for comparable positions.positions, retention, internal equity, individual development and succession planning. The Compensation Committee also considered Mr. Sloan’s assessment of Messrs. Mangum, Bready and Green and Dr. Sacchi. The Compensation Committee does not use a specific formula for evaluating the individual performance of each NEOs.NEO. The Compensation Committee makes each assessment taking into consideration the competitiveness of each NEO’s pay opportunity, the quality and effectiveness of each NEO’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.
Under our short-term incentive plan, we provide our NEOs with short-term incentive opportunities to motivate and reward them for the achievement of our defined business goals and objectives. Our short-term incentive plan provides an opportunity for executivesNEOs to earn variableat-risk cash.
Target Bonus Opportunities
For 2017,2018, after its review of the market data, our Compensation Committee approved the following target bonus opportunities for each of ourthe NEOs, expressed as a percentage of base salary:
Target Bonus
| % of Base
| |||||||||||||||||||
Target Bonus
| % of Base Salary
| |||||||||||||||||||
Jeffrey S. Sloan
| $
| 1,600,000
|
|
| 160
| %
| $
| 1,600,000
|
|
| 160
| %
| ||||||||
David E. Mangum
| $
| 620,000
|
|
| 100
| %
| $
| 780,000
|
|
| 120
| %
| ||||||||
Cameron M. Bready
| $
| 508,500
|
|
| 90
| %
| $
| 585,000
|
|
| 100
| %
| ||||||||
Guido F. Sacchi
| $
| 436,500
|
|
| 90
| %
| $
| 475,000
|
|
| 95
| %
| ||||||||
David. L. Green
| $
| 382,500
|
|
| 85
| %
| $
| 450,000
|
|
| 90
| %
| ||||||||
In determining the target bonus opportunities for each NEO for 2017,2018, the Compensation Committee considered the market data for bonus target opportunity and target total cash compensation opportunity for comparable
40 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
positions within our peer group, as reflected in the FWC report, and the Compensation Committee’s general assessment of the Chief Executive Officer, and the Chief Executive Officer’s assessment and recommendations with respect to the other NEOs. The Compensation Committee does not use a specific formula for evaluating the individual performance of each NEO. The Compensation Committee makes each assessment taking into consideration the quality and effectiveness of each NEO’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.
Performance Metrics
For 2017,2018, the Compensation Committee allocated the target opportunity under the short-term incentive plan evenly among the following three performance metrics: adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin, which arenon-GAAP financial measures. See Appendix A to this proxy statement for a description of the calculation of these measures.
We use these38 – GLOBAL PAYMENTS INC. |non-GAAP 2018 Proxy Statement
Adjusted EPS is a primary metric management usesfinancial measures to more clearly focus onset goals for and measure the economic benefits to our coreperformance of the business and other factors we believe are pertinent to the daily management of our operations. We use adjusted net revenue because we believe it demonstrates our performance in further penetrating our global footprint and executing against our market opportunities. We use adjusted operating margin because we believe it allows us to assess the quality and efficiency of our operations to promote a long-term outlook.determine incentive compensation.
Because these performance metrics are calculated for the sole purpose of determining compensation, they may differ from similarnon-GAAP financial measures reported elsewhere in Company filings. For each of these separately-calculated performance metrics, each NEO could earn upfrom 0% to 200% of the target opportunity.
Degree of Performance Attainment
| Adjusted EPS
| Adjusted Net
| Adjusted
| Total
| Adjusted EPS
|
Adjusted Net
| Adjusted
| Total
| ||||||||||||||||||||||||||||||||
Maximum
|
| 200
| %
|
| 200
| %
|
| 200
| %
|
| 200
| %
|
| 200
| %
|
| 200
| %
|
| 200
| %
|
| 200
| %
| ||||||||||||||||
Target
|
| 100
| %
|
| 100
| %
|
| 100
| %
|
| 100
| %
|
| 100
| %
|
| 100
| %
|
| 100
| %
|
| 100
| %
| ||||||||||||||||
Threshold
|
| 50
| %
|
| 50
| %
|
| 50
| %
|
| 50
| %
|
| 50
| %
|
| 50
| %
|
| 50
| %
|
| 50
| %
| ||||||||||||||||
Below Threshold
|
| 0
| %
|
| 0
| %
|
| 0
| %
|
| 0
| %
| ||||||||||||||||||||||||||||
The following table sets forth the range of goals for the performance measures for 2017,2018, our actual performance results for such period and the resulting payouts.
Performance / Payout
| Adjusted EPS
| Adjusted Net
| Adjusted
| Adjusted EPS
| Adjusted Net
| Adjusted
| ||||||||||||||||||||||||
Performance thresholds:
| ||||||||||||||||||||||||||||||
Maximum
| $
| 4.07
|
| $
| 3,969
|
|
| 30.30
| %
| $
| 5.52
|
| $
| 4,196
|
|
| 32.10
| %
| ||||||||||||
Target
| $
| 3.70
|
| $
| 3,451
|
|
| 29.30
| %
| $
| 5.02
|
| $
| 3,996
|
|
| 31.60
| %
| ||||||||||||
Threshold
| $
| 3.33
|
| $
| 2,933
|
|
| 28.30
| %
| $
| 4.52
|
| $
| 3,796
|
|
| 31.10
| %
| ||||||||||||
Below Threshold
| $
| <3.33
|
| $
| <2,933
|
|
| <28.30
| %
| |||||||||||||||||||||
Actual 2017 performance
| $
| 3.88
|
| $
| 3,457
|
|
| 29.70
| %
| |||||||||||||||||||||
Actual 2018 performance
| $
| 5.25
|
| $
| 3,995
|
|
| 31.80
| %
| |||||||||||||||||||||
Actual payout
|
| 149%
|
|
| 101%
|
|
| 144%
|
|
| 146%
|
|
| 100%
|
|
| 140%
|
| ||||||||||||
Payouts for 2017 Short-Term Incentive Plan
The following table summarizes the final short-term incentive plan payouts for each NEO based on performance in 20172018 for each performance metric and in total:
Name
| Adjusted
| Adjusted Net
| Adjusted Operating
| Total Payout
| Payout
| Adjusted
|
Adjusted Net
| Adjusted Operating
| Total Payout
| Payout
| ||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan
| $
| 794,667
|
| $
| 538,666
|
| $
| 768,000
|
| $
| 2,101,333
|
|
| 131
| %
| $
| 778,667
|
| $
| 533,333
|
| $
| 746,667
|
| $
| 2,058,667
|
|
| 129
| %
| ||||||||||||||||||||
David E. Mangum
| $
| 307,933
|
| $
| 208,734
|
| $
| 297,600
|
| $
| 814,267
|
|
| 131
| %
| |||||||||||||||||||||||||||||||||||
David E. Mangum*
| $
| 253,067
|
| $
| 173,333
|
| $
| 242,667
|
| $
| 669,067
|
|
| 129
| %
| |||||||||||||||||||||||||||||||||||
Cameron M. Bready
| $
| 252,555
|
| $
| 171,195
|
| $
| 244,080
|
| $
| 667,830
|
|
| 131
| %
| $
| 284,700
|
| $
| 195,000
|
| $
| 273,000
|
| $
| 752,700
|
|
| 129
| %
| ||||||||||||||||||||
Guido F. Sacchi
| $
| 216,795
|
| $
| 146,955
|
| $
| 209,520
|
| $
| 573,270
|
|
| 131
| %
| $
| 231,167
|
| $
| 158,333
|
| $
| 221,667
|
| $
| 611,167
|
|
| 129
| %
| ||||||||||||||||||||
David L. Green
| $
| 189,975
|
| $
| 128,775
|
| $
| 183,600
|
| $
| 502,350
|
|
| 131
| %
| $
| 219,000
|
| $
| 150,000
|
| $
| 210,000
|
| $
| 579,000
|
|
| 129
| %
| ||||||||||||||||||||
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 41
| * | Pursuant to his employment agreement, Mr. Mangum’s 2018 cash incentive bonus was prorated based on the number of full months of employment during 2018 prior to September 15, 2018, which was the last day of his employment with the Company. See “Potential Payments upon Termination or Change in Control” on page 59 for a discussion of his separation arrangements. |
Each year, we grant long-term incentive awards, which we refer to as LTIs, to executivesour NEOs and other key employees throughout the Company. All LTI grants are made pursuant to our 2011 Amended and Restated Incentive Plan, or the 2011 Incentive Plan, which was last approved at our 2016 annual shareholders meeting. All grants of LTIs to our NEOs were approved by the Compensation Committee and are based on target values consistent with each executive’s skills,NEO’s responsibilities, experience and performance relative to comparable positions in the marketplace. LTIs align the executives’NEOs’ interests with those of the shareholders by linking their compensation to our share price.
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 39
In determining the LTI awards for each NEO, the Compensation Committee considered the market data for LTI awards and target total direct compensation opportunities for comparable positions within our peer group, as reflected in the FWC report, the Compensation Committee’s general assessment of the Chief Executive Officer, and the Chief Executive Officer’s assessment and recommendations with respect to the other NEOs. The Compensation Committee does not use a specific formula for evaluating the individual performance of each NEO. The Compensation Committee makes each assessment taking into consideration the quality and effectiveness of each NEO’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.
In February 2018, the Compensation Committee granted LTIs to our NEOs in the form of time-based restricted shares, stock options and performance units, and subsequently in June 2018, in the form of restricted shares, following a report from FWC which supplemented the market data provided to the Compensation Committee in February 2018. The June 2018 awards of restricted shares were granted by the Compensation Committee to ensure target payout opportunity for our NEOs is commensurate with comparable positions within our peer group.
The grant value of the February 2018 LTI awards for our NEOs areis reflected in the following charttable (at target):
Name
| Performance
| Stock Options
| Restricted Stock
| Total
|
Performance
| Stock Options
| Restricted Stock
| Total
| ||||||||||||||||||||||||||||||||
Jeffrey S. Sloan
| $
| 3,000,000
|
| $
| 1,500,000
|
| $
| 1,500,000
|
| $
| 6,000,000
|
| $
| 3,750,000
|
| $
| 1,875,000
|
| $
| 1,875,000
|
| $
| 7,500,000
|
| ||||||||||||||||
David E. Mangum
| $
| 947,500
|
| $
| 473,750
|
| $
| 473,750
|
| $
| 1,895,000
|
| $
| 1,293,750
|
| $
| 646,875
|
| $
| 646,875
|
| $
| 2,587,500
|
| ||||||||||||||||
Cameron M. Bready
| $
| 770,500
|
| $
| 385,250
|
| $
| 385,250
|
| $
| 1,541,000
|
| $
| 915,000
|
| $
| 457,500
|
| $
| 457,500
|
| $
| 1,830,000
|
| ||||||||||||||||
Guido F. Sacchi
| $
| 506,500
|
| $
| 253,250
|
| $
| 253,250
|
| $
| 1,013,000
|
| $
| 700,000
|
| $
| 350,000
|
| $
| 350,000
|
| $
| 1,400,000
|
| ||||||||||||||||
David L. Green
| $
| 446,000
|
| $
| 223,000
|
| $
| 223,000
|
| $
| 892,000
|
| $
| 550,000
|
| $
| 275,000
|
| $
| 275,000
|
| $
| 1,100,000
|
| ||||||||||||||||
Approximately half of the grant value of LTIs granted to the executives for 2017our NEOs in February 2018 was in the form of performance units, approximately 25% was in the form of stock options, and approximately 25% was in the form of time-based restricted shares of common stock. The LTI mix for 2017 was the same as for the 2016 fiscal transition period. In determining the appropriate mix of LTIs, the Compensation Committee took into account competitive market practices of peer group companies, its belief that a blend of equity awards provides both an incentive and retention effect, and its belief that the utilization of the various LTI awards mitigates compensation risk that may be associated with the use of a single LTI vehicle.
42 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
The grant values of the June 2018 restricted stock awards for our NEOs is reflected in the following table:
Name | Restricted | ||||
Jeffrey S. Sloan | $ | 3,500,000 | |||
David E. Mangum | $ | 932,500 | |||
Cameron M. Bready | $ | 920,000 | |||
Guido F. Sacchi | $ | 250,000 | |||
David L. Green | $ | 175,000 | |||
Performance Units
In 2017,2018, our Compensation Committee granted approximately 50% of the grant value of the total February 2018 LTI awards to our NEOs in performance units. TheseThe performance units granted to our NEOs in 2018 are earned based on the growth of our annual adjusted EPS, over a three-yearas modified at the end of the three year performance period (January 1, 2017 through December 31, 2019). by the TSR modifier. The maximum possible payout is four times the target number of the performance units. The minimum payout is zero.
At the beginning of the performance period, both the threshold, target and maximum annual adjusted EPS growth rates and the TSR modifier are set by the Compensation Committee for the entire three-year performance period. The threshold, target and maximum adjusted EPS growth goal for each of the three years in the performance period is determined as a percentage increase or decrease over the actual results from the prior year, assuming constant currencies.
At the end of the performance period, the adjusted EPS growth performance for each year is evaluated and the calculated payout percentage (0% to 200% of target) is certified by the Compensation Committee. The final payout percentage is determined as the average of each of the three annual payout percentages. As a result, payouts for the second and third year of the performance period require sustained growth over the three-year period. Because growth rates are calculated separately for each year in the performance period and are not aggregated over the three-year performance period, the plan allows for a long-term growth goal while recalibrating to actual performance on an annual basis.
The TSR modifier is determined based on the Company’s total shareholder return performance rank relative to the S&P 500 index over the entire three year performance period. The weighted average annual adjusted EPS growth rate, as determined above, is then modified up or down by the TSR modifier, to obtain a final payout percentage. This design rewards our NEOs for strong relative total shareholder return performance.
Earned performance units will convert into unrestricted shares following the third anniversary of the performance unit grant date, provided that the Compensation Committee has previously certified the performance results described above. As a result, there is no payout of the award until the end of the three-year performance period.
40 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
The following table summarizes the grant value and target number of performance units to each of the NEOs in 2017:2018:
Name
| Target Allocation to
| Actual Number of
|
Target Allocation to
| Actual Number of Granted(1)
| ||||||||||||||||
Jeffrey S. Sloan
| $
| 3,000,000
|
|
| 37,760
|
| $
| 3,750,000
|
|
| 32,694
|
| ||||||||
David E. Mangum
| $
| 947,500
|
|
| 11,926
|
| $
| 1,293,750
|
|
| 11,280
|
| ||||||||
Cameron M. Bready
| $
| 770,500
|
|
| 9,698
|
| $
| 915,000
|
|
| 7,978
|
| ||||||||
Guido F. Sacchi
| $
| 506,500
|
|
| 6,376
|
| $
| 700,000
|
|
| 6,103
|
| ||||||||
David L. Green
| $
| 446,000
|
|
| 5,614
|
| $
| 550,000
|
|
| 4,796
|
| ||||||||
| (1) | The number of units was calculated by taking the target value divided by our stock price on the grant date ($ |
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 43
Payout of 2016 Fiscal 2015Year Performance Units
In each year of the most recently completed three-year performance period ofbeginning June 1, 2014 to2015 and ending May 31, 2017,2018, the Company achieved adjusted EPS growth at or above the maximum level, as calculated pursuant to the terms of the 2016 fiscal year 2015 awards. As a result, the NEOs2016 fiscal year performance units were earned at 200% of their performance units granted in fiscal year 2015. Accordingly, the number of shares earned from the fiscal year 2015 weretarget, as follows:
Name
| Shares Earned at
| Value at Vesting(1)
|
Shares Earned at
| Value at Vesting(1)
| ||||||||||||||||
Jeffrey S. Sloan
|
| 125,788
|
| $
| 11,793,883
|
|
| 80,476
|
| $
| 9,034,236
|
| ||||||||
David E. Mangum
|
| 43,328
|
| $
| 4,062,433
|
|
| 27,720
|
| $
| 3,111,847
|
| ||||||||
Cameron M. Bready
|
| 34,944
|
| $
| 3,276,349
|
|
| 22,356
|
| $
| 2,509,685
|
| ||||||||
Guido F. Sacchi
|
| 19,568
|
| $
| 1,834,696
|
|
| 14,308
|
| $
| 1,606,216
|
| ||||||||
David L. Green
|
| 14,676
|
| $
| 1,376,022
|
|
| 13,416
|
| $
| 1,506,080
|
| ||||||||
| (1) | Reflects the total value based upon the closing stock price of |
Payout of Leveraged Performance2016 Fiscal Year Synergy Units
On September 30, 2014,June 8, 2016, synergy awards of performance units, or synergy units, and a performance-based long term cash bonus opportunity were granted to our NEOs were granted performance-based restricted stock units that we refer toin connection with the Heartland acquisition as “leveraged performance units,” or LPUs. These LPUs were based on both the absolute share price appreciation and the relative share price appreciation of our stock compared to the S&P 500 index over a three-year performance period that commenced on September 30, 2014 and ended on September 30, 2017. To incentivize strong relative stock price performance, our Compensation Committee structured the LPUs to result in a reduced payout multiple in the event that our stock price underperformed the S&P 500 index. Following the three-year performance period,one-thirdnon-recurring, of any earned LPUs converted into unrestricted shares of our common stock, and the remainingtwo-thirds converted into restricted shares of our common stock that will vest in equal installments on September 30, 2018 and 2019, which are the fourth and fifth anniversaries of the LPU grant date.
supplemental awards. The appreciation of our stock or the S&P 500 index is defined as the increase in the average closing price of our stock or the S&P 500 index, as applicable,synergy goals for the twenty trading days immediately preceding the first day of the performance period comparedfrom August 22, 2016 to August 31, 2018 were met and exceeded in advance of the average closing price for the last twenty trading dayscompletion of the performance period. If our annualized stock price growth during the performance period had not met or exceed 6.0%, then the LPUs would have been forfeited.
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 41
Because our annualized stock price growth exceeded the 6.0% minimum performance threshold, the LPUs converted into a number of shares calculated as the number of LPUs awarded multiplied by the applicable multiple payout set forth in the following table, subject to the dollar amount caps described below:
Annualized Share Price Growth | Payout Multiple if Share Price Outperforms S&P 500 Index | Payout Multiple if S&P Share Price | ||||||||
6.0% | 0.25 | 0.00 | ||||||||
7.0% | 0.44 | 0.00 | ||||||||
8.0% | 0.63 | 0.25 | ||||||||
9.0% | 0.81 | 0.50 | ||||||||
10.0% | 1.00 | 0.75 | ||||||||
11.0% | 1.50 | 1.00 | ||||||||
12.0% | 2.00 | 1.25 | ||||||||
13.0% | 2.50 | 1.50 | ||||||||
14.0% | 3.00 | 1.75 | ||||||||
15.0% | 3.50 | 2.00 | ||||||||
16.0% | 4.00 | 2.25 | ||||||||
17.0% | 4.50 | 2.50 | ||||||||
18.0% | 5.00 | 2.50 | ||||||||
19.0% | 5.00 | 2.50 | ||||||||
The number of shares to be issued upon conversion of the LPUs resulting from the calculation above was subject to a cap that was based on a multiple of the target value of the award as of the grant date. Specifically, because our share price outperformed the S&P 500 index, the number of shares issued upon the conversion of the LPUs, multiplied by our share price on the conversion date, was capped at eight times the target amount (in dollars) of the award. If the S&P 500 index had outperformed our share price, then the number of shares issued upon the conversion of the LPUs, multiplied by our share price on the conversion date, would not have exceeded four times the target amount (in dollars) of the target award.
On October 5, 2017, the Compensation Committee certified that our annualizedthe achievement of the synergy goals at the maximum level, as verified by an independent accounting firm, and accelerated the vesting of the synergy units and the payout of the cash bonus. The earned synergy units were converted into restricted stock price growth over the three-year performance period was 38.9% and our share price outperformed the S&P 500 index, resultingvested in two equal tranches on February 26, 2018 (which shares are reflected in the payouts described below, which“Stock Options Exercised and Stock Vested during 2018” table below) and February 26, 2019. The cash bonus was paid on March 2, 2018.
Both awards were cappedearned at eight times the target amount.One-third of such shares vested on October 5, 2017, and the remaining shares will vest on each of September 30, 2018 and 2019.maximum value as shown below:
| Name | Number of LPUs Granted | Number of LPUs Earned | Synergy
|
Total Shares
| Long-Term Cash
| ||||||||||||||||||||
Jeffrey S. Sloan | 66,264 | 191,362 |
| 15,009
|
|
| 25,924
|
| $
| 1,900,000
|
| ||||||||||||||
David E. Mangum | 27,048 | 78,107 |
| 12,280
|
|
| 21,831
| (1)
| $
| 1,600,000
|
| ||||||||||||||
Cameron M. Beady | 21,788 | 62,919 | |||||||||||||||||||||||
Cameron M. Bready
|
| 10,233
|
|
| 19,102
|
| $
| 1,400,000
|
| ||||||||||||||||
Guido F. Sacchi | 13,024 | 37,607 |
| 8,869
|
|
| 16,374
|
| $
| 1,200,000
|
| ||||||||||||||
David L. Green | 10,068 | 29,073 |
| 3,411
|
|
| 4,776
|
| $
| 350,000
|
| ||||||||||||||
| (1) | Pursuant to his employment agreement, the second tranche of Mr. Mangum’s award of synergy units vested on September 17, 2018, the first business day following his separation date. See “Potential Payments upon Termination or Change in Control” on page 59 for a discussion of his separation arrangements. |
4244 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Stock Options
In 2017,2018, our Compensation Committee granted approximately 25% of the target February 2018 LTI value in stock options. Our Compensation Committee believes stock options provide a strong incentive for creation of long-term shareholder value, as stock options may be exercised for a profit only to the extent the price of the Company’s stock appreciates after the grant date. The exercise price is the closing price of the stock on the grant date. We do not grant discounted options orre-price previously granted options. The stock options vest in equal installments on each of the first three anniversaries of the grant date. During 2017,2018, the Compensation Committee approved the following stock option grants to each of the NEOs:
| Name | Target Allocation to Stock Options | Number of Stock Options Granted(1) |
Target
| Number of
| ||||||||||||||||
Jeffrey S. Sloan | $ | 1,500,000 | 63,345 | $
| 1,875,000
|
|
| 53,435
|
| |||||||||||
David E. Mangum | $ | 473,750 | 20,007 | $
| 646,875
|
|
| 18,435
|
| |||||||||||
Cameron M. Bready | $ | 385,250 | 16,270 | $
| 457,500
|
|
| 13,038
|
| |||||||||||
Guido F. Sacchi | $ | 253,250 | 10,695 | $
| 350,000
|
|
| 9,975
|
| |||||||||||
David L. Green | $ | 223,000 | 9,418 | $
| 275,000
|
|
| 7,837
|
| |||||||||||
| (1) | Calculated based on the closing price of our stock on the grant date and the Black-Scholes conversion ratio |
Time-Based Restricted Stock
In 2017,2018, our Compensation Committee granted approximately 25% of the total February 2018 LTI value in time-based restricted stock. As noted, after reviewing updated market data from FWC, the Compensation Committee approved the grant of additional restricted shares in June 2018 to ensure target pay opportunity for the NEOs is commensurate with comparable positions within our peer group. Our Compensation Committee believes restricted stock provides a retentive element to the long-term incentive program while still maintaining alignment with the long-term interests of our shareholders by tying the value of the awards to the value of our stock price. The restricted shares vest in equal installments on each of the first three anniversaries of the grant date.
Our NEOs received the following number of restricted shares in 2017:2018, including the June 2018 grants:
| Name | Target Allocation to Restricted Stock | Number of Restricted Shares Granted(1) |
Target
| Number of
| ||||||||||||||||
Jeffrey S. Sloan | $ | 1,500,000 | 18,880 | $
| 5,375,000
|
|
| 45,893
|
| |||||||||||
David E. Mangum | $ | 473,750 | 5,963 | $
| 1,579,375
|
|
| 13,512
|
| |||||||||||
Cameron M. Bready | $ | 385,250 | 4,849 | $
| 1,377,500
|
|
| 11,756
|
| |||||||||||
Guido F. Sacchi | $ | 253,250 | 3,188 | $
| 600,000
|
|
| 5,163
|
| |||||||||||
David L. Green | $ | 223,000 | 2,807 | $
| 450,000
|
|
| 3,876
|
| |||||||||||
| (1) | The number of shares was calculated by dividing the target dollar value by the stock price as of the grant |
Our NEOs are eligible to participate in other health and welfare programs that are available to substantially allfull-time salaried employees, including our 401(k) plan.
Perquisites offered to our NEOs on an annual basis are limited to financial planning.planning and, starting in 2018, we also offered our NEOs access to an executive health program as a benefit. These items can create taxable income to
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 45
the executive, which we do not gross up. In addition, we may ask our NEOs and their spouses to participate in President’s Club trips offered as rewards to certain other employees for excellent sales or other performance. We treat the expenses of spouses as taxable income to the executives. Because spousal participation is at our request and can be disruptive to other plans they may have, we provide a gross up on that taxable income.
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 43
Our NEOs are also eligible to participate in ournon-qualified deferred compensation plan, pursuant to which they may elect to defer up to 100% of their base salary and other forms of compensation. We do not make contributions to the deferred compensation plan. In 2017,2018, none of our NEOs made any contributions to or withdrawals from the plan. See “Compensation of Named Executive Officers —Non-Qualified Deferred Compensation Plan” on page 5255 for more detail regarding the plan.
We are party to an employment agreement with all of our NEOs. These employment agreements provide benefits to our Company that, we believe, are necessary in order to attract and retain highly-qualified executives. Each NEO has agreed not to disclose confidential information or compete with us, and not to solicit our customers or recruit our employees, for a period of generally 24 months following the termination of his or her employment. In exchange, we offer limited income and benefit protections to the executive,NEO, but we do not provide for any excise taxgross-ups. All of ourOn August 27, 2018, the Company entered into amendments to the employment agreements with all of our NEOs contain a term.except Mr. Mangum, which extended the term of each such employment agreement through August 27, 2021. All other terms under the employment agreements remained the same.
As of August 27, 2018, David Mangum no longer served as the Company’s President and Chief Operating Officer and subsequently left the Company, effective September 15, 2018. The payouts to Mr. Mangum under his employment agreement are discussed under “Potential Payments Upon Termination or Change in Control” on page 59.
Policy Regarding Timing of Equity Grants
Our Compensation Committee, in its discretion, typically makes the annual grant to all eligible employees onshortly after the first business day followingpublic disclosure of either the Company’s fourth quarter earnings release or the filing of the Company’s annual report, based upon the closing price of our common stock on the grant date. From time to time, our Compensation Committee may approve supplemental or othernon-recurring grants outside of our annual compensation program.
Anti-Hedging Policy
Our insider trading policy prohibits directors and employees from engaging in any transaction in which they profit if the value of our common stock declines.
Target Stock Ownership Guidelines
The Compensation Committee has implemented stock ownership guidelines for our NEOs to foster equity ownership and align the interests of our executivesNEOs with our shareholders. Within five years of the executive’sNEO’s initial appointment to his or her position, our Chief Executive Officer is expected to beneficially own a number of shares at least equal to 500% of his or her base salary, and all other NEOs are expected to beneficially own a number of shares at least equal to 200% of their base salary. Additionally, each NEO is required to hold such shares until the NEO has met the applicable ownership guideline. Each of our NEOs was in compliance with the stock ownership guidelines as of the record date.
Clawback Policy
The Compensation Committee has adopted a clawback policy, pursuant to which we may recoup all or any portion of the value of any annual or long-term incentive awards provided to any current or former executive officersNEOs in the event that our financial statements are restated due to material noncompliance with any financial reporting requirement under the securities laws.
46 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
Section 162(m) of the Code places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to any one of our NEOs (other than our Chief Financial Officer).NEOs. Prior to enactment of the Tax Cuts and Jobs Act of 2017 (the “Jobs Act”), qualifying “performance-based” compensation was not subject to the deduction limit if certain requirements were met. The 2011 Incentive Plan was designed to allow
However, the Compensation Committee to grant awards that may qualify for the performance-based compensation exemption from Section 162(m), such as the performance-based restricted stock units and synergy incentive awards granted in the 2016 fiscal transition period. Our short-term incentive plan, as a subplan of the 2011 Incentive Plan, also allows annual cash incentive awards that may qualify as performance-based compensation. Under the
44 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
2011 Incentive Plan, the minimum threshold performance goal that our Compensation Committee sets for each plan year is the achievement of positive operating income, as reflected in our consolidated statements of income and filed with our Annual Report on Form10-K for such year, which we refer to as “threshold operating income performance.” No bonuses will be payable under the short-term incentive plan unless we achieve threshold operating income performance. In any year that our Company achieves threshold operating income performance, our Chief Executive Officer’s maximum award is 2% of such operating income and each other NEO’s maximum award is 1% of such operating income (but in no event in excess of $10,000,000 per participant). The Compensation Committee then uses negative discretion to pay a lesser amount. To guide it in exercising such discretion, the Compensation Committee establishes intermediate performance metrics and their respective weightings, and intermediate award opportunity ranges, as it deems appropriate to encourage and reward particular areas of performance.
The exemption from Section 162(m)’s deduction limit for performance-based compensation has beenwas repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our NEOs including our Chief Financial Officer, in excess of $1 million will not be deductible unless it qualifiesdeductible. The Jobs Act provides for transition relief applicable to certain arrangements in place as of November 2, 2017. Despite the Compensation Committee’s efforts to structure our annual incentive awards and our performance-based restricted stock units and synergy incentive awards to be exempt from Section 162(m) and therefore not subject to its deduction limits, a number of requirements must be met for particular compensation to qualify under Section 162(m) and theThe scope of the transition relief under the legislation repealing Section 162(m)’s exemption from the deduction limit is uncertain, so there can be no assurance that any compensation awarded will be fully deductible under all circumstances. Also, to maintain flexibility in compensating our executives,NEOs, the Compensation Committee reserves the right to use its judgment to authorize compensation payments that may be subject to the deduction limit when the Compensation Committee believes that such payments are appropriate.
Report of Compensation Committee Members
The members of the Compensation Committee at the time the compensation of our NEOs for 2017 was approved have reviewed and discussed the foregoing section entitled “Compensation Discussion and Analysis” with management. Based on such review and discussion, thesethe Compensation Committee members recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement, which is to be incorporated by reference into the Company’s Annual Report on Form10-K for 2017.2018.
COMPENSATION COMMITTEE MEMBERS
Mitchell L. Hollin (Chair)
John G. Bruno (Chair)
William I Jacobs
John M. PartridgeWilliam B. Plummer
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 4547
Compensation of Named Executive Officers
The following table presents certain summary information concerning compensation that we paid or accrued for services rendered in all capacities during 2018, 2017, (January 1, 2017 to December 31, 2017), the 2016 fiscal transition period (the seven months ended December 31, 2016) which is referred to in the tables below as “TP 2016” and for the fiscal yearsyear ended May 31, 2016 and 2015.2016. Because the Company, effective as of December 31, 2016, adjusted its fiscal year end from May 31 to December 31, this Summary Compensation Table contains information from the 20152016 fiscal year, as well as TP 2016 in order to provide the required fulsome compensation disclosure for the three (3) most recent fiscal year periods of 12 months.
Name and Principal Position
| Year
| Salary ($)
| Stock
| Option
| Non-Equity
| All Other
| Total ($)
| Year
| Salary ($)
| Stock
| Option
| Non-Equity
| All Other
| Total ($)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan Chief Executive Officer | 2017 | $ | 1,000,000 | $ | 4,500,048 | $ | 1,500,010 | $ | 2,101,333 | $ | 34,392 | $ | 9,135,783 |
|
2018 |
| $ | 1,000,000 | $ | 9,950,022 | $ | 1,875,034 | $ | 3,958,667 | $ | 34,837 | $ | 16,818,560 | ||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 583,333 | (1) | $ | 3,506,376 | $ | 802,104 | $ | 1,057,778 | $ | 28,149 | $ | 5,977,740 | 2017 | $ | 1,000,000 | $ | 4,500,048 | $ | 1,500,010 | $ | 2,101,333 | $ | 34,392 | $ | 9,135,783 | ||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 1,000,000 | $ | 3,375,219 | $ | 1,110,782 | $ | 2,710,000 | $ | 41,401 | $ | 8,237,403 | TP 2016 | $ | 583,333 | (2) | $ | 3,506,376 | $ | 802,104 | $ | 1,057,778 | $ | 28,149 | $ | 5,977,740 | ||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 900,000 | $ | 6,045,511 | $ | 1,120,533 | $ | 2,106,324 | $ | 33,179 | $ | 10,205,547 | 2016 | $ | 1,000,000 | $ | 3,375,219 | $ | 1,110,782 | $ | 2,710,000 | $ | 41,401 | $ | 8,237,402 | |||||||||||||||||||||||||||||||||||||||||||||
David E. Mangum President and Chief Operating Officer | 2017 | $ | 620,000 | $ | 1,421,281 | $ | 473,766 | $ | 814,267 | $ | 30,072 | $ | 3,359,385 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 350,000 | (1) | $ | 1,687,515 | $ | 262,506 | $ | 396,667 | $ | 28,424 | $ | 2,725,111 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 585,000 | $ | 1,162,577 | $ | 382,606 | $ | 1,056,900 | $ | 35,111 | $ | 3,222,194 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 575,000 | $ | 2,252,574 | $ | 385,970 | $ | 996,820 | $ | 29,205 | $ | 4,239,569 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cameron M. Bready Senior Executive Vice President and Chief Financial Officer | 2017 | $ | 565,000 | $ | 1,155,759 | $ | 385,274 | $ | 667,830 | $ | 29,328 | $ | 2,803,191 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 320,833 | (1) | $ | 1,386,677 | $ | 212,205 | $ | 327,250 | $ | 29,973 | $ | 2,276,938 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 530,000 | $ | 937,667 | $ | 308,568 | $ | 861,780 | $ | 35,715 | $ | 2,673,730 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Mangum Former President and Chief Operating Officer* |
|
2018 |
| $ | 462,500 | (1) | $ | 3,157,881 | $ | 646,884 | $ | 1,600,000 | $ | 1,045,594 | $ | 6,912,859 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | $ | 620,000 | $ | 1,421,281 | $ | 473,766 | $ | 814,267 | $ | 30,072 | $ | 3,359,386 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 350,000 | (2) | $ | 1,687,515 | $ | 262,506 | $ | 396,667 | $ | 28,424 | $ | 2,725,112 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 458,904 | $ | 3,715,644 | $ | 311,266 | $ | 736,780 | $ | 281,974 | $ | 5,504,568 | 2016 | $ | 585,000 | $ | 1,162,577 | $ | 382,606 | $ | 1,056,900 | $ | 35,111 | $ | 3,222,194 | |||||||||||||||||||||||||||||||||||||||||||||
Guido F. Sacchi EVP and Chief Information Officer | 2017 | $ | 485,000 | $ | 759,860 | $ | 253,258 | $ | 573,270 | $ | 29,328 | $ | 2,100,715 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 274,167 | (1) | $ | 1,068,777 | $ | 139,574 | $ | 279,650 | $ | 13,907 | $ | 1,776,075 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 470,000 | $ | 600,133 | $ | 197,496 | $ | 721,763 | $ | 29,253 | $ | 2,018,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cameron M. Bready Senior EVP and Chief Financial Officer |
|
2018 |
| $ | 585,000 | $ | 2,494,010 | $ | 457,503 | $ | 2,152,700 | $ | 34,063 | $ | 5,723,276 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | $ | 565,000 | $ | 1,155,759 | $ | 385,274 | $ | 667,830 | $ | 29,328 | $ | 2,803,191 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 320,833 | (2) | $ | 1,386,677 | $ | 212,205 | $ | 327,250 | $ | 29,973 | $ | 2,276,938 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 530,000 | $ | 937,667 | $ | 308,568 | $ | 861,780 | $ | 35,715 | $ | 2,673,730 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guido F. Sacchi Senior EVP and Chief Information Officer |
|
2018 |
| $ | 500,000 | $ | 1,454,150 | $ | 350,023 | $ | 1,811,167 | $ | 30,517 | $ | 4,145,857 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | $ | 485,000 | $ | 759,860 | $ | 253,258 | $ | 573,270 | $ | 29,328 | $ | 2,100,716 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 274,167 | (2) | $ | 1,068,777 | $ | 139,574 | $ | 279,650 | $ | 13,907 | $ | 1,776,075 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 470,000 | $ | 600,133 | $ | 197,496 | $ | 721,763 | $ | 29,253 | $ | 2,018,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 375,000 | $ | 1,049,899 | $ | 174,322 | $ | 390,060 | $ | 28,400 | $ | 2,017,681 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Green EVP, General Counsel and Corporate Secretary | 2017 | $ | 450,000 | $ | 669,048 | $ | 223,018 | $ | 502,350 | $ | 28,760 | $ | 1,873,177 |
|
2018 |
| $ | 500,000 | $ | 1,121,257 | $ | 275,000 | $ | 929,000 | $ | 30,517 | $ | 2,855,774 | ||||||||||||||||||||||||||||||||||||||||||
| TP 2016 | $ | 253,750 | (1) | $ | 619,783 | $ | 123,237 | $ | 244,446 | $ | 10,538 | $ | 1,251,755 | 2017 | $ | 450,000 | $ | 669,048 | $ | 223,018 | $ | 502,350 | $ | 28,760 | $ | 1,873,176 | ||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 400,000 | $ | 562,667 | $ | 185,141 | $ | 578,133 | $ | 35,682 | $ | 1,761,623 | TP 2016 | $ | 253,750 | (2) | $ | 619,783 | $ | 123,237 | $ | 244,446 | $ | 10,538 | $ | 1,251,754 | ||||||||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 320,000 | $ | 799,549 | $ | 130,745 | $ | 277,376 | $ | 27,543 | $ | 1,555,213 |
| 2016
|
| $
| 400,000
|
| $
| 562,667
|
| $
| 185,141
|
| $
| 578,133
|
| $
| 35,682
|
| $
| 1,761,623
|
| |||||||||||||||||||||||||||||||||||||
| * | As of August 27, 2018, David Mangum no longer served as the Company’s President and Chief Operating Officer and subsequently left the Company, effective September 15, 2018. The payouts to Mr. Mangum under his employment agreement are discussed under “Potential Payments Upon Termination or Change in Control” on page 59. |
| (1) | Pursuant to his employment agreement, Mr. Mangum’s salary was prorated through September 15, 2018, which was the last day of his employment with the Company. |
| (2) | Represents base salary earned during the seven months in the 2016 fiscal transition period. |
This column reflects the aggregate grant date fair value of awards of time-based restricted shares of our common stock and awards of performance-based restricted stock units (including |
| Grant Date | Performance Period End Date | Expected Term (years) | Expected Volatility | Risk-Free Interest Rate | Expected Dividend Yield | ||||||||||||||||||||
2/26/2018 |
| 12/31/2020 |
| 2.84 |
| 26.15 | % |
| 2.32 | % |
| — | % | ||||||||||||
The Company used its historical stock prices as the basis for the volatility assumptions. The risk-free interest rates were based on U.S. Treasury rates in effect at the time of grant. The expected term was based on the time remaining in the performance period on the grant date.
4648 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
The tables below set forth the maximum grant date fair value, assuming that the highest levels of performance conditions were achieved, for all performance-based awards granted during 2018, 2017, the 2016 fiscal transition period, and the 2016 fiscal 2016 and fiscal 2015,year, for which an amount less than the maximum is reflected in the table above.
2018 Performance Units
| ||||||||||
Name
|
Grant Date Fair Value at Target
|
Value
| ||||||||
Jeffrey S. Sloan
|
$
|
4,575,002
|
|
$
|
18,300,009
|
| ||||
David E. Mangum
|
$
|
1,578,456
|
|
$
|
6,313,822
|
| ||||
Cameron M. Bready
|
$
|
1,116,393
|
|
$
|
4,465,574
|
| ||||
Guido F. Sacchi
|
$
|
854,017
|
|
$
|
3,416,069
|
| ||||
David L. Green
|
$
|
671,123
|
|
$
|
2,684,494
|
| ||||
2017 Performance Units
| ||||||||||
Name
|
Grant Date Fair Value at Target
|
Value
| ||||||||
Jeffrey S. Sloan
|
$
|
3,000,032
|
|
$
|
6,000,064
|
| ||||
David E. Mangum
|
$
|
947,521
|
|
$
|
1,895,041
|
| ||||
Cameron M. Bready
|
$
|
770,506
|
|
$
|
1,541,012
|
| ||||
Guido F. Sacchi
|
$
|
506,573
|
|
$
|
1,013,146
|
| ||||
David L. Green
|
$
|
446,032
|
|
$
|
892,064
|
| ||||
| 2016 Fiscal Transition Period Performance Units(a) | 2016 Fiscal Transition Period Synergy Units |
2016 Fiscal Transition Period
|
2016 Fiscal Transition Period
| |||||||||||||||||||||||||||||||||||||
| Name | Performance Grant Date Fair Value at Target | Performance Value | Synergy Grant Date | Synergy Value |
Performance Grant Date Fair Value at Target
|
Performance Value
|
Synergy Grant Date
|
Synergy Value
| ||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | $ | 1,604,219 | $ | 3,208,438 | $ | 1,100,000 | $ | 1,900,000 |
$
|
1,604,219
|
|
$
|
3,208,438
|
|
$
|
1,100,000
|
|
$
|
1,900,000
|
| ||||||||||||||||||||
David E. Mangum | $ | 525,009 | $ | 1,050,018 | $ | 900,000 | $ | 1,600,000 |
$
|
525,009
|
|
$
|
1,050,018
|
|
$
|
900,000
|
|
$
|
1,600,000
|
| ||||||||||||||||||||
Cameron M. Bready | $ | 424,442 | $ | 848,884 | $ | 750,000 | $ | 1,400,000 |
$
|
424,442
|
|
$
|
848,884
|
|
$
|
750,000
|
|
$
|
1,400,000
|
| ||||||||||||||||||||
Guido F. Sacchi | $ | 279,154 | $ | 558,308 | $ | 650,000 | $ | 1,200,000 |
$
|
279,154
|
|
$
|
558,308
|
|
$
|
650,000
|
|
$
|
1,200,000
|
| ||||||||||||||||||||
David L. Green | $ | 246,527 | $ | 493,054 | $ | 250,000 | $ | 350,000 |
$
|
246,527
|
|
$
|
493,054
|
|
$
|
250,000
|
|
$
|
350,000
|
| ||||||||||||||||||||
| (a) | The number of |
| Fiscal 2016 Performance Units | ||||||||||
| Name | Grant Date Fair Value at Target | Value Assuming Highest Performance | ||||||||
Jeffrey S. Sloan | $ | 2,250,000 | $ | 4,500,000 | ||||||
David E. Mangum | $ | 775,000 | $ | 1,550,000 | ||||||
Cameron M. Bready | $ | 625,000 | $ | 1,250,000 | ||||||
Guido F. Sacchi | $ | 400,000 | $ | 800,000 | ||||||
David L. Green | $ | 375,000 | $ | 750,000 | ||||||
| Fiscal 2015 | ||||||||||||||||||||
| Performance Units | LPUs | |||||||||||||||||||
| Name | Grant Date Fair Value at Target | Value Assuming Highest Performance(a) | Grant Date Fair Value at Target | Value Assuming Highest Performance(b) | ||||||||||||||||
Jeffrey S. Sloan | $ | 2,250,000 | $ | 4,500,000 | $ | 2,484,510 | $ | 18,522,000 | ||||||||||||
David E. Mangum | $ | 775,000 | $ | 1,550,000 | $ | 1,014,141 | $ | 7,560,000 | ||||||||||||
Cameron M. Bready | $ | 625,000 | $ | 1,250,000 | $ | 816,922 | $ | 6,090,000 | ||||||||||||
Guido F. Sacchi | $ | 350,000 | $ | 700,000 | $ | 488,323 | $ | 3,640,000 | ||||||||||||
David L. Green | $ | 262,500 | $ | 525,000 | $ | 377,491 | $ | 2,814,000 | ||||||||||||
| (b) | The synergy goals for the performance period beginning August 22, 2016 through August 31, 2018 were met and exceeded in advance of the completion of the performance period. Accordingly, the Compensation Committee certified the achievement of the synergy goals at the maximum level, as verified by an independent accounting firm, and accelerated the vesting of the performance units. The earned synergy units were converted into restricted stock and vested in two equal tranches on February 26, 2018 and February 26, 2019. See “Payout of 2016 Fiscal Year Synergy Units” on page 44. |
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 4749
| Fiscal 2016 Performance Units(a) | ||||||||||
| Name | Grant Date Fair Value at Target | Value Assuming Highest Performance | ||||||||
Jeffrey S. Sloan | $ | 2,250,000 | $ | 4,500,000 | ||||||
David E. Mangum | $ | 775,000 | $ | 1,550,000 | ||||||
Cameron M. Bready | $ | 625,000 | $ | 1,250,000 | ||||||
Guido F. Sacchi | $ | 400,000 | $ | 800,000 | ||||||
David L. Green
|
$
|
375,000
|
|
$
|
750,000
|
| ||||
| (a) | In each year of the most recently completed three-year performance period |
This column reflects the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718. |
Amounts and number of shares, as applicable, for |
For 2018, this columnincludes (i) cash payouts under our short-term incentive plan and (ii) the synergy cash bonus payout granted to our NEOs in the 2016 fiscal year in connection with the Heartland acquisition. For Mr. Mangum, this column for 2018 only includes his synergy cash bonus payout, as the lump sum cash payment he received pursuant to his employment agreement under the short-term incentive plan is reflected in the “All Other Compensation” column. |
| (7) | This column includes the following compensation components for |
| Name | Company Contributions to 401(k) Plans | Financial Planning Services | Other Perquisites and Personal Benefits(a) | Total | Company Contributions to 401(k) Plans | Financial Planning Services | Other Perquisites and Personal Benefits(a) | Severance Payment(b) | Total | ||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | $ | 10,800 | $ | 22,280 | $ | 1,312 | $ | 34,392 | $ | 11,000 | $ | 22,280 | $ | 1,557 | — | $ | 34,837 | ||||||||||||||||||||||||||||
David E. Mangum | $ | 10,800 | $ | 17,960 | $ | 1,312 | $ | 30,072 | $ | 11,000 | $ | 13,874 | $ | 5,453 | $ | 1,015,267 | $ | 1,045,594 | |||||||||||||||||||||||||||
Cameron M. Bready | $ | 10,800 | $ | 17,960 | $ | 568 | $ | 29,328 | $ | 11,000 | $ | 17,960 | $ | 5,103 | — | $ | 34,063 | ||||||||||||||||||||||||||||
Guido F. Sacchi | $ | 10,800 | $ | 17,960 | $ | 568 | $ | 29,328 | $ | 11,000 | $ | 17,960 | $ | 1,557 | — | $ | 30,517 | ||||||||||||||||||||||||||||
David L. Green | $ | 10,800 | $ | 17,960 | — | $ | 28,760 |
$
|
11,000
|
|
$
|
17,960
|
|
$
|
1,557
|
|
|
—
|
|
$
|
30,517
|
| |||||||||||||||||||||||
| (a) | These perquisites and personal benefits consist of compensation related to a Company-sponsored |
| (b) | The “All Other Compensation” for 2018 for Mr. Mangum includes (i) a lump sum payment of $325,000, representing his base salary for asix-month period, which will be made to Mr. Mangum on or about March 18, 2019; (ii) a lump sum cash payment of $669,067, representing his 2018 cash incentive bonus target based on actual performance, as certified by the Compensation Committee, prorated for the full months of employment through his separation date; and (iii) COBRA premium payments that we will pay to Mr. Mangum through September 2019 (or sooner if he obtains health care coverage from a new employer), estimated at $21,200. The payouts to Mr. Mangum were made under his employment agreement and are discussed under “Potential Payments Upon Termination or Change in Control” on page 59. |
4850 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Grants of Plan-Based Awards in 20172018
The following table sets forth information concerning grants of plan-based awards during 20172018 to ourthe NEOs, all of which were made pursuant to our 2011 Incentive Plan.
| Grant Date |
Estimated Future Payouts |
Estimated Future Payouts | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(5) | Grant
|
Estimated Future Payouts |
Estimated Future Payouts | All Other
| All Other
| Exercise
| Grant
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Threshold ($) | Target ($) | Max ($) | Threshold (#) | Target (#) | Max (#) | Threshold ($)
| Target ($)
| Max ($)
| Threshold (#)
| Target (#)
| Max (#)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 3/1/17 | $ | 800,000 | $ | 1,600,000 | $ | 3,200,000 | 2/26/2018 | $ | 800,000 | $ | 1,600,000 | $ | 3,200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 3/1/17 | 18,880 | 37,760 | 75,520 | $ | 3,000,032 | 2/26/2018 | 8,174 | 32,694 | 130,776 | $ | 4,575,002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 3/1/17 | 18,880 | $ | 1,500,016 | 2/26/2018 | 16,347 | $ | 1,875,001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 6/12/2018 | 29,546 | $ | 3,500,019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 3/1/17 | 63,345 | $ | 79.45 | $ | 1,500,010 | 2/26/2018 | 53,435 | $ | 114.70 | $ | 1,875,034 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Mangum | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 3/1/17 | $ | 310,000 | $ | 620,000 | $ | 1,240,000 | 2/26/2018 | $ | 390,000 | $ | 780,000 | $ | 1,560,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 3/1/17 | 5,963 | 11,926 | 23,852 | $ | 947,521 | 2/26/2018 | 2,820 | 11,280 | 45,120 | $ | 1,578,456 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 2/26/2018 | 5,640 | $ | 646,908 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 3/1/17 | 5,963 | $ | 473,760 | 6/12/2018 | 7,872 | $ | 932,517 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 3/1/17 | 20,007 | $ | 79.45 | $ | 473,766 | 2/26/2018 | 18,435 | $ | 114.70 | $ | 646,884 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cameron M. Bready | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 3/1/17 | 254,250 | $ | 508,500 | $ | 1,017,000 | 2/26/2018 | $ | 292,500 | $ | 585,000 | $ | 1,170,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 3/1/17 | 4,849 | 9,698 | 19,396 | $ | 770,506 | 2/26/2018 | 1,995 | 7,978 | 31,912 | $ | 1,116,393 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 3/1/17 | 4,849 | $ | 385,253 | 2/26/2018 | 3,989 | $ | 457,538 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 6/12/2018 | 7,767 | $ | 920,079 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 3/1/17 | 16,270 | $ | 79.45 | $ | 385,274 | 2/26/2018 | 13,038 | $ | 114.70 | $ | 457,503 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guido F. Sacchi | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 3/1/17 | $ | 218,250 | $ | 436,500 | $ | 873,000 | 2/26/2018 | $ | 237,500 | $ | 475,000 | $ | 950,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 3/1/17 | 3,188 | 6,376 | 12,752 | $ | 506,573 | 2/26/2018 | 1,526 | 6,103 | 24,412 | $ | 854,017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 2/26/2018 | 3,052 | $ | 350,064 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 3/1/17 | 3,188 | $ | 253,287 | 6/12/2018 | 2,111 | $ | 250,069 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 3/1/17 | 10,695 | $ | 79.45 | $ | 253,258 | 2/26/2018 | 9,975 | $ | 114.70 | $ | 350,023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Green | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | 3/1/17 | $ | 191,250 | $ | 382,500 | $ | 765,000 | 2/26/2018 | $ | 225,000 | $ | 450,000 | $ | 900,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance units | 3/1/17 | 2,807 | 5,614 | 11,228 | $ | 446,032 | 2/26/2018 | 1,199 | 4,796 | 19,184 | $ | 671,123 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 3/1/17 | 2,807 | $ | 223,016 | 2/26/2018 | 2,398 | $ | 275,051 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | 6/12/2018 | 1,478 | $ | 175,084 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options | 3/1/17 | 9,418 | $ | 79.45 | $ | 223,018 | 2/26/2018 | 7,837 | $ | 114.70 | $ | 275,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | These columns reflect the threshold, target and maximum annual cash incentive opportunities under our short-term incentive plan. At the time of the filing of this proxy statement, the actual results of ournon-equity incentive plan were certified, and our NEOs received the amounts set forth in the“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
| (2) | These columns reflect the number of estimated future payouts |
| (3) | This column reflects the number of restricted shares of our common stock granted in |
| (4) | This column represents the number of stock options |
| (5) | This column represents the aggregate grant date fair value of equity awards granted in |
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 4951
Outstanding Equity Awards at December 31, 20172018
The following table provides the outstanding equity awards at December 31, 20172018 for each of ourthe NEOs.
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
| Number of
| Number of
| Option ($/sh)
| Option
| Number of
| Market
| Equity
| Equity Incentive
| ||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | 8/18/14 | 132,686 | — | $ | 35.78 | 8/18/24 | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | 47,470 | 23,734 | $ | 55.92 | 7/30/25 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 7/29/16 | 12,225 | 24,451 | $ | 74.66 | 7/29/26 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/17 | — | 63,345 | $ | 79.45 | 3/1/27 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 9/30/14 | — | — | — | — | 127,574 | (3) | $ | 12,788,018 | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | 6,706 | (4) | $ | 672,209 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | 7,163 | (4) | $ | 718,019 | — | — | |||||||||||||||||||||||||||||||||||
| 3/1/17 | — | — | — | — | 18,880 | (4) | $ | 1,892,531 | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | — | — | 80,476 | (5) | $ | 8,066,914 | |||||||||||||||||||||||||||||||||||
| 6/8/16 | — | — | — | — | — | — | 25,924 | (6) | $ | 2,598,622 | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | — | — | 42,974 | (7) | $ | 4,307,714 | |||||||||||||||||||||||||||||||||||
| 3/1/17 | — | — | — | — | — | — | 75,520 | (8) | $ | 7,570,125 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
| 192,381 | 111,530 | 160,323 | $ | 16,070,778 | 224,894 | $ | 22,543,375 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
David E. Mangum | 8/18/14 | 45,704 | — | $ | 35.78 | 8/18/24 | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | 16,350 | 8,176 | $ | 55.92 | 7/30/25 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 7/29/16 | 4,001 | 8,002 | $ | 74.66 | 7/29/26 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/17 | — | 20,007 | $ | 79.45 | 3/1/27 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 9/30/14 | 52,071 | (3) | $ | 5,219,597 | — | — | |||||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | 2,310 | (4) | $ | 231,554 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | 2,344 | (4) | $ | 234,963 | — | — | |||||||||||||||||||||||||||||||||||
| 3/1/17 | 5,963 | (4) | $ | 597,731 | — | — | |||||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | — | — | 27,720 | (5) | $ | 2,778,653 | |||||||||||||||||||||||||||||||||||
| 6/8/16 | — | — | — | — | — | — | 21,831 | (6) | $ | 2,188,339 | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | — | — | 14,064 | (7) | $ | 1,409,775 | |||||||||||||||||||||||||||||||||||
| 3/1/17 | 23,852 | (8) | $ | 2,390,924 | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
| 66,055 | 36,185 | 62,688 | $ | 6,283,845 | 87,467 | $ | 8,767,692 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Cameron M. Bready | 8/18/14 | 36,858 | — | $ | 35.78 | 8/18/24 | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | 13,186 | 6,594 | $ | 55.92 | 7/30/25 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 7/29/16 | 3,234 | 6,469 | $ | 74.66 | 7/29/26 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/17 | — | 16,270 | $ | 79.45 | 3/1/27 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 6/30/14 | — | — | — | — | 13,040 | (3) | $ | 1,307,130 | — | — | |||||||||||||||||||||||||||||||||||
| 9/30/14 | — | — | — | — | 41,946 | (4) | $ | 4,204,667 | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | 1,864 | (4) | $ | 186,847 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | 1,895 | (4) | $ | 189,955 | — | — | |||||||||||||||||||||||||||||||||||
| 3/1/17 | — | — | — | — | 4,849 | (4) | $ | 486,064 | — | — | |||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | — | — | 22,356 | (5) | $ | 2,240,965 | |||||||||||||||||||||||||||||||||||
| 6/8/16 | — | — | — | — | — | — | 19,102 | (6) | $ | 1,914,784 | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | — | — | 11,370 | (7) | $ | 1,139,729 | |||||||||||||||||||||||||||||||||||
| 3/1/17 | — | — | — | — | — | — | 19,396 | (8) | $ | 1,944,255 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
| 53,278 | 29,333 | 63,594 | $ | 6,374,663 | 72,224 | $ | 7,239,734 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Guido F. Sacchi | |||||||||||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | 4,220 | $ | 55.92 | 7/30/25 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 7/29/16 | 2,127 | 4,255 | $ | 74.66 | 7/29/26 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/17 | 10,695 | $ | 79.45 | 3/1/27 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| 9/30/14 | — | — | — | — | 25,071 | (3) | $ | 2,513,117 | |||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | 1,192 | (4) | $ | 119,486 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | 1,247 | (4) | $ | 124,999 | |||||||||||||||||||||||||||||||||||||
| 3/1/17 | — | — | — | — | 3,188 | (4) | $ | 319,565 | |||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | — | — | 14,308 | (5) | $ | 1,434,234 | |||||||||||||||||||||||||||||||||||
| 6/8/16 | — | — | — | — | — | — | 16,373 | (6) | $ | 1,641,230 | |||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | — | — | 7,478 | (7) | $ | 749,595 | |||||||||||||||||||||||||||||||||||
| 3/1/17 | 12,752 | (8) | $ | 1,278.260 | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
| 2,127 | 19,170 | 30,698 | $ | 3,077,168 | 50,911 | $ | 5,103,319 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Option Awards |
Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
| Number of
| Number of
| Option ($/sh)
| Option
| Number of
| Market
| Equity
|
Equity Incentive Plan Awards:
| ||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan |
|
8/18/2014 |
|
|
132,686 |
|
|
— |
|
$ |
35.78 |
|
|
8/18/2024 |
| — | — | — | — | ||||||||||||||||||||||||||
| 7/30/2015 | 71,204 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 7/29/2016 | 24,451 | 12,225 | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/2017 | 21,115 | 42,230 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | 53,435 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 9/30/2014 | — | — | — | — | 63,787 | (3) | $ | 6,578,353 | — | — | |||||||||||||||||||||||||||||||||||
| 6/8/2016 | — | — | — | — | 12,962 | (4) | $ | 1,336,771 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | — | — | — | — | 3,581 | (5) | $ | 369,309 | — | — | |||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | 12,587 | (5) | $ | 1,298,097 | — | — | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | 16,347 | (5) | $ | 1,685,866 | — | — | |||||||||||||||||||||||||||||||||||
| 6/12/2018 | — | — | — | — | 29,546 | (5) | $ | 3,047,079 | — | — | |||||||||||||||||||||||||||||||||||
| 6/8/2016 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| 7/29/2016 | — | — | — | — | — | — | 42,974 | (6) | $ | 4,431,909 | |||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | — | — | 75,520 | (7) | $ | 7,788,378 | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | — | — | 98,082 | (8) | $ | 10,115,197 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 249,456 | 107,890 | 138,810 | $ | 14,315,475 | 216,576 | $ | 22,335,484 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
David E. Mangum(9) | 7/29/2016 | — | — | — | — | — | — | 7,032 | (6) | $ | 725,210 | ||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | — | — | 11,926 | (7) | $ | 1,229,928 | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | — | — | 16,920 | (8) | $ | 1,744,960 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | — | — | — | — | — | — | 35,878 | $ | 3,700,098 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Cameron Bready | 7/30/2015 | 19,780 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | 6,469 | 3,234 | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/2017 | 5,423 | 10,847 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | 13,038 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 9/30/2014 | — | — | — | — | 20,973 | (3) | $ | 2,162,945 | — | — | |||||||||||||||||||||||||||||||||||
| 6/8/2016 | — | — | — | — | 9,551 | (4) | $ | 984,995 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | — | — | — | — | 948 | (5) | $ | 97,767 | — | — | |||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | 3,233 | (5) | $ | 333,419 | — | — | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | 3,989 | (5) | $ | 411,386 | — | — | |||||||||||||||||||||||||||||||||||
| 6/12/2018 | — | — | — | — | 7,767 | (5) | $ | 801,011 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | — | — | — | — | — | — | 11,370 | (6) | $ | 1,172,588 | |||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | — | — | 19,396 | (7) | $ | 2,000,309 | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | — | — | 23,934 | (8) | $ | 2,468,313 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 31,672 | 27,119 | 46,461 | $ | 4,791,523 | 54,700 | $ | 5,641,211 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Guido Sacchi | 7/30/2015 | 4,220 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | 4,255 | 2,127 | $ | 74.66 | 7/29/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/1/2017 | 3,565 | 7,130 | $ | 79.45 | 3/1/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | 9,975 | $ | 114.70 | 2/26/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 9/30/2014 | — | — | — | — | 12,535 | (3) | $ | 1,292,735 | — | — | |||||||||||||||||||||||||||||||||||
| 6/8/2016 | — | — | — | — | 8,186 | (4) | $ | 844,222 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | — | — | — | — | 623 | (5) | $ | 64,250 | — | — | |||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | 2,125 | (5) | $ | 219,151 | — | — | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | 3,052 | (5) | $ | 314,753 | — | — | |||||||||||||||||||||||||||||||||||
| 6/12/2018 | — | — | — | — | 2,111 | (5) | $ | 217,707 | — | — | |||||||||||||||||||||||||||||||||||
| 7/29/2016 | — | — | — | — | — | — | 7,478 | (6) | $ | 771,206 | |||||||||||||||||||||||||||||||||||
| 3/1/2017 | — | — | — | — | — | — | 12,752 | (7) | $ | 1,315,114 | |||||||||||||||||||||||||||||||||||
| 2/26/2018 | — | — | — | — | — | — | 18,309 | (8) | $ | 1,888,207 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total | 12,040 | 19,232 | 28,632 | $ | 2,952,818 | 38,539 | $ | 3,974,527 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
5052 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
| Option Awards | Stock Awards |
Option Awards |
Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
| Number of
| Number of
| Option ($/sh)
| Option
| Number of
| Market
| Equity
| Equity Incentive
| Grant
| Number of
| Number of
| Option ($/sh)
| Option
| Number of
| Market
| Equity
|
Equity Incentive Plan Awards:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Green | 7/29/09 | 2,198 | — | $ | 21.09 | 7/29/19 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David Green |
|
8/18/2014 |
|
|
15,482 |
|
|
— |
|
$ |
35.78 |
|
|
8/18/2024 |
| — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/18/14 | 15,482 | — | $ | 35.78 | 8/18/24 | — | — | — | — | 7/30/2015 | 11,868 | — | $ | 55.92 | 7/30/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/15 | 7,912 | 3,956 | $ | 55.92 | 7/30/25 | — | — | — | — | 7/29/2016 | 3,757 | 1,878 | $ | 74.66 | 7/29/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/29/16 | 1,878 | 3,757 | $ | 74.66 | 7/29/26 | — | — | — | — | 3/1/2017 | 3,139 | 6,279 | $ | 79.45 | 3/1/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/1/17 | — | 9,418 | $ | 79.45 | 3/1/27 | — | — | — | — | 2/26/2018 | — | 7,837 | $ | 114.70 | 2/26/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9/30/14 | — | — | — | — | 19,382 | (3) | $ | 1,942,852 | — | — | 9/30/2014 | — | — | — | — | 9,691 | (3) | $ | 999,433 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | 1,118 | (4) | $ | 112,068 | — | — | 6/8/2016 | — | — | — | — | 2,388 | (4) | $ | 246,274 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | 1,101 | (4) | $ | 110,364 | — | — | 7/29/2016 | — | — | — | — | 550 | (5) | $ | 56,722 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/1/17 | 2,807 | (4) | $ | 281,374 | — | — | 3/1/2017 | — | — | — | — | 1,871 | (5) | $ | 192,956 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/15 | — | — | — | — | — | — | 13,416 | (5) | $ | 1,344,820 | 2/26/2018 | — | — | — | — | 2,398 | (5) | $ | 247,306 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6/8/16 | — | — | — | — | — | — | 4,776 | (6) | $ | 478,746 | 6/12/2018 | — | — | — | — | 1,478 | (5) | $ | 152,426 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/29/16 | — | — | — | — | — | — | 6,604 | (7) | $ | 661,985 | 7/29/2016 | — | — | — | — | — | — | 6,604 | (6) | $ | 681,071 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/1/17 | — | — | — | — | — | — | 11,228 | (8) | $ | 1,125,495 | 3/1/2017 | — | — | — | — | — | — | 11,228 | (7) | $ | 1,157,944 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| 2/26/2018 | — | — | — | — | — | — | 14,388 | (8) | $ | 1,483,834 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 27,470 | 17,131 | 24,408 | $ | 2,446,658 | 36,024 | $ | 3,611,046 |
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 34,246 | 15,994 | 18,376 | $ | 1,895,117 | 32,220 | $ | 3,322,849 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | All stock options were granted pursuant to our 2011 Incentive |
| (2) | Market value is calculated based on the closing price of our common stock on December |
| (3) | Represents shares of restricted common stock issued as a result of the conversion of LPUs, which were originally granted on September 30, 2014 as anon-recurring, supplemental award, and were earned based on the absolute share price appreciation of the Company’s stock and the relative share price appreciation of the Company’s stock compared to the S&P 500 index at the end of a three-year performance period.One-third of the restricted shares vested immediately on October 5, 2017,one-third vested on September 30, 2018 (which shares are reflected in the “Stock Options Exercised and Stock Vested during |
| (4) | Represents shares of restricted common stock issued as a result of the conversion of the synergy units granted on June 8, 2016 as anon-recurring, supplemental award. The Compensation Committee certified the achievement of the synergy goals at the maximum level, as verified by an independent accounting firm, and accelerated the vesting of the synergy units. Half of the earned restricted shares vested on February 26, 2018 (which shares are reflected in the “Stock Options Exercised and Stock Vested during 2018” table below), and the remaining half of the shares vested on February 26, 2019. |
| (5) | Represents shares of restricted stock that vest in equal installments on each of the first three anniversaries of the grant date. |
| (6) |
Represents performance units granted during |
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 51
| performance results described above. In accordance with SEC rules and based on actual performance |
Represents performance units granted during 2017. These performance units are earned based on the growth of our annual adjusted EPS over each year (calculated separately) in the three-year performance period ending December 31, 2019. The final percentage of performance units earned will be calculated as the average of each of the three annual payout percentages (as percentages of target). The earned units will convert into unrestricted shares following the third anniversary of the performance unit grant date, or March 1, 2020, provided that the Compensation Committee has previously certified the performance results described above. In accordance with SEC rules and based on actual performance |
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 53
| (8) | Represents performance units granted during 2018. These performance units are earned based on the growth of our annual adjusted EPS over each year (calculated separately) in the three-year performance period ending December 31, 2020, as may be further adjusted based on the TSR modifier. The final percentage of performance units earned is determined as the average of each of the three annual adjusted EPS payout percentages (as a percent of target) and then multiplied by the TSR modifier. The earned units will convert into unrestricted shares following the third anniversary of the performance unit grant date, or February 26, 2021, provided that the Compensation Committee has previously certified the performance results described above. In accordance with SEC rules, the number of performance units reflected in the table is based on an assumed achievement at the payout level of 300%, based on actual adjusted EPS during the first year of the three-year performance period and no modification of such payout based on actual TSR for the first year of the three-year performance period. |
| (9) | As of August 27, 2019, David Mangum no longer served as the Company’s President and Chief Operating Officer and subsequently left the Company, effective September 15, 2018. Pursuant to his employment agreement, all of the stock options that Mr. Mangum owned as of September 15, 2018 and that would have become exercisable on or before September 15, 2020, and all of the restricted shares of our common stock that Mr Mangum owned as of September 15, 2018 vested as of September 17, 2018, the first business day following his separation date. |
Stock Options Exercised and Stock Vested during 20172018
The following table provides information on options exercised and stock awards that vested in 2017.2018. The shares shown as acquired on exercise or on vesting represent shares of our common stock.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares Acquired on Exercise (#)
| Value Realized on
| Number of
| Value Realized on
| Number of Shares Acquired on Exercise (#)
| Value Realized on
| Number of
| Value Realized on Vesting ($)(3)
| |||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan
|
| 50,000
|
| $
| 3,387,735
|
|
| 236,931
|
| $
| 22,452,557
|
|
| —
|
|
| —
|
|
| 173,806
|
| $
| 20,514,438
|
| ||||||||||||||||||||||||||
David E. Mangum
|
| —
|
|
| —
|
|
| 86,288
|
| $
| 8,187,040
|
|
| 102,240
|
| $
| 7,209,123
|
|
| 125,751
| (4)
| $
| 15,346,336
| (4)
| ||||||||||||||||||||||||||
Cameron M. Bready
|
| —
|
|
| —
|
|
| 74,679
|
| $
| 7,022,729
|
|
| 36,858
|
| $
| 3,392,270
|
|
| 70,347
|
| $
| 8,229,473
|
| ||||||||||||||||||||||||||
Guido F. Sacchi
|
| 11,100
|
| $
| 581,162
|
|
| 39,399
|
| $
| 3,739,341
|
|
| —
|
|
| —
|
|
| 37,910
|
| $
| 4,466,552
|
| ||||||||||||||||||||||||||
David L. Green
|
| —
|
|
| —
|
|
| 28,017
|
| $
| 2,658,673
|
|
| 2,198
|
| $
| 209,601
|
|
| 28,100
|
| $
| 3,307,944
|
| ||||||||||||||||||||||||||
| (1) | Represents the excess of the fair market value of the shares at the time of exercise over the exercise price of the options. |
| (2) | Includes shares acquired on the vesting of (i) restricted stock awards, including the synergy units granted in the 2016 fiscal year which converted into restricted stock awards and (ii) performance units granted in the 2016 fiscal |
| (3) | Represents the fair market value of the shares on the vesting date. |
| (4) | Includes shares acquired on the vesting of restricted stock awards that vested pursuant to Mr. Mangum’s employment agreement in connection with his separation from the Company. |
54 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
Non-Qualified Deferred Compensation Plan
Our NEOs are eligible to participate in ourNon-Qualified Deferred Compensation Plan, or the deferred compensation plan. Mr. Sloan is our only NEO who participates, but did not make any contributions during 2017.
The following table provides information on deferred compensation under the deferred compensation plan for each NEO during 2017. There were no2018. Mr. Sloan is our only NEO who participates, but did not make any contributions or withdrawals, ornor did he receive any distributions, during 2017.2018. Aggregate earnings (Iosses) are not includable in the summary compensation table above because they were not above-market or preferential earnings. The aggregate balance includes amounts previously reported in the summary compensation table above in the previous years when earned if the executive’sNEO’s compensation was required to be disclosed in a previous year.
Name
| Aggregate
| Aggregate
| ||||||||
Jeffrey S. Sloan
| $
| 22,015
|
| $
| 115,218
|
| ||||
David E. Mangum
|
| —
|
|
| —
|
| ||||
Cameron M. Bready
|
| —
|
|
| —
|
| ||||
Guido F. Sacchi
|
| —
|
|
| —
|
| ||||
David L. Green
|
| —
|
|
| —
|
| ||||
52 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
Name
| Aggregate
| Aggregate
| ||||||||
Jeffrey S. Sloan
| $
| (12,299
| )
| $
| 102,919
|
| ||||
David E. Mangum
|
| —
|
|
| —
|
| ||||
Cameron M. Bready
|
| —
|
|
| —
|
| ||||
Guido F. Sacchi
|
| —
|
|
| —
|
| ||||
David L. Green
|
| —
|
|
| —
|
| ||||
Pursuant to the deferred compensation plan, participants are permitted to elect to defer up to 100% of their base salary and other forms of cash compensation (such as cash incentive bonus). Participant accounts are credited with earnings based on the participant’s investment allocation among a menu of investment options selected by the deferred compensation plan administrator. Participants are 100% vested in the participant deferrals and related earnings. We do not make contributions to the deferred compensation plan and do not guarantee any return on participant account balances. Participants may allocate their plan accounts intosub-accounts that are payable upon separation from service or on designated specified dates. Except in the case of death or disability, participants may elect in advance to have their various account balances pay out in a single lump sum or in installments over a period of two to ten years. In the event a participant separates from service by reason of death or disability, the participant or his designated beneficiary will receive the undistributed portion of his or her account balances in alump-sum payment. Subject to approval by the deferred compensation plan administrator, in the event of an unforeseen financial emergency beyond the participant’s control, a participant may request a withdrawal from an account up to the amount necessary to satisfy the emergency (provided the participant does not have the financial resources to otherwise meet the hardship).
We maintain a noncontributory defined benefit pension plan covering our U.S. employees who have met the eligibility provisions. The retirement plan was closed to new participants beginning June 1, 1998, and none of our NEOs were hired before that date.
Potential Payments upon Termination, Retirement or Change in Control
This section describes the post-employment benefits that each of our NEOs (other than Mr. Mangum) would be entitled to receive in connection with various termination of employment andchange-in-control scenarios.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 55
Employment Agreements with Our Named Executive Officers (other than Mr. Mangum)
Each of our NEOs is a party to an employment agreement with our Company. These agreements are for an initial term of three years and are automatically extended for one additional year on their second year anniversary and each anniversary thereafter unless either party provides notice ofnon-renewal before such anniversary date. The expiration dates for the initial employment periods are set forth below:
Name
| Expiration of
| ||||
Jeffrey S. Sloan
| |||||
|
| ||||
Cameron M. Bready
|
| ||||
Guido F. Sacchi
|
| ||||
David L. Green
|
| ||||
Each of these agreements prohibits the executiveNEO from disclosing our confidential information, soliciting our customers or recruiting our employees for a period of 24 months following the termination of employment. In addition, if the executive’sNEO’s employment is terminated by the Company or the executive,NEO, the executiveNEO has agreed not to compete with us generally for a period of 24 months. Thenon-compete does not apply if the executive’sNEO’s employment is terminated as a result of ourthe Company’s decision not to extend the employment agreement.
These employment agreements may be terminated by us at any time for “cause” (as defined below) or for no reason or by the executiveNEO with or without “good reason” (as defined below). The employment agreements will also terminate upon the executive’sNEO’s death, disability or retirement. Depending on the reason for the termination and when it occurs, the executiveNEO will be entitled to certain severance benefits, as described below, which may be delayed for such time as may be necessary to avoid a violation of Section 409A of the Code. “Cause,” as defined in the employment agreement, generally means (i) the failure by the executiveNEO to perform substantially his or her responsibilities after a cure period of ten business days, (ii) fraud, misappropriation, embezzlement or
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 53
similar dishonest or wrongful act, (iii) substance abuse which materially interferes with the executive’sNEO’s ability to perform, (iv) employment discrimination, harassment, conflicts of interest, retaliation, competition with our Company, solicitation of our customers or employees on behalf of anyone other than us, improper use or disclosure of confidential or proprietary information, or (v) conviction for, or plea of guilty ornolo contendere to, a felony or a crime involving dishonesty or other moral turpitude. “Good reason,” as defined in the employment agreement, generally means (a) an assignment of the executiveNEO to a materially different position, (b) a change in the person to whom the executiveNEO reports, (c) a reduction of the executive’sNEO’s base salary, bonus opportunity (to a target below the minimum specified in the agreement), or in welfare benefits, (d) a failure of our Company to require asuccessor-in-interest to agree to perform our obligations under the employment agreement, or (e) a requirement that the executiveNEO be based in any location other than that which is initially specified in the agreement.
Termination Without Cause or Resignation for Good Reason When Not Related to a Change in Control. If, prior to a change in control or on or after the second anniversary of a change in control, the executive’sNEO’s employment is terminated by us without cause or the executiveNEO resigns for good reason, the executiveNEO will be entitled to the following benefits:
We will pay the executive’sNEO’s accrued salary and benefits through the separation date, plus apro-rata portion of his or her annual incentive bonus for the fiscal year of separation, based upon actual performance against certifiedpre-established bonus targets.
We will continue to pay the executive’sNEO’s base salary for six months, or, if such payments are delayed by reason of Code Section 409A, make a lump sum payment equal to six months of the executive’sNEO’s base salary on the date that is six months and one day after the separation date, in each case provided that the executiveNEO does not violate any restrictive covenants.
For a period of up to 12 additional months (or the earlier of the executiveNEO becoming employed with a competitor or violating any restrictive covenants), we will continue to pay the executive’sNEO’s base salary, provided that the executiveNEO does not violate any restrictive covenants.
For a period of up to 12 months, we will pay the executive’sNEO’s COBRA premiums, provided that the executiveNEO does not obtain other employment that provides health care coverage.
56 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
All of the executive’sNEO’s restricted stock awards including unvested restricted stock granted in settlement oftwo-thirds of the earned LPUs, will vest as of the separation date, and the stock options that would have vested in the next 24 months will vest and remain exercisable for no more than 90 days from the separation date.
The executive’sNEO’s performance-based restricted stock units will remain outstanding, and, after the Compensation Committee certifies the results at the end of the performance period in which the separation date falls, the executiveNEO will receive 50% of the number of shares that would have vested based on actual performance.
Termination Without Cause or Resignation for Good Reason When Related to a Change in Control. If, within 24 months after a change in control, the executive’sNEO’s employment is terminated by us without cause or the executiveNEO resigns for good reason, the executiveNEO will be entitled to the following benefits:
We will pay the executive’sNEO’s accrued salary and benefits through the date of termination.
We will pay the executiveNEO 200% of the amount of the executive’sNEO’s then-current base salary as a lump sum payment or payments, provided that the executiveNEO does not violate any restrictive covenants.
We will pay the executiveNEO 200% of the amount of the executive’sNEO’s then-current target bonus opportunity, payable nine months after the separation date, provided that the executiveNEO does not violate any restrictive covenants.
We will pay the executiveNEO apro-rated annual incentive bonus for the year in which the termination occurs based on (i) the executive’sNEO’s then-current target bonus opportunity, if the termination date occurs before the end of the year in which the change of control occurred, or (ii) the actual amount earned based on certified results, if the termination date occurs during a year that began after the change in control occurred.
54 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
All of the executive’sNEO’s restricted stock awards including unvested restricted stock granted in settlement oftwo-thirds of the earned LPUs, and stock options will vest as of the separation date, and the options will remain exercisable for no more than 90 days from the separation date.
The executive’sNEO’s performance-based restricted stock units will convert into fully-vested shares of our common stock based on (i) assumed target performance, if the date of termination occurs before the end of the performance cycle in which the change in control occurs, (ii) the greater of assumed target performance or actual performance, if the date of termination occurs after the end of the performance cycle in which the change of control occurs, or (iii) actual performance, if the date of termination occurs during a performance cycle that began after the change in control occurred. With respect to the synergy units, if the date of the change in control occurs during the performance period and while the executive remains employed by our Company, then the number of synergy units earned will be the greater of (a) the number of synergy units that would have been earned based on actual performance as of the effective date of the change in control, as determined by the Compensation Committee or (b) the target award. Fifty percent of such synergy units will be converted to actual unrestricted shares on the effective date of the change in control. The remaining fifty percent will be converted to restricted stock on the effective date of the change in control.
The executiveNEO also will be eligible for comparable benefits if his or her employment is terminated without cause or if he or she resigns for good reason in anticipation of achange-in-control transaction. The agreements specify that a termination or resignation is in anticipation of achange-in-control transaction if it occurs after a public announcement of a transaction which would lead to a change in control and the transaction closes no later than nine months after termination of the executive’sNEO’s employment.
Death or Disability. Whether or not a change in control shall have occurred, if the executive’sNEO’s employment is terminated by reason of death or disability, the executiveNEO will be entitled to receive accrued salary and benefits through the date of termination and any other benefits that may apply, and all of the executive’sNEO’s restricted stock awards including unvested restricted stock granted in settlement oftwo-thirds of the earned LPUs, and stock options will vest. The executive’sNEO’s performance-based restricted stock units will convert into fully-vested shares of our common stock based upon assumed performance at the target level.
Retirement. Whether or not a change in control occurs, if the executive’sNEO’s employment is terminated by reason of his or her retirement, the executiveNEO will be entitled to receive accrued salary and benefits through the date of termination and any other benefits that may apply, and all of the executive’sNEO’s restricted stock awards including unvested restricted stock granted in settlement oftwo-thirds of the earned LPUs, and stock options will vest. The executive’sNEO’s performance-based restricted stock units will convert into fully-vested shares of our common stock based on actual performance as certified by the Compensation Committee at the end of the performance cycle.
Termination for Cause or Resignation Without Good Reason. If we terminate the executiveNEO for cause, or if the executiveNEO resigns without good reason, the executiveNEO will be entitled to receive accrued salary and benefits through the date of termination, but no additional severance amount will be payable under the terms of the employment agreement.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 57
Change in Control Without Termination of Employment. Our compensation arrangements with our executivesNEOs are “double trigger,” meaning that in order for the vesting of any of an executive’sNEO’s awards to accelerate upon a change in control, there must be achange-in-control transaction as well as a termination of employment without cause or resignation for good reason within 24 months after the change in control. As a result, if there is no such termination or resignation, then the vesting of the executive’sNEO’s awards will not be accelerated in connection with the change in control.
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 55
Potential Payments Table
The following table sets forth quantitatively the potential post-employment payments that are described above for each of our NEOs.NEOs (other than Mr. Mangum). The potential payments to our NEOs are hypothetical situations only and assume that termination of employment and/orchange-in-control occurred on December 31, 2017.2018. The amounts shown in the table do not include payments and benefits to the extent they are provided on anon-discriminatory basis to salaried employees generally upon termination of employment, such as accrued salary and distributions of plan balances under ourtax-qualified 401(k) plan. The value of the acceleration of vesting of stock options, restricted stock and performance-based restricted stock units are calculated based on the $100.24$103.13 closing price on December 29, 2017.31, 2018. The value of health care continuation is based on COBRA 2017 rates.
Name and Form of Payment
| Termination
| Termination
| Death or Disability
| Retirement
| Termination
| Termination
| Termination
| Death or Disability
| Retirement
| Termination
| ||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Sloan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base salary severance | $ | 1,500,000 | $ | 2,000,000 | $ | — | $ | — | $ | — | $ | 1,500,000 | $ | 2,000,000 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Annual cash incentive bonus | 2,101,333 | 1,600,000 | — | — | — | 2,058,667 | 1,600,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other cash severance | — | 3,200,000 | — | — | — | — | 3,200,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration(2) | 16,070 ,778 | 16,070,777 | 16,070,777 | 16,070,778 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(3) | 2,555,301 | 2,994,290 | 2,994,290 | 2,994,281 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based RSUs | 11,271,687 | (4) | 12,570,998 | (5) | 11,476,879 | (6) | 22,543,375 | (7) | — | |||||||||||||||||||||||||||||||||||||||||
COBRA | 19,194 | 28,791 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 33,518,301 | $ | 38,464,857 | $ | 30,541,946 | $ | 41,608,434 | $ | — | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
David E. Mangum | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base salary severance | $ | 930,000 | $ | 1,240,000 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||
Annual cash incentive bonus | 814,267 | 620,000 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other cash severance | — | 1,240,000 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration(2) | 6,283,845 | 6,283,845 | 6,283,845 | 6,283,845 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(3) | 844,349 | 982,997 | 982,997 | 982,997 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based RSUs | 4,383,846 | (4) | 5,478,016 | (5) | 4,520,624 | (6) | 8,767,692 | (7) | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration | 14,315,475 | 14,315,475 | 14,315,475 | 14,315,475 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(2) | 1,348,052 | 1,348,052 | 1,348,052 | 1,348,052 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance units | 11,167,741 | (3) | 9,481,875 | (4) | 9,481,875 | (4) | 22,335,483 | (5) | — | |||||||||||||||||||||||||||||||||||||||||
COBRA | 19,194 | 28,791 | — | — | — | 20,063 | 30,095 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Total | $ | 13,275,500 | $ | 15,873,649 | $ | 11,787,466 | $ | 16,034,534 | $ | — | $ | 30,409,998 | $ | 31,975,497 | $ | 25,415,402 | $ | 37,999,010 | $ | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Cameron M. Bready | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base salary severance | $ | 847,500 | $ | 1,130,000 | $ | — | $ | — | $ | — | $ | 877,500 | $ | 1,170,000 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Annual cash incentive bonus | 667,830 | 508,500 | — | — | — | 752,700 | 585,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other cash severance | 1,017,000 | — | 1,170,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration(2) | 6,374,663 | 6,374,663 | 6,374,663 | 6,374,663 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(3) | 683,232 | 795,976 | 795,976 | 795,976 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based RSUs | 3,619,867 | (4) | 4,577,259 | (5) | 3,688,231 | (6) | 7,239,734 | (7) | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration | 4,791,523 | 4,791,523 | 4,791,523 | 4,791,523 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(2) | 348,929 | 348,929 | 348,929 | 348,929 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance units | 2,820,606 | (3) | 2,409,220 | (4) | 2,409,220 | (4) | 5,641,211 | (5) | — | |||||||||||||||||||||||||||||||||||||||||
COBRA | 19,194 | 28,791 | — | — | — | 20,063 | 30,095 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Total | $ | 12,212,286 | $ | 14,432,189 | $ | 10,858,870 | $ | 14,410,373 | $ | — | $ | 9,611,321 | $ | 10,504,767 | $ | 7,549,672 | $ | 10,781,663 | $ | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Guido F. Sacchi | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base salary severance | $ | 727,500 | $ | 970,000 | $ | — | $ | — | $ | — | $ | 750,000 | $ | 1,000,000 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Annual cash incentive bonus | 573,270 | 436,500 | — | — | — | 611,167 | 475,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other cash severance | 873,000 | — | 950,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration(2) | 3,077,168 | 3,077,168 | 3,077,168 | 3,077,168 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(3) | 441,106 | 518,222 | 518,222 | 518,222 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based RSUs | 2,551,659 | (4) | 3,372,274 | (5) | 2,620,073 | (6) | 5,103,319 | (7) | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration | 2,952,818 | 2,952,818 | 2,952,818 | 2,952,818 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(2) | 229,394 | 229,394 | 229,394 | 229,394 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance units | 1,987,264 | (4) | 1,672,562 | (4) | 1,672,562 | (4) | 3,974,527 | (5) | — | |||||||||||||||||||||||||||||||||||||||||
COBRA | 19,194 | 28,791 | — | — | — | 21,475 | 32,212 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Total | $ | 7,392,897 | $ | 9,275,955 | $ | 6,215,463 | $ | 8,698,709 | $ | — | $ | 6,552,118 | $ | 7,311,986 | $ | 4,854,774 | $ | 7,156,739 | $ | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
David L. Green | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base salary severance | $ | 675,000 | $ | 900,000 | $ | — | $ | — | $ | — | $ | 750,000 | $ | 1,000,000 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Annual cash incentive bonus | 502,350 | 382,500 | — | — | — | 579,000 | 450,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other cash severance | 765,000 | — | 900,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration(2) | 2,446,658 | 2,446,658 | 2,446,658 | 2,466,658 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(3) | 401,967 | 467,234 | 467,234 | 467,234 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based RSUs | 1,805,523 | (4) | 2,044,896 | (5) | 1,908,069 | (6) | 3,611,046 | (7) | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock acceleration | 1,895,117 | 1,895,117 | 1,895,117 | 1,895,117 | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock option acceleration(2) | 202,153 | 202,153 | 202,153 | 202,153 | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance units | 1,661,424 | 1,414,119 | (4) | 1,414,119 | (4) | 3,322,849 | (5) | — | ||||||||||||||||||||||||||||||||||||||||||
COBRA | 19,194 | 28,791 | — | — | — | 20,063 | 30,095 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,850,699 | $ | 7,035,079 | $ | 4,822,961 | $ | 6,524,938 | $ | — | $ | 5,107,757 | $ | 5,891,484 | $ | 3,511,389 | $ | 5,420,119 | $ | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
| (1) | Assumes a change in control occurred on December 31, |
5658 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
For the purpose of this calculation, outstanding unvested options having an exercise price greater than the closing price of our common stock on such date have a value of $0. |
Amount reflects 50% of the number of shares that would be issued at 300% of target for the performance units granted in 2018 (and no modification of such payout based on actual TSR for the first year of the three-year performance), and the maximum payout levels (200% of target) for the performance units granted in 2017 |
| Amount reflects the number of shares that would be issued at the target payout levels for the performance units granted in 2018 (and no modification of such payout based on actual TSR for the first year of the three-year performance), 2017 and the 2016 fiscal transition |
Amount reflects the number of shares that would be issued at 300% of target for the performance units granted in 2018 (and no modification of such payout based on actual TSR for the first year of the three-year performance), and the maximum payout levels (200% of target) for the performance units |
Payments Made to Former NEO
As previously disclosed, as of August 27, 2018, David Mangum no longer served as the Company’s President and Chief Operating Officer and subsequently left the Company, effective September 15, 2018. The compensation that Mr. Mangum has received or will receive, as applicable, in connection with his departure is limited to, and does not exceed, the compensation that he was entitled to receive pursuant to his employment agreement, which includes the following:
Mr. Mangum will receive a lump sum cash payment of $325,000, representing his base salary for asix-month period, which will be made to Mr. Mangum on or about March 18, 2019. In addition, commencing on April 15, 2019, he will continue to receive his base salary for a period of up to an additional 12 months (or $650,000 in the aggregate for the12-month period), provided that these payments will cease if Mr. Mangum violates any of the restrictive covenants in his employment agreement.
Mr. Mangum received a lump sum cash payment of $669,067, representing his 2018 cash incentive bonus target based on actual performance, as certified by the Compensation Committee, prorated for the full months of employment through his separation date.
All of the restricted shares of our common stock that Mr. Mangum owned as of September 15, 2018 vested as of September 17, 2018, the first business day following his separation date. As of September 15, 2018, Mr. Mangum owned 81,645 unvested restricted shares of our common stock. The value of these shares based on the closing price of our stock on September 17, 2018 was $10,366,466.
All of the stock options that Mr. Mangum owned as of September 15, 2018 and that would have become exercisable on or before September 15, 2020 vested as of September 17, 2018, the first business day following his separation date. As of September 15, 2018, Mr. Mangum owned 29,629 stock options that would have vested on or before the day 24 months thereafter. The intrinsic value of these options on September 17, 2018, based on the closing price of our stock on that date, was $993,912.
Mr. Mangum’s performance units that he received in the 2016 fiscal transition period and calendar 2017 and 2018 will remain outstanding, and after the Compensation Committee certifies the results at the end of the performance period, Mr. Mangum will receive 50% of the number of shares that would have been earned and vested based on actual performance. Assuming a payout multiple of 300% for the 2018 performance units based on a result of actual performance during the first year of the three year performance period, and a maximum payout multiple of 200% for the 2017 and 2016 fiscal transition period performance units based on the results of the actual performance during the first two years of the respective three year performance periods, his performance units would convert into 35,878 unrestricted shares valued at $4,555,430 based on the closing price of our stock on September 17, 2018.
We will pay Mr. Mangum COBRA premiums for health care coverage through September 2019 (or sooner if he obtains health care coverage from a new employer), estimated at $21,200.
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 5759
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the median of the annual total compensation of our employees (excluding the Chief Executive Officer) and the annual total compensation of Jeffrey S. Sloan, our Chief Executive Officer. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies.
For 2017,2018, our last completed fiscal year:
The annual total compensation of the median employee was $57,725;$60,931; and
The annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table presented earlier in this Proxy, was $9,135,783$16,818,560 (which amount is exclusive of $19,194$21,056 in employer-provided health and welfare benefits).
Based on this information, for 2017 year,2018, the ratio of the annual total compensation of the median employee to the annual total compensation of Mr. Sloan, our Chief Executive Officer, was 1 to 159.276.
To determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used were as follows:
We selected December 31, 20172018 as the date upon which we would identify the “median employee.”
We determined that, as of December 31, 2017,2018, we had approximately 10,11110,896 employees working at the Company and its consolidated subsidiaries.
As is permitted under SEC rules, we eliminated 364390 global employees (approximately 4.05%3.58% of our total population) from the data set. A list of the excluded employees and their country of residency is provided in the table below. In addition, as permitted under SEC rules, approximately 1,133 employees acquired in connection with the acquisition of ACTIVE Network in 2017 were not included in this calculation.
| Country | # of Employees | Country | # of Employees | Country | # of Employees | # of Employees | Country | # of Employees | Country | # of Employees | ||||||||||||||||||||||||||||
China | 36 | Malaysia | 42 | Singapore | 19 | |||||||||||||||||||||||||||||||||
Hungary | 7 | Malta | 13 | Slovakia | 18 | 55 | Malta | 16 | Slovakia | 17 | ||||||||||||||||||||||||||||
India | 114 | New Zealand | 11 | Sri Lanka | 36 | 116 | New Zealand | 13 | Sri Lanka | 37 | ||||||||||||||||||||||||||||
Macao | 6 | Romania | 12 | Taiwan | 50 | 6 | Romania | 11 | Taiwan | 51 | ||||||||||||||||||||||||||||
Malaysia | 46 | Singapore | 22 | |||||||||||||||||||||||||||||||||||
To determine our “median employee” from our adjusted employee population, we used a consistently applied compensation definition and chose “base pay (actual).” We used a stratified statistical sampling methodology to provide a reasonable estimate of the median base pay for the employee population considered. We conducted an analysis using a sample of 8,61410,506 employees. Then we identified employees who we expected were paid within approximately a +/- 10% range of that value, based on our assumptions that the median employee was likely to be within that group and that those within that group had substantially similarly probabilities of being the median employee. We then analyzed taxable wages for this group (annualizing pay for permanent employees who commenced work during 2017)2018) to select a single median employee. We did not change our methodology or material assumptions, adjustments, or estimates from those used in our pay ratio disclosure for 2017.
Using this methodology, we determined that the “median employee” was a full-time, hourly employee located in the United States, with base pay (actual) for the12-month period ending December 31, 20172018 in the amount of $43,975.$46,498. We determined that the same median employee used for the year ended December 31, 2017 can be used again because there has not been a change in our employee population or employee compensation programs that we reasonably believe would result in a significant change in the pay ratio disclosure.
With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for 20172018 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, resulting in annual total compensation of $57,725 (inclusive of the value of employer-provided health and welfare benefits).
5860 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
402(c)(2)(x) of RegulationS-K, resulting in annual total compensation of $60,931 (inclusive of the value of employer-provided health and welfare benefits). |
With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column (column (j)) of the Summary Compensation Table, plus the value of employer-provided health and welfare benefits in the amount of $19,194,$21,056, which was not included in the Summary Compensation Table.
GLOBAL PAYMENTS INC. | 20182019 Proxy Statement – 5961
Proposal Three: Ratification of Reappointment of Auditors
We are asking you to ratify the appointment of Deloitte for the year ending December 31, 2018.2019. Ratification of the selection of Deloitte as the Company’s independent registered public accounting firm is not required by the SEC or NYSE rules, Georgia law, the Company’s articles of incorporation or the Company’s bylaws. However, the board of directors is submitting the selection of Deloitte to shareholders for ratification as a matter of good corporate practice. If a majority of shareholders fail to ratify the selection, the Audit Committee will consider the selection of other independent public accountants for the year ending December 31, 2018.2019.
Our Board of Directors recommends that you vote FOR the following resolution:
RESOLVED, that the appointment by the Audit Committee of the Company’s board of directors of Deloitte as independent registered public accounting firm for the Company, to audit the financial statements of the Company and its subsidiaries for the year ending December 31, 2018,2019, is ratified and approved.
The Audit Committee recommends, and the board of directors selects, our independent public accountants. Our Audit Committee has determined that it is in the best interest of our Company and its stockholdersshareholders to continue to retain Deloitte, who served during 2017,2018, to serve as our independent auditors for the year ending December 31, 2018,2019, and the board has approved the selection. A representative of Deloitte is expected to be present at the annual meeting. The representative will be given the opportunity to make a statement, if he or she desires to do so, and will be available to respond to appropriate questions from shareholders.
In accordance with applicable SEC rules, the Audit Committee issued the following report on February 21, 2018.20, 2019. The Audit Committee consisted of the following members as of such date: William B. Plummer (Chair), John M. Partridge and Alan M. Silberstein, each of whom is independent under the listing standards of the NYSE and the applicable rules and regulations promulgated by the SEC. The duties and responsibilities of the Audit Committee are set forth in a written Audit Committee charter which is available on the Investor Relations section of our website atwww.globalpaymentsinc.com. The Audit Committee reviews the charter annually and, when appropriate, recommends any changes to the board for approval.
The primary responsibility of the Audit Committee is to oversee our financial reporting process on behalf of the board and to report the results of the Audit Committee’s activities to the board. Management has the primary responsibility for the financial statements and reporting process, including the systems of internal control, and the independent registered public accounting firm (Deloitte) is responsible for auditing those financial statements in accordance with the standards of the Public Company Accounting Oversight Board, or the PCAOB, and issuing a report thereon.
The Audit Committee is directly responsible for the compensation, retention and oversight of the Company’s independent auditorsregistered public accounting firm and meets with the Company’s internal auditors and independent auditors, with and without management present (in person or by telephone), to discuss the scope, plan, status and results of their respective audits. In addition, the Audit Committee meets with management and the independent auditors to review the Company’s financial results and earnings press releases related thereto prior to their issuance.
In 2018, the Audit Committee held six meetings. Meeting agendas are established by the Audit Committee Chair, based on input from the Chief Financial Officer and the Chief Accounting Officer. During 2018, among other things, the Audit Committee:
met with the senior members of the Company’s financial management team at each regularly scheduled meeting;
held separate private sessions, during its regularly scheduled meetings, with each of the Company’s General Counsel, the independent auditors, and the Senior VP of Internal Audit, at which candid discussions regarding financial management, legal, accounting, auditing and internal control matters took place;
62 – GLOBAL PAYMENTS INC. |2019 Proxy Statement
received periodic updates on management’s processes to assess the adequacy of the Company’s internal controls over financial reporting and the framework used to make the assessment;
received periodic updates from management on the Company’s financial risk management practices;
reviewed and discussed with management and Deloitte the Company’s earnings releases and quarterly reports on Form10-Q and annual reports on Form10-K prior to filing with the SEC;
reviewed and approved the Company’s internal audit plan; and
participated, with representatives of management and Deloitte, in educational sessions about various relevant topics of interest to the Audit Committee.
Deloitte has served as the Company’s independent registered public accounting firm since 2002. Before retaining Deloitte for the year ending December 31, 2018,2019, the Audit Committee evaluated Deloitte’s performance with respect to its services to the Company provided during 2017.2018. In conducting this evaluation, the Audit Committee reviewed and discussed with management matters related to Deloitte’s independence, technical expertise and industry knowledge. The Audit Committee also reviewed Deloitte’s communications with the Audit Committee during 20172018 and considered Deloitte’s tenure. In addition, in order to ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent public accounting firm. The Audit Committee ensures that the mandated rotation of Deloitte’s personnel occurs routinely and is directly involved in the selection of Deloitte’s lead engagement partner.
60 – GLOBAL PAYMENTS INC. |2018 Proxy Statement
In keeping with its responsibilities and the performance of its oversight function, the members of the Audit Committee as of February 21, 201820, 2019 have reviewed and discussed with management and Deloitte our audited financial statements as of December 31, 20172018 and for the twelve months then ended. The Audit Committee has discussed with Deloitte the matters required to be discussed by PCAOB Auditing Standard No. 1301 (Communication with Audit Committees). The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with Deloitte its independence. In addition, the Audit Committee has considered the compatibility ofnon-audit services with Deloitte’s independence. Based on the reviews and discussions referred to above, the members of the Audit Committee as of February 21, 201820, 2019 recommended to the Board that the audited financial statements referred to above be included in our Annual Report on Form10-K for 20172018 filed with the SEC.
AUDIT COMMITTEE
William B. Plummer (Chair)
John M. Partridge
Alan M. Silberstein
The following table presents the aggregate fees for professional services rendered by Deloitte during 2017, the 2016 fiscal transition period2018 and the fiscal year ended May 31, 2016:2017:
| 2017 | TP2016 | 2016 | 2018 | 2017 | |||||||||||||||||||||
Audit fees | $ | 5,640,700 | $ | 4,777,717 | $ | 4,464,413 | $ | 5,541,200 | $ | 5,640,700 | |||||||||||||||
Audit-related fees | 197,876 | 199,500 | 355,200 | 170,750 | 197,876 | ||||||||||||||||||||
Tax fees | 809,495 | 1,499,909 | 386,400 | 2,025,323 | 809,495 | ||||||||||||||||||||
Other fees | — | — | — | — | — | ||||||||||||||||||||
|
|
|
|
| |||||||||||||||||||||
Total | $ | 6,648,071 | $ | 6,477,126 | $ | 5,206,013 | $ | 7,737,273 | $ | 6,648,071 | |||||||||||||||
|
|
|
|
| |||||||||||||||||||||
Audit fees. Audit fees represent fees for the audit of our annual financial statements, the reviews of the financial statements included in our Quarterly Reports on Form10-Q and the services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 63
Audit-related fees. Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included under “Audit fees” disclosed above. Each period includes fees for reports on Service Organization Controls.service organization controls and other fees associated with various initiatives by the Company. In fiscal 2016,2017, the audit-related fees also include consultations and procedures in connection with our merger with Heartland associated with (i) the inclusion of unaudited pro forma condensed combined financial information in our Registration Statement on FormS-4 filed in connection with the merger, or theS-4, and (ii) our update of certain information from our Annual Report on Form10-K for the year ended May 31, 2015, or the Fiscal 2015 Annual Report, to reflect the retrospective effectsCompany’s adoption of certain items occurring subsequent to the filing of our Fiscal 2015 Annual Report, which update was required in order to satisfy the disclosure requirementsASC 606 – Revenue from Contracts with respect to theS-4.Customers.
Tax fees. Tax fees represent fees for tax compliance, tax consulting and advisory services. In 2018, $236,248 of the fees were for tax return preparation and compliance, and $1,789,075 were for tax consulting and advisory services primarily related to the Jobs Act. In 2017, $136,855 of the fees were for tax return preparation and compliance, and $672,640 were for tax consulting and advisory services. In the 2016 fiscal transition period, $70,000 of the fees were for tax return preparation and compliance and $1,429,909 were for tax consulting and advisory services. In fiscal 2016, $60,800 of the fees were for tax return preparation and compliance, and $325,600 were for tax consulting and advisory services.
All other fees. There were no other fees for the periods presented.
GLOBAL PAYMENTS INC. |2018 Proxy Statement– 61
Audit CommitteePre-Approval Policies
The Audit Committee must approve any audit services and any permissiblenon-audit services provided by Deloitte prior to the commencement of the services, and is responsible for the audit fee negotiations associated with the engagement. In making itspre-approval determination, the Audit Committee considers whether providing thenon-audit services is compatible with maintaining the auditor’s independence. To minimize relationships which could appear to impair the objectivity of the independent registered public accounting firm, it is generally the Audit Committee’s practice to restrict thenon-audit services that may be provided to us by our independent auditor to audit-related services, tax services and merger and acquisition due diligence and integration services, but other permissiblenon-audit services are approved on acase-by-case basis.
The Audit Committee has delegated to the Chair of the Audit Committee the authority to approvenon-audit services by the independent registered public accounting firm within the guidelines set forth above, provided that the fees associated with the applicable engagement are not anticipated to exceed $100,000.$250,000. Any decision by the Chair topre-approvenon-audit services must be presented to the full Audit Committee for ratification at its next scheduled meeting. All of the services described above were approved by the Audit Committee in accordance with the foregoing policy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE
REAPPOINTMENT OF DELOITTE AS THE COMPANY’S INDEPENDENT PUBLIC
ACCOUNTING FIRM.
6264 – GLOBAL PAYMENTS INC. | 20182019 Proxy Statement
Relationships and Related Party Transactions
We review all known relationships and transactions in which we and our directors and executive officersNEOs or their immediate family members are participants to determine whether they qualify for disclosure as a transaction with related persons under Item 404(a) of RegulationS-K of the Exchange Act. We screen for these relationships and transactions through the annual circulation of a Directors and Officers Questionnaire, or a D&O Questionnaire, to each member of the board of directors and each of our officers who is a reporting person under Section 16 of the Exchange Act. The D&O Questionnaire contains questions intended to identify related persons and transactions between us and related persons. Our Employee Code of Conduct and Ethics requires employees to report to the General Counsel or Chief Executive Officer any transaction involving themselves or their immediate family members and our Company that may create a conflict of interest with us, and further requires the Chief Executive Officer to approve in writing any such transaction with a related person. Any related-party transaction that would require disclosure pursuant to Item 404 of RegulationS-K must be approved or ratified by the Audit Committee pursuant to the responsibilities set forth in its charter. In determining whether to approve a related party transaction, the Audit Committee evaluates the relevant facts and circumstances, including the fairness of the terms of the transaction, the benefit of the transaction to the Company, the impact on a director or officer’s independence, the availability of the goods or services from other sources and other facts considered material by the Audit Committee.
There were no transactions with related persons required to be disclosed pursuant to Item 404 of RegulationS-K since January 1, 2017.2018, except as set forth below.
On October 17, 2018, we completed the acquisition of SICOM from a fund owned by LLR Partners in a cash transaction valued at approximately $415 million. The transaction qualified as a related party transaction under Item 404 of RegulationS-K of the Exchange Act, as one of the Company’s directors, Mitchell L. Hollin, is an investor in the fund and a partner of the management company which manages and controls LLR Partners. Mr. Hollin’s direct interest in the transaction equaled approximately $1.1 million, which was the amount distributed to Mr. Hollin based on his investment interest in the LLR fund which owned SICOM.
In accordance with the audit committee charter, the Audit Committee is required to approve all related party transactions. In determining whether to approve the acquisition of SICOM, the Audit Committee considered, among other things, the following:
whether the terms of the transaction were fair to the Company;
whether the transaction was material to the Company;
the interests of Mr. Hollin in the transaction; and
the structure of the transaction.
Based on a consideration of all the material facts, including the foregoing as well as a fairness opinion from an independent, third-party investment banking firm, the Audit Committee determined that the terms of the transaction were fair to and in the best interests of the Company and approved the acquisition of SICOM.
As a result of his interest in the transaction, the board of directors determined that Mr. Hollin was no longer independent under the listing standards of the NYSE and accordingly, Mr. Hollin was removed from the Company’s Compensation Committee and was appointed to the Company’s Technology Committee.
20172018 Annual Report on Form10-K
A copy of our Annual Report on Form10-K, including the financial statements and financial statement schedules (but without exhibits) for 2017,2018, will be provided, free of charge, upon written request of any shareholder addressed to Global Payments Inc., 3550 Lenox Road, Suite 3000 Atlanta, Georgia 30326, Attention: Investor Relations. Additionally, our Annual Report on Form10-K is available on the SEC’s web site atwww.sec.gov.
GLOBAL PAYMENTS INC. |2019 Proxy Statement– 65
Shareholders Sharing the Same Address
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering to that address a single proxy statement to those shareholders. This process, which is commonly referred to as “householding,” provides convenience for shareholders and cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revokenotify us or your consent.broker that you no longer wish to participate in householding. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one copy, please notify your broker if your shares are held in a brokerage account, or notify us if you hold registered shares. You can notify us by sending a written request to Global Payments Inc., c/o Corporate Secretary, 3550 Lenox Road, Suite 3000, Atlanta, Georgia 30326 or by contacting Investor Relations at Investor.Relations@globalpay.com or(770) 829-8478.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of copies of Forms 3 and 4 filed with the SEC, or written representations that no annual forms (Form 5) were required, we believe that, during 2017,2018, all of our officers, directors and 10% shareholders complied with the reporting requirements of the SEC regarding their ownership and changes in ownership of our common stock (as required pursuant to Section 16(a) of the Exchange Act), with the following exception: one Form 4 with respect to the grantpurchase of restricted shares under the Company’s employee stock purchase plan for Mr. Sheffield was not timely filed. This transaction was subsequently reported and all errors have been corrected in subsequent filings.
We will maintain a list of shareholders entitled to vote at the annual meeting at our corporate offices at 3550 Lenox Road, Atlanta, GA 30326. The list will be available for examination at the annual meeting.
66 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– 63
Non-GAAP Financial Measures
In this proxy statement, we disclose performance goals related to cash incentive awards under our short-term incentive plan based on adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin, which arenon-GAAP financial measures. Set forth below is a methodology for determining, and the rational for using, these terms.
| Metric | Definition | Rationale for Use | ||
| Adjusted EPS | Adjusted EPS is calculated by dividing adjusted net income attributable to the Company, excluding the impact of foreign currency exchange rates, by the diluted weighted-average number of shares outstanding.
Adjusted net income attributable to the Company for
| Adjusted EPS is a primary metric management uses to more clearly focus on the economic benefits to our core business and other factors we believe are pertinent to the daily management of our operations. | ||
| Adjusted Net Revenue Plus Network Fees | Adjusted net revenue plus network fees for
| Adjusted net revenue plus network fees demonstrates our performance in further penetrating our global footprint and executing against our market opportunities. | ||
| Adjusted Operating Margin | Adjusted operating margin is calculated by dividing adjusted operating income, excluding the impact of foreign currency exchange rates, by adjusted net
| Adjusted operating margin allows us to assess the quality and efficiency of our operations to promote a long-term outlook. |
GLOBAL PAYMENTS INC. |2019 Proxy Statement– A-1
| Metric | Definition | Rationale for Use | ||
Adjusted operating income for 2018 reflects adjustments to remove (i) amortization of acquired intangibles; (ii) employee termination costs; (iii) acquisition and integration costs; (iv) share-based compensation expense; and (v) asset abandonment charges |
Adjusted EPS, adjusted net revenue plus network fees and adjusted operating margin should be considered in addition to, and not as a substitute for, GAAP diluted earnings per share, revenue and operating income, respectively.Because these performance metrics, as used herein, are calculated for the sole purpose of determining compensation, they may differ from similarnon-GAAP financial measures reported elsewhere in Company filings.
A-2 –GLOBAL PAYMENTS INC. | 20182019 Proxy Statement– A-1
|
| |||||||
Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. | ||||||||
 | Votes submitted electronically must be received by 11:59 PM (ET), on April 24, 2019. | |||||||
Online | ||||||||
 | Go towww.envisionreports.com/gpn or scan the QR code – login details are located in the shaded bar below. | |||||||
 | Phone | |||||||
Call toll free1-800-652-VOTE (8683) within the USA, US territories and Canada | ||||||||
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. |
|  | Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/gpn | |||||
globalpayments IMPORTANT ANNUAL MEETING INFORMATION 000004 ENDORSEMENT_LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 MMMMMMMMM ADD 5 ADD 6 Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. MMMMMMMMMMMM MMMMMMMMMMMMMMM C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., EDT, on April 26, 2018. Vote by Internet Go to www.envisionreports.com/GPN Or scan the QR code with your smartphone Follow the steps outlined on the secure website Vote by telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone Follow the instructions provided by the recorded message Annual Meeting Proxy Card 1234 5678 9012 345q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1. 1. Elect three directors: For Against Abstain For Against Abstain 01 q
- William I Jacobs, Class III 02 - Robert H. B. Baldwin, Jr., Class III 03 - Alan M. Silberstein, Class III For Against Abstain The Board of Directors recommends a vote FOR Proposal 2. 2. Approve, on an advisory basis, the compensation of our named executive officers for 2017. For Against Abstain The Board of Directors recommends a vote FOR Proposal 3. 3. Ratify the reappointment of Deloitte & Touche LLP as the company’s independent public accountants. For Against Abstain B Non-Voting Items Change of Address — Please print new address below. C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
| A | Proposals – The Board of Directors recommend a voteFOR all the nominees listed in Proposal 1 andFOR Proposals 2 – 3. |
1. Election of Directors | + | |||||||||||||||||||||||||||
| For | Against | Abstain | For Against Abstain | |||||||||||||||||||||||||||
| 01 - Mitchell L. Hollin Class I | ☐ | ☐ | ☐ | 02 - Ruth Ann Marshall Class I | ☐ ☐ | |||||||||||||||||||||||||
2. To approve, on an advisory basis, the compensation of our named executive officers for 2018. | For ☐ | Against ☐ | Abstain ☐ | 3. To ratify the reappointment of Deloitte & Touche LLP as the Company’s independent public accounting firm for the year ending December 31, 2019. | For ☐ | Against ☐ | Abstain ☐ | |||||||||||||||||||||||
| Any other business that properly comes before the meeting. | ||||||||||||||||||||||||||||||
| B | Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. |
Please sign exactly as your namename(s) appears hereon and date below. Where shares are held jointly,hereon. Joint owners should each shareholder should sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or guardian,custodian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C 1234567890 J N T MMMMMMM1UP X 3623751 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 02QU6C
Date (mm/dd/yyyy) – Please print date below. | Signature 1 – Please keep signature within the box. | Signature 2 – Please keep signature within the box. | ||||||
| // |
Directions to 
2019 Annual Meeting Admission Ticket
Global Payments Inc. 2019 Annual Shareholder MeetingGlobal Payments Inc. of Shareholders
April 25, 2019, 9:30 AM (ET)
3550 Lenox Road, Atlanta, GA 30326
Upon arrival, please present this admission ticket and photo identification at the registration desk.
Directions to Global Payments Inc. Annual Meeting of Shareholders |  | |
Global Payments Inc. 3550 Lenox Road Atlanta, GA 30326 770.829.8000 | ||
Using GA 400 North to Connector State Road 141/Lenox Road NE. Take Exit 2 fromGA-400 S. Merge onto Connector State Road 141/Lenox Road NE. | ||
Using GA 400 S/US 195S, followGA-400 S, take Exit 2. Merge onto Connector State Road 141/Lenox Road NE. |
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders.
The material is available at: www.envisionreports.com/gpn
| Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/gpn |  |
qUsing GA 400 North to Connector State Road 141/Lenox Road NE. Take Exit 2 from GA-400 S. Merge onto Connector State Road 141/Lenox Road NE.Using GA 400 S/US 195S, follow GA-400 S, take Exit 2. Merge onto Connector State Road 141/Lenox Road NE.
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.qProxy — GLOBAL PAYMENTS INC.2018 ANNUAL SHAREHOLDER MEETING
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Notice of 2019 Annual Meeting of Shareholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
GLOBAL PAYMENTS INC. AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE
The undersigned shareholder of Global Payments Inc. (the “Company”), Atlanta, Georgia, hereby constitutes Jeffrey S. Sloan and David L. Green, and each of them, each with full power of substitution, to vote the number of shares of common stock which the undersigned would be entitled to vote if personally present at the annual meeting of shareholders to be held at the Company’s offices at 3550 Lenox Road, Atlanta, Georgia 30326, on April 27, 2018,25, 2019, at 9:30 a.m. EDTET (the “Annual Meeting”), or at any adjournments or postponements thereof, upon the proposals described in the Notice of 20182019 Annual Meeting of Shareholders and Proxy Statement, both dated March 16, 2018,13, 2019, the receipt of which is acknowledged, in the manner specified below. The proxies, in their discretion, are further authorized to vote on any adjournments or postponements of the Annual Meeting, for the election of one or more persons to the Board of Directors if any of the nominees named herein becomes unable to serve or for good cause will not serve, on matters which the Board of Directors does not know a reasonable time before making the proxy solicitations will be presented at the Annual Meeting, or any other matters which may properly come before the Annual Meeting and any adjournments or postponements thereto.This proxy, when properly executed, will be voted in the manner directed
Shares represented by the undersigned shareholder. If no direction is made, this proxy will be voted “FOR”by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the director nominees named in Proposal 1, “FOR” Proposal 2 relating to the advisory vote on the compensationBoard of the Company’s named executive officers, “FOR” Proposal 3 relating to the ratification of the reappointment of Deloitte & Touche LLP as the Company’s independent public accountants,Directors and FOR items2-3, and with discretionary authority on all other matters that may properly come before the Annual Meeting and any adjournments or postponements thereof.YOU MAY VOTE BY TELEPHONE, THE INTERNET, OR U.S. MAIL.If you
In their discretion, the Proxies are voting by telephone orauthorized to vote upon such other business as may properly come before the Internet, please do not mail your proxy.meeting.
(Items to be voted appear on reverse side)
| C | Non-Voting Items |
Change of Address – Please print new address below. | Comments – Please print your comments below. | |||
| + |
