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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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PJT PARTNERS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
PJT PARTNERS INC. | ||
(Name of Registrant as Specified In Its Charter) | ||
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant) |
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March 16, 2018
Dear Fellow Stockholders,Shareholders,
We cordially invite you to attend our 20182023 Annual Meeting of Stockholders,Shareholders, to be held on Tuesday, May 1, 201824, 2023, at 8:10:30 a.m., Eastern Time, at our corporate headquarters located at 280 Park Avenue, New York, New York 10017.Time. The Annual Meeting will be a virtual meeting of shareholders. You will be able to attend the Annual Meeting, vote your shares electronically and submit your questions during the meeting via live audio webcast by visiting www.virtualshareholdermeeting.com/PJT2023. To participate in the meeting, you must have your 16-Digit Control Number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you elected to receive proxy materials by mail. You will not be able to attend the Annual Meeting in person.
The Notice of Annual Meeting of StockholdersShareholders and Proxy Statement that follow describe the business to be conducted at the Annual Meeting. Your vote is important. We encourage you to vote by proxy in advance of the Annual Meeting, whether or not you plan to attend.participate.
Thank you for your continuing support of PJT Partners.
Very truly yours,
Paul J. Taubman
Chairman and Chief Executive Officer
280 Park Avenue | New York, NY 10017 | t. +1.212.364.7800+1.212.364.7810 | pjtpartners.com
PJT PARTNERS INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 1, 2018
The Annual Meeting of Stockholders of PJT Partners Inc. will be held on May 1, 2018 at 8:30 a.m., Eastern Time, at our corporate headquarters located at
280 Park Avenue, New York, New York 10017 (the “Annual Meeting”), for the following purposes:
Notice of 2023 Annual Meeting of Shareholders
Items of Business | |
Item 1. Election to |
Statement
Item 2.Approval, on an advisory basis, of the compensation of our Named Executive Officers as disclosed in this Proxy Statement Item 3. Approval of the |
Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan
Item 4.Approval of an amendment to Item 5.Ratification of |
2023
To transact such other business as may properly come before our Annual Meeting or any adjournments or postponements thereof. | Time: 10:30 a.m. Eastern Daylight Time Place: Virtual format only. If you plan to participate in the virtual meeting, please see “Participation in our Annual Meeting” on page 88. Shareholders will be able to participate, vote, examine the shareholders list and submit questions (both before, and for a portion of, the meeting) from any location via the Internet. Shareholders may participate by logging in at: www.virtualshareholdermeeting.com/PJT2023. To participate you must have your 16-Digit Control Number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you elected to receive proxy materials by mail. | ||
Record Date: March 27, 2023 |
OurYour vote is important to us. Please exercise your shareholder right to vote.
By Order of the Board of Directors, has fixed
David K.F. Gillis
Corporate Secretary
April 10, 2023
Important Notice Regarding the closeAvailability of business on March 5, 2018 as the record dateProxy Materials for the determination of stockholders entitled to notice of and to vote at our Annual Meeting to be held on May 24, 2023. Our Proxy Statement, 2022 Annual Report to Shareholders and any adjournmentsother materials are available on our website at https://ir.pjtpartners.com/sec-filings/all-sec-filings. The Proxy Materials will be mailed or postponements thereof.
As permitted by the rules of the Securities and Exchange Commission, wemade available to our shareholders on or about April 10, 2023. We are sending to most of our stockholdersshareholders a Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) rather than a paper set of the Proxy Materials. By doing so, we save costs and reduce our impact on the environment. The Notice of Availability includes instructions on how to access our Proxy Materials over the Internet, as well as how to request the materials in paper form.
Your vote is important. We encourage you On or about April 10, 2023, we will mail to vote by proxy in advancemost of our shareholders the Annual Meeting, whether or not you plan to attend. The Notice of Availability includes instructions on how to vote, including by Internet. If you hold your shares through a brokerage firm, bank, broker-dealer or other similar organization, please follow their instructions.Availability.
BY ORDER OF THE BOARD OF DIRECTORS,
Salvatore Rappa
Managing Director, Corporate Counsel and
Corporate Secretary
March 16, 2018
280 Park Avenue | New York, NY 10017 | t. +1.212.364.7800 | pjtpartners.com
PROXY STATEMENT
TABLE OF CONTENTS
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Although we refer to our websitewebsites and other documents in thethis Proxy Statement, the contents of our websitesuch websites and documents are not included or incorporated by reference into thethis Proxy Statement. All references to our websitewebsites in the Proxy Statement are intended to be inactive textual references only.
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PROXY STATEMENTExecutive Summary
2018 ANNUAL MEETING OF STOCKHOLDERSThis summary highlights information from PJT Partners Inc.’s Proxy Statement for the 2023 Annual Meeting of Shareholders. You should read this entire Proxy Statement carefully before voting. Please refer to the Glossary of Terms in Appendix A for definitions of some of the terms used in this Proxy Statement.(1) Your vote is important. For more information on voting and participating in the Annual Meeting, see, “Participation in Our Annual Meeting” on page 88.
TO BE HELD ON MAY 1, 2018
Our Company
PJT Partners is a premier global advisory-focused investment bank.(2) We are built on the unique intellectual capital only diverse, collaborative world-class talent can provide. Our team draws on ever-growing expertise and experience to provide the original thinking that helps our clients navigate complexity and exceed their goals. This thinking drives the advice we provide to corporations, asset managers, funds, institutional investors, governments and others around the globe.
Matters to Be Voted on at the Annual Meeting
The Board of Directors recommends that you vote “FOR” each director nominee and “FOR” the following proposals:
> | Advisory Resolution to Approve Executive Compensation |
> | Approval of the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan |
> | Approval of an Amendment to the Amended and Restated Certificate of Incorporation to Reflect New Delaware Law Provisions Regarding Officer Exculpation |
> | Ratification of Independent Registered Public Accounting Firm |
2022 Highlights
Financials | ||
$1.03bn Total Revenues, | 19.6% GAAP Pretax Margin 21.5% Adjusted(3) Pretax Margin | $3.51 GAAP Diluted EPS $3.92 Adjusted(3) EPS |
Capital Management | ||
2.2mm Share equivalents | $223mm Cash, cash equivalents, and | $1.00 Annual dividend |
(1) | In this Proxy Statement, unless the context requires otherwise, the words “PJT Partners” refer to PJT Partners Inc. and the “company,” “we,” “us” and “our” refer to PJT Partners, together with its consolidated subsidiaries, including PJT Partners Holdings and its operating subsidiaries. |
(2) | PJT Partners Inc. is a holding company, and its only material asset is its controlling equity interest in PJT Partners Holdings LP (“PJT Partners Holdings”), a holding partnership that holds the company’s operating subsidiaries, and certain cash and cash equivalents it may hold from time to time. As the sole general partner of PJT Partners Holdings, PJT Partners Inc. operates and controls all of the business and affairs of PJT Partners Holdings and its operating subsidiaries. PJT Partners Inc.’s common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “PJT.” |
(3) | Figures are shown ‘as adjusted,’ a non-GAAP financial measure. See Appendix B, “U.S. GAAP Reconciliations” for a reconciliation of non-GAAP financial measures with comparable GAAP financial measures. |
1 | Executive Summary |
Footprint | ||
105 Total Partners, an 66 Strategic Advisory Partners, an increase of 18% YoY | 907 Company-wide headcount, | 11 Offices worldwide; |
Corporate Sustainability and Community | ||
2nd Annual Corporate Sustainability Report released | >$6.0mm Company-wide giving | >260 Charitable organizations |
Proposal 1: Election of Directors
The Board has nominated two directors, Thomas M. Ryan and K. Don Cornwell, for election as Class II directors. If elected, each Class II director will serve until the annual meeting of shareholders in 2026, or until succeeded by another qualified director who has been elected.
The Board recommends that you vote “FOR” each director nominee.
Nominees for Class II Directors Whose Terms Will Expire in 2026:
Thomas M. Ryan | Lead Independent Director, Compensation Committee Chair
Age: 70 | Director since October 2015
Thomas M. Ryan is the former Chairman and Chief Executive Officer of CVS Health Corporation, formerly known as CVS Caremark Corporation, a pharmacy healthcare provider (“CVS”). He served as Chairman of CVS from April 1999 to May 2011 and Chief Executive Officer of CVS from May 1998 to February 2011, and also served as President from May 1998 to May 2010. Mr. Ryan serves on the board of Five Below, Inc., and is an Operating Partner of Advent International. Mr. Ryan was a director of Yum! Brands, Inc. from 2002 to 2017, Reebok International Ltd. from 1998 to 2005, Bank of America Corporation from 2004 to 2010 and Vantiv, Inc. from 2012 to 2015. Mr. Ryan’s role as Chairman and Chief Executive Officer of a global pharmacy healthcare business, his extensive operations and management experience, his expertise in finance and strategic planning, as well as his public company directorship and committee experience, positions him well to serve on the Board.
K. Don Cornwell | Age: 52 | Director since January 2023
K. Don Cornwell is making this Proxy Statement availablea Co-Founder and the Chief Executive Officer of Dynasty Equity, a global sports investment firm focused on acquiring minority interests in sports franchises and other related assets and rights. Prior to its stockholdersfounding Dynasty Equity in connection with2022, Mr. Cornwell was a founding partner at PJT Partners, joining the solicitationcompany in 2015 following an 18-year career at Morgan Stanley. At Morgan Stanley, Mr. Cornwell was in the Mergers and Acquisitions Group and established a particularly focused area of proxies byexpertise in media and entertainment, specifically in sports and gaming, including serving as Head of Global Sports Investment Banking. Before he joined Morgan Stanley, Mr. Cornwell worked at McKinsey & Co. as a management consultant and in corporate development for the National Football League. He sits on the Board of Trustees of the Harlem Children’s Zone, an education and social services organization in Central Harlem; the East Harlem Tutorial Program, an after-school program for children in East Harlem; the Board of Directors for our 2018 Annual Meeting of Stockholders to be held on Tuesday, May 1, 2018 at 8:30 a.m., Eastern Time, at our corporate headquarters located at 280 Park Avenue, New York Cares, New York 10017, and any adjournment or postponement thereof (the “Annual Meeting”). You may obtain directions to our Annual Meeting by contacting our Corporate Secretary.
PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP (“PJT Partners Holdings”), a holding partnership that holds the company’s operating subsidiaries, and certain cash and cash equivalents it may hold from time to time. As sole general partner of PJT Partners Holdings, PJT Partners Inc. operates and controls all of the business and affairs of PJT Partners Holdings and its operating subsidiaries. In this Proxy Statement, unless the context requires otherwise, the words “PJT Partners” refers to PJT Partners Inc.City’s largest volunteer organization; and the “company,” “we,” “us” and “our” referVFILES Foundation, an organization with the mission to PJT Partners, together with its consolidated subsidiaries, including PJT Partners Holdings and its operating subsidiaries.
We are a global advisory-focused investment bank. Our team of senior professionals delivers a wide array of strategic advisory, restructuring and special situations and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments around the world. We offer a unique portfolio of advisory services designed to help our clients achieve their strategic objectives. We also provide, through Park Hill Group, private fund advisory and placement servicesincrease business ownership for alternative investment managers, including private equity funds, real estate funds and hedge funds. Our Class A common stock tradescreators in underrepresented communities. Mr. Cornwell served on the New York Stock Exchange (“NYSE”) under the symbol “PJT.”
The Proxy Materials will be mailed or made available to our stockholders on or about March 19, 2018. On or about March 19, 2018, we will mail to most of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) containing instructions on how to access our Proxy Statement. Below are answers to common questions stockholders may have about the Proxy Materials and the Annual Meeting.
Who can participate in our Annual Meeting?
You are entitled to participate in our Annual Meeting only if you were a stockholder of record of Class A common stock or Class B common stock as of the close of business on March 5, 2018, which we refer to in this Proxy Statement as the “Record Date,” or if you hold a valid proxy for the Annual Meeting. In order to be admitted to the Annual Meeting, you must present valid government-issued photo identification (such as a driver’s license or passport) and proof of ownership of shares of our Class A common stock or Class B common stock on the Record Date. Proof of ownership can be accomplished through the following:
We reserve the right to determine the validity of any purported proof of beneficial ownership. For the safety and security of our stockholders, we will be unable to admit you to the Annual Meeting if you do not present photo identification and proof of ownership of shares of our common stock or if you otherwise refuse to comply with our security procedures. The taking of photographs and use of cell phones, audio or video recording equipment is prohibited during the Annual Meeting. Cameras, recording devices and other electronic devices will not be permitted, and attendees may be subject to security inspections and other security precautions.
A number of stockholders may wish to speak at the Annual Meeting. TheManagement Board of Directors appreciates the opportunity to hear the viewsStanford University’s Graduate School of stockholders. In fairness to all stockholders and participants at the Annual Meeting, and in the interest ofBusiness until July 2022. He received an orderly and constructive meeting, rules of conduct will be enforced. Copies of these rules will be available at the meeting. Only stockholders or their valid proxy holders may address the meeting. Depending on the number of stockholders who wish to speak, we cannot ensure that every such stockholder will be able to do so or will be able to do so for as long as they might want to hold the floor.
What are the Proxy Materials?
Our Proxy Materials include:
If you received printed versions of these materials by mail (rather than through electronic delivery), these materials also include a Proxy Card or voting instruction form. If you received or accessed these materials through the Internet, your Proxy Card or voting instruction form are available to be filled out and executed electronically.
Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of materials?
Under rules adopted by the Securities and Exchange Commission (the “SEC”), we are furnishing Proxy Materials to most of our stockholders on the Internet, rather than mailing printed copies. By doing so, we save costs and reduce our impact on the environment. If you received a Notice of Availability by mail, you will not receive printed copies of the Proxy Materials unless you request them. Instead, the Notice of Availability will instruct you how to access and review the Proxy Materials on the Internet. If you would like printed copies of the Proxy Materials, please follow the instructions on the Notice of Availability.
What items will be voted on at the Annual Meeting?
You will be voting on the following proposals:
MBA from Stanford University’s
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Only proposals that meet the requirements of our amended and restated bylaws will be eligible for consideration at the Annual Meeting. This year, there are no stockholder proposals that meet the criteria. Therefore, stockholder proposals raised at the Annual Meeting will not be considered during the Annual Meeting. Stockholders may submit proposals and other matters for consideration at the 2019 Annual Meeting of Stockholders as described in “Stockholder Proposals and Nominations for 2019 Annual Meeting.”
How many shares may be voted at the Annual Meeting?
Holders of Class A common stock will have one vote for every share of Class A common stock that such holder owned at the close of business on the Record Date.
Shares of Class B common stock have no economic rights but entitle the holder, without regard to the number of shares of Class B common stock held, to a number of votes that is equal to the aggregate number of vested and unvested PJT Partners Holdings Class A partnership units (the “Partnership Units”) and LTIP Units (which is a class of partnership interests in PJT Partners Holdings) held by such holder on all matters presented to our stockholders other than director elections. With respect to the election of our directors, shares of Class B common stock initially entitle holders to only one vote per share, though the voting power of Class B common stock with respect to the election of our directors may be increased to up to the number of votes to which a holder is then entitled on all other matters presented to stockholders.
Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which such stockholders are entitled to vote generally, except as otherwise required by law. Our employees and certain current and former employees of The Blackstone Group L.P. (“Blackstone”) hold all issued and outstanding shares of our Class B common stock. Blackstone’s senior management has provided an irrevocable proxy to Mr. Taubman to vote their shares of Class B common stock for so long as Mr. Taubman is our Chief Executive Officer.
If you hold restricted stock units, you will not be entitled to vote the shares underlying such restricted stock units unless and until you actually receive delivery of the shares of Class A common stock underlying such units and are the holder of record of such shares.
As of March 5, 2018, the Record Date for our Annual Meeting, our share count for voting purposes set forth above was as follows:
Proposal 1: elect the two Class III director nominees identified in this Proxy Statement | Proposal 2: advisory vote on the compensation of our Named Executive Officers | Proposal 3: advisory vote on the frequency of approval of the compensation of our Named Executive Officers | Proposal 4: advisory vote to ratify the selection of Deloitte as our independent registered accounting firm for 2018 | |||||||||||||
Shares of Class A common stock | 19,158,332 | 19,158,332 | 19,158,332 | 19,158,332 | ||||||||||||
Shares of Class B common stock | 213 | 20,268,017 | 20,268,017 | 20,268,017 | ||||||||||||
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Total voting power | 19,158,545 | 39,426,349 | 39,426,349 | 39,426,349 | ||||||||||||
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What constitutes a quorum?
The holders of a majority in voting power of the issued and outstanding shares of Class A common stock and Class B common stock (which is equal to the aggregate number of vested and unvested Partnership Units and LTIP Units held by such Class B common stockholders) collectively as a single class entitled to vote, must be present in person or represented by proxy to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions are counted as present and entitled to vote for purposes of determining a quorum. Shares represented by brokernon-votes (as defined below) also are counted as present and entitled to vote for purposes of determining a quorum. However, if you hold your shares in street name and do not provide voting instructions to your bank, broker or other holder of record, under current NYSE rules, Proposals 1, 2 and 3 are considerednon-discretionary matters and a bank, broker or other holder of record will lack the authority to vote shares at his/her discretion on these proposals, and your shares will not be voted on these proposals (a “brokernon-vote”).
How many votes are required to approve each proposal and how are votes counted?
Graduate School of Business and an AB in Government from Harvard College. Mr. Cornwell’s extensive experience and expertise in investment banking and in the financial services industry, as well as his deep knowledge of PJT Partners’ business, operations and culture, and his understanding of the company’s clients, employees and other stakeholders, position him to contribute valuable acumen and insight to the Board.
ItThe PJT Partners Board of Directors is importantcomposed of highly accomplished and actively engaged individuals with diverse skills and experiences that contribute to notethe effective oversight of our company. Consistent with our commitment to diversity, equity and inclusion, the Board comprises an inclusive mix of backgrounds and perspectives from historically underrepresented groups. The Board includes two female directors, one Black director and one LGBTQ+ director. A majority of the Board — 57% — are members of groups that are historically underrepresented on public company boards:
Proposal 2: Advisory Resolution to Approve Executive Compensation
The Board recommends that you vote “FOR” the proposals to: (1) approveapproval, on an advisory basis, of the compensation of our Named Executive Officers; (2) determine whetherOfficers.
Key reasons to vote “FOR” the vote to approveapproval, on an advisory basis, of the compensation of our Named Executive Officers:
Our compensation program includes elements that are intended to ensure strong alignment between the interests of our Executive Officers will occur every one, two or three years; and (3) ratifyour shareholders:
> | Annual incentive compensation that places a strong emphasis on company-wide financial performance, with consideration given to the individual performance of each Executive Officer. |
> | An appropriate link between compensation and the creation of shareholder value through long-term equity awards. |
> | A focus on collaboration, and therefore does not include individual revenue pay-outs at any level. |
> | Consideration for each executive’s contribution to leadership and talent development. |
> | Benchmarking analysis to help us understand compensation practices of our competitors. |
Our compensation program for our Executive Officers and the selectioncompany overall also aims to be market-competitive versus our peers, in both quantum and structure to ensure that we are able to attract and retain executives and other professionals that contribute to the long-term success of the company.
3 | Executive Summary |
Proposal 3: Approval of the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan
On February 23, 2023, upon the recommendation of the Compensation Committee, the Board unanimously adopted the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), in the form attached hereto as Appendix C, subject to the approval of the shareholders at the Annual Meeting. The amendment to the Omnibus Incentive Plan includes an increase in the number of shares available under the plan by 16 million shares.
The use of equity compensation is integral to our compensation philosophy. It is a critical tool in attracting, retaining, and aligning the interests of employees and shareholders, particularly as investment in talent continues to be one of our principal capital priorities. We benefit from the fact that approximately 40% of our company is owned by our employees, creating an alignment and long-term focus that has been an important driver of our success in growing our business.
In 2019, we indicated that the plan shareholders voted on at that time would be sufficient to allow us to make equity awards in the amount we believed to be necessary for the next three to five years. If the renewed Omnibus Incentive Plan is approved by our shareholders, we believe the additional shares will be sufficient to allow us to grant equity awards for the next three to five years, based on our historical equity granting practices and our anticipated headcount growth.
The Board recommends that you vote “FOR” the approval of the Omnibus Incentive Plan.
Highlights |
Equity Compensation is Integral to Our Compensation Philosophy
ü | The use of equity compensation as part of annual incentives aligns the interests of our employees and shareholders, creates stickiness from a retention perspective and encourages a focus on long-term success. |
ü | Replacement of forfeited equity awards from prior employers is normal practice in the industry and investment in talent continues to be one of our principal capital priorities. |
ü | We believe our equity is an attractive currency and has proven to be an asset when hiring top talent to our company. |
Our Use of the Plan is Disciplined and Ensures Alignment with Shareholders
ü | Equity awards typically vest over three to five years and have a minimum vesting condition of one year. |
ü | All equity awards granted include service requirements with typical forfeiture provisions in the case of resignation. |
ü | Equity ownership guidelines for our directors and Executive Officers ensures alignment through significant personal investment in the success of the company. |
ü | Equity awards granted to our Chief Executive Officer (“CEO”) have included significant performance conditions and long-term service requirements. |
ü | Directors, partners and employees are prohibited from hedging equity holdings of the company. |
We have a Proven Track Record in Managing Dilution
ü | Our capital priorities consider the decisions made regarding equity grants in any given year. We have been proactive in offsetting any dilutive impact on the company’s share capital from our investments in talent. |
ü | Our Net Burn Rate, which is a measure of the dilutive impact of our equity issuances taking into account our repurchase activity, averages just 0.4% over the last 3 years. |
The Plan Includes a Number of Other Best Practice Design Elements
ü | Fixed maximum share limit |
ü | No “evergreen” provision |
ü | All awards are subject to clawback |
ü | No equity grants below fair market value |
4 | Executive Summary |
Shares in millions | 2020 | 2021 | 2022 | 3-Year Average |
Grants | ||||
Restricted Stock Units | 2.8 | 1.6 | 2.0 | 2.1 |
Partnership Units | 0.1 | 0.1 | 0.1 | 0.1 |
Awards Subject to Both Service and Market Conditions | 0.1 | 0.0 | 2.6 | 0.9 |
Adjustment for Forfeitures | (0.2) | (0.4) | (0.1) | (0.2) |
Net Grants | 2.8 | 1.3 | 4.6 | 2.9 |
Repurchases(1) | 2.9 | 3.2 | 2.2 | 2.8 |
Net Issuance (Net Grants – Repurchases) | 0.0 | (1.9) | 2.4 | 0.2 |
Percentage of Shares/Units Repurchased | 101% | 244% | 47% | 95% |
PJT Shares Outstanding(2) | 40.5 | 39.6 | 39.4 | 39.9 |
Burn Rate (Taking into Account Forfeitures) | 7.0% | 3.3% | 11.6% | 7.3% |
Net Burn Rate (Also Taking into Account Share/Unit Repurchases) | (0.1%) | (4.8%) | 6.1% | 0.4% |
(1) | Includes repurchases of shares of our Class A common stock, settlement of Partnership Unit exchanges with cash and employee net share settlements. |
(2) | PJT Shares Outstanding is calculated as the fully-diluted shares outstanding as described in our quarterly earnings releases (45,420,101 in 2020, 43,798,482 in 2021 and 43,599,438 in 2022), less unvested restricted stock units (4,873,620 in 2020, 4,148,889 in 2021 and 4,204,316 in 2022). |
Proposal 4: Approval of an Amendment to the Amended and Restated Certificate of Incorporation to Reflect New Delaware Law Provisions Regarding Officer Exculpation
In August 2022, the State of Delaware, which is the company’s state of incorporation, enacted legislation that enables Delaware companies to limit the liability of certain officers in limited circumstances. The new Delaware law permits exculpation for direct claims brought by shareholders for breach of an officer’s fiduciary duty of care, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the corporation itself or for derivative claims brought by shareholders on behalf of the company. The new law also would not allow officers to be exculpated for breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which an officer derived an improper personal benefit.
In light of this change in law, the Board, based on the recommendation of the Nominating/ Corporate Governance Committee, unanimously recommends that the company’s shareholders vote “FOR” an amendment (the “Amendment”) to the company’s Amended and Restated Certificate of Incorporation to add a new Article XII, which shall read in its entirety as follows:
“ARTICLE XII. Section 12.1. Limited Liability of Officers. No officer of the Corporation shall have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as an officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. Neither the amendment nor the repeal of this Article XII shall eliminate or reduce the effect thereof in respect of any state of facts existing or act or omission occurring, or any cause of action, suit or claim that, but for this Article XII, would accrue or arise, prior to such amendment or repeal.”
5 | Executive Summary |
Key reasons to vote “FOR” the approval of the Amendment:
> | The company and our shareholders expect our officers to effectively manage the company’s challenges within a complex and ever-evolving environment. Our officers are frequently called upon to make critical decisions under significant time pressure. Such skills, while essential to the management of our company, may expose our officers to substantial personal liability from litigants seeking to impose liability on the basis of hindsight and regardless of merit. Limiting this personal risk would provide comfort to and empower our officers to best exercise their business judgment in furtherance of the interests of our company and our shareholders. |
> | The Amendment strikes a balance between shareholders’ interest in accountability and their interest in the company being able to attract and retain experienced and high-quality officers to work on its behalf. Accordingly, the Board believes that the Amendment is in the best interests of the company and our shareholders. |
> | Several other states already permit corporations to eliminate or limit officer liability, and the Board believes it is appropriate for public companies in states that allow exculpation of officers to have exculpation clauses in their company charters. |
> | The Amendment more closely aligns the existing protections available to our directors with those available to our officers, enabling them to exercise their business judgment without the potential for distraction posed by the risk of personal liability. |
> | Given the narrow class and type of claims for which officers’ liability would be exculpated, the Board believes the Amendment would not negatively impact shareholder rights. |
> | The Amendment helps to clarify the application of exculpation provisions to individuals serving as both a director and an officer. |
> | To the extent the company’s peers adopt similar exculpation clauses that limit the personal liability of officers, failing to adopt the Amendment could negatively impact our recruitment and retention of exceptional officer candidates. |
> | The Amendment may reduce the company’s future insurance needs and costs. |
For these reasons, the Board recommends that you vote “FOR” the approval of the Amendment.
Proposal 5: Ratification of the Company’s Independent Registered Public Accounting Firm
The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the Firm’s independent registered public accounting firm arenon-bindingto audit the Consolidated Financial Statements of PJT Partners Inc. and advisory. However,its subsidiaries for the year ending December 31, 2023. A resolution is being presented to our shareholders requesting ratification of the appointment of Deloitte.
The Board intends to carefully considerrecommends that you vote “FOR” the resultsratification of Proposals 2 and 3 in making future compensation decisions and, if our stockholders fail to ratify the selectionappointment of Deloitte as the selection of anothercompany’s independent registered public accounting firm may be consideredfirm.
6 | Executive Summary |
Corporate Governance
Proposal 1: Election of Directors The Board has nominated two directors, Thomas M. Ryan and K. Don Cornwell, for election as Class II directors. If elected, each Class II director will serve until the annual meeting of shareholders in 2026, or until succeeded by another qualified director who has been elected. |
Board Recommendation The Board recommends that you vote “FOR” both nominees. |
7 | Corporate Governance |
This section of our Proxy Statement contains information about the Audit Committee. Even if the selection is ratified, the Audit CommitteeBoard of Directors, including our nominees, and key elements of our corporate governance. The Board places great value on strong governance controls, and we have structured our corporate governance in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be inmanner we believe closely aligns with the best interests of ourthe company and our stockholders.
How do I vote?shareholders.
The manner in which you cast your vote depends on whether you are a stockholder of record or you are a beneficial owner of shares held in “street name.”
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are a stockholder of record.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are a beneficial owner of shares held in “street name.” The organization holding your account is considered the stockholder of record. As a beneficial owner, younominees have the rightconsented to direct the organization holding your account on how to vote the shares you hold in your account.
Voting by Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares of common stock in your own name as a stockholder of record, you may instruct the proxy holdersbeing named in the Proxy Card how to vote your shares of common stock in one of the following ways:
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Voting by Proxy for Shares Registered in Street Name. If your shares of common stock are held in street name, you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares of common stock voted.
Voting in Person at the Annual Meeting. If you are a Class A or Class B common stockholder of record and attend the Annual Meeting, you may vote in person at the meeting. If your shares of common stock are held in street name and you wish to vote in person at the meeting, you will need to obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of common stock of record.
Can I revoke or change my vote after submitting a proxy?
Street name stockholders who wish to revoke or change their votes should contact the organization that holds their shares. Stockholders of record may revoke or change their proxy by voting a new proxy pursuant to the voting methods set forth above, by providing a written notice of revocation to the Corporate Secretary or by attending and voting at the Annual Meeting.
Is my vote confidential?
We keep all the proxies, ballots and voting tabulations confidential as a matter of practice. We only let our Inspector of Election, Broadridge Financial Solutions, Inc. (“Broadridge”), examine these documents. Occasionally, stockholders provide written comments on their Proxy Card, which are then forwarded to us by Broadridge.
Who is paying for this proxy solicitation?
The company is paying the costs of the solicitation of proxies. Members of our Board of Directors and officers and employees may solicit proxies by mail, telephone, fax, email or in person. We will not pay directors, officers or employees any extra amounts for soliciting proxies. We may, upon request, reimburse brokerage firms, banks or similar entities representing street name holders for their expenses in forwarding Proxy Materials to their customers who are street name holders and obtaining their voting instructions.
No arrangements or contracts have been made or entered into with any solicitors as of the date of this Proxy Statement although we reserve the rightand to engage solicitorsserve if we deem them necessary. If done, such solicitations mayelected. The Board has no reason to believe that any nominee will be made by mail, telephone, facsimile, emailunavailable or personal interviews.
Will the Annual Meeting be webcast?
Our Annual Meeting willunable to serve as a director, but if for any reason any nominee should not be webcast.
Where can I find voting results?
Weavailable or able to serve, the shares represented by all valid proxies will file a Current Report onForm 8-Kbe voted by the person or persons acting under said proxy in accordance with the SEC including the final voting results from the Annual Meeting within four business daysrecommendation of the Annual Meeting.Board.
How do I inspect the list of stockholders of record?
A list of our stockholders entitled to vote at the Annual Meeting will be available at our Annual Meeting and for the ten days prior to our Annual Meeting, between the hours of 8:45 a.m. and 4:30 p.m., Eastern Time, by written request to the Corporate Secretary.
Say on Pay and Frequency of Say on Pay
As of December 31, 2017, we no longer qualified as an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified
by the Jumpstart Our Business Startups Act of 2012. As a result, Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires that we provide stockholders with the opportunity to vote, on anon-binding advisory basis, (1) to approve the compensation of our Named Executive Officers and (2) to determine whether the vote to approve the compensation of our Named Executive Officers will occur every one, two or three years, described in more detail under Proposals 2 and 3 in this Proxy Statement.
What other information should I review before voting?
For your review, we make available free of charge on or through our website at www.pjtpartners.com under the “Investor Relations/Financial Reports” section, our annual reports on Form10-K, quarterly reports on Form10-Q, current reports on Form8-K, and amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.Hard copies may be obtained free of charge by contacting Investor Relations at PJT Partners Inc., 280 Park Avenue, New York, New York 10017 or by calling (212)364-7800. Copies may also be accessed electronically by means of the SEC’s website on the Internet at www.sec.gov. Neither our Annual Report on Form10-K for the year ended December 31, 2017 nor the 2017 Annual Report shall constitute a part of the proxy solicitation materials.
How can I contact our Corporate Secretary?
In several sections of this Proxy Statement, we suggest that you should contact our Corporate Secretary to follow up on various items. You can reach our Corporate Secretary by writing to the Corporate Secretary at PJT Partners Inc., 280 Park Avenue, New York, New York 10017 or by calling(212) 364-7800.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 1, 2018
The Notice of Annual Meeting, Proxy Statement, Form of Proxy and 2017 Annual Report to Stockholders are also available at www.proxyvote.com.
PROPOSAL 1—ELECTION OF DIRECTORS
Information Concerning the Nominees and Directors
Our amended and restated certificate of incorporation provides thatMeet the Board of Directors will consist of that number of directors determined from time to time by the Board of Directors.
The Board consists of Directorsseven directors, all of whom are independent with the exception of our Chairman and CEO and K. Don Cornwell. The Board is classified into three classes, designated Class I, Class II and Class III. The term of office of the members of one class of directors expires each year in rotation so that the members of one class generally are elected at each annual meeting to serve for full three-year terms or until their successors are elected and qualified, or until such director’s death, resignation or retirement. Each class consists, as nearly as possible, ofone-third of the total number of directors constituting the entire Board of Directors.Board.
The Board is comprised of Directors has selected James Costosactively engaged individuals with diverse skills, experiences and Kenneth C. Whitney for election as Class III directors. If elected, each Class III director will serve untilbackgrounds that contribute to the annual meeting of stockholders in 2021, or until succeeded by another qualified director who has been elected.
Set forth below are the nameseffective oversight of our company. The Board believes these varied qualifications help to inform and oversee decisions regarding the company’s long-term strategic growth. Under the guidance of the Nominating/Corporate Governance Committee, the Board reviews the structure of the Board, its committees and the individual directors their agesand, as part of March 5, 2018, their positionsthat process, considers, among other things, issues of structure, leadership and offices withoversight needs and skills to guide the company in executing its long-term strategic objectives.
Nominees for Class II Directors Whose Terms Will Expire in 2026
Thomas M. Ryan | Lead Independent Director and Compensation Committee Chair |
Age: 70 | Director since October 2015
Professional Highlights
Thomas M. Ryan is the monthformer Chairman and yearChief Executive Officer of CVS Health Corporation, formerly known as CVS Caremark Corporation, a pharmacy healthcare provider (“CVS”). He served as Chairman of CVS from April 1999 to May 2011 and Chief Executive Officer of CVS from May 1998 to February 2011, and also served as President from May 1998 to May 2010. Mr. Ryan serves on the nominees first became directorsboard of ourFive Below, Inc., and is an Operating Partner of Advent International. Mr. Ryan was a director of Yum! Brands, Inc. from 2002 to 2017, Reebok International Ltd. from 1998 to 2005, Bank of America Corporation from 2004 to 2010 and Vantiv, Inc. from 2012 to 2015.
Skills & Qualifications
Mr. Ryan’s role as Chairman and Chief Executive Officer of a global pharmacy healthcare business, his extensive operations and management experience, his expertise in finance and strategic planning, as well as his public company directorship and their biographical information.
committee experience, positions him well to serve on the Board.
K. Don Cornwell | Age: 52 | Director since January 2023
Professional Highlights
K. Don Cornwell is a Co-Founder and the Chief Executive Officer of Dynasty Equity, a global sports investment firm focused on acquiring minority interests in sports franchises and other related assets and rights. Prior to founding Dynasty Equity in 2022, Mr. Cornwell was a founding partner at PJT Partners, joining the company in 2015 following an 18-year career at Morgan Stanley. At Morgan Stanley, Mr. Cornwell was in the Mergers and Acquisitions Group and established a particularly focused area of expertise in media and entertainment, specifically in sports and gaming. Prior to leaving Morgan Stanley, he served as Head of Global Sports Investment Banking. Before he joined Morgan Stanley, Mr. Cornwell worked at McKinsey & Co. as a management consultant and in corporate development for the National Football League. He sits on the Board of Trustees of the Harlem Children’s
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Zone, an education and social services organization in Central Harlem; the East Harlem Tutorial Program, an after-school program for children in East Harlem; the Board of Directors of New York Cares, New York City’s largest volunteer organization; and the VFILES Foundation, an organization with the mission to increase business ownership for creators in underrepresented communities. Mr. Cornwell served on the Management Board of Stanford University’s Graduate School of Business until July 2022. He received an MBA from Stanford University’s Graduate School of Business and an AB in Government from Harvard College.
Skills & Qualifications
Mr. Cornwell’s extensive experience and expertise in investment banking and in the financial services industry, as well as his deep knowledge of PJT Partners’ business, operations and culture, and his understanding of the company’s clients, employees and other stakeholders, position him to contribute valuable acumen and insight to the Board.
Continuing Class I Directors Whose Terms Will Expire in 2025
Paul J. Taubman | Chairman and Chief Executive Officer | Age: 62 | Director since October 2015
Professional Highlights
Paul J. Taubman has been our Chairman and CEO since 2015. Prior to founding PJT Partners, Mr. Taubman spent nearly 30 years at Morgan Stanley where he served in a series of increasingly senior positions, most recently as executive vice president and Co-President of Institutional Securities, with responsibility for all of the firm’s investment banking, capital markets, and sales and trading businesses. Mr. Taubman serves in a leadership role on numerous philanthropic efforts including Board President of New York Cares, New York City’s largest volunteer organization; Trustee and executive committee member of Cold Spring Harbor Laboratory; Board Member of the Partnership for New York City; Advisory Council member at the Stanford Graduate School of Business; National Advisory Board member of Youth, Inc.; and Trustee of the Foundation for Empowering Citizens with Autism. Mr. Taubman received a B.S. in Economics from the Wharton School of the University of Pennsylvania and an M.B.A. from Stanford University’s Graduate School of Business.
Skills & Qualifications
Mr. Taubman’s extensive experience gained from various senior leadership roles in investment banking and the financial services industry, as well as his many years of providing strategic advice to management teams and boards around the world, operating in a wide array of industries bring valuable knowledge and expertise to the Board. In addition, Mr. Taubman’s role as our Chief Executive Officer brings management perspective to Board deliberations and provides critical information about the status of our day-to-day operations.
Emily K. Rafferty | Nominating / Corporate Governance Committee Chair |
Age: 74 | Director since October 2015
Professional Highlights
Emily K. Rafferty is President Emerita of The Metropolitan Museum of Art. She was elected President of the Museum in 2005 and served in that role until her retirement in March 2015. She had been a member of the Museum’s staff since 1976 serving in various roles in development, membership and external affairs until becoming President and Chief Administrative Officer in 2005, overseeing some 2,000 full- and part-time employees and volunteers. Ms. Rafferty’s global experience in some 50 countries on behalf of the Museum included interactions and negotiations with many senior world leaders. She is a Vice Chair of the National September 11 Memorial & Museum, a Board member of Carnegie Hall, the Hospital for Special Surgery, the Asia Society, Civitella Ranieri, an Artist Residency Program in Italy, the Hispanic Society Museum and Library, and the Association of Art Museum Curators. She is also a Board member of Koç Holdings, Istanbul from 2018 to the present; a member of the Advisory Council of the American University of Beirut and the Council on Foreign Relations. Ms. Rafferty is principal of Emily K. Rafferty & Associates, a consulting resource for non-profit institutions. Ms. Rafferty served as a Board member of the New York Federal Reserve Bank from 2011 to 2017 (Chair, 2012 to 2016), Senior Adviser for Heritage Protection and Conservation for UNESCO from 2015 to 2017 and was Chair of NYC & Company (the city’s tourism, marketing
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Nomineesand partnering organization) from 2008 to 2020 and continues to serve as an ex-officio board and executive committee member. She previously consulted for Russell Reynolds Associates in the firm’s non-profit sector and The Shed, a NYC performing arts center.
Skills & Qualifications
Ms. Rafferty’s breadth and depth of expertise and experience in human capital management, operations and senior executive leadership, her global expertise as well as her understanding of monetary policy and regulation of financial institutions, provide valuable knowledge and insight to the Board.
Continuing Class III Directors Whose Terms Will Expire in 20212024
James Costos | Age: 60 | Director since February 2017
Professional Highlights
James Costosserved as the U.S. Ambassador to the Kingdom of Spain and Principality of Andorra from August 2013 to January 2017. Prior to his appointment,Mr. Costos currently serves as president of Secuoya Studios, the TV and film content production arm of Secuoya Group. Previously, Mr. Costos was Vice President of Global Licensing and Retail forat Home Box Office (“HBO”) from 2007 to 2013. In this role, he was responsible for leading HBO’s newly created global licensing, retail and marketing division, which he established to further expand HBO’s domestic and international interest. He has also served as President and CEO of Eight Cylinders, Head of Promotions and Consumer Productsan executive at Revolution Studios and held senior leadership roles for more than a decade at Tod’s S.p.A. and Hermès of Paris and Tod’s S.p.A.Paris. Mr. Costos previously servedserves as an advisor to FC Barcelona, is an advisor and senior managing director at Dentons, in their Global Venture Technology group, and sits on the boardBoard of directorsDirectors of the Humane Society of the United States, the country’s largest animal protection organization.Grifols S.A. He is also a passionate supporter of several cultural and humanitarian organizations, including the Santa MonicaReina Sofia Museum and is on the Board of Art andDirectors of the Human Rights Campaign.Campaign, the largest LGBTQ+ advocacy and political lobbying organization in the United States. Mr. Costos earned his B.A. in Political Science from the University of Massachusetts.
Skills & Qualifications
Mr. Costos’s international government relations and policy experience, international marketing, operations, technology and executive leadership experience positions him well to serve on the Board. His strong international experience brings a geographically diverse perspective to the oversight of our multi-national business operations.
Grace R. Skaugen | Age: 69 | Director since July 2020
Professional Highlights
Grace Reksten Skaugen, a Norwegian national, has extensive experience working with a broad array of European companies. She previously served as a senior advisor to Deutsche Bank (2007-2014) and HSBC (2014-2019). In 2009, Ms. Skaugen co-founded the Norwegian Institute of Directors, where she still serves on its board. From 2012 to 2015, she was deputy chair of the Norwegian oil company Statoil (now Equinor) and served on its board for 13 years. Ms. Skaugen has served as the deputy chair and chair of the Compensation Committee at Orkla ASA and has been a board member, and member of the Compensation Committee and the Sustainability Committee, at Lundin Energy AB. Today, she chairs Euronav NV (member of the Compensation Committee, the Sustainability Committee and the Corporate Governance and Nomination Committee). She also chairs Orrön Energy AB (member of the Compensation Committee). She is a board member of Investor AB (member of the Audit and Risk Committee) and Panoro Energy (member of the Compensation and Sustainability Committees). Ms. Skaugen is also a council member and trustee of the International Institute for Strategic Studies (IISS) in London. She has previous investment banking experience, having worked at the Nordic bank SEB, where she advised companies within the energy, transportation and technology sectors. Ms. Skaugen started her career as a postdoctoral researcher at Columbia Radiation Laboratory in New York. She is a physicist by education and holds a PhD in laser physics from Imperial College in London. She also holds an M.B.A. from the Norwegian School of Management, BI.
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Skills & Qualifications
Ms. Skaugen’s experience and expertise in the international financial services industry, as well as her extensive corporate governance and board experience, provide unique insights into our business and add industry-specific expertise and knowledge to the Board. Her strong international experience brings a geographically diverse perspective to the oversight of our multi-national business operations.
Kenneth C. Whitney | Audit Committee Chair | Age: 65 | Director since October 2015
Professional Highlights
Kenneth C. Whitney has managed a private family investment office since April 2013, focused onstart-up businesses and entertainment projects. Since his retirement from The Blackstone Group L.P.Inc. in April 2013 until September 2015, he was also a Senior Advisor to Blackstone. Mr. Whitney was previously a Senior Managing Director and Head of Blackstone’s Investor Relations & Business Development Group from 1998 to April 2013. After joining Blackstone in 1988, Mr. Whitney focused his efforts inon raising capital for Blackstone’s private investment funds and the establishment of Blackstone affiliates in the alternative investment area. Mr. Whitney began his career at Coopers & Lybrand in 1980, where he spent time in the firm’s accounting and audit areas as well as in the tax and mergers and acquisitions areas. Mr. Whitney is a Tony Award-winning producer, and currently sits on the Board of Trustees for The First Tee and the University of Delaware, where he received a B.S. in Accounting.
Skills & Qualifications
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Continuing Class I
Experience and Skills of Our Directors Whose Terms Will Expireand Nominees
All of our directors and nominees are highly accomplished and experienced professionals, with fundamental attributes of senior leadership including integrity, honesty, intellectual curiosity, good judgment, strong work ethic, strategic thinking, vision, commitment to mission, excellent communication and collaboration skills, and the ability and willingness to challenge management constructively when needed. In addition to these and other core attributes, our directors and nominees possess a variety of other skills and experience necessary to carry out the Board’s responsibilities. The presentation below is a high-level summary of those skills and experience found on the Board, with information provided by the directors and nominees:
Banking & Financial Services | Breadth and depth of experience in the company’s business and industry |
Executive Experience | Experience in senior management roles, including serving as a CEO or senior executive, within a complex organization |
Financial | Expertise in overseeing the presentation of financial results as well as internal controls |
Human Capital Management | Experience in management of human resources and employee compensation |
International | Broad leadership experience within global companies and understanding of international markets |
IT & | Expertise or experience in information technology, including understanding the importance of maintaining the trust of our clients through the protection of their information |
Legal & | Experience in legal and regulatory affairs, and regulated industries, including as part of a business and/or through positions with government and/or regulatory bodies |
Marketing & | Experience overseeing internal and external communications and engagement with stakeholders |
Public Company Experience | Previous or current service as a director of other publicly traded companies |
Risk Management | Experience overseeing complex risk management matters |
Strategic Planning | Experience driving the strategic direction and growth of an organization |
ESG/Sustainability | Expertise or experience in Environmental, Social and Governance (“ESG”) and sustainability matters |
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Professional Skills | Cornwell | Costos | Rafferty | Ryan | Skaugen | Taubman | Whitney |
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ESG/ |
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Diversity of the Board
Consistent with our commitment to diversity, equity and inclusion, the Board comprises an inclusive mix of backgrounds and perspectives from historically underrepresented groups. The Board includes two female directors, one Black director and one LGBTQ+ director. The Board also includes a mix of tenures, benefiting from the experience of longer-term directors and the fresh perspectives of more recently appointed directors. Below is more detailed information about the Board’s diversity, with information provided by the directors and nominees:
Background | Cornwell | Costos | Rafferty | Ryan | Skaugen | Taubman | Whitney |
Black or African American | |||||||
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Female | |||||||
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Age | 52 | 60 | 74 | 70 | 69 | 62 | 65 |
Tenure | —(1) | 6 | 8 | 8 | 3 | 8 | 8 |
(1) Mr. Cornwell was appointed to the Board effective as of January 20, 2023.
Board Diversity at a Glance |
A majority of the Board — 57%— are members of groups that are historically underrepresented on public company boards. |
Additional Board Characteristics | ||
71% Independent | 64 Average Age | 6 years Average Tenure |
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Guiding Principles, Corporate Governance Practices and Policies of the Board
The Board is committed to corporate governance that serves the best interests of our company and shareholders, and to active engagement with our shareholders throughout the year. The following summarizes certain highlights of the Board’s guiding principles, corporate governance practices and policies:
Breadth of Skills | From the inception of our company, we have sought to ensure that each of our directors embodied a level of experience and expertise that was outsized relative to an early-stage company to ensure immediate and effective implementation of our company’s long-term strategic goals and to provide oversight of our company’s risk profile and strategic goals. The Board is committed to the ongoing evaluation of its composition, including the skills and expertise of each director as well as the diversity of our directors and how their collective skills align with our evolving business strategy. |
Commitment to Diversity | The Board believes that fostering an inclusive culture — which welcomes differing perspectives, backgrounds and beliefs — enables us to provide the best advice and insights to our clients. As such, diversity and the inclusion of historically underrepresented groups are important considerations in the composition of the Board. |
Independent & Engaged Board | Five of our seven current directors (71%) are independent, with all Board committees comprised entirely of independent directors. During 2022, each director then serving on the Board attended at least 75% of all Board meetings and meetings of each Board committee on which they served. |
Strong Lead Independent Director | The Board’s Lead Independent Director facilitates independent oversight of management. Our Lead Independent Director is responsible for coordinating the efforts of the non-management directors to ensure that objective judgment is brought to bear on important issues involving the management of the company, including the performance of senior management. See “Board Leadership Structure —Lead Independent Director” below. |
Shareholder Engagement and Responsiveness | As part of our annual shareholder engagement program, we contact many of our largest shareholders to offer meetings to discuss a range of topics related to the company’s strategy, governance profile, executive compensation practices, corporate sustainability, human capital management and other matters. A thematic summary of recent investor conversations is included under the section “Shareholder Engagement and Responsiveness” on page 22. |
Annual | The Board conducts a self-evaluation annually to determine whether it, its committees and its individual members are functioning effectively and whether the Board possesses the appropriate expertise and diversity. Each committee of the Board also conducts a self-evaluation annually and reports the results to the Board. The Board, acting through the Nominating/Corporate Governance Committee, monitors the mix of specific experience, qualifications, skills and diversity of its current directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the company’s business and structure. |
Open Channels of Communication Between the Board and Our Company | The Board maintains open channels of communication across our company. Our directors engage and spend time with our partners and employees throughout the year in a variety of forums. |
Minimum Equity Ownership Guidelines | We have minimum equity ownership guidelines for our directors that require significant ownership of our common stock. Our directors are required to hold equity in our company with a market value equal to or greater than three times their annual retainer. All of our directors are or are expected to be within the time ascribed in our ownership guidelines, in compliance with our Minimum Equity Ownership Guidelines. |
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Board Leadership Structure
Chairman of the Board
The Board understands there is no single, generally accepted approach to providing board leadership and that given the dynamic and competitive environment in 2019
Paul J. Taubman is our Chairman and Chief Executive Officer. Prior to founding PJT Partners,which we operate, the appropriate leadership may vary as circumstances warrant. Our Certificate of Incorporation provides that Mr. Taubman, spent almost 30 years at Morgan Stanley in a series of increasingly significant leadership positions includingCo-President of Institutional Securities. After retiring from Morgan Stanley in 2012,to the extent that he served in an independent capacity to advise companies on a number of significant transactions before starting PJT Partners. Mr. Taubman is involved in numerous philanthropic activities including servingserves as Board President of New York Cares, a Trusteeour CEO and Executive Committee member of Cold Spring Harbor Laboratory, a National Advisory Board member of Youth INC., and a trustee of the Foundation for Educating Children with Autism. Mr. Taubman received a B.S. in Economics from the Wharton School of the University of Pennsylvania and an M.B.A. from Stanford University’s Graduate School of Business.
Emily K. Rafferty is President Emerita of The Metropolitan Museum of Art. She was elected President of the Museum in 2005 and served in that role until her retirement in March 2015. She had beenas a member of the Museum’s staff since 1976 serving in various roles in development, membership and external affairs until becoming President and Chief Administrative Officer in 2005, overseeing some 2,300 full- and part-time employees. Ms. Rafferty’s global experience in some 50 countries on behalf of the Museum included interactions and negotiations with many senior world leaders. Ms. Rafferty served as a Board, member of the New York Federal Reserve Bank from 2011 to 2017 (Chair, 2012 to 2016), and Senior Adviser for Heritage Protection and Conservation for UNESCO from 2015 to 2017. She continues towill serve as Chair of NYC & Company (the city’s tourism, marketing and partnering organization) and Board member of the National September 11 Memorial & Museum. She consults for many organizations, including Russell Reynolds Associates in the firm’s nonprofit practice and The Shed, a performing arts center under construction in Hudson Yards. She is an Advisory Director to Carnegie Hall, a member of the Advisory Council of the American University of Beirut, a member of the Economic Club and the Council on Foreign Relations.
Continuing Class II Directors Whose Terms Will Expire in 2020
Dennis S. Hersch is President of N.A. Property, Inc., through which he has acted as a business advisor to Mr. and Mrs. Leslie H. Wexner since February 2008. He was a Managing Director of J.P. Morgan Securities Inc., an investment bank, from December 2005 through January 2008, where he served as the Global Chairman of its Mergers & Acquisitions Department. Mr. Hersch was a partner of Davis Polk & Wardwell LLP, a New York law firm, from 1978 until December 2005. Mr. Hersch has served as a director of L Brands, Inc. and a member of the Finance Committee since 2006, and was a director and Chairman of the NominatingBoard. Further, the Board currently believes it is in our company’s best interests to have Mr. Taubman serve as Chairman of the Board as well as our CEO. The Board believes combining these roles promotes effective leadership and provides the clear focus needed to execute our business strategy and objectives.
Lead Independent Director
Another important part of the Board’s leadership structure is the robust role of the Lead Independent Director. The Board has appointed Mr. Ryan as its Lead Independent Director and in this role, Mr. Ryan helps coordinate the efforts of the non-management directors to ensure that objective judgment is brought to bear on important issues involving the management of the company, including the performance of senior management. The authority and responsibility of our Lead Independent Director role is summarized in the following presentation:
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Strong Lead Independent Director
The Lead Independent Director:
Presides over all meetings of the Board at which the Chairman is not present, including any executive sessions of the independent directors or the non-management directors | |
Provides leadership and serves as temporary Chairman in the event of the inability of the Chairman to fulfill his role due to crisis or other event or circumstance that would make leadership by existing management inappropriate or ineffective, in which case the Lead Independent Director shall have the authority to convene meetings of the full Board or management | |
Assists in scheduling Board meetings and approves meeting schedules to ensure that there is sufficient time for discussion of all agenda items | |
Collaborates with the CEO in determining the need for special meetings of the Board | |
Collaborates with the CEO on Board meeting agendas and approves such agendas | |
Communicates to the CEO, together with the Chairman of the Compensation Committee (if the Lead Independent Director and the Chairman of the Compensation Committee are not the same person), the results of the Board’s evaluation of CEO performance | |
Coordinates Chairman and CEO succession planning | |
Confers with the Chairman and CEO and senior management on the overall strategy of the company | |
Is available for consultation and direct communication if requested by major shareholders | |
Acts as the liaison between the independent or non-management directors and the Chairman, as appropriate | |
Calls meetings of the independent or non-management directors when necessary and appropriate | |
Provides leadership, in conjunction with the Chairman, in the Board evaluation process |
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Board Committees
The Board has three standing committees: an Audit Committee; a Compensation Committee; and a Nominating/Corporate Governance Committee. The current charters for each of these committees are available on our corporate website at www.pjtpartners.com on the “Investor Relations/Governance” page. Further, we will provide copies of these charters without charge to any shareholder upon written request. Requests for copies should be addressed to our Corporate Secretary. The Board also may create additional committees for such purposes as the Board may determine.
Board Committee Membership at a Glance
Audit Committee | Compensation Committee | Nominating/ Corporate Governance Committee | |
K. Don Cornwell (Non-Independent) | |||
James Costos (Independent) | |||
Emily K. Rafferty (Independent) | |||
Thomas M. Ryan (Independent) | |||
Grace R. Skaugen (Independent) | |||
Paul J. Taubman (Chairman & CEO) | |||
Kenneth C. Whitney (Independent) |
Committee Chair | Committee Member |
Audit Committee
Our Audit Committee consists of Mr. Whitney (Chair), Mr. Costos and Ms. Skaugen, each of whom is “independent” and “financially literate” as such terms are defined by the applicable rules of the NYSE. The Board has determined that Mr. Whitney, Mr. Costos and Ms. Skaugen possess accounting or related financial management expertise within the meaning of the NYSE listing standards and that each of Mr. Whitney, Mr. Costos and Ms. Skaugen qualifies as an “audit committee financial expert” as defined under the applicable Securities and Exchange Commission (“SEC”) rules.
The Audit Committee assists the Board in fulfilling its responsibility relating to the oversight of:
(1) | the quality and integrity of our financial statements; |
(2) | our compliance with legal and regulatory requirements; |
(3) | our independent registered public accounting firm’s qualifications and independence; and |
(4) | the performance of our internal audit function and independent registered public accounting firm. |
Additional information regarding the functions performed by our Audit Committee is set forth in the “Report of the Audit Committee” included in this Proxy Statement.
Compensation Committee
Our Compensation Committee consists of Mr. Ryan (Chair) and Ms. Rafferty, each of whom is “independent” as defined by the applicable rules of the NYSE and is a “non-employee director” as defined by the applicable rules and regulations of the SEC. The Compensation Committee discharges the responsibilities of the Board relating to the oversight of our compensation programs and compensation of our executives, including oversight of the company’s human capital management.
The Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the Compensation Committee has retained Willis Towers Watson & Co. (“Willis Towers Watson”) as its independent outside compensation consultant primarily to assist in analyzing the competitiveness of the company’s executive compensation as well as to provide expertise and advice on various matters brought before the Compensation Committee. On February 22, 2023, the Compensation Committee considered the independence of Willis Towers Watson and determined that its work did not raise any conflict of interest.
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Nominating/Corporate Governance Committee
Our Nominating/Corporate Governance Committee consists of Clearwire Corporation from November 2008 until June 2013.
Thomas M. Ryan is the former ChairmanMs. Rafferty (Chair), Mr. Costos and Chief Executive Officer of CVS Health Corporation, formerly known as CVS Caremark Corporation, a pharmacy healthcare provider. He served as Chairman from April 1999 to May 2011. He was Chief Executive Officer of CVS from May 1998 to February 2011 and also served as President from May 1998 to May 2010. Mr. Ryan, serves oneach of whom is “independent” as such term is defined by the board of Five Below, Inc., and is an Operating Partner of Advent International. Mr. Ryan was a director of Yum! Brands, Inc. from 2002 to 2017, Reebok International Ltd. from 1998 to 2005, Bank of America Corporation from 2004 to 2010 and Vantiv, Inc. from 2012 to 2015.
Qualificationsapplicable rules of the NomineesNYSE. The Nominating/Corporate Governance Committee assists the Board in fulfilling its responsibility relating to corporate governance by:
(1) | identifying individuals qualified to become directors and recommending that the Board select the candidates for all directorships to be filled by the Board or by the shareholders; |
(2) | recommending directors to serve on committees and evaluating the operation and performance of the committees; |
(3) | developing and recommending to the Board the content of our Corporate Governance Guidelines and Code of Business Conduct and Ethics; |
(4) | overseeing the company’s ESG strategy; and |
(5) | otherwise taking a leadership role in shaping our corporate governance. |
Director Recruitment
The Board monitors the mix of specific experience, qualifications and Directorsskills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the company’s business and structure. While the Board does not have a formal diversity policy, the Board believes that fostering an inclusive culture, which welcomes differing perspectives, backgrounds and beliefs, enables us to provide the best advice and insights to our clients.
The Nominating/Corporate Governance Committee is responsible for reviewing the qualifications of potential director candidates and recommending to the Board of Directors those
candidates to be nominated for election to the board.Board. When considering director candidates, the Nominating/Corporate Governance Committee will seekseeks individuals with backgrounds and qualities that, when combined with those of the company’s incumbent directors, provide a blend of skills and experience to further enhance the effectiveness of the Board of Directors.Board. More specifically, the Nominating/Corporate Governance Committee considers (a) individual qualifications, including relevant career experience, strength of character, mature judgment, familiarity with the company’s business and industry, independence of thought and an ability to work collegially and (b) all other factors it considers appropriate, which may include age, diversity of background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations, corporate governance background, financial and accounting background, executive compensation background and the size, composition and combined expertise of the existing Board of Directors. The Board of Directors monitors the mix of specific experience, qualifications and skills of its directors in order to assure that the Board of Directors, as a whole, has the necessary tools to perform its oversight function effectively in light of the company’s business and structure. Although we have no formal policy regarding board diversity, the Board of Directors believes that diversity is an important component of a board, which includes such factors as background, skills, experience, expertise, gender, race and culture. Further, the Board of Directors does not discriminate on the basis of race, color, national origin, gender, religion, disability or sexual preference in selecting director candidates.considers:
When considering whether directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the company’s business and structure, the Nominating/Corporate Governance Committee and the Board of Directors focused primarily on the information discussed in each of the directors’ individual biographies set forth above.
In particular, with regard to Mr. Taubman, the Board of Directors considered his knowledge of and extensive experience in various senior leadership roles in investment banking and the financial services industry, which provide our Board of Directors valuable industry-specific knowledge and expertise. In addition, Mr. Taubman’s role as our Chief Executive Officer brings management perspective to board deliberations and provides valuable information about the status of ourday-to-day operations. With regard to Mr. Costos, the Board of Directors considered Mr. Costos’s broad and international marketing, operating and management experience, which positions him well to serve on our Board of Directors. With regard to Mr. Hersch, the Board of Directors considered his knowledge of and experience in investment banking and the financial services industry, which gives the Board of Directors valuable industry-specific knowledge and expertise on these and other matters. In addition, Mr. Hersch brings to our Board of Directors legal and financial expertise, as well as considerable experience with corporate governance matters, strategic issues and corporate transactions. With regard to Ms. Rafferty, the Board of Directors considered her operations and management experience, in addition to her understanding of monetary policy and regulation of financial institutions, which provide valuable knowledge and insight to our Board of Directors. With regard to Mr. Ryan, the Board of Directors considered his extensive operating and management experience, including as chief executive officer of a global pharmacy healthcare business, as well as his expertise in finance, strategic planning and his public company directorship and committee experience, which positions him well to serve on our Board of Directors. With regard to Mr. Whitney, the Board of Directors considered his knowledge of and experience in the private equity and financial services industry, as well as his extensive financial, accounting, operating and management experience, which provide unique insights on our business and add industry-specific expertise and knowledge to our Board of Directors.
(1) | Individual qualifications, including: |
> | Relevant career experience |
> | Strength of character |
> | Mature judgment |
> | Familiarity with the company’s business and industry |
> | Independence of thought |
> | Ability to work collegially |
> | Corporate governance background |
> | Financial and accounting background |
> | Executive compensation background |
(2) | All other factors the Nominating/Corporate Governance Committee considers appropriate, including: |
> | Size, composition and combined expertise of the existing Board |
> | Board diversity |
> | Existing commitments to other businesses |
> | Potential conflicts of interest with other pursuits |
> | Legal considerations |
When vacancies on the Board of Directors exist or are expected, or a need for a particular expertise has been identified, the Nominating/Corporate Governance Committee may seek recommendations for director candidates from current directors and management and may also engage a search firm to assist in identifying director candidates. In the case of Mr. Cornwell, who was appointed to the Board effective as of January 20, 2023, he was recommended to the Nominating/Corporate Governance Committee as a director candidate by our Named Executive Officers.
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The Nominating/Corporate Governance Committee will also consider properly submitted stockholdershareholder recommendations for director candidates under the same procedure used for considering director candidates recommended by current directors and management. StockholderShareholder recommendations for director candidates should include the candidate’s name and specific qualifications to serve on the Board, of Directors, and the recommending stockholdershareholder should also submit evidence of such stockholder’sshareholder’s ownership of shares of our common stock, including the number of shares owned and the length of time of such ownership. Recommendations should be addressed to the Corporate Secretary. In addition, any stockholdershareholder who wishes to submit director nominations must satisfy the notification, timeliness, consent and information requirements set forth in our Amended and Restated Bylaws. See “Stockholder“Shareholder Proposals and Nominations for 2019our 2024 Annual Meeting.”Meeting” on page 86 below.
Risk Management
Our risk management framework is designed to instill a culture of openness and transparency. We have a complementary array of policies, procedures and processes to identify, assess, monitor and manage the risks inherent in our business activities, supported by the work of committees at both the management level and the Board of Directors Recommendationlevel. This framework is reasonably designed to identify important risks and communicate them to senior management and, where appropriate, to the Board.
The Board’s Role in Risk Oversight
The proxies solicited hereby, unless directedBoard understands the importance of effective risk oversight as fundamental to both the success of our company and its obligation to our shareholders. While our management is responsible for the day-to-day management of risk, the Board, along with senior management, is responsible for promoting an appropriate culture of risk management within the company and for overseeing our aggregate risk profile and monitoring how we address specific risks. Throughout the year, the Board and each of its committees dedicate a portion of their time to review and discuss specific risk topics.
The company’s management team regularly reports to the contrary therein,Board the significant risks we face, highlighting any new risks that may have arisen since they last met. In addition, our directors have the opportunity to meet routinely with members of senior management in connection with their consideration of matters submitted for the approval of the Board and the risks associated with such matters. On a periodic basis, members of senior management report on our top enterprise risks and the steps management has taken or will be voted “take to mitigate these risks. For example:
> | The Board periodically meets with our Chief Technology Officer to assess cybersecurity risks and to evaluate the status of our cybersecurity efforts, which include a broad range of tools and training initiatives that work together to protect the data and systems used in our business. The Board is aware of the threats presented by cybersecurity incidents and is committed to taking measures to help prevent and mitigate the effects of any such incidents. |
> | Our Chief Compliance Officer provides updates to the Board on regulatory and compliance matters, which includes an annual in-depth review. |
> | Our General Counsel updates the Board regularly on material legal and regulatory matters. |
> | Our Chief Human Resources Officer provides updates to the Board on Human Capital matters, including hiring investment, talent, and diversity and inclusion. |
> | The senior leadership of our shareholder advisory business also presents periodically to the Board on key trends shaping the shareholder landscape across governance, executive compensation, activism-defense, strategic investor relations and ESG matters. |
FORThe Board Committees’ Role in Risk Oversight”
The Board exercises its risk oversight responsibility both directly and through its standing committees. The committees assist the two Class III nominees namedBoard by addressing specific matters within their purview, as summarized in this Proxy Statement. Such nomineesthe following table. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the Board keeps itself regularly informed regarding such risks through management and committee reports and otherwise.
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Key Risk Oversight Responsibilities of the Board’s Committees | ||
Audit Committee | Compensation Committee | Nominating/Corporate Governance Committee |
> Financial statements, accounting and financial reporting processes > Qualifications, performance, and independence of independent registered public accounting firm > Performance of internal audit > Assessment of major risks facing the company and management’s efforts to manage those risks | > Overall compensation philosophy > Corporate goals and objectives relevant to compensation of the CEO and other Executive Officers, including annual performance objectives > Evaluation of the CEO’s performance and determination of the CEO’s compensation > Review of other Executive Officers’ compensation > Modification of any executive compensation program yielding payments not reasonably related to executive and corporate performance > Review of potential material adverse effects on the company arising from compensation programs and plans for all employees > The company’s human capital management strategy | > Director and committee member selection > Evaluation of the Board, committees and management > Development of the company’s corporate governance principles > Evaluation of director independence and possible conflicts of interest > Composition and size of the Board and committees > The company’s ESG strategy |
Cybersecurity and Data Protection
We are currently directorscontinually evolving our technology platform to respond to innovation, cyber threats and the ongoing growth of our business. Given the potential impact of a security breach on our business and reputation, we are committed to continued investment in our technology to ensure the security of our information.
Breaches of our network security systems could involve attacks that are intended to obtain unauthorized access to, or to destroy, sensitive or proprietary information, or to disable, degrade or sabotage our systems. These attempts may involve the introduction of computer viruses or malware, phishing or email spoofing, denial-of-service, or cyber-attacks of other means that originate from a broad array of sources, including unknown third parties. We take various measures to ensure the confidentiality, integrity, and availability of our systems, including implementation of security controls and regular training of our employees with respect to measures we can take to try to thwart cybersecurity attacks. Further, all of our employees are trained at least annually on our information security polices and written supervisory procedures. Employees are subject to reviews if they miss the training or fail repeated phishing tests. The Board takes an active role in reviewing our cybersecurity program.
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Culture of Compliance
As a financial services company, our business is subject to extensive rules and regulations in the United States and around the globe. Adherence to these various rules and regulations is paramount to the reputation and success of our company. The nominees have consented to being named in this Proxy Statement and to serve if elected. The Board of Directors has no reason to believe that any nominee will be unavailable or unable to serve as a director, but if for any reason any nominee should not be available or able to serve, the shares represented byAs such, all valid proxies will be voted by the person or persons acting under said proxy in accordance with the recommendation of the Board of Directors.
Set forth below are biographical summaries of our executive officers as of March 5, 2018, other than Mr. Taubman,employees are required to participate in various mandatory regulatory and compliance training programs designed to educate our Chairman and Chief Executive Officer, whose biographical summary is set forth above in “Proposal 1—Election of Directors.”
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Ji-Yeun Lee is our Managing Partner. Prior to joining PJT Partners in early 2014 as one of the founding partners, Ms. Lee was Managing Director and Deputy Head of Global Investment Banking at Morgan Stanley. She joined Morgan Stanley in 1988 and most of her career there was spent in Mergers & Acquisitions advising clients on a broad range of transactions across industries and geographies, including six years in the firm’s London office. Ms. Lee was appointed the Chief Operating Officer of Morgan Stanley’s Mergers & Acquisitions Department in 2004 and the Deputy Head of Global Investment Banking in 2007. In 2011, she joined Morgan Stanley’s Management Committee. Ms. Lee also servesemployees on the Boardmany laws, rules and regulations that impact our company as well as reinforce the gravity of Directors of the Good Shepherd Services. She received a B.A. from Amherst College.
Helen T. Meates is our Chief Financial Officer. Prioradherence to joining PJT Partners in January 2015, Ms. Meates worked at Morgan Stanley fortwenty-two years, most recently serving as a Managing Director. Ms. Meates spent the majority of her career at Morgan Stanley in Global Capital Markets, including nine years in Leveraged Finance. In 2011 she was appointed as Deputy Head of Global Capital Marketssuch laws, rules andCo-Chair of the firm’s Capital Commitment Committee. In November 2013 she assumed the role of Global Chief Operating Officer for the Research Division and was appointed to the Institutional Securities Operating Committee. Ms. Meates also served regulations. Such programs include, without limitation, regular compliance training sessions on the firm’s Institutional Securities Risk Committee, Microfinance Advisory Boardcompany’s Global Compliance Policies Manual and Diversity Committee. Ms. Meates servesWritten Supervisory Procedures, including training sessions on the boards of the SMA Foundationour Anti-Money Laundering/Know Your Customer rules and the Bridgehampton Chamber Music Festival. She received a law degree (LL.B.) from Canterbury University in New Zealand and an M.B.A. from Columbia Business School.
James W. Cuminale is our General Counsel. Prior to joiningprocedures. In addition, all employees receive training on PJT Partners in July 2015, Mr. Cuminale was Chief Legal Officer at Nielsen Holdings N.V. from November 2006 to June 2015. Previously, Mr. Cuminale served for over ten years as the Executive Vice President – Corporate Development, General Counsel and Secretary of PanAmSat Corporation and PanAmSat Holding Corporation. He currently serves on the Board of Trustees of Trinity College and the Board of Advisors at Vanderbilt University Law School. Mr. Cuminale received a B.A. from Trinity College and a J.D. from Vanderbilt University Law School.
Each of our executive officers serves at the discretion of our Board of Directors without specified terms of office.
This section of our Proxy Statement contains information about a variety of our corporate governance policies and practices. We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. You are encouraged to visit our website at www.pjtpartners.com to view or to obtain copies of our Corporate Governance Guidelines, committee charters and Code of Business Conduct and Ethics. You may also obtain, free of charge, a copy of our Corporate Governance Guidelines, committee charters andPartners’ Code of Business Conduct and Ethics by directing your request in writing toand our Corporate Secretary. Additional information relating to the corporate governance of our company is also set forth belowpolicies and included in other sections of this Proxy Statement.procedures for reporting wrongdoing (see “Whistleblower Program” below).
Corporate Governance Guidelines
OurThe Board of Directors has adopted Corporate Governance Guidelines that address the following key corporate governance subjects, among others: director qualification standards; director responsibilities; director access to management and, as necessary and appropriate, independent advisors; director compensation; director orientation and continuing education; management succession; and an annual performance evaluation of the Board. In February 2023, the Nominating/Corporate Governance Committee and the Board reviewed the Corporate Governance Guidelines, and the Board approved and re-adopted them.
You are encouraged to visit our website at www.pjtpartners.com to view or to obtain copies of Directors.our Corporate Governance Guidelines. You may also obtain, free of charge, a copy of our Corporate Governance Guidelines by directing your request in writing to our Corporate Secretary.
Code of Business Conduct and Ethics
OurThe Board of Directors has adopted a Code of Business Conduct and Ethics for our directors, officers and employees that addresses these important topics, among others: conflicts of interest; corporate opportunities; confidentiality of information; fair dealing; protection and proper use of our assets; compliance with laws, rules and regulations (including insider trading laws); and encouraging the reporting of any illegal or unethical behavior. In 2022, the Nominating/Corporate Governance Committee and the Board reviewed the Code of Business Conduct and Ethics, and the Board approved and re-adopted it.
Any waiver of the Code of Business Conduct and Ethics for our directors or officers may be made only by ourthe Board of Directors or one of its committees. We intend to disclose on our website any amendment to, or waiver of, any provision of the Code of Business Conduct and Ethics applicable to our directors and executive officersExecutive Officers that would otherwise be required to be disclosed under the rules of the SEC or the NYSE.
You are encouraged to visit our website at www.pjtpartners.com to view or to obtain copies of our Code of Business Conduct and Ethics. You may also obtain, free of charge, a copy of our Code of Business Conduct and Ethics by directing your request in writing to our Corporate Secretary.
Shareholder Engagement and Responsiveness
As part of our annual shareholder engagement program, we contact many of our largest shareholders to offer meetings to discuss a range of topics related to the company’s strategy, governance profile, executive compensation practices, corporate sustainability, human capital management and other matters. These meetings may include participation by our Managing Partner, Chief Financial Officer, Chief Human Resources Officer and other members of management. This engagement program complements our normal course investor dialogue that we have conducted since the beginning of our company focused on our business and strategy, and demonstrates our commitment to maintaining an open dialogue with all of our shareholders.
In conversations throughout 2022, we discussed a range of topics, including:
˃ | Board Composition and Diversity |
˃ | Board Structure and Governance Practices |
˃ | Business Strategy and Priorities |
˃ | Corporate Sustainability |
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˃ | Executive Compensation |
˃ | Human Capital Management and Culture |
Human Capital Management Overview
Human Capital Management Philosophy
Our culture drives our success. From day one of our company, we have been committed to developing our culture as a commercial differentiator—one that attracts and retains people in order to create a world-class company built for the long term. Our culture is defined by strong character, differentiated capabilities and collaboration. These essential qualities help us build stronger client relationships and better outcomes for our clients. Our human capital successes are evident through the number and quality of hires we have made, our historically low levels of attrition and the consistent positive feedback we receive through our employee surveys. Reinforcement of the culture we are building comes through engagement with our employees, the reward principles we apply to compensation and promotion decisions and our various talent development initiatives, which continue to evolve as we grow.
As of December 31, 2022, we employed 907 individuals globally, including 105 partners.
Reward Principles
We believe our company culture is reinforced by rewarding employees who exemplify the pillars of our culture. Since the inception of our company, our compensation and promotion structure has been designed to encourage the qualities we believe to be necessary for building a sustainable franchise. Our compensation is not formulaic and does not include individual revenue pay-outs. For a broad group of employees, discretionary bonuses also typically include a company stock component to ensure long-term focus and alignment with the interests of our company. All compensation and promotion decisions consider a number of factors within each of the following areas of impact, which are communicated to managers and employees alike:
Character | Collaboration | Commercial Impact / Client Relationships | Content |
Board Oversight of Human Capital Management
The Board actively oversees the human capital management strategy of the company. Some key examples of the Board’s engagement include:
˃ | The Board maintains and periodically reviews a succession plan for our Chairman and CEO. The Board’s review includes an assessment of the experience, performance and skills of potential successors in these critically important roles. The Board holds CEO succession planning discussions in executive sessions led by the Lead Independent Director. |
˃ | The Board, including the Compensation Committee, maintains an active information flow and directs senior management to update and consult it regularly on key talent hires and other important aspects of the company’s human capital strategy. Under the Board’s oversight, the company continuously refines human capital priorities based on business drivers, employee feedback and the overall environment for talent. |
˃ | Directors actively engage and spend time with our senior management and other employees in a variety of ways. Our directors periodically attend partner meetings and dinners, participate in our town hall meetings, and meet with groups and individuals at our company. |
˃ | Directors receive relevant employee communications, including announcements of transactions on which the company has advised. |
Employee Feedback and Engagement
We view active dialogue with our employees as essential to maintaining our unique culture. Since 2017, we have conducted various employee surveys to formally gather systematic feedback. Participation has been high with greater than 75% of employees responding each year. The consistently positive themes include a
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strong belief in our commitment to doing the right thing for both our clients and our company, a belief that we have a differentiated culture, a commitment to excellence and a strong sense of respect among colleagues. In addition, we host regular company-wide town halls to connect employees with our management team and business leaders.
We use feedback from the survey, town halls and other employee connectivity forums to inform our ongoing efforts toward continuous improvement.
We have numerous other channels through which we engage with our employees on human capital topics, including our talent development committee, women’s development series, individual performance reviews and other less formal forums, such as regularly scheduled meetings by business and level. We use these channels to solicit input on issues, such as resourcing and training priorities. We have also established forums for engagement on broadening our diversity lens, including through our employee resource groups, such as the PJT Women’s Network, the PJT Black Professional Network and PJT Pride.
Employer of Choice Initiatives
We prioritize the health and well-being of our employees and their families. We have always aimed to provide pay, benefits and other support that seeks to meet the varying needs of our employees. Our total rewards package is based on competitive pay and is often structured to include discretionary bonuses that include long-term incentives. Such incentives are designed to ensure alignment with our shareholders and the overall success of our company. Other benefits we provide employees include comprehensive health care, 401(k) plan matching and pension contributions, generous paid-time off, discounted gym memberships, access to walk-in health care and emergency child and elderly care. We recognize that mental health is an integral part of our employees’ overall well-being and essential to our success. In addition to providing workshops on mental health awareness, we recently expanded our employee benefits to include a comprehensive mental health platform that provides on-demand access from a broad provider network. Furthermore, we acknowledge work-life balance issues for our employees through paid time off and leave policies that are consistent for all, regardless of level.
It is our practice to review and benchmark not only our compensation practices, but our health and wellness benefits annually and consider feedback from our employees to ensure we remain an employer of choice.
Diversity, Equity and Inclusion (“DE&I”)
Our success as a company is centered on recruiting, developing and retaining top talent from a diverse range of backgrounds and experiences. Fostering an inclusive culture, which welcomes differing perspectives and beliefs, enables us to provide the best advice to our clients.
We continue to expand our company’s diversity efforts. We have implemented initiatives to raise awareness and make DE&I a more regular part of employee conversations. These include diversity training sessions with a globally recognized DE&I consultant attended by 100% of our senior leadership team and 80% of our Partners and Managing Directors overall. We continue to support our employee resource groups, including the PJT Women’s Network, the PJT Black Professional Network and PJT Pride.
In 2021, we conducted our first company-wide survey on our commitment to diversity, which aimed to measure how comfortable our employees feel engaging with DE&I topics. We also included those questions in our broader annual employee survey in 2022. While early in our journey, we were encouraged to see that our employees increasingly believe the company is committed to DE&I and are becoming more comfortable having discussions about DE&I topics at work.
Employee Development
We understand that retaining best-in-class talent and building a company for the long term requires providing the opportunity for career growth. With this in mind, we invest in a range of growth and development opportunities including the improvement of technical skills, client communication and leadership capabilities. We also recognize that our long-term success requires not only the recruitment of best-in-class senior talent, but in providing positive career trajectory and upward mobility for our employees. To that end, we continue to make significant improvements to our promotion processes and the mentorship of our rising talent, including through partnering with external executive coaches. These development efforts need to be consistently reinforced. Our review process and reward principles are designed to facilitate high-quality, honest feedback that supports and rewards the development of our people.
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Engagement with the Broader Community
Our company and our employees are actively engaged in supporting the needs of the underserved in the communities where we operate. To aid in the support of the communities we serve, the company and our employees have donated just over $6 million over the last three years to more than 260 global organizations dedicated to COVID-19 relief, mental health related causes or the advancement of racial equity. Our employees, including our summer interns, have made significant contributions of their time to the communities in which we operate. We have continued to require our summer program participants to complete a community volunteering project as a pre-requisite for a full-time offer.
Competition
The financial services industry is intensely competitive, and we expect it to remain so. Our competitors for talent include other investment banking and financial advisory firms as well as private equity firms, hedge funds and corporate entities. We compete on both a global and a regional basis, and on the basis of a number of factors, including the strength and depth of client relationships, industry knowledge, transaction execution skills, our range of products and services, innovation, reputation, our ability to offer a compelling career path and competitive rewards.
Our ability to continue to compete effectively in our business will depend upon our ability to attract new employees and retain and motivate our existing employees. As a result, we remain focused on ensuring that our employment proposition includes an attractive culture, development opportunities and competitive rewards.
Corporate Sustainability at PJT Partners
Since the inception of our company, we have been committed to building a premier global advisory focused company based on a culture of excellence, integrity, and purpose, delivering best-in-class advice to decision makers around the globe. Our investment decisions have been guided by a relentless focus on building a company that will stand the test of time.
Our Corporate Sustainability Report is intended to share our ongoing efforts and progress on our sustainability journey across several key aspects of our company, including our people, our business, our governance and how we give back to our communities. Based on the feedback we received from our shareholders, our report includes disclosures aligned with the Investment Banking & Brokerage SASB standard, part of the Value Reporting Foundation. Our 2022 report also includes our greenhouse gas (GHG) emissions data from 2019-2021, under the GHG protocol. Our 2022 Corporate Sustainability Report is available on the Investor Relations section of our website at www.pjtpartners.com.
Director Independence
Background. A majority of the directors serving on ourthe Board of Directors must be independent as required by the listing standards of the NYSE and the rules promulgated by the SEC. The company defines an “independent” director in accordance with the corporate governance rules of the NYSE. Under the NYSE’s corporate governance rules, no director qualifies as independent unless ourthe Board of Directors affirmatively determines that the director has no “material relationship” with us, either directly or as a partner, stockholdershareholder or officer of an organization that has a relationship with us. Further, directors who have relationships covered by one of five bright-line independence tests established by the NYSE may not be found to be independent.
Audit Committee members are subject to heightened independence requirements under NYSE rules and Rule10A-3 under the Exchange Act. NYSE rules require that in affirmatively determining the independence of any director who will serve on the Compensation Committee, the Board of Directors must consider all factors specifically relevant to determining whether a director has a relationship to the company that is material to that director’s ability to be independent from management in connection with the duties of a member of the Compensation Committee.
Independence determinations made by ourThe Board of Directors. Our Board of Directors has determined, based upon its review of all relevant facts and circumstances and after considering all applicable relationships of which ourthe Board of Directors had knowledge between or among the directors and the company or our management, that each of our current directors and directors who served during 2022, other than Paul J.Mr. Taubman and Mr. Cornwell, has no material relationship with us (either directly or as a partner, stockholder
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shareholder or officer of an organization that has a relationship with us) and is “independent” as defined in the NYSE listing standards, the applicable SEC rules and our director independence standards. Further, ourthe Board of Directors has determined that the members of the Audit Committee and Compensation Committee are also independent under the applicable NYSE and SEC rules mentioned above. No director participated in the final determination of his or her own independence.
Management Succession Planning
The Board of Directors Leadership Structure
Our Board of Directors understands there is no single, generally accepted approach to providing board leadership andperiodically reviews a management succession plan that given the dynamic and competitive environment in which we operate, the appropriate leadership may vary as circumstances warrant. Our amended and restated certificate of incorporation provides that Mr. Taubman, to the extent that he serves as our Chief Executive Officer and as a member of our Board of Directors, will serve as Chairman of our Board of Directors. Further, our Board of Directors currently believes it is in our company’s best interests to have Mr. Taubman serve as Chairman of our Board of Directors and Chief Executive Officer. Our Board of Directors believes combining these roles promotes effective leadership and provides the clear focus needed to execute our business strategies and objectives.
Our Board of Directors has appointed Mr. Hersch as its lead independent director. Mr. Hersch helps coordinate the effortsincludes, among other things, an assessment of the independentexperience, performance andnon-management directors in the interest of ensuring that objective judgment is brought skills for possible successors to bear on sensitive issues involving the management of the companyour Chairman and in particular, the performance of senior management.CEO.
Executive Sessions and Lead Director
Executive sessions ofnon-management directors are held after each regularly scheduled boardBoard meeting. In addition, under our Corporate Governance Guidelines, if the non-management directors include directors who have not been determined to be independent, the independent directors will separately meet in executive session at least once a year. During 2017,2022, thenon-management directors who were then serving on the Board held four executive sessions.“Non-management “Non-management directors” include all directors who are not our officers and allnon-management directors who have been determined by the Board of Directors to be independent. Currently, Mr. Taubman is the only officer serving on our Board of Directors.
In order to facilitate communications amongnon-management directors on the one hand and management on the other hand,Board. Mr. Hersch was selected to serve as the lead independent director. Mr. Hersch presides over all executive sessions of thenon-management directors.
Board of Directors Role in Risk Oversight
While risk managementCornwell is primarily the responsibility of our senior management team, our Board of Directors playsa non-management director who is not an active role in overseeing management of the company’s risks. The committees of our Board of Directors assist the full board in risk oversightofficer but has not been determined by addressing specific matters within the purview of each committee. The Audit Committee focuses on oversight of financial risks relating to the company, the Compensation Committee focuses primarily on risks relating to executive compensation plans and arrangements and the Nominating/Corporate Governance Committee focuses on corporate governance risks relating to the company. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the full Board of Directors keeps itself regularly informed regarding such risks through management and committee reports and otherwise. Further, the Board of Directors routinely meets with our Chief
Technology Officer to assess cybersecurity risks and to evaluate the status of our cybersecurity efforts, which include a broad range of tools and training initiatives that work together to protect the data and systems used in our business.
The company’s management team reports to our Board of Directors the significant risks we face, highlighting any new risks that may have arisen since they last met. In addition, members of our Board of Directors have the opportunity to routinely meet with members of senior management, as appropriate, in connection with their consideration of matters submitted for the approval of our Board of Directors and the risks associated with such matters.
Further, we maintain a Disclosure Committee that meets at least quarterly. The purpose of our Disclosure Committee is to bring together representatives from our core business lines and employees involved in the preparation of our financial statements so that the group can discuss any issues or matters of which the members are aware that should be considered for disclosure in our public SEC filings. Results of the Disclosure Committee’s meetings and determinations are communicated quarterly to the Audit Committee.
Board Committees
Our Board of Directors has three standing committees: an Audit Committee; a Compensation Committee; and a Nominating/Corporate Governance Committee. The current charters for each of these committees are available on our corporate website at www.pjtpartners.com under the “Investor Relations/Corporate Governance/Governance Documents” section. Further, we will provide a copy of these charters without charge to any stockholder upon written request. Requests for copies should be addressed to our Corporate Secretary. From time to time, our Board of Directors also may create additional committees for such purposes as our Board of Directors may determine. We believe that the functioning of each of the committees of our Board of Directors complies with the applicable requirements of the NYSE and SEC rules and regulations.
Audit Committee. We have a standing Audit Committee, consisting of Kenneth C. Whitney (Chair), Dennis S. Hersch and Emily K. Rafferty, each of whom is “independent” and “financially literate” as such terms are defined by the applicable rules of the SEC and/or NYSE. Our Board of Directors has determined that Mr. Whitney, Mr. Hersch and Ms. Rafferty possess accounting or related financial management expertise within the meaning of the NYSE listing standards and that each of Mr. Whitney, Mr. Hersch and Ms. Rafferty qualifies as an “audit committee financial expert” as defined under the applicable SEC rules.
The Audit Committee assists our Board of Directors in fulfilling its responsibility relating to the oversight of: (1) the quality and integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm. Additional information regarding the functions performed by our Audit Committee is set forth in the “Report of the Audit Committee” included in this Proxy Statement.
Compensation Committee. We have a standing Compensation Committee, consisting of Thomas M. Ryan (Chair) and Dennis S. Hersch, each of whom is “independent” as defined by the applicable rules of the NYSE and is a“non-employee director” as defined by the applicable rules and regulations of the SEC. The Compensation Committee discharges the responsibilities of our Board of Directors relating to the oversight of our compensation programs and compensation of our executives. In fulfilling its responsibilities, the Compensation Committee can delegate any or all of its responsibilities to a subcommittee of the Compensation Committee.
The Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the Compensation Committee has retained Willis Towers Watson & Co. as its independent outside compensation consultant primarily to assist in analyzing the competitiveness of its executive compensation as well as to provide expertise and advice on various matters brought before the Compensation Committee. On February 22, 2018, the Compensation Committee considered the independence of Willis Towers Watson and determined that it did not have a conflict of interest.
Nominating/Corporate Governance Committee. We have a standing Nominating/Corporate Governance Committee, consisting of Emily K. Rafferty (Chair), James Costos and Thomas M. Ryan. Each of Ms. Rafferty and Messrs. Costos and Ryan is “independent” as such term is defined by the applicable rules of the NYSE. The Nominating/Corporate Governance Committee assists our Board of Directors in fulfilling its responsibility relating to corporate governance by: (1) identifying individuals qualified to become directors and recommending that our Board of Directors select the candidates for all directorships to be filled by our Board of Directors or by our stockholders; (2) overseeing the evaluation of the Board of Directors; (3) developing and recommending the content of our Corporate Governance Guidelines and Code of Business Conduct and Ethics to our Board of Directors; and (4) otherwise taking a leadership role in shaping our corporate governance.independent.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee is a current or former officer or employee of the company or any of its subsidiaries. None of our executive officersExecutive Officers serves as a member of the board of directors or compensation committee of any company that has one or more of its executive officersExecutive Officers serving as a member of ourthe Board of Directors or Compensation Committee.
Board and Committee Meetings; Annual Meeting Attendance
During 2017, our2022, the Board of Directors held eight meetings, our Audit Committee held eight meetings, our Compensation Committee held fourfive meetings and our Nominating/Corporate Governance Committee held two meetings. During such time, each director then serving on the Board attended at least 75% of each of the meetings of the Board of Directors and committees on which he or shethey served during the period for which he or she wasthey were a director or committee member, respectively. The independentnon-management directors of the company regularly meet in executive session without management. Under the Corporate Governance Guidelines adopted by the Board, our Board of Directors, Dennis S. Hersch, our lead independent director,Lead Independent Director presides at such executive sessions.
Under our Corporate Governance Guidelines, directors are expectedencouraged to attend our annual meetings of stockholders.shareholders. All of our directors attended our 20172022 virtual annual meeting either in person or by telephone.via audio conference.
Communications with the Board of Directors
Anyone who would like to communicate with, or otherwise make his or hertheir concerns known directly to any then-serving lead independent director,Lead Independent Director, to the chairperson of any of the Audit, Nominating/Corporate Governance and Compensation Committees, or to thenon-management or independent directors as a group, may do so by addressing such communications or concerns to our General Counsel at PJT Partners Inc., 280 Park Avenue, New York, New York 10017, who will, as appropriate, forward such communicationscommunication.
Whistleblower Program
We have adopted procedures for reporting concerns regarding accounting and other matters. These procedures are designed to provide channels of communication for employees and others who have concerns about the conduct of our company or any of its people, including with respect to the company’s accounting controls or auditing matters. All such channels of communication include the option to report anonymously. Any person may report to the Audit Committee any accounting allegation, legal allegation or retaliatory act. Reports
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can be made in writing to PJT Partners, Attn: Audit Committee, 280 Park Avenue, New York, New York 10017. In addition, reports can be made:
(1) | by contacting the General Counsel in writing or in person at PJT Partners, Attn: General Counsel, 280 Park Avenue, New York, New York 10017; |
(2) | by contacting the Head of Internal Audit in writing or in person at PJT Partners, Attn: Head of Internal Audit, 280 Park Avenue, New York, New York 10017; |
(3) | by contacting the Chief Compliance Officer in writing or in person at PJT Partners, Attn: Chief Compliance Officer, 280 Park Avenue, New York, New York 10017; |
(4) | by submitting a report online at www.pjtpartners.ethicspoint.com; or |
(5) | by calling the Employee and Reporting Hotline at any time. The hotline can be reached in the U.S. at 1-844-279-8892; dialing instructions for callers outside the U.S. are available at www.pjtpartners.ethicspoint.com. |
The information in any such report will be provided to management or, as appropriate, party. Such communications maythe Audit Committee as promptly as practicable. To the extent possible, reports should be done confidentiallyfactual rather than speculative or anonymously.conclusory, and should contain as much specific information as possible to allow for proper assessment. In addition, to the extent possible, reports should contain sufficient corroborating information to support the commencement of an investigation. The company strictly prohibits any retaliation for reporting a possible violation of law, ethics or company policy, no matter whom the report concerns.
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Director Compensation
Members of ourthe Board of Directors who are members of management receive no additional compensation for their services as directors. For the annual service periods from June 1, 2016 to May 31, 2017 and from June 1, 2017 to May 31, 2018, eachEach non-management director receivedreceives an annual base retainer for the service period from June 1 to May 31 in the amount of $125,000 in the form of cash, restricted stock units or a combination thereof as determined by such director.
On February 22, 2018, the Compensation Committee modified the compensation for ournon-management directors such that, from the annual service period beginning June 1, 2018, eachnon-management director will receive an annual base retainer in the amount of $175,000,$225,000, with a minimum of 50% (and, if selected by thenon-management director, up to 100%) of such annual retainer delivered in the form of restricted stock units.
Subject to continued service, restricted stock units granted pursuant to a director’s election vest quarterly in substantially equal installments over the subject year of service, with vesting accelerated upon death, disability or a change in control of the company. Vested restricted stock units will be settled on the earliest of the termination of service of such director, the fifth anniversary of the grant date andor a change in control of the company and will be settled in either shares of the company’s Class A common stock or cash (or a combination thereof) at the discretion of the Compensation Committee.
Each newnon-management director also receives aone-time grant of restricted stock units in an amount having a value of $100,000. Subject to continued service, theone-time restricted stock unit grant vests in substantially equal installments annually over four years, with vesting accelerated upon death, disability or a change in control of the company. Upon vesting, theone-time restricted stock unit grant will be settled on the earliest of the termination of service of the director, the fourth anniversary of the grant date andor a change in control of the company and will be settled in either shares of the company’s Class A common stock or cash (or a combination thereof) at the discretion of the Compensation Committee. We also reimburse each of ournon-management directors for his or her travel expenses incurred in connection with his or her attendance at meetings of the Board of Directors and its committees.
The PJT Partners Inc. 2015 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) limits the amount of compensation for director services that may be awarded to theeach non-management members of our Board of Directors director (including both equity awards and any cash fees paid to thenon-management members of our Board of Directors, director but excluding expense reimbursement) in any fiscal year to $750,000 in total value. Further, our Compensation Committee has engaged Willis Towers Watson, & Co., an outside independent compensation consultant, to provide guidance with respect to compensation paid to ournon-management members of our Board of Directors. directors.
Minimum Equity Ownership Guidelines for Non-Management Directors
In February 2018, ourOur Compensation Committee adopted minimum equity ownership guidelines that requirerequires our independentnon-management directors to maintain equity ownership in the company (including Partnership Units, LTIP Units or restricted stock units) having a market value equal to or greater than three times the $175,000$225,000 annual base retainer. Each independentnon-management director must achieve the minimum equity investment within five years from the later of the adoption of the guidelines (for directors in place at that time of the adoption of the guidelines) and the date of such director’s election to ourthe Board of Directors (for subsequently appointed directors). All directors are or are expected to attainbe within the time ascribed in our ownership guidelines, in compliance with the stock ownership requirements.our Minimum Equity Ownership Guidelines.
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Director Compensation for Fiscal Year 20172022
The 20172022 compensation of thenon-management directors who served on the Board of Directors in 2017 is set forth in the table below:
Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | |||
James Costos | 111,458(2) | 99,984 | 211,442 | |||
Dennis S. Hersch | — | 124,989 | 124,989 | |||
Emily K. Rafferty | 125,000 | — | 125,000 | |||
Thomas M. Ryan | — | 124,989 | 124,989 | |||
Kenneth C. Whitney | 125,000 | — | 125,000 |
Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total | ||||||||
James Costos | $ | 21,875 | $ | 225,032 | $ | 246,907 | |||||
Dennis Hersch(2) | $ | 21,875 | — | — | |||||||
Emily K. Rafferty | $ | 91,250 | $ | 112,554 | $ | 203,804 | |||||
Thomas M. Ryan | — | $ | 225,032 | $ | 225,032 | ||||||
Grace R. Skaugen | $ | 100,000 | $ | 112,554 | $ | 212,554 | |||||
Kenneth C. Whitney | $ | 100,000 | $ | 112,554 | $ | 212,554 |
(1) | The amounts in this column reflect the aggregate grant date fair value of restricted stock units granted in fiscal year |
On June 1, 2022, Mr. Costos and Mr. Ryan were awarded 2,959 restricted stock units with a grant date fair value computed in accordance with ASC Topic 718 of $225,032, or $76.05 per share underlying each restricted stock unit, and Ms. Rafferty, Ms. Skaugen and Mr. Whitney were awarded 1,480 restricted stock units with a grant date fair value computed in accordance with ASC Topic 718 of $112,554, or $76.05 per share underlying each restricted stock unit. Subject to continued service as a director, 25% of each of these restricted stock unit grants generally has vested or will vest on each of August 31, 2022, November 30, 2022, February 28, 2023 and May 31, 2023. The shares of Class A common stock underlying such vested restricted stock units will be delivered on the earliest of (i) the termination of the director’s services, (ii) June 1, 2026 or (iii) a change in control of the company. | |
As of December 31, 2022, each of Mr. Costos, Ms. Rafferty, Mr. Ryan, Ms. Skaugen and Mr. Whitney held 1,496, 748, 1,496, 1,739 and 748 unvested restricted stock units, respectively. These amounts include restricted stock units credited as dividend equivalents on the underlying restricted stock units held by Mr. Costos, Ms. Rafferty, Mr. Ryan, Ms. Skaugen and Mr. Whitney in connection with dividends paid by the company to holders of its Class A common stock. Credited dividend equivalents are subject to the same terms and conditions as the underlying restricted stock units. | |
(2) | Dennis Hersch served as our Lead Independent Director until he passed away on January 18, 2022. |
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Executive Compensation
Proposal 2: Non-binding advisory vote to approve executive compensation |
Board Recommendation |
The Board recommends that you vote “FOR” approval of the compensation of our Named Executive Officers. |
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In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to approve, in a non-binding advisory vote, the compensation of our Named Executive Officers as disclosed below. The text of the resolution in respect of Proposal 2 is as follows:
“RESOLVED, that the compensation paid to the company’s Named Executive Officers as disclosed in this Proxy Statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables, and any related narrative discussion, is hereby APPROVED.”
In considering your vote, you may wish to review with care the information on our compensation policies and decisions regarding the Named Executive Officers presented in the Compensation Discussion and Analysis set forth below.
In particular, shareholders should note that our compensation program includes elements that are intended to ensure strong alignment between the interests of our Executive Officers and our shareholders:
˃ | Annual incentive compensation that places a strong emphasis on company-wide financial performance, with consideration given to the individual performance of each Executive Officer. | |
˃ | An appropriate link between compensation and the creation of shareholder value through long-term equity awards. | |
˃ | A focus on collaboration, and therefore does not include individual revenue pay-outs at any level. | |
˃ | Consideration for each executive’s contribution to leadership and talent development. | |
˃ | Benchmarking analysis to help us understand compensation practices of our competitors. |
Mr. Costos joinedOur compensation program for our Executive Officers and the company overall also aims to be market-competitive versus our peers, in both quantum and structure to ensure that we are able to attract and retain executives and other professionals that contribute to the long-term success of the company.
While the results of the vote are non-binding and advisory in nature, the Board intends to carefully consider the results of Directorsthe vote.
At the company’s 2018 Annual Meeting of Shareholders, our shareholders indicated their preference to hold the non-binding advisory vote to approve the compensation of our Named Executive Officers each year. Accordingly, we currently intend to hold such votes annually. The next vote to approve the compensation of our Named Executive Officers is expected to be held at our 2024 Annual Meeting of Shareholders. While the Board intends to consider carefully the results of this vote, the final vote is advisory in nature and is not binding on February 7, 2017. Upon his joining the board, he was grantedcompany or the Board.
Executive Compensation Philosophy
Our executive compensation program considers company-wide financial measures to ensure alignment with our shareholders, in addition to goals targeted to each of the Named Executive Officers. We seek to ensure that each Named Executive Officer has goals that are tied to tangible measures of business success as well as those that are focused on leadership and talent development. Rewards for our Executive Officers are structured to ensure aone-time grant focus on the long-term success of 3,108the company. This is typically achieved by granting a significant portion of annual incentives in the form of restricted stock units having a grant date fair value in accordance with ASC Topic 718 of $99,984, or $32.17 per share underlying each restricted stock unit. Subject to continued service, thisone-time restricted stock unit grant vested or generally willawards that vest in substantially equal installments annually over four years.
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Executive Officers
Set forth below are biographical summaries of our Executive Officers as of March 27, 2023, other than Mr. Taubman, our Chairman and CEO, whose biographical summary is set forth above in “Proposal 1—Election of Directors.”
Name | Ji-Yeun Lee | Helen T. Meates | David A. Travin | ||||
Age | 56 | 61 | 47 | ||||
Position | Managing Partner | Chief Financial Officer | General Counsel | ||||
Professional Highlights | Prior to joining PJT Partners in early 2014 as one of the founding partners, Ms. Lee was Managing Director and Deputy Head of Global Investment Banking at Morgan Stanley. She joined Morgan Stanley in 1988 and spent most of her career in Mergers & Acquisitions, including six years in the firm’s London office, advising clients on a broad range of transactions across industries and geographies. Ms. Lee was appointed the Deputy Head of Global Investment Banking in 2007 and joined Morgan Stanley’s Management Committee in 2011. Ms. Lee also serves on the Board of Directors of Good Shepherd Services. She received a B.A. from Amherst College. | Prior to joining PJT Partners in January 2015, Ms. Meates worked at Morgan Stanley for 22 years, most recently serving as a Managing Director. Ms. Meates spent the majority of her career at Morgan Stanley in Global Capital Markets, including nine years in Leveraged Finance. In 2011, she was appointed Deputy Head of Global Capital Markets and Co-Chair of the firm’s Capital Commitment Committee. Ms. Meates also served on the firm’s Institutional Securities Risk Committee, Microfinance Advisory Board and Diversity Committee. Ms. Meates serves on the boards of the SMA Foundation and the Bridgehampton Chamber Music Festival. She received a law degree (LL.B.) from Canterbury University in New Zealand and an M.B.A. from Columbia Business School. | Prior to joining PJT Partners in December 2016, Mr. Travin was a member of the legal departments of both UBS AG and Deutsche Bank AG. Through the end of 2020, Mr. Travin served as the company’s Deputy General Counsel. He currently serves on the Board of Directors of Only Make Believe, a nonprofit organization based in New York City. Mr. Travin received a B.S. in Industrial and Labor Relations from Cornell University and a J.D. from The George Washington University Law School. |
Each of our Executive Officers serves at the discretion of the Board without a specified term of office.
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Elements of Our Named Executive Officer Compensation Program
Element | Key Features | Highlights | |||
Fixed Compensation | |||||
Base Salary | ˃ Fixed pay ˃ Informed by reference to peer group and adjusted for, among other variables, tenure, knowledge, ability and experience ˃ Level also takes into account scope of role ˃ Reviewed annually | ˃ Base salaries have not been adjusted since October 1, 2015 for Mr. Taubman, January 1, 2016 for Ms. Lee, and January 1, 2021 for Mr. Travin. ˃ Base salary for Ms. Meates adjusted from $500,000 to $1,000,000 for 2023. | |||
Annual Incentive Compensation (Discretionary Performance-Based) Value determined based on company-wide financial performance and individual objectives | |||||
Cash Bonus | ˃ Variable pay delivered in cash | ˃ Mr. Taubman has not received any cash compensation in excess of base salary since the company’s inception. | |||
Annual Long-Term Incentive Awards | ˃ Variable pay typically granted annually in equity ˃ Equity grants account for, on average, approximately 43% of the Annual Incentive Compensation for the Named Executive Officers (other than Mr. Taubman) | ˃ The percentage of the Named Executive Officers’ total 2022 annual incentive compensation that was delivered in the form of a long-term equity award was 47% for Ms. Lee, 45% for Ms. Meates and 38% for ˃ Equity awards granted with respect to performance in calendar year 2022 to Ms. Lee, Ms. Meates and Mr. Travin vest over four years, with the first tranche vesting after two years. ˃ Mr. Taubman did not receive an annual incentive award related to his 2022 performance. |
Other Compensation Highlights
Performance LTIPs. On February 8, 2022, the Compensation Committee approved the grant of performance-based LTIP Units (which is a class of partnership interests in PJT Partners Holdings) under the PJT Partners Inc. 2015 Omnibus Incentive Plan (the “Performance LTIPs”) to Mr. Taubman and our other Named Executive Officers, effective February 10, 2022 (the “Grant Date”). These Performance LTIPs are intended to reward performance on a multi-year basis and in a manner that is fully aligned with shareholders.
The sharesPerformance LTIPs are subject to both performance and long-term time-based vesting conditions. In granting the Performance LTIPs, the Compensation Committee intended to address three key objectives: (1) ensure leadership continuity; (2) align compensation with long-term shareholder value creation; and (3) enhance retention of top talent at the company.
The performance vesting requirement for the Performance LTIPs will be deemed satisfied to the extent that the company’s Class A common stock underlying such vested restricted stock units will be deliveredachieves the designated dividend-adjusted per-share prices listed in the table below, based on the earliest of (i) the terminationvolume-weighted average share price of the director’s services, (ii) February 7, 2021, and (iii) a change in control of the company.
Each of Messrs. Hersch and Ryan elected to receive their annual retainer entirely in restricted stock units. On June 1, 2017, each of Messrs. Hersch and Ryan was awarded 3,142 restricted stock units with a grant date fair value computed in accordance with ASC Topic 718 of $124,989, or $39.78 per share underlying each restricted stock unit, for their service on the Board of Directors from June 1, 2017 to May 31, 2018. Subject to continued service as a director, 25% of each of these restricted stock unit grants vested or generally will vest on each of on each of August 31, 2017, November 30, 2017, February 28, 2018 and May 31, 2018. The shares ofcompany’s Class A common stock underlying such vested restricted stock unitsover any 20 consecutive trading-day period (“20-day VWAP”). The number of Performance LTIPs for which the performance condition has been met (the “Earned Performance LTIPs”) will be delivereddetermined (i) on a quarterly
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basis at the end of each fiscal quarter to occur after the Grant Date and (ii) as of and for the period ended on February 28, 2027 (the “End Date”) (each such fiscal quarter end date, together with the period ending with the End Date, a “Measurement Date”), based on the earliesthighest 20-day VWAP to have been achieved at any time starting on the Grant Date and ending on End Date, as follows:
Highest 20-day VWAP Between Grant Date and End Date | Percent of Total LTIP Units Granted that Become Earned LTIP Units |
Less than $100 | 0% |
$100 | 50% |
$130 | 100% |
If as of (i)any Measurement Date, the terminationhighest 20-day VWAP is between $100 and $130, then the percentage of the director’s services, (ii) June 1, 2022,total Performance LTIPs that will become Earned Performance LTIPs as of such time shall be determined by linear interpolation between 50% and (iii)100%. The last Measurement Date will be the End Date. There is no potential for Mr. Taubman or our other Named Executive Officers to earn more than 100% of the Performance LTIPs.
The Performance LTIPs satisfy the time-vesting requirement over a five-year period, with 20% vesting per annum, with limited and customary vesting exceptions and forfeiture provisions provided in the applicable award agreement and the PJT Partners Inc. 2015 Omnibus Incentive Plan, such as change in control, death, disability and termination without cause.
Service Period End Date | Cumulative Service Requirement Satisfied |
March 1, 2023 | 20% |
March 1, 2024 | 40% |
March 1, 2025 | 60% |
March 1, 2026 | 80% |
March 1, 2027 | 100% |
Performance LTIPs Granted to Mr. Taubman. The Compensation Committee granted to Mr. Taubman 1,000,000 Performance LTIPs, with the performance and time-based vesting conditions as described above, in order to provide an appropriate link between compensation and the creation of shareholder value through long-term focused and retention-driven incentive awards. The company does not currently anticipate paying Mr. Taubman any further equity incentive compensation through the end of 2026. Mr. Taubman’s annual base salary, which has been unchanged since 2015, will continue at $1,000,000 for 2023.
Performance LTIPs Granted to Ms. Lee, Ms. Meates and Mr. Travin. In order to align the interests of our Executive Officers with our shareholders in the same manner as Mr. Taubman, the Compensation Committee granted to Ms. Lee, Ms. Meates and Mr. Travin, Performance LTIPs as part of such Named Executive Officers’ performance year 2021 annual incentive compensation.
Say on Pay Vote
With respect to our 2022 non-binding, advisory shareholder vote on executive compensation, or say on pay, our shareholders overwhelmingly approved our executive compensation program with over 93% of voted shares cast in favor of the company.
Assay on pay proposal. We believe these results reflect strong shareholder support for our pay-for-performance linkage and our compensation structure that facilitates it, and therefore underscores the endorsement by our shareholders of December 31, 2017, Mr. Costos owned 3,122 unvested restricted stock units, Messrs. Herschthe alignment between our executive compensation and Ryan each owned 3,994 unvested restricted stock units, and Ms. Rafferty and Mr. Whitney each owned 2,416 unvested restricted stock units. These amounts include restricted stock units credited as dividend equivalents on the underlying restricted stock units held by Ms. Rafferty and Messrs. Costos, Hersch, Ryan and Whitney in connection with dividends paid by the company to holders of its Class A common stock. Credited dividend equivalents are subject to the same terms and conditions as the underlying restricted stock units.performance.
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COMPENSATION OF OUR EXECUTIVE OFFICERS
Compensation Discussion and Analysis
This section of our Proxy Statement discusses the principles underlying our executive compensation policies and decisions. In addition, this section provides qualitative information about the manner and context in which compensation is awarded to, and earned by, our Named Executive Officers, and places in context the data presented in the tables and narrative that follow.
Throughout this Proxy Statement, our Named Executive Officers (our “Named Executive Officers”) for the fiscal year ended December 31, 20172022 are as follows: Paul J. Taubman, our Chairman and Chief Executive Officer;Ji-Yeun Lee, our Managing Partner; Helen T. Meates, our Chief Financial Officer; and James W. Cuminale, our General Counsel (our “Named Executive Officers”).
2017 Compensation Highlights
Total awarded compensation for our Named Executive Officers was flat for 2017 performance year, compared to 2016 performance year
A significant portion of the total compensation paid to our Named Executive Officers was delivered as a long-term incentive in the form of restricted stock units that vest over three years
Our compensation structures are designed to encourage a focus on sustainable franchise growth and collaboration and do not include individual revenuepay-outs
Long-term incentive compensation is subject to clawback provisions that can be applied in appropriate circumstances
We engage an independent compensation consultant to advise our Compensation Committee, which is comprised solely of independent directors
The independent compensation consultant performs a compensation benchmarking analysis using available data to ensure that our compensation programs are competitive with those of other independent investment banks
Compensation Philosophy
Our executive compensation program considers firm-wide financial measures to ensure alignment with stockholders and a cohesive working environment amongst senior executives, in addition to goals targeted to each of the Named Executive Officers.
In order to ensure that we are able to attract and retain executives and other professionals that will contribute to the long-term success of PJT Partners, our compensation program for the firm overall also aims to be market-competitive versus our peers (in both quantum and structure).
In order to meet these objectives, our compensation program includes:
annual incentive compensation that places a strong emphasis on financial performance, with the flexibility to assess company and individual performance;
an appropriate link between compensation and the creation of stockholder value through equity awards;
a focus on sustainable franchise growth and collaboration, and therefore does not include individual revenuepay-outs; and
long-term incentives that do not promote excessive risk-taking.
˃ | Paul J. Taubman, our Chairman and CEO; | |
˃ | Ji-Yeun Lee, our Managing Partner; | |
˃ | Helen T. Meates, our Chief Financial Officer; and | |
˃ | David A. Travin, our General Counsel. |
Roles of our Compensation Committee, Compensation Consultant and Management
Compensation Committee
Our Compensation Committee is comprised entirely of independent directors. Our Compensation Committee has overall responsibility for monitoring the performance of our Named Executive Officers and evaluating and approving our executive compensation plans, policies and programs. In addition, our Compensation Committee oversees the Omnibus Incentive Plan.
Through October 1, 2018, Mr. Taubman is paid in accordance with his Partner Agreement (see “Narrative Disclosure RelatingWith respect to the Summarycompensation paid to our Chairman and CEO, our Compensation TableCommittee reviews and approves all components of Mr. Taubman’s compensation and ensures that his compensation aligns with the Grants of Plan-Based Awards Table—Partner Agreements—Partner Agreements with Paul J. Taubman”).company’s strategic plan. With respect to the other Named Executive Officers, our Compensation Committee seeks input from our Chairman and CEO and Chief ExecutiveHuman Resources Officer, reviews and approves all components of our other Named Executive Officers’ compensation and ensures that their compensation aligns with the company’s strategic plan.
Compensation ConsultantUse of Independent Advisor
Since 2016, ourOur Compensation Committee has engaged Willis Towers Watson, & Co., an independent outside compensation consultant, to provide guidance with respect to the development and implementation of our compensation programs. Willis Towers Watson provides our Compensation Committee with advice concerning the types and levels of compensation to be paid to our Named Executive Officers. Willis Towers Watson provides the committeeCompensation Committee with peer executive andnon-employee director compensation data, as well as expertise and advice on various matters brought before the committee.Compensation Committee. The Compensation Committee utilizes Willis Towers Watson’s advice and insights to inform the eventual decision makingdecision-making process. Willis Towers Watson also assists management and the Compensation Committee by providing market data on the compensation practices and programs of our peer competitors and guidance on industry trends and best practices.
The Compensation Committee has the sole authority to retain and terminate the independent compensation consultant and approve fees and other engagement terms. Our Compensation Committee requires that its consultant be independent of company management. Our Compensation Committee performs an annual assessment of the consultant’s independence to determine whether the consultant is independent. Our Compensation Committee most recently assessedIn assessing Willis Towers Watson’s independence, on February 22, 2018the Compensation Committee considered the six independence factors for compensation consultants listed in the NYSE listing requirements and confirmeddetermined that the retention of Willis Towers Watson is independent and that Willis Towers Watson’s work hasdid not raisedraise any conflict of interests.interest.
Management
Our CEO and our Chief ExecutiveHuman Resources Officer attendsattend Compensation Committee meetings, providesprovide information as to the individual performance of the other Named Executive Officers and makesmake annual recommendations to our Compensation Committee of appropriate compensation levels. HeOur CEO, with input from the Chief Human Resources Officer and in consultation with the Compensation Committee, also develops annual performance goals focused on the company’s tactical and strategic objectives against which our Named Executive Officers will generally be measured. Our Chief Executive OfficerCEO and our Head ofChief Human Resources Officer present an
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evaluation against those objectives to the Compensation Committee as part of the annual compensation process. The broader population compensation pool funding and structure for employees overall is assessed consideringby giving consideration to the company’s tactical and strategic objectives as well as the performance of each business and is presented by our Chief Executive OfficerCEO and our Head ofChief Human Resources Officer to the Compensation Committee for approval. All components of our Named Executive Officers’ compensation must be approved by our Compensation Committee in its sole discretion.
Benchmarking Process
In developing our compensation programs, our Compensation Committee commissions a compensation benchmarking analysis to ensure that our programs are competitive with those of
other independent investment banks, including consideration of the cost of equivalent talent in the markets in which we operate. Our Compensation Committee reviews our Named Executive Officer compensation in relation to other financial institutions, working with Willis Towers Watson, whowhich provides market data and practices for consideration, as well as executive compensation trends and developments. One of the challenges for our company when establishing its peer group is the limited number of directly comparable organizations. Part of the Compensation Committee’s overall review of the executive compensation program over the past several years has included developing underlying principles for identifying peers. These principles include operating in similar or comparable industry segments: investment banking, comparable in size and scope and competitors for talent. The available data reviewed included thatfull peer group of independent investment banks as well asbanking firms is Cowen Group, Inc., Evercore, Greenhill, Houlihan Lokey, Jefferies, Lazard, Moelis, Perella Weinberg Partners and Rothschild & Co. The most relevant roles at bulge brackets firms occupied by similarly experienced talent. The public competitors considered within the independent investment bank benchmarking data included Evercore Inc., Greenhill & Co., Inc., Houlihan Lokey, Inc., Lazard Ltd, and Moelis & Company. The members of our peer group are reviewed each year to determine relevance of the peer set while taking into consideration data availability.for 2022 included:
Lazard Ltd. Evercore Inc. Houlihan Lokey, Inc. | Moelis & Company Perella Weinberg Partners |
For purposes of determining our overall level of executive compensation (i.e.(i.e., base salary and annual incentive compensation), our Compensation Committee generally reviews compensation in light of peer group anticipated compensation levels,ranges but does not limit target setting to a particular peer group percentile.
Our Compensation Committee also takes into account other factors, including the executive’s role and experience, as compared to our peers’ executives. Ultimately, our Compensation Committee believes that appropriate compensation for a particular executive should be made based on the full review of company and individual performance, while also considering market data.
Overall, as set forth below in “Elements of Our Compensation Program,” Willis Towers Watson determined that our executive compensation programs, as structured, are appropriately competitive relative to our peers.
Elements of Our Compensation Program
Compensation provided to our Named Executive Officers generally consists of base salary, discretionary annual incentive compensation, which includes a cash bonus and long-term incentive awards granted in the form of restricted stock units,equity, and other perquisites and benefits, each of which is described in more detail below.
Base Salary
The base salary payable to each Named Executive Officer provides a fixed component of compensation that reflects the executive’s position and responsibilities. Base salaries are reviewed annually by our Compensation Committee and may be adjusted to better match competitive market levels or to recognize an executive’s professional growth, development and increased responsibility.
20172022 Base Salaries. We provided an annual base salary of $1,000,000, $1,000,000, $500,000 and $500,000 to each of Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Cuminale,Travin, respectively. The amount of the base salary for the Named Executive Officers is set in accordance with the terms of their respective partner agreements with us, and may be adjusted from time to time in accordance with those agreements. These base salaries have not been adjusted since October 1, 2015, for Mr. Taubman, January 1, 2016 for Ms. Lee October 1, 2015 for Ms. Meates and January 1, 20172021 for Mr. Cuminale.Travin.
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In 2023, Ms. Meates base salary will be adjusted to $1,000,000, reflective of her seniority and the breadth of her role as a senior leader within our company.
Annual Incentive Compensation
Named Executive Officers are eligible to receive discretionary compensation on an annual basis to incentivize the achievement of key short- and long-term corporate strategic goals and to motivate certain desired individual behaviors.goals. We do not set specific quantitative performance targets upon which the annual incentive compensation paid to our Named Executive Officers would become payable. Instead, the annual incentive compensation paid to our Named Executive Officers is determined based on a performance evaluation conducted by our Compensation Committee with the assistance of Mr. Taubman and our Head of Human Resources, other(other than with respect to compensation to be paid to Mr. Taubman.Taubman) and our Chief Human Resources Officer. A portion of the annual incentive compensation is paid in cash and a portion is paid in the form of long-term incentive awards granted in the form of restricted stock units.equity.
Annual Incentive Compensation for Ms. Lee, Ms. Meates and Mr. Travin
The evaluation with respect to the annual incentive compensation paid to Ms. Lee, Ms. Meates and Mr. CuminaleTravin for the 20172022 performance year involved an analysis of both both:
(i) our overall companycompany-wide performance and
(ii) the performance of the individual officer and his or her contributions to the company, including consideration of role-specific goals previously agreed to by the Compensation Committee.
Overall company performanceCompany Performance.: The Compensation Committee’s executive compensation decisions consider firm-widecompany-wide financial performance as a collective measure to ensure alignment with shareholders and to foster a cohesive working environment amongstcollaborative approach among senior executives. With respect to overall company performance, the factors considered for our Named Executive Officers were: operating revenue growth; adjustedpre-tax income; adjusted net income per share;
˃ | share price performance, | |
˃ | revenue growth, | |
˃ | adjusted pretax income growth and | |
˃ | adjusted net income per share growth |
in each case taking into consideration performance versus the independent investment bank peers discussed above. Consistent with our long-term focus, each of these elements are reviewed through a multi-year lens and share price performance.with consideration given to our company’s business mix versus our competitors.
Performance of the individualIndividual Named Executive OfficerOfficers:. Individual, role-specific performance goals have been identified as goals where the Named Executive Officer is most able to influence the relevant outcome, acknowledging they may not be solely responsible for such outcomes and that success against these goals is also the collective responsibility of the executive team. In defining these goals we have also considered their relevance to the stage of the company’s development.
Ji-Yeun Lee: With respect to individual performance, the factors considered for Ms. Lee were her leadershipteam and executive management role with ourbroader company including: effectively driving collaboration across businesses and corporate functions; attraction and retention of top talent to the company; and momentum in our Strategic Advisory buildout.management.
˃ | Ji-Yeun Lee. With respect to the assessment of individual performance, the factors considered for Ms. Lee were her leadership and executive management role with our company, including: continued evidence of the growth in cross-company revenue generating opportunities; the continued development of the Strategic Advisory business, including year over year outperformance of the business relative to peers and continued success in the attraction and retention of top talent to the company at all levels. | |
˃ | Helen T. Meates. With respect to the individual assessment of Ms. Meates, factors considered included: Ms. Meates’ leadership and oversight of our global finance function including its strategic reporting and analytics capability; the continued building and maintenance of relationships with our investors, clients, equity research community, auditors and regulators; and effective management of corporate finance. | |
˃ | David A. Travin. With respect to the individual assessment of Mr. Travin, factors considered included: Mr. Travin’s leadership and oversight of our global legal and compliance functions, including a continued deepening of the bench strength of the talent therein; effectively managing the company’s risk exposure to potential litigation and regulatory matters; overseeing and enhancing the company’s compliance culture; strengthening relationships in the legal community and advising our bankers with appropriate legal and regulatory advice from a deal perspective. |
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Helen T. Meates: With respect to Ms. Meates, factors considered included: Ms. Meates’s leadership and oversight of our global finance function, including building and maintaining relationships with our investors; and providing the necessary tools and analytics to facilitate effective guardianship of ournon-compensation costs.
James W. Cuminale: With respect to Mr. Cuminale, factors considered included: Mr. Cuminale’s leadership and oversight of our global legal and compliance functions; effectively managing the firm’s risk exposure to any potential litigation and regulatory matters; and effectively developing the firm’s compliance culture.
Cash Bonus.The portion of each Named Executive Officer’s 20172022 annual incentive compensation paid in the form of restricted cash was as follows: Ms. Lee—$1,562,500;1,852,500; Ms. Meates—$1,037,500;1,652,500; and Mr. Cuminale—Travin—$900,000.1,027,500. Mr. Taubman has not received any cash compensation in excess of base salary with respect to performance years 2015 through 2017, and we do not anticipate paying Mr. Taubman annual incentive compensation through October 1, 2018,since the third anniversary of the closing of ourspin-off, in accordance with the terms of Mr. Taubman’s Partner Agreement.company’s inception.
Long-Term Incentive Awards.The Compensation Committee believes that a substantial portion of each Named Executive Officer’s annual incentive compensation (other than Mr. Taubman, who received a $1,000,000 base salary as referenced above) should be in the form of long-term incentive awards which for performance year 2017 were granted in the form of either LTIP Units or restricted stock units that will be satisfied by deliveryunits. Determination of sharesthe form of long-term incentive awards takes into consideration the significant equity holdings our Class A common stockNamed Executive Officers maintain, which in equal annual installments overeach case were acquired through a three year vesting period. combination of grants made at the company’s spin-off, performance-based awards and open market purchases.
Long-term incentive awards encourage management to create stockholdershareholder value over the long term, because the value of the equity awards is directly attributable to the price of our Class A common stock over time. In addition, equity awards are an effective tool for management retention because full vesting of the awards generally requires continued employment for multiple years.
Performance LTIPs Granted to Mr. Taubman
The portionCompensation Committee granted to Mr. Taubman 1,000,000 Performance LTIPs, with the performance and time-based vesting conditions as described above, in order to provide an appropriate link between compensation and the creation of each Named Executive Officer’s 2017 annualshareholder value through long-term focused and retention-driven incentive bonus paid in the form of restricted stock units was as follows: Ms. Lee—$1,937,500; Ms. Meates—$962,500; andawards. The company does not currently anticipate paying Mr. Cuminale—$850,000. The restricted stock units were granted on February 13, 2018. As these restricted stock units were granted in 2018, pursuant to the rules of the SEC, the grant date fair value of these restricted stock unit awards will be reflected in the “Stock Awards” column in the “Summary Compensation Table” for 2018.
For performance year 2017, the percentage of the Named Executive Officer’s total annualTaubman any further equity incentive compensation that was delivered as a long-term incentive inthrough the formend of restricted stock units was approximately 55%2026. Mr. Taubman’s annual base salary, which has been unchanged since 2015, will continue at $1,000,000 for Ms. Lee, 48% for Ms. Meates and 49% for Mr. Cuminale.2023.
Alternative Presentation of Annual Compensation
The following table is presented to show how our Compensation Committee viewed 2020 to 2022 annual compensation for our Named Executive Officers with respect to their 2017 performance,(except Mr. Travin, who was named as General Counsel on January 1, 2021, and as such, only 2021 and 2022 compensation is shown), and includes base salary as well as cash bonus and long-term incentive awards with respect to their 2017 performance, which was granted in February 2018.as part of annual incentive compensation. This table differs substantially from the “Summary Compensation Table” below and is not a substitute for that table. TheUnlike the “Summary Compensation Table” provides compensation information as required by SEC regulations, and thereforeTable,” which reflects for 2017 the grant date fair value of long-term incentive awards granted during the 2017applicable calendar year (i.e., those(whether or not such awards were granted in February 2017 with respect to 2016 performance)the performance for such year), while not including the long-termfollowing table reflects the dollar amounts of the annual incentive awards grantedcompensation paid in February 2018the form of restricted stock units, LTIPs and Performance LTIPs with respect to 2017 performance.each specific performance year (e.g., for 2021, the dollar amount of the Performance LTIPs that were granted in 2022 with respect to 2021 performance). In addition, this table includes the grant value of that portion of the one-time grant of 60,000 LTIP Units awarded to Mr. Taubman in September 2018 for the period from January 1, 2020 to December 31, 2020 with respect to performance year 2020, and for the period from January 1, 2021 to September 30, 2021 with respect to performance year 2021, as this award was intended by the Compensation Committee to serve as additional compensation for the three-year period from October 1, 2018 to October 1, 2021.
Name and Principal Position | Year | Salary $ | Cash Bonus(1) $ | Stock Awards $ | Total(2) $ | |||||
Paul J. Taubman | 2017 | 1,000,000 | — | — | 1,000,000 | |||||
Chairman and CEO | 2016 | 1,000,000 | — | — | 1,000,000 | |||||
2015 | 1,000,000 | — | — | 1,000,000 | ||||||
Ji-Yeun Lee | 2017 | 1,000,000 | 1,562,500 | 1,937,500 | 4,500,000 | |||||
Managing Partner | 2016 | 1,000,000 | 2,850,200 | 649,800 | 4,500,000 | |||||
2015 | 350,000 | 650,000 | — | 1,000,000 | ||||||
Helen T. Meates | 2017 | 500,000 | 1,037,500 | 962,500 | 2,500,000 | |||||
Chief Financial Officer | 2016 | 500,000 | 1,694,538 | 305,462 | 2,500,000 | |||||
2015 | 500,000 | 1,750,000 | — | 2,250,000 | ||||||
James W. Cuminale | 2017 | 500,000 | 900,000 | 850,000 | 2,250,000 | |||||
General Counsel | 2016 | 350,000 | 1,614,532 | 285,468 | 2,250,000 | |||||
2015 | 350,000 | 1,562,500 | — | 1,912,500 |
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Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Total | ||||||||
Paul J. Taubman Chairman and CEO | 2022 | $ | 1,000,000 | — | — | $ | 1,000,000 | ||||||
2021 | $ | 1,000,000 | — | $ | 799,500 | $ | 1,799,500 | ||||||
2020 | $ | 1,000,000 | — | $ | 1,066,000 | $ | 2,066,000 | ||||||
Ji-Yeun Lee Managing Partner | 2022 | $ | 1,000,000 | $ | 1,852,500 | $ | 1,647,500 | $ | 4,500,000 | ||||
2021 | $ | 1,000,000 | $ | 1,867,500 | $ | 1,632,500 | $ | 4,500,000 | |||||
2020 | $ | 1,000,000 | $ | 1,867,500 | $ | 1,632,500 | $ | 4,500,000 | |||||
Helen T. Meates Chief Financial Officer | 2022 | $ | 500,000 | $ | 1,652,500 | $ | 1,347,500 | $ | 3,500,000 | ||||
2021 | $ | 500,000 | $ | 1,667,500 | $ | 1,332,500 | $ | 3,500,000 | |||||
2020 | $ | 500,000 | $ | 1,667,500 | $ | 1,332,500 | $ | 3,500,000 | |||||
David A. Travin General Counsel | 2022 | $ | 500,000 | $ | 1,027,500 | $ | 622,500 | $ | 2,150,000 | ||||
2021 | $ | 500,000 | $ | 725,000 | $ | 525,000 | $ | 1,750,000 |
(1) |
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(2) | The dollar amounts of the |
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Retirement Arrangements
We have a 401(k) savings plan for eligible employees, including our Named Executive Officers, and may, in our sole discretion, provide annual matching contributions to certain 401(k) plan participants. We currently do not offer matching contributions to our Named Executive Officers.
Employee BenefitsBenefits; Perquisites
Eligible employees, including our Named Executive Officers, participate in broad-based and comprehensive employee benefit programs, including medical, dental, vision, life and disability insurance coverage. Our Named Executive Officers participate in these programs on the same basis as eligible employees generally, but the company does not typically pay for any portion of such employee benefits for partners, including our Named Executive Officers.
On occasion, certain of We make available to our partners, including our Named Executive Officers and on occasion, their families may makefamily members personal use of a company leased aircraft procured bywhen it is not being used for business purposes, for which the company,partners and any such personal use is charged to the Named Executive Officer based on market ratesOfficers pay the full incremental costs associated with such use.
All perquisites to our Named Executive Officers must be approved by the Compensation Committee. As approved by the Compensation Committee, we make available to our partners, including our Named Executive Officers, financial planning services at a cost of approximately $16,595 annually per partner paid by the company. In 2022, Mr. Taubman, Ms. Lee, Ms. Meates and usage.Mr. Travin took advantage of this service.
Compensation Program Governance Features
Clawback Policy
Pursuant to the terms of the Omnibus Incentive Plan, all awards are subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with:
(i) any clawback, forfeiture or other similar policy adopted by the Board or the Compensation Committee and as in effect from time to time, and
(ii) applicable law.
39 | Executive Compensation |
To the extent that a participant receives any amount in excess of the amount that the participant should otherwise have received under the terms of the award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the participant will be required to repay any such excess amount to the company.
Further, pursuant to the terms of the Omnibus Incentive Plan, to the extent a participant engages in:
(i) | unauthorized disclosure of any confidential or proprietary information of the company; | |
(ii) | any activity that would be grounds to terminate the participant’s employment for Cause (as defined in the Omnibus Incentive Plan); or | |
(iii) | the breach of any non-competition, non-solicitation or other agreement containing restrictive covenants, the Compensation Committee may, in its sole discretion, provide for one or both of the following: cancellation of any or all of such participant’s outstanding awards, or forfeiture by the participant of any gain realized on the vesting or exercise of awards, and to repay any such gain promptly to the company. |
We have also incorporated rigorous clawback provisions in the PJT Partners Inc. 2015 Bonus Deferral Plan (the “Bonus Deferral Plan”),. Pursuant to the terms of the Bonus Deferral Plan, if at any time before an applicable restricted stock unit vesting date, the Compensation Committee determines, in its sole and absolute discretion, that any of the following events has occurred, the company is authorized to cancel (and the employee would forfeit) an appropriate portion of the then unvested portion of the employee’s award granted pursuant to the Bonus Deferral Plan and any rights to dividend equivalents thereon:
misconduct by the employee in taking actions, or failing to take actions, that result in, or reasonably could be expected to result in, material detriment to the company or its business activities, including without limitation financial or reputational harm to the company or its business activities;
fraud, material misrepresentation or other dishonest acts by the employee which resulted in a determination by the Compensation Committee of an amount of such employee’s annual bonus that was greater than the amount the employee would have otherwise been entitled to but for such fraud, material misrepresentation or other dishonest act;
the employee’s gross negligence in, or other impropriety related to (including any failure to monitor or discharge supervisory or managerial responsibilities), failing to timely and reasonably identify, raise or assess issues and/or concerns with respect to risks material to the company or its business activities; or
following the termination of the employee’s employment, the company determines that such employee’s employment could have been terminated by the company for cause.
˃ | misconduct by the employee in taking actions, or failing to take actions, that result in, or reasonably could be expected to result in, material detriment to the company or its business activities, including, without limitation, financial or reputational harm to the company or its business activities; | |
˃ | fraud, material misrepresentation or other dishonest acts by the employee which resulted in a determination by the Compensation Committee of an amount of such employee’s annual bonus that was greater than the amount the employee would have otherwise been entitled to but for such fraud, material misrepresentation or other dishonest act; | |
˃ | the employee’s gross negligence in, or other impropriety related to (including any failure to monitor or discharge supervisory or managerial responsibilities), failing to timely and reasonably identify, raise or assess issues and/or concerns with respect to risks material to the company or its business activities; or | |
˃ | following the termination of the employee’s employment, the company determines that such employee’s employment could have been terminated by the company for cause. |
Nothing contained in the Bonus Deferral Plan limits or restricts the company from seeking repayment of any vested portions of an award made pursuant to the Bonus Deferral Plan already distributed to an employee, pursuant to any applicable clawback requirements imposed under applicable laws, rules and regulations. Accordingly, the clawback provisions contained in the Bonus Deferral Plan shall (i) be in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to our Chief Executive Officer and Chief Financial Officer and (ii) otherwise be deemed automatically amended to include the requirements of Section 954 of the Dodd-Frankshall:
Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, and any related rules or regulations promulgated by the SEC or the NYSE.
(i) | Be in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to our Chief Executive Officer and Chief Financial Officer and | |
(ii) | Otherwise be deemed automatically amended to include the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, and any related rules or regulations promulgated by the SEC or the NYSE. |
Our Compensation Committee intends tomay periodically review this clawback policy and, as appropriate, conform it to any applicable final rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.policy.
Hedging and Pledging of ourOur Securities
Our directors and employees, including our Named Executive Officers, are prohibited from engaging in a transaction meant to hedge or minimize losses in our securities, including engaging in transactions in forward contracts, equity swaps, collars, exchange funds, puts, calls, oroptions and other derivatives on our securities, or short-sellingshort selling our securities.
Our directors and employees, including our Named Executive Officers, are prohibited from pledging our securities as collateral for a loan unless such pledging transaction is approved by our General Counsel.
40 | Executive Compensation |
Minimum Equity Ownership Guidelines for Named Executive Officers
In February 2018, ourOur Compensation Committee adoptedhas implemented minimum equity ownership guidelines that require each Named Executive Officer to maintain equity ownership in the company (including Partnership Units, LTIP Units or restricted stock units) having a market value equal to or greater than a multiple of such Named Executive Officer’s base salary (ten times base salary for the Chairman and Chief Executive OfficerCEO and five times base salary for the other Named Executive Officers). Each executive officerNamed Executive Officer must achieve the minimum equity investment within five years from the later of the adoption of the guidelines (for Named Executive Officers in place at that time of the adoption of the guidelines) and the date of such Named Executive Officer’s appointment (for subsequently appointed Named Executive Officers).
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Our Compensation Committee also adopted minimum equity All Named Executive Officers are or are expected to be, within the time ascribed in our ownership guidelines, forin compliance with ournon-management directors. See “Compensation of Directors—Minimum Equity Ownership Guidelines” above.Guidelines.
Named Executive Officer | Ownership Requirement Multiple | Ownership Requirement Value | |||||
Paul J. Taubman | 10x Base Salary | $ | 10,000,000 | ||||
Ji-Yeun Lee | 5x Base Salary | $ | 5,000,000 | ||||
Helen T. Meates | 5x Base Salary | $ | 5,000,000 | * | |||
David A. Travin | 5x Base Salary | $ | 2,500,000 |
*Based on Ms. Meates’ fiscal 2023 base salary.
Vesting of Equity Awards
Our practice is to grant equity awards to our Named Executive Officers that generally vest over a period of several years, with the vesting of the first tranche of any such equity award at least one year from the grant date. For performance year 2022, equity awards granted to our Named Executive Officers and other partners vest over a four-year period, with equity awards vesting in equal installments following the second, third and fourth year anniversaries from grant.
No Individual RevenuePay-Outs
We have a no individual revenuepay-outs philosophy as it relates to annual incentive compensation, and no contractual entitlement to severance. To provide further flexibility with respect to employment and compensation matters, we maintain a flexible termination practice with no contractual rights to continued employment (other than for a notice and potential garden leave period) and no contractual right to severance upon termination..
Risk Considerations in ourOur Compensation Programs
Our Compensation Committee has discussed the concept of risk as it relates to our compensation programs with management and Willis Towers Watson, and our Compensation
Committee does not believe the goals, or the underlying philosophy of our compensation programs encourage excessive or inappropriate risk taking.
Our discretionary compensation program is designed to reflect the performance of our firmcompany and the performance of the individual employee, and we believe its design discourages excessive risk taking. For example, paying a significant portion of discretionary compensation in the form of equity awards, all with multi-year vesting periods, encourages each of our senior professionals to be sensitive to long-term risk outcomes, as the value of their awards increase or decrease with the price of our Class A common stock. Our directors, Named Executive Officers, partners and employees are prohibited from hedging their shares of our Class A common stock and from pledging such shares withoutpre-approval of our General Counsel. We believe these criteria will provide our employees additional incentives to prudently managefor the prudent management of the range of risks inherent in our business. Based on this, we do not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the company.
Award Timing
Annual equity awards were granted to Named Executive Officers and all other PJT Partners employees on February 13, 2018 following the company’s public announcement of its financial results for the prior fiscal year. The equity awards were delivered in the form of restricted stock units with aggregate number of restricted stock units determined on the basis of the average closing price of a share of Class A common stock over the five trading days immediately prior to and the five trading days immediately following the date that PJT Partners first publicly issued its earnings release for full year 2017, with grants made effective the final day of this window.
41 Executive Compensation
REPORT OF THE COMPENSATION COMMITTEE
The following Compensation Committee report to stockholdersshareholders shall not, in accordance with the rules of the SEC, be incorporated by reference into any of our future filings made under the Exchange Act or under the Securities Act and shall not be deemed to be soliciting material or to be filed under the Exchange Act or the Securities Act.
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with management and, based on such review and discussions, our Compensation Committee recommended to ourthe Board of Directors that our Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by our Compensation Committee:
Thomas M. Ryan, Chair
Dennis S. Hersch
Submitted by the Compensation Committee: | |
Thomas M. Ryan, Chair | |
Emily K. Rafferty |
42 | Executive Compensation |
Summary Compensation Table
The following table summarizes the total compensation paid to or earned by each of our Named Executive Officers in respect of fiscal years 2015, 20162020, 2021 and 2017,2022 for Mr. Taubman, Ms. Lee and Ms. Meates, and fiscal years 2021 and 2022 for Mr. Travin, each under the rules of the SEC. Mr. Travin was promoted to General Counsel on January 1, 2021.
Name and Principal Position | Year | Salary $ | Bonus(1) $ | Stock Awards(2) $ | Total $ | |||||
Paul J. Taubman | 2017 | 1,000,000 | — | — | 1,000,000 | |||||
Chairman and CEO | 2016 | 1,000,000 | — | — | 1,000,000 | |||||
2015 | 250,000 | — | 75,202,100 | 75,452,100 | ||||||
Ji-Yeun Lee | 2017 | 1,000,000 | 1,562,500 | 649,800 | 3,212,300 | |||||
Managing Partner | 2016 | 1,000,000 | 2,850,200 | — | 3,850,200 | |||||
2015 | 87,500 | 650,000 | 12,272,950 | 13,010,450 | ||||||
Helen T. Meates | 2017 | 500,000 | 1,037,500 | 305,462 | 1,842,962 | |||||
Chief Financial Officer | 2016 | 500,000 | 1,694,538 | — | 2,194,538 | |||||
2015 | 125,000 | 1,750,000 | 2,386,100 | 4,261,100 | ||||||
James W. Cuminale | 2017 | 500,000 | 900,000 | 285,468 | 1,685,468 | |||||
General Counsel | 2016 | 350,000 | 1,614,532 | — | 1,964,532 | |||||
2015 | 87,500 | 1,562,500 | 2,529,150 | 4,179,150 |
Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(1)(2) | Other(3) | Total | ||||||||||||
Paul J. Taubman Chairman and CEO | 2022 | $ | 1,000,000 | — | $ | 39,100,000 | $ | 16,595 | $ | 40,116,595 | ||||||||
2021 | $ | 1,000,000 | — | — | $ | 15,000 | $ | 1,015,000 | ||||||||||
2020 | $ | 1,000,000 | — | — | $ | 15,000 | $ | 1,015,000 | ||||||||||
Ji-Yeun Lee Managing Partner | 2022 | $ | 1,000,000 | $ | 1,852,500 | $ | 1,971,031 | $ | 16,595 | $ | 4,840,126 | |||||||
2021 | $ | 1,000,000 | $ | 1,867,500 | $ | 1,649,703 | $ | 15,000 | $ | 4,532,203 | ||||||||
2020 | $ | 1,000,000 | $ | 6,867,500 | $ | 1,753,474 | $ | 15,000 | $ | 9,635,974 | ||||||||
Helen T. Meates Chief Financial Officer | 2022 | $ | 500,000 | $ | 1,652,500 | $ | 1,608,809 | $ | 16,595 | $ | 3,777,904 | |||||||
2021 | $ | 500,000 | $ | 4,667,500 | $ | 1,346,550 | $ | 15,000 | $ | 6,529,050 | ||||||||
2020 | $ | 500,000 | $ | 1,667,500 | $ | 1,135,855 | $ | 15,000 | $ | 3,318,355 | ||||||||
David A. Travin General Counsel | 2022 | $ | 500,000 | $ | 1,027,500 | $ | 633,889 | $ | 16,570 | $ | 2,177,959 | |||||||
2021 | $ | 500,000 | $ | 725,000 | $ | 138,720 | $ | 15,000 | $ | 1,378,720 |
(1) |
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(2) | The amounts included in this column represent the aggregate grant date fair value of the equity awards computed in accordance with ASC Topic 718. A discussion of the assumptions used in calculating these |
values can be found in Note 10 to our | ||
(3) | We make available to our partners, including our Named Executive Officers, financial planning services on an annual basis paid for by the company. In 2022, each of our Named Executive Officers used this service. In addition, we make available to our partners, including our Named Executive Officers, and on occasion, their family members, personal use of a company leased aircraft when it is not being used for business purposes, for which the partners and the Named Executive Officers pay the full incremental costs associated with such use. |
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Grants of Plan-Based Awards in 20172022
The following table discloses the number of plan-based awards granted in 20172022 to our Named Executive Officers and the grant date fair value of these awards.
Estimated Future Payouts Under Equity Incentive Plan Awards(3)
Name | Grant Date | Action Date(1) | All Other Stock Awards: Number of Shares of Stock or Stock Units(2) (#) | Grant Date Fair Value of Stock and Option Awards(3) ($) | ||||
Paul J. Taubman | — | — | — | — | ||||
Ji-Yeun Lee | 2/15/17 | 1/12/17 | 19,152 | 702,112 | ||||
Helen T. Meates | 2/15/17 | 1/12/17 | 9,003 | 330,050 | ||||
James W. Cuminale | 2/15/17 | 1/12/17 | 8,414 | 308,457 |
Name | Grant Date(1) | Action Date(2) | Threshold (#) | Target (#)(3) | Maximum (#)(3) | Grant Date Fair Value of Stock and Option Awards(4) | ||||||||
Paul J. Taubman | 2/10/22 | 2/8/22 | 500,000 | 1,000,000 | 1,000,000 | $ | 39,100,000 | |||||||
Ji-Yeun Lee | 2/10/22 | 2/8/22 | 25,205 | 50,410(3) | 50,410(3) | $ | 1,971,031(3) | |||||||
Helen T. Meates | 2/10/22 | 2/8/22 | 20,573 | 41,146(3) | 41,146(3) | $ | 1,608,809(3) | |||||||
David A. Travin | 2/10/22 | 2/8/22 | 8,106 | 16,212(3) | 16,212(3) | $ | 633,889(3) |
(1) |
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(2) | The Compensation Committee acted to awardyear-end |
Represents |
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Narrative Disclosure Relating toEquity Awards at 2022 Fiscal Year-End
The following table sets forth the Summary Compensation outstanding equity awards held by our Named Executive Officers as of December 31, 2022.
Stock Awards | ||||||||||||||
Name | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock that Have Not Vested(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested(4) | ||||||||||
Paul J. Taubman | — | — | 1,000,000 | $ | 73,690,000 | |||||||||
Ji-Yeun Lee | 35,388(1) | $ | 2,607,742 | 50,410 | $ | 3,714,713 | ||||||||
Helen T. Meates | 26,922(2) | $ | 1,983,882 | 41,146 | $ | 3,032,049 | ||||||||
David A. Travin | 7,639(3) | $ | 562,918 | 16,212 | $ | 1,194,662 |
(1) | This amount consists of (i) 11,106 restricted stock units that vested on March 1, 2023, (ii) 22,540 restricted stock units that vest ratably on March 1, 2023, 2024, and 2025 and (iii) 1,832 unvested dividend equivalent restricted stock units. | |
(2) | This amount consists of (i) 7,136 restricted stock units that vested on March 1, 2023, (ii) 18,398 restricted stock units that vest ratably on March 1, 2023, 2024 and 2025, and (iii) 1,388 unvested dividend equivalent restricted stock units. | |
(3) | This amount consists of (i) 1,063 restricted stock units that vested on March 1, 2023, (ii) 2,037 LTIPs that vest ratably on March 1, 2023, 2024 and 2025, (iii) 4,250 restricted stock units that vest on March 1, 2025, and (iv) 289 unvested dividend equivalent restricted stock units. | |
(4) | Based on the closing price of our Class A common stock of $73.69 on December 31, 2022. | |
(5) | Amounts included in this column reflect Performance LTIPs granted in fiscal 2022. Performance LTIPs are subject to both service and performance conditions. Performance LTIPs satisfy the time-vesting requirement over a five year period, with 20% vesting per year commencing on March 1, 2023. The performance vesting requirement for the Performance LTIPs will be deemed satisfied to the extent that the company’s Class A common stock achieves the designated dividend-adjusted per-share prices ranging from $100 to $130. The number of Performance LTIPs for which the performance condition has been met will be determined (i) on a quarterly basis at the end of each fiscal quarter to occur after the grant date and (ii) as of and for the period ended on February 28, 2027 (the “End Date”), based on the highest 20-day VWAP to have been achieved at any time starting on the Grant Date and ending on End Date. If as of any measurement date, the highest 20-day VWAP is between $100 and $130, then the percentage of the total Performance LTIPs that will become Earned Performance LTIPs as of such time shall be determined by linear interpolation between 50% and 100%. The number of Performance LTIPs reported reflects the total number of units granted even though the performance period will not end until February 28, 2027 and vesting is contingent on meeting volume-weighted average share price targets. Therefore, there is no assurance that any portion of these units will be earned. |
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2022 Option Exercises and the Grants of Plan-Based Awards TableStock Vested
The following table sets forth certain information regarding equity awards that vested in 2022 for our Named Executive Officers.
Stock or Unit Awards | ||||||||
Name | Number of Shares or Units Acquired on Vesting(1) (#) | Value Realized on Vesting(2) | ||||||
Paul J. Taubman | — | — | ||||||
Ji-Yeun Lee | 23,151 | $ | 1,477,503 | |||||
Helen T. Meates | 12,926 | $ | 824,964 | |||||
David A. Travin | 1,553 | $ | 99,081 |
(1) | Represents the aggregate number of restricted stock units to Ms. Lee, Ms. Meates and Mr. Travin, that vested in 2022. |
(2) | The value realized on vesting of the equity awards is the product of (a) the closing price on the New York Stock Exchange of a share of our Class A common stock on the vesting date (or, if the vesting date was not a trading day, the immediately preceding trading day), multiplied by (b) the number of equity awards vested. |
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Partner Agreements
Partner Agreement with Paul J. Taubman
PJT Partners Holdings entered into a partner agreement with Mr. Taubman (the “CEO Agreement”) oneffective October 1, 2015. The CEO Agreement provides for an annual base salary of $1,000,000 through October 1, 2018, the third anniversary of the closing of the merger andspin-off transactions. Thereafter, Mr. Taubman’s compensation will be determined by our Compensation Committee, subject to a minimum annual base salary of $350,000.
Mr. Taubman is generally subject to covenants ofnon-competition andnon-solicitation of employees, consultants, clients and investors during his service to PJT Partners Holdings and for a period (the “Restriction Period”) ending on the later of (x) March 31, 2017 and (y) one year following the termination of his service to PJT Partners Holdings in the case of thenon-competition restrictions, and two years following the termination of his service to PJT Partners Holdings in the case of thenon-solicitation restrictions. If Mr. Taubman is terminated by PJT Partners Holdings without cause or he resigns for good reason, the foregoing periods of time during which he will be subject to thenon-competition restrictions will be reduced to 120 days and 90 days, respectively. If Mr. Taubman’s service with PJT Partners Holdings is terminated for any reason other than his resignation without Board Change Good Reason or a termination of service by PJT Partners Holdings for cause, in each case within 24 months following a Board Change of Control, then (1) the covenants ofnon-competition andnon-solicitation of client and investors will expire upon termination, and (2) the covenants ofnon-solicitation of employees and consultants will expire six months after termination. Mr. Taubman is also subject to perpetual covenants of confidentiality andnon-disparagement.
(1) | the covenants of non-competition and non-solicitation of clients and investors will expire upon termination, and | |
(2) | the covenants of non-solicitation of employees and consultants will expire six months after termination. Mr. Taubman is also subject to perpetual covenants of confidentiality and non-disparagement. |
For purposes of the CEO Agreement:
“cause” means the occurrence or existence of any of the following: (i) Mr. Taubman’s willful act of fraud, misappropriation, or embezzlement against PJT Partners Holdings that has a material adverse effect on the business of PJT Partners Holdings; (ii) Mr. Taubman’s conviction of a felony; or (iii) anun-appealable final determination by a court or regulatory body having authority with respect to securities laws that Mr. Taubman violated any applicable securities laws or any rules or regulations thereunder if such final determination (A) bars Mr. Taubman from employment in the securities industry or (B) renders Mr. Taubman unable to substantially perform his duties to PJT Partners Holdings; provided that, PJT Partners Holdings must provide a notice of termination to Mr. Taubman within 60 days of the occurrence of the event constituting “cause,” and, other than with respect to clause (ii) above, Mr. Taubman will have the opportunity to cure within 30 days of receiving such notice.
“good reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: (i) a material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities; (ii) the assignment of any duties materially inconsistent with Mr. Taubman’s positions; (iii) a reduction of Mr. Taubman’s salary; (iv) the relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office; (v) a material breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates; (vi) the failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to our Board of Directors (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the board by PJT Partners Holdings (other than for “cause”); (vii) the hiring or firing of any executive officer; or (viii) the failure by PJT Partners Holdings to obtain written assumption of the Partner Agreement by a purchaser or successor of PJT Partners Holdings; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 60 days of the occurrence of the event constituting “good reason,” and PJT Partners Holdings will have the opportunity to cure within 30 days of receiving such notice.
“Board Change Good Reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: (i) a material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities; (ii) the assignment of any duties materially inconsistent with Mr. Taubman’s positions; (iii) a reduction of Mr. Taubman’s salary; (iv) the
˃ | “cause” means the occurrence or existence of any of the following: |
(i) | Mr. Taubman’s willful act of fraud, misappropriation, or embezzlement against PJT Partners Holdings that has a material adverse effect on the business of PJT Partners Holdings. |
(ii) | Mr. Taubman’s conviction of a felony; or |
(iii) | an un-appealable final determination by a court or regulatory body having authority with respect to securities laws that Mr. Taubman violated any applicable securities laws or any rules or regulations thereunder if such final determination: |
(A) | bars Mr. Taubman from employment in the securities industry or |
(B) | renders Mr. Taubman unable to substantially perform his duties to PJT Partners Holdings; provided that, PJT Partners Holdings must provide a notice of termination to Mr. Taubman within 60 days of the occurrence of the event constituting “cause,” and, other than with respect to clause (ii) above, Mr. Taubman will have the opportunity to cure within 30 days of receiving such notice. |
˃ | “Good reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: |
(i) | a material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities. |
(ii) | the assignment of any duties materially inconsistent with Mr. Taubman’s positions. |
(iii) | a reduction of Mr. Taubman’s salary. |
(iv) | the relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal |
(v) | a material breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its |
(vi) | the failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to |
(vii) | the hiring or firing of any Executive Officer; or |
(viii) | the failure by PJT Partners Holdings to obtain written assumption of the Partner Agreement by a purchaser or successor of PJT Partners Holdings; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 60 days of the occurrence of the event constituting “good reason,” and PJT Partners Holdings will have the opportunity to cure within 30 days of receiving such notice. |
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˃ | “Board Change Good Reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: |
(i) | A material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities. |
(ii) | The assignment of any duties materially inconsistent with Mr. Taubman’s positions. |
(iii) | A reduction of Mr. Taubman’s salary. |
(iv) | The relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office. |
(v) | A breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates. |
(vi) | The failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to the Board (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the Board by PJT Partners Holdings (other than for “cause”); (vii) the failure by PJT Partners Holdings to obtain written assumption of the CEO Agreement by a purchaser or successor of PJT Partners |
(vii) | PJT Partners Holdings or any of its affiliates effecting a material disposition, acquisition or other business |
(viii) | PJT Partners Holdings or any of its affiliates entering into a new significant business line or discontinuing a significant existing business |
(ix) | the hiring or firing of any |
“Board Change of Control” means a majority of the members of our Board of Directors ceasing to be “continuing directors” which means any member of our Board of Directors who: (i) was a member of such board immediately following the merger andspin-off transactions on October 1, 2015; or (ii) was nominated for election or elected or appointed to the board with the approval of a majority of the “continuing directors” who were members of such board at the time of such nomination, election or appointment.
˃ | “Board Change of Control” means a majority of the members of the Board ceasing to be “continuing directors” which means any member of the Board who: |
(i) | was a member of such board immediately following the merger and spin-off transactions on October 1, 2015; or |
(ii) | was nominated for election or elected or appointed to the board with the approval of a majority of the “continuing directors” who were members of such board at the time of such nomination, election or appointment. |
Partner Agreements withJi-Yeun Lee, Helen T. Meates and James W. CuminaleDavid A. Travin
PJT Partners Holdings entered into partner agreements with each of Ms. Lee and Ms. Meates, effective October 1, 2015, and Mr. Cuminale on OctoberTravin, effective January 1, 2015.2021. The agreements generally set forth the terms of service of each officer, including their respective compensation and benefits, as described in “Elements of our ExecutiveOur Compensation Program.”
These officers are generally subject to covenants ofnon-competition andnon-solicitation of employees, consultants, clients and investors during their service to PJT Partners Holdings and for a period (the “Restriction Period”) ending on the later of (x) March 31, 2017 and (y) one year following the termination of service to PJT Partners Holdings in the case of thenon-competition restrictions, and two years following the termination of service to PJT Partners Holdings in the case of thenon-solicitation restrictions. If the executive officerExecutive Officer is terminated by PJT Partners Holdings without cause or the executive officerExecutive Officer resigns for good reason, the foregoing periods of time during which they will be subject to thenon-competition restrictions will be reduced to 120 days and 90 days, respectively. The officers are also subject to perpetual covenants of confidentiality andnon-disparagement.
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For purposes of the partner agreements with Ms. Lee, Ms. Meates and Mr. Cuminale:Travin:
“cause” means the occurrence or existence of any of the following: (i) (x) any material breach of the partner agreement
˃ | “cause” means the occurrence or existence of any of the following: |
(i) | (x) any material breach of the partner agreements, (y) material breach of any material rules or regulations of PJT Partners Holdings applicable that have been provided that has a material adverse effect on the business of PJT Partners Holdings, or (z) deliberate and repeated failure to perform substantially the Executive Officer’s material duties to PJT Partners Holdings; provided that, in the case of any of the foregoing clauses (x), (y) or (z), PJT Partners
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