UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
the Securities Exchange Act of 1934 (Amendment
(Amendment No.)
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | ||
Confidential, for Use of the Commission Only (as permitted byRule 14a-6(e)(2)) | ||
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material under§240.14a-12 |
MOELIS & COMPANY
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
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Fee paid previously with preliminary | ||||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act | |||
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399 PARK AVENUE
54TH FLOOR
NEW YORK, NEW YORK 10022
April 22, 202020, 2022
Dear Stockholder,
We cordially invite you to attend our 20202022 Annual Meeting of Stockholders, to be held on Thursday, June 4, 20202, 2022 at 8:30 a.m. (Eastern Time) at the offices of Moelis & Company located at 399 Park Avenue, 54th Floor, New York, NY 10022.
The Notice of Annual Meeting of Stockholders and the proxy statementProxy Statement that follow describe the business to be conducted at the meeting.
Your vote is important. We encourage you to vote by proxy in advance of the meeting, whether or not you plan to attend the meeting.
Sincerely,
Kenneth Moelis
ChairmanChair and Chief Executive Officer
399 PARK AVENUE
54TH FLOOR
NEW YORK, NEW YORK 10022
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Meeting Date: | Thursday, June | |
Time: | 8:30 a.m. (Eastern Time) | |
Place: | Offices of Moelis & Company 399 Park Avenue | |
New York, NY 10022 |
We are holding our 20202022 annual meeting of stockholders (the “Annual Meeting”) for the following purposes, which are described in more detail in the proxy statement:Proxy Statement:
1. | to elect |
2. | to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the accompanying Proxy Statement; |
3. | to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
4. | to transact any other business as may properly come before the meeting or any adjournment or postponement thereof. |
Only stockholders of record as of the close of business on April 9, 20207, 2022 will be entitled to attend and vote at the annual meeting.Annual Meeting.
As permitted by the rules of the Securities and Exchange Commission (the “SEC”), we are sending our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) rather than a paper set of the proxy materials. The Notice 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 to vote by proxy in advance of the meeting, whether or not you plan to attend the meeting. The Notice includes instructions on how to vote, including by internet and telephone. If you hold your shares through a brokerage firm, bank, broker-dealer or other similar organization, please follow their instructions.
Although weWe intend to hold the annual meetingAnnual Meeting in person, we are monitoringperson. We continue to monitor the protocols that federal, state and local governments may recommend or require in light of the evolving coronavirus(COVID-19) outbreak.pandemic. The health and well-being of our team members and our stockholders are paramount. As a result, we may impose additional procedures or limitations on meeting attendees (beyond those described herein) or may decide to hold the meeting in a virtual-only format over the Internet. Any such changes regarding the Annual Meeting will be announced in a press release and the filing of additional proxy materials with the SEC.
By order of the boardBoard of directors,Directors,
Osamu Watanabe,
General Counsel and Secretary
April 22, 202020, 2022
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING TO BE HELD ON JUNE 4, 2020.2, 2022.
The Company’s Proxy Statement and 20192021 Annual Report onForm 10-K
are also available at www.proxyvote.com.
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Although we refer to our website in this Proxy Statement, the contents of our website are not included or incorporated by reference into this Proxy Statement. All references to our website in this Proxy Statement are intended to be inactive textual references only.
20202022 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 20202, 2022
Moelis & Company is makingThis section highlights certain information that you should consider before voting on the matters presented at this proxy statement available to its stockholders on or about April 22, 2020 in connection with the solicitation of proxies by the board of directors for our 2020year’s Annual Meeting of Stockholders to be held on Thursday, June 4, 20202, 2022 at 8:30 a.m. (Eastern Time) at the offices of Moelis & Company, 399 Park Avenue, New York, NY 10022 and any adjournment or postponement of that meeting (the “Annual Meeting”). You should read this entire Proxy Statement carefully before voting. Your vote is important. We encourage you to vote by proxy in advance of the Annual Meeting, whether or not you plan to attend the Annual Meeting. Additional information about our Annual Meeting, including details about how to participate in our Annual Meeting and how to cast your votes, is provided under “General Information” beginning on page 5.
2022 Annual Meeting of Stockholders
Meeting Date: | Thursday, June 2, 2022 | |
Time: | 8:30 a.m. (Eastern Time) | |
Place: | Offices of Moelis & Company 399 Park Avenue | |
New York, NY 10022 |
Matters to be Voted on at our 2022 Annual Meeting
AGENDA AND BOARD RECOMMENDATIONS | ||||
PROPOSAL | BOARD VOTING | PAGE REFERENCE | ||
◾ Election of the 5 nominees named in this Proxy Statement to serve on our Board of Directors until the 2023 annual meeting | FOR each nominee | 10 | ||
◾ Non-binding, advisory vote to approve executive compensation of our named executive officers | FOR | 45 | ||
◾ Ratification of Deloitte & Touche LLP as our independent registered public accounting firm for 2022 | FOR | 55 |
Performance Highlights and Executive Compensation
Our compensation program is designed to align the interests of our named executive officers and other employees with the long-term interests of the Firm and its shareholders. The overall performance of the Company is a significant factor in determining our named executive officer compensation.
Our 2021 performance was exceptionally strong. We saw substantial growth in revenue, profitability, and returns to our shareholders on both an absolute and relative basis.
2021 FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data) | ||
Adjusted Revenues(1) | $1,557,997 65% YoY | |
Adjusted Diluted EPS(1) | $5.40 86% YoY | |
Adjusted Net Income(1) | $410,254 96% YoY | |
Dividends Declared Per Share(2) | $6.85 | |
(1) Adjusted Revenues, Adjusted Diluted Earnings Per Share, and Adjusted Net Income are non-GAAP measures. See Annex A for further information and reconciliations to our GAAP results. (2) Dividends declared related to each performance year. |
Strong Growth in Revenue and Our Firm
• | We reported total record annual GAAP revenues of $1,540.6 million and Adjusted revenues of $1,558.0 1 million in 2021, up 65% from 2020, which was our previous record. |
We continued to exhibit strong internal talent development by promoting eight banker Managing Directors in early 2021 and 16 in early 2022 ; nearly 50% of all Managing Directors are internal promotes.
Extraordinary Profitability
• | We reported diluted net income per share of $5.34 on a GAAP basis and $5.40 on an Adjusted basis in 2021, up 86% from the prior year.2 |
Our Adjusted pre-tax margin of 34% in the current year led the public independent boutique investment banks.
We maintained a strong cash position and no debt.
1 | See Annex A for a reconciliation between GAAP and Adjusted (non-GAAP) financial information |
2 | We reported diluted net income of $5.34 on a GAAP basis for 2021. See Annex A for a reconciliation between GAAP and Adjusted (non-GAAP) financial information |
Excellent Shareholder Returns
In total, for the 2021 performance year, we returned approximately $575 million in capital to shareholders through dividends and a record level of share repurchases.
º | We declared $6.85 per share in dividends with respect to the 2021 performance year. |
º | We increased our regular dividend by 9% to $0.60 per share currently. |
º | We have declared a special dividend in each year since becoming a public company. |
º | We have executed share repurchases totaling 1.9 million shares. |
Shareholder Alignment
The following provides highlights of our 2021 compensation program, which seeks to align the interests of our named executive officers with the long–term interests of the Firm and its shareholders.
✓ | Align pay with firmwide performance. Our program emphasizes variable incentive compensation, versus fixed base salaries, and serves to reward executives for Company performance and their individual contributions and accomplishments while retaining discretion. |
✓ | Grant a significant portion of compensation in equity. Our total incentive pay is delivered in the form of cash and equity-based compensation.The equity-based compensation allocation is designed to align the interests of our named executive officers with those of our shareholders, promote retention, and mitigate excessive risk taking. In 2021, equity-based compensation represented almost 80% of 2021 total incentive compensation awarded to our CEO and a minimum of 40% of total incentive compensation awarded to our other named executive officers. |
✓ | Multi-year vesting that is longer than most of our peers. We have imposed a five-year vesting schedule for the portion of incentive compensation that is delivered in unvested equity. We have elected a vesting schedule that is longer than the three-year standard of our industry because we believe it better aligns management’s interests with those of shareholders. |
✓ | Clawback Policies. We apply clawback policies to annual incentive cash compensation in line with encouraging a long term Firm focus. |
✓ | Significant Equity Ownership by NEOs. All of our named executive officers currently have significant equity ownership as a result of multi-year vesting schedules applied to annual incentive equity compensation. As of December 31, 2021, each of our named executive officers own equity of the Company (in the form of vested and unvested equity, including LP Units and RSUs) representing greater than 10x their base salaries. |
✓ | Hedging Prohibition. We prohibit hedging of our common stock and equity-based awards by our named executive officers and employees. |
Our Board of Directors
Our Board is comprised of directors with diverse skills, experiences and backgrounds, which contribute to the Board’s ability to effectively oversee the Company and execute on its long-term strategy. In determining that each director should be nominated for re-election, our Board considered his or her service, business experience, prior directorships, qualifications, attributes and skills described in the biographies set forth below under “Proposal 1: Election of Directors—Directors.”
Diverse Skills and Experiences of Our Director Nominees | ||
Executive/Strategic Leadership | Risk Management | |
Corporate CEO Experience | Financial Services (non-Investment Banking) | |
Finance/Accounting/Auditing | Media/Branding/Marketing | |
Law/Public Policy/Regulatory | Compensation | |
IT/Cybersecurity Oversight | Academia/Education | |
Corporate Social Responsibility |
Corporate Governance
We are committed to corporate governance that serves the best interests of our Company and shareholders and encourages active engagement with our shareholders. The following are our highlights of our key board and governance practices and policies.
✓ | Independent Board |
We have a majority independent board
All committees of our Board are comprised entirely of independent directors
✓ | Strong Board Leadership |
Combined Chair/CEO providing focused strategic leadership
Lead Independent Director with active role and responsibilities
✓ | Qualified and Engaged Board |
Diverse qualifications, skills and experiences
Overall attendance by our directors at board and committee meetings averaged over 95% in 2021
✓ | Increasing Board Size |
Commenced a process to add an additional independent director that would provide the Board with additional experience and a diverse set of knowledge and skills that will be complimentary to our existing board members
✓ | Executive Sessions |
Independent directors meet regularly with CEO and without management
✓ | Accountability |
Director nominees must receive a majority of the votes cast (for and against) in an uncontested election
See “General Information—What vote is required for each proposal?” on page 6 for more information
✓ | Annual Self-Assessments |
The Board and each committee conduct an annual self-assessment, which is overseen by the Nominating and Corporate Governance Committee.
Corporate Responsibility
Our core values of trust, partnership and commitment to long-term relationships allow us to deliver differentiated advice to our clients, attract and develop exceptional talent and maintain a diverse, innovative and agile culture. Please see “Corporate Governance–Corporate Responsibility” for more information on our commitment to our values.
Diversity & Inclusion. We are dedicated to maintaining an inclusive workplace that promotes and values diversity. As a global firm, we are committed to building a workforce with diversity of thought and perspective that are representative of the range of clients we advise around the world.
Sustainability Report. We look forward to releasing our inaugural Corporate Responsibility and Sustainability report this year, which details key Company focus areas in pursuit of our environmental, social and governance strategy.
Moelis & Company is making this Proxy Statement available to its stockholders on or about April 20, 2022 in connection with the solicitation of proxies by the Board of Directors for our Annual Meeting. As a stockholder, you are invited to attend the Annual Meeting and are entitled and encouraged to vote on the proposals described in this proxy statement.Proxy Statement. On or about April 22, 2020,20, 2022, we mailed our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statementProxy Statement and our 20192021 Annual Report onForm 10-K.
Although Moelis intends to hold the annual meetingAnnual Meeting in person,person. Moelis is monitoringcontinues to monitor the protocols that federal, state and local governments may recommend or require in light of the evolving coronavirus(COVID-19)COVID-19 outbreak.pandemic. The health and well-being of Moelis team members and Moelis stockholders are paramount. As a result, Moelis may impose additional procedures or limitations on meeting attendees (beyond those described herein) or may decide to hold the meeting in a virtual-only format over the Internet. Any such changes regarding the Annual Meeting will be announced in a press release and the filing of additional proxy materials with the SEC.Securities Exchange Commission (the “SEC”).
We are a leading global independent investment bank that provides innovative strategic and financial advice to a diverse client base, including corporations, governments and financial sponsors.
Moelis & Company is a holding company and its only assets are its partnership interests in Moelis & Company Group LP (“Group LP”), its equity interest in the sole general partner of Group LP, Moelis & Company Group GP LLC (“GP LLC”), and its interests in its subsidiaries. Moelis & Company operates and controls all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Moelis & Company Group GP LLC.
In this proxy statement,Proxy Statement, unless the context requires otherwise, the words “Company,” “Firm,” “we,” “us” and “our” refer to Moelis & Company and its subsidiaries, and for periods prior to the reorganization in connection with our initial public offering refer to the advisory business of our predecessor company, Moelis & Company Holdings LP (“Old Holdings”). In the reorganization, Old Holdings was renamed Moelis Asset Management LP. Unless the context requires otherwise, all references herein to “MAM” refer to Moelis Asset Management LP.
Moelis & Company was formed in January 2014 and completed an initial public offering of its Class A common stock in April 2014. Our Class A common stock trades on the New York Stock Exchange under the symbol “MC.”
Below are answers to common questions stockholders may have about the Proxy Materials and the Annual Meeting.
What are the Proxy Materials?
The “Proxy Materials” are this proxy statementProxy Statement and our annual report to stockholders for the fiscal year ended December 31, 2019.2021. If you request printed versions of the Proxy Materials, you will also receive a proxy card.
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”),SEC, we are furnishing Proxy Materials to many of our stockholders on the internet, rather than mailing printed copies. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive printed copies of the Proxy Materials unless you request them. Instead, the notice 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.
What items will be voted on at the Annual Meeting and how does the boardBoard of directorsDirectors recommend that I vote?
There are three proposals to be voted on at the Annual Meeting:
1. | the election of |
2. | the approval, on an advisory basis, of the compensation of our named executive officers; and |
3. | the ratification of the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ending December 31, |
Our amended and restatedby-laws require that we receive advance notice of any proposals to be brought before the Annual Meeting by our stockholders. We have not received any such proposals. We do not anticipate any other matters will come before the Annual Meeting. If any other matter properly comes before the Annual Meeting, the proxy holders appointed by our boardBoard of directorsDirectors will have discretion to vote on those matters.
The boardBoard of directorsDirectors recommends:
1. | that you vote |
2. | that you vote |
3. | that you vote |
Who may vote at the meeting?
Holders of Class A common stock and holders of Class B common stock as of the close of business on April 9, 20207, 2022 (the “Record Date”) may vote at the Annual Meeting.
How many shares may be voted at the Annual Meeting?
Only stockholders of record as of the close of business on the Record Date will be entitled to vote at the Annual Meeting. As of the close of business on the Record Date, there were 53,419,33664,956,709 shares of Class A common stock and 10,397,9154,685,898 shares of Class B common stock entitled to vote.
How many votes do I have?
Holders of our Class A common stock are entitled to one vote for each share held as of the Record Date. Holders of our Class B common stock are entitled to ten votes for each share held as of the Record Date. Holders of our Class A common stock and Class B common stock will vote as a single class on all matters at the Annual Meeting.
What vote is required for each proposal?
For the election of directors, each incumbent director must be elected byreceive a pluralitymajority of the votes cast. This meanscast (for and against) with respect to such director (meaning that the eight nominees receiving the largest number of votes cast “for” a director’s election must exceed the number of votes cast “against” that director’s election) in an uncontested election. Pursuant to our by-laws, each incumbent director nominated for election must submit an irrevocable resignation, contingent on (i) not receiving a majority of the votes cast in an uncontested election, and (ii) the acceptance of that proffered resignation by the Board of Directors in accordance with the policies and procedures adopted by the Board of Directors for such purpose. In the event an incumbent director does not receive a majority of the votes cast in an uncontested election, the Nominating and Corporate Governance Committee of the Board of Directors will be elected as directors. We do not have cumulative voting.make
a recommendation to the Board of Directors whether to accept or reject such incumbent director’s resignation or whether other action should be taken. The Board of Directors, taking into account the Nominating and Corporate Governance Committee’s recommendation, will decide whether to accept or reject such incumbent director’s resignation and will publicly disclose its decision, including, if the Board of Directors determines to reject such resignation, the rationale of the decision. The Board of Directors is not required to accept the resignation of an incumbent director that fails to receive a majority of the votes cast in an election that is not a Contested Election. If the Board of Directors accepts a director’s resignation, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors may fill the resulting vacancy by vote of a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director, or may decrease the size of the Board of Directors in accordance with the Company’s by-laws. The foregoing is subject to the rights and obligations of the Company pursuant to the stockholders agreement between the Company, Moelis & Company Partner Holdings LP and certain stockholders. See “Certain Relationships and Related Person Transactions—Transaction with Our Directors, Executive Officers and 5% Holdings—Rights of Partner Holdings and Stockholders Agreement” below.
The approval, on an advisory basis of the compensation of our named executive officers, the ratification of the Company’s independent registered public accounting firm and any other proposals that may come before the Annual Meeting will be determined by the majority of the votes cast.
As of the Record Date, Moelis & Company Partner Holdings LP (“Partner Holdings”) owned all of our outstanding Class B shares. Partner Holdings is controlled by Kenneth Moelis, our ChairmanChair and Chief Executive Officer. As a result of his beneficial ownership of shares and control of nearly a majority of the voting power of our shares, Mr. Moelis has thesubstantial ability to decide all matters to be voted upon at the Annual Meeting. See “Certain Relationships and Related Person Transactions—Transactions with Our Directors, Executive Officers and 5% Holders—Rights of Partner Holdings and Stockholders Agreement” below.
How are abstentions and brokernon-votes counted?
Abstentions (shares present at the meeting in person or by proxy that are voted “abstain”) and brokernon-votes (explained below) are counted for the purpose of establishing the presence of a quorum, but are not counted as votes cast.
What is the difference between a stockholder of record and 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, Computershare, 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, you have the right to direct the organization holding your account on how to vote the shares you hold in your account.
How do stockholders of record vote?
There are four ways for stockholders of record to vote:
• | Via the internet.You may vote via the internet until 11:59 p.m. (Eastern Time) on the day before the Annual Meeting by visiting http://www.proxyvote.com and entering the unique control number for your shares located on the Notice of Internet Availability of Proxy Materials. |
• | By telephone.You may vote by phone until 11:59 p.m. (Eastern Time) on the day before the Annual Meeting by calling(800) 690-6903. You will need the control number from your Notice of Internet Availability of Proxy Materials. |
• | By mail.If you requested that Proxy Materials be mailed to you, you will receive a proxy card with your Proxy Materials. You may vote by filling out and signing the proxy card and returning it in the envelope provided. The proxy card must be received by the close of business on the day before the Annual Meeting. |
• | In person.You may also vote your shares in person by completing a ballot at the Annual Meeting. |
How do beneficial owners of shares held in street name vote?
If you hold your shares through a brokerage firm, bank, broker-dealer or other similar organization, please follow their instructions.
Can I change my vote after submitting a proxy?
Stockholders of record may revoke their proxy before the Annual Meeting by delivering to the Company’s General Counsel and Secretary a written notice stating that a proxy is revoked, by signing and delivering a proxy bearing a later date, by voting again via the internet or by telephone or by attending and voting in person at the Annual Meeting.
Street name stockholders who wish to change their votes should contact the organization that holds their shares.
If I hold shares in street name through a broker, can the broker vote my shares for me?
If you hold your shares in street name and you do not vote, the broker or other organization holding your shares can vote on certain “routine” proposals but cannot vote on other proposals. Proposals 1 and 2 are not considered “routine” proposals. Proposal 3 is a “routine” proposal. If you hold shares in street name and do not vote on Proposals 1 and 2 your shares will be counted as “brokernon-votes.”
Who is paying for this proxy solicitation?
The Company is paying the costs of the solicitation of proxies. Members of our boardBoard of directorsDirectors 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.
The Company has engaged D.F. King & Co., Inc. (“D.F. King”) to assist in the solicitation of proxies for the Annual Meeting. The Company will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials, and will pay D.F. King a fee of approximately $20,000, plus reimbursement of out-of-pocket expenses. The address of D.F. King is 48 Wall Street, 22nd Floor, New York, NY 10005. You can call D.F. King at (800) 714-3312 or email at MC@dfking.com.
What do I need to do if I want to attend the meeting?
You will need to provide evidence that you are a stockholder as of the Record Date. This can be a copy of your proxy card or a brokerage statement showing your shares. You shouldmust also bring photo identification. If you hold your shares in street name and wish to vote in person at the meeting, you will need to contact the organization that holds your shares in order to obtain a legal proxy from that organization.
We intend to hold the annual meeting in person, we continue to monitor the protocols that federal, state and local governments may recommend or require in light of the evolving COVID-19 pandemic. The health and well-being of our team members and our stockholders are paramount. As a result, we may impose additional procedures or limitations on meeting attendees (beyond those described herein) or may decide to hold the meeting in a virtual-only format over the Internet. Any such changes regarding the Annual Meeting will be announced in a press release and filing with the SEC.
Where can I find voting results?
We will file a Current Report onForm 8-K with the SEC including the final voting results from the Annual Meeting within four business days of the Annual Meeting.
I share an address with another stockholder. Why did we receive only one set of Proxy Materials?
Some banks, brokers and nominees may be participating in the practice of “householding” Proxy Materials. This means that only one copy of our Proxy Materials may be sent to multiple stockholders in your household. If you hold your shares in street name and want to receive separate copies of the Proxy Materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact the bank, broker, or other nominee who holds your shares.
Upon written or oral request, the Company will promptly deliver a separate copy of the Proxy Materials to any stockholder at a shared address to which a single copy of any of those documents was delivered. To receive a separate copy of the Proxy Materials, you can contact our Investor Relations department at(212) 883-3800, investor.relations@moelis.com or 399 Park Avenue, 5th4th Floor, New York, NY 10022.
Who should I contact if I have additional questions?
You can contact our Investor Relations department at(212) 883-3800, investor.relations@moelis.com or at our principal executive offices at 399 Park Avenue, 5th4th Floor, New York, NY 10022. Stockholders who hold their shares in street name should contact the organization that holds their shares for additional information on how to vote. If you have any questions about how to vote your shares, you may contact our proxy solicitor at:
D.F. King & Co, Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Call Toll-Free: (800) 714-3312
Banks and Brokers Call: (212) 269-5550
PROPOSAL 1: ELECTION OF DIRECTORS
Our boardBoard of directorsDirectors is currently comprised of eightfive directors. At the Annual Meeting, stockholders will vote to elect as directors of the Company the eightfive nominees named in this proxy statement.Proxy Statement. Each of the directors elected at the Annual Meeting will hold office until the 20202023 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified.
The boardBoard of directorsDirectors has nominated Kenneth Moelis, Navid Mahmoodzadegan, Jeffrey Raich, Eric Cantor, Elizabeth Crain,Kenneth L. Shropshire, John A. Allison IV and Yolonda Richardson and Kenneth L. Shropshire for election at the Annual Meeting. The persons named as proxies will vote to elect each of these nominees unless a stockholder indicates that his or her shares should be withheld with respect to one or more of such nominees.
The following table sets forth information regarding our directors, including their ages as of the date hereof.
Name | Age | Position | ||||
Kenneth Moelis | 63 | Chair of the Board of Directors and Chief Executive Officer | ||||
Eric Cantor | 58 | Managing Director, Vice Chair of the Company and Director | ||||
Kenneth L. Shropshire | 67 | Lead Independent Director | ||||
John A. Allison IV | 73 | Independent Director | ||||
Yolonda Richardson | 60 | Independent Director |
Kenneth Moelis is the Chair of our Board of Directors and has served as our Chief Executive Officer since 2007. Mr. Moelis has over 30 years of investment banking and mergers and acquisitions experience. Prior to founding our Company, Mr. Moelis worked at UBS from 2001 to 2007, where he was most recently President of UBS Investment Bank and previously Joint Global Head of Investment Banking. Before joining UBS, Mr. Moelis was Head of Corporate Finance at Donaldson, Lufkin & Jenrette, where he worked from 1990 through 2000. Mr. Moelis began his career as an investment banker with Drexel Burnham Lambert in 1981. Mr. Moelis is the Non-Executive Chairman of the Board of the Atlas Crest Entities (as defined in “Certain Relationships and Related Persons Transactions—Transactions with Atlas Crest” below). Mr. Moelis serves on the University Of Pennsylvania Board Of Trustees, the Wharton Board of Overseers, the Ronald Reagan UCLA Medical Center Board of Advisors and was formerly Chair and Director on the Tourette Association of America Board. Mr. Moelis holds a B.S. and an M.B.A. from the Wharton School at the University of Pennsylvania. | ||
Mr. Moelis’ knowledge of and extensive experience in investment banking and the financial services industry give the Board of Directors valuable industry-specific knowledge and expertise on these and other matters. In addition, as our Founder and Chief Executive Officer, he has an unparalleled understanding of our business and operations, which positions him well to serve on our Board of Directors. | ||
Eric Cantor has served as a Managing Director, Vice Chair of the Company and a director of our Company since September 2014. Mr. Cantor, who has more than 25 years of political and business experience, was formerly United States Representative for Virginia’s 7th Congressional District and U.S. House Majority Leader. He served in the U.S. House of Representatives from 2001 to 2014. He was elected by his colleagues in the House to serve as the Majority Leader for the 112th |
and 113th Congresses where he led the public policy agenda for the House. During his time in office, Mr. Cantor was a leading voice on the economy, job creation and policies focused on improving the lives of the American middle class. He championed pro-growth solutions including lowering taxes, eliminating excessive regulation, strengthening businesses, and encouraging entrepreneurship. He was also regularly featured in publications focusing on a wide range of topics including both domestic and international matters. Mr. Cantor holds a B.A. from The George Washington University, a J.D. from The College of William and Mary, and an M.A. from Columbia University. | ||
Mr. Cantor’s knowledge of public and economic policy, his extensive experience in public policy, international business and geo-politics and his investment banking experience position him well to serve on our Board of Directors. | ||
Kenneth L. Shropshire has been a director since July 2014. Mr. Shropshire is the Adidas Distinguished Professor of Global Sport and CEO of Global Sport Institute at Arizona State University. Mr. Shropshire is the David W. Hauck Professor Emeritus at the Wharton School at the University of Pennsylvania and the former Faculty Director of its Wharton Sports Business Initiative. Mr. Shropshire joined the Wharton faculty in 1986 specializing in sports business and law and served as Chairman of the Wharton School’s Legal Studies and Business Ethics department from 2000 to 2005. His consulting roles have included work for the NFL, the NCAA, the NFL Players Association and USA Track and Field, and he was an executive on the organizing committee for the 1984 Los Angeles Olympic Games. Mr. Shropshire was previously a member of the board of directors of Peace Players International and Valley Green Bank in Philadelphia and a trustee of the Women’s Sports Foundation. He is a former president of the Sports Lawyers Association, the largest such organization in the world, and Program Chair of the ABA Forum Committee, Sports Law Section. Mr. Shropshire is the author of numerous books and articles on the business of sports. He holds an A.B. in Economics from Stanford University and a J.D. from Columbia Law School. | ||
Mr. Shropshire’s knowledge of corporate and business law and his extensive experience with business law and ethics, negotiation and dispute resolution position him well to serve on our Board of Directors. | ||
John A. Allison IV has been a director since October 2015. Mr. Allison is Executive in Residence at Wake Forest School of Business and Chairman of the Executive Advisory Council of the Cato Institute’s Center for Monetary and Financial Alternatives, and a member of the Cato Institute’s Board of Directors. Mr. Allison was president and CEO of the Cato Institute from October 2012 to April 2015. Mr. Allison served as the Chief Executive Officer of BB&T Corporation from 1989 to 2008. Mr. Allison was also a director of BB&T Corporation from 1986 to 2014, serving as Chairman from 1989 to 2008, and a Branch Bank & Trust Company director from 1986 to 2008 and 2013 to 2014. Mr. Allison served as Chairman and Chief Executive Officer of Branch Bank & Trust Company from 1989 to 2008. He also served as a Distinguished Professor of Practice on the faculty of the Wake Forest University Schools of Business from 2009 to 2012. Mr. Allison is a Phi Beta Kappa graduate of the University of North Carolina—Chapel Hill. He received his master’s degree in management from Duke University, and is also a graduate of the Stonier Graduate School of Banking. | ||
Mr. Allison’s knowledge of and extensive experience with finance, banking and investments, in addition to his years of experience and expertise as a senior corporate executive and public company board member, position him well to serve on our Board of Directors. | ||
Yolonda Richardson has been a director since January 2019. Ms. Richardson is the Executive Vice President of Global Programs for the Campaign for Tobacco Free Kids and the Global Health Advocacy Incubator, where she leads several initiatives in global health, most notably the Bloomberg Global Initiative to Reduce Tobacco Use. Ms. Richardson joined the Campaign in 2009. From 2008 to 2010, Ms. Richardson served as the President and Founder of Richardson Consulting, a management consulting firm specialized in providing strategic support to nonprofit organizations, foundations, corporate philanthropies, and global development agencies. From 2003 to 2008, Ms. Richardson served as President and CEO of the Centre for Development and Population Activities (CEDPA), which seeks to advance women’s rights and expand their access to health and other services. Prior to CEDPA, Ms. Richardson was a Senior Vice President at Africare from 1999 to 2002 and served as the Special Counsel for the African Development Foundation — a government-funded granting agency that provides financial support to African NGOs and small businesses to enhance the participation of the poor in the development of their countries. From 1989 to 1999, Ms. Richardson worked at the Carnegie Corporation of New York, a global foundation, where she managed an international grant program focused on improving women’s health programs and promoting improved democracy and governance. Ms. Richardson started her career on Wall Street as a corporate attorney at Cahill Gordon & Reindel. She is a member of the New York State Bar Association and the Council on Foreign Relations. She holds a B.A., summa cum laude, from Dillard University in New Orleans, a Master’s degree in Public Health from Columbia University, and a J.D. from Yale University School of Law. | ||
Ms. Richardson’s senior management and operational experience with leading non-profit organizations and international foundations positions her well to serve on our Board of Directors. |
Our Board is comprised of directors with diverse skills, experiences and backgrounds, which contribute to the Board’s ability to effectively oversee the Company and execute on its long-term strategy.
1. | The demographic information presented is based on the voluntary self-identification of each director nominee. |
2. | One director nominee, out of a total of five director nominees, identifies as female. |
Director Nomination Rights of Partner Holdings
In connection with our initial public offering, we entered into a stockholders agreement with Partner Holdings, an entity controlled by our ChairmanChair and Chief Executive Officer, Kenneth Moelis, pursuant to which our boardBoard of directorsDirectors is required to nominate individuals designated by Partner Holdings equal to a majority of the boardBoard of Directors, and to take all actions necessary to cause such directors to continue in office, as long as the Class B Condition is satisfied. The designees of Partner Holdings nominated by the boardBoard of directorsDirectors for election at the Annual Meeting are Kenneth Moelis Navid Mahmoodzadegan, Jeffrey Raich,and Eric Cantor,Cantor. Although the Class B Condition is satisfied, Partner Holdings has notified the Company that Partners Holdings will not designate a third nominee to our Board of Directors this year. This is because the Company, which is no longer a “controlled company” under New York Stock Exchange (“NYSE”) rules, is required to satisfy NYSE independence requirements, including the requirement to have independent directors constitute a majority of our Board of Directors. In addition, in the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal of any director who is designated by Holdings in accordance with the stockholders agreement, the Company agrees to take at any time and Elizabeth Crain.from time to time all actions necessary to cause the vacancy created thereby to be filled as promptly as practicable by a designee of Holdings, including without limitation, in the event of a resignation of a Holdings’ designee as a result of a failure to obtain a majority vote. The stockholders agreement and the Class B Condition are described under “Certain Relationships and Related Person Transactions—Transactions With Our Directors, Executive Officers and 5% Holders—Rights of Partner Holdings and Stockholders Agreement” below. Mr. Moelis’ beneficial ownership of our shares is set forth under “Stock Ownership of Certain Beneficial Owners and Management” below.
Director Nominees and Board Recommendation
In the event that any nominee for director becomes unavailable or declines to serve as a director at the time of the Annual Meeting, the persons named as proxies will vote the proxies in their discretion for any nominee who is designated by the current
board of directors to fill the vacancy. All of the nominees are currently serving as directors and we do not expect that any of the nominees will be unavailable or will decline to serve.
In determining that each director should be nominated forre-election, our boardBoard considered his or her service, business experience, prior directorships, qualifications, attributes and skills described in the biography set forth below under “Corporate Governance—Executive Officers and Directors.”above.
The boardBoard of directorsDirectors recommends that you vote “FOR” each of the director nominees in this Proposal 1.
CORPORATE GOVERNANCEEXECUTIVE OFFICERS
Executive Officers and Directors
The following table sets forth information regarding our executive officers, and directors, including their ages as of the date hereof. Information relating to Mr. Moelis, our Chair and Chief Executive Officer, is set forth above in “Proposal 1: Election of Directors.”
Name | Age | Position | ||||
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Navid Mahmoodzadegan | Co-President and Managing Director | |||||
Jeffrey Raich | ||||||
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| 55 | Co-President and Managing Director | ||||
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Joseph Simon | Chief Financial Officer | |||||
Osamu R. Watanabe | General Counsel and Secretary |
Kenneth Moelis is the Chairman of our Board of Directors and has served as our Chief Executive Officer since 2007. Mr. Moelis has over 30 years of investment banking and mergers and acquisitions experience. Prior to founding our Company, Mr. Moelis worked at UBS from 2001 to 2007, where he was most recently President of UBS Investment Bank and previously Joint Global Head of Investment Banking. Before joining UBS, Mr. Moelis was Head of Corporate Finance at Donaldson, Lufkin & Jenrette, where he worked from 1990 through 2000. Mr. Moelis began his career as an investment banker with Drexel Burnham Lambert in 1981. Mr. Moelis serves on the University of Pennsylvania Board of Trustees, the Wharton Board of Overseers, the Ronald Reagan UCLA Medical Center Board of Advisors and was formerly Chair and Director on the Tourette Association of America Board. Mr. Moelis holds a B.S. and an M.B.A. from the Wharton School at the University of Pennsylvania.
Mr. Moelis’ knowledge of and extensive experience in investment banking and the financial services industry give the board of directors valuable industry-specific knowledge and expertise on these and other matters. In addition, as our Founder and Chief Executive Officer, he has an unparalleled understanding of our business and operations, which positions him well to serve on our board of directors.
Navid Mahmoodzadegan is aCo-Founder and has served asCo-President since September 2015 and as a Managing Director of our Company since 2007. Mr. Mahmoodzadegan | ||
| Jeffrey Raich is aCo-Founder and has served asCo-President since September 2015 and as a Managing Director of our Company since 2007. Mr. Raich Mergers and Acquisitions. Prior to joining UBS, Mr. Raich was a Managing Director and Head of West Coast Mergers and Acquisitions at Donaldson, Lufkin & Jenrette, where he worked from 1996 to 2000. He began his career as an investment banker with PaineWebber in 1989. | |
| Elizabeth Crain is aCo-Founder and has served as our Chief Operating Officer since 2007, where she leads the |
1997 to 2001. She began her career in investment banking in 1988 at Merrill Lynch. Ms. Crain serves on the Board of Directors of Exscientia Ltd., the Graduate Executive Board of The Wharton School and the Board of Trustees of The Windward | ||
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Joseph Simon has served as our Chief Financial Officer since 2010. Prior to joining our Company, Mr. Simon served as Chief Financial Officer of Financial Security Assurance from 2002 to 2010. Prior to joining Financial Security Assurance, Mr. Simon served as Chief Financial Officer of IntraLinks and TENTV.com from 2000 to 2002. Prior to that, Mr. Simon worked at Cantor Fitzgerald where he served as Chief Financial Officer, Global Controller and Global Head of Operations from 1993 to 1999. Before joining Cantor Fitzgerald, Mr. Simon was a Fixed Income Product and Legal Entity Controller at Morgan Stanley from 1986 to 1993. He began his career at Price Waterhouse from 1983 to 1986. Mr. Simon holds a B.S. from Cornell University and an M.B.A. from The University of Michigan. He is a Certified Public Accountant. | |
Osamu R. Watanabe has served as our General Counsel and Chief Compliance Officer since 2011. Prior to joining our Company in 2010, he was General Counsel and Chief Compliance Officer of Sagent Advisors from 2009 to 2010. Prior to joining Sagent Advisors, Mr. Watanabe held senior legal positions at UBS from 2002 to 2009, Credit Suisse First Boston from 2001 to 2002 and Donaldson, Lufkin & Jenrette from 1997 to 2001. From 1987 to 1997, Mr. Watanabe was in private practice at Sullivan & Cromwell in New York, Tokyo, Hong Kong and Melbourne. Prior to that, he clerked for the Honorable Morey L. Sear, Eastern District of Louisiana. Mr. Watanabe holds a B.A. from Antioch College and a J.D. from Yale Law School (1985).
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The Company is governed by a “controlled company” under the rules of the New York Stock Exchange (“NYSE”). Under these rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that (i) a majority of the board of directors consist of independent directors and (ii) that the board of directors have compensation and nominating and corporate governance committees composed entirely of independent directors. For at least some period, we intend to continue to utilize these exemptions.
The NYSE rules required us to have an audit committee comprised entirely of independent directors within one year of our initial public offering. From February 2015, our audit committee has been comprised entirely of directors meeting the NYSE audit committee independence requirements.
Director Independence
The board of directors has reviewed its composition, the composition of its committees and the independence of each director and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. The board of directors and various committees of the Board that meet regularly throughout the year. Our Board has three standing committees, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each committee has adopted and operates under a written charter. You are encouraged to visit our website at www.moelis.com to view or to obtain copies of our Corporate Governance Guidelines, committee charters and Code of Business Conduct and Ethics. Additional information relating to the corporate governance of our Company is also set forth below and included in other sections of this Proxy Statement.
Board of Directors Leadership Structure
Mr. Moelis serves as our Chair and Chief Executive Officer in accordance with the terms of his employment agreement. As Mr. Moelis is the founder, Chief Executive Officer and among the largest shareholders of the Company, we believe that combining the roles of Chair of the Board and Chief Executive Officer encourages focused, strategic leadership.
Under our Corporate Governance Guidelines, the Board of Directors does not require the separation of the offices of the Chair of the Board and the Chief Executive Officer. If at any time the Chair is not an independent director, then the Board of Directors will elect a Lead Independent Director. Our Board of Directors periodically reviews its leadership structure.
In February 2022, in consultation with our Nominating and Corporate Governance Committee, our Board of Directors voted to update our Corporate Governance Guidelines to add the role of Lead Independent Director to our Board leadership structure. Effective March 1, 2022, Ken Shropshire was elected our Lead Independent Director. Mr. Shopshire is an independent director and active board member and also serves as the Chair of our Audit Committee.
The specific duties and responsibilities of the Lead Independent Director include the following:
Meetings and Executive Sessions
Presides at all meetings of the Board at which the Chair is not present, including executive sessions of the independent directors.
Has discretion to call meetings of the independent directors.
Facilitates discussion and open dialogue among the independent directors during Board meetings, executive sessions and outside of Board meetings.
Liaison with the Chair and Management
Serves as the principal liaison between the independent directors and the Chair, without inhibiting direct communication between them.
Communicates to the Chair and management, as appropriate, any decisions reached, suggestions, views or concerns expressed by independent directors in executive sessions or outside of Board meetings.
Provides the Chair with feedback and counsel concerning the Chair’s interactions with the Board.
Oversight of Information Provided to the Board
Works with the Chair to develop and approve Board meeting agendas and meeting schedules, including to ensure that there is sufficient time for discussion of all agenda items.
Works with the Chair on the appropriateness (including quality and quantity) and timeliness of the information provided to the Board.
Authorizes the retention of advisors and consultants who report directly to the Board when appropriate.
Board and Leadership Evaluation
In consultation with the Nominating and Corporate Governance Committee, reviews and reports on the results of the Board and Committee performance self-evaluations.
Periodically meets with independent directors to discuss Board and Committee and Chair performance, effectiveness and composition.
Coordinate with the CEO regarding the agenda for the annual review of the CEO succession plan.
Stockholder Communication
If requested, and in coordination with executive management, is available for consultation and direct communication with stockholders.
Crisis Management
Play an increased role in crisis management oversight, as appropriate under the circumstances.
The Lead Independent Director shall be appointed annually and serve until his or her successor is duly appointed and qualified, or until his or her earlier removal or resignation, or such time as he or she is no longer an independent director or such time as the Chair is an independent director. Although elected annually, the Lead Independent Director is generally expected to serve for more than one year.
With the growth of our Company, the Nominating and Corporate Governance Committee has commenced a process to add an additional independent director that would provide the Board with additional experience and a diverse set of knowledge and skills that will be complimentary to our existing board members.
The Board of Directors has reviewed the composition of its committees and the independence of each director and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. The Board of Directors has determined that each of John A. Allison IV, Yolonda Richardson and Kenneth L. Shropshire is an “independent director” under applicable NYSE standards and that each such director has no relationships with the Company that would interfere with such director’s exercise of independent judgment in carrying out his responsibilities as a director of the Company.
Board of Directors Role in Risk Oversight, Succession Planning and Environmental, Social and Governance Matters Oversight
We are exposed to a number of risks, and we regularly identify and evaluate these risks and our risk management strategy. Management is principally responsible for identifying, evaluating and managing the risks on a day-to-day basis, under the oversight of the Board and the Audit Committee. Our Managing Directors and certain business committees of our Managing Directors are responsible for various aspects of risk management
associated with our business, and our executive officers have the primary responsibility for enterprise-wide risk management. Our Chief Operating Officer, Chief Financial Officer and General Counsel work closely with our Managing Directors, our management and operations teams (including our finance and accounting, legal and compliance, human capital management and information technology and security teams) and our outsourced internal audit function to monitor and manage risk. Our executive officers meet with the Audit Committee at least four times a year in conjunction with a review of our quarterly and annual periodic SEC filings to discuss important risks we face. Our executive officers meet regularly with the Board to discuss important risks we face, including without limitation, those related to information security and coronavirus (COVID-19). Our Audit Committee focuses on oversight of financial risks relating to the company and the Compensation Committee determines named executive officer compensation plans and arrangements. The full Board keeps itself regularly informed regarding risks overseen by the Audit Committee through management and committee reports and otherwise.
The Board will annually evaluate succession planning with respect to the CEO and the executive officers. In addition, the Company’s emergency succession plan is reviewed by the Board (or a committee designated by the Board) at least annually.
The Board will conduct a periodic review of matters related to environmental, social and governance (“ESG”) (other than within the purview of other committees of the Board), including the overall ESG strategy, sustainability initiatives and stakeholder engagement. The Board will also periodically review and monitor the Company’s policies and initiatives in the areas of diversity and inclusion (other than within the purview of other committees of the Board).
Our Board of Directors has the authority to appoint committees to perform certain management and administrative functions. Our Board of Directors has established an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, each of which has the composition and the responsibilities described below. Our Board of Directors may from time to time establish other committees.
Audit Committee
Our Audit Committee oversees our accounting and financial reporting process and the audit of our financial statements and assists our Board of Directors in monitoring our financial systems and our legal and regulatory compliance. Our Audit Committee is responsible for, among other things:
appointing, compensating and overseeing the work of our independent auditors, including resolving disagreements between management and the independent registered public accounting firm regarding financial reporting;
approving engagements of the independent registered public accounting firm to render any audit or permissible non-audit services;
reviewing the qualifications and independence of the independent registered public accounting firm;
reviewing our financial statements and related disclosures and reviewing our critical accounting policies and practices;
reviewing the adequacy and effectiveness of our internal control over financial reporting;
establishing procedures for the receipt, retention and treatment of accounting and auditing related complaints and concerns;
preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement;
reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, our quarterly financial statements and our publicly filed reports; and
reviewing and approving in advance any proposed related person transactions.
We believe that the functioning of our Audit Committee complies with the applicable requirements of the NYSE and SEC rules and regulations.
The members of our Audit Committee are Mr. Allison, Ms. Richardson and Mr. Shropshire. Since November 2015, our Audit Committee has been comprised of three entirely independent directors as defined under NYSE rules. Mr. Allison is our Audit Committee financial expert, as defined under SEC rules.
Mr. Shropshire is the Chairperson of our Audit Committee.
Our Board of Directors has considered the independence and other characteristics of each member of our Audit Committee. Audit Committee members must satisfy the NYSE independence requirements and additional independence criteria set forth under Rule 10A-3 of the Exchange Act of 1934 (the “Exchange Act”). In addition, the NYSE requires that, subject to specified exceptions, including certain phase-in rules, each member of a listed company’s audit committee be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3. In order to be considered independent for purposes of Rule 10A-3, an audit committee member may not, other than in his or her capacity as a member of the Board, accept consulting, advisory or other fees from us or be an affiliated person of us. Our Board of Directors has determined that each of Mr. Allison, Ms. Richardson and Mr. Shropshire qualifies as an independent director pursuant to NYSE rules and Rule 10A-3.
Our Board of Directors has adopted a written charter for the Audit Committee. The Audit Committee charter is available in the Corporate Governance section of our Investor Relations website at investors.moelis.com.
Compensation Committee
The Compensation Committee is responsible for, among other things:
reviewing and recommending policies, plans and programs relating to compensation and benefits of our directors, officers and employees;
reviewing and recommending compensation and the corporate goals and objectives relevant to compensation of our executive officers, including our Chief Executive Officer;
evaluating the performance of our Chief Executive Officer and other executive officers in light of established goals and objectives and determining and approving the Chief Executive Officer’s and other executive officers compensation level based on this evaluation;
administering our equity compensation plans for our employees and directors; and
approving the appointment of a retained independent compensation consultant.
The members of our Compensation Committee are Mr. Allison, Ms. Richardson and Mr. Shropshire. From February 2015, our Compensation Committee has been comprised of entirely independent directors meeting NYSE requirements. Ms. Richardson is the Chairperson of the Compensation Committee.
As permitted under the 2014 Omnibus Incentive Plan, the Board has authorized our Chief Operating Officer and Chief Financial Officer, acting together, to grant awards of up to 2,500,000 shares in any fiscal quarter.
The Compensation Committee Charter is available in the Corporate Governance section of our Investor Relations website at investors.moelis.com. The charter allows the Compensation Committee to form and delegate its responsibility to subcommittees of the Compensation Committee for any purpose it deems appropriate, with certain limits.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee was formed on February 23, 2021 and advises on identifying individuals qualified to become members of our Board of Directors. The Nominating and Corporate Governance Committee is responsible for, among other things:
assisting in identifying, recruiting and, if appropriate, interviewing candidates to fill positions on the Board;
reviewing the background and qualifications of individuals being considered as director candidates;
recommending to the Board of Directors the director nominees for election by the stockholders or appointment by the Board of Directors, as the case may be, pursuant to the Company’s Corporate Governance Guidelines; and
reviewing the suitability for continued service as a director of each board member when his or her term expires and when he or she has a change in status.
The members of our Nominating and Corporate Governance Committee are Mr. Allison, Ms. Richardson and Mr. Shropshire. From April 19, 2021, our Nominating and Corporate Governance Committee has been comprised of entirely independent directors meeting NYSE requirements. John Allison is the Chairperson of the Nominating and Corporate Governance Committee.
Our Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee Charter is available in the Corporate Governance section of our Investor Relations website at investors.moelis.com. The charter allows the Nominating and Corporate Governance Committee to form and delegate its responsibility to subcommittees of the Compensation Committee for any purpose it deems appropriate, with certain limits.
Board and Committee Meetings; Annual Meeting Attendance
Between January 1, 2021 and December 31, 2021 our Board of Directors held seven meetings, our Audit Committee held seven meetings, our Compensation Committee held five meetings and our Nominating and Corporate Governance Committee held three meetings. During 2021, each director attended at least 95% of the total number of meetings of the Board of Directors Leadership Structure
Under our Corporate Governance Guidelines, the board of directors does not require the separation of the offices of the chairman of the board and the chief executive officer. These guidelines provide that the board of directors shall be free to choose its chairman in any way that it deems best for the Company at any given point in time. The board of directors periodically reviews its leadership structure and may make changes in the future. The Company’s employment agreement with Kenneth Moelis provides that Mr. Moelis is the Company’s Chief Executive Officer and the Chairman of its board of directors.
Board of Directors Role in Risk Oversight
We are exposed to a number of risks, and we regularly identify and evaluate these risks and our risk management strategy. Management is principally responsible for identifying, evaluating and managing the risks on aday-to-day basis, under the oversight of the board and the audit committee. Our Managing Directors and
certain business committees of our Managing Directors are responsible for various aspects of risk management associated with our business, and our executive officers have the primary responsibility for enterprise-wide risk management. Our Chief Operating Officer, Chief Financial Officer and General Counsel work closely with our Managing Directors, our management and operations teams (including our finance and accounting, legal and compliance, human capital management and information technology and security teams) and our outsourced internal audit function to monitor and manage risk. Our executive officers meet with the audit committee at least four times a year in conjunction with a review of our quarterly and annual periodic SEC filings to discuss important risks we face. Our executive officers meet regularly with the board to discuss important risks we face, including without limitation, those related to information security, and most recently, coronavirus(COVID-19). Our audit committee focuses on oversight of financial risks relating to the company and the compensation committee makes recommendations to the board regarding executive compensation plans and arrangements. The full board keeps itself regularly informed regarding risks overseen by the audit committee through management and committee reports and otherwise.
Board Committees
Our board of directors has the authority to appoint committees to perform certain management and administrative functions. Our board of directors has established an audit committee and a compensation committee, each of which has the composition and the responsibilities described below. We do not currently have a separately designated nominating committee. Our board of directors may from time to time establish other committees.
Audit Committee
Our audit committee oversees our accounting and financial reporting process and the audit of our financial statements and assists our board of directors in monitoring our financial systems and our legal and regulatory compliance. Our audit committee is responsible for, among other things:
appointing, compensating and overseeing the work of our independent auditors, including resolving disagreements between management and the independent registered public accounting firm regarding financial reporting;
approving engagements of the independent registered public accounting firm to render any audit or permissiblenon-audit services;
reviewing the qualifications and independence of the independent registered public accounting firm;
reviewing our financial statements and related disclosures and reviewing our critical accounting policies and practices;
reviewing the adequacy and effectiveness of our internal control over financial reporting;
establishing procedures for the receipt, retention and treatment of accounting and auditing related complaints and concerns;
preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, our quarterly financial statements and our publicly filed reports; and
reviewing and approving in advance any proposed related person transactions.
We believe that the functioning of our audit committee complies with the applicable requirements of the NYSE and SEC rules and regulations.
The members of our audit committee are Mr. Allison, Ms. Richardson and Mr. Shropshire. Since November 2015, our audit committee has been comprised of three entirely independent directors as defined under NYSE rules. Mr. Allison is our audit committee financial expert, as defined under SEC rules. Mr. Shropshire is the chairperson of our audit committee.
Our board of directors has considered the independence and other characteristics of each member of our audit committee. Audit committee members must satisfy the NYSE independence requirements and additional independence criteria set forth underRule 10A-3 of the Exchange Act of 1934 (the “Exchange Act”). In addition, the NYSE requires that, subject to specified exceptions, including certainphase-in rules, each member of a listed company’s audit committee be independent and that audit committee members also satisfy independence criteria set forth inRule 10A-3. In order to be considered independent for purposes ofRule 10A-3, an audit committee member may not, other than in his or her capacity as a member of the board, accept consulting, advisory or other fees from us or be an affiliated person of us. Our board of directors has determined that each of Mr. Allison, Ms. Richardson and Mr. Shropshire qualifies as an independent director pursuant to NYSE rules andRule 10A-3.
Our board of directors has adopted a written charter for the audit committee. The audit committee charter is available in the Corporate Governance section of our Investor Relations website at investors.moelis.com.
Compensation Committee
Our compensation committee advises on our compensation policies, plans and programs. The compensation committee is responsible for, among other things:
reviewing and recommending policies, plans and programs relating to compensation and benefits of our directors, officers and employees;
reviewing and recommending compensation and the corporate goals and objectives relevant to compensation of our executive officers, including our Chief Executive Officer;
evaluating the performance of our Chief Executive Officer and other executive officers in light of established goals and objectives; and
administering our equity compensation plans for our employees and directors.
The members of our compensation committee are Mr. Allison, Ms. Richardson and Mr. Shropshire. From February 2015, our compensation committee has been comprised of entirely independent directors meeting NYSE requirements. Ms. Richardson is the chairperson of the compensation committee.
As permitted under the 2014 Omnibus Incentive Plan, the board has authorized our Chief Operating Officer and Chief Financial Officer, acting together, to grant awards of up to 2,500,000 shares in any fiscal quarter.
Our board of directors has adopted a written charter for the compensation committee. The compensation committee charter is available in the Corporate Governance section of our Investor Relations website at investors.moelis.com.
Board and Committee Meetings; Annual Meeting Attendance
Between January 1, 2019 and December 31, 2019 our board of directors held seven meetings, our audit committee held six meetings and our compensation committee held five meetings. During 2019, each director attended at least 75% of the total number of meetings of the board of directors and committees on which the director served. The independent directors of the Company regularly meet in executive session with our CEO and without management. Under the Corporate Governance Guidelines adopted by our Board of Directors, the Lead Independent Director (or in his absence, another independent director designated by him) presides at such executive sessions.
Under our Corporate Governance Guidelines, directors are expected to attend the Company’s annual meetings of stockholders. A director who is unable to attend an annual meeting of stockholders (which it is understood will occur on occasion) is expected to notify the Chair of the Board of Directors. All directors attended our 2021 annual meeting.
Our Board and each committee conduct an annual self-evaluation, which is overseen by our Nominating and Corporate Governance Committee.
Director Qualifications and Nominating Process
In considering candidates for nomination, the Nominating and Corporate Governance Committee and Board of Directors take into consideration many factors, including the needs of the Board and the candidate’s
qualifications. At a minimum, director candidates must demonstrate high standards of ethics, integrity and professionalism, independence, sound judgment, and meaningful experience in business, law or accounting or other relevant areas. Candidates must also be committed to representing the long-term interests of our stockholders. The Board also considers other factors it deems appropriate based on current needs, including specific business and financial expertise currently desired, experience as a public company director, experience overseeing information technology or cybersecurity, gender, age and racial diversity.
Our full Board of Directors participates in the consideration of nominees to our Board of Directors other than as set forth below. The Board believes that recommendations from the Nominating and Corporate Governance Committee and input from all directors in the nominating process enhances the Company’s ability to identify, evaluate and select director nominees. In addition, the Stockholders Agreement provides that our Board of Directors will nominate individuals designated by Partner Holdings equal to a majority of the Board of directors, for so long as the Class B Condition is satisfied and, thereafter, one quarter of the candidates for so long as the Secondary Class B condition is satisfied. Partner Holdings is an entity controlled by our Chair and Chief Executive Officer, Kenneth Moelis, and the designees of Partner Holdings nominated by the Board of Directors for election at the Annual Meeting are currently Kenneth Moelis and Eric Cantor. Although the Class B Condition is satisfied, Partner Holdings has notified the Company that Partners Holdings will not designate a third nominee to our Board of Directors. This is because the Company, which is no longer a “controlled company” under NYSE rules, is required to satisfy NYSE independence requirements, including the requirement to have independent directors constitute a majority of our Board of Directors. See “Certain Relationships and Related Person Transactions—Transactions with Our Directors, Executive Officers and 5% Holders—Rights of Partner Holdings and Stockholders Agreement” below.
The Board of Directors will consider a candidate nominated by a stockholder in a manner consistent with its evaluation of potential nominees, so long as the nomination meets the requirements of our by-laws, as summarized below.
The notice of nomination should include the following information:
the stockholder’s name, record address, and name and principal place of business,
the name, age, business address, residence address, and principal occupation or employment of the nominee,
the class or series, and number of all shares of the Company’s stock owned beneficially or of record by the stockholder or the nominee,
whether and the extent to which any derivative or other instrument, transaction, agreement, or arrangement has been entered into by the stockholder or the nominee with respect to the Company’s stock,
a description of all agreements or arrangements to which the stockholder or the nominee is a party with respect to the nomination, the Company or the Company’s stock,
a description of agreements or arrangements entered into by the stockholder or the nominee with the intent to mitigate loss, manage risk or benefit from changes in the stock price or increase or decrease the stockholder’s voting power,
a representation that the stockholder will attend the meeting in person or by proxy to nominate the persons named in its notice, and
any other information related to the stockholder or the nominee required to be disclosed in the solicitation of proxies for election of directors under federal securities laws.
The notice must be accompanied by the nominee’s consent to be elected and to serve as a director and include certain representations and agreements by the nominee set forth in our by-laws.
This notice must be updated, if necessary, so that the information is true and correct as of the record date for the meeting.
Stockholder nominees should be submitted to the Company’s General Counsel and Secretary at the Company’s principal executive offices. Stockholder nominations may be made at any time. However, in order for a candidate to be included in the slate of director nominees for approval by stockholders in connection with a meeting of stockholders and for information about the candidate to be included in the Company’s proxy materials for such a meeting, the stockholder must submit the information required by our by-laws and other information reasonably requested by the Company within the timeframe described below under “Additional Information— Procedures for Submitting Stockholder Proposals.”
When the Company or the Board of Directors is required by contractual obligation (including pursuant to the Stockholders Agreement) to nominate candidates designated by any person or entity, the selection and nomination of these directors is not subject to the above process.
In 2021, we engaged with unaffiliated shareholders representing approximately 81% of the outstanding Class A shareholders at the time. In our meetings with shareholders, we primarily discussed feedback on our executive compensation program, financial performance, talent/ human capital management updates, among other matters.
We remain committed to having an open dialogue with shareholders, which allows us to better appreciate our shareholders’ perspective. Our senior management frequently meets with our shareholders during conferences, sell-side sponsored group meetings, and other ad-hoc interactions. We carefully consider their feedback while evaluating key business decisions. Finally, our investor presentation, and other relevant shareholder information can be found on our website as www.investors.moelis.com. The information on our website is not incorporated into this Proxy Statement.
Communication with the Board of Directors
Any stockholder or other interested parties who would like to communicate with the Board of Directors, the independent directors as a group or any specific member or members of the Board of Directors should send such communications to the attention of our General Counsel and Secretary at Moelis & Company, 399 Park Avenue, 4th Floor, New York, NY 10022. Communications should contain instructions on which member or members of the Board of Directors the communication is intended for. Such communications will generally be forwarded to the intended recipients. However, our General Counsel and Secretary may, in his sole discretion, decline to forward any communications that are inappropriate.
Moelis was founded in 2007 on the tenets of trust, partnership and commitment to long-term relationships and we remain true to these values in delivering differentiated advice to our clients, attracting and developing exceptional talent and maintaining a diverse, innovative and agile culture. We are focused on integrating these values into all facets of our business. Last year, we adopted environmental guidelines and a standalone anti-money laundering policy, updated our Code of Business Ethics and implemented the governance changes described elsewhere in this “Corporate Governance” section.
This year, we look forward to releasing our inaugural Corporate Responsibility and Sustainability report, which will detail Company focus areas in pursuit of our environmental, social and governance strategy. Below are highlights of our approach to our people.
Our People
We believe that our people are our most valuable asset. Our goal is to attract, retain and develop top talent in our industry across all levels. Our management team devotes significant time and resources to training and mentoring our employees and strives to foster a collaborative environment, and attract and retain talent that is passionate about our business and our culture.
As detailed below, during 2021, we remained committed to fostering diversity, equity and inclusion efforts, as well as executing our business strategy in light of the COVID-19 pandemic and prioritizing the health and safety of our employees.
Diversity & Inclusion
We are dedicated to maintaining an inclusive workplace that promotes and values diversity. Our commitment to uphold a culture of respect and inclusion is driven by our executive leadership and our Board of Directors. As a global firm we are committed to building a workforce with diversity of thought and perspective that are representative of the range of clients we advise around the world. Our ability to provide a rewarding career path in an environment focused on collaboration that brings together diverse perspectives and experiences results in best in class advice for our clients. Pipeline talent programs including our flagship Leadership Development Program, targeted coaching and development programs and our Employee Networks, provide an important opportunity for an exchange of ideas and relationship building among employees who identify as part of underrepresented groups and their allies. These firm-sponsored and employee-driven networks support our culture of inclusion and career development and create a framework for global connectivity and idea sharing.
We recruit from the world’s leading undergraduate and graduate programs and have developed relationships with a variety of associations and diversity groups at universities where we recruit. Since our inception we have had a dedicated campus recruiting effort through which we have hired many of our analysts and associates. We devote significant time and resources to training and mentoring our employees to ensure our junior professionals receive transaction experience across a wide range of products and industries. We believe this exposure enhances the investment banking experience and allows our developing talent to refine their proficiency in a broad variety of corporate finance matters at an early stage in their career. We are committed to talent retention and our goal is to develop our brightest and most ambitious junior professionals into productive Managing Directors.
Our Firm also supports diverse communities through volunteerism, fundraising efforts and partnerships. We support more than 40 employee selected nonprofit organizations around the world.
While the Firm has always been focused on the health and well-being of our employees, we have expanded access to mental health services and support for employees and their families as we faced the challenges of the pandemic together.
COVID-19 and Responsiveness
During 2021, our experienced management team continued to successfully lead the Firm through an extraordinary business and transaction environment during which we supported our global clients while essentially all of our employees continued to work from home for most of the year. Our unique culture of collaboration allowed our people to continue to come together in a hybrid work environment to creatively solve client challenges. Additionally, our investments in technology and cybersecurity enabled our teams to maintain a high level of productivity across their respective business functions, leading to record performance during 2021.
We prioritize employee health and safety as we focus on high levels of employee engagement. In 2021, this included enhancing behavioral health initiatives to support global Employee Assistance Programs and providing
resources for employees and their families. Throughout the year we utilized systematic management communication initiatives to connect and inform our employees around firmwide actions.
Our ability to respond to change and our continued focus on professional development and growth for our employees supported our performance. In 2021, we successfully transitioned our junior banker internship programs to a predominately virtual format with a near 100% offer acceptance rate. In addition, we implemented virtual onboarding, enhanced training programs for new employees and targeted skill based training for existing employees to adapt to a hybrid work environment.
In 2021, we adopted our Environmental Guidelines. We endeavor to implement efficiencies and environmental sustainability in our business practices and seek to operate our office footprint and daily operations more efficiently. We will continue to monitor our progress as we move forward in our corporate citizenship journey to reduce our environmental impact.
Code of Business Conduct and Code of Ethics
We have adopted a code of business conduct and ethics that is applicable to all of our employees, officers and directors, including our chief executive and senior financial officers. The code of business conduct and ethics is available in the Corporate Governance section of our Investor Relations website at investors.moelis.com. We expect that any amendment to the code, or any waivers of its requirements, will be disclosed on our website.
Corporate Governance Guidelines
Our Board of Directors has adopted Corporate Governance Guidelines to assist the Board of Directors in the exercise of its responsibilities. The Corporate Governance Guidelines are available in the Corporate Governance section of our Investor Relations website at investors.moelis.com.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
Each of our non-employee directors receive annual compensation of $150,000, which is comprised of (i) $65,000 in the form of RSUs (the “RSU Grants”) and (ii) $85,000, which the director may elect to receive in the form of cash, RSUs or a combination thereof. Additionally, the Chairperson of each Board committee and the Lead Independent Director will receive $20,000 annually, which is comprised of (i) $5,000 of RSU Grants and (ii) $15,000, which the Chairperson or Lead Independent Director, as applicable, may elect to receive in the form of cash, RSUs or a combination thereof.
Cash compensation is paid quarterly in arrears. The annual RSU Grants generally vest upon grant and are settled following the second anniversary of grant. Any other RSUs elected to be received generally vest 25% on a quarterly basis over the one year period beginning July 1 of each year and are settled within 60 days following the applicable vesting date. We reimburse all directors for expenses incurred in connection with attending Board and committee meetings.
The following table shows compensation paid to the individuals who served as our non-employee directors in fiscal year 2021.
Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) | |||||||||
John A. Allison IV | 46,250 | 121,659(3) | 167,909 | |||||||||
Yolonda Richardson | 92,500 | 70,977(4) | 163,477 | |||||||||
Kenneth L. Shropshire | 90,000 | 81,068(5) | 171,068 |
(1) | Our directors who also serve as our employees or executive officers do not receive any compensation for their service as directors and have thus been omitted from this table. These individuals consist of: (i) Mr. Moelis who is a named executive officer of the Company,
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(2) | Amounts represent the grant date fair value of
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(3) | Award comprised of
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(4) |
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Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) | |||||||||
John A. Allison IV | 41,250 | 82,931 | (3) | 124,181 | ||||||||
Yolonda Richardson | 82,171 | 60,842 | (4) | 143,013 | ||||||||
Kenneth L. Shropshire | 75,000 | 60,307 | (5) | 135,307 |