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Corporate Office
1775 Tysons Boulevard
Tysons, VA 22102
www.dxc.technology
| June 12, 2023 Dear Fellow Stockholder, We hope you and your family are doing well. The Board of Directors and executive leadership team of DXC Technology are pleased to invite you to join our Annual Meeting of Stockholders on Attend our virtual meeting You can attend the annual meeting online and submit your questions during the meeting by visitingwww.virtualshareholdermeeting.com/ Our Transformation Journey For the
Our clear execution by our talented team in fiscal year 2023 has delivered a better culture, stronger customer relationships, an enhanced sales model, improved financial performance, and we have maintained our investment grade credit profile while returning $1 billion back to stockholders. This strong operational execution resulted in significant stock outperformance for DXC as compared to the market and our Our team is excited and proud of what we accomplished this year because we have delivering in fiscal year 2024. Your vote is important We encourage you to vote as soon as possible, whether you plan to participate in the meeting or not. You can vote by proxy over the Internet, by telephone or by completing and returning the printed proxy card, or voting instruction card if you are a beneficial owner and requested and received
We value your support and are committed to communicating regularly and openly. Thank you for your continued trust and confidence. | ||||||||||
Corporate Office 20408 Bashan Dr. Suite 231 Ashburn, VA 20147 www.dxc.com | |||||||||||
MICHAEL J. SALVINO Chairman, President |
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William L. Deckelman, Jr.
Executive
Tysons,
July 2, 2020
Proxy Summary |
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Date:
July 25, 2023www.virtualshareholdermeeting.com/DXC2023
Voting:date:
•Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2021
•Approval, in anon-binding advisory vote, of our named executive officer compensation
•Approval, in a non-binding advisory vote, of increase in shares available under the DXC Technology Company 2017 Omnibus Incentive Plan
Approvalfrequency of increase in shares available under the DXC Technology Company 2017Non-Employee Director Incentive Plan
•Such other business that may properly come before the meeting
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Voting Matters and Vote Recommendation
Management Proposals | Vote Recommendation | |||||||||
Proposal No. 1: | Election of each of the 11 director nominees listed in this proxy statement | FOR each nominee | ||||||||
Proposal No. 2: | Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, | FOR | ||||||||
Proposal No. 3: | Approval, in a non-binding advisory vote, of our named executive officer compensation | FOR | ||||||||
Proposal No. 4: | Approval, in a non-binding advisory vote, of the frequency of holding future non-binding advisory votes on named executive officer compensation | ONE YEAR |
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Proxy Summary | ||||||
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Directors
Name | Age | Director Since | Independent | Principal Occupation | Other Public Company Boards | |||||
Mukesh Aghi | 64 | 2017 | ● | President & CEO ofUS-India Strategic Partnership Forum | — | |||||
Amy E. Alving | 57 | 2017 | ● | Former Chief Technology Officer of SAIC and current member of Fannie Mae and Howmet Aerospace boards | 2 | |||||
David A. Barnes | 64 | — | ● | Former SVP and Chief Information and Global Business Services Officer of UPS and current member of Hertz board | 1 | |||||
Raul J. Fernandez | 54 | — | ● | Vice Chairman and owner of Monumental Sports & Entertainment and current member of Broadcom and GameStop boards | 2 | |||||
David L. Herzog | 60 | 2017 | ● | Former CFO of AIG and current member of MetLife, AMBAC Financial Group and PCCW Limited (Hong Kong) boards | 3 | |||||
Mary L. Krakauer | 63 | 2018 | ● | Former EVP and Chief Information Officer of Dell Corporation and current member of Mercury Systems and Xilinx boards | 2 | |||||
Ian C. Read1 | 67 | 2020 | ● | Chairman of DXC Technology, former Chairman and CEO of Pfizer and current member of Kimberly-Clark Corporation board | 1 | |||||
Michael J. Salvino2 | 54 | 2019 |
| President and CEO of DXC Technology | — |
Name | Age* | Director Since | Independent | Principal Occupation | Other Public Company Boards | ||||||||||||
David A. Barnes | 67 | 2020 | l | Former SVP and Chief Information and Global Business Services Officer of UPS | — | ||||||||||||
Raul J. Fernandez | 56 | 2020 | l | Vice Chairman and co-owner of Monumental Sports & Entertainment and current member of Broadcom board | 1 | ||||||||||||
Anthony Gonzalez | 38 | 2023 | l | Former U.S. Congressman in the United States House of Representatives and current Executive-in-Residence for Alpine Investors | — | ||||||||||||
David L. Herzog Lead Independent Director | 63 | 2017 | l | Former CFO and EVP of AIG and current member of MetLife and Ambac Financial Group boards | 2** | ||||||||||||
Pinkie D. Mayfield | 55 | — | l | Chief Communications Officer and Vice President of Corporate Affairs at Graham Holdings Company and current member of Broadmark Realty Capital board | 1 | ||||||||||||
Karl Racine | 60 | 2023 | l | Former Attorney General of the District of Columbia and current Partner at Hogan Lovells | — | ||||||||||||
Dawn Rogers | 58 | 2021 | l | Director of Human Capital at American Securities LLC and former EVP and Chief Human Resources Officer at Pfizer | — | ||||||||||||
Michael J. Salvino Chairman | 57 | 2019 | Chairman, President and CEO of DXC Technology | — | |||||||||||||
Carrie Teffner | 56 | 2022 | l | Former Interim Executive Chair of the Board of the Ascena Retail Group and former CFO of Crocs | — | ||||||||||||
Akihiko Washington | 64 | 2021 | l | Former EVP of Worldwide Human Resources for Warner Bros. Entertainment | — | ||||||||||||
Robert F. Woods | 68 | 2017 | l | Former SVP and CFO at SunGard Data Systems Inc. | — |
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Proxy Summary |
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Name | Age | Director Since | Independent | Principal Occupation | Other Public Company Boards | |||||
Manoj P. Singh | 67 | 2017 | ● | Former Chief Operating Officer for Deloitte Touche Tohmatsu Ltd. | — | |||||
Robert F. Woods | 65 | 2017 | ● | Former SVP and CFO at Sungard Data Systems Inc. | — |
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2024
our stockholders’ interests.
frequency of holding future non-binding advisory votes on named executive officer compensation
In addition to the increase in the number of available shares, the proposed amendment to the Incentive Plan also:
prohibits the replacement of options and stock appreciation rights without stockholder approval; and
removes certain provisions relating to the qualification of awards for the performance-based compensation exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) as these provisions are no longer required after the enactment of the Tax Cuts and Jobs Act of 2017. However, we are not proposing to eliminate the individual award limits set forth in Section 4.3 of the Incentive Plan or otherwise to change ourpay-for-performance policy.
Proposal 5: Approval of increase in shares available under the DXC Technology Company 2017Non-Employee Director Incentive Plan
We are asking stockholders to approve an increase in the number of sharesCompensation Committee of our common stock available for issuance under the DXC Technology Company 2017Non-Employee Director Incentive Plan, as amended as proposed hereinBoard (the “Director Plan”), by 515,000 shares,Compensation Committee) with frequent input from 230,000 to 745,000 shares.
In addition to the increase in the number of available shares, the proposed amendment to the Director Plan also imposes an annual limitstockholders on the value of equity awards that may be granted under the Director Plan to our Independent Chairman during any calendar year to $900,000 and to any other singlenon-employee director during any calendar year to $500,000, based on the value of our shares as of the grant date of the award.
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Table of Contents |
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DirectorsRequired
votes cast for such nominee’s election exceeds the number of votes cast against such nominee’s election. Abstentions and broker non-votes, if any, will have no effect on the vote for this proposal.
Committee of our Board (the Nominating/Corporate Governance Committee).
•Leadership and Management:Includes experience as a senior executive in a global or large public or private organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results.
•Public Company Governance:Governance: Experience with corporate and board governance, including oversight of compliance, risk, regulatory requirements, executive compensation practices, and policies and processes to effectively manage and monitor these in support of the stockholders’ interests.
Industry:•Industry: Experience in the professional services industry with a good understanding of DXC’s strategy, offerings, enabling technologies (e.g. cloud, AI, ML, IoT and SaaS), digital transformation, innovation, customers, marketplace dynamics and success drivers.
•Audit and Financial Expertise:Expertise: Experience and understanding of areas such as accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions.
•Enterprise Transformation and Culture Building:Building: Experience in workforce transformation, restructuring and building a high-performance culture in a complex global or large environment as the landscape for technology services embraces marketplace ledmarketplace-led disruption. Experience aligning HR policies and practices to attract, onboard, develop and retain top talent in support of DXC’s strategic talent plan.
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The Nominating/Corporate•Government/Regulatory and Public Policy: Broad regulatory or policy-making experience in business, government, technology, or public service. Experience in government positions or through extensive interactions with the government, policymakers and government agencies.
ESG matters.
•integrity and demonstrated high ethical standards,
•sound judgment,
•analytical skills,
•the ability to engage management and each other in a constructive and collaborative fashion,fashion; and
•the commitment to devote significant time and energy to service on the Board and its committees.
2020
Mukesh Aghi and Amy Alving will not stand for re-election and their respective term will end at the conclusion of the Annual Meeting.
2 | 2023 Proxy Statement |
Top Skills | Leadership and Management |
Company Governance | Industry |
Financial Expertise |
| Enterprise Transformation and Culture Building | Capital Markets and Treasury |
| Government/Regulatory and Public Policy | ESG | ||||||||||||||||||||||||
David A. Barnes | l | l | l | l | l | |||||||||||||||||||||||||||||
Raul J. Fernandez | l | l | l | l | l | l | l | |||||||||||||||||||||||||||
Anthony Gonzalez | l | l | l | l | l | |||||||||||||||||||||||||||||
David L. Herzog | l | l | l | l | l | l | ||||||||||||||||||||||||||||
Pinkie D. Mayfield | l | l | l | l | ||||||||||||||||||||||||||||||
Karl Racine | l | l | l | l | ||||||||||||||||||||||||||||||
Dawn Rogers | l | l | l | l | ||||||||||||||||||||||||||||||
Michael J. Salvino | l | l | l | l | l | l | ||||||||||||||||||||||||||||
Carrie W. Teffner | l | l | l | l | l | l | ||||||||||||||||||||||||||||
Akihiko Washington | l | l | l | l | l | |||||||||||||||||||||||||||||
Robert F. Woods | l | l | l | l | l |
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Board Diversity—Background of Director Nominees | |||||||||||||||||||||||||||||||||||
David Barnes | Raul Fernandez | Anthony Gonzalez | David Herzog | Pinkie Mayfield | Karl Racine | Dawn Rogers | Michael Salvino | Carrie Teffner | Akihiko Washington | Robert Woods | |||||||||||||||||||||||||
Tenure/Age/Gender | |||||||||||||||||||||||||||||||||||
Years on the Board | 3 | 3 | 0 | 6 | 0 | 0 | 2 | 4 | 1 | 2 | 6 | ||||||||||||||||||||||||
Age | 67 | 56 | 38 | 63 | 55 | 60 | 58 | 57 | 56 | 64 | 68 | ||||||||||||||||||||||||
Gender | M | M | M | M | F | M | F | M | F | M | M | ||||||||||||||||||||||||
Race/Ethnicity/Nationality | |||||||||||||||||||||||||||||||||||
African American/Black | l | l | l | ||||||||||||||||||||||||||||||||
Asian | l | ||||||||||||||||||||||||||||||||||
White/ Caucasian | l | l | l | l | l | l | |||||||||||||||||||||||||||||
Hispanic/ Latinx | l | l | |||||||||||||||||||||||||||||||||
Born Outside the U.S. | l |
2023 Proxy Statement |
There are no family relationships among any of our directors, director nominees and executive officers.
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20202023 Director Nominees Biographies
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Dr. Aghi has served as a member of our Board since April 1, 2017. Dr. Aghi is President and CEO of U.S.-India Strategic Partnership Forum (USISPF) since 2017, a strategic policy organization focused on fostering a stronger relation between the two democracies. Dr. Aghi has over 35 years of experience in international business and IT environment. Earlier, Dr. Aghi served as Chief Executive Officer of L&T Infotech from 2012 to 2015, where he expanded the business internationally, and as Chairman and CEO of Steria India Ltd. from 2007 to 2012. Additionally, Dr. Aghi was the founding CEO of Universitas 21 Global, the world’s largest consortium ofresearch-led universities and global leader in providing post-graduate online education. He was also the President of IBM India for IBM Corporation and worked at Ariba and J.D. Edwards. Dr. Aghi is a Trustee at the Claremont Graduate University.
Qualifications: Dr. Aghi brings to the DXC Board of Directors extensive leadership and management experience, including global and international business experience, a broad understanding of the professional services industry, with a good understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers, strong experience with corporate and board governance, including oversight of compliance, risk, regulatory requirements, executive compensation practices and policies and processes to effectively manage and monitor these, and robust enterprise transformation and culture building experience.
David A. Barnes Age: 67 Director Since: 2020 |
DXC Committees: •Audit • Nominating/Corporate Governance | Other Public Company Boards: Former (Past Five Years): •Hertz Global Holdings, Inc. •Ingram Micro Inc. | |||||||||
Mr. Barnes has served as a member of our Board since August 13, 2020. He is the former Senior Vice President, Chief Information and Global Business Services Officer of United Parcel Service, Inc. (UPS), a role he served from 2011 to 2016. From 2005 to 2011, Mr. Barnes served as Senior Vice President and Chief Information Officer for UPS. UPS is one of the world’s largest global package delivery companies, a provider of global supply chain management and advanced logistic & health care solutions, and an operator of one of the world’s largest airlines. In his role as Chief Information Officer of UPS and a member of the UPS Management Committee, Mr. Barnes was responsible for all aspects of UPS technology utilized in over 220 countries and territories. He also chaired the UPS Information Technology Governance Committee responsible for global technology strategy, architecture, mobility, hardware design, and research and development. In addition, he was responsible for information security, served as Co-Chair of the Enterprise Risk Committee, and was a member of the UPS Corporate Strategy and the Finance Committees. Prior to serving as a member of the UPS Management Committee, he held a number of key leadership positions throughout his 39-year career at UPS in areas including technology development, operations, UPS airline, international custom house brokerage, mergers and acquisitions, and finance. Mr. Barnes has also served as Senior Advisor for Bridge Growth Partners LLC (Bridge Growth), a private equity fund, since 2016 and in this capacity serves as a member of the board of directors for several privately held companies in Bridge Growth’s technology investment portfolio. Mr. Barnes also served as a director of Hertz Global Holdings, Inc. from May 2016 to August 2021 and of Ingram Micro Inc., a global technology and supply chain service provider, from June 2014 to December 2016, where he was a member of the Audit Committee and chair of the Technology Committee. Mr. Barnes serves as a director for Solace Corporation, a software company, since 2016, where he serves on the Audit Committee, and Syniti, a software and services company, since 2017, where he serves on the Audit and Technology Committees. Qualifications: Mr. Barnes brings to the DXC Board of Directors robust experience managing information security risks, including an understanding of the information security threat landscape and of DXC’s enabling technologies. He also has strong leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Barnes has extensive experience with corporate and board governance, including oversight of compliance, risk, regulatory requirements, and processes to effectively manage and monitor these in support of stockholders’ interests. Mr. Barnes also brings to the Board broad experience in the professional services industry, with an understanding of DXC’s strategy, offerings, digital transformation, innovation, customers, marketplace dynamics and success drivers, as well as experience and understanding of areas such as accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions. |
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Dr. Alving has served as a member of our Board since April 1, 2017. Dr. Alving is the former Senior Vice President and Chief Technology Officer of Leidos Holdings, Inc. (formerly Science Applications International Corporation (SAIC)), one of the nation’s top defense sector providers of hardware, software and services, where she worked from 2005 to 2013. From 2007 to 2013, she was SAIC’s Chief Technology Officer, where she was responsible for the creation, communication and implementation of SAIC’s technical and scientific vision and strategy. Prior to joining SAIC, Dr. Alving was the director of the Special Projects Office (SPO) at the Defense Advanced Research Projects Agency (DARPA) until 2005, where she was a member of the federal Senior Executive Service. Prior to her time at DARPA, Dr. Alving was a White House Fellow for the Department of Commerce serving as a senior technical advisor to the Deputy Secretary of Commerce from 1997 until 1998. Dr. Alving is a member of the board of directors of the Federal National Mortgage Association (Fannie Mae) and Howmet Aerospace, Inc. (formerly named Arconic Inc.). She is also a member of the board of trustees of Princeton University.
Qualifications: Dr. Alving brings to the DXC Board of Directors robust leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Dr. Alving has extensive experience in the professional services industry, with a robust understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers. She also brings to the Board strong public company governance experience and leadership and management experience.
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Raul J. Fernandez Age: 56 Director Since: 2020 |
DXC Committees: •Nominating/Corporate Governance (chair) | Other Public Company Boards: Current: •Broadcom, Inc. Former (Past Five Years): •GameStop Corp. •Capitol Investment Corp. V | |||||||||
Mr. Fernandez has served as a member of our Board since August 13, 2020. He is Vice Chairman and co-owner of Monumental Sports & Entertainment, a private partnership that owns some of Washington, D.C.’s major sports franchises, including the Women’s National Basketball Association’s Washington Mystics, the National Hockey League’s Washington Capitals, the National Basketball Association’s Washington Wizards and the Wizards District Gaming NBA 2K team. The partnership also owns and operates Capital One Arena, Washington, D.C.’s premier sports and entertainment complex, and NBC Sports Washington, a regional sports network operating in the mid-Atlantic region. He is a Special Advisor to and a Limited Partner of Carrick Capital Partners, a private equity firm, and a member of the Strategic Advisory Board and a Limited Partner of Volition Capital, a growth equity firm. He founded and was Chief Executive Officer of Proxicom, Inc. (NASDAQ: PXCM), a global provider of e-commerce solutions for Fortune 500 companies, from its inception in 1991 until its acquisition by Dimension Data (LSE: DDT) in 2001. He was Chairman and Chief Executive Officer of ObjectVideo, Inc., a developer of intelligent video surveillance software, from January 2004 to March 2017. He was also a member of President George W. Bush’s Council of Advisors on Science and Technology. Mr. Fernandez currently serves on the board of directors of Broadcom, Inc. (NASDAQ: AVGO), a global technology leader in semiconductor and infrastructure software solutions. He also served as a director of Capitol Investment Corp. V from October 2020 to July 2021, GameStop Corp. from April 2019 to June 2021 and Kate Spade & Co. from 2001 until its acquisition by Coach, Inc. in July 2017, and as Chairman of the board of Proxicom from 1991 until its acquisition in 2001. Qualifications: Mr. Fernandez brings to the DXC Board of Directors extensive leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation and driving results. Mr. Fernandez has strong experience in the technology landscape and with overseeing information security risks, including an understanding of the information security threat landscape and of DXC’s enabling technologies. Mr. Fernandez also brings to the Board experience with corporate and board governance, including oversight of compliance, risk, regulatory requirements, and policies and processes to effectively manage and monitor these in support of stockholders’ interests, as well as experience in the professional services industry, with a good understanding of DXC’s strategy, offerings, digital transformation, innovation, customers, marketplace dynamics and success drivers. |
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Mr. Barnes is the former Senior Vice President, Chief Information and Global Business Services Officer of United Parcel Service, Inc. (“UPS”) a role he served in from 2011 to 2016. From 2005 to 2011, Mr. Barnes served as Senior Vice President and Chief Information Officer for UPS. UPS is the world’s largest package delivery company, a leader in the U.S. less-than-truckload industry, a provider of global supply chain management and advanced logistic solutions and an operator of one of the world’s largest airlines. In his role as Chief Information Officer of UPS and a member of the UPS Management Committee, Mr. Barnes was responsible for all aspects of UPS technology utilized in over 220 countries and territories. He also chaired the UPS Information Technology Governance Committee responsible for global technology strategy, architecture, mobility, hardware design and research and development. In addition, he was responsible for information security, served asCo-Chair of the Enterprise Risk Committee and was a member of the UPS Corporate Strategy and the Finance Committees. Prior to serving as a member of the UPS Management Committee, he held a number of key leadership positions throughout his39-year career at UPS in areas including technology development, operations, UPS airline, international custom house brokerage, mergers and acquisitions and finance. Mr. Barnes also has served as Senior Advisor for Bridge Growth Partners LLC (“Bridge Growth”), a private equity fund, since 2016 and in this capacity serves as a member of the board of directors for several privately-held companies in Bridge Growth’s technology investment portfolio. Mr. Barnes is currently a member of the board of directors of Hertz. He was a director at Ingram Micro Inc., a global technology and supply chain service provider, from June 2014 to December 2016, where he was a member of the Audit Committee and chair of the Technology Committee. Mr. Barnes also serves as a director for Solace Corporation, a software company, since 2016 where he serves on the Audit Committee and BackOffice Associates, a software company, since 2017 where he serves on the Audit and Technology Committees.
Qualifications: Mr. Barnes brings to the DXC Board of Directors robust leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Barnes has extensive experience with corporate and board governance, including oversight of compliance, risk, regulatory requirements, executive compensation practices and policies and processes to effectively manage and monitor these, in support of the stockholders’ interests. Mr. Barnes also brings to the Board broad experience in the professional services industry, with an understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers, as well as experience and understanding of areas such as accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions.
Anthony Gonzalez Age: 38 Director Since: 2023 |
DXC Committees: •Compensation | ||||||||||
Mr. Gonzalez has served as a member of our Board since January 5, 2023. He currently is an Executive in Residence for Alpine Investors, a private equity firm, since March 2023. Mr. Gonzalez is a former U.S. Congressman for Ohio’s 16th Congressional District in the United States House of Representatives, where he served from 2019 until January 2023. Mr. Gonzalez served on the House Financial Services Committee and the Committee on Science, Space, and Technology. Additionally, he served on the House China Task Force and the Select Committee on the Climate Crisis. His legislative areas of focus included capital markets, financial technology, and climate change while he also proudly served as the Vice Ranking Member of the Diversity and Inclusion Subcommittee on Financial Services. A graduate of The Ohio State University and Stanford University’s Graduate School of Business, Mr. Gonzalez played five seasons in the National Football League where he was a first-round draft pick of the Indianapolis Colts. Upon retiring from the NFL in 2012 and earning his Masters in Business Administration in 2014, Mr. Gonzalez served as the Director of Business Development and Corporate Development for Beneco, Inc. from June 2014 until June 2015, where he was a Board Observer and helped stabilize the business through a change of ownership and multiple CEO transitions. In July 2015, he joined InformedK12 (formerly Chalk Schools) where he served as Chief Operating Officer and led all commercial and business functions for the company until June 2017, helping to triple the size of the business. Qualifications: Mr. Gonzalez brings to the DXC Board of Directors extensive regulatory and policy-making experience in business, government, technology, and public service as well as on ESG matters, including climate-related matters, from his service in the United States House of Representatives. He has experience in workforce transformation, restructuring and building a high-performance culture in a complex large environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent in support of the Company’s strategic talent plan. Mr. Gonzalez also brings to the Board broad leadership and management experience with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation and driving results, as well as experience in the professional services industry, with a good understanding of DXC’s strategy, offerings, digital transformation, innovation, customers, marketplace dynamics and success drivers. |
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Mr. Fernandez has served as Vice Chairman and owner of Monumental Sports & Entertainment, a private partnership thatco-owns the NBA’s Washington Wizards, the NHL’s Washington Capitals, the WNBA’s Washington Mystics and Wizards District Gaming NBA 2K team, and whichco-owns and operates the Capital One Arena in Washington, DC, since 2000. He also serves as Special Advisor to, and is a Limited Partner of, each of General Atlantic Partners, a growth equity firm, and Carrick Capital Partners, a growth equity firm. Mr. Fernandez previously served in several leadership roles at various technology companies, including, from 2004 to 2017, as Chairman and Chief Executive Officer for ObjectVideo, Inc., a developer of intelligent video surveillance software. Mr. Fernandez also founded Proxicom, Inc. (NASDAQ:PXCM), a global provider ofe-commerce solutions for Fortune 500 companies, and served as its Chief Executive Officer and Chairman of its board of directors since its inception in 1991 until its acquisition in 2001. He is currently on the board of directors of GameStop Corp., where he also serves on the Audit Committee, and on the board of directors of Broadcom, Inc., where he also serves on the Audit and Nominating and Corporate Governance Committees. Mr. Fernandez also served as a director of Kate Spade & Co. from 2001 through 2017, and previously served as a member of President George W. Bush’s Council of Advisors on Science and Technology.
Qualifications: Mr. Fernandez brings to the DXC Board of Directors extensive leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Fernandez has strong experience with corporate and board governance, including oversight of compliance, risk, regulatory requirements, executive compensation practices and policies and processes to effectively manage and monitor these, in support of the stockholders’ interests. Mr. Fernandez also has strong experience as a direct investor in early-stage and mature technology companies, and working with management teams on business strategy and execution. Mr. Fernandez also has experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent, as well as experience in the professional services industry, with a good understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers.
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David L. Herzog Age: 63 Director Since: 2017 |
DXC Committees: •Audit • Compensation • Nominating/Corporate Governance | Other Public Company Boards: Current:* •Metlife, Inc. •Ambac Financial Group, Inc. Former (Past Five Years): •PCCW Limited (Hong Kong) | |||||||||
Mr. Herzog has served as a member of our Board since April 1, 2017 and as Lead Independent Director since July 26, 2022. Mr. Herzog served as the Chief Financial Officer and Executive Vice President of American International Group (AIG) from 2008 to 2016. Mr. Herzog served as Senior Vice President and Comptroller of AIG from June 2005 to October 2008, Chief Financial Officer for worldwide life insurance operations from April 2004 to June 2005 and Vice President, Life Insurance from 2003 to 2004. In addition, Mr. Herzog has served in other senior officer positions for AIG and its subsidiaries, including as the Chief Financial Officer and Chief Operating Officer of American General Life following its acquisition by AIG. Previously, Mr. Herzog served in various executive positions at GenAmerica Corporation and Family Guardian Life, a Citicorp company, and at a large accounting firm that is now part of PricewaterhouseCoopers LLP. In addition, Mr. Herzog holds the designations of Certified Public Accountant and Fellow, Life Management Institute. Mr. Herzog is currently also a member of the board of directors and chair of the Audit Committees of MetLife Inc. and of Ambac Financial Group, Inc. He previously served as a member of the board of directors of PCCW Limited (Hong Kong) from November 2017 to July 2022. *Mr. Herzog is not standing for reelection at the 2023 annual meeting of stockholders of Ambac Financial Group, Inc. to be held on June 22, 2023. Therefore, as of the conclusion of Ambac’s 2023 annual meeting of stockholders, Mr. Herzog will serve on the board of one public company other than DXC. Qualifications: Mr. Herzog has extensive experience and understanding of accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions. Mr. Herzog brings more than three decades of life insurance and financial service expertise to DXC, and his financial and international business experience in the oversight of AIG and its subsidiaries uniquely positions him to enhance stockholder value by leveraging his financial and risk management expertise and deep understanding of the insurance business. Mr. Herzog also has broad capital markets and treasury experience as well as enterprise transformation and culture-building experience. In addition, the Board believes that his extensive leadership and management experience qualifies Mr. Herzog to serve as Lead Independent Director of the Board and to help ensure effective, independent oversight and an appropriate balance between management and the independent directors of the Board. |
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Mr. Herzog has served as a member of our Board since April 1, 2017. Mr. Herzog served as the Chief Financial Officer and Executive Vice President of American International Group (AIG) from 2008 to 2016. Mr. Herzog served as Senior Vice President and Comptroller of AIG from June 2005 to October 2008, Chief Financial Officer for worldwide life insurance operations from April 2004 to June 2005 and Vice President, Life Insurance from 2003 to 2004. In addition, Mr. Herzog has served in other senior officer positions for AIG and its subsidiaries, including as the Chief Financial Officer and Chief Operating Officer of American General Life following its acquisition by AIG. Previously, Mr. Herzog served in various executive positions at GenAmerica Corporation and Family Guardian Life, a Citicorp company, and at a large accounting firm that is now part of PricewaterhouseCoopers LLP. In addition, Mr. Herzog holds the designations of Certified Public Accountant and Fellow, Life Management Institute. Mr. Herzog is also a member of the board of directors and chair of the audit committees of MetLife Inc. and of Ambac Financial Group, Inc. He is also a member of the Board of Directors of PCCW Limited (Hong Kong).
Qualifications: Mr. Herzog has extensive experience and understanding of accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions. Mr. Herzog brings more than three decades of life insurance and financial service expertise to DXC, and his financial and international business experience in the oversight of AIG and its subsidiaries, uniquely positions him to enhance stockholder value by leveraging his financial and risk management expertise and deep understanding of the insurance business. Mr. Herzog also has broad capital markets and treasury experience as well as enterprise transformation and culture building experience.
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Mrs. Krakauer has served as a member of our Board since March 15, 2018. Mrs. Krakauer retired as the Executive Vice President, Chief Information Officer of Dell Corporation in 2017, where she was responsible for global IT, including all operations and integration activity. She served as the Chief Information Officer and EVP, Global Business Services of EMC Corporation in 2016. Prior to that she served as EVP, Business Development, Global Enterprise Services for EMC Corporation during 2015 and as Executive Vice President, Global Human Resources for EMC Corporation from 2012 to 2015, where she was responsible for executive, leadership, and employee development, compensation and benefits, staffing, and all of the people-related aspects of acquisition integration. Previously, she held executive leadership roles in the services businesses at EMC Corporation, Hewlett-Packard Corporation, Compaq Computer Corporation, and Digital Equipment Corporation. Mrs. Krakauer currently serves as a director of Mercury Systems and Xilinx.
Qualifications: Mrs. Krakauer brings to the Board extensive experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent. Mrs. Krakauer has extensive experience in the professional services industry, with a good understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers. Mrs. Krakauer brings to the Board leadership and management expertise from her extensive experience gained from serving as an executive at multi-national technology companies as well as public company governance experience.
Pinkie D. Mayfield Age: 55 |
Other Public Company Boards: Current: •Broadmark Realty Capital Inc. | ||||||||||
Ms. Mayfield is the Chief Communications Officer and Vice President of Corporate Affairs at Graham Holdings Company (formerly The Washington Post Company), a diversified conglomerate whose principal operations include education and media. In her current role since 2015, Ms. Mayfield is responsible for corporate affairs, public relations, communications and strategic initiatives. Since joining Graham Holdings in 1998, she has held several executive leadership positions. Prior to joining Graham Holdings, Ms. Mayfield was a Vice President and Trust Officer at NationsBank (now Bank of America) in the Investment Services Division. A director of Founders Bank, a Washington D.C.-based community bank, she has chaired the audit committee since joining the board in 2020. Ms. Mayfield also currently serves as a member of the board of directors of Broadmark Realty Capital Inc. and as the treasurer of the board of directors of the District of Columbia College Access Program and a trustee of the Philip L. Graham Fund. Ms. Mayfield graduated magna cum laude with a B.A. in business administration from Trinity Washington University and earned an M.B.A. from the University of Maryland University College. Qualifications: Ms. Mayfield is a seasoned finance and banking executive with experience in multiple sectors who brings to the Board extensive leadership and management experience, including in public relations, corporate affairs, communications, and investor relations. She brings a diverse perspective to the Board as well as experience with corporate and board governance, including assessing enterprise risk, regulatory requirements, executive compensation practices and policies and processes to effectively manage and monitor these areas, in support of the stockholders’ interests. Ms. Mayfield also has experience and understanding of accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions. |
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Mr. Read has served as Chairman of our Board since March 16, 2020. Mr. Read served as Pfizer Inc.’s Executive Chairman from January 2019 until his retirement on December 31, 2019, completing a41-year career with the global pharmaceutical company. Prior to that, he had served as Chairman of the Board and Chief Executive Officer since December 2011 and as President and CEO since December 2010. Mr. Read joined Pfizer in 1978 in its financial organization. He worked in Latin America through 1995, holding positions of increasing responsibility, and was appointed President of the Pfizer International Pharmaceuticals Group, Latin America/Canada, in 1996. In 2000, Mr. Read became Executive Vice President of Europe/Canada and was named a Corporate Vice President in 2001. In 2006, he was named Senior Vice President of Pfizer, as well as Group President of its worldwide biopharmaceutical businesses. Mr. Read is also a member of the board of directors and chair of the executive committee of Kimberly-Clark Corporation.
Qualifications: Mr. Read brings to the DXC Board of Directors robust leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Read has broad experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent. Mr. Read also brings to the Board strong experience and understanding of areas such as accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions, as well as public company governance experience. In addition, the DXC Board of Directors believes that his extensive experience at Pfizer Inc., including his position as executive chairman, qualifies Mr. Read to serve as Chairman of the Board and to help communicate the Board’s priorities to management and management’s perspective to the Board.
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Karl Racine Age: 60 Director Since: 2023 |
DXC Committees: •Nominating/Corporate Governance | Other Public Company Boards: Current: •SHF Holdings, Inc. | |||||||||
Mr. Racine has served as a member of our Board since January 5, 2023. Mr. Racine is the former Attorney General of the District of Columbia. He was sworn in as the District of Columbia’s first elected Attorney General in 2015 and was reelected to a second term in 2018, where he served until January 2, 2023. As Attorney General, Mr. Racine was front-and-center on emerging issues that intersect with artificial intelligence, big data, privacy and competition law. He has been a national leader in holding big tech companies accountable and fighting for the privacy rights of consumers. Lawsuits he pioneered as Attorney General have been credited with bringing issues–such as geolocation tracking and inadequate data protection–into the national spotlight and are being replicated by bipartisan attorneys general across the country. Outside of litigation, Mr. Racine has been a vocal advocate calling on tech companies to be responsible content moderators. After the January 6th insurrection, Mr. Racine's advocacy prompted Facebook to take down targeted ads of military tactical gear and weapons accessories until after the inauguration. Mr. Racine is a partner at Hogan Lovells LLP since January 2023. He also serves on the board of directors of SHF Holdings, Inc., a financial services technology firm that serves the regulated cannabis industry. In 2021, Mr. Racine served as President of the bipartisan National Association of Attorneys General (NAAG). In 2022, NAAG awarded him the highest honor bestowed to a sitting Attorney General—the Kelley-Wyman Award. Mr. Racine draws on over 30 years of legal and leadership experience. Over the course of his career, he has worked at the D.C. Public Defender Service, where he represented District residents who could not afford a lawyer, served as Associate White House Counsel to President Bill Clinton, and worked on criminal cases and complex civil litigation at private firms. While in private practice, he was elected managing partner of his firm, Venable LLP, and became the first African-American managing partner of a top-100 American law firm. Qualifications: Mr. Racine is a seasoned lawyer and politician who brings to the DXC Board of Directors extensive legal and leadership experience. He brings a diverse perspective to the Board as well as broad regulatory and policy-making experience in government, public service and ESG matters. The Board believes Mr. Racine’s legal background can assist in fulfilling the Board’s oversight responsibilities as to ESG matters and legal and regulatory compliance and regulatory authority engagement. |
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Mr. Salvino became the President and Chief Executive Officer of DXC in September 2019 and has been a member of the Board of Directors of DXC since May 2019. Prior to joining DXC, Mr. Salvino served as Managing Director of Carrick Capital Partners from 2016 to 2019. Prior to his tenure at Carrick, from 2009 to 2016, Mr. Salvino served as group chief executive of Accenture Operations, where he led a team of more than 100,000 consulting and outsourcing professionals focused on providing business process outsourcing, infrastructure, security and cloud services to deliver business value and drive productivity and digital improvements for clients. Prior to that, he held leadership roles in the HR outsourcing business at Hewitt Associates Inc. and as President of the Americas Region at Exult Inc. Mr. Salvino is a board member of the Atrium Health Foundation, the largest healthcare system in the Carolinas, where he serves on the Investment Oversight Committee for both the hospital and the foundation. Mr. Salvino graduated from Marietta College with a Bachelor of Science degree in industrial engineering. He serves on the Marietta College Board of Trustees and is Chair of its Investment Committee. Mr. Salvino is also a member of the Board of Visitors of the Duke University Pratt School of Engineering.
Qualifications: Mr. Salvino brings to the DXC Board of Directors extensive experience in the professional services industry, with a robust understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers. Mr. Salvino has broad experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent in support of DXC’s strategic talent plan. Mr. Salvino also brings to the Board strong leadership and management experience and public company governance experience. In addition, the Board believes that his expertise and perspective in operations, digital, artificial intelligence and security, and strong international business experience qualifies Mr. Salvino to serve as our President and Chief Executive Officer.
Dawn Rogers Age: 58 Director Since: 2021 |
DXC Committees: •Compensation | ||||||||||
Ms. Rogers has served as a member of our Board since March 4, 2021. She is a global human resources executive with 35 years of experience in companies large and small, with deep expertise in the United States, Europe and emerging markets. She has built innovative HR organizations and high-impact teams focused on business outcomes and employee experience and engagement. Ms. Rogers has successfully led executive transitions, culture transformations, and large-scale M&A and business change programs. Ms. Rogers is currently Director of Human Capital at American Securities LLC, where she provides leadership and support to the firm’s portfolio of companies in all areas of human capital management. Prior to joining American Securities, she was the Executive Vice President and Chief Human Resources Officer at Pfizer Inc. Ms. Rogers’ career with Pfizer spanned more than 20 years across their global businesses, working as a key member of the executive team supporting growth and innovation. Prior to Pfizer, she was Senior Director of Human Resources at Kos Pharmaceuticals, where she established the human resources function and built their commercial organization in preparation for their first product launch and IPO. Ms. Rogers also held human resources positions at Earth Tech and The Ares Serono Group/Serono Diagnostics. Qualifications: Ms. Rogers brings to the DXC Board of Directors extensive experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment as well as aligning HR policies and practices to attract, onboard, develop and retain top talent in support of the Company’s strategic talent plan. Ms. Rogers has robust leadership and management experience, including experience in a global organization, with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. She also has strong experience with ESG matters and with corporate governance, including oversight of human capital management and executive compensation practices. |
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Mr. Singh has served as a member of our Board since April 1, 2017. Mr. Singh is the former Chief Operating Officer and Global Managing Director of Deloitte Touche Tohmatsu, Ltd. Prior to his mandatory retirement from that position in June 2015, Mr. Singh’s responsibilities included leading various Deloitte initiatives, including setting global strategy, directing investments globally, leading areas such as finance, global technology, knowledge management and branding, and guiding country leadership in high-growth markets such as China, India, Africa, Southeast Asia, Mexico and Germany. He has been a Director at Abt Associates Inc. since December 2015 and a Trustee of The Putnam Funds since March 2017. He also holds an advisory role at Altimetrik Inc. since April 2016. He served on the board of directors of Deloitte U.S. and the boards of Deloitte member firms in China, Mexico and Southeast Asia. Over his36-year career with Deloitte, Mr. Singh held numerous other positions, including leading the company’s Asia-Pacific region and consulting in the Americas.
Qualifications: Mr. Singh brings to the DXC Board of Directors robust leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Singh has strong experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent. Mr. Singh also brings to the Board broad experience in the professional services industry, with an understanding of DXC’s offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers, as well as audit and financial expertise.
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Michael J. Salvino Age: 57 Director Since: 2019 |
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Mike Salvino serves as Chairman, President and Chief Executive Officer of DXC. He was appointed Chief Executive Officer of DXC in 2019, has been a member of the Board of Directors since May 2019, and became Chairman of the Board of Directors of DXC effective July 2022. Mr. Salvino has expertise in transforming businesses by building better cultures, strengthening customer relationships, and focusing on a company’s financial foundation. At DXC he has also focused on reducing debt, better managing capital allocation, and driving growth through expanded margin, earnings per share (EPS) and free cash flow (FCF). Prior to joining DXC, Mr. Salvino served as managing director of Carrick Capital Partners from 2016 to 2019. Prior to his tenure at Carrick, from 2009 to 2016, Mr. Salvino served as group chief executive of Accenture Operations, one of Accenture’s five businesses, where he led a team of more than 100,000 consulting and outsourcing professionals focused on providing business process outsourcing, infrastructure, security and cloud services to deliver business value and drive productivity and digital improvements for clients. Prior to that, he held leadership roles in the HR outsourcing business at Hewitt Associates Inc. and as president of the Americas Region at Exult Inc. Mike is a board member of the Atrium Health Foundation, the largest healthcare system in the Carolinas, where he serves on the Investment Oversight Committee for both the hospital and the foundation. Mr. Salvino graduated from Marietta College with a BS degree in industrial engineering. He is a member of the Board of Visitors of the Duke University Pratt School of Engineering. Qualifications: Mr. Salvino brings to the DXC Board of Directors extensive experience in the professional services industry, with a robust understanding of DXC’s strategy, offerings, enabling technologies, digital transformation, innovation, customers, marketplace dynamics and success drivers. Mr. Salvino has broad experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent in support of DXC’s transformation journey. Mr. Salvino also brings to the Board strong leadership and management experience and public company governance experience. In addition, the Board believes that his expertise and perspective in operations, digital, artificial intelligence and security, and strong international business experience, qualify Mr. Salvino to serve as our Chairman, President and Chief Executive Officer. |
12 | 2023 Proxy Statement |
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Carrie W. Teffner Age: 56 Director Since: | DXC Committees: •Audit | Other Public Company Boards: Former (Past Five Years): •Avaya Holdings •GameStop Corp. •Ascena Retail Group | |||||||||||
Ms. Teffner has served as a member of our Board since April 21, 2022. Ms. Teffner is a strategic, financial, and operational executive with over 30 years of experience assisting consumer product and retail companies to grow their businesses worldwide. Ms. Teffner’s career has been marked by leading successful large-scale transformational initiatives thanks to her ability to engage, inspire and lead organizations through significant change. She serves on the boards of directors of BFA Industries since February 2021 and of International Data Group (IDG) since February 2022. Prior to that, Ms. Teffner served on the Ascena Retail Group board of directors, first as a member of the board from October 2018 to May 2019 and then as interim executive chair from May 2019 to March 2021. She also served on the GameStop board of directors from September 2018 to June 2021 and on the board of directors of Avaya Holdings from February 2023 to May 2023. Before her most recent board roles, Ms. Teffner was at Crocs for four years, where she served as EVP of Finance and Strategic Projects from August 2018 to April 2019, as EVP and Chief Financial Officer from December 2015 to August 2018, and as a member of the board of directors from June 2015 to December 2015. Prior to Crocs, she was the EVP and Chief Financial Officer of PetSmart, a Fortune 300 company, from June 2013 to June 2015. Prior to that, Ms. Teffner was the EVP and Chief Financial Officer of Weber Stephen Products from October 2011 to May 2013 and the Chief Financial Officer of Timberland from September 2009 to September 2011. Ms. Teffner spent the first 21 years of her career with Sara Lee Corporation, a Fortune 100 company, where she held various domestic and international roles, including division and segment Chief Financial Officer roles and Corporate Treasurer. Qualifications: Ms. Teffner brings to the DXC Board of Directors extensive leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. She has a robust understanding of accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions. Ms. Teffner also brings to the Board extensive experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, as well as broad capital markets and treasury experience. She also has experience managing information security risks, including an understanding of the information security threat landscape. |
13 |
Akihiko Washington Age: 64 Director Since: 2021 | DXC Committees: •Compensation (chair) | ||||||||||
Mr. Washington has served as a member of our Board since March 4, 2021. He retired from Warner Bros. Entertainment as Executive Vice President of Worldwide Human Resources, where he served in that role from 2009 until December 2020 and was responsible for managing the company’s global HR department, including organizational planning and development, recruitment, compensation and benefits, employee training and development, employee relations, employee communications, inclusion and belonging, shared services and work-life initiatives. He joined Warner Bros. in 2000 as Senior Vice President of Worldwide Human Resources. Mr. Washington is a proven leader in shaping cultures and human resources initiatives globally. His professional experience spans serving as Vice President of Human Resources at Time Warner and 15 years as Vice President of Human Resources at HBO. Qualifications: Mr. Washington brings to the DXC Board of Directors extensive experience in workforce transformation, restructuring and building a high-performance culture in a complex global environment, and aligning HR policies and practices to attract, onboard, develop and retain top talent in support of the Company’s strategic talent plan. Mr. Washington has robust leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. He also has strong experience in the professional services industry, with a good understanding of DXC’s strategy, as well as experience with ESG matters and with corporate governance, including oversight of human capital management, executive compensation practices. |
14 | 2023 Proxy Statement |
Robert F. Woods Age: 68 Director Since: 2017 | DXC Committees: •Audit (chair) | ||||||||||
Mr. Woods has served as a member of our Board since April 1, 2017. Mr. Woods served as Senior Vice President of Finance and Chief Financial Officer of SunGard Data Systems, Inc. from 2010 to 2012. Prior to that, from 2004 to 2009, Mr. Woods served as Senior Vice President and Chief Financial Officer of IKON Office Solutions, Inc., a document management systems and services public company. Mr. Woods also served as Vice President and Controller of IBM Corporation from 2002 to 2004 and Vice President and Treasurer of IBM Corporation from 2000 to 2002. He served on the board of directors and the Audit Committee of Computer Sciences Corporation from 2015 to 2017. Mr. Woods also served as a director of Insight Enterprises, Inc., from 2009 to 2011 and as a member of its Audit and Compensation Committees. Qualifications: As the former Chief Financial Officer of two publicly traded companies and having served as an audit committee member of two other publicly traded companies, Mr. Woods brings to the DXC Board of Directors extensive financial experience globally including raising funds in the debt and equity markets, managing liquidity, and managing the complex interplay of operational performance, rating agencies and stockholder relationships. He has strong leadership and management experience, including experience in a global organization, with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Woods also brings to the Board public company governance experience and robust experience and understanding of areas such as accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions. |
Mr. Woods has served as a member of our Board since April 1, 2017. Mr. Woods served as Senior Vice President—Finance and Chief Financial Officer of SunGard Data Systems, Inc. from 2010 to 2012. Prior to that, from 2004 to 2009, Mr. Woods served as Senior Vice President and Chief Financial Officer of IKON Office Solutions, Inc., a document management systems and services public company. Mr. Woods also served as Vice President and Controller of IBM Corporation from 2002 to 2004 and Vice President and Treasurer of IBM Corporation from 2000 to 2002. Mr. Woods served as a director of Computer Sciences Corporation from 2015 to 2017. Mr. Woods also served as a director of Insight Enterprises, Inc., from 2009 to 2011 and as a member of its audit and compensation committees.
Qualifications: As the former Chief Financial Officer of two publicly traded companies and having served as an audit committee member of two other publicly traded companies, Mr. Woods brings to the DXC Board of Directors robust experience globally in raising funds in the debt and equity markets, managing liquidity and the complex interplay of operational performance, rating agencies and stockholder relationships. He has strong leadership and management experience, including experience in a global organization with practical skills and insights around setting business strategy, overseeing operations, driving cost leadership, facilitating change management, leading transformation, and driving results. Mr. Woods also brings to the Board public company governance experience and experience and understanding of areas such as accounting policies and standards, financial reporting, disclosure requirements, financial statements, internal controls, audit (internal and external), complex financial transactions, capital allocation, and mergers and acquisitions.
each of these 1011 nominees for director.
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2024
questions regarding the audit of DXC’s financial statements.
Vote Required
A majority of the votes cast at the annual meeting is necessary for the approval of this proposal.
routine matter.
of the appointment of Deloitte & Touche LLP as our independent registered public
accounting firm for the fiscal year ending March 31, 2021.
2024.
(in millions) | Fiscal 2020 | Fiscal 2019 | ||||||||
Audit Fees1 | $ | 27 | $ | 32 | ||||||
Audit-Related Fees2 |
| 17 |
| 4 | ||||||
Tax Fees3 |
| 2 |
| 4 | ||||||
All Other Fees4 |
| 1 |
| 1 | ||||||
Total Fees | $ | 47 | $ | 41 |
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(in millions) | Fiscal 2023 ($) | Fiscal 2022 ($) | ||||||
Audit Fees(1) | 18.50 | 20.70 | ||||||
Audit-Related Fees(2) | 10.80 | 10.40 | ||||||
Tax Fees(3) | 0.50 | 0.90 | ||||||
All Other Fees(4) | 0.10 | 0.10 | ||||||
Total Fees | 29.90 | 32.10 |
16 | 2023 Proxy Statement |
2024.
Required
narratives. Abstentions and broker non-votes, if any, will have no effect on the vote for this proposal.
to approve our named executive officer compensation.
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We are asking stockholders to approve an increase in the number of shares of our common stock available for issuance under the DXC Technology Company 2017 Omnibus Incentive Plan, as amended as proposed herein (the “Incentive Plan”), by 17,000,000 shares, from 34,200,000 to 51,200,000 shares.
As of March 31, 2020, 19,571,067 shares of the original 34,200,000 share pool remain available for issuance. If approved, the additional 17,000,000 shares would increase the total number of shares available under the Incentive Plan to 36,571,067 shares.
In addition to the increase in the number of available shares, the proposed amendment to the Incentive Plan does the following:
Expands current provisions prohibiting the repricing of stock options to include a banNon-Binding Advisory Vote on the replacementFrequency of stock option or stock appreciation right awards without stockholder approval; and
Removes certain provisions relating to the qualification of awards for the performance-based compensation exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). These provisions are no longer applicable after the enactment of the Tax Cuts and Jobs Act of 2017. However, we are not proposing to eliminate the individual award limits set forth in Section 4.3 of the Incentive Plan or otherwise to change ourpay-for-performance policy.
Factors Regarding our Equity Usage and Needs under the Omnibus Incentive Plan
Equity is Essential to Talent Acquisition & Retention: Under the leadership of our new CEO, DXC has highlighted new strategic priorities that will guide the next phase of DXC’s transformation. A significant focus of our new strategic priorities isHolding Future Non-Binding Advisory Votes on investing in our people and strengthening our employee value proposition to help us drive better outcomes for our customers, which will in turn help us create value for stockholders. Equity-based compensation is a critical component of our ability to both attract and retain talent in a very competitive technology sector. Since Mr. Salvino’s appointment as CEO, we have hired senior talent as part of our transformation, and we will continue to recruit top talent. It is critical that we have the ability to issue shares to these individuals to help attract them to the company, retain their services, and align their interests to those of stockholders and the creation of long-term stockholder value.
Increased Market Volatility Driving Need for More Shares:As we realign the Company with our new strategic priorities, our stock price has been negatively impacted in the short term, and this decline was exacerbated by market-wide impacts due to theCOVID-19 pandemic. The decrease in our share price, combined with equity share issuances in connection with new hires, has impacted the pool of shares we have available under the Incentive Plan and contributed to a sooner-than-expected need for additional shares. In order to continue to attract and retain employees and align their interests with those of our stockholders, we are seeking stockholder approval to make an additional 17,000,000 shares available for issuance under the Incentive Plan, which would increase the number of available shares under the Incentive Plan from 19,571,067 shares as of March 31, 2020 to 36,571,067 shares in total. We would expect this increased share pool under the Incentive Plan to be sufficient for equity grants to our employees for up to the next four fiscal years at the current stock price, or longer if our stock price increases as we execute on our transformation strategy.
Historic Use of Equity and Outstanding Awards
If approved by our stockholders, the overall total dilution represented by the total shares available under the Incentive Plan (and the 2017Non-Employee Director Incentive Plan, as described below), including the proposed increase to the shares available for issuance under both plans and the shares attributable to currently outstanding awards under both plans, would be 16.9%, based on our outstanding shares as of March 31, 2020. Our historical average burn rate under both plans combined for the past three years has been 1.76%.
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| 2023 Proxy Statement |
Promotion of Good Governance Practices in the Omnibus Incentive Plan
The Incentive Plan includes a number of responsible corporate governance provisions which will not be impacted by the changes proposed in this Proposal Four. These include, but are not limited to, the following:
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Vote required
A majority of the votes cast at the annual meeting is necessary for the approval of this proposal.
The Board of Directors recommends a vote FOR the approval of the increase in the number of shares
available under the DXC Technology Company 2017 Omnibus Incentive Plan.
Summary of Proposed Incentive Plan
The following summary is qualified in its entirety by reference to the Incentive Plan, which is attached to this proxy statement as Appendix C.
Eligibility
All employees of DXC and its subsidiaries are eligible for awards under the Incentive Plan. However, only employees at certain job levels are eligible to receive annual equity awards. As of March 31, 2020, there are approximately 138,000 employees eligible to receive awards under the Incentive Plan, of which approximately 1,000 employees are eligible to receive annual equity awards,
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including eight executive officers. In addition, holders of employee equity awards granted under one or more HPE equity incentive plans, which were converted and assumed by us in connection with our spinoff from HPE (“Spinoff Awards”), and employee equity awards granted under one or more CSC equity incentive plans, which were converted and assumed by us in connection with the CSC merger (“CSC Rollover Awards”), are eligible to participate in the Incentive Plan.
Administration
The Incentive Plan is administered by our Compensation Committee, except as otherwise provided with respect to actions or determinations by the Board.
Types of Awards
Options to purchase shares of common stock, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”) and cash awards may be granted under the Incentive Plan. Awards may be structured as performance awards subject to the attainment of one or more performance goals. Performance awards may be in the form of performance-based RSUs or PSUs, restricted stock, options, SARs or cash awards.
The per share exercise price of an option or SAR cannot be less than the fair market value per share of the common stock on the date of grant. Options and SARs must have fixed terms no longer than 10 years. Options may be granted as incentive stock options under Section 422 of the Code or nonqualified stock options. Options may not include provisions that “reload” the option upon exercise.
Repricing and Exchanges
Repricing of options and SARs and the replacement or cancellation of options and SARs in exchange for cash or other awards or options or SARs having a lower exercise price is prohibited under the Incentive Plan without approval of our stockholders.
Vesting Limitations
Any award (other than a Spinoff Award or CSC Rollover Award) generally must have a minimum vesting period of one year. Earlier vesting of awards may occur in the events of death, disability, change in control, retirement, involuntary termination without cause or voluntary termination for good reason and to the extent provided for in an employee’s employment agreement that was effective prior to the effective date of the Incentive Plan. Vesting of options, SARs, restricted stock, RSUs, and PSUs may occur incrementally over theone-year vesting period. However, we may currently issue up to 1,710,000 shares (which would increase to 2,560,000 shares if this proposal is approved by our stockholders) that are not subject to the minimum vesting period.
Shares Reserved
The maximum number of shares of our common stock as to which awards may be granted under the Incentive Plan is currently 34,200,000 shares, which, if this proposal is approved by our stockholders, would increase by 17,000,000 shares to 51,200,000 shares. Each Award (including a Spinoff Award or CSC Rollover Award) granted under the Incentive Plan, regardless of type, reduces the maximum share limit by one share for each share associated with the Award. Awards that by their terms may only be settled in cash do not reduce the maximum share limit. If an award expires or is terminated, cancelled or forfeited, the shares of common stock associated with the expired, terminated, cancelled, or forfeited award will again be available for awards under the Incentive Plan. However, the following shares of common stock will not become available again for issuance under the Incentive Plan:
shares of common stock that are tendered by a participant or withheld as full or partial payment of minimum withholding taxes or as payment for the exercise price of an award; and
shares of common stock reserved for issuance upon grant of a SAR, to the extent the number of reserved shares of common stock exceeds the number of shares of common stock actually issued upon exercise or settlement of such SAR.
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If cash is issued in lieu of shares of common stock pursuant to an award, the shares will not become available for issuance under the Incentive Plan.
Award Limits
Under the Incentive Plan, no employee may be granted, in any fiscal year period: options or SARs that are exercisable for more than 1,000,000 shares of common stock; stock awards covering more than 1,000,000 shares of common stock; or cash awards or RSUs that may be settled solely in cash having a value greater than $10,000,000. Spinoff Awards and CSC Rollover Awards are disregarded for purposes of applying these limitations.
Adjustments
The Incentive Plan provides for appropriate adjustments in the number of shares of common stock subject to awards and available for future awards, the exercise price or other price of outstanding awards, as well as the maximum award limits under the Incentive Plan, in the event of changes in our outstanding common stock by reason of a merger, stock split, reorganization, recapitalization, or similar events.
Award Agreements
Each award granted under the Incentive Plan will be evidenced by an agreement that contains additional terms and conditions not inconsistent with the Incentive Plan as may be determined by the Compensation Committee in its sole discretion. These terms and conditions may include, among other things, the date of grant, the number of shares covered by the award or the cash amount of the award, the purchase or exercise price per share, the treatment upon a termination of employment of a participant, the means of payment for the shares, the purchase or exercise period and the terms and conditions of purchase or exercise, if applicable. No awards will provide any right to continued employment.
Dividends
The Compensation Committee may include provisions in stock awards for the payment or crediting of dividends or dividend equivalents upon vesting of the award. No dividends or dividend equivalents will be paid on unvested stock, RSU, or PSU awards prior to vesting, and no dividends or dividend equivalents will be paid on options or SARs.
Performance Awards
Any award available under the Incentive Plan may be structured as a performance award. Performance awards will be based on achievement of goals and will be subject to terms, conditions and restrictions as the Compensation Committee determines.
Performance goals may apply to the employee, one or more of our business units, divisions or sectors, or our entire company, and if so desired by the Compensation Committee, by comparison with a peer group of companies including by direct reference to peers, by reference to an index, or by a similar mechanism. Performance awards may be based on any performance criteria determined by the Compensation Committee.
The Compensation Committee may provide in any particular performance award agreement that any evaluation of performance may include or exclude particular factors, including any of the following:
asset write-downs,
litigation or claim judgments or settlements,
the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results,
any reorganization and restructuring programs,
unusual or infrequent items as described in applicable accounting guidance or in management’s discussion and analysis of financial condition and results of operations appearing in the annual report to stockholders for the applicable year,
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acquisitions or divestitures,
foreign exchange gains and losses, and
settlement of hedging activities.
The Compensation Committee may retain the discretion to adjust any performance awards upward or downward, either on a formula or discretionary basis or any combination, as the Compensation Committee determines.
Change in Control
Unless (i) an award agreement provides otherwise or (ii) we are not the surviving company and the agreement effectuating a change in control fails to provide for the assumption or substitution of awards, upon a participant’s qualifying termination of employment within two years after the date of a change in control:
all outstanding options that have not vested in full shall be fully vested and exercisable;
all restrictions applicable to outstanding restricted stock will lapse in full;
all outstanding RSUs that have not vested in full will be fully vested; and
all performance awards will be considered earned and payable at their target value and prorated (if the qualifying termination occurs during the performance period), and will be immediately paid or settled. If the qualifying termination occurs after the end of the performance period, all performance awards will be paid or settled based on the actual achievement of the applicable performance.
Assignability and Transfer
Generally, no award under the Incentive Plan will be assignable or otherwise transferable except by will or the laws of descent and distribution or pursuant to a domestic relations order issued by a court of competent jurisdiction.
Award Termination; Forfeiture; Disgorgement
The Compensation Committee will have full power and authority to determine whether, to what extent, and under what circumstances any award will be terminated, forfeited, or the participant should be required to disgorge the gains attributable to the award. In addition, awards will be subject to any recoupment or clawback policy adopted by, or applicable to, the Company.
Duration; Plan Amendments
The Incentive Plan, as amended, has a term of ten (10) years from its original effective date and will expire on March 30, 2027. The Board may at any time amend, modify, suspend, or terminate the Incentive Plan (and the Compensation Committee may amend or modify an award agreement). but in doing so cannot adversely affect any outstanding award without the participant’s written consent. Plan amendments are subject to stockholder approval, if stockholder approval is otherwise required by applicable legal or exchange listing requirements.
Material Federal Income Tax Consequences of Awards Under the Incentive Plan
The following summary is based on current interpretations of existing U.S. federal income tax laws. The discussion below does not purport to be complete, and it does not discuss the tax consequences arising in the context of the participant’s death or the income tax laws of any local, state, or foreign country in which a participant’s income or gain may be taxable.
Stock Options
Some of the options issuable under the Incentive Plan may constitute incentive stock options, while other options granted under the Incentive Plan may be nonqualified stock options. The Internal Revenue Code provides for special tax treatment of stock options qualifying as incentive stock options, which may be more favorable to employees than the tax treatment accorded
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nonqualified stock options. On grant of either form of option, the optionee will not recognize income for tax purposes, and we will not receive any deduction. Generally, on the exercise of an incentive stock option, the optionee will recognize no income for U.S. federal income tax purposes. However, the difference between the exercise price of the incentive stock option and the fair market value of the shares at the time of exercise is an adjustment in computing alternative minimum taxable income that may require payment of an alternative minimum tax. On the sale of shares of common stock acquired by exercise of an incentive stock option (assuming that the sale does not occur within two years of the date of grant of the option or within one year of the date of exercise), any gain will be taxed to the optionee as long-term capital gain. In contrast, on the exercise of a nonqualified option, the optionee generally recognizes taxable income (subject to withholding) in an amount equal to the difference between the fair market value of the shares of common stock acquired on the date of exercise and the exercise price. On any sale of those shares by the optionee, any difference between the sale price and the fair market value of the shares on the date of exercise of the nonqualified option will be treated generally as capital gain or loss. No deduction is available to us on the exercise of an incentive stock option (although a deduction may be available if the employee sells the shares acquired on exercise before the applicable holding periods expire); however, on exercise of a nonqualified stock option, we generally are entitled to a deduction in an amount equal to the income recognized by the employee. Except in the case of the death or disability of an optionee, an optionee has three months after termination of employment in which to exercise an incentive stock option and retain favorable tax treatment on exercise. An incentive stock option exercised more than three months after an optionee’s termination of employment other than on death or disability of an optionee cannot qualify for the tax treatment accorded incentive stock options. Any such option would be treated as a nonqualified stock option for tax purposes.
Stock Appreciation Rights (“SARs”)
The amount of any cash or the fair market value of any shares of common stock received by the holder on the exercise of SARs in excess of the exercise price will be subject to ordinary income tax in the year of receipt, and we will be entitled to a deduction for that amount.
Restricted Stock
Generally, a grant of shares of common stock under the Incentive Plan subject to vesting and transfer restrictions will not result in taxable income to the participant for federal income tax purposes or a tax deduction to us at the time of grant. The value of the shares will generally be taxable to the participant as compensation income in the year in which the restrictions on the shares lapse. Such value will be the fair market value of the shares as to which the restrictions lapse on the date those restrictions lapse. Any participant, however, may elect pursuant to Internal Revenue Code Section 83(b) to treat the fair market value of the restricted shares on the date of grant as compensation income in the year of grant, provided the participant makes the election pursuant to Internal Revenue Code Section 83(b) within 30 days after the date of grant. In any case, we will receive a deduction for federal income tax purposes equal to the amount of compensation included in the participant’s income in the year in which that amount is so included.
Restricted Stock Units
A grant of a right to receive shares of common stock or cash in lieu of the shares will result in taxable income for federal income tax purposes to the participant at the time the award is settled in an amount equal to the fair market value of the shares or the amount of cash awarded. We will be entitled to a corresponding deduction at that time for the amount included in the participant’s income.
Performance Units
The amount of any cash or the fair market value of any shares of common stock received by the holder on the settlement of performance units under the Incentive Plan will be subject to ordinary income tax in the year of receipt, and we will be entitled to a deduction for that amount in the year in which that amount is included.
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Cash Awards
Cash Awards under the Incentive Plan are taxable income to the participant for federal income tax purposes at the time of payment. The participant will have compensation income equal to the amount of cash paid, and we will have a corresponding deduction for federal income tax purposes.
Basis; Gain
A participant’s tax basis in vested shares of common stock purchased under the Incentive Plan is equal to the sum of the price paid for the shares, if any, and the amount of ordinary income recognized by the participant on the transfer of vested shares. The participant’s holding period for the shares generally begins on the transfer to the participant of vested shares. If a participant sells shares, any difference between the amount realized in the sale and the participant’s tax basis in the shares is taxed as long-term or short-term capital gain or loss (provided the shares are held as a capital asset on the date of sale), depending on the participant’s holding period for the shares.
Certain Tax Code Limitations on Deductibility
In order for us to deduct the amounts described above, such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses. The ability to obtain a deduction for awards under the Incentive Plan could also be limited by Code Section 280G, which provides that certain excess parachute payments made in connection with a change in control of an employer are not deductible.
The ability to obtain a deduction for amounts paid under the Incentive Plan could also be affected by Code Section 162(m), which limits the deductibility, for U.S. federal income tax purposes, of compensation paid to certain employees to $1 million during any taxable year.
Internal Revenue Code Section 409A
Code Section 409A generally provides that deferred compensation subject to Code Section 409A that does not meet the requirements for an exemption from Code Section 409A must satisfy specific requirements, both in operation and in form, regarding: (1) the timing of payment; (2) the election of deferrals; and (3) restrictions on the acceleration of payment. Failure to comply with Code Section 409A may result in the early taxation (plus interest) to the participant of deferred compensation and the imposition of a 20% penalty at the federal level (and possibly penalties at the state level) on the participant of the deferred amounts included in the participant’s income.
New Plan Benefits
The number and type of awards that may be granted under the Incentive Plan in the future are not determinable at this time as the Compensation Committee or the Board, as applicable, will make these determinations in its sole discretion.
Other information
As of March 31, 2020, the following persons have received the following numbers of stock options under the Incentive Plan (all of which representpre-merger awards that were assumed by DXC under the Incentive Plan in connection with the merger):
Mr. Saleh has received 224,328 stock options under the Incentive Plan, Mr. Lawrie has received 604,033 stock options under the Incentive Plan, and none of our other current named executive officers have received any stock options under the Incentive Plan.
Our current executive officers as a group have received 1,071,129 stock options under the Incentive Plan, and ournon-executive officer employees as a group have received 4,830,687 stock options under the Incentive Plan.
We have not granted any stock options under the Incentive Plan to any of ournon-employee directors or any other person, including any associate of any of the above.
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As of March 31, 2020, the closing price of a share of our common stock on the New York Stock Exchange was $13.05 per share.
Equity Compensation Plan Information
The following table gives information about our common stock that may be issued under our equity compensation plans as of March 31, 2020. See Note 16—“Stock Incentive Plans” of the Annual Report on Form10-K for the fiscal year which ended on March 31, 2020 for information regarding the material features of these plans.
Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a) | |||||||||||||
Plan Category | (a) | (b) | (c) | ||||||||||||
Equity compensation plans approved by security holders | 6,158,906 | $ | 9.08 | 19,610,518 | |||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||
Total | 6,158,906 | $ | 9.08 | 19,610,518 |
Proposal 5: Approval of Increase in Shares Available under the DXC Technology Company 2017Non-Employee Director Incentive Plan
We are asking stockholders to approve an increase in the number of shares of our common stock available for issuance under the DXC Technology Company 2017Non-Employee Director Incentive Plan, as amended as proposed herein (the “Director Plan”), by 515,000 shares, from 230,000 to 745,000 shares.
As of March 31, 2020, 39,451 shares of the original 230,000 share pool remain available for issuance. If approved, the additional 515,000 shares would increase the total number of shares available under the Director Plan to 554,451 shares.
Factors Regarding Our Equity Usage and Needs under the Director Plan
Increased Market Volatility Driving Need for More Shares: As we realigned the Company with our new strategic priorities, our stock price was negatively impacted in the short term. This decline was exacerbated by market-wide impacts due to theCOVID-19 pandemic. These impacts contributed to a sooner-than-expected need for additional shares in our Director stock plan. As of March 31, 2020, we had 39,451 shares remaining available for issuance under the Director Plan and this pool is no longer sufficient for our expected August 2020non-employee director grants. In order to continue to attract and retainnon-employee directors and align their interests with those of our stockholders, we are seeking stockholder approval to make an additional 515,000 shares available for issuance under the Director Plan, which would increase the number of available shares under the Director Plan to 554,451 shares in total.
Reasonable Amount of Dilution for Market Competitive Grant Capabilities: If approved by our stockholders, the dilution represented by the total shares available under the Director Plan (and the 2017 Omnibus Incentive Plan, as described in Proposal 4 above), including the proposed increase to the shares available for issuance under both plans and the currently outstanding awards under both plans, would be 16.9%, based on our outstanding shares as of March 31, 2020. Our historical burn rate under both plans combined for the past three years has been 1.76%. In addition to the increase in the number of available shares, the proposed amendment to the Director Plan also imposes an annual limit on the value of equity awards that may be granted under the Director Plan to our Independent Chairman during any calendar year of $900,000 and to any other singlenon-employee director during any calendar year of $500,000 based on the value of our shares as of the grant date of the award.
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Vote required
A majority of the votes cast at the annual meeting is necessary for the approval of this proposal.
The Board of Directors recommends a vote FOR the approval of the increase in the number of shares
available under the DXC Technology Company 2017Non-Employee Director Incentive Plan.
Summary of Proposed Director Plan
The following summary is qualified in its entirety by reference to the Director Plan, which is attached to this proxy statement as Appendix D.
Shares Available for Issuance
If the stockholders approve this proposal, the maximum number of shares of our common stock that may be issued pursuant to awards granted under the Director Plan will increase by 515,000 shares to 745,000 shares in total, subject to certain adjustments for corporate transactions, as described in “Adjustments” below. Shares of our common stock issued under the Director Plan may consist of newly issued shares, treasury shares and/or shares purchased in the open market or otherwise. Only shares of our common stock actually issued pursuant to awards granted under the Director Plan will be counted against the authorized shares. If an award is settled or terminates by expiration, forfeiture, cancellation or otherwise without the issuance of all shares originally covered by the award, then the shares not issued will again be available for use under the Director Plan.
Eligibility
Each member of the Board of Directors of the Company who is not an employee of the Company or any of its subsidiaries is eligible for the grant of awards under the Director Plan. As of March 31, 2020, there were 10non-employee directors who were eligible to receive awards under the Director Plan.
Award Limits
The maximum dollar value of all awards that may be granted under the Director Plan to our Independent Chairman during any calendar year may not exceed $900,000 and for any other singlenon-employee director during any calendar year may not exceed $500,000 based on the fair market value of the shares subject to such award as of the grant date.
Administration
The Director Plan will be administered by the Board or, in the Board’s discretion, a committee of the Board consisting of three or more directors, each of whom is:
“independent” for purposes of our Corporate Governance Guidelines; and
a“non-employee director” for purposes of SEC Rule16b-3(b)(3).
The administrator of the Director Plan (the “Administrator”) will have full and final authority to select thenon-employee directors to whom awards will be granted under the Director Plan, to grant awards and to determine the terms and conditions of those awards.
Types of Awards
The Director Plan provides for the grant of:
restricted stock; and
RSUs
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Subject to the Director Plan, the Administrator will determine the terms and conditions of each award, which will be set forth in an award agreement executed by the Company and the participant.
The Director Plan authorizes the Administrator to grant awards of restricted stock and RSUs with time-based vesting. An RSU represents the right to receive a specified number of shares of our common stock, or cash based on the market value of those shares, upon vesting or at a later date permitted in the award agreement. The terms and conditions of the restricted stock and RSUs will be determined by the Administrator, subject to the requirements of the Director Plan. Among those requirements are the following:
Unless the Administrator determines otherwise, all restricted stock will have full voting rights;
Rights to dividends or dividend equivalents may be extended to and made part of any award of restricted stock or RSUs, subject to such terms, conditions and restrictions as the Administrator may establish; and
The Administrator may also establish rules and procedures for the crediting of interest on deferred cash payments.
Transferability
Unless the Administrator determines otherwise, no award, and no shares of our common stock subject to an outstanding award as to which any applicable restriction or deferral period has not lapsed, may be sold or transferred except by will or the laws of descent and distribution.
Change in Control
Unless an award agreement specifies otherwise, upon the date of a change in control of the Company (as such term is defined under Section 409A of the Internal Revenue Code):
all restrictions applicable to outstanding restricted stock will lapse in full; and
all outstanding RSUs will become fully vested.
Adjustments
If there is a reorganization, merger, consolidation, recapitalization, restructuring, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split or similar transaction, or a sale of substantially all of our assets, then, unless the terms of the transaction provide otherwise and the outstanding shares of our common stock are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities (or if cash, property, and/or securities are distributed in respect of such shares), the Administrator will make such adjustments as it deems appropriate and proportionate in:
the number and type of shares, cash or property subject to outstanding awards granted under the Director Plan, and the exercise or purchase price per share; and
the maximum number and type of shares authorized for issuance under the Director Plan.
Plan Amendments
The Board may amend or terminate all or any part of the Director Plan at any time and in any manner, subject to the following:
Our stockholders must approve any amendment or termination if (i) stockholder approval is required by the SEC, NYSE or any taxing authority, or (ii) the amendment or termination would materially increase the benefits accruing tonon-employee directors or the maximum number of shares which may be issued under the Director Plan, or materially modify the Director Plan’s eligibility requirements; and
Non-employee directors must consent to any amendment or termination that would impair their rights under outstanding awards.
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The Administrator may amend the terms of any outstanding award, but no such amendment may impair the rights of anynon-employee director without his or her consent.
Plan Duration
No award may be granted under the Director Plan after March 30, 2027, but any award granted prior to that date may extend beyond that date.
Material Federal Income Tax Treatment
The following is a brief description of the principal effect of U.S. federal income taxation upon anon-employee director and the Company with respect to the grant and settlement of awards under the Director Plan, based on U.S. federal income tax laws in effect on the date hereof. The following is only a summary and therefore is not complete, does not discuss the income tax laws of any state or foreign country in which anon-employee director may reside, and is subject to change.
Restricted Stock.Pursuant to the Director Plan,non-employee directors may be granted restricted stock. Unless thenon-employee director makes a timely election under Section 83(b) of the Internal Revenue Code, he or she will generally not recognize any taxable income until the restrictions on the shares expire or are removed, at which time thenon-employee director will recognize ordinary income in an amount equal to the excess of the fair market value of the shares at that time over the purchase price for the restricted shares, if any. If thenon-employee director makes an election under Section 83(b) within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income on the date of grant equal to the fair market value of the shares on the date of grant. We will generally be entitled to a deduction equal to the amount of ordinary income recognized by thenon-employee director.
Restricted Stock Units.Pursuant to the Director Plan,non-employee directors may be granted RSUs. The grant of an RSU is generally not a taxable event for thenon-employee director. In general, thenon-employee director will not recognize any taxable income until the shares of our common stock subject to the RSU (or cash equal to the value of such shares) are distributed to him or her without any restrictions, at which time thenon-employee director will recognize ordinary income equal to the fair market value of the shares (or cash) at that time. We will generally be entitled to a deduction equal to the amount of ordinary income recognized by thenon-employee director.
Section 409A. Awards made under the Director Plan are intended to comply with or be exempt from Section 409A of the Internal Revenue Code. If any provision or award under the Director Plan would result in the imposition of an additional tax under Section 409A, that Plan provision or award will be reformed to avoid imposition of the additional tax and no action taken to comply with Section 409A shall be deemed to adversely affect thenon-employee director’s rights to an award.
New Plan Benefits
The number and type of awards that may be granted under the Director Plan in the future are not determinable at this time as the Board, as applicable, will make these determinations in its sole discretion.
Other information
Since the inception of the Director Plan on March 30, 2017, we have not granted any stock options under the Director Plan to any of ournon-employee directors or to any named executive officer, other executive, employee or other person, including any associate of the above.
As of March 31, 2020, the closing price of a share of our common stock on the New York Stock Exchange was $13.05 per share.
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DXC is committed to maintaining the highest standards of corporate governance. The Board’s responsibilities include, but are not limited to:
•overseeing the management of our business and the assessment of our business risks
•overseeing the processes for maintaining integrity with regard to our financial statements and other public disclosures, and compliance with law and ethics
•reviewing and approving our major financial objectives and strategic and operating plans, and other significant actions,actions; and
•overseeing our talent management and succession planning.
During the fiscal year ended March 31, 2020, DXC held 12 meetings of the full DXC Board of Directors, DXC’s Audit Committee held 13 meetings, DXC’s Compensation Committee held 7 meetings and DXC’s Nominating/Corporate Governance Committee held 5 meetings. No DXC director on the DXC Board as of March 31, 2020 attended fewer than 97% of the aggregate of (1) the total number of meetings of the Board, and (2) the total number of meetings held by all committees of the Board on which he or she served during the fiscal year ended March 31, 2020. Each of the DXC directors then serving attended the 2019 Annual Meeting of Stockholders. The Risk Committee was formed in May 2020 and became effective on June 15, 2020.
Governance is a continuing focus at DXC, starting with the Board and extending to all employees.
Management and the Board believe that stockholder engagement is an important component of our governance practices. DXC has a stockholder outreach program to build relationships with our stockholders and develop a dialogue about DXC’s corporate governance program. We engage with stockholders on a variety of matters, such as corporate governance, executive compensation, and human capital management, and strive to be responsive to that feedback. We continue our stockholder outreach program as part of an ongoing engagement process.
For details regarding stockholder engagement relating to our executive compensation program, please refer to Section 1 of theCompensation Discussion and Analysis–Stockholder Feedback and Evolution of Compensation Program.
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On September 12, 2019, Michael J.regularly considers different structures as circumstances may warrant, including: the strategic goals of the Company, the status of DXC’s progress with respect to our transformation journey, the various capabilities of our directors, the dynamics of our Board, and best practices in the market. The Board also reflects upon the Company’s independent oversight function exercised by our Board, which consists entirely of independent directors other than Mr. Salvino, as well as the independent leadership provided by Mr. Herzog and each of the three standing Board Committees, which consist solely of, and are chaired by, independent directors.
Separation of CEO and Board Chairman Positions
Following Mr. Lawrie’s retirement, David L. Herzog, a member of the Board of Directors of DXC and chair of the Audit Committee, was appointed to serve as Board chair until the Board completed its evaluation process for appointing a new Board chair. Effective March 16, 2020, Ian C. Read was appointed independent Chairman of the Board, succeeding Mr. Herzog, who remains as chair of the Audit Committee of the Board. Mr. Read has extensive senior level management experience and familiarity with the global aspects ofOfficer’s performance. Accordingly, our business and operations.
The new Board leadership structure consists of a Chairman, a Chief Executive Officer and independent chairs for our Audit Committee, Compensation Committee, Nominating/Corporate Governance Committee and Risk Committee. The Board of Directors has determined that this leadership structure, which separates the Chairman and Chief Executive Officer roles, provides independent Board leadership and engagement and is appropriate at this time considering the evolution of DXC’s business strategy and operating environment. In particular, the Board of Directors believes that this structure clarifies the individual roles and responsibilities of Chief Executive Officer and Chairman and enhances accountability. The Board also believes that the separation of roles allows our Chairman to focus on establishing priorities and procedures and to set Board and committee agendas while our CEO focuses on execution of our strategy, and management of the Company’sday-to-day operations. The Board regularly reviews its leadership structure to determine the most beneficial arrangement, based on the Company’s unique individual circumstances.
Independent Board Chairman Duties & Responsibilities
In accordance with the Guidelines, as Chairman of the Board, Mr. Read has the following duties and responsibilities:
presiding at annual and special meetings of the stockholders
presiding at Board of Director meetings, including executive sessions of independent directors
organizing and presenting the agenda for regular and special Board meetings in consultation with the Chief Executive Officer and other directors
serving as a focal point for management to inform the Board, ensuring the proper flow of information to the Board by maintaining close contact with the Chief Executive Officer and other members of senior management
lead Board reviews of the performance of the Chief Executive Officer and other key senior managers
working with the Nominating/Corporate Governance Committee to develop guidelines for the conduct of directors and to advise in making recommendations to the Board regarding director candidates
working with the Nominating/Corporate Governance Committee to determine standing and ad hoc committees, committee structure and charters, committee assignments and committee chairpersons
serving as anex-officio,non-voting member of each standing committee of the Board and attending committee meetings as deemed appropriate
assisting in representing the Company to external groups, and
recommending outside advisors and consultants that report to the Board on board-wide issues.
DXC’s governance processes include executive sessions of the independent directors after the conclusion ofmeet separately in an executive session at each regularly scheduled Board meeting and at such additional times as they may determine. Our independent directors held ten executive sessions during fiscal 2023, all of which were led by Mr. Herzog.
20 | 2023 Proxy Statement |
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Management Role. We appointed a Chief Risk Officer (CRO) in fiscal 2020 to focus on leading the Company’s risk and security efforts and on risk management, including the ethics and compliance function, cybersecurity preparedness, resiliency and security, brand protection initiatives, asset protection and environmental, social and governance (ESG) risks. The CRO also works to advance DXC’s enterprise-level resilience strategy to enable leaders to respond to security and business disruptions in an efficient and consistent manner, keeping the safety and security of employees at the forefront while protecting company assets. The CRO reports to the President and Chief Executive Officer.
In order for us to identify and mitigate our risk exposures, we have also established an Enterprise Risk Management (ERM) function to (i) identify risks in the strategic, operational, financial reporting and compliance domains, for DXC as a whole, as well as for each operating unit, and (ii) evaluate the effectiveness of existing mitigation strategies. The ERM function coordinates and reviews assessments of internal processes and controls for ongoing compliance with internal policies and legal regulatory requirements. The ERM function periodically reports potential areas of risk to the
Our enterprise risk, issue and opportunity management framework is centralized under a single executive owner to facilitate consistent processes, definitions and tools to proactively address operational, financial, compliance and strategic risks, issues and opportunities.
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Board Role.Role. The Board has overall responsibility for oversight of risk and assessment of our strategic and operational risks throughout the year on an ongoing basis. Members of senior management regularlyyear. The Board (either directly or through reports from Board committees’ chairs) receives a report at each regular meeting on the opportunities and risks faced by usfacing DXC in the markets in which we conduct business.
business, including on the assessment, monitoring and mitigation of risks material to the Company in the short, intermediate, and long-term, the effectiveness of the Company’s control environment in managing these risks, the functioning of the Company’s internal controls and procedures, and the identification and consideration of key emerging risks.
•The Audit Committee oversees the accounting, financial reporting processes and disclosure controls and procedures, and related internal control framework of DXC and audits of the Company’s financial statements and internal control over financial reporting, and discusses our policies with respect to risk assessment and risk management.
The Audit Committee also oversees the Company’s enterprise risk management (ERM) program and ethics and compliance program.22 | 2023 Proxy Statement |
•The Nominating/Corporate Governance Committee monitors the risks related to DXC’s governance structure and process. The Nominating/Corporate Governance Committee is responsible for overseeing the Board’s annual self-evaluation of its performance and overall Board effectiveness, and periodic review and recommendation to the Board of any proposed changes to DXC’s significant corporate governance documents.
The RiskNominating/Corporate Governance Committee oversees the Company’s ESG and climate risks, and the Information Security program.
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See more below under Risk Assessment in the Compensation Discussion and Analysis.
24 | 2023 Proxy Statement |
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The Nominating/Corporate Governance Committee is responsible for developing and recommending to the Board the appropriate qualifications including specific qualities or skills sought for Board members in the context of our business and then-current membership on the Board. The Board believes that maintaining a diverse membership with varying backgrounds, skills, expertise and other differentiating personal characteristics promotes inclusiveness, enhances the Board’s deliberations and enables the Board to better represent all of DXC’s constituents, including its diverse customer base and workforce. Accordingly, the Board is committed to seeking out highly qualified candidates with diverse backgrounds, skills and experiences as part of each Board search we undertake. These considerations and goals have been important factors in the Board’s refreshment efforts, which, since DXC’s inception in 2017, have included the addition of Mary L. Krakauer in March 2018 and the nomination of Raul J. Fernandez for election as director at our 2020 annual meeting of stockholders.
Board Diversity—Background of Director Nominees | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mukesh Aghi | Amy E. Alving | David A. Barnes | Raul J. Fernandez | David L. Herzog | Mary L. Krakauer | Ian C. Read | Michael J. Salvino | Manoj P. Singh | Robert F. Woods | ||||||||||||||||||||||||||||||||||||||||
Tenure/Age/Gender | ||||||||||||||||||||||||||||||||||||||||||||||||||
Years on the Board | 3 | 3 | — | — | 3 | 2 | 0 | 1 | 3 | 3 | ||||||||||||||||||||||||||||||||||||||||
Age | 64 | 57 | 64 | 54 | 60 | 63 | 67 | 54 | 67 | 65 | ||||||||||||||||||||||||||||||||||||||||
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Native American |
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is independent under the rules and regulations of the NYSE.
•Each Audit Committee member must meet heightened independence criteria under the rules and regulations of the NYSE and the SEC relating to audit committees, and must be financially literate.literate or must become financially literate within a reasonable period of time after the director’s appointment to the Audit Committee. No member of the Audit Committee may simultaneously serve on the audit committees of more than three other public companies unless the Board determines that such simultaneous service would not impair the member’s ability to effectively serve on the Audit Committee.
•Messrs. Barnes, Herzog Singh and Woods and Ms. Teffner each qualifies as an “audit committee financial expert”, for purposes of the rules of the SEC, and all membersSEC. Each member of the Audit Committee areis financially literate.
•Each Compensation Committee member must meet heightened independence criteria under the rules and regulations of the NYSE and SEC relating to compensation committees, and be a“non-employee “non-employee director” for purposes ofRule 16b-3 promulgated under the Exchange Act and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code. Act.
26 | 2023 Proxy Statement |
Current Committee Memberships
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Audit Committee | Robert F. Woods, Chair |
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David Barnes |
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David Herzog |
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Carrie Teffner |
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Compensation Committee | Akihiko Washington, Chair | Akihiko Washington, Chair | ||||||||
Mukesh Aghi |
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Anthony Gonzalez | David Herzog | |||||||||
David Herzog | Pinkie Mayfield | |||||||||
Dawn Rogers | Dawn Rogers | |||||||||
Nominating/ | Raul Fernandez, Chair | Raul Fernandez, Chair | ||||||||
Corporate Governance | Amy Alving | David Barnes | ||||||||
Committee | David Barnes | David Herzog | ||||||||
David Herzog | Karl Racine | |||||||||
Karl Racine |
Committee | Primary Responsibilities |
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| •Oversee DXC’s accounting and financial reporting processes and disclosure controls and procedures, and related internal control framework and audits of •Assist the Board in its oversight
•Prepare the Audit Committee report for inclusion in our annual proxy statement. •Oversee and review with management DXC’s enterprise risk management framework, addressing DXC’s exposure across the range of operational risk, brand/reputational risk, strategic risk, compliance risk and other risk categories as appropriate. •Oversee the development and implementation of our risk management program. •Oversee DXC’s ethics and compliance program. | 9 | |||||||
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Committee | Primary Responsibilities | Number of Fiscal
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Compensation | •Assist the Board in determining the performance and compensation of the CEO and the compensation of thenon-management directors. •Discharge the responsibilities of the Board with respect to the compensation of other executives. •Administer our incentive stock plans. •Oversee succession planning and leadership development for our senior management. • | 5 | ||||||||||
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Nominating/Corporate Governance Committee
Committee | Primary Responsibilities | Number of Fiscal 2023 Meetings | ||||||||||
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Nominating/ Corporate Governance |
| •Identify and recommend to the Board the slate of individuals to be nominated for election as directors. •Develop and recommend to the Board the qualifications for director nominees. •Develop a process for identifying and evaluating director nominees and identify and recommend individuals to fill Board vacancies. •Recommend to the Board directors to serve as members and •Review and recommend to the Board the appropriateness of a director’s continued service in circumstances such as a material change in the director’s job responsibility. •Review proposed director memberships on new boards. •Oversee the orientation of new directors and the education of all directors. •Oversee the Board’s annual self-evaluation of its performance. •Periodically review and recommend to the Board proposed changes to the size, structure and operations of the Board and its committees. •Periodically review and recommend to the Board proposed changes to •Review any •Oversee the Company’s Information Security program, including cyber security. •Oversee the Company’s ESG program and climate risks. | 4 | |||||||||
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During fiscal 2020 the Board initiated informal meetings on a regular basis to support DXC’s new management team as it instituted a transformation plan for the Company and has continued these meetings as the Company navigates the ongoingCOVID-19 pandemic. Through these meetings, the Board determined that separate meetings dedicated to risk oversight would be valuable for the Company and its stockholders and decided to establish a separate Board committee to continue the work that began with the Board in fiscal 2020. The Risk Committee was formed in May of 2020 and became effective on June 15, 2020. The formation of the Risk Committee increases the Board’s effectiveness of its risk oversight processes, focuses director attention on DXC’s most critical risks and risk management capabilities, and fosters an integrated, enterprise-wide approach to
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identifying and managing risk. The Board believes that the directors assigned to the Risk Committee have the requisite knowledge and expertise to provide effective oversight over the risks falling within the Risk Committee’s scope. However, the Board will add at least one more member to the Risk Committee after the 2020 Annual Meeting.
The Risk Committee’s current primary responsibilities include overseeing the development and implementation of DXC’s enterprise risk management program, the scope of which includes establishing DXC’s risk appetite, aligning risk appetite with strategy and operations, defining the policies and processes for risk identification, assessment and mitigation, and monitoring evolving risks and mitigation effectiveness. Oversight will be provided for specific high-risk areas of the business, such as cyber security, asset protection, and business continuity.
Peter Rutland
Manoj P. Singh
Robert F. Woods
Director Compensation Best Practices | |||||
Annual Benchmarking | Director compensation is reviewed annually relative to DXC’s peer group to ensure it is market-competitive. | ||||
Mix of Cash and Equity | The program includes an appropriate mix of annual cash compensation | ||||
Vesting Requirements of Annual Equity Awards | Restricted stock units granted under the Director Plan are scheduled to vest in full at the earlier of the first anniversary of the grant date, or the date of the next annual stockholders meeting. | ||||
Ownership Guidelines | |||||
Anti-Hedging or Anti- Pledging of Company Stock |
In addition to the best practices above, the proposed amendment to our Director Plan, if approved, will impose annual limits on the value of equity awards that may be granted under the Director Plan during any calendar year. See “Proposal 5 – Approval of increase in shares available under the DXC Technology Company 2017Non-Employee Director Incentive Plan.”
30 | 2023 Proxy Statement |
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Fiscal 2023 Director Retainers and Fees | ||||||
Annual Cash Retainer(1) | $90,000.00 | |||||
Annual Equity Award(2) | $200,000.00 | |||||
Lead Independent Director Retainer(1) |
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Audit Committee Chairman Retainer(1) | $30,000.00 | |||||
Compensation Committee Chairman Retainer(1) | $25,000.00 | |||||
Nominating/Corporate Governance Committee Chairman Retainer(1) | $20,000.00 | |||||
Committee Member Retainer(1) | $10,000.00 | |||||
Additional Meeting Attendance Fee(1)(3) | $2,500 per meeting |
31 |
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Name (a) | Fees Earned1 or Paid in Cash (b) | Stock Awards2 (c) | Total (d) | ||||||||||||
Mukesh Aghi |
| $125,000 |
| $198,476 | $ | 323,476 | |||||||||
Amy E. Alving |
| 100,000 |
| 198,476 |
| 298,476 | |||||||||
David L. Herzog3 |
| 155,000 |
| 198,476 |
| 353,476 | |||||||||
Mary L. Krakauer |
| 100,000 |
| 198,476 |
| 298,476 | |||||||||
Sachin Lawande |
| 100,000 |
| 198,476 |
| 298,476 | |||||||||
Julio A. Portalatin |
| 100,000 |
| 198,476 |
| 298,476 | |||||||||
Ian C. Read4 |
| — |
| — |
| — | |||||||||
Peter Rutland |
| 145,000 |
| 198,476 |
| 343,476 | |||||||||
Michael J. Salvino5 |
| 28,148 |
| 245,186 |
| 273,334 | |||||||||
Manoj P. Singh |
| 130,000 |
| 198,476 |
| 328,476 | |||||||||
Robert F. Woods |
| 100,000 |
| 198,476 |
| 298,476 |
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Name
(a)Total
($)
(d)100,000 199,080 299,080 100,000 199,080 299,080 David A. Barnes 106,821 199,080 305,901 Raul J. Fernandez 120,000 199,080 319,080 Anthony Gonzalez 24,167 111,568 135,735 David L. Herzog 147,745 199,080 346,825 31,793 — 31,793 — — — Karl Racine 24,167 111,568 135,735 Dawn Rogers 100,000 199,080 299,080 — — — 31,793 — 31,793 Carrie W. Teffner 94,722 252,414 347,136 Akihiko Washington 125,000 199,080 324,080 Robert F. Woods 130,000 199,080 329,080
32 | 2023 Proxy Statement |
Name | Aggregate Unvested Stock Awards Outstanding
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Mukesh Aghi(4) | 6,300 | |||||||
Amy E. Alving(4) |
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David A. Barnes | 6,300 | |||||||
Raul J. Fernandez | 6,300 | |||||||
Anthony Gonzalez | 3,800 | |||||||
David L. Herzog | 6,300 | |||||||
Mary L. Krakauer(5) | — | |||||||
Ian C. Read(5) | — | |||||||
Karl Racine | 3,800 | |||||||
Dawn Rogers | 6,300 | |||||||
Michael J. Salvino | — | |||||||
Manoj P. Singh(5) | — | |||||||
Carrie W. Teffner | 6,300 | |||||||
Akihiko Washington | 6,300 | |||||||
Robert F. Woods | 6,300 |
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Environmental | Governance | |||||||||||||
Advancing the sustainability of our operations and IT services while assisting our customers to become more sustainable |
| Building a diverse, inclusive, values-based, and people-first culture based on equitable practices, employee perspectives, and community stewardship | Instilling trust and garnering respect among the stakeholders we serve through transparent leadership, to drive sustainable growth |
34 | 2023 Proxy Statement |
35 |
| Reporting through Sustainability Accounting Standards Board (SASB) beginning in 2021 | |||||||||||||
CDP respondent since 2018; Sustained 2022 “B” rating despite increasing requirements | Reporting against the Task Force on Climate-related Financial Disclosures (TCFD) standards beginning in 2021 | |||||||||||||
UN Global Compact Signatory since 2017 |
36 | 2023 Proxy Statement |
37 |
•each person or group believed by the Company to be the beneficial owner of more than 5% of our outstanding common stock;
•each of our named executive officers;
•each of our directors and director nominees;
and•all executive officers and directors, as a group.
Name and Address of Beneficial Owner1 | Number of Shares Beneficially Owned | Percentage of Class2 | ||||||||
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | | 29,118,590
| 3 | | 11.46
| % | ||||
BlackRock, Inc. 40 East 52nd Street New York, New York 10022 | | 19,079,721
| 4 | | 7.51
| % | ||||
Michael J. Salvino | | 6,800
| 6 | | —
| 8 | ||||
Paul N. Saleh | | 241,169
| 5, 7 | | —
| 8 | ||||
Mary E. Finch | | —
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| 8 | |||||
Vinod Bagal | | —
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| 8 | |||||
Edward Ho | | 6,881
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| 8 | |||||
William L. Deckelman, Jr. | | 251,463
| 5, 7 | | —
| 8 | ||||
James R. Smith | | 172,757
| 5 | | —
| 8 | ||||
Neil A. Manna | | 21,366
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| 8 | |||||
J. Michael Lawrie | | 1,707,130
| 5 | | —
| 8 | ||||
Mukesh Aghi | | 20,917
| 6 | | —
| 8 | ||||
Amy E. Alving | | 11,759
| 6 | | —
| 8 | ||||
David L. Herzog | | 11,806
| 6 | | —
| 8 | ||||
Mary L. Krakauer | | 9,124
| 6 | | —
| 8 | ||||
Sachin Lawande | | 21,546
| 6 | | —
| 8 | ||||
Julio A. Portalatin | | 11,759
| 6 | | —
| 8 | ||||
Ian C. Read | | 12,900
| 6 | | —
| 8 | ||||
Peter Rutland | | 20,659
| 6 | | —
| 8 | ||||
Manoj P. Singh | | 11,759
| 6 | | —
| 8 | ||||
Robert F. Woods | | 22,231
| 6 | | —
| 8 | ||||
David A. Barnes | | —
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| 8 | |||||
Raul J. Fernandez | | —
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| 8 | |||||
All executive officers and directors of the Company, as a group (21 persons) | | 2,562,026
| | 1.01
| % |
Name and Address of Beneficial Owner(1) | Number of Shares Beneficially Owned (#) | Percentage of Class(2) (%) | ||||||||||
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100 Vanguard |
26,485,956(3) | 12.57 | |||||||
Franklin Resources, Inc. | 17,317,249(4) | 8.22 | ||||||
BlackRock, Inc. |
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New York, New York 10022 | 15,792,904(5) | 7.49 | ||||||
Invesco Ltd. | ||||||||
1555 Peachtree Street NE, Suite 1800 | ||||||||
Atlanta, GA 30309 | 15,474,869(6) | 7.34 | ||||||
Michael J. Salvino | 821,735 | * | ||||||
Kenneth P. Sharp | 62,694 | * | ||||||
William L. Deckelman, | 212,627(7) | * | ||||||
Chris Drumgoole | 145,438 | * | ||||||
Mary E. Finch | 191,882 | * | ||||||
Mukesh Aghi | 43,117(8) | * | ||||||
Amy E. Alving | 33,959(8) | * | ||||||
David A. Barnes | 22,200(8) | * | ||||||
Raul J. Fernandez | 47,092(8) | * | ||||||
Anthony Gonzalez | 3,800(8) | * | ||||||
David L. Herzog | 34,006(8) | * | ||||||
Pinkie D. Mayfield | 0 | * | ||||||
Karl Racine | 3,800(8) | * | ||||||
Dawn Rogers | 14,700(8) | * | ||||||
Carrie W. Teffner | 8,100(8) | * | ||||||
Akihiko Washington | 14,700(8) | * | ||||||
Robert F. Woods | 44,431(8) | * | ||||||
All executive officers and directors of the Company, as a group | 1,826,101(8) | * |
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Delinquent Section 16(a) Reports
Section 16(a) of
To our knowledge, based solely on a review of information furnished to DXC, reports filed through DXC and representations that no other reports were required, all of DXC’s executive officers, directors and greater than 10% beneficial owners, filed the reports required under Section 16(a) on a timely basis for the fiscal year ended March 31, 2020, except that, due to administrative error, a late Form 4 was filed on behalfaddress of each of Messrs. Manna and Lawrie on July 31, 2019 and October 25, 2019, respectively.
38 |
| 2023 Proxy Statement |
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•A director or executive officer of the company
•Any nominee for director
•Any immediate family member of a director or executive officer, or of any nominee for director. Immediate family members are any child, stepchild, parent, stepparent, spouse, sibling,mother-in-law,father-in-law,son-in-law,daughter-in-law,brother-in-law, orsister-in-law of such director, executive officer or nominee for director, and any person (other than a tenant or employee) sharing the household of such director, executive officer or nominee for director,director; and
•Any person who was in any of the following categories when a transaction in which such person had a direct or indirect material interest occurred or existed:
•Any beneficial owner of more than 5% of DXC common stock, or
•Any immediate family member, as defined above, of any such beneficial owner.
40 |
AKIHIKO WASHINGTON Chair | MUKESH AGHI | ANTHONY GONZALEZ | DAVID HERZOG | DAWN ROGERS |
41 |
Michael J. Salvino | Chairman, President and Chief Executive Officer | ||||
Kenneth P. Sharp | Executive Vice President and Chief Financial Officer(1) | ||||
Mary E. Finch | Executive Vice President and Chief Human Resources Officer(2) | ||||
Christopher Drumgoole | Executive Vice President and Chief Operating Officer(3) | ||||
William L. Deckelman Jr | Executive Vice President and General Counsel |
Executive Summary | Section I | ||||
2022 Say-on-Pay Vote and Stockholder Engagement | Section II | ||||
Compensation Philosophy and Objectives | Section III | ||||
Compensation Determination Process | Section IV | ||||
Components of Our Compensation Program | Section V | ||||
Additional Compensation Policies and Practices | Section VI |
42 | 2023 Proxy Statement |
43 |
44 | 2023 Proxy Statement |
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Target Total Direct Compensation: Majority Performance-Based | •Consistent with our compensation philosophy, which emphasizes performance-based and “at-risk” pay, the proportion of performance-based and at-risk compensation encourages a focus on the Company’s short- and long-term success to align with the long-term interests of our stockholders. •Approximately 92% of CEO target total compensation is variable and at-risk, with 69% being performance-based and subject to achievement of meaningful pre-set, objective goals. •For the other NEOs, an average of approximately 81% of target total compensation is variable and at-risk, with 57% being performance-based and subject to achievement of meaningful pre-set, objective goals. | |||||||
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Compensation Committee Report
The Compensation Committee of the Board of Directors has reviewed and discussed this CD&A with management. Based on this review and discussion, it has recommended to the Board that the CD&A be included in this proxy statement and in DXC’s Annual Report on Form10-K for the fiscal year ended March 31, 2020.
Compensation Committee of the Board of Directors
Mukesh Aghi, Chairman of the Committee
Sachin Lawande
Julio A. Portalatin
Compensation Discussion and Analysis
The Compensation Discussion and Analysis (CD&A) describes the objectives, principles, and process the Compensation Committee of the Board of Directors (Compensation Committee) used to evaluate the executive compensation program and determine fiscal year 2020 compensation for our executive officers, including the named executive officers (NEOs) identified below:
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Long-Term Incentive Equity: Majority Performance-Based | •Majority of CEO and NEO long-term incentive equity awards are performance-based. •Overall, 76% (delivered in 70% PSUs and 30% RSUs) of our CEO’s target compensation is allocated to long-term incentive equity. •For other NEOs, 59% (delivered in 60% PSUs and 40% RSUs) of their fiscal 2022 target compensation is allocated to long-term incentive equity. •Starting in fiscal 2023, the PSU weighting of the equity granted to other NEOs was increased from 50% to 60% to further enhance the performance orientation of our executive compensation program. | |||||||
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Short-Term Annual Cash Incentive: Payouts based on performance against rigorous goals and using objective measures only | •Fiscal 2023 Adjusted EBIT Margin %, with 60% weighting, was introduced as a new metric that best captures the success of DXC’s optimization efforts and improved operational performance. •Fiscal 2023 Organic Revenue Growth %, with 40% weighting, was also introduced as a new metric. | |||||||
45 |
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Annual incentive payouts below target demonstrate Pay for Performance Alignment | •In fiscal 2023, under the annual cash incentive plan, the Compensation Committee determined that the Company’s achievements for Adjusted EBIT Margin % and Organic Revenue Growth % were approximately 90% and 97%, respectively, which were below target performance but above threshold, resulting in a calculated payout of approximately 60%of target, also demonstrating the alignment between pay and performance. |
Table of contents
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Award |
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STI: Fiscal 2023 (Incentive Compensation Plan) | Below Target |
| 60% Payout |
Since its inception in 2017, DXC has successfully executed a complex integration while delivering strong customer impact for many of the largest companies in the world.
During the last seven months of the fiscal year, DXC made several changes at the executive level. The Board appointed a new President and CEO, Michael J. Salvino, in September 2019. Shortly thereafter, DXC continued to build out its senior leadership team. Mary E. Finch was brought in as Executive Vice President and Chief Human Resources Officer, highlighting the importance of taking care of our people. Vinod Bagal joined the team as Executive Vice President of Global Transformation, underscoring the importance of delivering for our customers.
Under Mr. Salvino’s leadership, DXC is on a transformation journey focused on unlocking value across the Enterprise Technology Stack and building stronger relationships with customers. DXC is seizing opportunities to cross-sell to its customers. Core to this new strategy is are-emphasis on the ITO business. DXC is best known for its ability to help customers securely modernize their IT estate, by runningon-prem technology, migrating relevanton-prem resources to the cloud, developing and adapting innovative applications and harvesting data with advanced analytics and engineering.
We are confident this strategy will position DXC for long-term financial success and stability. We recognize, however, that in the short-term our operating and financial results will be impacted as we work to implement this strategy. Our fiscal 2020 financial results—and accordingly our executive compensation outcomes—reflect this. As financial and operating results for fiscal 2020 were below the threshold funding level for the Annual Cash Incentive plan, no payout was made for relevant NEOs, consistent with ourpay-for-performance philosophy.
Going forward, the Compensation Committee is committed to reviewing the executive compensation program – including metrics and weightings—to ensure it aligns with our evolving strategy and that it reflects the unprecedented market conditions we are facing in fiscal 2021.
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| •Further underscoring the pay and performance alignment, actual annual incentive payouts were based on Company financial performance withno positive subjective discretion applied to increase any NEOs’ final annual cash incentive payouts. |
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Leadership Transitions and Strategic Realignment
In September 2019, the DXC Board appointed Michael J. Salvino as President and Chief Executive Officer. Mr. Salvino succeeded J. Michael Lawrie, who terminated as President and CEO, and as DXC’s Executive Chairman in January 2020.
Mr. Salvino has an extensive background in leadership roles in the IT services industry with more than 30 years of experience building profitable businesses that delivered value for customers and stockholders. Mr. Salvino is the right choice to lead DXC into its next phase of growth as he is a proven leader with a strong track record of successfully running businesses, forging trusted customer relationships, and creating an environment to grow and develop talent, all critical to DXC’s long-term success.
As CEO, Mr. Salvino spent several months meeting with our largest customers, each of our strategic partners and our employees around the world. Mr. Salvino shared his observations following this strategic and operational review with investors during our November 2019 earnings presentation, including the strengths of our business and areas that need improvement. Mr. Salvino also announced ago-forward strategy for operating the business and unlocking value that leverages the strengths and opportunities he identified. In addition, he discussed that DXC will be making investments to acknowledge, recognize and reward our people, which will strengthen our employee value proposition.
Our CEO, along with a team composed of continuing and new management, has set forth a plan to execute the new strategy, with a focus on the next phase of our transformation, forging trusted customer relationships and creating an environment to grow and develop talent. Several key leadership changes were made to help drive the successful execution of DXC’s new strategy, including the appointment of two leaders who are named executive officers for fiscal 2020—Mary E. Finch as Executive Vice President and Chief Human Resources Officer and Vinod Bagal as Executive Vice President of Global Transformation.
Peer Group: Appropriate Peer Group to Reference |
•Each year, the Compensation |
| Committee, with the assistance of its independent compensation consultant, reviews the peer group of comparable companies to use as a reference point in connection with executive compensation decisions. •In determining the peer group, the criteria of competitors for talent, revenues and headcount are given more weight in the Compensation Committee’s determination than market capitalization, in part because of the view that DXC’s stock price is somewhat depressed and thus market capitalization is not as significant a factor. |
Our key strategic priorities include advancing our transformation journey, taking care
Focus on customers and ensure weat-risk. If the Company does not meet performance targets and/or our stock price decreases (or, conversely, if goals are deliveringachieved and/or our stock price increases), the value of our CEO’s pay is affected, underscoring the pay for performance nature of our customers:
Received overwhelmingly positive feedback from customers on our ability to innovate and executeTo illustrate this alignment of pay outcomes with performance, the chart below contrasts the amounts reported in the Summary Compensation Table under SEC reporting rules, which uses the accounting grant date fair value of equity grants, with the amounts of CEO compensation that were realized (actual compensation) during a fiscal year.
Fixed vast majority total cumulative actual realized value (shown in chart below). This not only provides a meaningful demonstration of the accounts designated as “challenged” accounts in Mr. Salvino’s first six months
Closed $2.1 billion in total contract value from these accounts as a resultpay for performance alignment of improvements in customer delivery
Optimize costs to better serveDXC’s executive compensation program, but the line representing Cumulative TSR also shows the strong alignment of our customers and eliminate confusion and complexity:
Simplified the operating model byre-emphasizing regional execution to enable faster decision making and increased accountability
Eliminated unnecessary management layers, taking appropriate steps toright-size cost structure to revenue
Prioritized the quality and speed of delivery execution capabilities focusing on the delivery footprint, utilization and talent, while streamlining processes
Seize the market opportunity by cross-selling and expanding what we doCEO’s realized pay with our customers acrossstock price performance and the Enterprise Technology Stack:
Launched a program leveraging the capabilities of the Virtual Clarity team to assess the ITO estateexperience of our top 200 customers—addressing their cloud migration and IT modernization roadmaps to reinvigorate our ITO business
Significantly increased focus on the top 200 accounts
Assessed how each of our current businesses are aligned to the Enterprise Technology Stack to meet emerging customer demands and unlock value
Rewarded our people who are closest to our customers and delivering value around the Enterprise Technology Stack
EstablishedCOVID-19 Command Center to navigate through the crisis. Enabled 99% of our people to successfully work from home, taking care of their total well-being while seamlessly serving our customers
Ensured our people are focused and engaged. Motivated people will help us drive better outcomes for our customers, which will in turn help us create value for stockholders. An important component of this strategy is the ability to continue to use equity-based compensation to both attract and retain talent in our very competitive technology sector
Developed action plans around employee engagement results, with focus on three impact drivers—Decision Making, Career Goals and Customer Focus
46 |
| 2023 Proxy Statement |
Two key priorities in this area are running a long-term sustainable business focused onAs described below under “Section IV. Compensation Determination Process--Compensation Peer Group and Peer Selection Process,” the Enterprise Technology Stack and unlocking value by pursuing strategic alternatives for businessesCompensation Committee believes that do not fit our long-term strategy
Announced the sale of the U.S. State and Local Health and Human Services Businessobtaining relevant market data is very important to Veritas Capital for $5 billion; at transaction close, proceeds will be used to pay down debt
Continue rationalizing our portfolio and strengthening our balance sheet while positioning DXC for growth
Also pursuing a balanced capital allocation strategy consistent with an investment grade credit profile
Improving liquidity and enhancing financial flexibility by increasing cash position, extending maturities and paying down debt
making determinations about executive compensation. The Compensation Committee takes into consideration the structure, components, and amounts paid under the executive compensation programs of other comparable, peer companies when making decisions about the structure and component mix of our program. The Compensation Committee also considers the Company’s compensation philosophy and objectives, internal fairness and market trends, and other relevant factors.
47 |
Successful Transition Year: Appointed DXC’s new CEO—and several other key leaders criticaltotal shareholder return performance relative to drivinga comparison peer group over the successful execution of DXC’s new strategy
Flat Target Compensation Levels: Year-over-year base salaries remained flat, as did target short-term and long-term incentive opportunities for continuing executives
Pay for Performance: Financial and operating results were below the threshold funding level for the Annual Cash Incentive Plan, leading to no payout for relevant NEOs, consistent with ourpay-for-performance philosophy. Thethree-year performance period for PSU awards granted in fiscal 2018 concluded, and the PSU awards paid out at 50% of target, demonstrating the alignment of our executives’ compensation with performance outcomes
Stockholder Feedback and Evolution of Compensation Program
48 | 2023 Proxy Statement |
Over the last few years we have introduced several changes to our program to ensure that it remains alignedvotes cast, indicating stockholder satisfaction with our business strategy and reflects stockholder feedback. These enhancements include:
Replacing stock options with a mix of PSUs and RSUs to better incentivize performance and retention
Introducing a strategic performance modifier for NEOs, which may result in final payout modifications from 0% to 200%
Implementing a doubletrigger change-in-control provision for outstanding equity awards
Modifying the vesting of PSUs to require employment through the end of the three-year performance period to earn any payout
We will continue to seek input from our stockholders on our executive compensation program and the disclosed executive compensation program changes in fiscal 2022, the disclosed going forward changes in fiscal 2023, and the Compensation Committee commitments made to ensure it alignsstockholders during the fiscal 2022 outreach.
49 |
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Fiscal 2020 Executive Compensation Program Overview
The executive compensation program for our NEOs for fiscal 2020 is outlined in the table below. Our program was structured with a mix of variable and fixed compensation that incentivizes short- and long-term stockholder value creation and gives appropriate consideration to the objectives and measures of success entailed in our strategic priorities.
What We Do | What We Don’t Do | |||||||
Proactively reach out to stockholders to understand and address their feedback and concerns regarding our executive compensation program Majority of | ||||||||
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Appropriate allocation of short- and long-term compensation Combination of balanced performance metrics Multi-year vesting period for PSUs and RSUs to motivate long-term performance and align the |
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Independent consultant engaged by Compensation Committee Benchmark compensation decisions against data
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Apply stock ownership guidelines (CEO guideline is 7x base salary) Include clawback provisions in
Perform an annual risk assessment of our
Regularly review dilution and Annual incentives and PSU payouts are capped Double trigger Change in Control provisions |
No dividend equivalents on unearned awards No hedging or pledging of Company securities No repricing of underwater stock options No excessive perks No excise tax gross-ups related to Change in Control No share recycling for options / SARs No exchanges of underwater options for cash No evergreen provisions in the equity
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50 |
| 2023 Proxy Statement |
51 |
Role of the Independent Compensation Consultant
Since 2012, the Compensation Committee has retained Pearl Meyer and Partners (Pearl Meyer), an independent compensation consulting firm, to advise on executive compensation matters and provide additional assurance that DXC’s executive compensation program is reasonable and consistent with its objectives. Pearl Meyer reports directly to the Compensation Committee, and regularly participates in Compensation Committee meetings at the request of the Committee Chairman. During fiscal 2020, Pearl Meyer advised the Compensation Committee on trends in pay practices; proxy trends; CEO and Section 16 officer compensation;non-employee director compensation; pay for performance; selection of peer group companies; and peer group pay comparisons.
Pearl Meyer does not perform any other services for the company, other than its work for the Compensation Committee. The Compensation Committee has assessed the independence of Pearl Meyer according to SEC and NYSE rules and concluded that Pearl Meyer’s work does not raise any conflict of interest that prevents them from providing independent advisory services to the Compensation Committee.
decisions.
52 |
| 2023 Proxy Statement |
We have adopted several best practices to ensureCommittee took into consideration the review and recommendations of Pay Governance when making decisions about our executive compensation program, policies, and decision-making processes are rooted in sound governance, and structured to driveultimately, the right outcomes to create stockholder value.
Committee believes that obtaining relevant market and benchmark data where we compete for talent is very important to making determinations about executive compensation. Such information provides a solid reference point for making decisions and very helpful context even though, relative to other companies, there are differences and unique aspects of the Company.
Throughout our evolution, our compensation program has been grounded in a philosophy aimed at achieving strong alignment between the company’s financial and strategic goals and our stockholders’ interests:
We understand thatour people are critical to our success. We aim to attract and retain the best talent with a rangecomponents of, backgrounds, skills, capabilities and experiences to unlock value for our customers and enable our business to thrive.
We are committed to a pay for performance culture. Our compensation program aims tomotivate our people to perform at a consistently high level andrewards contributions that enhance our ability to deliver outstanding results for our customers and create value for our stockholders.
We believe thatcompensation should be competitive to attract the best talent.Actual pay variesbased on individual and company performance.
We believe that compensation should reflect an appropriatemix of short-term and long-term pay elements that make executives accountable for both short-term and long-term performance. Compensation should be aligned to stockholder interests and the long-term value realized by our stockholders through a balance of cash and equity.
We believe thatamounts paid under, themajority of an executive’s total compensation should be variable and tied to performance of measurable financial and strategic objectives that support the company’s business strategy. Performance measures are reviewed annually to ensure that we continue to align our pay programs with our business strategy, create sustainable value and motivate the right behaviors.
Executive Compensation Peer Group
DXC’s executive compensation programs of other, comparable peer group is reviewed annually to ensure we appropriately assesscompanies, as derived from public filings and other sources, when making decisions about the competitiveness of our compensation program as well as the compensation levelsstructure and component mix of our executive officers. Selectioncompensation program. The Compensation Committee also considers broader industry practices and our competitors for talent.
Start with our existing peer group
Exclude any companies less than•Revenue in the range of 1/3x or greater thanto 3x the revenue of DXC
Add companies based on similar company size, industry,•Direct competitors for talent
Add companies with whom we compete for talent
DXC operates in an industry where the market for top talent is very competitive. Accordingly, the Compensation Committee recognizes that an accurate representation of DXC’s competition for talent includes a broad number of companies across the IT services landscape. In addition, we compete for talent and hire from industry leading organizations with larger market capitalizations. While DXC’s unique position as a leadingend-to-end IT services company means there are relatively few pure-play IT companies of our size that are considered direct comparators, we believe that the resulting peer group provides DXC and the Compensation Committee with a valid set of comparators and benchmarks for the company’sCompany’s executive compensation program and governance practices.
Our In fiscal 2023, no changes were made to the existing peer group.
53 |
Company | Revenue Latest FYE(1) ($ in millions) | Total Employees (#) | ||||||
Accenture plc | 44,327 | 506,000 | ||||||
Aon plc | 11,066 | 50,000 | ||||||
Automatic Data Processing, Inc. | 15,005 | 56,000 | ||||||
Cisco Systems, Inc. | 49,818 | 79,500 | ||||||
Cognizant Technology Solutions Corporation | 16,652 | 289,500 | ||||||
Fidelity National Information Services, Inc. | 12,552 | 62,000 | ||||||
Fiserv, Inc. | 14,852 | 44,000 | ||||||
Hewlett Packard Enterprise Company | 26,982 | 59,400 | ||||||
Intel Corporation | 77,867 | 110,600 | ||||||
International Business Machines Corporation | 73,621 | 345,900 | ||||||
Leidos Holdings, Inc. | 12,297 | 39,000 | ||||||
Marsh & McLennan Companies, Inc. | 17,224 | 76,000 | ||||||
Texas Instruments Incorporated | 14,461 | 30,000 | ||||||
VMware, Inc. | 11,767 | 32,300 | ||||||
Western Digital Corporation | 16,922 | 65,600 | ||||||
Willis Towers Watson Public Limited Company | 9,352 | 46,100 | ||||||
Xerox Holdings Corporation | 7,022 | 24,700 | ||||||
25th Percentile | 12,297 | 44,000 | ||||||
Median | 15,005 | 59,400 | ||||||
75th Percentile | 26,982 | 79,500 | ||||||
DXC Technology Company | 17,729 | 134,000 | ||||||
Percentile Rank | 69th | 82nd |
54 | 2023 Proxy Statement |
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We will continue to evaluate our
Type of Pay | Key Characteristics | |||||||||||||
Base Salary |
| |||||||||||||
Fixed | •Fixed cash compensation based on the individual’s experience, skills, and competencies, relative to the competitive market value of the role | •Reflects competitive market conditions and individual experience and performance •Commensurate with scope of responsibility, experience, internal value of the position and impact to the Company, reflecting internal pay equity | ||||||||||||
Annual Cash Incentive | ||||||||||||||
Performance-Based | •Variable cash compensation motivates achievement of annual strategic goals, as measured by objective, pre-established financial metrics •Metrics are intended to drive consistent growth and stockholder value creation by measuring successful execution of our current strategy | •Target opportunities are based on market data and reflect impact to the Company of the executive role •Actual payouts are based on achievement of measurable Company performance and individual or team performance |
55 |
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Long-Term Incentive | ||||||||||||||
Performance-Based Restricted Stock Units (PSUs)* | •Encourage focus on long-term stockholder value creation through profitable growth and increase in stock price over time •Aligns compensation with key indicators of success of our strategy •Promotes retention through long-term performance achievement and vesting requirements | •70% long-term incentive (“LTI”) weighting of regular annual grant in PSUs for the CEO (60% for other NEOs) ensures a substantial proportion of equity and overall compensation is performance-based •Payouts based: 50% on cumulative Free Cash Flow achievement over the three-year performance period against a meaningful target goal, and 50% on relative total shareholder return (rTSR) against a comparator group composed of the S&P 500 IT Services Index and a custom peer group over the three-year performance period, aligning executive pay with the creation of stockholder value Cliff vesting feature requires continued employment through the end of the three- year performance period | ||||||||||||
Time-Based Restricted Stock Units (RSUs)* | •Aligns to stockholder interests by providing a retention incentive and rewarding increase in stock price over time | •30% LTI weighting of regular annual grant in RSUs for the CEO (40% for other NEOs) incentivizes long-term value creation and retention •Vests in increments over a three-year period |
56 | 2023 Proxy Statement |
We haveCommittee increased Mr. Sharp's base salary by 4% to bring his target total compensation closer to the peer group median (previously at the 14th percentile of the peer group). No other NEOs received any adjustments.
NEO | Fiscal 2022 Base Salary ($) | Fiscal 2023 Base Salary ($) | Change (%) | ||||||||
Michael J. Salvino | 1,350,000 | 1,350,000 | — | ||||||||
Kenneth P. Sharp | 700,000 | 725,000 | 4% | ||||||||
Mary E. Finch | 700,000 | 700,000 | — | ||||||||
Christopher Drumgoole | 700,000 | 700,000 | — | ||||||||
William L. Deckelman Jr. | 600,000 | 600,000 | — |
Financial Metrics 100% | Total 100% | |||||||||||||
Organic Revenue Growth % 40% | Adjusted EBIT Margin % 60% | Pool Funding |
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58 | 2023 Proxy Statement |
Pool Funding | Target Bonus | Individual Performance Modifier | Individual Payout |
NEO | Fiscal 2023 Target Annual Cash Incentive Plan Opportunity as a % of Base Salary | Fiscal 2023 Target Annual Cash Incentive Plan Opportunity ($) | ||||||
Michael J. Salvino | 200.0 | 2,700,000 | ||||||
Kenneth P. Sharp | 125.0 | 906,250 | ||||||
Mary E. Finch | 110.0 | 770,000 | ||||||
Christopher Drumgoole | 110.0 | 770,000 | ||||||
William L. Deckelman Jr. | 110.0 | 660,000 |
59 |
Performance Metric | Relative Weighting (%) | Target | Actual Result | Attainment % | Funding (% of Target) | Weighted Funding % | ||||||||||||||
Organic Revenue Growth %(1)(2) | 40% | 0.0% | (2.7%) | 97% | 73% | 29% | ||||||||||||||
Adjusted EBIT Margin %(2) | 60% | 9.0% | 8.0% | 90% | 51% | 31% | ||||||||||||||
Calculated Pool Funding % | 60% |
NEO | Pool Funding % | X | Target Annual Cash Incentive | = | Individual Payout | ||||||||||||
Michael J. Salvino | 60% | X | $2,700,000 | = | $1,620,000 | ||||||||||||
Kenneth P. Sharp | 60% | X | $906,250 | = | $543,750 | ||||||||||||
Mary E. Finch | 60% | X | $770,000 | = | $462,000 | ||||||||||||
Christopher Drumgoole | 60% | X | $770,000 | = | $462,000 | ||||||||||||
William L. Deckelman Jr. | 60% | X | $660,000 | = | $396,000 |
program is long-term incentives delivered in the form of equity. Consistent with our pay for performance philosophy, this component is also the largest component of executive total pay.
60 | 2023 Proxy Statement |
Equity Vehicle | Fiscal 2023 Allocation | Vesting Period | How Payouts Are Determined | Rationale for Use | ||||||||||
PSUs | •70% for CEO •60% for other NEOs | 3-year cliff | 50% on relative total shareholder return (rTSR) against a comparator group composed of the S&P 500 IT Services Index and a custom peer group over the three-year performance period* 50% on cumulative Free Cash Flow (FCF) achievement over the three-year performance period | •rTSR performance aligns executive officer compensation directly with the creation of stockholder value •Cumulative FCF production aligns executive officer compensation directly with a key long-term indicator of fiscal strength •Promotes long-term focus | ||||||||||
RSUs | •30% for CEO •40% for other NEOs | 3 years: 1/3 per year | Value of stock at vesting | •Aligns with stockholders •Promotes retention •Provides alignment to stockholders’ interests, even during periods of market volatility |
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DXC Technology’s Fiscal 2023 PSU rTSR Peer Group | ||
S&P 500 IT Services Index Companies + Additional Custom Peer Group Companies: Conduent Incorporated Cisco Systems, Inc. Hewlett Packard Enterprise Company Intel Corporation Kyndryl Holdings, Inc. Unisys Corporation VMware, Inc. |
62 | 2023 Proxy Statement |
NEO | Base Salary ($) | Target LTI (%) | Value ($) | PSUs ($) | PSUs (#) | RSUs ($) | RSUs (#) | ||||||||||||||||
Michael J. Salvino | 1,350,000 | 941%* | 12,700,000 | 8,890,000 | 288,075 | 3,810,000 | 123,461 | ||||||||||||||||
Kenneth P. Sharp | 725,000 | 510% | 3,697,500 | 2,218,500 | 71,889 | 1,479,000 | 47,926 | ||||||||||||||||
Mary E. Finch | 700,000 | 300% | 2,100,000 | 1,260,000 | 40,830 | 840,000 | 27,220 | ||||||||||||||||
Christopher Drumgoole | 700,000 | 250% | 1,750,000 | 1,050,000 | 34,025 | 700,000 | 22,683 | ||||||||||||||||
William L. Deckelman Jr. | 600,000 | 250% | 1,500,000 | 900,000 | 29,164 | 600,000 | 19,443 |
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NEO | Target PSUs (#) | PSU Award Achievement (%) | Earned PSUs (#) | ||||||||
Michael J. Salvino | 519,818 | 150% | 779,727 | ||||||||
Kenneth P. Sharp(1) | 24,618 | 150% | 36,927 | ||||||||
Mary E. Finch | 68,226 | 150% | 102,339 | ||||||||
Christopher Drumgoole | 34,113 | 150% | 51,170 | ||||||||
William L. Deckelman Jr. | 48,733 | 150% | 73,100 |
Matched Asset Plan (MAP) | Broad-based, qualified, defined contribution 401(k) plan with Company match on a portion of employee contributions and directed investment alternatives. | ||||
Deferred Compensation Plan | Unfunded plan offered to a select group of management or highly compensated employees. Allows participants to defer receipt of incentive compensation and salary. |
64 | 2023 Proxy Statement |
65 |
66 | 2023 Proxy Statement |
Each
Position | Multiple of Base Salary | ||||
CEO | 7x | ||||
Other Executive Officers | 3x |
The Board has adopted a policy that prohibits directors, corporate
loan.
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68 | 2023 Proxy Statement |
Name and Principal Position (a) | Fiscal Year (b) | Salary(1) ($) (c) | Bonus(2) ($) (d) | Stock Awards(3) ($) (e) | Option Awards(4) ($) (f) | Non-Equity Incentive Plan Comp.(5) ($) (g) | Change in Pension and Nonqualified Deferred Comp. Earnings(6) ($) (h) | All Other Comp.(7) ($) (i) | Total ($) (j) | ||||||||||||||||||||
Michael J. Salvino Chairman, President and Chief Executive Officer | 2023 | 1,298,077 | — | 17,130,174 | — | 1,620,000 | — | 269,721 | 20,317,972 | ||||||||||||||||||||
2022 | 1,365,064 | — | 25,087,727 | — | 2,025,000 | — | 238,889 | 28,716,680 | |||||||||||||||||||||
2021 | 1,250,000 | — | 15,311,312 | — | 5,000,000 | — | 171,808 | 21,733,120 | |||||||||||||||||||||
Kenneth P. Sharp Executive Vice President and Chief Financial Officer | 2023 | 690,865 | — | 4,877,660 | — | 543,750 | — | 13,559 | 6,125,834 | ||||||||||||||||||||
2022 | 722,436 | — | 4,908,371 | — | 577,500 | — | 10,692 | 6,218,999 | |||||||||||||||||||||
2021 | 215,385 | 750,000 | 1,673,186 | — | 291,000 | — | 2,029 | 2,931,600 | |||||||||||||||||||||
Mary E. Finch Executive Vice President and Chief Human Resources Officer | 2023 | 673,077 | — | 2,770,315 | — | 462,000 | — | 13,903 | 3,919,295 | ||||||||||||||||||||
2022 | 722,436 | — | 3,681,222 | — | 577,500 | — | 10,692 | 4,991,850 | |||||||||||||||||||||
2021 | 700,000 | — | 3,899,241 | 960,500 | — | 15,824 | 5,575,565 | ||||||||||||||||||||||
Christopher Drumgoole Executive Vice President and Chief Operating Officer | 2023 | 673,077 | — | 2,308,575 | — | 462,000 | — | 33,283 | 3,476,935 | ||||||||||||||||||||
William L. Deckelman Jr. Executive Vice President and General Counsel | 2023 | 576,923 | — | 2,291,226 | — | 396,000 | — | 30,161 | 3,294,310 | ||||||||||||||||||||
2022 | 619,231 | — | 3,055,400 | — | 495,000 | — | 24,462 | 4,194,093 | |||||||||||||||||||||
2021 | 600,000 | — | 2,313,613 | — | 823,500 | — | 24,536 | 3,761,649 |
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| Fiscal 2023 Stock Awards at Maximum Value ($) |
Section 4: Fiscal 2020 Compensation Decisions
Setting Compensation for the NEOs
DXC’s executive compensation program is designed to motivate, retain and engage our executive leadership and appropriately reward them for their contributions to the achievement of our business strategy.
Since becoming CEO in September 2019, Mr. Salvino has committed DXC to focusing on its new strategic priorities as described in Section 1 of this CD&A. As part of this, our leadership recognized the need to hire top talent to lead the organization as we execute on this strategy. Over the last several months, DXC has recruited several high performing individuals to join the Company in roles that are critical to ensuring our success. The Compensation Committee and our leadership considered various challenges in their recruitment, including the competitive market for talent across the IT services industry and the perceived risk that established executives must consider when joining a company that is in the midst of a transformation and that has a strong, but new, senior leadership team engaged in a new strategy, such as DXC. The Committee determined that securing the employment of these experienced executives required a competitive compensation package to incentivize them to join DXC and retain them through the Company’s transformation.
The Compensation Committee determined the fiscal 2020 compensation for the NEOs based on a range of factors including an assessment of performance, market competitiveness, and demonstration of DXC’s values.
Assessing Performance: The Compensation Committee engaged in robust discussions about both company and individual performance to set pay levels for the NEOs in fiscal 2020. NEO compensation was structured to encourage executives to deliver strong results over multiple time horizons to promote sustained value for our stockholders. The majority of NEO total target compensation is at risk and based on performance.
Staying Competitive with the Market: The Compensation Committee compared our pay practices and pay levels with market data to make sure executive pay was competitive with the market, particularly as we seek to attract candidates whom the Committee and CEO believed have the right leadership skills, experience, and agility to lead us through our transformation.
Demonstrating our Values: We believe that how results are achieved are just as important as the results themselves. The Compensation Committee considered each executive’s performance through the lens of DXC’s core values.
Using Informed Judgment: While performance and market competitiveness remained the cornerstones of DXC’s executive compensation program, the Compensation Committee also relied on their informed judgment to set compensation for our NEOs. The Compensation Committee believed that this allowed them to respond to certain unique circumstances in a way that was still consistent with our compensation philosophy and guiding principles. This flexibility was especially important in developing competitive pay packages to induce executive new hire candidates to join DXC during a time of dynamic and unpredictable change and risk.
Base salary is designed to compensate executives for normalday-to-day responsibilities. It is the only component of executive compensation considered fixed and not at risk.
Michael J. Salvino | 29,912,053 | |||||||||
Kenneth P. Sharp | ||||||||||
Mary E. Finch | 4,581,943 | |||||||||
Christopher Drumgoole | 3,818,255 | |||||||||
William L. Deckelman Jr. |
| 3,585,232 |
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Fiscal 2020 Base Salaries
4. No stock option awards were granted to the NEOs.
Annualized Base Salary | Change from Last Fiscal Year | |||||||||||||||||||
Fiscal 2019 | Fiscal 2020 | % Change | $ Change | |||||||||||||||||
Michael J. Salvino
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| —
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| $
| 1,250,000
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| —
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| —
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Paul N. Saleh
| $
| 800,000
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| $
| 800,000
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| 0.0%
| $
| 0.00
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Mary E. Finch
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| —
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| $
| 700,000
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| —
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| —
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Vinod Bagal
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| $
| 625,000
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| —
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| —
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Edward Ho
| $
| 675,000
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| $
| 675,000
|
| 0.0%
| $
| 0.00
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J. Michael Lawrie
| $
| 1,250,000
|
| $
| 1,250,000
|
| 0.0%
| $
| 0.00
|
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The Compensation Committee reviewed the salaries of Messrs. Lawrie, Saleh, and Ho as part of its annual process and in consultation with its independent compensation consultant. Their salaries were determined to be competitively positioned and as a result, no adjustments were made.
Messrs. Salvino and Bagal and Ms. Finch were hiredmid-year and their salaries were determined as part of their employment offers. In establishing Mr. Salvino’s salary, the Compensation Committee conducted a thorough review of peer compensation and considered the skills, expertise, and experience he would bring as CEO during a critical phase in DXC’s transformation.
The annual cash incentive award is designed to motivate and reward the achievement of annual financial and customer satisfaction goals. The target award is based on the executive’s position and is calculated as a percentage of salary. Actual awards, which are paid in cash, are based on both company and individual performance against targets established at the beginning of the fiscal year.
Fiscal 2020 Financial Goals
The fiscal 2020 annual cash incentive plan included two key financial metrics – revenue and adjusted EBIT. The Committee sets rigorous targets for each metric based on a reasonable range of expectations for the year based on Company and industry outlooks, while also weighing prior year performance and economic conditions. Targets are designed to incentivize high performance without encouraging excessive risk-taking. Fiscal 2020 targets, including the weighting for each metric, are shown below.
DXC believes these metrics provided a balance between top line and bottom line goals and reflected DXC’s focus on driving stockholder value creation.
Financial Metric | Weighting | Fiscal 2020 Target (in millions) | ||
Revenue |
20% |
$20,070 | ||
Adjusted EBIT1 | 60% | $3,100 |
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Performance against targets was assessed using the following payout scales for our NEOs, established for fiscal 2020 and approved by the Compensation Committee.
Fiscal 2020 Customer Satisfaction Goal
In addition to financial metrics,under the annual cash incentive plan, included a customer satisfaction metric, weighted at 20%. The customer satisfaction metric, which used the Net Promoter Score methodology, was intended to ensure that DXC remained focusedbased on customer retention, building strong customer relationships, and ensuring satisfaction with our services and solutions. Payout for the customer satisfaction metric was contingent upon both the achievement of a response ratecorporate and individual performance objectives. See “Compensation Discussion and Analysis — Components of at least 50% and a Net Promoter Score at or above target.
Fiscal 2020 Strategic Goals
The inclusion of strategic goals was to enable DXC to recognize and reward strategic accomplishments that drive value for stockholders within the annual cash incentive plan’s framework. Given the transformative nature of the business, it was important to incentivize and reward successful execution of DXC’s long-term strategy, especially in areas that strengthen our ability to deliver solutions across the enterprise stack to our customers.
Strategic goals were established for each executive at the beginning of the fiscal year and were evaluated atyear-end. Based on the attainment of strategic goals, each executive was assigned a strategic performance modifier. The strategic performance modifier, which ranged from 0% to 200%, served to adjust the executive’s cash incentive plan payout upward or downward based on the degree to which strategic goals were achieved.
How the Fiscal 2020Our Compensation Program — Annual Cash Incentive Plan” for additional detail regarding the annual performance bonus program.
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The plan’s funding pool, subject to threshold adjusted EBIT achievement, was calculated as follows.
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The pool funding percentage was then applied to the executive’s base salary, target bonus percentage, and strategic performance modifier to determine the executive’s final payout:
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Fiscal 2020 Annual Cash Incentive Plan Target Awards
The following target awards were approved for fiscal 2020.
Annual Incentive Target as a % of Base Salary | ||||||||||
Fiscal 2019 | Fiscal 2020 | |||||||||
Michael J. Salvino | — | 200% | ||||||||
Paul N. Saleh | 125% | 125% | ||||||||
Mary E. Finch | — | 110% | ||||||||
Vinod Bagal | — | 110% | ||||||||
Edward Ho | 110% | 110% | ||||||||
J. Michael Lawrie | 200% | 200% |
The Compensation Committee believed that the target opportunities for the NEOs were appropriate relative to the peer group and ensured that a substantial portion of their compensation was tied to performance. No adjustments to targets were made.
Fiscal 2020 Annual Cash Incentive Plan Performance
We recognize that achieving success based on a focused new strategy is a multi-year effort. While we continued to make steady progress, we did not reach the threshold EBIT target under our annual cash incentive plan and therefore, there was no funding of the plan for fiscal 2020.
Fiscal 2020 Annual Cash Incentive Awards
Certain fiscal 2020 award payments were made to new NEOs pursuant to the terms of their employment offers.
In recognition of theirmid-year hire dates, Messrs. Salvino and Bagal and Ms. Finch were entitled to participateany year presented in the fiscal 2020 annual cash incentive plan on a prorated basis. Messrs. Salvino and Bagal and Ms. Finch received a prorated payment of $1,250,000, $288,185, and $383,945, respectively, consistent with their employment offers.
DXC believes that stock-based grants create an ownership culture by giving executives an equity stake intable.
Annual long-term incentive awards are prospective in nature and intended to tie a substantial portion of an executive’s pay to creating long-term stockholder value. Multi-year vesting improves retention because it gives executives an incentive to stay with
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the company throughout the vesting period and be actively engaged in driving strong financial results.A significant weighting of performance-based incentives motivates executives to achieve superior financial results.
Performance Conditions for the Fiscal 2020 PSUs
PSUs vest and pay out based on three-year performance ofnon-GAAP Earnings per Share (EPS) weighted at 75%, and adjusted Free Cash Flow (FCF) weighted at 25%. The Compensation Committee chose EPS because it believes that, in addition to being a prevalent key indicator of stockholder value, EPS is the best measure of performance and profitability in light of DXC’s multi-year transformation strategy. The Compensation Committee also selected FCF as a metric because it promotes cash flow generation, improvements in working capital, and reduction in capital intensity.
EPS and FCF performance are measured and paid out independently (there may be a payout for one metric but not the other). Payout of the PSUs is capped at 200%. PSUs vest only at the end of a three-year performance period subject to the executive’s continued employment through the end of the third fiscal year. The Compensation Committee reviews progress against targets each year and ascertains the probability that a portion (up to 25%) of the target PSUs may be earned for each of the first two years. However, it is not until the end of the three-year period when final performance is measured that the Committee conclusively determines whether any PSUs were earned and would vest.
EPS and FCF goals are based on DXC’s operating plan and budget. The threshold EPS and FCF goals for the fiscal 2020 PSU awards were set by the Compensation Committee at $7.50 per share and $1,850 million, respectively, at the beginning of fiscal 2020.2
|
|
|
|
Fiscal 2020 Performance and Fiscal 2018, 2019 and 2020 PSUs
Fiscal 2020 represented the last year in the three-year performance period for the fiscal 2018 PSUs. The Committee determined that 50% of the fiscal 2018 target PSUs were earned and vested based on EPS and FCF results during the three-year performance period. No portion of the fiscal 2019 or fiscal 2020 PSUs was earned based on fiscal 2020 performance.
Fiscal 2020 Long-Term Incentive Plan Target Awards
The following long-term incentive targets were approved for fiscal 2020.
Long-Term Incentive Target as a % of Base Salary | ||||
Fiscal 2019 | Fiscal 2020 | |||
Michael J. Salvino | — | 800% | ||
Paul N. Saleh | 500% | 500% | ||
Mary E. Finch | — | 300% | ||
Vinod Bagal | — | 250% | ||
Edward Ho | 400% | 400% | ||
J. Michael Lawrie | 975% | 975% |
The Compensation Committee believed that the target opportunities for the NEOs were appropriate relative to the peer group and aligned a higher proportion of their compensation to driving stockholder value creation over a multi-year period. No adjustments to targets were made.
Fiscal 2020 Long-Term Incentive Awards
Below is a summary of the annual fiscal 2020 long-term incentive awards granted to our NEOs:
Form of Award
| ||||||||||||||||||||||||||||||
30% Restricted
|
70% Performance-Based Restricted
| |||||||||||||||||||||||||||||
Award as a % of Fiscal 2020 Base Salary
| Total Long-Term Incentive Award
| Grant Value of RSUs
| Number of RSUs
| Grant Value of PSUs
|
Target PSUs
| |||||||||||||||||||||||||
Michael J. Salvino1 |
| 400 | % | $ | 5,000,000 | $ | 1,500,000 |
| 46,182 | $ | 3,500,000 |
| 107,759 | |||||||||||||||||
Paul N. Saleh |
| 500 | % | $ | 4,000,000 | $ | 1,200,000 |
| 19,151 | $ | 2,800,000 |
| 44,686 | |||||||||||||||||
Mary E. Finch1 |
| — | $ | — | $ | — |
| — | $ | — |
| — | ||||||||||||||||||
Vinod Bagal1 |
| 104 | % | $ | 651,042 | $ | 195,313 |
| 6,360 | $ | 455,729 |
| 14,840 | |||||||||||||||||
Edward Ho |
| 400 | % | $ | 2,700,000 | $ | 810,000 |
| 19,927 | $ | 1,890,000 |
| 30,463 | |||||||||||||||||
J. Michael Lawrie2 |
| 975 | % | $ | 12,187,500 | $ | 3,656,250 |
| 58,351 | $ | 8,531,250 |
| 136,151 |
|
|
In line with DXC’s Equity Grant Policy, the number of RSUs and PSUs granted was calculated by dividing thetotal dollar amount of each award byall other compensation, perquisites and other property paid to the average closing priceNEOs. During fiscal 2023, DXC offered the following perquisites and other personal benefits, or property to NEOs, except as otherwise indicated: personal use of DXC stock for the three-month period ending on the grant date. This approach reduces the impact positive or negative swings in our stock price can have on the executive’s award. The grant value that appears in the Summary Compensation Table will be different because it is calculated by multiplying the number of RSUs and
|
|
PSUs granted by the grant date closing price. Per the terms of his employment agreement, the number of PSUs and RSUs granted to Mr. Salvino as part of his annual fiscal 2020 award was based on the grant date price.
In connection with Mr. Salvino’s appointment as CEO, we granted him an RSU award with an aggregate value of $4,350,000, vesting subject to his continued employment in three equal annual installments on the first, second and third anniversaries of the grant date. In addition, we paid him a cash lump sum equal to $2,000,000 subject to repayment if he resigns his employment with DXC other than for good reason or if we terminate his employment for cause, in either case prior to September 12, 2021. In addition, Mr. Salvino received a guaranteed annual bonus for fiscal 2020 equal to 200% of hispro-rated annual salary of $625,000 and Mr. Salvino also receivedpro-rata LTI awards for the fiscal 2020 cycle on the same terms as the other NEOs, as described above under Fiscal 2020 Long-Term Incentive Awards. The Board determined that this was consistent with our compensation strategy and appropriate to secure Mr. Salvino’s hire at a critical time in our transformation and to effectively align his interests with stockholders.
Mr. Bagal and Ms. Finch were granted awards of RSUs with values of $750,000 and $2,250,000, respectively, in connection with their hire. The inducement grants vestone-third per year on the first, second, and third anniversaries of the grant date. As additional inducements, Mr. Bagal and Ms. Finch each received a lump sum cash payment of $750,000. Mr. Bagal and Ms. Finch are obligated to repay the cash payment if they voluntarily terminate employment or if they are terminated for cause, within 24 months of their hire date.
|
|
|
Section 5: Other Aspects of Compensation
In addition to base salary and annual cash and long-term incentives, DXC provides a mix of other benefits as part of each NEO’s total rewards package.
Retirement Benefits
The Compensation Committee views retirement benefits as an important component of DXC’s executive compensation program. DXC offers its employees, including the NEOs, a retirement program that provides the opportunity to accumulate retirement income. DXC reviews the benefits program against the peer group periodically, to ensure the program remains competitive with the market.
|
| |
|
|
Health Care Benefits
DXC provides health and welfare benefits to eligible employees, includingaircraft, medical dental, life, disability and accident insurance. These benefits are available to all U.S. employees generally, including the NEOs. These programs are designed to provide certain basic quality of life benefits and protections.
Perquisites
DXC provides certain limited perquisites to senior executives, including the NEOs, to enhance their security and productivity. Perquisites include optional financial planning services, optional executive health screening, benefits, and relocation benefits for new hires, as applicable.
We reimburse Mr. Salvino for up to $25,000 annually for assistance with tax preparation and financial planning. In addition, Mr. Salvino may useDXC-ownedDXC made matching contributions to DXC’s broad-based 401(k) defined contribution plan on behalf of the NEOs. DXC also paid premiums for life insurance policies for the benefit of the NEOs, none of whom has or leased aircraft for business purposes and reasonablewill receive, or has been allocated, an interest in any cash surrender value under these policies. The incremental costs of each perquisite representing the greater of $25,000 or 10% of the total amount of perquisites, personal use of DXC aircraft, and the amount of matching contributions to the defined contribution plan and life insurance premiums paid for domestic flights only and subject to such limits as may be reasonably imposed byeach NEO in fiscal 2023, are shown in the Board. Mr. Salvinotable below.
Personal Use of Corporate Aircraft(a) ($) | 401(k) Plan Matching Contribution(b) ($) | Basic Life Insurance Premiums ($) | |||||||||
Michael J. Salvino | 233,302 | 9,150 | 2,269 | ||||||||
Kenneth P. Sharp | — | 9,150 | 1,659 | ||||||||
Mary E. Finch | — | 9,150 | 1,588 | ||||||||
Christopher Drumgoole | 2,895 | 9,150 | 1,588 | ||||||||
William L. Deckelman Jr. | — | 9,150 | 1,361 |
Mr. Salvino is taxedbased on the valuevariable costs to DXC, including fuel costs, on-board catering, landing/ramp fees and other miscellaneous variable costs. This calculation does not include fixed costs which do not change based on usage, such as depreciation, leasing costs, and flight crew salaries and flight-based maintenance.
Career Shares
DXC grants Career Sharesservice are vested in the form of RSUsmatching contributions credited to a select, limited number of key executives. The Compensation Committee believes that the Career Share program is a valuable compensation tool for attracting and retainingmid-career executive talent. Once vested, delivery of shares is designed to commence at retirement and be spread ratably in ten annual installments following retirement, thereby continuing to tie a portion of the executive’s post-retirement income to share value and promoting long-term alignment with stockholder interests.
The Career Share program replaced CSC’s Supplemental Executive Retirement Plan which was frozen in 2009 and is no longer maintained by DXC. The Career Share program is closed to new executives. At the beginning of fiscal 2020, Messrs. Lawrie and Saleh received grants of Career Shares equal to 25% of their fiscal 2019 base salary and annual cash incentive award for fiscal 2019. Career Shares for Messrs. Lawrie and Saleh have all fully vested as each of them has satisfied the requisite age and service for retirement.
70 |
|
|
Severance and Change in Control Compensation
| 2023 Proxy Statement |
To offer competitive total compensation packages to our executive officers, as well as to ensure the ongoing retention of these individuals, DXC offers certain post-employment benefits to a select group of executives, including its NEOs. Additional details about these severance arrangements are provided under the Potential Payments Upon Change in Control and Termination of Employment section.
DXC has also entered intonon-compete agreements with each of its executive officers other than the CEO. These agreements generally prohibit DXC’s executives from competing with DXC for 12 months following any termination of employment, prohibit DXC’s executives from soliciting DXC’s employees or clients for 24 months following any termination of employment, and contain anon-disclosure provision. DXC entered into these agreements in an effort to protect vital DXC interests. Mr. Salvino is subject to separatenon-compete requirements under the terms of his employment agreement. In addition, all of our employees who receive equity awards under our 2017 Omnibus Incentive Plan (including our NEOs) are subject to the terms of certainnon-compete and other restrictive covenants pursuant to the terms of such awards.
|
|
Section 6: Executive Compensation Tables
Summary Compensation Table
The following table provides information on the compensation of the NEOs paid or awarded by DXC for fiscal 2020, fiscal 2019 and fiscal 2018.
Name and Principal Position (a) | Fiscal Year (b) | Salary1 (c) | Bonus2 (d) | Stock Awards3 (e) | Option Awards4 (f) | Non-Equity Incentive Plan Comp.5 (g) | Change in Pension Value and Nonqualified Deferred Comp. Earnings6 (h) | All Other Comp.7 (i) | Total (j) | ||||||||||||||||||||||||||||||||||||
Michael J. Salvino President and Chief Executive Officer |
|
2020
|
|
$
|
658,654
|
|
$
|
3,250,000
|
|
$
|
9,350,018
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
61,833
|
|
$
|
13,320,505
|
| ||||||||||||||||||||||
|
2019
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
|
2018
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
Paul N. Saleh Executive Vice President and Chief Financial Officer |
|
2020
|
|
$
|
800,000
|
|
$
|
—
|
|
$
|
3,575,368
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
9,565
|
|
$
|
4,384,933
|
| ||||||||||||||||||||||
|
2019
|
|
$
|
800,000
|
|
$
|
1,500,000
|
|
$
|
4,151,523
|
|
$ —
|
$
|
1,244,421
|
|
$ —
|
$
|
9,517
|
|
$
|
7,705,461
|
| |||||||||||||||||||||||
|
2018
|
|
$
|
716,923
|
|
$
|
—
|
|
$
|
4,609,395
|
|
$ —
|
$
|
1,584,000
|
|
$ —
|
$
|
8,016
|
|
$
|
6,918,334
|
| |||||||||||||||||||||||
Mary E. Finch Executive Vice President, Chief Human Resources Officer |
|
2020
|
|
$
|
333,846
|
|
$
|
1,133,945
|
|
$
|
2,727,693
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
541
|
|
$
|
4,196,025
|
| ||||||||||||||||||||||
|
2019
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
|
2018
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
Vinod Bagal Executive Vice President, Global Transformation |
|
2020
|
|
$
|
247,596
|
|
$
|
1,038,185
|
|
$
|
1,698,507
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
401
|
|
$
|
2,984,689
|
| ||||||||||||||||||||||
|
2019
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
|
2018
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
Edward Ho Executive Vice President, General Manager, Americas |
|
2020
|
|
$
|
675,000
|
|
$
|
—
|
|
$
|
2,141,573
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
9,494
|
|
$
|
2,826,067
|
| ||||||||||||||||||||||
|
2019
|
|
$
|
675,000
|
|
$
|
—
|
|
$
|
2,337,902
|
|
$ —
|
$
|
540,000
|
|
$ —
|
$
|
9,344
|
|
$
|
3,562,246
|
| |||||||||||||||||||||||
|
2018
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||
J. Michael Lawrie Former Chairman, Chief Executive Officer |
|
2020
|
|
$
|
971,154
|
|
$
|
1,875,000
|
|
$
|
10,534,263
|
|
$ —
|
$
|
—
|
|
$ —
|
$
|
1,435,403
|
|
$
|
14,815,820
|
| ||||||||||||||||||||||
|
2019
|
|
$
|
1,250,000
|
|
$
|
—
|
|
$
|
12,476,347
|
|
$ —
|
$
|
3,125,000
|
|
$ —
|
$
|
405,192
|
|
$
|
17,256,539
|
| |||||||||||||||||||||||
|
2018
|
|
$
|
1,250,000
|
|
$
|
—
|
|
$
|
25,553,929
|
|
$ —
|
$
|
5,000,000
|
|
$ —
|
$
|
381,380
|
|
$
|
32,185,309
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
|
|
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
|
|
Personal Use of Corp Aircraft | Housing Expense | 401(k) Plan Matching Contribution | Basic Life Insurance Premiums | Financial Planning | Termination Benefits | Total All Other Compensation | |||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||
| Michael J. Salvino | $ | 60,979 | $ | — | $ | — | $ | 854 | $ | — | $ | — | $ | 61,833 | ||||||||||||||||||||||
Paul N. Saleh | $ | — | $ | — | $ | 8,269 | $ | 1,296 | $ | — | $ | — | $ | 9,565 | |||||||||||||||||||||||
Mary E. Finch | $ | — | $ | — | $ | — | $ | 541 | $ | — | $ | — | $ | 541 | |||||||||||||||||||||||
Vinod Bagal | $ | — | $ | — | $ | — | $ | 401 | $ | — | $ | — | $ | 401 | |||||||||||||||||||||||
Edward Ho | $ | — | $ | — | $ | 8,400 | $ | 1,094 | $ | — | $ | — | $ | 9,494 | |||||||||||||||||||||||
J. Michael Lawrie | $ | 343,241 | $ | 55,692 | $ | 10,029 | $ | 1,184 | $ | 25,000 | $ | 1,000,257 | $ | 1,435,403 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
Grants of Plan-Based Awards
The following table provides information about annual cash incentive awards, RSUs, PSUs and Career Shares granted to the NEOs in fiscal 2020,2023, which ended March 31, 2020.
Grant Date (b) | Approval Date (c) | Estimated Future Payments UnderNon-Equity Incentive Plan Awards(1) | Estimated Future Payments Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Units (j) | All Other Option Awards: Number of Securities Underlying Options (k) | Exercise of Base Price of Option Awards (l) | Grant Date Fair Value of Stock and Options Awards (m) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Threshold (d) | Target (e) | Maximum (f) | Threshold (g) | Target (h) | Maximum (i) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Salvino | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan |
| — |
| — | $ | 1,250,000 | $ | 2,500,000 | $ | 5,000,000 |
| — |
| — |
| — |
| — |
| — |
| — | $ | — | ||||||||||||||||||||||||||||||||||||
RSUs – Performance(2) |
| 12-Sep-19 |
| — | $ | — | $ | — | $ | — |
| 26,940 |
| 107,759 |
| 215,518 |
| — |
| — |
| — | $ | 3,500,012 | ||||||||||||||||||||||||||||||||||||
RSUs – Time Based(3) |
| 12-Sep-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 180,111 |
| — |
| — | $ | 5,850,005 | ||||||||||||||||||||||||||||||||||||
Paul N. Saleh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan |
| — |
| — | $ | 500,000 | $ | 1,000,000 | $ | 2,000,000 |
| — |
| — |
| — |
| — |
| — |
| — | $ | — | ||||||||||||||||||||||||||||||||||||
RSUs – Performance(2) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| 11,172 |
| 44,686 |
| 89,372 |
| — |
| — |
| — | $ | 2,220,894 | ||||||||||||||||||||||||||||||||||||
RSUs – Time-Based(3) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 19,151 |
| — |
| — | $ | 951,805 | ||||||||||||||||||||||||||||||||||||
RSUs – Career Shares(4) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 8,102 |
| — |
| — | $ | 402,669 | ||||||||||||||||||||||||||||||||||||
Mary E. Finch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan |
| — |
| — | $ | 385,000 | $ | 770,000 | $ | 1,540,000 |
| — |
| — |
| — |
| — |
| — |
| — | $ | — | ||||||||||||||||||||||||||||||||||||
RSUs – Time-Based(3) |
| 15-Nov-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 73,266 |
| — |
| — | $ | 2,727,693 | ||||||||||||||||||||||||||||||||||||
Vinod Bagal | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan |
| — |
| — | $ | 343,750 | $ | 687,500 | $ | 1,375,000 |
| — |
| — |
| — |
| — |
| — |
| — | $ | — | ||||||||||||||||||||||||||||||||||||
RSUs – Performance(2) |
| 15-Nov-19 |
| — | $ | — | $ | — | $ | — |
| 3,710 |
| 14,840 |
| 29,680 |
| — |
| — |
| — | $ | 552,493 | ||||||||||||||||||||||||||||||||||||
RSUs – Time-Based(3) |
| 15-Nov-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 30,782 |
| — |
| — | $ | 1,146,014 | ||||||||||||||||||||||||||||||||||||
Edward Ho | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan |
| — |
| — | $ | 371,250 | $ | 742,500 | $ | 1,485,000 |
| — |
| — |
| — |
| — |
| — |
| — | $ | — | ||||||||||||||||||||||||||||||||||||
RSUs – Performance(2) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| 7,541 |
| 30,163 |
| 60,326 |
| — |
| — |
| — | $ | 1,499,101 | ||||||||||||||||||||||||||||||||||||
RSUs – Time-Based(3) |
| 29-May19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 12,927 |
| — |
| — | $ | 642,472 | ||||||||||||||||||||||||||||||||||||
J. Michael Lawrie | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan |
| — |
| — | $ | 1,250,000 | $ | 2,500,000 | $ | 5,000,000 |
| — |
| — |
| — |
| — |
| — |
| — | $ | — | ||||||||||||||||||||||||||||||||||||
RSUs – Performance(2) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| 34,038 |
| 136,151 |
| 272,302 |
| — |
| — |
| — | $ | 6,766,705 | ||||||||||||||||||||||||||||||||||||
RSUs – Time-Based(3) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 58,351 |
| — |
| — | $ | 2,900,045 | ||||||||||||||||||||||||||||||||||||
RSUs – Career Shares(4) |
| 29-May-19 |
| — | $ | — | $ | — | $ | — |
| — |
| — |
| — |
| 17,455 |
| — |
| — | $ | 867,514 |
|
|
|
|
Estimated Future Payments Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payments Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock Units (#) (j) | All Other Option Awards: Number of Securities Underlying Options (#) (k) | Exercise of Base Price of Option Awards ($) (l) | Grant Date Fair Value of Stock and Options Awards ($) (m) | ||||||||||||||||||||||||||||||||||||
Name (a) | Grant Date (b) | Approval Date (c) | Threshold ($) (d) | Target ($) (e) | Maximum ($) (f) | Threshold (#) (g) | Target (#) (h) | Maximum (#) (i) | |||||||||||||||||||||||||||||||||
Michael J. Salvino | |||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan | — | — | 1,350,000 | 2,700,000 | 5,400,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
RSUs – Performance(2) | 31-May-22 | 16-May-22 | — | — | — | 144,038 | 288,075 | 575,150 | — | — | — | 12,781,878 | |||||||||||||||||||||||||||||
RSUs – Time-Based(3) | 31-May-22 | 16-May-22 | — | — | — | — | — | — | 123,461 | — | — | 4,348,296 | |||||||||||||||||||||||||||||
Kenneth P. Sharp | |||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan | — | — | 453,125 | 906,250 | 1,812,500 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
RSUs – Performance(2) | 31-May-22 | 16-May-22 | — | — | — | 35,945 | 71,889 | 143,778 | — | — | 3,189,706 | ||||||||||||||||||||||||||||||
RSUs – Time-Based(3) | 31-May-22 | 16-May-22 | — | — | — | — | — | — | 47,926 | — | — | 1,687,954 | |||||||||||||||||||||||||||||
Mary E. Finch | |||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan | — | — | 385,000 | 770,000 | 1,540,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
RSUs – Performance(2) | 31-May-22 | 16-May-22 | — | — | — | 20,415 | 40,830 | 81,660 | — | — | 1,811,627 | ||||||||||||||||||||||||||||||
RSUs – Time-Based(3) | 31-May-22 | 16-May-22 | — | — | — | — | — | — | 27,220 | — | — | 958,688 | |||||||||||||||||||||||||||||
Christopher Drumgoole | |||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan | — | — | 385,000 | 770,000 | 1,540,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
RSUs – Performance(2) | 31-May-22 | 16-May-22 | — | — | — | 17,013 | 34,025 | 68,050 | — | — | 1,509,680 | ||||||||||||||||||||||||||||||
RSUs – Time-Based(3) | 31-May-22 | 16-May-22 | — | — | — | — | — | — | 22,683 | — | — | 798,895 |
71 |
Estimated Future Payments Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payments Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock Units (#) (j) | All Other Option Awards: Number of Securities Underlying Options (#) (k) | Exercise of Base Price of Option Awards ($) (l) | Grant Date Fair Value of Stock and Options Awards ($) (m) | ||||||||||||||||||||||||||||||||||||
Name (a) | Grant Date (b) | Approval Date (c) | Threshold ($) (d) | Target ($) (e) | Maximum ($) (f) | Threshold (#) (g) | Target (#) (h) | Maximum (#) (i) | |||||||||||||||||||||||||||||||||
William L. Deckelman Jr. | |||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Plan | — | — | 330,000 | 660,000 | 1,320,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
RSUs – Performance(2) | 31-May-22 | 16-May-22 | — | — | — | 14,582 | 29,164 | 58,328 | — | — | 1,294,007 | ||||||||||||||||||||||||||||||
RSUs – Time-Based(3) | 31-May-22 | 16-May-22 | — | — | — | — | — | — | 19,443 | — | — | 684,782 | |||||||||||||||||||||||||||||
RSUs – Career Shares(4) | 31-May-22 | 16-May-22 | — | — | — | — | — | — | 8,871 | — | — | 312,437 |
72 | 2023 Proxy Statement |
2023
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name (a) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (b) | Number of Securities Underlying Unexercised Options Unexercisable (c) | Option Exercise Price (d) | Option Expiration Date (e) | Number of Shares or Units of Stock That Have Not Vested (f) | Market Value of Shares or Units of Stock That Have Not Vested(1) (g) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (h) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Vested(1, 2) (i) | |||||||||||||||||||||||
Michael J. Salvino |
| 9/12/2019
|
| — | — | — | — | — | — | 26,940 | (3) | $351,567 | ||||||||||||||||||||
| 9/12/2019
|
| — | — | — | — | 180,111 | (4) | $ | 2,350,449 | — | — | ||||||||||||||||||||
Paul N. Saleh |
| 5/29/2019
|
| — | — | — | — | 19,151 | (4) | $ | 249,921 | — | — | |||||||||||||||||||
| 5/29/2019
|
| — | — | — | — | — | — | 11,172 | (3) | $145,795 | |||||||||||||||||||||
| 5/30/2018
|
| — | — | — | — | 7,924 | (5) | $ | 103,408 | 23,773 | (6) | $310,238 | |||||||||||||||||||
| 5/30/2018
|
| — | — | — | — | 9,057 | (4) | $ | 118,194 | — | — | ||||||||||||||||||||
| 5/31/2017
|
| — | — | — | — | 4,338 | (4) | $ | 56,611 | — | — | ||||||||||||||||||||
| 5/31/2017
|
| — | — | — | — | 15,184 | (7) | $ | 98,151 | ||||||||||||||||||||||
| 5/15/2017
|
| — | — | — | — | 7,293 | (4) | $ | 95,174 | ||||||||||||||||||||||
| 5/27/2016
|
| 49,787 | — | $42.59 | 5/27/2026 | (9) | — | — | — | — | |||||||||||||||||||||
Mary E. Finch |
| 11/15/2019
|
| — | — | — | — | 73,266 | (4) | $ | 956,121 | — | — | |||||||||||||||||||
Vinod Bagal |
| 11/15/2019
|
| — | — | — | — | — | — | 3,710 | (3) | $48,416 | ||||||||||||||||||||
| 11/15/2019
|
| — | — | — | — | 30,782 | (4) | $ | 401,705 | — | — | ||||||||||||||||||||
Edward Ho |
| 5/29/2019
|
| — | — | — | — | — | — | 7,541 | (3) | $98,410 | ||||||||||||||||||||
| 5/29/2019
|
| — | — | — | — | 12,927 | (4) | $ | 168,697 | — | — | ||||||||||||||||||||
| 2/15/2019
|
| — | — | — | — | 1,337 | (5) | $ | 17,448 | 4,014 | (6) | $52,383 | |||||||||||||||||||
| 2/15/2019
|
| — | — | — | — | 1,529 | (4) | $ | 19,953 | (5) | — | — | |||||||||||||||||||
| 5/30/2018
|
| — | — | — | — | 4,012 | (5) | $ | 52,357 | 12,036 | (6) | $157,070 | |||||||||||||||||||
| 5/30/2018
|
| — | — | — | — | 4,585 | (4) | $ | 59,834 | (5) | — | — | |||||||||||||||||||
| 2/15/2018
|
| — | — | — | — | 15,985 | (8) | $ | 208,604 | (6) | — | — | |||||||||||||||||||
J. Michael Lawrie |
| 5/30/2018
|
| — | — | — | — | 24,145 | (5) | $ | 315,092 | 72,435 | (6) | $945,277 | ||||||||||||||||||
| 5/31/2017
|
| — | — | — | — | 56,021 | (7) | $ | 731,074 | — | — | ||||||||||||||||||||
| 5/27/2016
|
| 155,583 | — | $42.59 | 5/27/2026 | (9) | — | — | — | — | |||||||||||||||||||||
| 5/22/2015
|
| 438,231 | — | $26.58 | 5/22/2025 | (9) | — | — | — | — | |||||||||||||||||||||
| 5/16/2014
|
| 99,608 | — | $23.63 | 5/16/2024 | (9) | — | — | — | — | |||||||||||||||||||||
| 4/16/2012
|
| 4,962 | — | $10.63 | 4/16/2022 | (9) | — | — | — | — |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name (a) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) (b) | Number of Securities Underlying Unexercised Options Exercisable (#) (c) | Option Exercise Price ($) (d) | Option Expiration Date (e) | Number of Shares or Units of Stock That Have Not Vested (#) (f) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (g) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (h) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) (i) | |||||||||||||||||||||||
Michael J. Salvino | 6/2/20 | — | — | — | — | 43,318(2) | 1,107,208 | — | — | |||||||||||||||||||||||
6/2/20 | — | — | — | — | 779,727(3) | 19,929,822 | — | — | ||||||||||||||||||||||||
6/1/21 | — | — | — | — | 79,773(2) | 2,038,998 | 558,418(4) | 14,273,164 | ||||||||||||||||||||||||
5/31/22 | — | — | — | — | 123,461(2) | 3,155,663 | 576,150(5) | 14,726,394 | ||||||||||||||||||||||||
Kenneth P. Sharp | 12/15/20 | — | — | — | — | 12,309(6) | 314,618 | — | — | |||||||||||||||||||||||
12/15/20 | — | — | — | — | 36,927(3) | 943,854 | — | — | ||||||||||||||||||||||||
6/1/21 | — | — | — | — | 29,313(2) | 749,240 | 87,940(4) | 2,247,746 | ||||||||||||||||||||||||
5/31/22 | — | — | — | — | 47,926(2) | 1,224,989 | 143,778(5) | 3,674,966 | ||||||||||||||||||||||||
Mary E. Finch | 6/2/20 | — | — | — | — | 22,741(2) | 581,260 | — | — | |||||||||||||||||||||||
6/2/20 | — | — | — | — | 102,339(3) | 2,615,785 | — | — | ||||||||||||||||||||||||
6/1/21 | — | — | — | — | 21,984(2) | 561,911 | 65,954(4) | 1,685,784 | ||||||||||||||||||||||||
5/31/22 | — | — | — | — | 27,220(2) | 695,743 | 81,660(5) | 2,087,230 | ||||||||||||||||||||||||
Christopher Drumgoole | 4/15/20 | — | — | — | — | 28,309(6) | 723,578 | — | — | |||||||||||||||||||||||
6/2/20 | — | — | — | — | 11,370(2) | 290,617 | — | — | ||||||||||||||||||||||||
6/2/20 | — | — | — | — | 51,170(3) | 1,307,905 | — | — | ||||||||||||||||||||||||
6/1/21 | — | — | — | — | 14,656(2) | 374,607 | 43,970(4) | 1,123,873 | ||||||||||||||||||||||||
5/31/22 | — | — | — | — | 22,683(2) | 579,777 | 68,050(5) | 1,739,358 | ||||||||||||||||||||||||
William L. Deckelman Jr. | 5/22/15 | 67,575 | — | 26.58 | 5/22/25(7) | — | — | — | — | |||||||||||||||||||||||
5/27/16 | 23,991 | — | 42.59 | 5/27/26(7) | 2,329(8) | 59,529 | — | — | ||||||||||||||||||||||||
5/31/17 | — | — | — | — | 2,032(8) | 51,938 | — | — | ||||||||||||||||||||||||
5/30/18 | — | — | — | — | 4,701(8) | 120,158 | — | — | ||||||||||||||||||||||||
5/29/19 | — | — | — | — | 4,768(8) | 121,870 | — | — | ||||||||||||||||||||||||
6/2/20 | — | — | — | — | 16,244(2) | 415,197 | — | — | ||||||||||||||||||||||||
6/2/20 | — | — | — | — | 73,100(3) | 1,868,436 | — | — | ||||||||||||||||||||||||
6/2/20 | — | — | — | — | 9,747(8) | 249,133 | — | — | ||||||||||||||||||||||||
6/1/21 | — | — | — | — | 15,703(2) | 401,369 | 47,110(4) | 1,204,132 | ||||||||||||||||||||||||
6/1/21 | — | — | — | — | 11,177(8) | 285,684 | — | — | ||||||||||||||||||||||||
5/31/22 | — | — | — | — | 19,443(2) | 496,963 | 58,328(5) | 1,490,864 | ||||||||||||||||||||||||
5/31/22 | — | — | — | — | 8,871(8) | 226,743 | — | — |
|
|
|
| 73 |
|
|
|
|
|
|
|
Option Awards | Stock Awards | |||||||||||||||||||
Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting(1) | Value Realized on Vesting | |||||||||||||||||
Michael J. Salvino | — | $ — | — | $ | — | |||||||||||||||
Paul N. Saleh | — | $ — | 59,183 | $ | 2,702,022 | |||||||||||||||
Mary E. Finch | — | $ — | — | $ | — | |||||||||||||||
Vinod Bagal | — | $ — | — | $ | — | |||||||||||||||
Edward Ho | — | $ — | 3,057 | $ | 150,955 | |||||||||||||||
J. Michael Lawrie | — | $ — | 428,113 | $ | 15,584,962 |
Option Awards | Stock Awards | ||||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | ||||||||||||||
Michael J. Salvino | — | — | 212,493 | 7,036,105 | |||||||||||||
Kenneth P. Sharp | — | — | 26,966 | 839,035 | |||||||||||||
Mary E. Finch | — | — | 87,695 | 2,578,952 | |||||||||||||
Christopher Drumgoole | — | — | 57,344 | 1,778,917 | |||||||||||||
William L. Deckelman Jr. | 33,331 | 180,671 | 36,299 | 1,166,485 |
| |||||
74 | 2023 Proxy Statement |
Stock Awards | ||||
Shares Issued on Vesting | Value Realized on Vesting | |||
Michael J. Salvino | — | $ — | ||
Paul N. Saleh | 30,749 | $1,631,740 | ||
Mary E. Finch | — | $ — | ||
Vinod Bagal | — | $ — | ||
Edward Ho | 2,018 | $ 99,649 | ||
J. Michael Lawrie | 252,136 | $9,031,190 |
DXC
2023.
|
|
Each cash participant is required to select from among four notional investment options, and deferred amounts are credited with earnings (or losses) based on the participant’s investment choices. The notional investment options mirror actual investment options offered under DXC’s Matched Asset Plan. The annual returns of the notional investment options for the twelve-month period ending March 31, 20202023 were as follows: SSgA Money Market Fund, 2.25%2.6%; BlackRock Core Bond 1.57%Fund, -4.7%; Mellon S&P 500 Index Fund,-20.92% -7.7%; and SSgA Target Retirement Income-7.27% Fund, -4.97%.
Participants elect when they wish to receive distributions of their Deferred Compensation Plan account balances upon termination of employment, death, disability, change in control, or a date certain. There is a potentialsix-month delay in payments under the Deferred Compensation Plan to certain specified employees (as determined under Section 409A of the Internal Revenue Code) for amounts deferred on or after January 1, 2005 (as determined under Section 409A). The Deferred Compensation Plan provides for the crediting of earnings during any such payment delay period.
Executive Contributions in Last FY (b) | Aggregate Earnings in Last FY (c) | Aggregate Withdrawals/ Distribution (d) | Aggregate Balance at Last FYE (e) | |||||||||||||
Michael J. Salvino | $ | — |
| $ | — |
| $ | — |
| $ | — |
| ||||
Paul N. Saleh | $ | — |
| $ | — |
| $ | — |
| $ | — |
| ||||
Mary E. Finch | $ | — |
| $ | — |
| $ | — |
| $ | — |
| ||||
Vinod Bagal | $ | — |
| $ | — |
| $ | — |
| $ | — |
| ||||
Edward Ho | $ | — |
| $ | — |
| $ | — |
| $ | — |
| ||||
J. Michael Lawrie | $ | — |
| $ | 54,159 |
| $ | — |
| $ | 4,443,483 |
|
The Executive Contributions set forth on Column (b) of this table are reported as compensation in the applicable column of the Summary Compensation Table (i.e., fiscal 2020 salary and/or fiscal 2020non-equity incentive plan compensation). Earnings are not reported in the Summary Compensation Table.2022. There were no companyCompany contributions to the Deferred Compensation Plan on behalf of any NEOs for fiscal 2020.
Name (a) | Executive Contributions in Last FY ($) (b) | Aggregate Earnings in Last FY(1) ($) (c) | Aggregate Withdrawals/ Distribution ($) (d) | Aggregate Balance at Last FYE ($) (e) | ||||||||||
Michael J. Salvino | — | — | — | — | ||||||||||
Kenneth P. Sharp | — | (3,384) | — | 40,373 | ||||||||||
Mary E. Finch | — | — | — | — | ||||||||||
Christopher Drumgoole | — | — | — | — | ||||||||||
William L. Deckelman Jr. | — | — | — | — |
| 75 |
|
Changeamounts in Control Termination Benefits
The table below reflects the valuetables that follow reflect the terms of compensation and benefits that would have become payable to each of the NEOs (other than Mr. Lawrie) under DXC plans and arrangements existing as of March 31, 2020 (the final day of fiscal year 2020), if a change in control had occurred on that date and, in circumstances explained below, the executive’s employment had terminated. These amounts are reported based upon the executive’s compensation and service levels as of such date and, if applicable, in accordance with SEC regulations, based on DXC’s closing stock price of $13.05effect on March 31, 2020, the last trading day of fiscal 2020. These benefits are in addition to benefits available prior to the occurrence of any termination of employment, including under then-exercisable stock options, retirement plans and deferred compensation plans, and benefits available generally to salaried employees, such as distributions under DXC’s broad-based 401(k) plan. Mr. Lawrie is not included in the table below due to his termination prior to March 31, 2020; the actual compensation and benefits payable to Mr. Lawrie in connection with his termination are reported in the “Termination Benefits Unrelated to Change in Control” table below.
The actual amounts that would be paid upon an NEO’s termination of employment in connection with a change in control can be determined only at the time of any such event. Due to the number of factors that affect the nature and amount of any benefits provided upon such an event, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event, DXC’s stock price and the executive’s age and service.
The benefits payable as a result of a change in control as reported in the columns of this table are as follows:
Cash Severance Benefit: Under the Severance Plan and Mr. Salvino’s employment agreement, upon an involuntary termination without cause or a voluntary termination for good reason following a change in control (and, in the case of executives other than Mr. Salvino, within a specified number of years following a change in control), executives are paid a 2x multiple of base salary plus average annual cash incentive award earned/paid during the three fiscal years prior to which employment termination had occurred (or, in the case of Mr. Salvino, target annual bonus for the year of termination); Mr. Saleh is also entitled to accelerated payment of his retention bonuses upon termination of his employment without cause;
Annual Cash Incentive Award: Mr. Salvino’s employment agreement provides that, in the event of an involuntary termination without cause or a voluntary termination for good reason following a change in control, Mr. Salvino also will receive apro-rata annual cash incentive award for the year in which the termination occurs based on actual performance for the fiscal year in which the termination occurs;
Benefits Continuation: The Severance Plan provides that upon an involuntary termination without cause or a voluntary termination for good reason within a specified number of years following a change in control, executives also receive the continuation of certain health and welfare benefits for a specified period following the termination of employment; Mr. Salvino does not receive this benefit; however, for Mr. Salvino, in lieu of lifetime coverage under our group medical plan, we will pay Mr. Salvino a cash lump sum equal to $1,000,000 upon any termination of his employment with us;
Equity Awards: The amounts reported in the table below are the intrinsic value of RSU and PSU awards that vest only if the executive experiences a qualifying termination of employment on or after the change in control (the table below assumes such termination occurred on March 31, 2020);
Reduction to Avoid Excise Tax: None of the NEOs is entitled to an excise tax gross up. To the extent that any payments or benefits provided to Severance Plan participants or to Mr. Salvino (under his employment agreement) constitute excess
|
|
|
Additional information regarding the conditions under which these benefits are payable and the definitions used under the arrangements for determining whether an event triggering the benefit has occurred are discussed further following the table.
Potential Payments Upon Change in Control and Termination of Employment
Cash-based Payments | Equity-based Awards(1) | Total Payments(6) | ||||||||||||||||||||||
Cash Severance(2)
|
Misc Benefits Continuation (COBRA)(3)
|
Stock Options
|
Service- vesting RSUs(4)
| PSUs(5)
| (Cash + Equity)
| |||||||||||||||||||
Michael J. Salvino |
| $10,000,000 |
|
| $1,000,000 |
| $ | — |
| $ | 2,350,449 |
| $ | 1,406,255 |
| $ | 14,756,704 |
| ||||||
Paul N. Saleh |
| $ 6,485,614 |
|
| $ 49,680 |
| $ | — |
| $ | 519,886 |
| $ | 1,393,114 |
| $ | 8,448,294 |
| ||||||
Mary E. Finch |
| $ 2,940,000 |
|
| $ 28,351 |
| $ | — |
| $ | 956,121 |
| $ | — |
| $ | 3,924,472 |
| ||||||
Vinod Bagal |
| $ 2,625,000 |
|
| $ 46,064 |
| $ | — |
| $ | 401,705 |
| $ | 193,662 |
| $ | 3,266,431 |
| ||||||
Edward Ho |
| $ 675,000 |
|
| $ 41,522 |
| $ | — |
| $ | 457,088 |
| $ | 672,884 |
| $ | 1,846,494 |
| ||||||
Totals |
| $22,725,614 |
|
| $1,165,617 |
| $ | — |
| $ | 4,685,249 |
| $ | 3,665,915 |
| $ | 32,242,395 |
|
|
|
|
|
|
|
Change in Control Severance Plan for Senior Management and Key Employees
(Severance Plan)
•had a voluntary termination of employment for Good Reason (as defined below) within two years afterward, or
•had an involuntary termination of employment, other than for death, disability or Cause (as defined below), within three years afterward,
|
|
|
There is a potentialsix-month delay in payments and benefits provided under the Severance Plan to certain specified employees (as determined under Section 409A). The Severance Plan provides for the crediting of earnings during any such payment or benefits delay period.
The Severance Plan does not provide for any tax gross-ups on any amounts payable in connection with a Change in Control.
•Change ofin Control means the consummation of a change in the ownership of DXC, a change in effective control of DXC or a change in the ownership of a substantial portion of the assets of DXC, in each case, as defined under Section 409A of the Internal Revenue Code.
•A participant’s termination of employment with DXC is deemed for Good Reason if it occurs within six months of any of the following without the participant’s express written consent:
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4.A failure to continue in effect any stock option or other equity-based or non-equity based incentive compensation plan in effect immediately prior to the Change in Control, or a reduction in the participant’s participation in any such plan, unless the participant is afforded the opportunity to participate in an alternative incentive compensation plan of reasonably equivalent value; 5.A failure to provide the participant the same number of paid vacation days per year available to him or her prior to the Change in Control, or any material reduction or the elimination of any material benefit or perquisite enjoyed by the participant immediately prior to the Change in Control; 6.Relocation of the participant’s principal place of employment to any place more than 35 miles from the participant’s previous principal place of employment; 7.Any material breach by DXC of any provision of the Severance Plan or of any agreement entered into pursuant to the Severance Plan or any stock option or restricted stock agreement; 8.Conduct by DXC, against the participant’s volition, that would cause the participant to commit fraudulent acts or would expose the participant to criminal liability; or 9.Any failure by DXC to obtain the assumption of the Severance Plan or any agreement entered into pursuant to the Severance Plan by any successor or assign of DXC |
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provided that for purposes of bullets 2 through 5 above, Good Reason will not exist (i)(1) if the aggregate value of all salary, benefits, incentive compensation arrangements, perquisites and other compensation is reasonably equivalent to the aggregate value of salary, benefits, incentive compensation arrangements, perquisites and other compensation as in effect immediately prior to the change of control, or as in effect thereafter if the aggregate value of such items has been increased and such increase was approved prior to the change of control, or (ii)(2) if the reduction in aggregate value is due to reduced performance by DXC, the operating unit of DXC for which the participant is responsible, or the participant, in each case applying standards reasonably equivalent to those utilized by DXC prior to the change in control.
•Cause means:
1.fraud, misappropriation, embezzlement or other act of material misconduct against DXC or any of its affiliates
2.conviction of a felony involving a crime of moral turpitude
3.willful and knowing violation of any rules or regulations of any governmental or regulatory body material to the business of DXC,DXC; or
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4.substantial and willful failure to render services in accordance with the terms of the Severance Plan (other than as a result of illness, accident or other physical or mental incapacity), provided that (i)(1) a demand for performance of services has been delivered to the participant in writing by or on behalf of the Board of Directors at least 60 days prior to termination identifying the manner in which the Board believes that the participant has failed to perform and (ii)(2) the participant has thereafter failed to remedy such failure to perform.
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(as defined above), RSUs and PSUs granted by DXC provide for accelerated vesting upon an executive’s qualifying terminationat the greater of employment within two years following atarget or actual performance achieved as of the change in control, defined as a change in ownership of the company, a change in effective control of the company or a change in the ownership of a substantial portion of the assets of the company, in each case as defined in Section 409A of the Internal Revenue Code.control. In general, a qualifying termination of employment includes termination of the executive’s employment without cause at a time when the employee is meeting performance expectations (or, for Mr. Salvino, pursuant to the terms of his employment agreement, a termination without cause or termination for good reason), or termination due to death, disability, or retirement (for outstanding fiscal 2022 and prior equity awards, executive qualifies for retirement if separation from service occurs on or after age 62 with at least 10 years of service.
Termination Benefits Unrelated to Change in Control
The table below reflects the valueservice; for fiscal 2023 equity awards or later, executive qualifies for retirement if separation from service occurs on or after age 55 with at least 5 years of compensation and benefits that would have become payable to each of the NEOs (other than Mr. Lawrie) under DXC plans and arrangements existing as of March 31, 2020, if their employment had been terminated on that date in the circumstances explained below, and the termination wasservice).
The actual amounts that would be paid upon an NEO’s termination of employment absent a change in control can be determined only at the time of any such event. Due to the number of factors that affect the nature and amount of any benefits provided upon such an event, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event, DXC’s stock price and the executive’s age and service.
The benefits payable as a result of a termination of employment as reported in the columns of this table for the NEOs (other than Mr. Lawrie) are as follows:
Cash Severance Benefit: Under the Severance Policy, letter agreement terms, and Mr. Salvino’s employment agreement, upon an involuntary termination without cause (or, in Mr. Salvino’s case, a voluntary termination for good reason), executives are paid a multiple of base salary (plus, in certain cases, target annual cash incentive award); Mr. Saleh is also entitled to accelerated payment of his retention bonuses upon termination of his employment without cause;
Pro-Rata Bonus: The Severance Policy and Mr. Salvino’s employment agreement provide that, in the event of an involuntary termination without cause (or, in Mr. Salvino’s case, voluntary termination for good reason), executives also will receive apro-rata annual cash incentive award for the year in which the termination occurs based on actual performance;
Benefits Continuation: The Severance Policy provides that upon an involuntary termination without cause, executives also receive the continuation of certain health and welfare benefits for a specified period following the termination of employment; Mr. Salvino does not receive this benefit; however, for Mr. Salvino, in lieu of lifetime coverage under our group medical plan, we will pay Mr. Salvino a cash lump sum equal to $1,000,000 upon any termination of his employment with us; and
Equity Awards: The amounts reported in the table below are the intrinsic value of RSU awards that vest only if the executive experiences a qualifying termination of employment (the table below assumes such termination occurred on March 31, 2020).
Additional information regarding the conditions under which these benefits are payable and the definitions used under the arrangements for determining whether an event triggering the benefit has occurred are discussed further following the table. The amounts payable to Mr. Lawrie as set forth in the table are described below under “Separation Agreement with Mr. Lawrie.”
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Potential Payments Upon aNon-Change in Control Employment Termination
Cash Severance Benefit(1)
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Michael J. Salvino | $ | 10,000,000 |
| $ | 1,000,000 |
| $ | 1,848,219 |
| $ | 12,848,219 |
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Paul N. Saleh | $ | 3,800,000 |
| $ | 24,840 |
| $ | 519,886 |
| $ | 4,344,726 |
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Mary E. Finch | $ | 1,470,000 |
| $ | 14,176 |
| $ | — |
| $ | 1,484,176 |
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Vinod Bagal | $ | 1,312,500 |
| $ | 23,032 |
| $ | — |
| $ | 1,335,532 |
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Edward Ho | $ | 675,000 |
| $ | 41,522 |
| $ | — |
| $ | 716,522 |
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J. Michael Lawrie | $ | 9,791,667 |
| $ | 171,315 |
| $ | 8,755,801 |
| $ | 18,718,783 |
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Totals | $ | 27,049,167 |
| $ | 1,274,885 |
| $ | 11,123,906 |
| $ | 39,447,958 |
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Non-Change in Control Executive Officer Severance Policy
The company also maintains the Severance Policy to provide severance benefits to certain executives whose employment with the company is terminated in situations not involving a change in control. The Severance Policy covers executive officers reporting directly to the CEO who are subject to Section 16 of the 1934 Act, and certain othernon-Section 16 officers who report to the CEO, and provides for benefits similar to those offered under the Severance Plan.
Upon termination of employment by DXC without cause (as defined in the Severance Policy), each covered executive may receive, in the discretion of DXC and the Compensation Committee, up to 12 months of base salary continuation, paid in installments, and 12 months ofDXC-provided healthcare coverage continuation. Terminated executives also are eligible to receive apro-rata portion of the annual cash incentive award earned for the year of employment termination, subject to approval by the Compensation Committee.
For purposes of the Severance Policy, Cause means:
fraud, misappropriation, embezzlement or other act of material misconduct against the DXC or any of its affiliates
conviction of a felony involving a crime of moral turpitude
willful and knowing violation of any rules or regulations of any governmental or regulatory body material to the business of DXC, or substantial and willful failure to render services in accordance with the terms of his or her employment (other than as a result of illness, accident or other physical or mental incapacity), provided that (i) a demand for performance of services has been delivered to the employee in writing by the employee’s supervisor at least 60 days prior to termination identifying the manner in
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Vesting of Equity Awards UponNon-Change in Control Termination of Employment
Allall DXC annual equityRSU awards provide for accelerated vesting (unless the Compensation Committee determines otherwise) upon retirement (as defined above), other than for Cause (as defined below)above), at age 62 or older with at least 10 years of service (and,and, in the case of PSUs, provided the executive’s retirement date is more thanat least one year has elapsed during the performance period, then a pro-rata fraction of the award will vest after the grant date)performance period based on actual achievement). None ofMr. Deckelman was the NEOs wasonly NEO eligible to retire under thiseither definition stated above, as of March 31, 2020,2023, the last day of fiscal 2020.2023. In addition, all annual equity awards provide for accelerated vesting upon an executive’s termination of employment due to death or permanent disability, with vesting of annual-cycle PSUs occurring with respect to only apro-rata fraction of the target amount (based on the executive’s service during the applicable performance period), as opposed to the full target amount, if such termination occurred during the applicable performance period. If the NEOs other than Mr. Lawrie had terminated employment due to death or permanent disability on March 31, 2020, they would have each received the amounts shown next to their names for early vesting of RSUs and PSUs on the “Potential Payments Upon Change in Control and Termination of Employment” table above, except that amounts for annual-cycle PSU grants.amount. Mr. Salvino is entitled to accelerated vesting of equity awards in certain additional circumstances as described in “Employment Agreement with Mr. Salvino,” below.
Upon a termination of employment not in connection with a Change in Control for any reason other than those set forth in this paragraph, all annual equity awards will be forfeited.
•apro-rata annual cash incentive award for the year in which the termination occurred, based on DXC’s actual performance for the entire fiscal year, payable at the time annual cash incentive awards are generally paid (thepro-rata bonus);
78 | 2023 Proxy Statement |
•accelerated vesting of equity awards as described below.
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incentive award as shown on the Summary Compensation Table had Mr. Salvino terminated employment due to death or disability on March 31, 2020. pro rata bonus. Any outstanding inducement RSUs would vest in full upon Mr. Salvino’s termination due to death or disability as well.
Separation Agreement with Mr. Lawrie
Mr. Lawrie terminated from his position as President and Chief Executive Officer of DXC effective September 12, 2019 and as DXC’s Chairman of the Board on December 31, 2019. In connection with his termination, we amended Mr. Lawrie’sSalvino’s employment agreement with us (i) todoes not provide that Mr. Lawrie would continue to receive his annual base salary of $1,250,000 until his retirement as Chairmanfor any tax gross-ups on December 31, 2019, (ii) to acknowledge that Mr. Lawrie’s termination wasany amounts payable in connection with a Change in Control.
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Cash-based Payments | Equity-based Payments(1) | Total Payments(6) | |||||||||||||||||||||
Cash Severance(2) ($) | Misc. Benefits Continuation (COBRA)(3) ($) | Performance- Vesting RSUs(4) ($) | Service-Vesting RSUs(5) ($) | (Cash + Equity) ($) | |||||||||||||||||||
Michael J. Salvino | 13,770,000 | 1,000,000 | 42,845,129 | 6,301,869 | 63,916,998 | ||||||||||||||||||
Kenneth P. Sharp | 4,168,750 | 57,672 | 3,672,285 | 2,288,847 | 10,187,554 | ||||||||||||||||||
Mary E. Finch | 3,710,000 | 38,568 | 5,546,699 | 1,838,914 | 11,134,181 | ||||||||||||||||||
Christopher Drumgoole | 3,710,000 | 83,865 | 3,961,928 | 1,313,528 | 9,069,321 | ||||||||||||||||||
William L. Deckelman Jr. | 3,180,000 | 62,235 | 3,486,256 | 1,968,580 | 8,697,071 |
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Cash Severance Benefit(1) ($) | Benefits Continuation(2) ($) | Performance- Vesting RSUs(3) ($) | Service- Vesting RSUs(3) ($) | Total Payments ($) | ||||||||||||||||
Michael J. Salvino | Termination without Cause/for Good Reason | 9,720,000 | 1,000,000 | —(4) | 2,471,585(4) | 13,191,585 | ||||||||||||||
Death/Disability | 1,620,000 | — | 19,726,826(5) | 6,301,869(5) | 27,648,695 | |||||||||||||||
Kenneth P. Sharp | Termination without Cause/for Good Reason | 1,631,250 | 28,836 | — | — | 1,660,086 | ||||||||||||||
Death/Disability | — | — | 1,768,889(5) | 2,288,847(5) | 4,057,736 | |||||||||||||||
Mary E. Finch | Termination without Cause/for Good Reason | 1,470,000 | 19,284 | — | — | 1,489,284 | ||||||||||||||
Death/Disability | — | — | 2,552,813(5) | 1,838,914(5) | 4,391,727 | |||||||||||||||
Christopher Drumgoole | Termination without Cause/for Good Reason | 1,470,000 | 41,933 | — | — | 1,511,933 | ||||||||||||||
Death/Disability | — | — | 1,472,458(5) | 1,968,580(5) | 3,441,038 | |||||||||||||||
William L. Deckelman Jr. | Termination without Cause/for Good Reason | 996,000 | 31,117 | — (6) | 639,390(6) | 1,666,507 | ||||||||||||||
Retirement | — | — | — (6) | 639,390(6) | 639,390 | |||||||||||||||
Death/Disability | — | — | 1,823,439(5) | 1,313,528 (5) | 3,136,867 |
Given that Mr. Lawrie’s termination qualified as a terminationwithout cause or for good reason, pursuanta pro rata portion (based on NEO's service during the performance period) of annual cycle PSUs as to Section 5(d)which at least one year in the performance period has elapsed at the time of his employment agreement, Mr. Lawrie became entitled to receive severance benefits in connection with his termination as follows: (a) apro-rata annual bonus for fiscal year 2020, based on Mr. Lawrie’s target annual bonus, equal to $1,875,000 (75% x $2,500,000); (b) a payment equal to $7,916,667, payable in twenty-four (24) equal monthly installments following Mr. Lawrie’s retirement as Chairman on December 31, 2019. In addition, in accordance with their terms and the terms of the employment agreement, as of September 12, 2019, (i) Mr. Lawrie’s outstanding stock options immediately vested and will remain exercisable for the lesser of five (5) years after his termination or the expiration of their term; (ii) Mr. Lawrie’s outstanding fiscal 2018-2020 and fiscal 2019-2021 PSU awards were towould remain outstanding and eligible to vest at the end of the performance period, based on performance as if termination had not occurred (and Executive’s outstanding fiscal 2020-2022 PSU award was forfeited), (iii) Mr. Lawrie’s outstanding RSU awards immediately vested as of September 12, 2019; and (iv) Mr. Lawrie’s outstanding Career Shares, which were already vested, will be settledoccurred. No value is reported in ten annual installments after his termination in accordance with the terms thereof.
With respect to Mr. Lawrie’s supplemental PSU award granted June 15, 2017, 75%"Performance-Vesting RSUs" column of the award vested and settled on September 12, 2019, andtable above because vesting remains subject to ongoing performance conditions. As of March 31, 2023, the remaining 25%potential total value would be $27,948,045, which includes 150% payout of the award remainedfiscal 2021 PSUs based on performance and 188% of the fiscal 2022 PSUs based on performance. In addition, a pro rata portion of Mr. Salvino's annual-cycle time-based RSUs vest based on service during the vesting period.
Following his retirement as Chairman, Mr. Lawrie agreed to provide consulting services to the Board and Mr. Salvino on anas-needed basis for atwo-year period until December 31, 2021 at a rate of $500 per hour. In addition, the Company will: (i) help procure office facilities and administrative support for Mr. Lawrie for atwo-year period, (ii) provide financial planning and accounting support (up to $25,000), and (iii) provide security services (up to $60,000) for aone-year period following his retirement as Chairman.
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We used the same median employee in our pay ratio calculation for fiscal 2023 as we used in fiscal 2022 and fiscal 2021, as permitted under the SEC rules, because there has been no change in our employee population or compensation arrangements that we believe would significantly impact our pay ratio disclosure. As required under the SEC rules, a new median employee will be identified for the fiscal 2024 disclosure.
DXC is using the same median employee as last year, since there has been no change in the company’s employee population or employee compensation arrangements, which DXC reasonably believes would result in a significant change in the company’s pay ratio disclosure.
•We used January 1, 20192021, as the date to identify our median employee. The median employee was determined by using total taxable income, also referred to asW-2 earnings, for all U.S. employees and equivalent total taxable income for employees located outside of the United States, for the 20182020 calendar year.
•Annualized salaries for full-time and part-time permanent employees that were not employed for the full calendar year of 20182020 were used. We did not annualize the salaries of seasonal or temporary employees.
•For employees located outside of the United States, local currency compensation was converted to U.S. dollars using the company’sCompany’s standard exchange rates for fiscal 2019,2021, which are also used for financial reporting purposes.
•Given DXC’s presence in approximately 70 countries, in determining the median employee we usedcost-of-living adjustments to normalize differences in the underlying economic conditions of the countries where DXC operates, as permitted under the rules.Cost-of-living adjustments were initially based on the World Bank’s 20182020 PPP ratio, or Purchasing Power Parity, for all countries outside of the United States.
•As permitted by the de minimis exemption under the rules, we excluded 6,4946,847 employees in Brazil (3,229), Costa Rica (1,904)(1,845), Switzerland (616), New Zealand (566), Sweden (448), Hungary (441), Lithuania (342), Ireland (302), Hong Kong (266), Portugal (259), Chile (258), Austria (250), Norway (225), Taiwan (216), Thailand (205), Serbia (113), Colombia (108), Luxembourg (106), Finland (75), Peru (74), Republic of Korea (68), Indonesia (47)(35), MoroccoFiji (15), Panama (6), Nigeria (6)Greece (5), Tunisia (193)Croatia (2), Vietnam (1,109),and Cyprus (1) who, as a group, represented approximately 5% of our total employee population of nearly 130,000131,500 on January 1, 2019.2021. As a result of these exclusions, the employee population used to identify our median employee consisted of approximately 123,500124,650 employees.
Additionally,In accordance with the Pay Ratio Rule, we excluded approximately 14,000 employees who were part of DXC’s acquisition of Luxoftcalculated the median employee’s annual total compensation in June 2019,the same manner as permitted under the rules.
CEO’s annual total compensation was calculated in the fiscal 2023 Summary Compensation Table. Our previously identified median employee, determined usingcost-of-living adjustments, resides in India.the Philippines. The annual total compensation of the median employee was $41,602, with the application of the samecost-of-living adjustments used to determine the median employee.$39,684. Theannualized total compensation of Mr. Salvino, our CEO, was $18,973,666, which we calculated by annualizing his base salary, stock awards, and all other compensation that would have been incurred if he had been employed for$20,317,972, the full year with DXC and including any bonus payment for fiscal 2020 andone-time inducements. Theamount reported in the “Total” column of the Summary Compensation Table. Accordingly, the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee was 456:1, withcost-of-living adjustments applied.512:1. Without the application ofcost-of-living adjustments, the previously identified median employee resides in India. The annual total compensation of the median employee was $30,693,$34,107, resulting in a ratio of 618:596:1.
82 | 2023 Proxy Statement |
Fiscal Year | Summary Compensation Total for PEO(1) ($) | Compensation Actually Paid to PEO(1)(2)(3) ($) | Average Summary Compensation Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) ($) | Value of Initial Fixed $100 Investment Based On: | Net Income ($ in millions) | Free Cash Flow(5) ($ in millions) | |||||||||||||||||||
TSR ($) | Peer Group TSR(4) ($) | |||||||||||||||||||||||||
2023 | 20,317,972 | (1,015,552) | 4,204,094 | 1,442,117 | 209.53 | 162.66 | (566) | 737 | ||||||||||||||||||
2022 | 28,716,680 | 30,679,306 | 4,832,088 | 5,153,180 | 276.76 | 184.28 | 736 | 743 | ||||||||||||||||||
2021 | 21,733,120 | 44,697,450 | 5,146,324 | 6,300,328 | 261.37 | 169.51 | (146) | (652) |
Fiscal 2021 | Fiscal 2022 | |||||||
Kenneth P. Sharp | Kenneth P. Sharp | Kenneth P. Sharp | ||||||
Mary E. Finch |
| Mary E. Finch | ||||||
Vinod Bagal | William L. Deckelman Jr. | Christopher Drumgoole | ||||||
William L. Deckelman Jr. | Vinod Bagal | William L. Deckelman Jr. | ||||||
Paul N. Saleh | ||||||||
Neil Manna |
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Fiscal Year | Summary Compensation Table Total for Mr. Salvino ($) | Exclusion of Stock Awards for Mr. Salvino ($) | Total - Inclusion of Equity Values for Mr. Salvino ($) | Compensation Actually Paid to Mr. Salvino ($) | ||||||||||
2023 | 20,317,972 | 17,130,174 | (4,203,350) | (1,015,552) | ||||||||||
2022 | 28,716,680 | 25,087,727 | 27,050,353 | 30,679,306 | ||||||||||
2021 | 21,733,120 | 15,311,312 | 38,275,642 | 44,697,450 |
Fiscal Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | ||||||||||
2023 | 4,204,094 | 3,061,944 | 299,967 | 1,442,117 | ||||||||||
2022 | 4,832,088 | 3,599,308 | 3,920,400 | 5,153,180 | ||||||||||
2021 | 5,146,324 | 2,807,624 | 3,961,628 | 6,300,328 |
Fiscal Year | Year End Fair Value of Equity Awards Granted During Year that Remained Unvested as of Last Day of Year for Mr. Salvino ($) | Change in Fair Value of Prior Awards that Remained Unvested at Year End for Mr. Salvino ($) | Vesting Date Fair Value of Equity Awards Granted During Year that Vested During Year for Mr. Salvino ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During the Year for Mr. Salvino ($) | Value of Dividends Paid on Stock Awards Not Otherwise Included for Mr. Salvino ($) | Total - Inclusion of Equity Values for Mr. Salvino ($) | ||||||||||||||
2023 | 10,916,402 | (15,247,425) | — | 102,458 | 25,215 | (4,203,350) | ||||||||||||||
2022 | 23,666,951 | 3,071,643 | — | 286,543 | 25,216 | 27,050,353 | ||||||||||||||
2021 | 34,966,312 | 1,622,393 | 1,271,467 | 390,254 | 25,216 | 38,275,642 |
84 | 2023 Proxy Statement |
Fiscal Year | Average Year End Fair Value of Equity Awards Granted During Year that Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value of Prior Awards that Remained Unvested at Year End for Non-PEO NEOs ($) | Average Vesting Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During the Year for Non-PEO NEOs ($) | Average Value of Dividends Paid on Stock Awards Not Otherwise Included for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | ||||||||||||||
2023 | 1,934,108 | (1,606,924) | 78,109 | (108,393) | 3,067 | 299,967 | ||||||||||||||
2022 | 3,235,621 | 370,681 | 106,489 | 201,597 | 6,012 | 3,920,400 | ||||||||||||||
2021 | 3,601,866 | 41,020 | 196,348 | 94,901 | 27,493 | 3,961,628 |
Free Cash Flow | ||
Organic Revenue Growth % | ||
Adjusted EBIT Margin % | ||
Relative TSR |
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86 | 2023 Proxy Statement |
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DXC.
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2023 Annual Meeting.
Annual Meeting.
Annual Meeting.
materials, please contact your broker, bank or other nominee well in advance of the Annual Meeting for instructions on how to obtain a 16-digit control number and access the virtual meeting as a “stockholder.”
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88 | 2023 Proxy Statement |
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1-855-449-0991 (U.S. Domestic Toll Free)
1-720-378-5962 (International)
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call the numbers that will be listed on the virtual meeting website.
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•to elect the 1011 director nominees listed in this proxy statement,
•to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2021,
•to approve, in anon-binding advisory vote, our named executive officer compensation; and
to approve an increase in the number of shares available under the DXC Technology Company 2017 Omnibus Incentive Plan, and
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to approve an increase in7.What are the numberBoard of shares available under the DXC Technology Company 2017Non-Employee Director Incentive Plan.
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Proposal No. 1 | FOR the election of each of the | |||||
Proposal No. 2 | FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, | |||||
Proposal No. 3 | FOR the approval, in anon-binding advisory vote, of our named executive officer compensation | |||||
Proposal No. 4 |
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90 | 2023 Proxy Statement |
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For each matter presented, stockholders entitled to castmeeting?
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2024.
We do not expect any broker non-votes on this proposal.
Thisholding future non-binding advisory votes on named executive officer compensation.
Proposal 5—Approval of increase in shares available under the DXC Technology Company 2017Non-Employee Director Incentive Plan.
This proposal requires an affirmative FOR vote of a majority ofall the votes cast (i.e.,on Proposal 4 is the option that will be deemed the recommendation of the votes FOR or AGAINST) to be approved. Abstentions and,stockholders.
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I don’t give specific voting instructions?
•indicate when voting by Internet or by telephone that you wish to vote as recommended by our Board, or
•return a signed proxy card but do not indicate how you wish to vote,
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the trustee how to vote the shares of DXC common stock allocated to his or her account. The MAP trustee will vote all unallocated shares of common stock held by the MAP and all allocated shares for which no timely voting
92 | 2023 Proxy Statement |
July 20, 2023.
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However, please note that if you would like to vote at the annual meeting and you are not the stockholder of record, you must have your 16-digit control number.
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return your notice, proxy card or voting instruction card. Telephone and Internet voting facilities are available now and will be available 24 hours a day until 11:59 p.m., Eastern Time on August 12, 2020.July 24, 2023. You also will be able to vote your shares electronically at the annual meeting (other than shares held through our Matched Asset Plan, which must be voted prior to the meeting).
Company.
94 | 2023 Proxy Statement |
Corporate
1775 Tysons Boulevard
Tysons, Virginia 22102
Facsimile:1-703-991-0430
•not earlier than the close of business on April 15, 2021;March 27, 2024; and
•not later than the close of business on May 17, 2021.
95 20202023 Annual Report and Proxy Statementnotice,copy of proxy statement or annual reportmaterials to an address shared by two or more stockholders. This delivery method, referred to as “householding”,“householding,” can result in significant cost savings for the company.Company. To take advantage of this opportunity, DXC, and banks and brokerage firms that hold your shares, have delivered only one notice,copy of proxy statement or annual reportmaterials to multiple stockholders who share an address unless one or more of the stockholders has provided contrary instructions. DXC will deliver promptly, upon written or oral request, a separate copy of the notice, proxy statement or annual reportmaterials to a stockholder at a shared address to which a single copy of the documents was delivered.notice, 2020 Annual Report or this proxy statement, with exhibits,materials, these documents are available on the Company’s website, www.dxc.technology,www.dxc.com, underAbout Us/Investor Relations/ “Financials/SEC Filings.Filings.” These documents are also available without charge to any stockholder, upon request, by calling1-703-245-9700emailing investor.relations@dxc.com or writing to:1775 Tysons BoulevardTysons,22102
2014783
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If you share the same address with other DXC stockholders and would like to start or stop householding for your account, you can call1-866-540-7095 or write to: Householding Department, Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717, including your name, the name of your broker or other holder of record and your account number(s).
Forward-Looking Statements
All statements in this proxy statement that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control. For a written description of these factors, see the section titled “Risk Factors” in DXC’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020, and any updating information in subsequent SEC filings. No assurance can be given that any goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. DXC disclaims any intention or obligation to update these forward-looking statements whether as a result of subsequent event or otherwise, except as required by law.
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Appendix A – Independence Standards
A director is “independent” if the Board of Directors has determined that he or she has no material relationship with DXC Technology or any of its consolidated subsidiaries (collectively, the “Company”), either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company. For purposes of this definition, the Board has determined that a director is not “independent” if:
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An “immediate family” member includes a director’s spouse, parents, children, siblings,mother-in-law andfather-in-law,sons-in-law anddaughters-in-law,brothers-in-law andsisters-in-law, and anyone (other than a domestic employee) who shares the director’s home.
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Adjusted Free Cash Flow
A reconciliation of net cash provided by operating activities to adjusted free cash flow is as follows:
Fiscal Year Ended | |||||
(in millions) | March 31, 2020 | ||||
Net cash provided by operating activities | $ | 2,350 | |||
Net cash used in investing activities(1) |
| (2100 | ) | ||
Acquisitions, net of cash acquired |
| 1997 | |||
Payments on capital leases and other long-term asset financings |
| (865 | ) | ||
Payments on transaction, separation and integration-related costs |
| 257 | |||
Payments on restructuring costs |
| 334 | |||
Arbitration award |
| (632 | ) | ||
Adjusted free cash flow | $ | 1,341 |
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| 97 |
Appendix C – DXC Technology Company 2017 Omnibus Incentive Plan
Originally Effective March 30, 2017
Amended and Restated Effective August 13, 2020
Section 1
Purpose and Objectives
This DXC Technology Company 2017 Omnibus Incentive Plan (this “Plan”) was adopted by Everett SpinCo, Inc. (“Everett”), the predecessor of DXC Technology Company, prior to the spinoff of Everett from Hewlett Packard Enterprise Company (“HPE”) effective as of March 31, 2017 (the “Spinoff”).
The primary purpose of the Plan is to reward selected corporate officers and key employees of the Company and its Subsidiaries by enabling them to acquire shares of common stock of the Company and/or through the provision of cash payments. The Plan is designed to attract and retain employees of the Company and its Subsidiaries and to encourage the sense of proprietorship in the Company and its Subsidiaries.
The Plan also governs the terms of certain Spinoff Awards and CSC Rollover Awards assumed by the Company in connection with the Spinoff and the merger with Computer Sciences Corporation (“CSC”) following the Spinoff (the “CSC Merger”).
Section 2
Definitions
As used herein, the terms set forth below shall have the following respective meanings:
(a) “Authorized Officer” means the Chairman of the Board, the Chief Executive Officer of the Company or the Chief Human Resources Officer of the Company (or any other senior officers of the Company to whom any of such individuals shall delegate the authority to execute any Award Agreement).
(b) “Award” means the grant of any Option, Stock Appreciation Right, Stock Award, or Cash Award, any of which may be structured as a Performance Award, whether granted singly, in combination or in tandem, to a Participant pursuant to such applicable terms, conditions, and limitations as the Committee may establish in accordance with the objectives of this Plan, including any Spinoff Awards and any CSC Rollover Awards.
(c) “Award Agreement” means the document (in written or electronic form) communicating the terms, conditions and limitations applicable to an Award. The Committee may, in its discretion, require that the Participant execute such Award Agreement, or may provide for procedures through which Award Agreements are made available but not executed. Any Participant who is granted an Award and who does not affirmatively reject the applicable Award Agreement shall be deemed to have accepted the terms of Award as embodied in the Award Agreement.
(d) “Board” means the Board of Directors of the Company.
(e) “Cash Award” means an Award denominated in cash and that may be settled only in cash.
(f) “Change in Control” means the consummation of a “change in ownership” of the Company, a “change in effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company, and in each case, as defined under Code Section 409A.
(g) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(in millions) | Fiscal Year Ended March 31, 2023 | |||||||
Net loss |
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(h) “Committee” means the Compensation Committee of the Board, and any successor committee thereto or such other committee of the Board as may be designated by the Board to administer this Plan in whole or in part including any subcommittee of the Board as designated by the Board.
(i) “Common Stock” means the Common Stock, par value $0.01 per share, of the Company.
(j) “Company” means DXC Technology Company, a Nevada corporation, or any successor thereto.
(k)“CSC” has the meaning set forth in Section 1.
(l)“CSC Merger” has the meaning set forth in Section 1.
(m)“CSC Rollover Awards” means employee equity awards granted under one or more CSC equity incentive plans which were converted and assumed by the Company in connection with the CSC Merger in accordance with the terms of the Employee Matters Agreement.
(n) “Disability” means, unless otherwise provided in an Award Agreement, a disability that entitles the Employee to benefits under the Company’s long-term disability plan, as may be in effect from time to time, as determined by the plan administrator of the long-term disability plan, or if the Employee is not a participant under the Company’s long-term disability plan, as determined if the Employee were a participant in a long-term disability plan that covers similarly situated employees. Notwithstanding the foregoing, if an Award is subject to Code Section 409A and Disability is a payment event, the definition of Disability shall conform to the requirements of Treasury Regulation §1.409A-3(i)(4)(i).
(o) “Dividend Equivalents” means, in the case of Restricted Stock Units or Performance Units, an amount equal to all dividends and other distributions (or the economic equivalent thereof) that are payable to shareholders of record during the Restriction Period or performance period, as applicable, on a like number of shares of Common Stock that are subject to the Award.
(p) “Effective Date” means March 30, 2017, the date prior to the Spinoff on which this Plan was approved by HPE as sole shareholder of Everett SpinCo, Inc., the predecessor to the Company.
(q) “Employee” means an employee of the Company or any of its Subsidiaries.
(r)“Employee Matters Agreement” means the amended and restated employee matters agreement between Everett SpinCo, Inc., HPE and CSC dated March 31, 2017, as amended.
(s) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
(t) “Exercise Price” means the price at which a Participant may exercise his right to receive cash or Common Stock, as applicable, under the terms of an Award.
(u) “Fair Market Value” of a share of Common Stock means, as of a particular date, (1) if shares of Common Stock are listed on a national securities exchange, the closing sales price per share of Common Stock on the consolidated transaction reporting system for the principal national securities exchange on which shares of Common Stock are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, (2) if the Common Stock is not so listed, the average of the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, as reported by an inter-dealer quotation system, (3) if shares of Common Stock are not publicly traded, the most recent value determined by an independent appraiser appointed by the Committee for such purpose, or (4) if none of the above are applicable, the fair market value of a share of Common Stock as determined in good faith by the Committee.
(v) “Fiscal Year” means a fiscal year of the Company.
(566) | |||||||
(319) | |||||||
Interest income | (135) | ||||||
Interest expense | 200 | ||||||
EBIT | (820) | ||||||
Restructuring costs | 216 | ||||||
Transaction, separation, and integration-related costs | 16 | ||||||
Amortization of acquired intangible assets | 402 | ||||||
Merger related indemnification | 46 | ||||||
SEC Matter | 8 | ||||||
Gains on dispositions | (190) | ||||||
Pension and OPEB actuarial and settlement losses | 1,431 | ||||||
Arbitration loss | 29 | ||||||
Impairment losses | 19 | ||||||
Adjusted EBIT | $ | 1,157 | |||||
EBIT Margin | (5.7) | % | |||||
Adjusted EBIT Margin | 8.0 | % |
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(w) “Grant Date” means the date an Award is granted to a Participant and, with respect to any Spinoff Award or CSC Rollover Award, shall mean the date the award was originally granted.
(x) “HPE” has the meaning set forth in Section 1.
(y) “Incentive Stock Option” means an Option that is intended to comply with the requirements set forth in Code Section 422.
(z) “Nonqualified Stock Option” means an Option that is not intended to comply with the requirements set forth in Code Section 422.
(aa) “Option” means a right to purchase a specified number of shares of Common Stock at a specified Exercise Price, which is either an Incentive Stock Option or a Nonqualified Stock Option, including any such right that is Spinoff Award or CSC Rollover Award.
(bb) “Participant” means an Employee to whom an Award has been made under this Plan. Participant also includes any holder of a Spinoff Award or a CSC Rollover Award.
(cc) “Performance Award” means an Award made pursuant to this Plan to a Participant which is subject to the attainment of one or more Performance Goals. A Performance Award may be in the form of Performance Unit Awards, Restricted Stock Awards, Options, SARs or Cash Awards.
(dd) “Performance Goal” means one or more standards established by the Committee to determine in whole or in part whether a Performance Award shall be earned.
(ee) “Performance Unit” means a unit evidencing the right to receive in specified circumstances cash or shares of Common Stock or equivalent value of Common Stock in cash, the value of which at the time it is settled is determined as a function of the extent to which established performance criteria have been satisfied. Performance Units may take the form of performance-based Restricted Stock Units or Cash Awards.
(ff) “Performance Unit Award” means an Award in the form of Performance Units.
(gg) “Restricted Stock” means a share of Common Stock that is restricted or subject to forfeiture provisions.
(hh) “Restricted Stock Award” means an Award in the form of Restricted Stock.
(ii) “Restricted Stock Unit” means a unit evidencing the right to receive in specified circumstances one share of Common Stock or equivalent value in cash that is restricted or subject to forfeiture provisions.
(jj) “Restricted Stock Unit Award” means an Award in the form of Restricted Stock Units.
(kk) “Restriction Period” means a period of time beginning as of the date upon which a Restricted Stock Award or Restricted Stock Unit Award is made pursuant to this Plan and ending as of the date upon which such Award is no longer restricted or subject to forfeiture provisions.
(ll)“Spinoff Awards” means employee equity awards granted under one or more HPE equity incentive plans which were converted and assumed by the Company in connection with the Spinoff in accordance with the terms of the Employee Matters Agreement.
(mm) “Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value of a specified number of shares of Common Stock on the date the right is exercised over a specified Exercise Price, including any such right that is a Spinoff Award or CSC Rollover Award.
(in millions) | Fiscal Year Ended March 31, 2022 | ||||||||
Net income | $ | 736 | |||||||
Income tax expense |
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| 405 |
(nn) “Stock Award” means an Award in the form of shares of Common Stock, including a Restricted Stock Award, and a Restricted Stock Unit Award or Performance Unit Award that may be settled in shares of Common Stock, and excluding Options and SARs, including any such Award that is a Spinoff Award or CSC Rollover Award.
(oo) “Stock-Based Award Limitations” has the meaning set forth in Section 4.3.
(pp) “Subsidiary” means any corporation, partnership, association, joint stock company, business trust, unincorporated organization or other entity that the Company controls directly, or indirectly through one or more intermediaries.
Section 3
Eligibility
All Employees are eligible for Awards under this Plan. The Committee shall determine the type or types of Awards to be made under this Plan and shall designate from time to time the Employees who are to be granted Awards under this Plan. In addition, holders of Spinoff Awards and CSC Rollover Awards shall be eligible to participate in the Plan.
Section 4
Shares Subject to Awards
4.1Common Stock Available for Awards. Subject to the provisions of Section 18 hereof, there shall be available for Awards under this Plan granted wholly or partly in Common Stock (including rights or Options that may be exercised for or settled in Common Stock) an aggregate of 51,200,000 shares of Common Stock (the “Maximum Share Limit”). Each Award (including a Spinoff Award or CSC Rollover Award) granted under the Plan, regardless of type, shall reduce the Maximum Share Limit by one share for each share associated with the Award.
Such shares shall be reserved from authorized but unissued shares, treasury shares and from shares which have been reacquired by the Company. The Board and the appropriate officers of the Company shall from time to time take whatever actions are necessary to file any required documents with governmental authorities, stock exchanges and transaction reporting systems to ensure that shares of Common Stock are available for issuance pursuant to Awards.
4.2Share Counting. If an Award (including a Spinoff Award or CSC Rollover Award) expires or is terminated, cancelled or forfeited, the shares of Common Stock associated with the expired, terminated, cancelled or forfeited Award shall again be available for Awards under this Plan. The Maximum Share Limit shall be increased by one share of Common Stock for each share associated with such terminated, cancelled or forfeited Award.
In addition, the following principles shall apply in determining the number of shares under any applicable limit within the Maximum Share Limit:
(a) Shares of Common Stock that are tendered by a Participant or withheld as full or partial payment to satisfy minimum withholding taxes shall not become available again for issuance under this Plan;
(b) Shares of Common Stock that are tendered by a Participant or withheld as full or partial payment for the Exercise Price of an Award shall not become available again for issuance under this Plan;
(c) Shares of Common Stock reserved for issuance upon grant of an SAR, to the extent the number of reserved shares of Common Stock exceeds the number of shares of Common Stock actually issued upon exercise or settlement of such SAR, shall not become available again for issuance under this Plan;
(d) Awards that by their terms may only be settled in cash shall not reduce the Maximum Share Limit under this Plan; and
(e) If cash is issued in lieu of shares of Common Stock pursuant to an Award, such shares shall not become available again for issuance under this Plan.
Interest income | (65) | ||||
Interest expense | 204 | ||||
EBIT | 1,280 | ||||
Restructuring costs | 318 | ||||
Transaction, separation, and integration-related costs | 26 | ||||
Amortization of acquired intangible assets | 434 | ||||
Gains on dispositions | (341) | ||||
Pension and OPEB actuarial and settlement gains | (684) | ||||
Debt extinguishment costs | 311 | ||||
Impairment losses | 31 | ||||
Adjusted EBIT | $ | 1,375 | |||
EBIT Margin | 7.9 | % | |||
Adjusted EBIT Margin | 8.5 | % |
% | Fiscal Year Ended March 31, 2023 | ||||
Total revenue growth | (11.3) |
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Foreign currency | 6.0 | % | |||
Acquisitions and divestitures |
| % | |||
Organic Revenue Growth | (2.7) | % |
4.3Fiscal Year Limitations on Grants of Awards. The following limitations shall apply to any Awards made hereunder, other than to Spinoff Awards and CSC Rollover Awards which shall be disregarded for purposes of applying the following limits:
(a) No Employee may be granted during any Fiscal Year Awards consisting of Options or SARs that are exercisable for more than 1,000,000 shares of Common Stock;
(b) No Employee may be granted during any Fiscal Year Stock Awards covering or relating to more than 1,000,000 shares of Common Stock (the limitation set forth in this subsection (b), together with the limitation set forth in subsection (a), being hereinafter collectively referred to as the “Stock-Based Award Limitations”); and
(c) No Employee may be granted during any Fiscal Year (1) Cash Awards or (2) Restricted Stock Unit Awards or Performance Unit Awards that may be settled solely in cash having a value determined on the Grant Date in excess of $10,000,000.
Section 5
Administration
5.1Authority of the Committee; Qualifications. Except as otherwise provided in this Plan with respect to actions or determinations by the Board, this Plan shall be administered by the Committee, subject to the following:
(a) The members of the Committee shall satisfy any independence requirements prescribed by any stock exchange on which the Company lists its Common Stock; and
(b) Awards may be granted to individuals who are subject to Section 16(b) of the Exchange Act only if the Committee is comprised solely of two or more“Non-Employee Directors” as defined in Securities and Exchange Commission Rule16b-3 (as amended from time to time, and any successor rule, regulation or statute fulfilling the same or similar function).
5.2Powers. Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and to adopt such rules, regulations and guidelines for carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of the Company and in keeping with the objectives of this Plan.
Subject to Sections 5.4, 6.2 and 6.3 hereof, the Committee may, in its discretion,
(a) Provide for the extension of the exercisability of an Award;
(b) In the event of death, Disability, Change in Control, retirement, involuntary termination without cause or voluntary termination for good reason, accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of this Plan or an Award or otherwise amend or modify an Award in any manner that is, in either case, (1) not adverse to the Participant to whom such Award was granted, (2) consented to by such Participant or (3) authorized by Section 18.3 hereof;provided, however, that no such action shall permit the term of any Option or SAR to be greater than 10 years from its Grant Date; or
(c) Accelerate the vesting or exercisability of an Award to the extent provided for in an Employee’s employment agreement with the Company or any Subsidiary that was effective prior the Effective Date.
5.3Final and Binding. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award Agreement in the manner and to the extent the Committee deems necessary or desirable to further this Plan’s purposes. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.
% | Fiscal Year Ended March 31, 2022 | |||||
Total revenue growth | % | |||||
Foreign currency | (0.8) |
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Acquisitions and divestitures | 6.5 | % | ||||
Organic Revenue Growth | (2.6) | % |
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5.4Prohibition on Repricing of Awards.Subject to the provisions of Section 18 hereof, the Committee may not, without the approval of the Company’s stockholders,
(a) reduce the Exercise Price of any outstanding Options or SARs;
(b) take any action which would be treated as a “repricing” under generally accepted accounting principles; or
(c) cancel or replace any outstanding Option or SAR at a time when its Exercise Price exceeds the Fair Market Value of the stock underlying such Option or SAR in exchange for (i) another Option or SAR with an Exercise Price below the Exercise Price of the then outstanding Option or SAR, (ii) any other type of Award, (iii) any other equity in the Company or (iv) cash.
Nothing in this Section 5.4 shall be construed to apply to the issuance of Spinoff Awards and CSC Rollover Awards that are Options or SARs.
5.5Delegation of Authority. Subject to Nevada law, the Committee may delegate any of its authority to the Board, to any other committee of the Board or to an Authorized Officer to grant Awards to Employees who are not subject to Section 16(b) of the Exchange Act; provided that the requirements of Section 5.1 are met. Such delegation shall be made in writing specifically setting forth such delegated authority. As permitted by Nevada law, the Committee may also delegate to an Authorized Officer authority to execute on behalf of the Company any Award Agreement. The Committee and the Board, as applicable, may engage or authorize the engagement of a third party administrator to carry out administrative functions under this Plan.
Section 6
Awards
6.1Grants. The Committee, in its absolute discretion, may grant all Awards under this Plan from time to time.
6.2Award Agreements. Each Award shall be embodied in an Award Agreement, which shall contain such terms, conditions and limitations as shall be determined by the Committee, in its sole discretion, and, if required by the Committee, shall be signed by the Participant to whom the Award is granted and by an Authorized Officer for and on behalf of the Company. Awards may consist of those listed in Sections 7—13 and may be granted singly, in combination or in tandem. Awards may also be made in combination or in tandem with, in replacement of, or as alternatives to, grants or rights under this Plan or any other plan of the Company or any of its Subsidiaries, including the plan of any acquired entity. Upon the termination of employment by a Participant who is an Employee, any unexercised, unvested or unpaid Awards shall be treated as set forth in the applicable Award Agreement or in any other written agreement the Company has entered into with the Participant.
6.3Vesting Limitations. Except as otherwise provided below, any Stock Award, Option, Stock Appreciation Right or Cash Award (other than any Spinoff Award or CSC Rollover Award which shall not be subject to the following limits) that
(a) is not a Performance Award shall have a minimum Restriction Period of one year from the date of grant; or
(b) is a Performance Award shall have a minimum performance period of one year from the date of grant;
provided, however, that (1) the Committee may provide for earlier vesting (x) to the extent provided for in an Employee’s employment agreement with the Company or any Subsidiary that was effective prior the Effective Date and (y) upon an Employee’s termination of employment by reason of death, Disability, Change in Control, retirement, involuntary termination without cause or voluntary termination for good reason and (2) vesting of a Stock Award, Option or Stock Appreciation Right may occur incrementally over theone-year Restriction Period orone-year minimum performance period, as applicable. The foregoing notwithstanding, up to five percent (5%) of the total number of shares of Common Stock available for issuance under this Plan may be granted without regard to any minimum Restriction Period or performance period, as applicable, described in this Section 6.3.
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6.4Payment
6.5Dividends and Dividend Equivalents. Rights to dividends will be extended to and made part of any Restricted Stock Award and Dividend Equivalents may, in the Committee’s discretion, be extended to and made part of any Restricted Stock Unit Award and Performance Unit Award, subject in each case to such terms, conditions and restrictions as the Committee may establish;provided,however, that no such dividends or Dividend Equivalents shall be paid with respect to unvested Stock Awards, including Stock Awards subject to Performance Goals. Dividends and/or Dividend Equivalents shall not be extended to any Options or SARs.
6.6 Spinoff and CSC Rollover Awards. Notwithstanding anything in the Plan to the contrary, (i) Spinoff Awards shall be governed by the terms of the Spinoff Awards as in effect immediately prior to the Spinoff, and (ii) CSC Rollover Awards shall be governed by the terms of the CSC Rollover Awards as in effect immediately prior to the CSC Merger, in each case except for any adjustment pursuant to the terms of the Employee Matters Agreement.
Section 7
Options
7.1General. An Award may be in the form of an Option. An Option awarded pursuant to this Plan may consist of either an Incentive Stock Option or a Nonqualified Stock Option. Subject to Section 18 hereof, the price at which shares of Common Stock may be purchased upon the exercise of an Option shall be not less than the Fair Market Value of the Common Stock on the Grant Date. For avoidance of doubt, Spinoff Awards and CSC Rollover Awards that are Options may have an Exercise Price that is less than the Fair Market Value of the Common Stock on the date such Awards are converted and assumed by the Company. The term of an Option shall not exceed 10 years from the Grant Date. Options may not include provisions that “reload” the Option upon exercise. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Option, including, but not limited to, the term of any Option and the date or dates upon which the Option becomes vested and exercisable, shall be determined by the Committee and subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6 hereof.
7.2Option Exercise. The Exercise Price shall be paid in full at the time of exercise in cash or, if permitted by the Committee and elected by the Participant, the Participant may pay the exercise price by means of the Company withholding shares of Common Stock otherwise deliverable on exercise of the Award or tendering Common Stock valued at Fair Market Value on the date of exercise, or any combination thereof. The Committee, in its sole discretion, shall determine acceptable methods for Participants to tender Common Stock. The Committee may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from the sale of Common Stock issuable pursuant to an Award (including cashless exercise procedures approved by the Committee involving a broker or dealer approved by the Committee). The Committee may adopt additional rules and procedures regarding the exercise of Options from time to time, provided that such rules and procedures are not inconsistent with the provisions of this Section.
Section 8
Stock Appreciation Rights
An Award may be in the form of an SAR. The Exercise Price for an SAR shall not be less than the Fair Market Value of the Common Stock on the Grant Date. For avoidance of doubt, Spinoff Awards and CSC Rollover Awards that are SARs may have an Exercise Price that is less than the Fair Market Value of the Common Stock on the date such Awards are converted and assumed by the Company. The holder of a tandem SAR may elect to exercise either the Option or the SAR, but not both. The
($) | Fiscal Year Ended March 31, 2023 | |||||
Diluted Earnings per Share as reported | (2.48) | |||||
Restructuring costs |
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Transaction, separation, and integration-related costs | 0.06 | |||||
Amortization of acquired intangible assets | 1.38 | |||||
Impairment losses | 0.06 | |||||
Merger related indemnification | 0.06 | |||||
SEC Matter | 0.03 | |||||
Gain on dispositions | (0.92) | |||||
Pension and OPEB actuarial and settlement losses | 4.89 | |||||
Arbitration loss | 0.13 | |||||
Tax Adjustment | (0.52) | |||||
Non-GAAP Diluted Earnings per Share | $ | 3.47 |
($) | Fiscal Year Ended March 31, 2022 | |||||||
Diluted Earnings per Share as reported |
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exercise period for an SAR shall extend no more than 10 years after the Grant Date. SARs may not include provisions that “reload” the SAR upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any SAR, including, but not limited to, the term of any SAR and the date or dates upon which the SAR becomes vested and exercisable, shall be determined by the Committee;provided, however, that a SAR that may be settled all or in part in shares of Common Stock shall be subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6 hereof.
Section 9
Restricted Stock Awards
An Award may be in the form of a Restricted Stock Award. The terms, conditions and limitations applicable to any Restricted Stock Award, including, but not limited to, vesting or other restrictions, shall be determined by the Committee and subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6 hereof.
Section 10
Restricted Stock Unit Awards
An Award may be in the form of a Restricted Stock Unit Award. The terms, conditions and limitations applicable to a Restricted Stock Unit Award, including, but not limited to, the Restriction Period and the right to Dividend Equivalents, if any, shall be determined by the Committee. Subject to the terms of this Plan, the Committee, in its sole discretion, may settle Restricted Stock Units in the form of cash or in shares of Common Stock (or in a combination thereof) equal to the value of the vested Restricted Stock Units;provided, however, that a Restricted Stock Unit Award that may be settled all or in part in shares of Common Stock shall be subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6 hereof.
Section 11
Performance Unit Awards
An Award may be in the form of a Performance Unit Award. Each Performance Unit shall have an initial value that is established by the Committee on the Grant Date. Subject to the terms of this Plan, after the applicable performance period has ended, the Participant shall be entitled to receive settlement of the value and number of Performance Units earned by the Participant over the performance period, to be determined as a function of the extent to which the corresponding performance goals have been achieved. The timing and the terms of settlement of earned Performance Units shall be as determined by the Committee and as evidenced in an Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may settle earned Performance Units in the form of cash or in shares of Common Stock (or in a combination thereof) equal to the value of the earned Performance Units as soon as practicable after the end of the performance period and following the Committee’s determination of actual performance against the performance measures and related goals established by the Committee; provided, however, that a Performance Unit Award that may be settled all or in part in shares of Common Stock shall be subject to the minimum Restriction Period and performance period requirements and any other applicable requirements described in Section 6 hereof.
Section 12
Cash Awards
An Award may be in the form of a Cash Award. The terms, conditions and limitations applicable to a Cash Award, including, but not limited to, vesting or other restrictions, shall be determined by the Committee.
Section 13
Performance Awards
13.1General. Without limiting the type or number of Awards that may be made under the other provisions of this Plan, an Award may be in the form of a Performance Award. The terms, conditions and limitations applicable to an Award that is a Performance
2.81 | |||||
0.99 | |||||
Transaction, separation, and integration-related costs | 0.07 | ||||
Amortization of acquired intangible assets | 1.35 | ||||
Impairment losses | 0.09 | ||||
Gain on dispositions | (0.93) | ||||
Pension and OPEB actuarial and settlement gains | (1.99) | ||||
Debt extinguishment costs | 0.93 | ||||
Tax Adjustment | 0.17 | ||||
Non-GAAP Diluted Earnings per Share | $ | 3.50 |
100 |
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| 2023 Proxy Statement |
Award shall be determined by the Committee. Performance Awards shall be based on achievement of such Performance Goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine.
Performance Goals may apply to the Employee, one or more business units, divisions or sectors of the Company, or the Company as a whole, and if so desired by the Committee, by comparison with a peer group of companies including by direct reference to peers, by reference to an index, or by a similar mechanism. A Performance Goal may be based on any one or more criteria as the Committee or its delegate may determine.
Unless otherwise stated, a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria).
13.2Adjustment of Performance Awards. The Committee may provide in any Performance Award that the results may be adjusted to include or exclude particular factors, including but not limited to any of the following events that occur during a Performance Period:
(a) asset write-downs;
(b) litigation or claim judgments or settlements;
(c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results;
(d) any reorganization and restructuring programs;
(e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable Fiscal Year;
(f) acquisitions or divestitures;
(g) foreign exchange gains and losses; and
(h) settlement of hedging activities.
The Committee may retain the discretion to adjust any Performance Awards upward or downward, either on a formula or discretionary basis or any combination, as the Committee determines.
13.3Grandfathered Awards. In interpreting Plan provisions applicable to any Performance Awards granted on or before November 2, 2017 that were intended to qualify for the performance-based compensation exemption under Code Section 162(m), it is the intent of this Plan to conform with the standards of Code Section 162(m) and Treasury Regulation §1.162-27(e)(2)(i), and the Committee in establishing such goals and interpreting this Plan shall be guided by such provisions.
Section 14
Change in Control
Notwithstanding any other provision of this Plan to the contrary, unless (1) an Award Agreement shall specify otherwise or (2) the agreement effectuating the Change in Control fails to provide for the assumption or substitution of Awards (in which case, the Committee may make any of the adjustments to outstanding Awards authorized by Section 18.3), upon a Participant’s qualifying termination of employment within two (2) years after the date of the Change in Control:
(a) all outstanding Options that have not vested in full on or prior thereto shall be fully vested and exercisable;
(in millions) | Fiscal Year Ended March 31, 2023 | |||||||
Cash flow from Operations |
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(b) all restrictions applicable to outstanding Restricted Stock shall lapse in full;
(c) all outstanding Restricted Stock Units that have not vested in full on or prior thereto shall be fully vested;
(d) if the qualifying termination of employment occurs during the Performance Period, all Performance Awards shall be considered earned and payable at their target value, prorated for the portion of the Performance Period that has elapsed and shall be immediately paid or settled; and
(e) if the qualifying termination of employment occurs after the Performance Period, all Performance Awards shall, as soon as administratively practicable, be paid or settled based on the actual achievement of the applicable performance goals.
For this purpose, a qualifying termination of employment shall be as determined by the Committee and set forth in the applicable Award Agreement and may include, without limitation, involuntary termination without cause, death, disability or retirement.
Section 15
Taxes
The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of required withholding taxes or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes; provided, however, that the number of shares of Common Stock withheld for payment of required withholding taxes must equal no more than the maximum individual statutory rate in the applicable jurisdiction. The Committee may also permit withholding to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Award with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made.
Section 16
Amendment, Modification, Suspension or Termination
The Board may amend, modify, suspend or terminate this Plan (and the Committee may amend an Award Agreement) for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law, except that no amendment or alteration that would adversely affect the rights of any Participant under any Award previously granted to such Participant shall be made without the consent of such Participant.
No amendment or alteration shall be effective prior to its approval by the stockholders of the Company to the extent stockholder approval is otherwise required by applicable legal requirements or the requirements of the securities exchange on which the Company’s stock is listed, including any amendment that:
(a) expands the types of Awards available under this Plan;
(b) materially increases the number of shares of Common Stock available for Awards under this Plan;
(c) materially expands the classes of persons eligible for Awards under this Plan;
(d) materially extends the term of this Plan;
(e) materially changes the method of determining the Exercise Price of Options;
(f) deletes or limits any provisions of this Plan that prohibit the repricing of Options or SARs; or
(g) decreases any minimum vesting requirements for any Stock Award.
1,415 | |||||
(267) | |||||
Transition and transformation contract costs | (223) | ||||
Software purchased or developed | (188) | ||||
Free Cash Flow | $ | 737 |
(in millions) | Fiscal Year Ended March 31, 2022 | ||||
Cash flow from Operations | $ | 1,501 | |||
Purchase of property and equipment | (254) |
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Transition and transformation contract costs | (209) | ||||
Software purchased or developed |
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Free Cash Flow | $ | 743 |
Section 17
Assignability
Unless otherwise determined by the Committee and expressly provided for in an Award Agreement, no Award or any other benefit under this Plan shall be assignable or otherwise transferable except (1) by will or the laws of descent and distribution or (2) pursuant to a domestic relations order issued by a court of competent jurisdiction that is not contrary to the terms and conditions of this Plan or applicable Award and in a form acceptable to the Committee. The Committee may prescribe and include in applicable Award Agreements other restrictions on transfer. Any attempted assignment of an Award or any other benefit under this Plan in violation of this Section 17 shall be null and void. Notwithstanding the foregoing, no Award may be transferred for value or consideration.
Section 18
Adjustments
18.1Outstanding Awards. The existence of outstanding Awards shall not affect in any manner the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the Common Stock) or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above.
18.2 Plan Adjustments
(a) Subdivision or Consolidation. In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration of a dividend payable in shares of Common Stock or other stock split, then:
(i) the number of shares of Common Stock reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Section 4;
(ii) the number of shares of Common Stock covered by outstanding Awards;
(iii) the exercise price or other price in respect of such Awards;
(iv) the appropriate Fair Market Value and other price determinations for such Awards; and
(v) any other limitations contained within this Plan shall each be proportionately adjusted by the Committee as appropriate to reflect such transaction.
(b) Recapitalizations, Reorganizations, etc. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting the Common Stock or any distribution to holders of Common Stock of securities or property (other than normal cash dividends or dividends payable in Common Stock), the Committee shall make appropriate adjustments to:
(i) the number of shares of Common Stock reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Section 4;
(ii) the number of shares of Common Stock covered by outstanding Awards;
(iii) the exercise price or other price in respect of such Awards;
(iv) the appropriate Fair Market Value and other price determinations for such Awards;
(v) the Stock-Based Award Limitations; and
(vi) any other limitations contained within this Plan;
(in millions) | Fiscal Year Ended March 31, 2021 | |||||
Cash flow from Operations | 124 | |||||
Purchase of property and equipment |
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Transition and transformation contract costs | (261) | |||||
Software purchased or developed | (254) | |||||
Free Cash Flow | $ | (652) |
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provided that such adjustments shall only be such as are necessary to maintain the proportionate interest of the holders of the Awards and preserve, without exceeding, the value of such Awards.
18.3Award Adjustments. In the event of a corporate merger, consolidation, acquisition of property or stock, separation,split-up,spin-off,split-off, initial public offering of the common equity of a Subsidiary, reorganization or liquidation, or other Change in Control in which the Company is not the surviving publicly traded entity, the Committee may make such adjustments to Awards or other provisions for the disposition of Awards as it deems equitable, and shall be authorized, in its discretion, to:
(a) provide for the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such property or stock as the Committee determines, including stock of another company) for an Award or the assumption of the Award (and for awards not granted under this Plan), regardless of whether in a transaction to which Code Section 424(a) applies;
(b) provide, prior to the transaction, for the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, the Award and, if the transaction is a cash merger, provide for the termination of any portion of the Award that remains unexercised at the time of such transaction;
(c) provide for the acceleration of the vesting and exercisability of an Award and the cancellation thereof in exchange for such payment as the Committee, in its sole discretion, determines is a reasonable approximation of the value thereof;
(d) cancel any Awards and direct the Company to deliver to the Participants who are the holders of such Awards cash in an amount that the Committee shall determine in its sole discretion is equal to the Fair Market Value of such Awards as of the date of such event, which, in the case of any Option, shall be the amount equal to the excess of the Fair Market Value of a share of Common Stock as of such date over theper-share exercise price for such Option (for the avoidance of doubt, if such exercise price is less than such Fair Market Value, the Option may be canceled for no consideration or for such consideration that the Committee shall determine or as provided by the agreement effectuating an event described in this Section 18.3); or
(e) cancel Awards that are Options and give the Participants who are the holders of such Awards notice and opportunity to exercise prior to such cancellation;
provided, however, that the vesting of any time-based awards shall be accelerated upon a Change in Control only if the awards are not assumed by or substituted for awards of the acquiring entity, and the acceleration of vesting of any performance-based awards upon a Change in Control shall be adjusted for actual performance and/or the fractional performance period through the date of the Change of Control.
18.4Compliance with Code Section 409A. No adjustment or substitution pursuant to this Section 18 shall be made in a manner that results in noncompliance with the requirements of Code Section 409A, to the extent applicable.
Section 19
Restrictions
No Common Stock or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws. Certificates evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to which it is admitted for quotation and any applicable federal or state securities law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions.
Section 20
Unfunded Plan
This Plan is unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, Common Stock or rights thereto under this Plan, any such accounts shall be used merely as a bookkeeping convenience. The
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Company shall not be required to segregate any assets that may at any time be represented by cash, Common Stock or rights thereto, nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash, Common Stock or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to an Award of cash, Common Stock or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Award Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. None of the Company, the Board or the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan. With respect to this Plan and any Awards granted hereunder, Participants are general and unsecured creditors of the Company and have no rights or claims except as otherwise provided in this Plan or any applicable Award Agreement.
Section 21
Code Section 409A
21.1Awards. Awards made under this Plan are intended to comply with or be exempt from Code Section 409A, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for an Award if such action would result in the imposition of taxes under Code Section 409A. Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under this Plan would result in the imposition of an additional tax under Code Section 409A, that Plan provision or Award shall be reformed, to the extent permissible under Code Section 409A, to avoid imposition of the additional tax, and no such action shall be deemed to adversely affect the Participant’s rights to an Award.
21.2Settlement Period. Unless the Committee provides otherwise in an Award Agreement, each Restricted Stock Unit Award, Performance Unit Award or Cash Award (or portion thereof if the Award is subject to a vesting schedule) shall be settled no later than the 15th day of the third month after the end of the first calendar year in which the Award (or such portion thereof) is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A. If the Committee determines that a Restricted Stock Unit Award, Performance Unit Award or Cash Award is intended to be subject to Code Section 409A, the applicable Award Agreement shall include terms that are designed to satisfy the requirements of Code Section 409A.
21.3Specified Employees. If the Participant is identified by the Company as a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation §1.409A-1(h), any Award payable or settled on account of a separation from service that is deferred compensation subject to Code Section 409A shall be paid or settled on the earliest of (i) the first business day following the expiration of six months from the Participant’s separation from service, (ii) the date of the Participant’s death, or (iii) such earlier date as complies with the requirements of Code Section 409A.
Section 22
Award Termination, Forfeiture and Disgorgement
The Committee shall have full power and authority to determine whether, to what extent and under what circumstances any Award shall be terminated or forfeited, or the Participant should be required to disgorge to the Company any gains attributable to the Award. Such circumstances may include, without limitation, the following actions by a Participant:
(a) competing with the Company or participating in any enterprise that competes with the Company;
(b) using or disclosing, other than as expressly authorized by the Company or a Subsidiary, any confidential business information or trade secrets that the Participant obtains during the course of his or her employment with the Company or any Subsidiary; and
(c) after the Participant is no longer employed by the Company or any Subsidiary:
(i) soliciting, with respect to any of the services or products that the Company or any Subsidiary then provides to customers, any person or entity whom the Participant knows to be a customer of the Company or any Subsidiary, or whose business the Participant solicited on behalf of the Company or any Subsidiary while employed by it,
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(ii) soliciting or hiring any person who is then an Employee, or
(iii) taking any action that, in the judgment of the Committee, is not in the best interests of the Company.
Additionally, any Awards granted pursuant to this Plan shall be subject to any recoupment or clawback policy that is adopted by, or applicable to, the Company.
Section 23
Awards toNon-U.S. Employees
Awards may be granted to Employees who are foreign nationals or employed outside the United States, or both, on such terms and conditions different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Employees on assignments outside their home country.
Section 24
Governing Law
This Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Nevada.
Section 25
Right to Continued Service or Employment
Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate any Participant’s employment or other service relationship with the Company or its Subsidiaries at any time, nor confer upon any Participant any right to continue in the capacity in which he is employed or otherwise serves the Company or its Subsidiaries.
Section 26
Term
This Plan shall be effective as of the Effective Date. This Plan shall continue in effect for a term of 10 years commencing on the Effective Date, unless earlier terminated by action of the Board.
Section 27
Usage
Words used in this Plan in the singular shall include the plural and in the plural the singular, and the gender of words used shall be construed to include whichever may be appropriate under any particular circumstances of the masculine, feminine or neuter genders.
Section 28
Headings
The headings in this Plan are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Plan.
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Appendix D – DXC Technology Company 2017Non-Employee Director Incentive Plan
As amended and restated effective August 13, 2020
SECTION 1. PURPOSE
The purpose of this 2017Non-Employee Director Incentive Plan (“Plan”) is to enable the Company to attract, retain and motivate itsNon-Employee Directors by providing for or increasing their proprietary interests in the Company.
The Plan was adopted by Everett SpinCo, Inc. (“Everett”), the predecessor of DXC Technology Company, prior to the spinoff of Everett from Hewlett Packard Enterprise Company (“HPE”) effective as of March 31, 2017 (the “Spinoff”).
SECTION 2. CERTAIN DEFINITIONS
As used in this Plan, the following terms have the meanings set forth below:
(a) “Administrator” means that administrator of the Plan as described in Section 3.
(b) “Award” means any Restricted Stock or RSU, including any CSC Rollover Awards.
(c) “Award Agreement” means any written or electronic agreement, contract, or other instrument or document evidencing any Award granted hereunder, in a form approved by the Administrator that is executed or acknowledged by both the Company and the Participant.
(d) “Board” means the Board of Directors of the Company.
(e) “Change in Control” means a “change in control,” as defined in Section 409A.
(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.
(g) “Company” means DXC Technology Company or any successor thereto.
(h) “CSC” means Computer Sciences Corporation.
(i) “CSC Merger” means the merger with CSC following the Spinoff.
(j) “CSC Rollover Awards” means awards granted under one or more CSCnon-employee director equity incentive plans which were converted and assumed by the Company in connection with the CSC Merger in accordance with the terms of the Employee Matters Agreement.
(k) “Dividend Equivalents” means an amount equal to dividends and other distributions (or the economic equivalent thereof) that are payable to stockholders of record on a like number of Shares.
(l) “Employee Matters Agreement” means the amended and restated employee matters agreement between Everett SpinCo, Inc., HPE and CSC dated March 31, 2017, as amended.
(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(n) “Fair Market Value” means, with respect to any property, the market value of such property determined by such methods or procedures as shall be established from time to time by the Administrator. Unless the Administrator shall determine otherwise, the Fair Market Value of a Share on any day means the last sale price, regular way, of a Share on such day (or in case the principal United States national securities exchange on which the Shares are listed or admitted to trading is not open on such date, the next preceding date upon which it is open), or in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal United States national securities exchange on which the Shares are listed or admitted to trading.
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(o) “HPE” has the meaning set forth in Section 1.
(p)“Non-Employee Director” means a director of the Company who is not an employee of the Company or any of its subsidiaries.
(q) “Participant” means aNon-Employee Director who is selected by the Administrator to receive an Award under this Plan. Participant also includes any holder of a CSC Rollover Award.
(r) “Plan” has the meaning set forth in Section 1.
(s) “Restricted Stock” means any Share issued hereunder with the restriction that the holder may not sell, assign, transfer, pledge or otherwise encumber such Share, and with such other restrictions as the Administrator, in its sole discretion, may impose, which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Administrator may deem appropriate, including any such Share which is a CSC Rollover Award.
(t) “Restricted Stock Unit” or “RSU” means a right granted hereunder to receive a specified number of Shares, or cash based on the Fair Market Value of such Shares, upon vesting or at a later date permitted in the Award Agreement, including any such right that is a CSC Rollover Award.
(u) “Section 409A” means Section 409A of the Code, together with the regulations and other Treasury department guidance promulgated thereunder.
(v) “Shares” means shares of the common stock of the Company, par value $0.01 per share, as adjusted in accordance with Section 5(d) hereof.
(w) “Spinoff” has the meaning set forth in Section 1.
SECTION 3. ADMINISTRATION
This Plan shall be administered by the Board (excluding any employee member of the Board) or, in the Board’s discretion, a committee of the Board (in either case, the “Administrator”) consisting of at least three directors, each of whom is (i) “independent” for purposes of the Company’s Corporate Governance Guidelines; and (ii) a“non-employee director” for purposes of Rule16b-3(b)(3) promulgated under the Exchange Act.
Subject to the provisions of this Plan, the Administrator shall be authorized and empowered to do all things necessary or desirable in connection with the administration of this Plan, including, without limitation, the following:
(a) adopt, amend and rescind rules and regulations relating to this Plan;
(b) determine which persons areNon-Employee Directors, and to which of suchNon-Employee Directors, if any, Awards shall be granted hereunder;
(c) grant Awards toNon-Employee Directors and determine the terms and conditions thereof, including the number of Shares and/or the amount of cash issuable pursuant thereto;
(d) determine whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other property, or canceled or suspended;
(e) determine whether, and the extent to which adjustments are required pursuant to Section 5(d) hereof; and
(f) interpret and construe this Plan and the terms and conditions of all Awards granted hereunder.
Decisions of the Administrator shall be final, conclusive and binding upon all persons and entities, including the Company, all stockholders of the Company, allNon-Employee Directors, all Participants and all persons claiming under Award Agreements.
SECTION 4. ELIGIBILITY
AnyNon-Employee Director shall be eligible to be selected as a Participant. In addition, any holder of a CSC Rollover Award shall be a Participant.
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SECTION 5. SHARES SUBJECT TO THIS PLAN
(a) The maximum aggregate number of Shares that may be issued pursuant to all Awards granted under this Plan shall be 745,000, subject to adjustment as provided in Section 5(d) hereof.
(b) In connection with the granting of an Award, the number of Shares available for issuance under this Plan shall be reduced by the number of Shares in respect of which the Award is granted or denominated. For avoidance of doubt, any shares issued pursuant to a CSC Rollover Award shall reduce the number of Shares available for issuance under this Plan in accordance with this Section 5(b).
(c) Whenever any outstanding Award (or portion thereof), including any CSC Rollover Award, expires, is cancelled or is otherwise terminated for any reason without having been exercised or payment having been made in the form of Shares, the number of Shares available for issuance under this Plan shall be increased by the number of Shares allocable to the expired, cancelled or otherwise terminated Award (or portion thereof). To the extent that any Award is forfeited, the Shares subject to such Awards will not be counted as shares delivered under this Plan. Awards valued by reference to Shares that may be settled in equivalent cash value will count as Shares delivered to the same extent as if the Award were settled in Shares.
(d) If the outstanding securities of the class then subject to this Plan are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities, or if cash, property and/or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, restructuring, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split or the like, or if substantially all of the property and assets of the Company are sold, then, unless the terms of such transaction shall provide otherwise, the Administrator shall make appropriate and proportionate adjustments, as of the date of such transaction, in:
(i) the number and type of shares or other securities or cash or other property that may be acquired pursuant to outstanding Awards; and
(ii) the maximum number and type of shares or other securities that may be issued pursuant to all Awards granted under this Plan, as set forth in Section 5(a) hereof.
(e) The maximum dollar value of all Awards that may be granted to (i) the Independent Chairman during any single calendar year shall not exceed $900,000 and (ii) to any single Participant other than the Independent Chairman during any calendar year shall not exceed $500,000, determined in each case as of the grant date of the Award based on the Fair Market Value of the Shares subject to such Award as of such grant date.
SECTION 6. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
Restricted Stock and RSUs may be granted hereunder to Participants. All Restricted Stock and RSUs shall be subject to the following terms and conditions, and to such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Administrator shall deem desirable:
(a)Restrictions. The restrictions applicable to each grant of Restricted Stock and the vesting provisions applicable to each grant of RSUs shall be determined by the Administrator, in its sole discretion, and shall be based on the Participant’s continued service as aNon-Employee Director (“time-based vesting”).
(b)Accelerated Vesting. The vesting of Restricted Stock or RSUs may, in the sole discretion of the Administrator, be accelerated in the event of the Participant’s death or termination of service as aNon-Employee Director, or may be accelerated pursuant to Section 7 hereof upon a Change in Control.
(c)Voting and Dividends. Rights to dividends or Dividend Equivalents may be extended to and made part of any Award consisting of Restricted Stock or RSUs, subject to such terms, conditions and restrictions as the Administrator may establish. The Administrator may also establish rules and procedures for the crediting of interest on deferred cash payments and Dividend Equivalents for Awards consisting of Restricted Stock or RSUs. Unless the Administrator, in its sole discretion, shall determine otherwise, all Restricted Stock shall have full voting rights.
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(d)Stock Certificates. Restricted Stock issued hereunder may be evidenced in such manner as the Administrator, in its sole discretion, shall deem appropriate, including, without limitation, book-entry registration or the issuance of a stock certificate or certificates registered in the name of the Participant and bearing an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock.
(e)CSC Rollover Awards. Notwithstanding anything in the Plan to the contrary, CSC Rollover Awards shall be governed by the terms of the CSC Rollover Awards as in effect immediately prior to the CSC Merger, except for any adjustment pursuant to the terms of the Employee Matters Agreement.
SECTION 7. CHANGE IN CONTROL
Notwithstanding any other provision of this Plan to the contrary, unless an Award Agreement shall specify otherwise, upon the date of a Change in Control:
(a) all restrictions applicable to outstanding Restricted Stock shall lapse in full; and
(b) all outstanding RSUs that have not vested in full on or prior thereto shall be fully vested.
SECTION 8. AMENDMENTS AND TERMINATION
The Board may amend, alter, suspend, discontinue or terminate this Plan or the terms of any outstanding Award, or any portion thereof, at any time and in any manner; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without:
(a) the approval of the Company’s stockholders, if:
(i) such approval is necessary to qualify for or comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to qualify or comply,
(ii) such approval is required by the New York Stock Exchange or the Securities and Exchange Commission, or
(iii) such amendment, alteration, suspension, discontinuation or termination would materially increase the benefits accruing to Participants, materially increase the maximum number of shares or other securities which may be issued under this Plan, materially modify this Plan’s eligibility requirements; and
(b) the consent of each Participant whose rights under any outstanding Award would be impaired by such action.
SECTION 9. GENERAL PROVISIONS
(a)Nontransferability of Awards. Unless the Administrator determines otherwise at the time the Award is granted or thereafter no Award, and no Shares subject to an outstanding Award as to which any applicable restriction or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, except by will or the laws of descent and distribution; provided, however, that if so permitted by the Administrator, a Participant may designate a beneficiary to receive his or her rights under any Award after his or her death.
(b)Award Entitlement. NoNon-Employee Director or Participant shall have any claim to be granted any Award under this Plan, and there is no obligation for uniformity of treatment ofNon-Employee Directors or Participants under this Plan.
(c)Requirement of Award Agreement. The prospective recipient of any Award under this Plan shall not, with respect to such Award, be deemed to have become a Participant, or to have any rights with respect to such Award, unless and until both the Company and such recipient shall have executed an Award Agreement evidencing the Award and the recipient shall have delivered a copy thereof to the Company.
(d)Termination, Forfeiture and Disgorgement. The Administrator shall have full power and authority to determine whether, to what extent and under what circumstances any Award shall be terminated or forfeited, or the Participant should be required to disgorge
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to the Company any amounts attributable to the Award. Such circumstances may include, without limitation, the following actions by a Participant:
(i) competing with the Company or participating in any enterprise that competes with the Company; and
(ii) using or disclosing, other than as expressly authorized by the Company or a Subsidiary, any confidential business information or trade secrets that the Participant obtains during the course of his or her service as aNon-Employee Director.
(e)Compliance with Securities Laws. No Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator, in its sole discretion, has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. federal securities laws and any other laws to which such offer, if made, would be subject.
(f)Award Deferrals. The Administrator shall have full power and authority to establish procedures in compliance with Section 409A, if applicable, pursuant to which the payment or settlement of any Award may be deferred.
(g)Governing Law. The validity, construction and effect of this Plan and any rules and regulations relating to this Plan shall be determined in accordance with the laws of the State of Nevada and applicable U.S. federal law.
(h)Severability. If any provision of this Plan is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of this Plan, it shall be stricken and the remainder of this Plan shall remain in full force and effect.
SECTION 10. SECTION 409A
Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under this Plan would result in the imposition of an additional tax under Section 409A, that Plan provision or Award will be reformed to avoid imposition of the additional tax, including that any Award subject to 409A held by a specified employee that is settled upon termination of employment (for reasons other than death) shall be delayed in payment until the expiration of six months, and no action taken to comply with Section 409A shall be deemed to adversely affect the Participant’s rights to an Award. Awards made under this Plan are intended to comply with or be exempt from Section 409A, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for an Award if such action would result in the imposition of taxes under Section 409A.
SECTION 11. TERM OF PLAN
This Plan is effective as of March 30, 2017, the date prior to the Spinoff on which this Plan was approved by HPE as sole shareholder of Everett SpinCo, Inc, the predecessor to the Company. No Award may be granted under this Plan after March 30, 2027, but any award granted prior to that date may extend beyond that date.
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DXC INVESTOR RELATIONS 1775 TYSONS BOULEVARD TYSONS, VA 22102 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet up until 11:59 p.m. Eastern Time on August 12, 2020 to transmit your voting instructions and to enroll for electronic delivery of subsequent stockholder communications. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/DXC2020 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1.800.690.6903 To transmit your voting instructions, use any touch-tone telephone up until 11:59 p.m. Eastern Time on August 12, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Note: Regardless of which voting method you use, proxy voting instructions for shares held in the Company’s Matched Asset Plan must be given by 11:59 p.m. Eastern Time on August 10, 2020. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY D20088-Z77764-P42372 For Against Abstain The Board of Directors recommends you vote “FOR” each of the nominees in Proposal 1: 1a. Mukesh Aghi 1h. Michael J. Salvino 1. To elect ten nominees to the DXC Board of Directors Nominees: 1d. Raul J. Fernandez 1f. Mary L. Krakauer 1i. Manoj P. Singh 1j. Robert F. Woods 1e. David L. Herzog 1g. Ian C. Read 1c. David A. Barnes 1b. Amy E. Alving The Board of Directors recommends you vote “FOR” Proposal 2: The Board of Directors recommends you vote “FOR” Proposal 4: The Board of Directors recommends you vote “FOR” Proposal 3: The Board of Directors recommends you vote “FOR” Proposal 5: 2. Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2021 4. Approval of increase in shares available under the DXC Technology Company 2017 Omnibus Incentive Plan 3. Approval, by advisory vote, of named executive officer compensation 5. Approval of increase in shares available under the DXC Technology Company 2017 Non-Employee Director Incentive Plan To provide comments, please check this box and write them on the back where indicated. For Against Abstain For Against Abstain For Against Abstain For Against Abstain Please sign, date and return this Proxy promptly whether or not you plan to attend the meeting. If signing for a corporation or partnership, or as an agent, attorney or fiduciary, indicate the capacity in which you are signing. If you do attend the meeting and elect to vote by ballot, such vote will supersede this Proxy. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
IMPORTANT NOTICE TO STOCKHOLDERS VOTING PREVENTS ESCHEATMENT Most states have escheatment laws which require DXC to transfer stockholder accounts when they meet that state’s criteria for abandoned property. These laws require DXC to issue a replacement stock certificate to the applicable state and the certificate in the stockholder’s possession is cancelled on the records of DXC’s transfer agent. While the specified number of years varies by state, escheatment generally occurs if you have not voted during a three-year period and you have not contacted DXC’s transfer agent during that time. After delivery to the state, the stock often is sold and claimants are given only the proceeds of the sale, which may or may not be to your benefit, depending on the subsequent trend of the stock price. In addition, it can take many months to retrieve custody of the stock or the proceeds of its sale. Therefore, it is very important that you vote and that DXC has your current address. If you have moved, please provide your new address to DXC’s transfer agent: EQ Shareowner Services, P.O. Box 64874, St. Paul, MN 55164-0874; telephone 800.468.9716; and Internet address: shareowneronline.com. Please inform EQ if there are multiple accounts or stock is held under more than one name. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D20089-Z77764-P42372 DXC TECHNOLOGY COMPANY ANNUAL MEETING OF STOCKHOLDERS, AUGUST 13, 2020 The undersigned hereby appoints MICHAEL J. SALVINO, PAUL N. SALEH and WILLIAM L. DECKELMAN, JR., and each of them, with full power of substitution and discretion in each of them, as the proxy or proxies of the undersigned to represent the undersigned and to vote all shares of Common Stock of DXC Technology Company which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held at www.virtualshareholdermeeting.com/DXC2020, at 10:30 a.m., Eastern Time, on August 13, 2020, and at any adjournments or postponements thereof, and to consider to vote on any other matter properly coming before the meeting. If more than one of such proxies or substitutes shall be present and vote, a majority thereof shall have the powers hereby granted, and if only one of them shall be present and vote, he shall have the powers hereby granted. This card also provides voting instructions for shares, if any, held in the Company’s Matched Asset Plan. This proxy when properly executed will be voted in the manner directed on the reverse side. If this proxy is signed but no direction is given, this proxy will be voted “FOR” the election of each of the director nominees on the reverse side and “FOR” proposals 2, 3, 4 and 5. It will be voted in the discretion of the proxies upon such other matters as may properly come before the Annual Meeting of Stockholders or at any adjournment or postponement thereof. Shares allocated to this account and held in the Company’s Matched Asset Plan will be voted by the plan trustee for those shares. If the trustee does not receive voting instructions for shares held in the Matched Asset Plan by August 10, 2020, those shares will be voted in the same proportion as the shares for which voting instructions have been received. This proxy is solicited on behalf of the Board of Directors of the Company. This proxy may be revoked at any time prior to the voting thereof. Note: This proxy must be signed and dated on the reverse side.