☒ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| Definitive Proxy Statement | ||
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Under Rule 240.14a-12 | |
☒ | No fee required. | |||
☐ | Fee paid previously with preliminary materials. | |||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
| 320 Park Avenue, New York, NY 10022 (212) 277-7100 |
Dear Stockholder,
2022
As we reflect on the past year, 2023 was a year markeddefined by disruptiongrowth and transformation. At EXL, we viewedcontinued evolution. The most significant development was EXL’s continued integration of emerging artificial intelligence (“AI”) technology into our longstanding data-led strategy. We achieved this as an opportunity. We developed innovative solutions to harness our clients’by unlocking key synergies between data and gain a competitive advantage. Their successes ledAI. To create better outcomes for our clients, we leverage our deep experience with data to employ AI in more reliable ways, and we use AI to refine and enrich our success.data. This integration of AI into our data-led strategy positioned us well for industry-leading performance over the past year and will continue to do so looking forward to 2024, our 25th anniversary year, and beyond.
Our headline earnings numbers help tell part of thethat story. In 2022,2023, we generated strong growth across both Analytics and Digital Operations and Solutions. Our 20222023 revenue was 1.41$1.63 billion, representing growth of 26%16% over 2021.2022. We also grew adjusted EPS(1) to $6.02,$1.43, up 25%19% from $4.83$1.20 in 2021.
Our achievements in 2022 are rooted in our unique data-driven capabilities to improve our clients’ operations through digital solutions, enable better decision-making through advanced analytics, and embed intelligence in their workflows through machine learning, AI and automation. Every business today is being challenged to do more with less while customer expectations for speed, personalization and seamless integration continue to expand. EXL harnesses the power of data to help our clients meet those challenges. These data-driven efforts help our clients react faster, reduce costs and build stronger customer experiences. Going forward, we believe this strategy will continue to grow the success of our clients and our success.2022.
Our ability to executecontinue executing at this high level, despite fast-moving changes in technology and market dynamics, is the result of sound execution, our differentiated strategy, is a testament to our talentedbalanced portfolio of businesses and steadily growingour amazing team of more than 45,40050,000 people as well ascommitted to constant improvement. In 2023, we established an AI Center of Excellence with 1,500 specialists. Our employees spent 1.3 million hours training through our culturedemocratized self-learning platform, with more than a quarter of learning, diversity and experience. Our employees’ creativity and dedication allow EXL to meet market demand and keep pace with our clients’ evolving requirements. In 2022, our employees continued to enhance their expertise, collectively investingtaking advantage of AI training and development tools and more than 509,000 hours57% of our employees participating in developing their professionaldigital skills functional and leadership capabilities and domain expertise.training. We achieved more than 8,000 specializations across keydeveloped several generative AI applications for internal use in areas such as cloud, analyticsemployee self-service, recruiting and artificial intelligence solution architecture, among others.finance, and embedded AI into our core solutions. We now have more than 150 AI use cases, with over 30 deployments in production with go-live for 6 clients.
(1) Adjusted EPS is a non-GAAP financial measure. See “Non-GAAP Reconciliation” later in this proxy statement.
| EXL 2024 Proxy Statement | / |
This year’s Proxy Statement continues to highlighthighlights continued progress on our environmental, social and governance (ESG)sustainability efforts, which we view as integralcontribute to our corporate strategy. In 2022,business success. We have installed solar power projects at several of our centers in India and also transitioned several centers in India and the UK to renewable energy through open access arrangements, which has helped reduce our Scope 2 greenhouse gas emissions. We have continued our focus on diversity, equity and inclusion by developing diverse leadership and building an inclusive work culture where our employees are empowered to bring their authentic contributions, collaborate and drive innovation. Making good on our commitment to not only run a world class business, but to also support our people and the communities in which we made strides towardoperate, we significantly increased our transition to sustainable energy and gave back tocommunity engagement participation: EXL employees contributed more than 14,000 people in37,000 volunteer hours as part of our communities aroundcommunity engagement efforts, up approximately 22,000 hours from the world through volunteering inprior year, and more than 19,000 of our signatureemployees joined EXL-sponsored community engagement initiatives, Skills to Win and Education as a Foundation. We also helped our clients make their businesses more sustainable through the use of cloud services, digital operations and solutions resultingup from 7,000 participants in paper reduction and analytics to meet compliance and risk objectives. We continuously improve on our corporate governance – in 2022, by allocating formal oversight over ESG-related controls and disclosures to our Audit Committee, and by carrying through our board refreshment philosophy to promote the diversity of backgrounds, skills and professional experience among our directors necessary to oversee our evolving corporate strategy, while continuing to hold regular conversations with our stockholders on governance-related topics through our stockholder engagement program. 2022.
We are proud of this progress, and the external recognitions we received for these efforts, including for the secondfourth year as one of America’s Most Responsible Companies by Newsweek and Statista, Inc., and for the secondthird year as one of Barron’s 100 Most Sustainable Companies and a Gold rating from EcoVadis. You can read more about our commitment to ESG issuessustainability on our website, in our Sustainability Report and in the “Sustainability” section of this Proxy Statement.
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Finally, we would like to thank Anne Minto and Clyde Ostler who will be retiring from our board of directors following our 2023 Annual Meeting of Stockholders. Anne served on EXL’s board for 10 years and Clyde has been on our board since 2007. Both have played key roles in guiding our company to its current position. We would also like to welcome Andreas Fibig, a seasoned global executive with a strong record of innovation across industries and geographies, who joined EXL’s board as an independent director in January 2023, and is standing for reelection at the 2023 Annual Meeting of Stockholders.
On behalf of the board of directors of ExlService Holdings, Inc., we are pleased to invite you to the 20232024 Annual Meeting of Stockholders, which will be held on June 20, 2023.2024. We look forward to sharing more about our Companycompany at the Annual Meeting. We encourage you to carefully read the attached 20232024 Annual Meeting of Stockholders and Proxy Statement, which contains important information about the matters to be voted upon and instructions on how you can vote your shares.
Your vote is important to us. Please vote as soon as possible whether or not you plan to participate in the Annual Meeting.
The board of directors and management look forward to your attendance at the Annual Meeting.
Sincerely,
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Rohit Kapoor Chair and CEO | Vikram Pandit |
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Notice of 20232024 Annual Meeting of Stockholders
Dear Stockholder:
You are cordially invited to the 20232024 Annual Meeting of Stockholders of ExlService Holdings, Inc., a Delaware corporation (the “Company”), for the purposes of voting on the following matters:
| 1. | the election of |
| 2. | the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for fiscal year |
| 3. | the approval, on a non-binding advisory basis, of the compensation of the named executive officers of the Company; |
| 4. | the |
| 5. |
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the transaction of such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
We will hold our Annual Meeting in virtual format only, via live audio webcast (rather than at any physical location) on June 20, 20232024 at 8:309:00 AM, Eastern Time. Our virtual meeting platform will allow for full participation as if you were attending physically. You or your proxyholder may participate, vote, and examine our stockholder list at the Annual Meeting by visiting www.virtualshareholdermeeting.com/EXLS2023EXLS2024 and using your 16-digit control number.
If you are a stockholder of record at the close of business on April 21, 2023,23, 2024, the record date for the Annual Meeting, you are entitled to vote at the Annual Meeting. A list of stockholders as of the record date will be available for examination for any purpose germane to the Annual Meeting, during ordinary business hours, at the Company’s executive offices at 320 Park Avenue, 29th Floor, New York, New York 10022, for a period of 10 days prior to the date of the Annual Meeting and at the Annual Meeting itself.Meeting. If our corporate headquarters are closed during the 10 days prior to the Annual Meeting, you may send a written request to the Corporate Secretary at our corporate headquarters, and we will arrange a method for you to inspect the list. The list of stockholders will also be available during the Annual Meeting at www.virtualshareholdermeeting.com/EXLS2023.
Please note the technical requirements for virtual attendance at the Annual Meeting, as described in the enclosed Proxy Statement beginning on page 128122 under the heading “Annual Meeting Q&A.”
Pursuant to rules promulgated by the Securities and Exchange Commission, we are providing access to our proxy materials over the Internet. On or about April 28, 2023,29, 2024, we will mail a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) to each of our stockholders of record and beneficial owners at the close of business on the record date. On the date of mailing of the
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Internet Notice, all stockholders and beneficial owners will have the ability to access all of the proxy materials on a website referred to in the Internet Notice. These proxy materials will be available free of charge.
Whether or not you expect to attend the Annual Meeting, the Company encourages you to promptly vote and submit your proxy (i) by Internet (by following the instructions provided in the Internet Notice), (ii) by phone (by following the instructions provided in
| EXL 2024 Proxy Statement | / |
the Internet Notice) or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Voting by proxy will not deprive you of the right to attend the Annual Meeting or to vote your shares. You can revoke a proxy at any time before it is exercised by voting at the Annual Meeting, by delivering a subsequent proxy or by notifying the inspector of elections in writing of such revocation prior to the Annual Meeting. YOUR SHARES CANNOT BE VOTED UNLESS YOU EITHER (I) VOTE BY USING THE INTERNET, (II) VOTE BY PHONE, (III) REQUEST PROXY MATERIALS BE SENT TO YOU BY MAIL AND THEN USE THE PROXY CARD PROVIDED BY MAIL TO CAST YOUR VOTE BY COMPLETING, SIGNING AND RETURNING THE PROXY CARD BY MAIL OR (IV) ATTEND THE ANNUAL MEETING AND VOTE.
By Order of the Board of Directors
Ajay Ayyappan
Executive Vice President, General Counsel and Corporate Secretary
New York, New York
April 28, 202329, 2024
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2023 Proxy Statement
Table of contents
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Table of contents
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20232024 Proxy Statement summary
20232024 Proxy Statement summary
Summary
Below is a summary of select components of this Proxy Statement, including information regarding this year’s stockholder meeting, nominees for our board of directors, summary of our business, performance highlights and selective executive compensation information. This summary does not contain all of the information that you should consider prior to submitting your proxy, and you should review the entire Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 20222023 (the “2022“2023 Form 10-K”). We refer to the fiscal year ended December 31, 20222023 as “fiscal year 2022,2023,” “fiscal 2022,2023,” and “2022.“2023.” Unless otherwise indicated, all prior period information has been adjusted to reflect the 5-for-1 forward stock split of our common stock effected in August 2023.
Meeting agenda, voting matters and recommendations*
| Voting proposal item |
| Board vote recommendation | ||
1. Election of directors |  | FOR the election of each nominee (pg. | ||
Required vote: Affirmative vote of a majority of votes cast
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2. Ratification of appointment of independent registered public accounting firm | | FOR (pg. | ||
Required vote: Affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote
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3. Advisory (non-binding) Say-on-Pay vote to approve executive compensation | | FOR (pg. | ||
Required vote: Affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote
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4. |  | |||
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Required vote: Affirmative vote of a majority | ||||
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* Virtual attendance at our Annual Meeting will constitute presence in person for purposes of quorum and voting at the Annual Meeting. | ||||
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Annual meeting information | ||||
| Time and date: | |||
June 20, | ||||
| Record date: | |||
| April | ||||
| Place: | |||
| Virtual format only via live audio webcast | ||||
| Voting: | |||
Stockholders as of the
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Voting methods | ||||
| Internet (pre-meeting): | |||
| www.proxyvote.com | ||||
| Mail: | |||
Follow instructions on the Internet notice | ||||
| Phone: | |||
| Call the number listed on the Internet notice | ||||
| Electronically: | |||
| Attend the Annual Meeting and vote electronically | ||||
If you are the beneficial owner of shares held in the name of a brokerage, bank, trust or other nominee as a custodian (also referred to as shares held in “street name”), your broker, bank, trustee or nominee will provide you with materials and instructions for voting your shares. See page
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20232024 Proxy Statement summary
Our business
We are a leading data analytics and digital operations and solutions company that partnerscompany. We partner with clients using a data and AI-led approach to improvereinvent business models, drive better business outcomes and unlock growth. By bringing together deep domain expertisegrowth with robustspeed. EXL harnesses the power of data, powerful analytics, cloud, artificial intelligence (“AI”), and machine learning (“ML”), we create agile, scalable solutions and execute complexdeep industry knowledge to transform operations for the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media and retail, among others. Focused on driving faster decision making and transforming operating models, EXL was founded onin 1999 with the core values of innovation, collaboration, excellence, integrity and respect. HeadquarteredWe are headquartered in New York, our team is over 45,400 strong, with more than 50 officesand have approximately 54,000 employees as of December 31, 2023, spanning six continents.
| Company 3 year performance | ||||||||||||||||||||||||||||||||||||||||||||||||
| Company’s three year performance | ||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue (Year-over-year growth %) | Revenue (Year-over-year growth %) | |||||||||||||||||||||||||||||||||||||||||||||||
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| Revenue by segment information ($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue by segment information ($ in millions) | 2020 YOY% | 2021 YOY% | 2022 YOY% | 2021 YOY% | 2022 YOY% | 2023 YOY% | ||||||||||||||||||||||||||||||||||||||||||
Insurance | $341.8 | -1.3% | $382.0 | 11.8% | $448.7 | 17.5% | $382.0 | 11.8% | $448.7 | 17.5% | $529.9 | 18.1% | ||||||||||||||||||||||||||||||||||||
Healthcare | 101.2 | 4.0% | 112.4 | 10.9% | 97.4 | -13.4% | 112.4 | 10.9% | 97.4 | -13.4% | 106.0 | 8.9% | ||||||||||||||||||||||||||||||||||||
Emerging Business | 152.7 | -19.7% | 167.2 | 9.5% | 218.6 | 30.7% | 167.2 | 9.5% | 218.6 | 30.7% | 265.7 | 21.5% | ||||||||||||||||||||||||||||||||||||
Analytics | 362.7 | 1.5% | 460.7 | 27.0% | 647.3 | 40.5% | 460.7 | 27.0% | 647.3 | 40.5% | 729.1 | 12.6% | ||||||||||||||||||||||||||||||||||||
Consolidated | $958.4 | -3.3% | $1,112.3 | 17.1% | $1,412.0 | 25.8% | $1,112.3 | 17.1% | $1,412.0 | 25.8% | $1,630.7 | 15.5% | ||||||||||||||||||||||||||||||||||||
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20232024 Proxy Statement summary
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20232024 Proxy Statement summary
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20232024 Proxy Statement summary
Total stockholder return
The graphs below compare our 1-year, 3-year and 5-year cumulative total stockholder return (“TSR”) as of December 31, 20222023 with the median TSR for companies comprising Nasdaq, S&P 600 and our peer group.
1-Year TSR
| 3-Year TSR
| 5-Year TSR
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20232024 Proxy Statement summary
Corporate governance highlights
The following information is based on our board profile immediately following our Annual Meeting (assuming the election of our seveneight director nominees), and reflects current board practices.
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20232024 Proxy Statement summary
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2023 Proxy Statement summary
Nominees for election as directors
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20232024 Proxy Statement summary
Director nominees - skills matrix
Our director nominees review and indicate whether they are experts in each of the skills and areas of experience listed below. An “expert,” for purpose of the skills set forth in this skill matrix, means an individual who, based on career experience (other than as an EXL director), has developed and continues to maintain comprehensive knowledge and command over the subject matter, including relevant updates. Definitions for each of these skills, as well as a description for how these are considered for candidates for directors, can be found under “Director Qualifications” beginning on page 29 of this Proxy Statement.
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| Finance and accounting | Executive leadership | Public company governance | Analytics | Human capital management | Digital operations and solutions | Marketing | Global experience | Risk oversight and management | Information and cyber security | ESG | Mergers acquisitions | |||||||||||||
Vikram Pandit | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
Rohit Kapoor | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
Thomas Bartlett | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
Andreas Fibig | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
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Kristy Pipes | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
Nitin Sahney | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||
Jaynie Studenmund | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
Sarah K. Williamson | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
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2024 Proxy Statement summary
Board statistics*
Board tenure
| Gender diversity
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| Racial and ethnic diversity
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Board independence
* Following our Annual Meeting, assuming election of all nominees
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20232024 Proxy Statement summary
Our purpose and core values
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2024 Proxy Statement summary
Sustainability
At EXL, we believe that there is always a better way; we look deeper, find it, and make it happen. This purpose informs our corporate culture, which, in turn, is rooted in our five core values. In line with our purpose, values and culture, we are committed to finding a better way through sustainability initiatives that are key toaligned with our long-term corporate strategy and designed to benefit our stockholders, clients, employees, communities and communities.manage expectations and commitments across various stakeholder groups. See “Sustainability” beginning on page 4844 below for more details on our recent accomplishments in sustainability.
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2023 Proxy Statement summary
2022 Compensation highlights
Named Executive OfficersOverview
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2022 Standard annual compensation
| Compensation component | Rohit Kapoor | Maurizio Nicolelli | Vikas Bhalla(3) | Vivek Jetley | Ankor Rai | |||||||||||||||
| Salary | $766,384 | $483,822 | $265,432 | $440,164 | $420,082 | |||||||||||||||
| Non-equity incentive plan compensation | 1,829,887 | 554,929 | 357,340 | 525,488 | 481,822 | |||||||||||||||
| Equity awards (1) | 8,356,213 | 1,810,865 | 1,964,960 | 1,862,689 | 1,553,192 | |||||||||||||||
| Other compensation (2) | 58,423 | 9,654 | 38,432 | 9,654 | 9,654 | |||||||||||||||
| Total | $11,010,906 | $2,859,270 | $2,626,165 | $2,837,996 | $2,464,750 | |||||||||||||||
(1) Equity award values reflect equity grants in 2022 based on the grant date fair value of awards in accordance with FASB ASC Topic 718.
(2) For each named executive officer, this category includes, if applicable, his perquisites and personal benefits, hiring bonus, changes in pension value, Company-paid life insurance premiums and Company contributions to our 401(k) plan. A detailed discussion of the compensation components for each named executive officer for fiscal year 2022 is provided in the “Summary compensation table for fiscal year 2022” beginning on page 87.
(3) Mr. Bhalla is based in India. Certain of his compensation components, as described herein, are paid in Indian rupees (INR), and are converted for comparison purposes at 82.72 INR to 1 U.S. Dollar (USD), which was the exchange rate on December 30, 2022.
On an annual basis, we submit to our stockholders a vote to approve, on a non-binding advisory basis, the compensation of our named executive officers as described in this Proxy Statement. We refer to this vote as “say-on-pay”. Please refer to our Compensation Discussion and Analysis, beginning on page 63 for a complete description of our 2022 compensation program.
Below are a few highlights of our executive compensation:
| • | Compensation philosophy: Our executive compensation philosophy is focused on |
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2023 Proxy Statement summary
| • | Over |
| • | Annual incentive program |
| – | Company-wide metrics (75%)—Revenue and adjusted operating profit margin (“AOPM”) |
| – | Individual metrics (25%)—Linked to areas of performance that are specific to each executive |
In 2023, we achieved 100.6% of our revenue performance target, and 101.4% of our AOPM target resulting in annual incentive payout calculations for our named executive officers, ranging from 113% of target performance to 133% of target performance. |
| EXL 2024 Proxy Statement | / | 11 |
2024 Proxy Statement summary
| • | Long-term equity incentive program: We also continued our equity incentive program, which |
In 2023, we also granted |
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| • | Compensation Policies. Our compensation program is designed to reflect appropriate governance practices aligned with the needs of our business, and includes, among others, the following features: robust clawback policy; robust stock ownership guidelines; limited perquisites; no excise tax gross-ups; and an anti-hedging and anti-pledging policy. See “Executive compensation program, practices and policies” beginning on page 65 below. |
Compensation mix
Chair & CEO compensation mix | NEO compensation mix (Excluding Chair & CEO) | |
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* Base salary also includes items included in “All Other Compensation” in the Summary Compensation Table on page 84.
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2023 Proxy Statement summary
Compensation mix
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* Base salary also includes other compensation
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Our board of directors
Our board of directors
Our board of directors currently consists of nine directors (including our seveneight director nominees, and twoone of our directors who currently serveserves on the board, but will not stand for reelection)re-election) with diverse experience, including in analytics, digital operations and solutions, client industries, information and cybersecurity, human capital management, ESG,sustainability, and finance and accounting, among others.
From top left: Clyde Ostler* (Independent Director), Nitin Sahney (Independent Director and Nominating and Governance Committee Chair), Kristy Pipes (Independent Director and Audit Committee Chair), Rohit Kapoor (Vice Chairman and CEO),Andreas Fibig (Independent Director) Jaynie Studenmund, (Independent Director and Compensation and Talent Management Committee Chair), Andreas Fibig
From bottom left: Sarah K. Williamson, (Independent Director) , Rohit Kapoor (Chair and CEO), Vikram Pandit (Independent Chairman)(Lead Director), Som MittalMittal* (Independent Director), Anne Minto*. Not pictured: Thomas Bartlett (Independent Director)
* Not standing for reelectionre-election
| EXL 2024 Proxy Statement | / | 13 |
Our board of directors
Board diversity matrix
2024 Board diversity matrix (as of April 29, 2024)*
Total number of directors: | 9 | |||
| Female | Male | |||
| Part I: Gender identity | ||||
Directors | 3 | 6 | ||
| Part II: Demographic background | ||||
Asian | — | 4 | ||
White (other than Middle Eastern) | 3 | 2 | ||
* Includes our nine current directors, including our eight nominees for election at the Annual Meeting.
2023 Board diversity matrix (as of April 29, 2023)
Total number of directors: | 9 | |||
| Female | Male | |||
| Part I: Gender identity | ||||
Directors | 3 | 6 | ||
| Part II: Demographic background | ||||
Asian | — | 4 | ||
White (other than Middle Eastern) | 3 | 2 | ||
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Our board of directors
Board diversity matrix
2023 Board diversity matrix (as of April 28, 2023)*
Total number of directors: | 9 | |||
| Female | Male | |||
| Part I: Gender identity | ||||
Directors | 3 | 6 | ||
| Part II: Demographic background | ||||
Asian | — | 4 | ||
White (other than Middle Eastern) | 3 | 2 | ||
* Includes our nine current directors, including our sevenDirector nominees for election at the Annual Meeting
Upon the recommendation of our Nominating and Governance Committee, we are pleased to propose eight of our existing directors as nominees for election as directors at the Annual Meeting. As previously disclosed, one of our current directors, Mr. Mittal, will not be standing for re-election at the Annual Meeting; the remaining eight directors are our director nominees at the Annual Meeting.
2022 Board diversity matrix (asThe following tables provide a summary of April 28, 2022)our board composition by tenure, age, gender and independence immediately after our Annual Meeting (assuming the election of all nominees).
Total number of directors: | 9 | |||
| Female | Male | |||
| Part I: Gender identity | ||||
Directors | 3 | 6 | ||
| Part II: Demographic background | ||||
Asian | — | 4 | ||
White (other than Middle Eastern) | 3 | 2 | ||
| Board tenure | Age distribution | Gender diversity | Board independence | |||
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* Following our Annual Meeting, assuming election of all nominees
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Our board of directors
DirectorOur nominees for election at the Annual Meeting
Upon the recommendation of our Nominating and Governance Committee, we are pleased to propose seven of our existing directors as nominees for election as directors at the Annual Meeting. As previously disclosed, two of our current directors, Ms. Minto and Mr. Ostler, will not be standing for re-election at the Annual Meeting; the remaining seven directors are our director nominees at the Annual Meeting.
The following tables provide a summary of our board composition by age, gender, tenure and independence immediately after our Annual Meeting (assuming the election of all nominees).
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Our nominees for re-election as directors at the Annual Meeting are as follows:
| Rohit Kapoor |
| Vikram Pandit
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| Thomas Bartlett Independent Director |
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| Andreas Fibig Independent Director |
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| Kristy Pipes Independent Director and Chair of the Audit Committee |
| Nitin Sahney Independent Director and Chair of the Nominating and Governance Committee | |||
| Jaynie Studenmund Independent Director and Chair of the Compensation and Talent Management Committee |
| Sarah K. Williamson Independent Director | |||
We believe that our director nominees, and continuing directors, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to maintain an effective board to serve the best interests of the Company and its stockholders described below under “Director qualifications” (see pages 34-35).beginning on page 29.
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Our board of directors
The name, age (as of the date of this Proxy Statement), principal occupation and other information, including the specific experience, qualifications, attributes or skills that led to the conclusion that such person should serve as a director of the Company, with respect to each of the nominees, are set forth below. There are no family relationships among any of our directors or executive officers.
Nominees for election at the Annual Meeting - Biographical information
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* Audit committee financial expert under applicable SEC rules and regulations
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Our board of directors
Rohit Kapoor Director since November 2002 | (since 2008) | Non-independent |
|
Age:
Committees: N/A
Business experience at the Company
• Chair and CEO (2024 - present) • Vice
• President and CEO (2008 - 2012)
• Various senior leadership roles, including CFO and COO (2000 - 2008)
Other business experience • Business head, Deutsche Bank, a financial services provider (1999 - 2000)
• Various capacities at Bank of America in the United States and Asia, including India (1991 - 1999)
• Lead independent director, director and member of the audit committee, CA Technologies, Inc. (NASDAQ: CA), a software services company (2011 - 2018)
• Member, Board of Directors, American India Foundation (AIF)
• Member, Board of Directors, Pratham (Tristate Chapter) | ||||||
SKILLS | |||||||
| Finance and accounting | ||||||
| Executive leadership (within the last 5 years) | ||||||
| Public company governance | ||||||
| Analytics | ||||||
| Human capital management | ||||||
| Digital operations and solutions | ||||||
| Marketing | ||||||
| Global experience | ||||||
| Risk oversight and management | ||||||
| Mergers and acquisitions | ||||||
| EXL 2024 Proxy Statement | / | 17 |
Our board of directors
Vikram S. Pandit Director since October 2018 | Lead Director since 2024 (Chair of Board from 2022 - 2024) | Independent |
| Age: 67 — is Chairman and Chief Executive Officer of The Orogen Group, which makes significant long-term strategic investments in financial services companies and related businesses. Mr. Pandit’s business experience, skills and directorships are detailed below. The Company has concluded, based in part on Mr. Pandit’s more than 30 years of experience in the financial services industry, including his experience as Chief Executive Officer, and a member of the board of directors, of Citigroup Inc. (NYSE: C), that Mr. Pandit should serve as a director. Committees: • Compensation and Talent Management; Nominating and Governance Business experience • Chairman and Chief Executive Officer, The Orogen Group LLC (July 2016 - present) • Chairman, TGG Group (February 2014 - June 2016) • Chief Executive Officer, Citigroup Inc. (December 2007 - October 2012) Public directorships during past five years • Director and member of the nominating and governance and finance committees, Virtusa Corporation (NASDAQ: VRTU) (2017 - 2021) • Lead Independent Director, chair of the human resources and compensation committee and member of the corporate governance and nominating committee, former member of the audit committee, Bombardier Inc. (TSX: BBD) (2014 - 2021) Other relevant experience • Director, Citigroup Inc. (December 2007 - October 2012) • Director, Fair Square Financial Holdings (2017 - 2021) • Director, Westcor Land Title Insurance Company (2020 - present) • Chairman, JM Financial Credit Solutions Ltd. (2014 - present) • Member of the Board of Overseers of Columbia Business School • Member of the Board of Visitors of Columbia School of Engineering and Applied Science | |||||
| SKILLS | ||||||
| Finance and accounting | |||||
| Executive leadership (within the last 5 years) | |||||
| Public company governance | |||||
| Analytics | |||||
| Human capital management | |||||
| Digital operations and solutions | |||||
| Global experience | |||||
| Mergers and acquisitions | |||||
/ | EXL |
Our board of directors
Thomas Bartlett Director since March 2024 | Independent |
| Age: 66 — is a seasoned business executive with extensive experience in technology and management of real estate. Mr. Bartlett’s business experience, skills and directorships are detailed below. The Company has concluded, based in part on Mr. Bartlett’s experience as the former Chief Executive Officer of American Tower Corporation, as well as his prior executive experience at Verizon Communications, that Mr. Bartlett should serve as a director. Committees: • Audit*; Nominating and Governance Business experience • Former Chief Executive Officer of American Tower Corporation (2020-2023); Executive vice president and chief financial officer (2009-2020); Treasurer (July 2017-Nov. 2018, 2012-2013) • Various operations and business development roles with predecessor companies and affiliates, including most recently senior vice president and corporate controller, Verizon Communications (1984-2009) • Began career at Deloitte, Haskins & Sells Public directorships during past five years • Director and member of the audit committee and the compensation committee, Otis Worldwide Corporation (NYSE: OTIS) (2023-present) • Director and member of the audit committee and chair of the finance committee, Equinix, Inc. (Nasdaq: EQIX) (2013-2021) • Director, American Tower Corporation (NYSE: AMT) (2020-2023) Other relevant experience • Member, Business Roundtable • Member, Board of Advisors of the Rutgers Business School • Member, Samaritans Advisory Council • Former member, Massachusetts Institute of Technology Presidential CEO Advisory Board • Former member, World Economic Forum’s Information and Communications Technology Board of Governors • Former member, National Association of Real Estate Investment Trust (NAREIT) Executive Committee | |||||
SKILLS | ||||||
| Finance and accounting | |||||
| Executive leadership (within the last 5 years) | |||||
| Public company governance | |||||
| Human capital management | |||||
| Digital operations and solutions | |||||
| Global experience | |||||
| Risk oversight and management | |||||
| Mergers and acquisitions | |||||
* Audit committee financial expert under applicable SEC rules and regulations.
| EXL 2024 Proxy Statement | / | 19 |
Our board of directors
Andreas Fibig Director since January 2023 |
|
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Age:
Committees: •
Business experience
• Chairman and Chief Executive Officer, International Flavors & Fragrances, Inc., a food ingredients, beverage, scent, healthcare and biosciences company (2014 - 2022)
• President and Chairman of the Board of Management, Bayer Healthcare Pharmaceuticals, LLC a global pharmaceutical company (2008 - 2014)
• Senior Vice President/General Manager and various leadership positions, Pfizer, Inc., a multinational pharmaceutical and biotechnology company (2000 - 2008))
Public directorships during past five years
• Director, International Flavors & Fragrances, Inc. (2011 - 2022, Chairman from 2014 - 2022)
• Independent director and member of the research and development committee, former member of the audit committee, Novo-Nordisk A/S (NYSE: NVO), a global healthcare company (2018 - present)
• Independent director and member of the audit committee and finance and risk policy committee, Bunge Limited (NYSE: BG), a global agribusiness and food company (2016 - 2018)
Other relevant experience
• Chairman, Simtra (formerly Baxter Bioscience), a pharmaceutical contract development and manufacturing organization (2023 - present) • Director, Indigo Agriculture, an agricultural technology company (2022 - present)
• Director, EvodiaBio, a bioindustrial aroma company (2022 - present) | ||||||||
SKILLS | |||||||||
| Executive leadership (within the last 5 years) | ||||||||
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Our board of directors
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/ | EXL |
Our board of directors
Kristy Pipes Director since January 2021 |
|
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Age:
Committees:
• Audit (Chair)*; Compensation and Talent Management
Business experience
• Chief Financial Officer, member of the Management Committee and various leadership positions, Deloitte Consulting LLP, a management consulting firm (1999 - 2019)
• Vice President and Manager, Finance Division, Transamerica Life Companies (1997 - 1999)
• Senior Vice President and Chief of Staff for the President and CEO, among other senior management positions, First Interstate Bank of California (1985 - 1996)
Public directorships during past five years
• Director and chair of the audit committee, and member of the nominating, governance and sustainability committee, Public Storage (NYSE: PSA), an international self storage company
• Director and chair of the audit committee, AECOM (NYSE: ACM), an international infrastructure consulting firm (2022 - present)
• Director and member of the nominating, governance, and sustainability committee, Savers Value Village (NYSE: SVV) one of the world’s largest thrift retailers (2023 - present) • Director and chair of the audit committee, and member of the nominating/corporate governance committee, PS Business Parks, Inc. (NYSE: PSB), a commercial property real estate investment trust (2019 - 2022)
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SKILLS | |||||||||
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Finance and accounting | ||||||||
| Executive leadership
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| Public company governance | ||||||||
| Analytics | ||||||||
| Human capital management | ||||||||
| Global experience | ||||||||
| Risk oversight and management | ||||||||
| Information and cybersecurity | ||||||||
* Audit committee financial expert under applicable SEC rules and regulations.
| EXL | / |
Our board of directors
Nitin Sahney Director since January 2016
| Independent |
|
Age:
Committees:
• Nominating and Governance (Chair);
Business experience
• Founder, Member-Manager and Chief Executive Officer, PharmaCord, LLC, a company that helps biopharma manufacturers address product access hurdles (2016 - present)
• Operating Advisor, Clayton Dubilier & Rice Funds, a private equity firm (2016 - 2017)
• President and CEO (2014 - 2015) and President and COO (2012 - 2014) of Omnicare Inc., a former New York Stock Exchange-listed Fortune 500 company in the long-term care and specialty care industries
• Manager of a healthcare investment fund (2008 - 2010)
• Founder and CEO of RxCrossroads, a specialty pharmaceutical company (2001 - 2007)
• Prior leadership positions with Cardinal Healthcare, a global healthcare services and products company
Public directorships during past five years
• Director and member of the audit committee and the nominating and governance committee, Option Care Health, Inc. (NASDAQ: OPCH) (2019 -
Other relevant experience
• Member of the Board of Trustees, University of Louisville (2016 - 2019) | |||||
| SKILLS | ||||||
|
Finance and accounting
| |||||
| Executive leadership (within the last 5 years) | |||||
| Public company governance | |||||
| Mergers and acquisitions | |||||
* Audit committee financial expert under the applicable SEC rules and regulations
/ | EXL |
Our board of directors
Jaynie Director since September 2018
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Age:
Committees:
• Compensation and Talent Management (Chair), Audit*
Business experience
• Chief Operating Officer, Overture Services, a pioneer in paid search and search engine marketing
• President & Chief Operating Officer, PayMyBills, the leading consumer bill payment and presentment company (1999 - 2001)
• Previously for over two decades served as Executive Vice President and Head of Consumer and Business Banking for three of the nation’s largest banks at the time and primarily for First Interstate of California. Today, these three banks form the backbone of Chase’s and Wells Fargo’s consumer business in California following the era of bank consolidation.
• Management Consultant, Booz, Allen & Hamilton
Public directorships during past five years
• Director and chair of the compensation committee and member of the risk management committee, Pacific Premier Bancorp (Nasdaq: PPBI), a top performing regional bank
• Director and member of the contracts committee, audit committee and nomination and governance committee, Western Asset Management funds, a major global fixed income fund, and director of affiliated funds for Western Asset Management (2004 - present)
• Director and chair of the compensation committee and member of the nominating and governance committee, CoreLogic, Inc. (NYSE: CLGX) until its acquisition in 2021 (2012
Other relevant experience • Director, compensation committee chair and member of the compliance committee, Pinnacle Entertainment (Nasdaq: PNK) until its acquisition in 2018 (2012 - 2018)
• Member of the National Association of Corporate Directors (“NACD”) Directorship 100, 2021, as one of the top public company directors in the U.S.; Named to Women Inc.’s 2019 Most Influential Corporate Directors listing
• Board chair emeritus and life trustee, Huntington Health, an affiliate of Cedars Sinai Health
• Trustee and board member, and member of the finance, audit and compensation committees, J. Paul Getty Trust | |||||
SKILLS | ||||||
| Finance and accounting
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| Executive leadership | |||||
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| Analytics | |||||
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| Human capital management | |||||
| Digital operations and solutions | |||||
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experience | ||||||
| Risk oversight and
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| ESG | |||||
| Mergers and
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* Audit committee financial expert under applicable SEC rules and regulations.
| EXL | / | |
Our board of directors
Sarah K. Williamson Director since June 2023 | Independent |
| Age: 60 — is a leader in the global financial services and investment industries. Ms. Williamson’s business experience, skills and directorships are detailed below. The Company has concluded, based in part on Ms. Williamson’s experience as the Chief Executive Officer FCLTGlobal, as well as her prior experience at Wellington Management Company, LLP and her expertise in the global financial services and investment industries, that Ms. Williamson should serve as a director. Committees: • Audit*; Nominating and Governance Business experience • Chief Executive Officer, FCLTGlobal, a not-for-profit organization dedicated to encouraging long-term behaviors in business and investment decision-making (2016 - present) • Partner, Global Director of Alternative Investments, among other senior positions, Wellington Management Company LLP, a private independent investment management firm (1995 - 2016) • Senior Consultant, McKinsey & Company (1989-1994) Public directorships during past five years • Director and member of the audit committee and the compensation committee, Evercore (NYSE: EVR), a public investment bank (2018 - present) Other relevant experience • Board chair, Whitehead Institute for Biomedical Research, a non-profit research institution at the Massachusetts Institute of Technology • Member of the board, MITIMCo, the Massachusetts Institute of Technology Investment Management Company • Member of the board, Women’s Foundation of Boston • Member, Council on Foreign Relations, an independent American think tank focused on international relations and U.S. foreign policy | |||||
| SKILLS | ||||||
| Finance and accounting | |||||
| Executive leadership (within the last 5 years) | |||||
| Public company governance | |||||
| Global experience | |||||
| Risk oversight and management | |||||
| ESG | |||||
| Mergers and acquisitions | |||||
* Audit committee financial expert under applicable SEC rules and regulations.
| 24 | / | EXL 2024 Proxy Statement |
Corporate governance
Corporate governance
Director independence
In determining director independence, the board of directors considered the transactions and relationships set forth below under “Certain Relationships and Related Person Transactions—Related Party Transactions” and routine service arrangements between the Company and Westcor Land Title Insurance Company (“Westcor”). During 2022,2023, one of our directors, Mr. Pandit, served as a non-executive director and, through his ownership in The Orogen Group (see below for information on Mr. Pandit’s relationship with The Orogen Group), owned an immaterial indirect equity interest, in Westcor. Mr. Pandit is not, and was not during 2022,2023, a partner, controlling shareholder or executive officer of Westcor.
Based on its review of all applicable relationships, our board of directors has determined that all of the members on our board of directors, other than Mr. Kapoor, meet the independence requirements of the Nasdaq Stock Market and federal securities laws.
Meeting attendance
We expect our directors to attend all board of directors meetings and meetings of committees on which they serve. We also expect our directors to spend sufficient time and meet as frequently as necessary to discharge their responsibilities properly. It is our policy that all of our directors standing for election should attend our Annual Meetings of Stockholders absent exceptional cause.
Incumbent director meeting attendance
Board and committeeCommittee meetings in 20222023
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| Board meetings | Audit Committee meetings | Compensation and Talent Management Committee meetings | Nominating and Governance Committee meetings | |||||||||||||||
| 5 | 7 | 5 | 5 | |||||||||||||||
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| EXL 2024 Proxy Statement | / | 25 |
Corporate governance
Corporate governance framework
TheOur board is responsible for providing governance and oversight over the effectiveness of policy and decision-making with respect to the strategy, operations and management of EXL, in order to enhance our financial performance and stockholder value over the long term.
Our board’s commitment to strong corporate governance is informed by the five core values of our corporate culture: innovation, respect, integrity, excellence and collaboration. Our board seeks to maintain best practices in corporate governance by reviewing and updating our governance policies, as appropriate, at least annually, and provides oversight over our risk management and strategic planning as relates to our growth, human capital management, and environmental, social and governancesustainability matters, each as discussed further below.
Governance policies
Our Corporate Governance Guidelines and other governance policies, including our committee charters and Code of Conduct and Ethics, codify our corporate governance framework.
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The Corporate Governance Guidelines address Board responsibilities and conduct, director qualifications and membership matters, director orientation and continuing education, Board and committee meetings, and |
Our Code of Conduct and Ethics is applicable to our directors, officers and
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Our committee charters specifically set out the authority and responsibilities of the Committees of the board.
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/ | EXL 2024 Proxy Statement | |
Corporate governance
Beyond the board room
Director onboarding | Director continuing education | |||||||||||||||||||||||||||||||
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| All new directors participate in an orientation program shortly after their election or appointment, which is overseen by the Nominating and Governance Committee. New directors |
| We encourage our directors to participate in director continuing education (“DCE”): • We provide reimbursements for participation in DCE courses | ||||||||||||||||||||||||||||
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| participate in site visits and presentations by
• strategic and business plans
• significant financial, accounting and risk
• compliance programs, and
• corporate governance framework. | ||||||||||||||||||||||||||||||
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| engage with our employees, stakeholders and community members directly. •
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• We provide regular updates to our directors on corporate governance and ESG matters, executive compensation developments and trends, accounting standards changes, risk management matters and other legal and other topics of interest from a variety of internal and external sources.
Our directors are active DCE participants: For example, in
• attended
• participated in over
• received an NACD Cybersecurity certification following her participation in the NACD’s course on Cybersecurity led by Carnegie Mellon University.
In 2023, while visting our India offices, our directors had the opportunity to meet with NASSCOM leadership to discuss a wide range of industry-related topics. In addition, Ms. Williamson attended the Stanford University Directors’ College in June 2023. Certain of our directors are also involved in industry-level or general governance matters. For example:
•Ms. Williamson’s work as the CEO of FCLTGlobal involves assisting the boards of directors of its member companies with governance matters and investor-corporate engagement, among others. • Mr. Mittal is the former president and chairman of the National Association of Software and Service Companies (“NASSCOM”), an Indian trade association and governance group focused on the information technology and business process outsourcing industry, in which we, and many of our U.S. peer companies with operations in India, are members. He advises NASSCOM on best practices for corporate governance and is currently assisting NASSCOM in the development of data privacy legislation in India.
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Employee engagement | ||||||||||||||||||||||||||||
| Our directors are generally invited to visit any EXL office and have complete and open access to our management and employees. | |||||||||||||||||||||||||||
| They also take part in EXL company initiatives in • In 2023, our directors had several • In January 2024, Ms. Williamson | |||||||||||||||||||||||||||
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| Kristy Pipes Independent director |
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Independent | Som Mittal Independent director | Jaynie Studenmund Independent director |
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| EXL 2024 Proxy Statement | / | 27 |
Corporate governance
Board leadership structure
|
| Our board of directors is currently led by Rohit Kapoor, our Chair and CEO, and Vikram Pandit, our
| ||||
Rohit Kapoor Chair and CEO | Vikram Pandit Lead Director | |||||
Consolidating
Our Sixth Amended and Restated By-laws (our “By-laws”) provide that our Chair or, in the Vice Chairmanabsence of our Chair, our Lead Director, or in the absence of both our Chair and Lead Director, our CEO, calls meetings of our board of directors to order and acts as the chair for those board meetings. In the absence of our Chair, our Lead Director, and our CEO, a majority of our directors present may elect as chair of the meeting any director present. Independent directors meet at least quarterly in executive session without any management directors or members of the Company’s management present. Our Corporate Governance Guidelines provide that in the absence of our Chair, our Lead Director or, in the absence of the Lead Director, a director chosen by the directors meeting in executive session, presides at all executive sessions.
The board of directors does not have a permanent policy or practice regarding the combination of the Chair and CEO role. At present, the board believes that consolidating the Chair and CEO positions allows our CEO to contribute his experience and perspective regarding management and leadership of the Company towards the goals of improved corporate governance and greater management accountability. In addition,This structure also provides greater information flow between the management team and directors. At the same time, the presence of our ChairmanLead Director ensures that the board can retain sufficient delineation of responsibilities, such that our ChairmanLead Director and our Vice ChairmanChair and CEO may each successfully and effectively perform and discharge their respective duties and, as a corollary, enhance our prospects for success. As a result, the Company will benefitbenefits from the ability to integrate the collective leadership and corporate governance experience of our ChairmanLead Director and our Vice ChairmanChair and CEO, while retaining the ability to facilitate the functioning of the board of directors independently of our management and to focus on our commitment to corporate governance.
For the foregoing reasons, our board of directors has determined that its leadership structure is appropriate and in the best interests of our stockholders at this time.
/ | EXL 2024 Proxy Statement | |
Corporate governance
Director qualifications, refreshment and evaluations
Director qualifications
|
Key skills and attributes we look for in board nominees
|
The board of directors considers it paramount to achieving excellence in corporate governance
to assemble a board of directors that, taken together, has the breadth of skills, qualifications, experience and attributes appropriate for functioning as the board of our Company and working productively with management. The Nominating and Governance Committee of the board is responsible for recommending nominees who are qualified and bring a diverse set of skills and qualifications to oversee the Company effectively.
The Nominating and Governance Committee has not formally established any minimum qualifications for director candidates, but pursuant to our Corporate Governance Guidelines, our board seeks independent directors from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. The board believes that its membership should reflect a diversity of gender, race, ethnicity, age, and skills and experience in the context of the needs of the board and endeavors
to consider such criteria, when applicable, for positions on the board. The Nominating and Governance Committee assesses each director candidate on this basis. The Nominating and Governance Committee considers a number of factors in selecting director candidates, including, among others: ethical standards and integrity; independence; diversity of professional and personal backgrounds; skills and experience; other public company directorships; and financial literacy and expertise; communication skills; and ability and willingness to comply with Company policies and procedures.
In light of our business, the primary areas of experience, qualifications and attributes typically sought and put forward by the Nominating and Governance Committee in director candidates include, but are not limited to, the following:
|
Executive leadership Experience holding significant leadership positions, including as a CEO or head of a significant business, to help us drive business strategy, growth and performance. | |||
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Finance and accounting Experience with finance, accounting or financial reporting processes, to help drive financial performance. | |||
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| Global companies Experience working outside of the United States or with multinational companies, to help facilitate our global expansion. | |||
|
| EXL 2024 Proxy Statement | / | 29 |
Corporate governance
| Board experience Understanding of public company board of director and fiduciary duties, to help provide perspective on corporate governance best practices and related matters. | |||
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Experience with data analytics, digital operations and solutions, artificial intelligence and machine learning, and other key technologies that are central to our business.
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| Client and industry knowledge Experience with our key client industries, including insurance, healthcare, banking and financial services, finance/accounting, and our other capabilities, to help deepen our knowledge of our key industry verticals and markets in which we do business. | |||
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| Risk oversight/management Experience assessing and overseeing the overall risk profile of multinational public companies.
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| Human capital management Experience in management and development of human capital, including management of a large workforce, diversity and inclusion, talent development, workplace health and safety, compensation and other human capital issues. | |||
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| Diverse backgrounds We seek directors with diverse professional and personal backgrounds and perspectives to promote the values of diversity and inclusion from the top and to provide perspective from varying viewpoints. | |||
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Experience in Experience in managing | |||
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| Information and cybersecurity Experience in information and cybersecurity matters, best practices and associated risks.
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Mergers and acquisitions Experience in mergers and acquisitions as a component of business development and strategy. | |||
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Marketing Experience in marketing and branding of multinational companies. | |||
/ | EXL 2024 Proxy Statement | |
Corporate governance
Refreshment
Our Nominating and Governance Committee
Considerations include whether the composition of the board of directors (and its committees) includes sufficient diversity and independent skill sets and background as appropriate for our immediate and long-term strategic needs. These considerations are also informed by discussions with our investors through stockholder engagement. In terms of diversity, our board, following the Annual Meeting will be
|
Board refreshment
| |||||
ADDITIONS
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EXITS
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2023 Andreas Fibig Sarah K. Williamson |
2023
Anne Minto Clyde Ostler
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While the Company does not maintain term limits, our Corporate Governance Guidelines provide that the expectationsexpectation for new directors is a maximum term of ten years. Each of our director nominees, other than Mr. Kapoor, our Vice ChairmanChair and CEO, has served on the board for less than ten years as of the date of this Proxy Statement. The board actively manages board refreshment and succession planning at the board and committee level. For example, the board generally expects that each member serve on two committees, and that each committee chair serve for a maximum of five years. The board expects that over the next few years, the committee and board composition will continue to change due to rotation and retirement. The Nominating and Governance Committee will identify successors based on the goal of maintaining the board’s overall balance of experience and perspective. A recommendation regarding board (and committee) composition is shared with the full board of directors on an annual basis.
| EXL 2024 Proxy Statement | / | 31 |
Corporate governance
Board refreshment process
/ | EXL |
Corporate governance
Board refreshment process
|
Corporate governance
Committee rotation
We rotate committee and committee chair assignments based on the current composition of the board. Recent rotations include the following:
* Former director
Board evaluations
We consider the continued effectiveness of the board and its committees as critical to our long-term success and stockholder value. The board evaluates its performance and the performance of itits committees and each director on an annual basis through the following process:
|
| EXL 2024 Proxy Statement | / | 33 |
Corporate governance
Succession planning
Our board of directors (without the participation of the CEO), guided by our Lead Director, is responsible for developing and annually reassessing succession plans for our CEO and other key executive officers of the Company, and preparing contingency plans for interim CEO succession in the event of an unexpected occurrence for board review. In addition, our Compensation and Talent Management Committee is responsible for ensuring appropriate compensation strategies and design to align with the retention and recruitment of our key executive officers. We actively plan for the succession of our executive officers (including those who are retiring or departing from the Company), and regularly consider our strong pipeline of internal and external candidates. As part of this process, in April 2024, Vikas Bhalla and Vivek Jetley, who had been serving as Executive Vice President and Business Head, Insurance and Executive Vice President and Business Head, Analytics, respectively, were each promoted to President of EXL in addition to their business head roles. In their expanded roles, they will take on broader Company-wide responsibilities, including supporting our Chair and CEO to drive overall corporate performance and the adoption of our data and AI-led solutions. We generally consider succession planning and associated executive compensation matters on the following schedule:
Committees
Our board of directors currently has three standing committees: the Audit Committee, the Compensation and Talent Management Committee and the Nominating and Governance Committee. As discussed above, our board of directors has determined that each member of the Audit, Compensation and Talent Management and Nominating and Governance Committees meets the independence and experience requirements of the Nasdaq Stock Market and federal securities laws. Copies of our committee charters can be found on the Investor Relations page of our website at: https://ir.exlservice.com/corporate-governance. Information on our website referred to in this Proxy Statement does not constitute a part of this Proxy Statement.
| 34 | / | EXL 2024 Proxy Statement |
Corporate governance
The following table sets forth the current chairs and members of each standing committee of the board of directors. As an executive director, Mr. Kapoor, our Chair and CEO, does not serve on any board committee.
Audit | Compensation and | Nominating and | ||||||
Vikram Pandit |  | | ||||||
Thomas Bartlett * | | | ||||||
Andreas Fibig | | | ||||||
Som Mittal* | | | ||||||
Kristy Pipes*
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Nitin Sahney
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Jaynie Studenmund*
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Committee Chair
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Member
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*Not standing for re-election
*Audit Committee Financial Expert
| EXL | / | |
Corporate governance
Audit Committee
Our Audit Committee oversees and assists our board of directors in fulfilling its oversight responsibilities with respect to our accounting and financial reporting processes, including the integrity of the financial statements and other financial information provided by us to our stockholders, the public, stock exchanges and others; our compliance with legal and regulatory requirements; our independent registered public accounting firm’s qualifications and independence; the audit of our financial statements; the performance of our internal audit function and independent registered public accounting firm; and the Company’s cybersecurity program and cyber strategy-related risks; business continuity and disaster recovery planning; our Code of Conduct and ESG-relatedEthics and the processes used to disseminate it to our employees and monitor their compliance with our Code of Conduct and Ethics; and environmental, social and governance-related disclosure, processes and controls. Our Audit Committee’sIts risk oversight is discussed below beginning on page 43.39. Our Audit Committee charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable requirement of federal securities laws as well as independence requirements of the Nasdaq Stock Market.
Our Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent registered public accounting firm, and our independent registered public accounting firm reports directly to our Audit Committee. Our Audit CommitteeIt also reviews and approves specified related-party transactions as required by the rules of the Nasdaq Stock Market, and oversees the Company’s cybersecurity program and cyber strategy-related risks. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). Our Audit Committee annually reviews and assesses the adequacy of the Audit Committeeits charter and its own performance.
The members of our Audit Committee are appointed by our board of directors. All members of our Audit Committeethe committee must also be recommended by our Nominating and Governance Committee.
Audit Committee profile
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Kristy Pipes, Chair*
Thomas Bartlett* Andreas Fibig
Jaynie Studenmund* Sarah K. Williamson*
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• Accounting and financial reporting processes
• Our independent registered public accounting firm’s appointment and independence
• The audit of our financial statements and internal audit function
• Other key areas including cybersecurity, ESG disclosures, processes and controls, litigation, business continuity and disaster recovery, compliance and regulatory enforcement matters
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*Audit committee financial expert under applicable SEC rules and regulations
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7 committee meetings in
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Corporate governance
Compensation and Talent Management Committee
Our Compensation and Talent Management Committee reviews and recommends policies relating to compensation and benefits of our directors, officers and employees and is responsible for approving the compensation of our Vice ChairmanChair and CEO and other executive officers, as well as our employee benefitbenefits policies, programs and administration. Our Compensation and Talent Management CommitteeThe committee reviews, evaluates and makes recommendations to our board of directors with respect to our incentive compensation plans and equity-based plans and administers the issuance of awards under our equity incentive plans. Our Compensation and Talent Management CommitteeIt also provides oversight with respect to human capital management matters, including diversity, equity and inclusion, and talent and leadership engagement, development and training and, in 2022, changed its name from Compensation Committee to Compensation and Talent Management Committee to reflect these responsibilities. Our Compensation and Talent Management Committeetraining. The committee’s charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Nasdaq Stock Market.
OurThe Compensation and Talent Management Committee charter also permits the committee to retain advisors, consultants or other professionals to assist the Compensation and Talent Management Committeecommittee to evaluate director, Vice ChairmanChair and CEO or other senior executive compensation and to carry out its duties. For 2022,2023, our Compensation and Talent Management Committee retained the services of Farient Advisors LLC (“Farient”), a qualified and independent compensation consultant, to aid the Compensation and Talent Management Committeecommittee in performing its review of executive compensation including executive compensation benchmarking and peer group analysis. Our Compensation and Talent Management Committee annually reviews and assesses the adequacy of the Compensation and Talent Management Committeeits charter and its own performance. Additional information regarding our Compensation and Talent Management Committee’s processes and procedures for considering executive compensation are addressed in the Compensation Discussion and Analysis below.
Compensation and Talent Management Committee profile
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Jaynie Studenmund, Chair Som Mittal
Vikram Pandit Kristy Pipes
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• Overall compensation risk management, including recommending incentive compensation plans
• Retention of advisors or other compensation consultants
• Oversight of human capital management matters, including diversity, equity and inclusion
• No interlocks or insider participation
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The members of our Compensation and Talent Management Committee are appointed by our board of directors. All new members of our Compensation and Talent Management Committeethe committee must be recommended by our Nominating and Governance Committee.
During 2022,2023, none of our executive officers served as a member of the board of directors or Compensation and Talent Management Committee ofcompensation committee (or similar) of any entity that has one or more executive officers who serve on our board of directors or Compensation and Talent Management Committee.
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Corporate governance
Nominating and Governance Committee
Our Nominating and Governance Committee is responsible for: (i) identifying and recommending candidates for election to our board of directors using selection criteria approved by our board of directors, reviewing composition of the board and committee membership and overseeing board refreshment and director compensation and benefits matters, (ii) developing and recommending to our board of directors Corporate Governance Guidelines, including independence standards, and other board procedures or corporate governance policies, as well as any changes to such guidelines, procedures or policies or to any of our organizational documents; (iii) overseeing our board of director and management evaluations and our director education program, and (iv) overseeing our ESGenvironmental, social and governance-related goals, policies and practices. Our Nominating and Governance CommitteeThe committee’s charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Nasdaq Stock Market.
Nominating and Governance Committee profile
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Nitin Sahney, Chair
Thomas Bartlett Andreas Fibig
Som Mittal Vikram Pandit Sarah K. Williamson
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• Reviewing composition of the board, overseeing board refreshment and identifying and recommending board candidates
• Developing and recommending governance practices, including our Corporate Governance Guidelines
• Overseeing board evaluations
• Overseeing our ESG goals, policies and practices
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Our Nominating and Governance Committee reviews written and oral information provided by and about candidates and considers any additional criteria it feels isare appropriate to ensure that all director nominees possess appropriate skills and experience to serve as a member of our board of directors.
The Nominating and Governance CommitteeIt also oversees our director onboarding and training program, which provides new directors with training regarding the Company’s policies and procedures and specific requirements that may be needed based on the director’s committee memberships.
In addition, the Nominating and Governance Committee oversees and reviews the Company’s ESG goals, policies and programs and the Company’s corporate governance policies and practices regularly. Our Nominating and Governance CommitteeIt is responsible for reviewing and assessing the adequacy of our organizational documents, and recommending any changes as well asand annually reviewing and assessing the adequacy of the Nominating and Governance Committeeits charter and its own performance. The members of our Nominating and Governance Committee are appointed by our board of directors.
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Corporate governance
Board and committee oversight of risk management
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| Our board of directors is ultimately responsible for overseeing EXL’s risk management activities as a whole. | |||||||||
Our management is responsible for development of our risk management framework and methodological guidelines. Management, and ultimately, our Chair and CEO, is responsible for our day-to-day risks, and, because we are exposed to financial risks in multiple areas of our business, day-to-day risk management activities and processes are performed by multiple members of our senior and other management.
| Our management assists the board in identifying strategic and operating risks that could affect the achievement of our business goals and objectives, assessing the likelihood and potential impact of these risks and proposing courses of action to mitigate and/or respond to these risks. |
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Audit Committee Responsible for primary oversight of our risk management, financial and cybersecurity risk and reporting internal and external audit controls and regulatory requirements. Reviews and discusses with management our enterprise risk assessment, major financial risk and cybersecurity exposures and the steps management has taken to monitor, control and manage such exposures, including our risk management guidelines and policies. Reviews and discusses with other board committees our | Nominating and Governance Responsible for risk relating to | Compensation and Talent Responsible for executive and employee compensation and retention-related risk, as well as other human capital management-related risk. | |||||||||||||
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Our management maintains, as part of our disclosure controls and procedures, a separate disclosure committee | |||||||||||||||
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Corporate governance
Cybersecurity risk management
Given the nature of our business, EXL is highly focused on maintaining a robust and comprehensive program that identifies and manages a broad range of cybersecurity and data privacy, referred to collectively herein as “cybersecurity,” risks on behalf of our clients and their customers, as well as our employees, contractors and any relevant third parties. Cybersecurity is managed by our cross-functional cybersecurity apex body, the Management Security, Continuity and Privacy Forum, which is comprised of representatives from our management, business unit heads, and ourenterprise functions, such as legal, human resources, growth and strategy, compliance, technology and information security leadership teams.security. Our Audit Committee has primary oversight over cybersecurity and receives regular briefings from management throughout the year, typically on all identified and possiblea quarterly basis, regarding our security risk management, including cybersecurity-related risks, vulnerabilities, policies, practices, and strategic policies and practices frommanagement.initiatives. At least once a year, our board receives a report from management on the Company’sour cybersecurity posture, our readiness and our capability to reduce the risk of, detect and respond to a cyber-attack. Our cybersecurity team consists of privacy attorneys, qualified technical cybersecurity professionals, and business continuity specialists.specialists and attorneys. We regularly conduct cybersecurity and other risk assessments and compliance audits both internally and through third party auditors that we independently engage or that we engage in connection with our certification to certain international standards. We also regularly assess and deploy technical safeguards and conduct vulnerability assessment and penetration testing of our technology environment independently and through third parties. We use the outcome of these assessments to align our cybersecurity program and technical safeguards with the evolving cybersecurity threat landscape and adjust and augment our security controls environment as required. We also periodically engage third-party experts to review and assess our cybersecurity governance and management.management, including as may relate to our use of suppliers and third party partners. In 2022 and 2023, our Boardboard and senior management completed cybersecurity tabletop exercises to further our preparedness in the event of a need to address a variety of cybersecurity threat scenarios. Our directors also participated in a walkthrough of our Cyber Defense Center in Noida, India during their September 2023 visit to India.
For more details on our cybersecurity program, see “Sustainability – Cybersecurity at EXL” on page 54.
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Corporate governance
Environmental, social and governance (“ESG”)Sustainability risk management
Our board reviews and receives regular reports on ESG and sustainability risks, including those relating to ESGsustainability disclosures, employee safety, environmental-related efforts, human capital management matters, and corporate governance trends and best practices. In 2022, we continued to implement further controls, processes and frameworks for the collection and disclosure of ESG-related data. We also receive third-party limited assurance of certain indicatorsthe information contained withinin our Sustainability Report from a Big 4 accounting firm affiliate.
Each of our board Committees is involved in oversight over ESG-relatedsustainability-related risks as relate to matters within their purview as follows:purview:
The full board is regularly briefed on the matters overseen by each Committee.
We maintain a cross functional management-level ESGsustainability steering committee (“ESG Steering Committee”), which is responsible for setting our sustainability/ESG strategy and risk management, keeping our management and board up-to-date on ESG-related developments, overseeing our internal and external disclosure on ESG matters, and providing implementation support across our Company. The ESG steering committeeSteering Committee works in close coordination with the board, and provides the board with advice and assistance in its oversight of ESG risks and other matters. For more details on our ESG and sustainability-related efforts, see “Sustainability” on page 48.44.
Artificial intelligence risk management
We have a centralized, cross-functional Artificial Intelligence (“AI”) Governance Committee that is led by the General Counsel and Chief Information Officer and supported by our corporate compliance team, and engineering, digital, analytics and applicable business leads, which oversees high-risk AI projects. The AI Governance Committee is guided by our global AI Governance Policy. Our board and our Audit Committee are briefed from time to time by management, as well as by third-party firms, on AI-related risks and opportunities, including in-depth discussions regarding current AI deployments with our customers. For more details on responsible AI, see “Responsible artificial intelligence” on page 54.
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Corporate governance
Stockholder engagement
In 2023 and continuing into early 2024, we continued our formal governance-focused stockholder outreach program. Given our frequent engagement and the maturity of our stockholder outreach program, a number of our stockholders that we engaged with in prior years indicated that they had all required information at this time, and elected to defer meeting again to a future year. For the meetings we conducted with our stockholders in 2023 and early 2024, EXL was represented by our management and members of our legal and investor relations teams. We discussed the below topics:
~80%
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Outreach to stockholders by shares outstanding during 2023-2024 season
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EXL also regularly interacts and shares information with our stockholders through our quarterly earnings calls, investor meetings, SEC filings and publications on our website, among others.others, including in 2023, our sustainability materiality analysis. The feedback received from our stockholders is shared with and reviewed by our board, which is used to inform and focus our decisions relating to our governance and sustainability practices and to improve our disclosure.
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Corporate governance
Communications with the board
Stockholders interested in contacting our board of directors, our ChairmanLead Director or any individual directorthe directors who meet in executive session are invited to do so by writing to:
Board of Directors of ExlService Holdings, Inc.
c/o Corporate Secretary
ExlService Holdings, Inc.
320 Park Avenue, 29th Floor
New York, New York 10022
All other stockholder communications addressed to our board of directors will be referred to our ChairmanChair and CEO and our Lead Director and tracked by our Corporate Secretary. Stockholder communications specifically addressed to a particular director will be referred to that director.
Complaints and concerns relating to our accounting, internal accounting controls or auditing matters should be communicated to our Audit Committee, which consists solely of non-employee directors. Any such communication may be anonymous and may be reported to our Audit Committee through our General Counsel by writing to:
Audit Committee of the Board of Directors
ExlService Holdings, Inc.
320 Park Avenue, 29th Floor
New York, New York 10022
Attn: General Counsel
All such concerns will be reviewed under Audit Committee direction and oversight by our General Counsel, our Head of Internal Audit or such other persons as our Audit Committee determines to be appropriate. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of our Audit Committee. We prepare periodic summary reports of all such communications for our Audit Committee.
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Sustainability
Sustainability
In line with our mission of looking deeper to find a better way for our clients, at EXL we are committed to doing our part as a global citizen to build a better future by operating in a responsible and sustainable manner.manner that is aligned with our business goals. We believe that by integrating sustainable practices into our business model, working towards positive social change, and providing transparent reporting on those practices and our progress, we are a stronger and more resilient organization that is best able to deliver long-term value to our stockholders while promoting and developing our business, people, communities and the world around us. We refer to these activities as “sustainability” and “environmental, social and governance” or “ESG” throughout this Proxy Statement.stakeholders.
Recent activities
In 20222023 and continuing into 2023,2024, we took a number of steps to continue improving our sustainability program. These recent activities include:
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• continuing to update our Sustainability page on our website, which highlights all of our relevant sustainability-related policies, reports, certifications and awards, targets and activities, available at www.exlservice.com/about/sustainability • publishing our • • • engaging with our management, employees, clients and investors in a materiality assessment conducted by an independent third party, through which we identified priority sustainability topics to help inform our sustainability strategy and reporting, the results of which are available on the Sustainability page of our website at www.exlservice.com/about/sustainability
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• Engaging more than 19,000 volunteers overall in • Bringing local relevance to our global community engagement initiatives through our CSR champion teams comprised of employee volunteers, who own local-level community engagement activities and
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Sustainability
Community Engagementengagement
EXL is focused on
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Skills to Win Initiative
| Education as a Foundation Initiative
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Skills to Win focuses on equipping people in our communities with the skills that the market demands. We provide training on employability skills for back-office roles, finance and accounting, and data and analytics and digital capabilities,
Over the past | Education as a Foundation provides school-aged children with a foundation in data and analytics skills, as well as extracurricular activities such as art, music, fitness, and languages and life skills, all of which will enable them to position themselves as future leaders. We use a blend of online and Over the past two years, we have also added a new focus in our content on the physical and mental wellbeing of our students and their families. For example, in 2023, we collaborated with our non-profit partner organizations and affiliated schools in India to reintegrate into the education system female students who had previously exited formal schooling, through the delivery of education on specific skills, including mental wellness and personal hygiene, as well as direct educational skills.
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Our employees are an integral part of our community strategy, sharingstrategy. They share their skills and experience working on advanced digital technologies through volunteering.volunteering and participate in charitable efforts – either through financial or in-kind donations. We also support our employees’ charitable efforts by enabling payroll giving withand/or recurring donations and providing company matching and recognizing social impact through individual, geography and business unit awards.matching. Our use of virtual volunteering has made participation in our community engagement programming even easier for our employees, and has enabled us to reach more people through our programming.
We are also involved in fundraising initiatives. In 2022, we hosted an employee fundraiser and also routed a portion of our community engagement funding toward supporting the humanitarian aid and relief efforts in Ukraine. In 2023, we hosted an employee fundraiser to provide meals to individuals affected by the February 2023 earthquake in Turkey and Syria.
We regularly seek to increase engagement across our organization in our community initiatives. We hold an annual awards ceremony to recognize our employee volunteers for their contributions. In early 2023, we hosted geography-specific trainings for certain of our employees who we appointed to be our local “CSR champions.” Our CSR champions will assist us in driving interest and participation across our employee base in our community engagement programming.programming and enabling our global initiatives to reflect local matters.
We also organize and take part on an organizational level in fundraising and in-kind donation initiatives. In 2023, we hosted employee fundraisers for several causes, including to provide meals to individuals affected by the February 2023 earthquake in Turkey and Syria and support humanitarian efforts by providing critical aid, medical care, and supplies to the affected people and their families due to Israel-Hamas conflict. At the end of 2023, more than 4,500 EXL employees in the Philippines participated in a donation drive to provide essentials like clothing and shoes, canned goods and books to their communities.
We are proud to report that in 2023, more than 19,000 EXL employees participated in our CSR activities by donating their time or resources.
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Sustainability
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Sustainability
Human rights and sustainable supply chain
Human rights
Our Human Rights Policy details our commitment to human rights and our zero tolerance for workplace harassment and discrimination and preventing forced labor and trafficking and other abuses.
Sustainable supply chain
To ensure that our suppliers’ business conduct aligns with our expectations, we collect background information from our new suppliers on their policies and performance relating to economic and environmental, data privacy, and labor rights matters. We ask our suppliers to attest to their compliance with our Supplier Standards of Conduct, which set out commitments relating to creating a more sustainable and responsible world through addressing human rights, labor rights and environmental issues, and ask suppliers to attest to their compliance.issues. We generally maintain the right to review our suppliers’ practices at onboarding and in the future.throughout our engagement.
We seek to procure our materials from local suppliers, to the extent feasible.practicable.
Our supplier diversity programs encourage the engagement of suppliers of diverse backgrounds, including, without limitation, suppliers owned by people belonging to minority groups, women, the LGBTQ+ community, and veterans, specially-abled people, and small business enterprises.
Supporting and developing our people
Our people are our primary assets. The worldassets and our workforce stands out as our primary differentiator, critical to delivering the data-driven solutions that propel our business forward and support our long-term strategic growth. At EXL, we workprioritize the acquisition, development, and live in is fullengagement of diversitycritical talent with sophisticated skills and powered by innovation.expertise who can help us to deliver for our clients and evolve with their evolving needs. We believeare dedicated to developing our employees’ success in suchthrough fostering engagement, offering comprehensive workforce training, and promoting continuous capability development. We embrace a world will come through an environment that embraces diversity of thoughtperspectives and experience. In line withexperiences and emphasize a fair and inclusive culture rooted in our core values, one of our principal priorities is promoting talent development, while creating an inclusive work environment that permits us to leverage our employees’ diversity to deliver exceptional results for our clients. We have an active employee relations function, which is overseen by our Compensation and Talent Management Committee, that regularly communicates with and seeks to understand our employees in order to swiftly respond to specific needs and concerns as they arise.values. We regularly conduct employee surveys to monitor our employee satisfaction and engagement, as further described below and employ people analytics in our talent management processes to optimize our delivery of our talent acquisition and development strategy. On an annual basis, our Compensation and Talent Management Committee previews, and then our full board reviews, a comprehensive human capital strategic review prepared by management.
Headquartered in New York, we are made up of over 45,400 professionals, with more than 50 offices spanning six continents.
EXL locations
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Sustainability
Headquartered in New York, we are made up of approximately 54,160 professionals as of December 31, 2023, with more than 50 offices spanning six continents.
EXL locations
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Sustainability
Diversity, equity and inclusion
Diversity, equity and inclusion (“DEI”) is a focus at EXL, as we believe that our employees’ diversity of thoughtperspective and experience are key to our ability to innovate on a global scale, in line with our long-term corporate strategy. OurWe believe that creating a diverse and inclusive environment is the responsibility of all of our people managers, but the overall governance of our DEI program is led by our human resources leadership team, together with our Diversity and Inclusion Council, and is ultimately overseen by our board. Our Diversity and Inclusion Council, which consists of a global, diverse mix of leaders, provides inputs to the design of our diversity, equityinput and inclusion program to bring in diverse perspectives, collaborates with external partners for customization inputs,helps set direction on key DEI priorities and actions, conducts periodic reviews of the progress of our program and provides execution leadership for specific initiatives. The following are select DEI statistics*key diversity data points as of December 31, 2022:2023*:
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| Gender Diversity Company-wide | Gender Diversity Company-wide Vice President and Up | Gender Diversity Senior Management | Racial and Ethnic Diversity U.S. Employees | Racial and Ethnic Diversity Senior Management | Gender Diversity Company-wide Vice President and Up | Gender Diversity Senior Management | Racial and Ethnic Diversity U.S. Employees | Racial and Ethnic Diversity Senior Management |
*Senior Management includes members of our Executive Committee and Operating Committee. U.S. Employees includes diversity data as self-reported by employees.
Our DEI program is designed around three pillars: capability development, communicationphilosophy aims to create a fair and recruitment. Key featuresinclusive work environment that harnesses the power of diversity to drive organizational success. We focus on each element of our DEI program arestrategy as follows:
| Diversity: We strive to create a workplace that is representative of the diversity in the communities where we work in and clients that we serve.
• Focus on hiring channels that drive more diverse talent pools • Concerted efforts to • Training programs to raise awareness and promote diversity and inclusion through opportunities |
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• Development programs aimed to accelerate the professional development of women at mid-management levels |
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• LGBTQ+ employee resource group, which fosters an environment where employees feel uplifted, safe, included and • Diversity and | ||
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Sustainability
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Talent recruitment, development and retention
Talent-first mindset for our multifaceted talent needs | Integrated talent management framework | Active role for senior leadership | Continuous employee development | |||||||||||||
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| We view talent as a differentiator for our Company’s competitive advantage and, under the leadership of our board | We maintain an integrated talent management framework, employing active collaboration between our recruitment, capability development and human resource functions. We use data, technology, including an AI-driven infrastructure, and business insights to help us create a global talent network and stay ahead of the dynamic talent economy, while building a future ready workforce. | Our senior leadership team and board | From the time they join EXL, we focus on | |||||||||||||
We consider EXL to be a “learning” company, and promote a strong self-learning culture. We have institutionalized a comprehensive set of practices, processes and programs to create an active learning culture and to proactively build market-relevant talent within our Company in four stages:
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Our capability development framework is focused on developing our employees’ digital and domain expertiseindustry knowledge and leadership as a means to develop our talent internally. We doachieve this through our learning academies, and through partnerships with industry organizations, institutes, business schools and consulting firms. In 2021 and into 2022, we launchedWe use a new learning management system, reNew, that permits our employees to engage in self-directed learning by participating in collaborative trainings that are personalized to their interests and positions and are delivered virtually from any location, at any time. In 2022, weWe also launchedmaintain a learning marketplace that provides employees with regularly updated best-in-class digital trainings and certifications.
Academies
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Sustainability
2023 Training
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Sustainability
Academies
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Sustainability
2022 Training
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Sustainability
Employee engagement and communication
We consider communication and engagement with our more than 45,400approximately 54,000 employees distributed throughout more than 50 offices worldwide to be important to our ability to promote our ONE EXL culture that prioritizes inclusivity and collaboration, especially following our adoption of a hybrid operating model with our employees working remotely and in-office. We continued to rely on, and improve, our digital communication and collaboration platforms and multi-channel approach to keeping our employees informed that we built out beginning in 2020 during the COVID-19 pandemic.informed. In particular, we engage with our employees through:
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Sustainability
Employee health, safety and wellbeing
Because our people are so important to us, we have always viewed employee health, safety and wellbeing as one of our top commitments. EXL has a well-defined Health and Safety Management System that is certified to ISO 45001:2018. In 2023, we received a Five Star Rating from the British Safety Council for best practices in occupational health and safety in our United Kingdom and India centers. We periodically provide trainings on health and safety to our employees, suppliers and partners. In 2022, approximately 99% of our employees completed our2023, health and safety training e-module.e-module was mandatory for all of our employees. We also conduct a risk assessment every six months with the aim of minimizing risk in the workplace. We have received a number of recognitions and awards for our efforts in employee health and safety, detailed below under “Achievements,“Sustainability achievements, certifications and awards” on page 59.55. We also have a number of initiatives to promote our employees’ wellbeing:
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Sustainability
Cybersecurity at EXL
We are committed to protecting the confidentiality, integrity, availability and privacy of the information assets of our clients and their customers, as well as our employees, vendors and any other third parties, that are shared with us and for which we are responsible and have developed robustresponsible. We maintain a comprehensive information security and cybersecurity and data privacy controls, safeguardsprogram, based on defined policies processes and enabling measurespractices to safeguard the security, confidentiality, integrity, availability and protection of this information that we aim to continually strengthen in accordanceorder to mitigate material vulnerabilities and the impact of cyber incidents and comply with applicable privacy laws regulations and information security standards.regulations.
We have implemented and maintain, and regularly improve upon, tools and capabilities to identify, protect, detect, respond and recover from cyber threats, incidents and attacks; reduce vulnerabilities; and minimize the impact from cyber incidents. We have
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Sustainability
an established culture of compliance around cybersecurity matters, and have a strong governance program built upon and supported by policies and processes, tools and technologies, and regular knowledge and awareness training. Each of our employees receives regular knowledge and awareness training on risk mitigation and management and controls and procedures relating to information security, cybersecurity and data privacy.
We comply with and/or are certified in the following standards:
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For more information on our cybersecurity risk management, please see “Cybersecurity risk management” on page 44.40. For more information on our information security and data privacy procedures, please refer to our Sustainability Report, which is available on our website at www.exlservice.com/corporate-sustainability.the 2023 Form 10-K, Item 1C.
Responsible artificial intelligence
We seek to ensure that our use of artificial intelligence (“AI”)AI in our business and operations is ethical and trustworthy. We emphasize data integrity as key to eliminate bias intrustworthy and that its development and application is based on the applicationprinciples of AI.fairness, security, reliability, transparency, accountability, and privacy. We have a global AI Governance Policy and framework, and acentralized, cross-functional AI Governance Committee that is led by the General Counsel and Chief Information Officer and supported by our corporate compliance team, and engineering, digital, analytics and applicable business leads, which oversees and governs our use of AI with the overall aim of vetting and minimizing potential unethical or unlawful biases in AI processes.projects. Pursuant to our AI Governance Policy, for each new deployment of AI, our business teams are guided by ourwe assess the AI biasmodel against the principles of trustworthy AI described above. Our AI Governance Policy also provides guidelines on general use, regulatory compliance, data privacy and in many cases, include asecurity, best practices for front-end and back-end development and human oversight. Our use of AI and management of its risks is reported to the board and the Audit Committee from time to time. See “Artificial intelligence risk assessment exercise. Applicable employees also participate in trainings to identify and reduce bias in AI.management” on page 41.
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Sustainability
Achievements,Sustainability achievements, certifications and awards
Health and safety management system, ISO 45001:2018, meeting international standards for occupational health and safety
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Reporting pursuant to SASB Software
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Participant in the CDP’s Climate Change disclosure program with respect to GHG emissions and climate change data
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Sustainability
Sustainability scorecard
Environmental, social and governance matters and pay-for-performance at EXL
A portion of our CEO’s total compensation is tied to the achievement of specific performance goals relating to ESG matters. For more information, see “Detailed review of compensation components – Annual incentives – Determination of individual performance measure achievement” on page 79.75.
Sustainability oversight
For more information on our oversight of sustainability and ESG-related matters and risks, see “Environmental, social and governance“Sustainability risk management” on page 45.41.
Learn more about sustainability and environmental, social and governance matters at EXL
Please visit www.exlservice.com/about/sustainability to learn more about our efforts toward sustainability and the impacts we are making on our communities and the environment. Information on our website referred to in this Proxy Statement does not constitute a part of this Proxy Statement.
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Our executive officersExecutive Committee
Our executive officersExecutive Committee
From back left: Vivek Jetley, President of EXL and Business Head, Analytics, Vikas Bhalla, President of EXL and Business Head, Insurance, Anita Mahon, Executive Vice President and Business Head, Healthcare, Narasimha Kini, Executive Vice President and Business Head, Emerging Business, Maurizio Nicolelli, Executive Vice President and Chief Financial Officer, Pamela Harrison, Executive Vice President and Chief Human Resources Officer, Ajay Ayyappan, Executive Vice President, General Counsel and Corporate Secretary
From front left: Andy Logani, Executive Vice President and Chief Digital Officer, Vishal Chhibbar, Executive Vice President and Chief Growth and Strategy Officer, Rohit Kapoor, Chair and CEO, Baljinder Singh, Executive Vice President, Global Chief Information Officer, and Head of Enterprise Digital Transformation
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Our Executive Committee
Executive Committee biographies
The following are biographies for each of the members of our Executive Committee. Of the members of our Executive Committee, Rohit Kapoor, Ajay Ayyappan, Vikas Bhalla, Vishal Chhibbar, Pamela Harrison, Vivek Jetley, Narasimha Kini, Anita Mahon and Maurizio Nicolelli are considered executive officers.
| Rohit Kapoor (age See section entitled “Our board of directors” above. | |
| Ajay Ayyappan (age 46) Mr. Ayyappan has served as our Executive Vice President, General Counsel and Corporate Secretary since February 2023. He previously served as our Senior Vice President, General Counsel and Corporate Secretary (December 2018 to February 2023), our Vice President, Acting General Counsel and Corporate Secretary (August 2018 to December 2018), our Vice President, Deputy General Counsel and Assistant Secretary (April 2014 to August 2018) and our Vice President and Assistant General Counsel (March 2007 to March 2014). Prior to joining us, Mr. Ayyappan was a corporate associate at the law firm, Morgan, Lewis & Bockius LLP. | |
| Vikas Bhalla (age Mr. Bhalla has served as our President of EXL and Business Head, Insurance since April 2024 and previously as our Executive Vice President and Business Head, Insurance since January 2014 and as our Head of Outsourcing since November 2009. He previously served as Vice President, Operations of EXL India (June 2006 to October 2009), as Vice President, Migrations, Quality and Process Excellence of EXL India (April 2002 to June 2006) and as Director, Quality Initiatives of EXL India (May 2001 to March 2002). From May 1998 to May 2001, Mr. Bhalla served in various capacities at General Electric, including as the Quality Leader and E-Business Leader for GE Plastics India. Mr. Bhalla is based in India. | |
| Vishal Chhibbar (age 56) |Executive Vice President and Chief Growth and Strategy Officer Mr. Chhibbar has served as our Executive Vice President and Chief Growth and Strategy Officer since July 2023. Mr. Chhibbar was EXL’s chief financial officer from 2009 – 2019, and also previously served as the head of Finance and Accounting at EXL. Between 2019 and his return to EXL as chief financial officer at Brillio and president and chief financial officer of EPIQ. Mr. Chhibbar has also served in various financial leadership roles across companies such as GE Capital, American Express Bank and Xerox. | |
| Pamela Harrison (age 59) |Executive Vice President and Chief Human Resources Officer Ms. Harrison has served as our Executive Vice President and Chief Human Resources Officers since June 2023. She previously served as executive vice president of human resources at Genworth Financial, and as a director of human resources of business transformation at Latham & Watkins LLP. | |
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Our Executive Committee
| Vivek Jetley (age Mr. Jetley has served as our President of EXL and Business Head, Analytics since April 2024 and previously as our Executive Vice President and Business Head, Analytics since January 2020. He previously served in various leadership roles with us, including heading enterprise strategy and setting up a strategic deal team. Mr. Jetley has been with EXL since 2006. Prior to joining us, Mr. Jetley was a Partner at Inductis. | |
 | Narasimha Kini (age Mr. Kini has served as our Executive Vice President and Business Head, Emerging Business since October 2021. He previously served in several leadership roles with us, including in our strategic initiatives and finance and accounting services. Mr. Kini has been with EXL since 2001. Prior to joining us, Mr. Kini was a Finance Leader at Willis Faber. | |
 | Anand “Andy” Logani (age 47) Mr. Logani has served as our Executive Vice President and Chief Digital Officer since January 2024. Since joining EXL in 2001, he has served in various leadership positions with us, including as Chief Digital Officer and as our Global Head of Life & Annuity Insurance business. Prior to joining us, Mr. Logani was a member of the strategic sales team at Kuehne & Nagel. |
Our executive officers
 | Anita Mahon (age Ms. Mahon has served as our Executive Vice President and Business Head, Healthcare since May 2022, and previously served as our Executive Vice President and Chief Growth Officer (March 2020 to May 2022). Prior to joining us, Ms. Mahon served as Vice President, Data, Strategy & Portfolio Officer at IBM Watson Health, a business unit focused on developing cognitive and data-driven technologies to advance health. Ms. Mahon joined IBM in 2016 through its acquisition of Truven Health Analytics, a healthcare information and analytics business, where she served as Chief Strategy Officer. Prior to Truven, she held other leadership roles that placed her at the intersection of strategy, technology and analytics. | ||
 | Maurizio Nicolelli (age Mr. Nicolelli has served as our Executive Vice President and Chief Financial Officer since February 2020. Prior to joining the Company, Mr. Nicolelli served as Senior Vice President and Chief Financial Officer of Casa Systems beginning in 2019. He previously served 23 years at FactSet Research Systems, where he was Senior Vice President, Principal and Chief Financial Officer from 2009 to 2018. | ||
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Executive compensation
Executive compensation
Compensation Discussion and Analysis
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Executive compensation
Executive compensation
Compensation Discussion and Analysis
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Executive compensation
Named Executive Officers
As determined in accordance with SEC rules, our named executive officers (“NEOs”) for 20222023 are:
| Rohit Kapoor, our | |
| Maurizio Nicolelli, our Executive Vice President and CFO | |
| Vikas Bhalla, our | |
| Vivek Jetley, | |
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Executive summary
Select 20222023 financial and business highlights
Our annual revenues increased 25.8%15.5% from $1.12 billion in fiscal year 2021 to $1.41 billion in fiscal year 2022.2022 to $1.63 billion in fiscal year 2023. Analytics revenue increased 40.5%12.6% and digital operations and solutions revenue increased 15.6%17.9%.
We improved our net income attributable to stockholders by 24.6%29.1% from $114.8$143.0 million in fiscal year 2022 to $143.0 million.$184.6 million in fiscal year 2023.
Our diluted EPS increased from $3.35$0.85 in fiscal year 2022 to $4.23,$1.10 in fiscal year 2023, an increase of 26.1%29.4%.
We added approximately 8,0008,500 employees to our global workforce, mainly in our delivery centers.
In 2022, the Company returned capital to stockholders by repurchasing $68.5 million of shares. The Company’s board of directors authorized a $300 million common stock repurchase program beginning January 1, 2022.
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Executive compensation
Total stockholder return
In 2023, we returned capital to stockholders by repurchasing $125.4 million of shares. The following graphs compare our 1-year, 3-year and 5-year cumulative total stockholder return (“TSR”) asCompany’s board of directors authorized a $300 million common stock repurchase program beginning January 1, 2022, which was replaced by a subsequently authorized new $500 million common stock repurchase program beginning March 1, 2024.
As of December 31, 2022, with the median2023, our 1-year TSR was -9.0% which was lower than our comparator groups; however, on a longer-term basis, our 3- and 5-year TSR of companies comprising Nasdaq, S&P 60081.2% and 193.1% far exceeded our peer group. As shown in the table,comparator groups and reflect our 1-Year, 3-Yearlong-term growth expectations and 5-Year TSR outperformed all of our market benchmarks.performance.
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Awards and industry recognition
Our people are our primary assets, and they continue to be recognized across the industry.
As in prior years, we continued to receive numerous industry recognitions and awards, including:
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| – | Leader in |
| – | Leader and Star Performer in the Everest Group Life and Annuities Insurance BPS and TPA PEAK Matrix® Assessment 2023 |
| – | Leader in the ISG Provider Lens |
| – | Earned the 2023 XCelent Award for Individual Life Insurance Policy Administration, and recognized as a “Luminary” in Celent’s 2023 Individual Life Report |
| – | Leader in the Everest Group Clinical and Care Management Operations Services PEAK Matrix® Assessment 2023 |
| – | Leader in the Everest Group Healthcare Data and Analytics Services PEAK Matrix® Assessment 2023 |
| – | Leader in ISG Provider Lens™ Healthcare Digital Services 2023 for Payer Digital Transformation Services |
| – | Leader in the 2023 Gartner® Magic Quadrant™ for Finance and Accounting Business Process Outsourcing |
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Clients and operations
In 2022, we won 59 new clients, adding to the 58 new clients we won in 2021.
In the past year, revenue from our top 20 clients grew by 18.4%, with 16 of those clients contracting for our services and solutions in both analytics and digital operations and solutions.
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Executive compensation
Clients and operations
In 2023, we won 63 new clients, adding to the 59 new clients we won in 2022.
Summary of key compensation considerations & decisions in 20222023
The following highlights the Compensation and Talent Management Committee’s key considerations and compensation decisions in 2022 and with respect to performance for 2022 for our NEOs.2023.
Items | Considerations and decisions | |
Stockholder Input | Over
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| Base Salaries | Base salaries | |
| Annual Incentives | We | |
| Equity Incentives |
In addition, in 2023 we granted one-time stock option awards to a group of executives including our NEOs, other than the CEO. Both the time-based restricted stock units and stock options vest ratably over four years based on continued employment and the performance-based restricted stock units
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Pay-for-performance
Our executive compensation philosophy is focused on pay-for-performance. In this regard, we link a significant portion of each NEO’s total compensation to the achievement of specified performance goals. This variable compensation is “at-risk” and rewards performance and contributions to both short- and long-term financial performance.
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Executive compensation
As illustrated by the following charts, the majority of compensation that may be earned by our named executive officers is tied to the achievement of financial performance metrics (annual incentive awards and PRSUs) or fluctuates with the underlying value of our common stock (RSUs)(PRSUs, RSUs and options).
compensation mix | NEO compensation mix (Excluding Chair & CEO) | |||
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*Base salary also includes other compensationitems included in “All Other Compensation” in the Summary Compensation Table on page 84.
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Executive compensation
Executive compensation program, practices and policies
Our compensation programs, practices and policies are reviewed and re-evaluated regularly and are subject to change from time to time in line with market best practices, including alignment of pay with performance. Our executive compensation philosophy is aligned with our core values, focused on pay-for-performance and designed to reflect appropriate governance practices aligned with the needs of our business. Listed below are some of the Company’s more significant practices and policies that were in effect during fiscal year 2022,2023, which were adopted to drive performance and to align our executives’ interests with those of our stockholders.
What we do | What we don’t do | |||||
| Align our executive pay with performance: We link a significant portion of each NEO’s total compensation to the achievement of specific performance goals.
Variable compensation is “at-risk” and rewards performance and contributions to both short- and long-term financial performance.
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| No option repricing: We prohibit option repricing without stockholder approval. | |||
| Use appropriate peer groups when establishing compensation: We established a peer group to help us review market practices and design a competitive compensation program. The criteria for peer group selection include, annual revenues, similarity in business model and strategic focus, scope of operations, potential mobility of talent and industry alignment.
We set compensation of our executive officers at levels that we believe are appropriate relative to the compensation paid to similarly situated officers of our peers, giving consideration to market and other factors.
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| No option backdating or discounting: We prohibit option backdating and discounting. | |||
| Ensure equity compensation best practices: We design annual long-term equity incentives to encourage our executives to maintain a long-term view of stockholder value creation and to encourage
We hold dividends accrued under our equity awards, if any, until the recipient vests in the underlying shares or units.
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| No excessive overhang or dilution: We do not have excessive overhang or dilution from equity grants. | |||
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Executive compensation
What we do | What we don’t do | |||||
| Maintain an independent Compensation and Talent Management Committee and consultant: Compensation decisions for our NEOs are approved by a Compensation and Talent Management Committee composed of non-employee independent directors.
Our Compensation and Talent Management Committee is advised by an independent consultant who reports directly to the Compensation and Talent Management Committee and provides no other services to the Company or management.
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| Limited perquisites: We provide our named executive officers with only limited perquisites and personal benefits that serve an important business purpose in addition to the regular benefits offered to all employees.
We consider the perquisites and personal benefits that we offer to our executives in India to be customary benefits which allow us to remain competitive for top talent. | |||
| Mitigate risks: The mix and design of our compensation programs serves to mitigate operational, financial, legal, regulatory, strategic and reputational risks. |
| No tax gross-ups: We do not provide
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| Maintain a clawback policy: We |
| No hedging: We maintain a policy in which the following persons are prohibited from engaging in hedging transactions involving our shares and other securities: our directors and their secretaries and other assistants; our executive officers and their secretaries and other assistants; our employees in the accounting, finance and legal departments; the members and permanent invitees of our operating and executive committees; and all of our vice president level 2 and 3 officers (whom we refer to collectively as “Reporting Persons”). For this purpose, “hedging” refers to any strategy to offset or reduce the risk of price fluctuations in our shares or other securities or to protect, in whole or in part, against declines in the value of our shares or other securities. This prohibition thus applies to all transactions in derivative securities based on our stock such as other securities, including puts, calls, swaps and collar arrangements.
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| Maintain a robust stock ownership policy: We maintain a robust stock ownership policy that requires
We maintain a similar stock ownership policy for our non-employee
As of December
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| No pledging: Under our policy mentioned above, Reporting Persons (as defined above) are only permitted to pledge shares of our stock that exceed those required to be owned under our | |||
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Executive compensation
Overview of compensation policies and philosophies
We believe that our long-term success is linked to our ability to recruit, train, motivate and retain employees at every level. There is significant competitive pressure in our industry for qualified managers with a track record of achievement. It is critical that we recruit, train, motivate and retain highly talented individuals at all levels of the organization who are committed to our core values of innovation, collaboration, excellence, integrity and mutual respect. We believe that our executive compensation programs are integral to achieving this end.
Our Compensation and Talent Management Committee bases its executive compensation programs on the following objectives, which guide us in establishing all of our compensation programs:
Compensation should be based on |
responsibility and performance.
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Our compensation program should deliver top-tier compensation in return for top-tier individual and company performance, and
performance and/or our performance that falls short of expectations.
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Pay-for-performance and retention must be balanced motivation and commitment of our employees.
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Compensation should balance long-term and short-term objectives.
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Equity-based compensation should be higher for responsibility and greater influence on long-term results.
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To enable us to attract and retain top talent, compensation should reflect the value of the job in the marketplace.
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Compensation programs should be easy to understand.
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Compensation should be administered uniformly across the Company with objectives and performance metrics.
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Executive compensation
Compensation process: roles and responsibilities
Our Compensation and Talent Management Committee has established a number of processes to assist it in ensuring that our executive compensation programs are achieving their objectives. Our Compensation and Talent Management Committee, our management and our independent compensation consultant are each engaged in these processes, as described in greater detail below.
Company performance – Compensation and Talent Management Committee |
Establishment of performance measures At the beginning of each year, or the end of the prior year, our Compensation and Talent Management Committee establishes the Company-wide and relevant business line performance measures on which our named executive officers’ annual cash incentive awards and equity incentive awards are largely based. These measures reflect targets that are intended to encourage stretch performance.
Assessment of Company performance At the end of the performance period, the Compensation and Talent Management Committee reviews and certifies our performance achievement in relation to the pre-established targets, and considers the appropriateness of adjustments to the performance criteria and calculations of performance
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Individual performance – board of directors, Compensation and |
The evaluation of an individual’s performance determines a portion of the payouts under our annual incentive program and
Assessment of For Mr. Kapoor, our board of directors reviews and provides feedback on a self-evaluation prepared by Mr. Kapoor. Once all directors have given feedback on Mr. Kapoor’s performance, our
Assessment of performance for all other NEOs and executive officers For all other NEOs and executive officers, Mr. Kapoor makes a performance assessment and compensation recommendation to our board of directors. He bases the performance assessments on our named executive officers’ self-evaluations and his performance assessments of each of them.
Our board of directors reviews the performance assessments with Mr. Kapoor and evaluates the achievement of established objectives by each executive officer and his or her business line, if applicable, and his or her contribution to our performance, leadership accomplishments and overall competence.
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Other matters relevant to compensation decisions – Compensation and Talent Management Committee
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Our Compensation and Talent Management Committee periodically reviews related matters such as succession planning and management, evaluation of management performance, changes in the scope of managerial responsibilities, and consideration of the business environment, and considers such matters in making compensation decisions. The Compensation and Talent Management Committee also takes into account an executive officer’s job responsibilities, performance, qualifications and skills in determining individual compensation levels. |
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Executive compensation
Independent compensation consultant | For • reviewing our executive pay philosophy, • collecting and evaluating external market data regarding executive compensation and performance, • selecting peer group companies, • reviewing the Proxy Statement, • advising the Compensation and Talent Management Committee on developing trends and best practices in executive • advising the Compensation and Talent Management Committee on incentive plan design that aligns with our strategy. In addition, Farient advises our Nominating and Corporate Governance Committee regarding director compensation. Other than performing these consulting services, Farient does not provide other services to us or our executive officers. We have affirmatively determined that no conflict of interest has arisen in connection with the work of Farient as compensation consultant for the Compensation and Talent Management Committee.
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Peer market data
Compensation and Talent Management Committee and independent compensation consultants | We review peer compensation data on an annual basis in order to set compensation for each following year. At the time compensation decisions were made for our senior executive officers in
The following chart shows the peer group companies that we used to make
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| Company | Industry | 2023 Revenue ($MM, USD) | ||||
| EPAM Systems, Inc. | IT Consulting and Other Services | $ | |||
| Genpact Limited | Data Processing and Outsourced Services | $ | |||
| Splunk Inc. | Application Software | $ | |||
| Verisk Analytics, Inc. | Research and Consulting Services | $ | |||
| TTEC Holdings, Inc. | Data Processing and Outsourced Services | $ | |||
| Teradata Corporation | Systems Software | $ | |||
| ExlService Holdings, Inc. | Data Processing and Outsourced Services | $ | |||
| Fair Isaac Corporation | Application Software | $ | ||||
| WNS (Holdings) Limited | Data Processing and Outsourced Services | $ | |||
| CGS Systems International, Inc. | Data Processing and Outsourced Services | $ | |||
| MultiPlan Corporation | Health Care Technology | $ | |||
| Perficient, Inc. | IT Consulting and Other Services | $ | |||
| Guidewire Software, Inc. | Application Software | $ | |||
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Executive compensation
In June of 2023, we updated the peer group companies that we used to make 2024 pay decisions as follows: CSG Systems and Multiplan were removed due to weak business model fit in both cases, and were replaced with Informatica, Thoughtworks Holding, and UIPath, which reflects our emphasis on technology-based consulting and analytics offerings. We use a separate peer group for measuring performance under our PRSUs, as described under “Compensation—Fiscal year
Management also used compensation survey data from Aon Consulting,
Our Compensation and Talent Management Committee reviews compensation information provided by Farient and other third-party data
Our Compensation and Talent Management Committee uses the compensation data to obtain a general understanding of current market practices, so it can design our executive compensation program to be competitive. Market data is not used exclusively, but rather as a point of reference to draw comparisons and distinctions.
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Components of executive compensation for 20222023
For 2022,2023, the compensation of executive officers consisted of the following five primary components:
Compensation component | Description | Objectives | ||
Base salary |
Fixed compensation that is reviewed annually and is based on performance, experience, responsibilities, skill set and market value. |
Provide a base level of compensation that corresponds to the job function performed.
Attract, retain, reward and motivate qualified and experienced executives.
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Annual incentives |
“At-risk” compensation earned based on performance measured against pre-established annual goals.
75% of each NEO’s award is tied to Company-wide performance with the remaining 25% to the achievement of individualized goals.
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Incentivize executives to achieve annual goals that ultimately contribute to long-term company growth and stockholder return. | ||
Long-term incentives |
“At-risk” compensation in the form of
RSU Awards: - 40% of the award vests based on continued service.
- 60% vests based on achievement of revenue and total stockholder return goals.
- 100% of the award vests based on continued service. |
Align executive interests with those of stockholders.
Reward continuous service with the company.
Incentivize executives to achieve goals that drive company performance over the long-term. |
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Executive compensation
Compensation component | Description | Objectives | ||
Other benefits |
Broad-based benefits provided to company employees (e.g., health and group insurance), a retirement savings plan and other personal benefits where |
Provide a total compensation package that is competitive with the marketplace and addresses unique needs, especially for overseas executives. | ||
Severance and change |
Protect executives during potentially tumultuous corporate transaction.
Provide |
Allow executives to focus on generating stockholder value during a change in control transaction.
Provide market-competitive post-employment compensation recognizing executives likely require more time to find subsequent employment.
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Detailed review of compensation components
Base salary
As discussed above, we provide our executive officers fixed cash compensation commensurate with their performance, experience, responsibilities, skill set and market value. This attracts and retains an appropriate caliber of talent for the position and provides a base wage that is not subject to our performance risk. In setting base salaries for 2022,2023, our Compensation and Talent Management Committee considered:
| Individual performance | The degree to which the executive met and exceeded expectations. | |
| Market data | Market data to test reasonableness of compensation. | |
| Overall compensation mix | Senior employees should have a greater portion of their compensation tied to increasing stockholder value. | |
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Executive compensation
Upon completing its review, the Compensation and Talent Management Committee determined it was appropriate to increasekeep 2023 base salaries at the levels set in October 2022 for all of our named executive officers, effective as of October 1, 2022. Noting that, as of that date, it had been one and a half years since any base salary increase for Mr. Bhalla and Mr. Jetley and almost three years since any base salary increase for Mr. Nicolelli, the Compensation and Talent Management Committee determined that base salary increases were warranted in order to align more closely to the median of the market, including in light of the internal promotion of certain of our NEOs, Mr. Jetley and Mr. Rai, within the last several years, and account for individual performance. In addition, Mr. Jetley’s base salary increase recognizes the significant growth in Analytics over the past year, and Mr. Rai’s recognizes the importance of the Company’s digital strategy.officers. The fixed compensation amount for Mr. Bhalla covers not only base salary, but also amounts available as a travel allowance, an automobile allowance, a housing allowance, and a cash supplementary allowance, consistent with compensation practices in India.
Name | 2021 Base salary / | 2022 Base salary / | % | |||||||||
| Rohit Kapoor | 750,000 | 815,000 | 8.67 | % | ||||||||
| Maurizio Nicolelli | 475,000 | 510,000 | 7.37 | % | ||||||||
| Vikas Bhalla | INR 24,500,000(1) | INR 27,900,000(2) | 13.88 | % | ||||||||
Vivek Jetley | 420,000 | 500,000 | 19.05 | % | ||||||||
Ankor Rai | 410,000 | 450,000 | 9.76 | % | ||||||||
Name | 2023 Base salary / | |||
| Rohit Kapoor | 815,000 | |||
| Maurizio Nicolelli | 510,000 | |||
| Vikas Bhalla | INR 27,900,000(1) | |||
| Vivek Jetley | 500,000 | |||
| Anita Mahon | 450,000 | |||
(1) Equivalent to $329,611,$335,304, converted at 74.3383.21 INR to 1 USD, which was the exchange rate on December 31, 2021.
(2) Equivalent to $337,282, converted at 82.72 INR to 1 USD, which was the exchange rate on December 30, 2022.29, 2023.
Annual incentives
We have established an annual cash incentive program in order to align our executive officers’ goals with our performance targets for the current year and to encourage meaningful contributions to our future financial performance. Our Compensation and Talent Management Committee approved the framework of our annual incentive program in late 20212022 for awards payable in respect of 20222023 performance. Under the program, annual incentive award target amounts, expressed as a percentage of base salary or annual fixed compensation, are established for participants at the beginning of each year unless their employment agreements contain different terms.year. Funding of potential annual incentive award payouts for the year are determined by our financial results for the year relative to predetermined performance measures and our assessment of each named executive officer’s performance relative to his or her predetermined individual performance goals. If our performance falls short of target, our aggregate funding of the annual incentive pool declines. If we do not achieve a minimum threshold for the established financial performance objectives, then the annual incentive pool is not funded for that particular objective. Although theThe Compensation and Talent Management Committee has not historically done so, except in 2020 in light of the unanticipated impact of the COVID-19 pandemic, it has the discretion under the 2018 Plan to adjust an award payout from the amount yielded by the formula at the end of the performance period for reasons such asincluding, but not limited to, the effect of changes in laws or regulatory rules, acquisitions or divestitures, reorganization or restructuring, extraordinary accounting items, foreign exchange gains or losses, and/or any specific unusual or non-recurring events. The Compensation and Talent Management Committee did not useapply any discretionsuch discretionary adjustments for the 20222023 annual incentive awards.
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Executive compensation
Our Compensation and Talent Management Committee considered the following when establishing the awards for 2022:2023:
Annual incentive award targets
Annual incentive award targets were established based on job responsibilities and comparable market data. Our objective was to set targets such that total annual cash compensation was within the broad middle range of market data and a substantial portion of that compensation was linked to our performance. Consistent with our executive compensation policy, individuals with greater job responsibilities had a greater proportion of their total compensation tied to our performance. During 2022, ourOur Compensation and Talent Management Committee established the following annual incentive award targets (expressed as a percentage of base salary or annual fixed compensation) as well as maximum targets for each named executive officer.officer for 2023, which remained unchanged versus the prior year.
Name | Annual incentive award target | Annual incentive award maximum | ||
| Rohit Kapoor | 150% of base salary | 300% of base salary | ||
| Maurizio Nicolelli | 75% of base salary | 150% of base salary | ||
| Vikas Bhalla | 75% of annual fixed compensation | 150% of annual fixed compensation | ||
| Vivek Jetley | 75% of base salary | 150% of base salary | ||
| 75% of base salary | 150% of base salary | |||
Performance measures
Our executives were eligible to earn annual incentives with 75% of the award based on their achievement of Company-wide performance metrics and the remaining 25% of the award based on individual performance. TheConsistent with prior years, the Company-wide portion of 20222023 annual incentives was based 50% in part on the Company’s revenue goal, and 50% in part on the Company’s adjusted operating profit margin (AOPM) for all employees, including our named executive officers, whose annual incentives are linked to Company-wide financial performance.
In 2022, the Compensation and Talent Management Committee continued to set the Company-wideofficers. Individual performance goals as well as the individual performance goals described above, for all named executive officers to ensure the executives were properly focused on the Company’s revenue and AOPM goals, as well as other areas of performance that are unique to theireach of our executive positions within the organization. The Compensation and Talent Management Committee believes achievement of these performance metrics will drive our business and, in turn, lead to increased stockholder value.
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Executive compensation
Determination of financial performance achievement
For 2022,2023, our Compensation and Talent Management Committee established a revenue target of $1.33$1.61 billion (which was 18.8%12.7% higher than our actual revenue for the prior year and 23.4%21.4% higher than our prior year’s target performance) and an AOPM target of $247.37$306.32 million (which was 18.7%22.1% higher than our actual for the prior year and 38.3%23.8% higher than our prior year’s target). As shown below, the portion of annual incentive award payments that were subject to these financial performance measures could have ranged from zero to 200% of the target depending on the achievement of the performance goals.
Performance targets: revenue ($ | ||
% of performance achieved compared to target goal | % of target portion | |
Above 110% | 200% | |
At 100% | 100% | |
At 90% | 10% | |
Less than 90% | 0% | |
*Linear interpolation for performance between discrete pointspoints.
Based on our performance during the 20222023 fiscal year, we achieved 107.66%100.6% of our revenue performance target (resulting in funding of 176.63%106.0%), and 101.45%101.4% of our AOPM target (resulting in funding of 114.51%114.3%), which together yielded a weighted funding of 145.57%110.2%. For purposes of achievement of financial performance targets, revenue and AOPM are measured using the estimates and assumptions (particularly, currency exchange rates) at the time the targets are established.
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Executive compensation
Determination of individual performance measure achievement
Our named executive officers earn a portion of their annual incentive awards based on the achievement of individual performance measures designed to balance the named executive officers’ efforts between the achievement of near-term objectives that improve specific processes or performance metrics and long-term objectives that increase the Company’s value, economic impact, and sustained stockholder returns. For more information on the process for determining individual performance measure achievement, please see “Compensation process: roles and responsibilities” on page 72.68. Below is a summary of each named executive officer’s individual performance measures, as well as a summary of each named executive officer’s achievements in light of the designated performance measures:
Named Executive
|
|
| ||
Rohit Kapoor | • Drive profitability with sustained momentum • • Leverage data-led positioning to promote a market-leading brand for digital and analytics • • Continued focus on diversity, equity, and inclusion strategies •
metrics | • Led growth resulting in • • Executed a company-wide • Continued focus on talent acquisition and strong progress on building diverse and expanded leadership and key digital, AI and data-related capabilities
• Progressed on ESG matters, | ||
Maurizio Nicolelli | •
• Execute on long-term tax strategy | •
• Drove long-term tax strategy resulting in current benefits and a pathway to future benefits | ||
Vikas Bhalla | • •
| • Drove revenue growth of Insurance • Developed and enhanced existing digital-led solutions for insurance
that helped to expand client relationships and win new clients | ||
Vivek Jetley | • Drive profitability and build high growth business for Analytics • Build EXL’s data management and drive partnerships | • • Created significant foundational capabilities in data management, | ||
| • • | • • strong progress on building diverse leadership. Championed women’s diversity initiatives | ||
(1) Adjusted EPS is a non-GAAP financial measure. See “Non-GAAP Reconciliation” beginning on page 120 for more details, as well as a reconciliation of the non-GAAP measures used herein.
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Executive compensation
The table below sets out the 20222023 annual incentive awards paid to our named executive officers (paid in March 2023)2024):
incentive awarded ($) | ||
| ||
| ||
| ||
| ||
| ||
| Name | Overall Percentage Attainment of Target Bonus | 2023 Actual annual incentive awarded ($)(1) | ||||||||
Rohit Kapoor | 124 | % | 1,514,253 | |||||||
Maurizio Nicolelli | 120 | % | 459,441 | |||||||
Vikas Bhalla | 128 | % | 320,917 | |||||||
Vivek Jetley | 113 | % | 422,307 | |||||||
Anita Mahon | 133 | % | 447,577 | |||||||
| (1) | The exchange rate used for the conversion from Indian rupees to U.S. dollars for Mr. Bhalla was |
Long-term equity incentives
The Compensation and Talent Management Committee believes long-term equity awards provide employees with the incentive to stay with us for longer periods of time, which in turn provides greater stability as we grow. These incentives foster the long-term perspective necessary for continued success in our business because the value of the awards is directly linked to long-term performance of our stock price, and they ensurethereby ensuring that our executive officers are properly focused on stockholder value.
Moreover, theThe Compensation and Talent Management Committee favorselects to grant time-vested and performance-vested restricted stock unit awards because these awards offer executives the opportunity to receive shares of our common stock on or shortly following the date that the restrictions lapse. Such awards serve both to reward and retain executives because value is linked to the price of our stock, on the date that the restriction lapses, and the executive must generally remain employed by the Company through the date that the restrictions lapse.lapse, and the performance-vested awards require achievement of certain performance goals. For these reasons, restricted stock unit awards provide a significant degree of alignment between the interests of our executives and stockholders.
The Compensation and Talent Management Committee also believes that the mix between Time-Vested RSUs and Performance-Vested RSUs provides an appropriate balance between incentivizing our executives to continue their employment with the Company and ensuring they are focused on generating long-term financial performance and sustained stockholder value, which, in turn, results in additional compensation.
/ | EXL |
Executive compensation
Compensation
Fiscal year 2022 awards2023 Annual Restricted Stock Unit Awards
Under our equity compensation program, our named executive officers received restricted stock units under the 2018 Omnibus Incentive Plan approved by the Company’s stockholders at the annual meeting of stockholders held in June 2018 (the “2018 Plan”). We awarded40% of the restricted stock units to nearly allvest based on continued employment over four years, and 60% percent of our named executive officers in the proportions shown below. In 2021, in response to the COVID-19 pandemic, we temporarily revised our long-term equity incentive program for 2021 only to remove the revenue performance metric. Therefore, in 2022, we reinstated the revenue performance metric and returned to our pre-2021 practice of awarding performance-based restricted stock units withmay be earned based on our relative TSR performance and our revenue performance during a portion subject to revenue-basedthree-year performance metrics and a separate portion subject to TSR-based performance metrics. In addition, we adjusted the overall weighting of our restricted stock units to change the total percentage of PRSUs from 50% to 60% to further increase the percentage of incentive compensation tied to performance.period, as shown below.
| 40% | + | 36% | + | 24% | = | Total | + | 36% | + | 24% | = | Total | ||||||||||||
Time-vested RSUs | ||||||||||||||||||||||||
Time-vested RSUs | Relative TSR-linked PRSUs | Revenue-linked PRSUs | LTI award | Relative TSR-linked PRSUs | Revenue-linked PRSUs | Restricted Stock Unit Award |
Our Compensation and Talent Management Committee selected revenue and relative TSR as onethe performance measuremeasures for the PRSUs because itrevenue is a key driver of stockholder value, thus aligning stockholder and executive interests. Our Compensationinterests and Talent Management Committee selected relative TSR because it incorporates a comparative component that requires our stock to outperform our industry classification peers for awards to vest. In addition, both the revenue and relative TSR performance measures encourage a focus on our strategic goals of long-term financial performance and market share growth.
2023 Option Awards
In June 2023, the Compensation and Talent Management Committee granted stock options to all NEOs other than the CEO. The goal of the grants was to provide wealth creation opportunities that are aligned to stockholder value and to position these NEOS’ total direct compensation for 2023 at median or above in response to the very competitive talent market in which the Company is operating. Accordingly, the Compensation and Talent Management Committee elected stock options as the vehicle for these grants in order to incentivize recipients to increase the value of the Company’s stock price, and further align their interests with those of our stockholders, as the options are only valuable to the recipients if our stock price appreciates over the exercise price. The grants vest in four equal installments on the first four anniversaries of the grant date.
| EXL 2024 Proxy Statement | / | 77 |
Executive compensation
The table below shows the amounttarget dollar value of Time-Vested andRSUs, Performance-Vested RSUs and options our Compensation and Talent Management Committee awarded our named executive officers in 2022.2023. In general, the Compensation and Talent Management Committee believes that the size of the award granted to an executive officer should increase based on the executive officer’s level of responsibility within the Company. The number of shares subject to each NEO’s Time-Vested RSU and Performance-Vested RSU (assuming a “target” level of performance) was determined by dividing the NEO’s target dollar value by the average stock closing price for the preceding month. The number of shares subject to each NEO’s option grant was determined by dividing the applicable target option value by the Black Scholes value of a share ($12.03 on a post-stock split basis).
| Name | Annual Time-Vested RSUs | Relative TSR-Linked PRSUs | Revenue-Linked PRSUs | |||||||||
Rohit Kapoor | 25,164 | 22,647 | 15,099 | |||||||||
Maurizio Nicolelli | 3,884 | 3,495 | 2,331 | |||||||||
Vikas Bhalla | 4,348 | 3,913 | 2,609 | |||||||||
Vivek Jetley | 4,040 | 3,636 | 2,424 | |||||||||
Ankor Rai | 3,108 | 2,797 | 1,865 | |||||||||
|
Executive compensation
| Name | Target Time-Vested RSUs ($) | Target Revenue-Linked PRSUs ($) | Target Relative TSR-Linked PRSUs ($) | Target Option Awards ($) | ||||||||||||||||
Rohit Kapoor | 3,560,000 | 2,136,000 | 3,204,000 | — | ||||||||||||||||
Maurizio Nicolelli | 560,000 | 336,000 | 504,000 | 1,500,000 | ||||||||||||||||
Vikas Bhalla | 600,000 | 360,000 | 540,000 | 3,000,000 | ||||||||||||||||
Vivek Jetley | 600,000 | 360,000 | 540,000 | 3,000,000 | ||||||||||||||||
Anita Mahon | 440,000 | 264,000 | 396,000 | 1,500,000 | ||||||||||||||||
The “Time-Vested RSUs” will vest in increments of 25% on each of the first four anniversaries of the grant date, subject to continuous service with the Company through the applicable vesting date.
| – | The Compensation and Talent Management Committee believes these Time-Vested RSUs provide an important role in promoting retention of our executive officers. |
The “Performance-Vested” portion of the 20222023 RSUs (“PRSUs”) are split into two types that each vest based on separate performance measures as follows:
| – | Revenue-Linked PRSUs: 40% of these performance-based restricted stock unit awards will cliff-vest on December 31 of the third fiscal year in the performance period, subject to achievement of threshold Company revenues against an aggregate revenue target over the grant’s three-year performance period of January 1, |
| Revenue target achievement | Percentage of Revenue-Linked PRSUs earned | ||||
110% or more | 200% | ||||
At 100% | 100% | ||||
90% | 25% | ||||
| 78 | / | EXL 2024 Proxy Statement |
| Revenue target achievement | Percentage of Revenue-Linked PRSUs earned | |
110% or more | 200% | |
At 100% | 100% | |
90% | 25% | |
Executive compensation
| – | Relative TSR-Linked PRSUs: The remaining 60% of the performance-based restricted stock unit awards cliff-vests on December 31 of the third fiscal year in the performance period, based on the achievement of a threshold level of relative total stockholder return performance of the Company against a performance peer group over the grant’s three-year performance period of January 1, |
|
Executive compensation
The percentage of Relative TSR-Linked PRSUs earned will be determined based on straight-line interpolation to the extent the Company’s TSR falls in between the 20th and 80th percentiles, as per the chart below: |
| TSR peer group percentile | Percentage of Relative TSR-Linked PRSUs earned | Percentage of Relative TSR-Linked PRSUs earned | Percentage of Relative TSR-Linked PRSUs earned | ||||
80.0 or more | 200% | 200% | 200% | ||||
65.0 | 150% | 150% | 150% | ||||
50.0 | 100% | 100% | 100% | ||||
35.0 | 50% | 50% | 50% | ||||
21.0 | 3.33% | ||||||
20.0 or less | 0% | 0% | 0% | ||||
| – | The Compensation and Talent Management Committee believes the PRSUs focus our executives on key drivers of our Company’s business that will ultimately lead to creation of additional stockholder value. |
In 2022, we also adopted a Share Matching Program (“SMP”) under
The Options were granted to all NEOs other than the 2018 Plan to promote long-term ownershipCEO and alignmentthey will vest in increments of executive and stockholder interest. The SMP generally entitles a participant to one restricted stock unit for every share of Company common stock newly acquired and held by the participant during a specified acquisition period, up to a pre-established maximum of $500,000. For purposes25% on each of the match, “newly acquired shares” includes the employee’s first quarter 2022 open market purchases of our common stock, and/or, to the extent elected by the employee, the after-tax value of equity vesting in the first quarter 2022, in an amount between $100,000 to $500,000 per such employee. In general, as long as a participant continues to hold his or her newly acquired shares and remains employed with the Company, the associated restricted stock units received will cliff vest in two installments with one-third vesting on the second anniversaryfour anniversaries of the grant date, andsubject to continuous service with the remaining two-thirds vesting on the third anniversary of the grant date. In addition, each award agreement requires the executive to hold any shares of Company stock acquired under the SMP for a period of two years followingthrough the applicable settlementvesting date. Accordingly, participation in the SMP ties the executive’s compensation to the Company’s stock performance for a total of five years. The SMP is designed to encourage key executives to acquire a larger equity ownership interest (up to an additional $1 million of stock value that effectively must be held for five years) in the Company, thereby further aligning the interests of these key executives with the interest of stockholders.
Each of the NEOs, other than Mr. Kapoor, received a share matching award of 4,177 restricted stock units in 2022 as a result of his acquisition of shares that qualified under the SMP as newly acquired. Those NEOs took full advantage of this program and participated near the maximum limit, which shows our NEOs’ long-term commitment to the Company.
Finally, our modified executive stock ownership policy, which went into effect in 2022, doubles the amount of Company equity that each executive officer other than the CEO is expected to maintain (see “Maintain a robust stock ownership policy” on page 70), which serves to further align executive and stockholder interests.
| – | The Compensation and Talent Management Committee believes these options serve an important retentive purpose by making 2023 target total direct compensation levels for the NEOs (other than the CEO) competitive, and incentivizing these NEOs to increase the value of the Company’s stock price. |
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Executive compensation
Payout of awards granted in prior fiscal years
This was the third and final performance year for the 20202021 performance-based restricted stock units. We achieved 101.6% of the revenue target for the revenue-linked restricted stock units, resulting in 100% of target funding of those grants.which exclusively had a relative TSR metric. The Company’s TSR performance was at the 97.696th percentile among its peer group, resulting in the executives earning 200% of the 20202021 relative TSR-linked restricted stock units pursuant to the terms of the original grant. No adjustments were made to the 2020 performance-based restricted stock units or the associated performance targets to account for the impact of the COVID-19 pandemic in the 2020, 2021 and 2022 fiscal years.
| Performance Metric | Threshold (3.33%) | Target (100%) | Maximum (200%) | Actual Performance | ||||||||
TSR(1) | 21st percentile | 50th percentile | 80th or > percentile | 96th percentile | ||||||||
2021-2023 PSU Final Payout Percentage: 200% | ||||||||||||
| (1) | As noted above, the TSR peer group for this performance metric is comprised of the public companies traded on either the NYSE or NASDAQ stock markets in our 8-digit Global Industry Classification Standard sub-industry group. |
Benefits and perquisites
We offer employee benefits coverage in order to:
provide our global workforce with a reasonable level of financial support in the event of illness or injury; and
provide market-competitive benefits that enhance productivity and job satisfaction through programs that focus on work/life balance.
The benefits available for all U.S. employees include customary medical and dental coverage, disability insurance, life insurance and life insurance. In addition, oura 401(k) plan provides a reasonable level of retirement income reflecting employees’ careers with us.plan. A number of our U.S. employees, including our U.S.-based named executive officers, participate in these plans. The cost of employee benefits is partially borne by our employees, including our named executive officers. Our named executive officersofficer in India, Mr. Bhalla, is eligible to participate in the Company’s pension benefit, health and welfare and fringe benefit plans otherwise available to executive employees in India.
We generally do not provide significant perquisites or personal benefits to executive officers other than our Vice Chairman and CEO and our executive officers in India. Our Vice Chairman and CEO is provided a limited number of perquisites which we believe are reasonable and consistent with market trends, and which are intended to be part of a competitive overall compensation program. A discussion of the benefits provided to our Vice Chairman and CEO is provided under “Employment“NEO Employment agreements” beginning on page 90.87.
RiskClawback Policy
In 2023, we updated our clawback policy to bring it into compliance with new NASDAQ listing standards implementing clawback rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act. In the event a restatement of our financial statements is required, incentive-based compensation tied to a financial reporting measure that was “received” under the rules by covered executive officers in the three prior completed fiscal years will be recalculated (if applicable) based on the updated financial statements. Incentive compensation deemed to have been erroneously received as a result of the restatement will be subject to recoupment. The method of recoupment will be determined by the board or a committee of the board.
In addition, our clawback policy contains an additional recoupment trigger in the event of executive officer misconduct. If the board or a committee of the board determines that an executive violated material Company policies, misstated financial or other material information about the Company, committed fraud or misconduct, breached a restrictive covenant or other agreement
| 80 | / | EXL 2024 Proxy Statement |
Executive compensation
with the Company, engaged in other conduct that is detrimental to the business or reputation of the Company, or was identified by the Department of Justice as having engaged in wrongdoing (including through supervisory activity), the board or a committee of the board may in its sole discretion recoup compensation (including time-based equity awards) from that executive officer. Amounts recoupable under the misconduct trigger may include compensation that would not otherwise be subject to recoupment under the NASDAQ listing standards.
Stock Ownership Policy
Our executive stock ownership policy requires:
Our CEO to maintain aggregate stock ownership equal to at least six times his base salary (counting common stock, vested restricted stock units and unvested time-based restricted stock units) and three times his base salary (when excluding unvested time-based restricted stock units).
Other members of our executive committee (including our named executive officers) to maintain aggregate stock ownership equal to at least two times their base salary (counting common stock and vested restricted stock units).
Common stock is counted toward the ownership requirement if it is owned by or for the benefit of the executive, the executive’s spouse or the executive’s children sharing the same household. Unearned performance-based restricted stock units and unexercised options (including in-the-money options) do not count toward the ownership requirement.
New executives generally have five years to meet the ownership requirement, whereas existing executives generally have three years to meet any increased ownership requirements as a result of base salary increases. During the applicable phase-in period, executives generally must retain at least 50% of shares delivered (net of tax) following the vesting of an equity award until the ownership requirement is met. If the ownership requirement is not met at the end of the phase-in period, executives generally may not sell any shares (other than to satisfy taxes) until the ownership requirement is met.
All covered executives were in compliance with the executive stock ownership policy as of the December 15, 2023 measurement date.
Compensation risk assessment
Our Compensation and Talent Management Committee has taken into account its discussions with management and Farient regarding our compensation practices and has concluded that any risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. This conclusion was based on the features of our compensation programs, practices and policies set forth under “Executive compensation program, practices and policies” on page 69.65.
Severance and change-in-control benefits
Each named executive officer including Mr. Bhalla and Mr. Jetley as of April 2022, is party to an employment agreement that sets forth the terms of his or her employment, including compensation, which was negotiated through arms’-length contract negotiations. Under these employment agreements or letters, we are obligated to pay severance or other enhanced benefits upon termination of their employment. A discussion of the
|
| EXL 2024 Proxy Statement | / | 81 |
Executive compensation
termination of their employment. A discussion of the severance and other enhanced benefits provided to our named executive officers is provided under “Potential payments upon termination or change in control at fiscal 20222023 year-end” beginning on page 95.90.
We have provided change-in-control severance protection for some of our executive officers, including our named executive officers. Our Compensation and Talent Management Committee believes that such protection is intended to preserve employee morale and productivity and encourage retention in the face of the disruptive impact of an actual or rumored change in control. In addition, for executive officers, the program is intended to align executive officers’ and stockholders’ interests by enabling executive officers to consider corporate transactions that are in the best interests of our stockholders and other constituents without undue concern over whether the transactions may jeopardize the executive officers’ own employment.
Senior executive officers, including our named executive officers, have enhanced levels of benefits based on their job level, seniority and probable loss of employment after a change in control. We also consider it likely that it will take more time for senior executive officers to find new employment.
Deductibility cap on executive compensation
As in the past, our Compensation and Talent Management Committee expects to continue to take into consideration the tax deductibility of compensation, but reserves the right to authorize payments that may not be deductible if it believes that the payments are appropriate and consistent with our compensation philosophy.
Despite the limited availability of Code Section 162(m) performance-based compensation exceptions following the Tax Cuts and Jobs Act of 2017, our Compensation and Talent Management Committee does not anticipate a shift away from variable or performance-based compensation payable to our named executive officers. Similarly, we do not expect to apply less rigor in the process by which we establish performance goals or evaluate performance against pre-established goals with respect to compensation paid to our named executive officers.
| 82 | / | EXL 2024 Proxy Statement |
|
Executive compensation
Compensation and Talent Management Committee Report
The Compensation and Talent Management Committee of the board of directors of ExlService Holdings, Inc. has reviewed and discussed the Compensation Discussion and Analysis with our management and, based on such review and discussion, has recommended to the board of directors of ExlService Holdings, Inc. that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022,2023, and our Proxy Statement relating to the Annual Meeting.
Compensation and Talent Management Committee
Ms. Jaynie M. Studenmund (Chair)
Ms. Anne Minto
Mr. Som Mittal
Mr. Clyde W. Ostler
Mr. Vikram Pandit
Ms. Kristy Pipes
|
| EXL 2024 Proxy Statement | / | 83 |
Executive compensation
Summary compensation table for fiscal year 20222023
The following table sets forth information for compensation earned in fiscal years 2020, 2021, 2022 and 20222023 by our named executive officers:
Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($)(2) | Non-equity incentive plan ($)(3) | Change in pension value and nonqualified deferred compensation earnings ($)(4) | All other compensation ($) | Total ($) | ||||||||||||||||||||||||||||||
Rohit Kapoor |
| 2022 |
|
| 766,384 |
|
|
|
|
| — |
|
| 8,356,213 |
|
| 1,829,887 |
|
| — |
|
| 58,423 |
| (5) |
| 11,010,906 |
| ||||||||||
Vice Chairman & CEO |
| 2021 |
|
| 742,603 |
|
|
|
|
| — |
|
| 7,209,918 |
|
| 2,050,000 |
|
| — |
|
| 31,068 |
|
|
| 10,033,589 | |||||||||||
| 2020 |
|
| 599,016 |
|
|
|
|
| — |
|
| 5,701,209 |
|
| 810,000 |
|
| — |
|
| 31,041 |
|
|
| 7,141,267 | ||||||||||||
Maurizio Nicolelli |
| 2022 |
|
| 483,822 |
|
|
|
|
| — |
|
| 1,810,865 |
|
| 554.929 |
|
|
|
|
| 9,654 |
| (6) |
| 2,859,270 |
| ||||||||||
Executive Vice President and CFO |
| 2021 |
|
| 475,000 |
|
|
|
|
| 100,000 |
|
| 2,220,441 |
|
| 640,498 |
|
| — |
|
| 9,204 |
|
|
| 3,445,143 | |||||||||||
| 2020 |
|
| 384,283 |
|
|
|
|
| 125,000 |
|
| 1,166,955 |
|
| 243,097 |
|
| — |
|
| 8,970 |
|
|
| 1,928,305 | ||||||||||||
Vikas Bhalla |
| 2022 |
|
| 265,432 |
|
| (1) |
|
| — |
|
| 1,964,960 |
|
| 357,340 |
|
| 20,200 |
|
| 18,233 |
| (7) |
| 2,626,165 |
| ||||||||||
Executive Vice President and Business Head, Insurance |
| 2021 |
|
| 276,716 |
|
|
|
|
| — |
|
| 2,711,454 |
|
| 444,718 |
|
| 16,865 |
|
| 19,034 |
|
|
| 3,468,787 | |||||||||||
| 2020 |
|
| 229,016 |
|
|
|
|
| — |
|
| 1,399,048 |
|
| 169,370 |
|
| 5,067 |
|
| 37,962 |
|
|
| 1,840,463 | ||||||||||||
Vivek Jetley |
| 2022 |
|
| 440,164 |
|
|
|
|
| — |
|
| 1,862,689 |
|
| 525,488 |
|
| — |
|
| 9,654 |
| (8) |
| 2,837,996 |
| ||||||||||
Executive Vice President and Business Head, Analytics |
| 2021 |
|
| 415,068 |
|
|
|
|
| — |
|
| 2,429,371 |
|
| 586,146 |
|
| — |
|
| 9,204 |
|
|
| 3,439,789 | |||||||||||
| 2020 |
|
| — |
|
|
|
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
| |||||||||||
Ankor Rai |
| 2022 |
|
| 420,082 |
|
|
|
|
| — |
|
| 1,553,192 |
|
| 481,822 |
|
| — |
|
| 9,654 |
| (9) |
| 2,464,750 |
| ||||||||||
Executive Vice President and Chief Digital Officer |
| 2021 |
|
| — |
|
|
|
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
| ||||||||||
| 2020 |
|
| — |
|
|
|
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
| |||||||||||
Name and principal position | Year | Salary ($)(1) | Bonus ($)(2) | Stock awards ($)(3) | Option ($)(3) | Non-equity incentive plan ($)(4) | Change in pension value and nonqualified deferred compensation earnings ($)(5) | All other compensation ($) | Total ($) | |||||||||||||||||||||||||||||||||
Rohit Kapoor | 2023 | 815,000 |
|
|
| — | 9,982,605 | — | 1,514,253 | — | 34,148 | (7) | 12,346,006 | |||||||||||||||||||||||||||||
Chair & CEO | 2022 | 766,384 |
|
|
| — | 8,356,213 | — | 1,829,887 | — | 58,423 |
| 11,010,906 | |||||||||||||||||||||||||||||
| 2021 | 742,603 |
|
|
| — | 7,209,918 | — | 2,050,000 | — | 31,068 |
| 10,033,589 | ||||||||||||||||||||||||||||||
Maurizio Nicolelli | 2023 | 510,000 |
|
|
| — | 1,570,763 | 1,615,392 | 459,441 | — | 10,947 | (8) | 4,166,543 | |||||||||||||||||||||||||||||
Executive Vice President and CFO | 2022 | 483,822 |
|
|
| — | 1,810,865 | — | 554,929 | — | 9,654 |
| 2,859,270 | |||||||||||||||||||||||||||||
| 2021 | 475,000 |
|
|
| 100,000 | (6) | 2,220,441 | — | 640,498 | — | 9,204 |
| 3,445,143 | |||||||||||||||||||||||||||||
Vikas Bhalla | 2023 | 300,188 |
|
|
| — | 1,681,606 | 3,230,785 | 320,917 | 5,642 | 18,383 | (9) | 5,557,521 | |||||||||||||||||||||||||||||
President of EXL and Business Head, Insurance | 2022 | 265,432 |
|
|
| — | 1,964,960 | — | 357,340 | 20,200 | 18,233 |
| 2,626,165 | |||||||||||||||||||||||||||||
| 2021 | 276,716 |
|
|
| — | 2,711,454 | — | 444,718 | 16,865 | 19,034 |
| 3,468,787 | ||||||||||||||||||||||||||||||
Vivek Jetley | 2023 | 500,000 |
|
|
| — | 1,681,606 | 3,230,785 | 422,307 | — | 10,404 |
| 5,845,102 | |||||||||||||||||||||||||||||
President of EXL and Business Head, Analytics | 2022 | 440,164 |
|
|
| — | 1,862,689 | — | 525,488 | — | 9,654 | (10) | 2,837,996 | |||||||||||||||||||||||||||||
| 2021 | 415,068 |
|
|
| — | 2,429,371 | — | 586,146 | — | 9,204 |
| 3,439,789 | ||||||||||||||||||||||||||||||
Anita Mahon | 2023 | 450,000 |
|
|
| — | 1,234,421 | 1,615,392 | 447,577 | — | 10,404 | (11) | 3,757,795 | |||||||||||||||||||||||||||||
Executive Vice President and Global Head, Healthcare | 2022 | — |
|
|
| — | — | — | — | — | — |
| — | |||||||||||||||||||||||||||||
| 2021 | — |
|
|
| — | — | — | — | — | — |
| — | ||||||||||||||||||||||||||||||
(1) The amount set forth in the “Salary” column for Mr. Bhalla includes $107,259$117,357 of base salary, $95,608$104,382 of a cash supplementary allowance, $35,496$46,640 of housing allowance (which Mr. Bhalla elected to receive instead in cash), $8,935$9,776 of travel allowance (which Mr. Bhalla elected to receive instead in cash), and $18,134$22,033 of a special car allowance (which Mr. Bhalla elected to receive instead in cash).
(2) There were no discretionary bonuses paid in 2023.
(3) Amounts reflect the total grant date fair value of awards in accordance with FASB ASC Topic 718, recognized(RSUs and revenue-based PRSUs), Monte Carlo value of awards (TSR-based PRSUs) and Black Scholes value of awards (options) (recognized for financial statement reporting purposes for the fiscal years ended December 31, 2020, 2021, 2022 and 2022)2023, as applicable, in accordance with FASB ASC Topic 718 (disregarding any forfeiture assumptions)). Assumptions used in the calculation of these amounts are included (i) for 2023 , in footnotes 2 and 23 to the audited financial statements for the fiscal year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2024; (ii) for 2022, in footnotes 2 and 23 to the audited financial statements for the fiscal year ended December 31, 2022, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 23, 2023; (ii)and (iii) for 2021, in footnotes 2 and 22 to the audited financial statements for the fiscal year ended December 31, 2021, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2022; and (iii) for 2020, in footnotes 2 and 23 to the audited financial statements for the fiscal year ended December 31, 2020, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2021.2022. With respect to stock awards granted in 2022,2023, the table below sets forth the value attributable to performance restricted stock units valued at target achievement. Performance restricted stock units granted in 20222023 may pay out up to 200% of the target award, which would have amounted to the grant date fair values listed as the maximum total grant date fair value for each named executive officer in the table below.
| Name | Total grant date fair value ($) | Maximum total grant date fair value ($) | Total grant date fair value ($) | Maximum total grant date fair value ($) | ||||
Rohit Kapoor | 5,337,037 | 10,674,073 | 6,371,776 | 12,743,552 | ||||
Maurizio Nicolelli | 823,740 | 1,647,480 | 1,002,596 | 2,005,193 | ||||
Vikas Bhalla | 922,165 | 1,844,329 | 1,073,350 | 2,146,700 | ||||
Vivek Jetley | 856,848 | 1,713,695 | ||||||
Ankor Rai | 659,172 | 1,318,343 | ||||||
/ | EXL 2024 Proxy Statement | |
Executive compensation
| Name | Total grant date fair value ($) | Maximum total grant date fair value ($) | ||
Vivek Jetley | 1,073,350 | 2,146,700 | ||
Anita Mahon | 787,906 | 1,575,812 | ||
(3)(4) Reflects the annual incentive awards earned in respect of 20222023 and paid in 2023.2024. For details on our annual incentive program, see “Compensation Discussion and Analysis—Annual incentives” beginning on page 76.72.
(4)(5) Reflects the present value of accruals under the Gratuity Plan for Indian employees. Information regarding our Gratuity Plan (including the assumptions used to calculate these amounts) may be found under “Pension benefits for fiscal year 2022”2023” beginning on page 95.90.
(5)(6) Mr. Nicolelli received a joining bonus of $225,000 in connection with his commencement of employment in 2020, $125,000 of which was paid in 2020 and $100,000 of which was paid in 2021. This amount represents the second and final installment of such joining bonus.
(7) Amount for Mr. Kapoor includes the travel allowance ($43,336)23,744) provided for under his employment agreement, to be used for once-a-year business class airfare for himself and his family between the United States and India, costs associated with use of an automobile and driver ($2,021), car lease rental ($3,412), contribution to our 401(k) plan ($9,150)9,900), and Company-paid life insurance premiums ($504). In addition, certain travel expenses for Mr. Kapoor’s spouse to accompany him on business trips were provided at no incremental cost to the Company.
(6)(8) Amount for Mr. Nicolelli includes contribution to our 401(k) plan ($9,150)9,900), travel expenses ($543) and Company-paid Life Insurance premiums ($504).
(7)(9) Amount for Mr. Bhalla includes contributions to the Employees’ Provident Fund Scheme (a statutorily required defined contribution program for Indian employees) ($12,871)14,083), costs associated with use of an automobile and driver in India ($4,860)3,351), and home internet and telephone charges ($502)950).
(8)(10) Amount for Mr. Jetley includes contributions to 401(k) plan ($9,150)9,900) and Company-paid Life Insurance premiums ($504).
(9)(11) Amount for Mr. RaiMs. Mahon includes contributions to 401(k) plan ($9,150)9,900) and Company-paid Life Insurance premiums ($504).
Unless otherwise specified, U.S. dollar figures in this Proxy Statement have been converted from Indian rupees at a rate of 82.7283.21 Indian rupees to $1.00, the Indian rupee to U.S. dollar exchange rate in effect as of December 30, 2022.29, 2023. Some of the information in the Summary Compensation Tables for fiscal years 20212022 and 20202021 was converted using the exchange rates in effect as set forth below:
| Fiscal year | Rate | Exchange rate of INR per US$1 | Rate | Exchange rate of INR to US $1 | ||||||
| 2022 | December 30, 2022 | 82.72 | ||||||||
| 2021 | December 31, 2021 | 74.33 | December 31, 2021 | 74.33 | ||||||
2020 | December 31, 2020 | 73.065 | ||||||||
|
| EXL 2024 Proxy Statement | / | 85 |
Executive compensation
Grants of plan-based awards table for fiscal year 20222023
The following table sets forth information concerning grants of stock and option awards and non-equity incentive plan awards granted to our named executive officers during fiscal year 2022:2023:
| Name | Grant date |
Estimated future payouts under non-equity incentive plan awards(1) | Estimated future payouts under equity incentive plan awards | All other number of shares of stock or units (#) | Grant Date Fair Value of Stock and Option Awards(6) ($) | |||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||
Rohit Kapoor | 1,149,575 | 3,448,726 | ||||||||||||||||||||||||||||||||||
| 2/16/2022 | 25,164 | (4) | 3,019,177 | |||||||||||||||||||||||||||||||||
| 2/16/2022 | 15,099 | (2) | 30,198 | 1,811,578 | ||||||||||||||||||||||||||||||||
| 2/16/2022 | 22,647 | (3) | 45,294 | 3,525,458 | ||||||||||||||||||||||||||||||||
Maurizio Nicolelli | 362,866 | 544,300 | ||||||||||||||||||||||||||||||||||
| 2/16/2022 | 3,884 | (4) | 466,002 | |||||||||||||||||||||||||||||||||
| 3/31/2022 | 4,177 | (5) | 521,123 | |||||||||||||||||||||||||||||||||
| 2/16/2022 | 2,331 | (2) | 4,662 | 279,673 | ||||||||||||||||||||||||||||||||
| 2/16/2022 | 3,495 | (3) | 6,990 | 544,067 | ||||||||||||||||||||||||||||||||
Vikas Bhalla | 229,905 | 344,857 | ||||||||||||||||||||||||||||||||||
| 2/16/2022 | 4,348 | (4) | 521,673 | |||||||||||||||||||||||||||||||||
| 3/31/2022 | 4,177 | (5) | 521,123 | |||||||||||||||||||||||||||||||||
| 2/16/2022 | 2,609 | (2) | 5,218 | 313,028 | ||||||||||||||||||||||||||||||||
| 2/16/2022 | 3,913 | (3) | 7,826 | 609,137 | ||||||||||||||||||||||||||||||||
Vivek Jetley | 330,123 | 495,185 | ||||||||||||||||||||||||||||||||||
| 2/16/2022 | 4,040 | (4) | 484,719 | |||||||||||||||||||||||||||||||||
| 3/31/2022 | 4,177 | (5) | 521,123 | |||||||||||||||||||||||||||||||||
| 2/16/2022 | 2,424 | (2) | 4,848 | 290,832 | ||||||||||||||||||||||||||||||||
| 2/16/2022 | 3,636 | (3) | 7,272 | 566,016 | ||||||||||||||||||||||||||||||||
Ankor Rai | 315,062 | 472,592 | ||||||||||||||||||||||||||||||||||
| 2/16/2022 | 3,108 | (4) | 372,898 | |||||||||||||||||||||||||||||||||
| 3/31/2022 | 4,177 | (5) | 521,123 | |||||||||||||||||||||||||||||||||
| 2/16/2022 | 1,865 | (2) | 3,730 | 223,763 | ||||||||||||||||||||||||||||||||
| 2/16/2022 | 2,797 | (3) | 5,594 | 435,409 | ||||||||||||||||||||||||||||||||
| Name | Grant date |
Estimated future payouts under non-equity incentive plan awards(1) | Estimated future payouts under equity incentive plan awards | All other number of shares of stock or units (#) | All other option number of securities underlying (#) | Exercise price of option | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
Rohit Kapoor | — | 1,222,500 | 3,667,500 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 104,480 | (4) | 3,610,829 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 15,673 | 62,690 | (2) | 125,380 | 2,166,566 | |||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 3,131 | 94,030 | (3) | 188,060 | 4,205,210 | (6) | ||||||||||||||||||||||||||||||||||||||
Maurizio Nicolelli | — | 382,500 | 573,750 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 16,440 | (4) | 568,166 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 2,466 | 9,865 | (2) | 19,730 | 340,934 | |||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 493 | 14,795 | (3) | 29,590 | 661,662 | (6) | ||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 134,325 | (5) | $ | 30.15 | 1,615,392 | (7) | ||||||||||||||||||||||||||||||||||||||
Vikas Bhalla | — | 251,478 | 377,217 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 17,600 | (4) | 608,256 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 2,640 | 10,560 | (2) | 21,120 | 364,954 | |||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 527 | 15,840 | (3) | 31,680 | 708,396 | (6) | ||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 268,650 | (5) | $ | 30.15 | 3,230,785 | (7) | ||||||||||||||||||||||||||||||||||||||
Vivek Jetley | — | 375,000 | 562,500 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 17,600 | (4) | 608,256 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 2,640 | 10,560 | (2) | 21,120 | 364,954 | |||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 527 | 15,840 | (3) | 31,680 | 708,396 | (6) | ||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 268,650 | (5) | $ | 30.15 | 3,230,785 | (7) | ||||||||||||||||||||||||||||||||||||||
Anita Mahon | — | 337,500 | 506,250 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 12,920 | (4) | 446,515 | |||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 1,939 | 7,755 | (2) | 15,510 | 268,013 | |||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 387 | 11,625 | (3) | 23,250 | 519,893 | (6) | ||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 134,325 | (5) | $ | 30.15 | 1,615,392 | (7) | ||||||||||||||||||||||||||||||||||||||
(1) These amounts reflect the target and maximum annualcash incentive awardsbonuses set for 2022.2023. There is no threshold amount reported for the cash incentive bonus as the individual performance measure (25% of the total bonus) does not have a threshold performance below which no payment will be made. However, the Company performance metric (75% of the total bonus) does have a threshold. For details of our annual incentive bonus program, see “Compensation Discussion and Analysis – Analysis—Annual incentives” beginning on page 80.72.
(2) Represents annual PRSU—Revenue based awards granted under the 2018 Plan, which will cliff vest, subject to performance, on December 31, 2025.
(3) Represents annual PRSU—TSR based awards granted under the 2018 Plan, which will cliff vest, subject to performance, on December 31, 2025.
(4) Represents annual awards of Revenue-Linked PRSUsrestricted stock units granted under the 2018 Plan, subject to ratable vesting on the vesting set forth in footnote 7.first four anniversaries of the grant date.
(3)(5) Represents annualstock option awards of Relative TSR-Linked PRSUs granted under the 2018 Plan, subject to ratable vesting on the vesting set forth in footnote 7.
(4) Represents annual awardsfirst four anniversaries of time-vested restricted stock units granted to all named executive officers under the 2018 Plan, subject to the vesting set forth in footnote 7.
(5) Represents the share matching awards granted under the 2018 Plan pursuant to the SMP and subject to the vesting set forth in footnote 7.grant date.
(6) The grant date fair value reflects valuationof the estimated future payouts under equity incentive plan awards for TSR Linked PRSUs is based on the Monte Carlo value.
(7) The grant date of awards in accordance with FASB ASC Topic 718.fair value for stock options is based on the Black Scholes Fair Market value.
|
Executive compensation
(7) The vesting schedules of the stock grants mentioned in the table below are as follows for each named executive officer (subject to continued employment through each applicable vesting date):
| 100% vesting on 12/31/2024 | |
| 100% vesting on 12/31/2024 | |
| Vesting over 4 Years – 25% each year | |
| Vesting over 3 Years – 1/3 on the second anniversary and 2/3 on the third anniversary of the grant date | |
Employment agreements
In addition to the terms described below, the employment and severance agreements for each of our named executive officers include severance, termination and/or noncompetition provisions, which are described below under “Potential payments upon termination or change in control at fiscal 2022 year-end” beginning on page 95. In 2022, we entered into employment agreements with Messrs. Bhalla and Jetley.
Rohit Kapoor
Mr. Kapoor serves as our Vice Chairman and CEO, and is based in the United States. Our engagement of Mr. Kapoor has been under the terms of employment agreements for over 15 years. Effective as of August 3, 2020, the Company entered into a second amended and restated employment agreement with Mr. Kapoor (the “Kapoor Agreement”). The Kapoor Agreement provides for an employment term that extends until Mr. Kapoor’s termination or resignation.
Salary, bonus and equity
The Kapoor Agreement provides for a base salary of $750,000. Mr. Kapoor’s base salary can be increased at our sole discretion and cannot be decreased unless a Company-wide decrease in pay is implemented. Mr. Kapoor can earn an annual cash bonus, with a target of 150% of base salary and a maximum payout of no greater than 310% of base salary, based upon the attainment of performance criteria determined by our Compensation and Talent Management Committee. Mr. Kapoor remains eligible to receive equity-based awards annually during the term, in amounts and forms determined by the Compensation and Talent Management Committee but with terms no less favorable than his direct reports.
Personal benefits
We provide Mr. Kapoor with certain personal benefits, including certain club memberships, home office supplies, term life insurance policy (with a face value of $500,000), once-a-year business class airfare between the United States and India for the
/ | EXL |
Executive compensation
NEO Employment agreements
We maintain employment agreements with each of the NEOs. Each agreement generally provides for base salary, target bonus opportunity, eligibility to receive equity-based awards, participation in our benefit plans, severance, and in certain cases, specified perquisites.
Salary
Mr. Kapoor’s employment agreement provides a minimum base salary of $750,000, which may not be decreased unless a Company-wide decrease in pay is implemented. The base salaries that were in effect for our NEOs during the 2023 year are described on page 71 above.
Target Bonus Opportunities
Target bonus opportunity as a percentage of base salary, as specified in the NEO employment agreements, is as follows: Mr. Kapoor, 150% (with a maximum of 310%), Messrs. Nicolelli, Bhalla and Jetley and Ms. Mahon: 75%.
Equity Awards
The NEOS are generally eligible to receive annual equity awards in the discretion of the Compensation and Talent Management Committee. Mr. Kapoor’s employment agreement provides that in determining his annual equity award, the Compensation and Talent Management Committee will consider, among other factors, an aggregate “baseline” value equal to $4,925,000, Company and individual performance, shareholder input on executive compensation, and market data.
India-Specific Compensation Arrangement
Mr. Bhalla’s annual fixed compensation includes base salary, as well as amounts available as a leave travel allowance, a housing allowance, an automobile allowance, a medical allowance and a cash supplementary allowance.
Perquisites for CEO
Mr. Kapoor’s employment agreement specifies certain perquisites to which he is entitled, including: (1) certain club memberships in the United States and India, (2) home office supplies, (3) term life insurance policy (with a face value of $500,000), (4) once-a-year business class airfare between the United States and India for the executive and his family, (5) up to $30,000 for personal tax and estate planning expenses (increased from $12,000 pursuant to an amendment to the Kapoor Agreement, effective as of February 16, 2023), (6) up to $2,067$1,400 per month car allowance for an automobile in the United States, (7) up to $12,000 per year for expenses associated with maintaining an automobile in India (including cost of a driver), (8) personal security for the executive and his family while in India, reimbursement for first-class business travel, and (9) a per diem allowance for certain trips. In addition, his employment agreement entitles him to certain other benefits in the event he is relocated to India, but which are not applicable currently as he maintains a U.S. residency.
Mr. Kapoor’s The employment agreement also includes severance, termination and noncompetition provisions,agreements for other U.S. based NEOs do not detail the perquisites to which are described below under “Potential payments upon termination or change in control at fiscal 2022 year-end” beginningthe NEOs may be entitled. Please see the “All Other Compensation” column of the Summary Compensation Table on page 95.
Maurizio Nicolelli
Mr. Nicolelli serves as our Executive Vice President and CFO and is based84 above for information about the perquisites the NEOs received in the United States. We entered into an employment agreement with him, effective February 3, 2020, which will continue throughout Mr. Nicolelli’s employment with the Company. In connection with his appointment, Mr. Nicolelli received a joining bonus of $225,000, payable in two installments, and an initial grant of restricted stock units of the Company’s common stock with a fair market value of $425,000, which will vest in four equal, annual installments beginning on the first anniversary of the grant date.2023.
Salary, bonus and equity
Mr. Nicolelli’s agreement also includes severance, termination and noncompetition provisions, which are described below under “Potential payments upon termination or change in control at fiscal 2022 year-end” beginning on page 95.
Vikas Bhalla
Mr. Bhalla serves as our Executive Vice President and Business Head, Insurance, and is based in India. We entered into an employment agreement with him, effective April 28, 2001 and a severance letter, effective March 15, 2011. In April 2022, we entered into an employment agreement with Mr. Bhalla that supersedes his prior agreements, and will continue throughout Mr. Bhalla’s employment with the Company.
| EXL | / | |
Executive compensation
Salary, bonus and equitySeverance
Mr. Bhalla’s agreements also includesinclude severance, termination andand/or noncompetition provisions, which are described below under “Potential payments upon termination or change in control at fiscal 20222023 year-end” beginning on page 95.90.
Vivek Jetley
Mr. Jetley serves as our Executive Vice President and Business Head, Analytics, and is based in the United States. We entered into an employment agreement with him in April 2022, which will continue throughout Mr. Jetley’s employment with the Company.
Salary, bonus and equity
Mr. Jetley’s base salary was set at $420,000 and is subject to review on an annual basis. In addition, Mr. Jetley can earn an annual cash bonus, with a target of 75% of base salary, based upon attainment of performance criteria determined by our Compensation and Talent Management Committee. Mr. Jetley is also eligible, subject to performance and other conditions, to receive annualOutstanding equity awards at the discretion of the Compensation and Talent Management Committee.
Mr. Jetley’s agreement also includes severance, termination and noncompetition provisions, which are described below under “Potential payments upon termination or change in control at fiscal 2022 year-end” beginning on page 95.
Ankor Rai
Mr. Rai served from October 2021 through April 2023 as our Executive Vice President and Chief Digital Officer and was based in the United States. We entered into an employment agreement with him, effective November 1, 2021, which continued throughout Mr. Rai’s employment with the Company.
Salary, bonus and equityyear-end
Mr. Rai’s agreements also included severance, termination and noncompetition provisions, which are described below under “Potential payments upon termination or change in control at fiscal 2022 year-end” beginning on page 95.
|
|
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of shares (#) Exercisable(1) | Number of shares underlying the unexercised Stock Options (#) Unexercisable(1) | Option Price ($) | Option | Number have not (#) | Market ($)(6) | Equity incentive plan Number of (#)(5)(7) | Equity incentive Market or payout ($)(6) | ||||||||||||||||||||||||||||||||||||
Rohit Kapoor | 2/20/2020 | 29,400(2) | 906,990 | ||||||||||||||||||||||||||||||||||||||||||
| 2/17/2021 | 88,500(2) | 2,730,225 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 94,365(2) | 2,911,160 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 104,480(2) | 3,223,208 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 150,990 | 4,658,042 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 226,470 | 6,986,600 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 62,690 | 1,933,987 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 94,030 | 2,900,826 | |||||||||||||||||||||||||||||||||||||||||||
Maurizio Nicolelli | 2/3/2020 | 7,375(2) | 227,519 | ||||||||||||||||||||||||||||||||||||||||||
| 2/19/2020 | 5,460(2) | 168,441 | |||||||||||||||||||||||||||||||||||||||||||
| 2/17/2021 | 17,300(2) | 533,705 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 14,565(2) | 449,330 | |||||||||||||||||||||||||||||||||||||||||||
| 9/1/2021 | 27,075(4) | 835,264 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 16,440(2) | 507,174 | |||||||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 134,325 | 30.15 | 6/21/2033 | ||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 23,310 | 719,114 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 34,950 | 1,078,208 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 9,865 | 304,335 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 14,795 | 456,426 | |||||||||||||||||||||||||||||||||||||||||||
| 3/31/2022 | 20,885(3) | 644,302 | |||||||||||||||||||||||||||||||||||||||||||
Vikas Bhalla | 2/19/2020 | 10,375(2) | 320,069 | ||||||||||||||||||||||||||||||||||||||||||
| 2/17/2021 | 18,350(2) | 566,098 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 16,305(2) | 503,009 | |||||||||||||||||||||||||||||||||||||||||||
| 9/1/2021 | 40,610(4) | 1,252,819 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 17,600(2) | 542,960 | |||||||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 268,650 | 30.15 | 6/21/2033 | ||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 26,090 | 804,877 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 39,130 | 1,207,161 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 10,560 | 325,776 | |||||||||||||||||||||||||||||||||||||||||||
/ | EXL |
Executive compensation
|
|
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of shares (#) Exercisable(1) | Number of shares underlying the unexercised Stock Options (#) Unexercisable(1) | Option Price ($) | Option | Number have not (#) | Market ($)(6) | Equity incentive plan Number of (#)(5)(7) | Equity incentive Market or payout ($)(6) | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 15,840 | 488,664 | |||||||||||||||||||||||||||||||||||||||||||
| 3/31/2022 | 20,885(3) | 644,302 | |||||||||||||||||||||||||||||||||||||||||||
Vivek Jetley | 2/19/2020 | 5,460(2) | 168,441 | ||||||||||||||||||||||||||||||||||||||||||
| 2/17/2021 | 14,890(2) | 459,357 | |||||||||||||||||||||||||||||||||||||||||||
| 9/1/2021 | 40,610(4) | 1,252,819 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 15,150(2) | 467,378 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 17,600(2) | 542,960 | |||||||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 268,650 | 30.15 | 6/21/2033 | ||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 24,240 | 747,804 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 36,360 | 1,121,706 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 10,560 | 325,776 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 15,840 | 488,664 | |||||||||||||||||||||||||||||||||||||||||||
| 3/31/2022 | 20,885(3) | 644,302 | |||||||||||||||||||||||||||||||||||||||||||
Anita Mahon | 3/2/2020 | 2,490(2) | 76,817 | ||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 5,460(2) | 168,441 | |||||||||||||||||||||||||||||||||||||||||||
| 2/17/2021 | 11,800(2) | 364,030 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 9,900(2) | 305,415 | |||||||||||||||||||||||||||||||||||||||||||
| 9/1/2021 | 27,075(4) | 835,264 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 12,920(2) | 398,582 | |||||||||||||||||||||||||||||||||||||||||||
| 6/21/2023 | 134,325 | 30.15 | 6/21/2033 | ||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 15,840 | 488,664 | |||||||||||||||||||||||||||||||||||||||||||
| 2/16/2022 | 23,760 | 732,996 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 7,755 | 239,242 | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2023 | 11,625 | 358,631 | |||||||||||||||||||||||||||||||||||||||||||
| 3/31/2022 | 15,060(3) | 464,601 | |||||||||||||||||||||||||||||||||||||||||||
Outstanding(1) The stock option awards in this table became or will become vested and exercisable as to 25% of the underlying grant on each of the first four anniversaries of the grant date, generally subject to continued employment through each applicable vesting date.
(2) The restricted stock units vest as to 25% of the underlying grant on each of the first four anniversaries of the grant date.
(3) We offered NEOs (other than the CEO) the opportunity to participate in a Share Matching Program (“SMP”) in 2022. The SMP provided an opportunity for those NEOs to receive one restricted stock unit for every share of Company common stock acquired through the settlement of vested equity incentive awards or through open market purchases in the first quarter of 2022 and subsequently held for a two-year period. The SMP restricted stock units vest as to 1/3 of the underlying grant on the second anniversary of the grant date and 2/3 on the third anniversary of the grant date.
(4) The restricted stock units granted in September 2021 vested as to 1/3 of the underlying grant on September 1, 2023, and the remaining 2/3 will vest on September 1, 2024.
(5) The Performance Restricted Stock Unit awards in this table vest and convert to shares, subject to performance, at fiscalthe end of a three-year performance period, generally subject to continued employment through such date. The vesting date for awards granted in 2022 year-endis December 31, 2024 and for awards granted in 2023 is December 31, 2025.
(6) The price used in determining the market values set forth in this table is $30.85, which was the closing price of our stock on December 29, 2023.
| Name | Stock award grant date | Number of shares or units of stock that (#)(1) | Market value of shares or units of stock that have | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(3) | Equity incentive plan awards: market or payout value of unearned shares, | |||||||||||||||
Rohit Kapoor | ||||||||||||||||||||
| 2/20/2019 | 7,228 | 1,224,640 | ||||||||||||||||||
| 2/20/2020 | 11,760 | 1,992,497 | ||||||||||||||||||
| 2/17/2021 | 26,550 | 4,498,367 | ||||||||||||||||||
| 2/17/2021 | 70,800(a) | 11,995,644 | ||||||||||||||||||
| 2/16/2022 | 25,164 | 4,263,537 | ||||||||||||||||||
| 2/16/2022 | 15,099(b) | 2,558,224 | ||||||||||||||||||
| 2/16/2022 | 22,647(c) | 3,837,081 | ||||||||||||||||||
Maurizio Nicolelli | 2/3/2020 | 2,949 | 499,649 | |||||||||||||||||
| 2/19/2020 | 2,183 | 369,866 | ||||||||||||||||||
| 2/17/2021 | 5,190 | 879,342 | ||||||||||||||||||
| 2/17/2021 | 13,840(a) | 2,344,911 | ||||||||||||||||||
| 9/1/2021 | 8,121(2) | 1,375,941 | ||||||||||||||||||
| 2/16/2022 | 3,884 | 658,066 | ||||||||||||||||||
| 2/16/2022 | 2,331(b) | 394,941 | ||||||||||||||||||
| 2/16/2022 | 3,495(c) | 592,158 | ||||||||||||||||||
| 3/31/2022 | 4,177(2) | 707,709 | ||||||||||||||||||
Vikas Bhalla | 2/20/2019 | 1,708 | 289,386 | |||||||||||||||||
| 2/19/2020 | 4,150 | 703,135 | ||||||||||||||||||
| 2/17/2021 | 5,505 | 932,712 | ||||||||||||||||||
| 2/17/2021 | 14,680(a) | 2,487,232 | ||||||||||||||||||
| 9/1/2021 | 12,181(2) | 2,063,827 | ||||||||||||||||||
| 2/16/2022 | 4,348 | 736,682 | ||||||||||||||||||
| 2/16/2022 | 2,609(b) | 442,043 | ||||||||||||||||||
| 2/16/2022 | 3,913(c) | 662,980 | ||||||||||||||||||
| 3/31/2022 | 4,177(2) | 707,709 | ||||||||||||||||||
Vivek Jetley | 2/20/2019 | 723 | 122,498 | |||||||||||||||||
| 2/19/2020 | 2,183 | 369,866 | ||||||||||||||||||
| 2/17/2021 | 4,467 | 756,844 | ||||||||||||||||||
| 2/17/2021 | 11,910(a) | 2,017,911 | ||||||||||||||||||
| 9/1/2021 | 12,181(2) | 2,063,827 | ||||||||||||||||||
| 2/16/2022 | 4,040 | 684,497 | ||||||||||||||||||
| 2/16/2022 | 2,424(b) | 410,698 | ||||||||||||||||||
| 2/16/2022 | 3,636(c) | 616,047 | ||||||||||||||||||
| 3/31/2022 | 4,177(2) | 707,709 | ||||||||||||||||||
(7) The amounts shown in this column reflect target performance with the exception of the 2022 Revenue-Linked PRSUs and the 2022 Relative TSR-Linked PRSUs. Amounts shown in this column for the 2022 Revenue-Linked PRSUs and the 2022 Relative TSR-Linked PRSUs reflect maximum performance.
| EXL | / | |
Executive compensation
| Name | Stock award grant date | Number of shares or units of stock that (#)(1) | Market value of shares or units of stock that have | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(3) | Equity incentive plan awards: market or payout value of unearned shares, | |||||||||||||||
Ankor Rai | 2/20/2019 | 672 | 113,857 | |||||||||||||||||
| 2/19/2020 | 1,680 | 284,642 | ||||||||||||||||||
| 2/17/2021 | 2,880 | 487,958 | ||||||||||||||||||
| 2/17/2021 | 7,680(a) | 1,301,222 | ||||||||||||||||||
| 9/1/2021 | 12,181(2) | 2,063,827 | ||||||||||||||||||
| 2/16/2022 | 3,108 | 526,588 | ||||||||||||||||||
| 2/16/2022 | 1,865(b) | 315,987 | ||||||||||||||||||
| 2/16/2022 | 2,797(c) | 473,896 | ||||||||||||||||||
| 3/31/2022 | 4,177(2) | 707,709 | ||||||||||||||||||
(1) Unless otherwise noted, this column represents annual restricted stock unit awards that vest and convert to shares in accordance with the following schedule (subject to continued employment through each applicable vesting date): 25% of the restricted stock units vest on each of the first, second, third and fourth anniversaries of the grant date.
(2) These restricted stock unit awards vest and convert to shares in accordance with the following schedule (subject to continued employment through each applicable vesting date): 1/3 of the restricted stock units vest on the second anniversary of the grant date with the remaining 2/3 vesting on the third anniversary of the grant date.
(3) The performance restricted stock unit awards in this table vest and convert to shares in accordance with the following schedules (subject to continued employment through the applicable vesting date and achievement of applicable performance goals):
(a) 100% of the restricted stock units vest on December 31, 2023. This amount represents the 2021 Relative TSR-Linked PRSUs and reflects maximum performance.
(b) 100% of the restricted stock units vest on December 31, 2024. This amount represents the 2022 Revenue-Linked PRSUs and reflects target performance.
(c) 100% of the restricted stock units vest on December 31, 2024. This amount represents the 2022 Relative TSR-Linked PRSUs and reflects target performance.
(4) The price used in determining the market values set forth in this table is $169.43, which was the closing price of our stock on December 30, 2022.
Option exercises and stock vested during fiscal year 20222023
The following table provides additional information about the value realized by our named executive officers on option award exercises and stock award vesting during fiscal year 2022:2023.
| Option awards | Stock awards | |||||||
| Name | Number of shares acquired on exercise | Value realized on ($) | Number of shares acquired on vesting | Value realized on ($) | ||||
Rohit Kapoor | — | — | 93,449 | 14,288,566 | ||||
Maurizio Nicolelli | — | — | 10,843 | 1,624,495 | ||||
Vikas Bhalla | — | — | 19,731 | 2,957,319 | ||||
Vivek Jetley | — | — | 15,005 | 2,314,952 | ||||
Ankor Rai | — | — | 12,615 | 1,955,042 | ||||
|
| Option awards | Stock awards | |||||||
| Name | Number of shares acquired on exercise | Value realized on ($) | Number of shares acquired on vesting | Value realized on ($) | ||||
Rohit Kapoor | — | — | 495,245 | 16,257,963 | ||||
Maurizio Nicolelli | — | — | 109,060 | 3,533,355 | ||||
Vikas Bhalla | — | — | 127,220 | 4,108,477 | ||||
Vivek Jetley | — | — | 101,410 | 3,253,190 | ||||
Anita Mahon | — | — | 77,875 | 2,493,776 | ||||
Executive compensation
Pension benefits for fiscal year 20222023
The following table discloses the present value of accumulated pension benefits payable to each of the named executive officers.Mr. Bhalla.
| Name | Plan name | Number of years credited service (#)(1) | Present value of accumulated benefit ($) | Payments during last fiscal year ($) | Plan name | Number of years credited service (#)(1) | Present value of accumulated benefit ($)(2) | Payments during last fiscal year ($) | ||||||||
Vikas Bhalla | Gratuity Plan for Indian Employees(2) | 22 | 124,859 | — | Gratuity Plan for Indian Employees | 23 | 129,769 | — | ||||||||
(1) Consists of the number of years of service credited as of December 31, 2022,2023 for the purpose of determining benefit service under the Gratuity Plan. Credited service is determined based on the completed years of continuous employment (rounded to the nearest whole number of years) with the Company since the executive’s date of hire.
(2) Liabilities with regard to the Gratuity Plan isPlans are determined by actuarial valuation using the projected unit credit method. Under this method, we determine our liability based upon the discounted value of salary increases until the date of separation arising from retirement, death, resignation or other termination of services. Critical assumptions used in measuring the plan expense and projected liability under the projected unit credit method include the discount rate, expected return on assets and the expected increase in the compensation rates. Details regarding the assumptions used in the calculation of these amounts are included in footnote 20 to the audited financial statements for the fiscal year ended December 31, 2022,2023 included in the 2022our Annual Report on Form 10-K.10-K filed with the Securities and Exchange Commission on February 29, 2024.
We are required to provide all Indian employees with benefits under the Gratuity Plan, a statutory, defined benefit pension plan in India. Distributions from the Gratuity Plan are made in a single lump sum following retirement from the Company. An executive’s benefit under the Gratuity Plan is determined at any time as the executive’s annual base salary (determined based on the executive’s most recent monthly base salary) divided by 26, multiplied by 15, and the product multiplied by the executive’s completed years of continuous service with the Company. An executive has a vested and nonforfeitable right to payment of his accrued Gratuity Plan benefit only after five years of service. The present value of Mr. Bhalla’s accumulated benefits has been determined based on his monthly basic salary rate in effect on December 31, 2022,2023, which was approximately $9,837.$9,780.
Potential payments upon termination or change in control at fiscal 20222023 year-end
The following tables summarize the amounts payable to each named executive officer upon a change in control or termination of his employment with us on December 31, 2022.2023. In calculating potential payments for purposes of this disclosure, we have
| 90 | / | EXL 2024 Proxy Statement |
Executive compensation
quantified our equity-based payments using the closing stock price on December 30, 2022,29, 2023, which was $169.43.$30.85. Some of the capitalized terms used in the employment agreements for our named executive officers are defined in the section entitled “Certain defined terms” on page 102.98.
Rohit Kapoor
Cash severanceSeverance on Termination Without “Cause,” “Good Reason,” or “Retirement”
If Mr. Kapoor’s employment were terminated by us without “cause” or by the executivehim for “good reason” or by “retirement” (in each case, as described below) on December 31, 2022,, he would have beenbe entitled to cash severance consisting of:
except in the case of retirement, (1) continuation of his base salary for 24 months;
except in the case of retirement, his actual bonus, if any, earned for the year of termination, determined as if he had been employed for the full year of termination, paid ratably over the remaining period of base salary payments;
any unpaid bonus amounts from prior periods;
any accrued but unpaid base salary and vacation days or unreimbursed expenses;
|
Executive compensation
|
|
Change-in-control cash severance
If Mr. Kapoor’s employment is terminated by us without “cause” or by the executive for “good reason” (in each case, as described above) within 12 months following a “change in control” or in specific contemplation of a change in control, the executive will receive, in lieu of the cash severance described above, (1) a lump sum payment equal to 24 months of base salary and (2) his actual bonus, if any, earned for the year of termination, determined as if he had been employed for the full year of termination, paid ratably over the remaining periodbase salary continuation period; (3) 18 month continuation of life insurance coverage; and (4) only with respect to termination by us without cause, 18 months of post-termination COBRA payments or reimbursements, as applicable; provided, however, that the life insurance and COBRA benefits described in this sentence will terminate if Mr. Kapoor is eligible to receive comparable benefits from a subsequent employer prior to the conclusion of the 18 month post-termination period. If Mr. Kapoor’s employment terminated as a result of his retirement (described below), he would be entitled only to items (3) and (4) from the prior sentence.
Mr. Kapoor will not receive any enhanced cash severance benefits in the event that he is terminated without “cause” or for “good reason” in connection with a “Change in Control;” however, rather than salary continuation being paid in installments, he will receive his cash payment equal to 24 months of base salary payments.in a lump sum.
Severance on Death or disabilityDisability
If Mr. Kapoor’s employment terminates due to his death or is terminated by either the executive or us due to his disability, he (or his estate) will be entitled to a prorated portion of his projected bonus amount for the year of termination.
Noncompetition and non-solicitation provisionsTreatment of Equity
Mr. Kapoor is subject to confidentiality and non-disparagement restrictions at all times, as well as noncompetition and non-solicitation restrictions during his employment and for one year thereafter.
Annual equity awards
IfOn a qualifying event described below, Mr. Kapoor’s employment is terminated by us without cause or by Mr. Kapoor for good reason, Mr. Kapoor will be treated as if he was still employed by the Company for a period of twenty-seven months following the termination date. On a “change in control” (as defined in the 2006 Plan, 2015 Plan, or 2018 Plan, as applicable), retirement (as defined below), or on death, Mr. Kapoor’s outstanding annual equity awards will vest as described below:follows:
Time-Vested RSUs
If a change in control occurs prior to the end of the four-year vesting period, Mr. Kapoor’s Time-Vested RSUs will be advanced by one year. In addition, all of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested if he is terminated without cause in specific contemplation of or within 12 months following a change in control, or he voluntarily terminates his employment for good reason within 12 months following a change in control. If Mr. Kapoor dies before the end of the four-year vesting period, all of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested. If Mr. Kapoor retires and the applicable award has been outstanding for at least 6 months, Mr. Kapoor will become fully vested in any unvested RSUs that would have vested within the next 12 months absent his retirement.
Revenue-Linked PRSUs
If a change in control occurs prior to the end of the performance period, 100% of target of Mr. Kapoor’s Revenue-Linked PRSUs will be deemed earned, will be subject to a three-year installment vesting schedule and will be advanced by one year under suchRSUs:
|
| • | Change in Control: If a change in control occurs prior to the end of the four-year vesting period, any portion of Mr. Kapoor’s Time-Vested RSUs that would have vested within the 12 months following the change in control will vest. |
| • | Termination without Cause or Resignation for Good Reason in Connection with a Change in Control: All of Mr. Kapoor’s outstanding Time-Vested RSUs will become fully vested on termination if, within 12 months following or in specific contemplation of a change in control, he is terminated without cause or, within 12 months following a change in control, resigns for good reason. |
Executive compensation
schedule. In addition, all of Mr. Kapoor’s outstanding Revenue-Linked PRSUs will become fully vested if, (i) he is terminated without cause in specific contemplation of or within 12 months following a change in control; (ii) he voluntarily terminates his employment for good reason within 12 months following a change in control; or (iii) he dies following a change in control. If Mr. Kapoor dies prior to the end of the performance period and no change in control has occurred, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of completed full months during the three-year performance period up to the date of Mr. Kapoor’s death divided by (y) 36 multiplied by (z) 100% of Mr. Kapoor’s Revenue-Linked PRSUs. If Mr. Kapoor retires and the award has been outstanding for at least 6 months, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of years of service completed by Mr. Kapoor from the grant date (rounding up to the closest whole number) divided by (y) 3 multiplied by (z) the number of Revenue-Linked PRSUs earned based on actual performance.
Relative TSR-Linked PRSUs
If a change in control occurs on or prior to the first anniversary of the grant date, 100% of target of Mr. Kapoor’s Relative TSR-Linked PRSUs will be deemed earned. If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation and Talent Management Committee will determine the number of earned Relative TSR-Linked PRSUs based on the TSR of the Company and the peer group as of such date. In either scenario, the Relative TSR-Linked PRSUs that are deemed earned will be subject to a three year installment vesting schedule and will be advanced by one year under such schedule. In addition, all of Mr. Kapoor’s outstanding Relative TSR-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) voluntarily terminates his employment for good reason or (ii) dies. If Mr. Kapoor dies prior to the end of the performance period and no change in control has occurred, Mr. Kapoor will become vested in a portion of the outstanding Relative TSR-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Kapoor’s death divided by (y) 36 multiplied by (z) 100% of Mr. Kapoor’s Relative TSR-Linked PRSUs. If Mr. Kapoor retires and the award has been outstanding for at least 6 months, Mr. Kapoor will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of years of service completed by Mr. Kapoor from the grant date (rounding up to the closest whole number) divided by (y) 3 multiplied by (z) the number of Revenue-Linked PRSUs earned based on actual performance.
Release of claims
Mr. Kapoor’s severance payments and termination-related equity acceleration are subject to his execution of a release of claims against us, his not having committed a material breach of the restrictive covenants that has remained uncured for 15 days after we have given him notice of such breach and his resignation from the board of directors and all committees thereof, if requested by the Company.
Code Section 280G
Mr. Kapoor’s employment agreement also contains a “modified cut-back” provision such that any payments that constitute “excess parachute payments” under Section 280G of the Code will be reduced to an amount that does not trigger the applicable excise
| EXL | / | |
Executive compensation
taxes, to the extent such reduced amount is larger than the amount Mr. Kapoor would have received on a present-value net-after-tax basis (including excise taxes) absent such a reduction.
Indicative payouts for Rohit Kapoor
Payments upon termination | Death prior to a control ($) | Death after a change in control ($) | Disability ($) | Termination for ($) | Change in control ($) | Termination in control or without cause in control ($) | ||||||||||||||||||
Base salary payout | — | — | — | 1,630,000 | — | 1,630,000 | ||||||||||||||||||
Bonus payout | 1,829,887 | 1,829,887 | 1,829,887 | 1,829,887 | — | 1,829,887 | ||||||||||||||||||
Life insurance | — | — | — | 4,239 | — | 4,239 | ||||||||||||||||||
Health insurance | — | — | — | 42,433 | — | 42,433 | ||||||||||||||||||
Restricted stock units | 11,979,040 | 11,979,040 | — | 10,913,156 | 4,786,228 | 11,979,040 | ||||||||||||||||||
Performance restricted stock units | 12,393,127 | 12,393,127 | — | 12,393,127(1) | 16,259,394 | 12,393,127 | ||||||||||||||||||
(1) As described above, upon his termination for good reason or without cause, Mr. Kapoor is treated as having continued his employment for two additional years for purposes of his annual equity awards. The information in this table was calculated assuming target performance over the additional two year-period, however, the actual payment would depend upon the Company’s actual performance following Mr. Kapoor’s termination.
Maurizio Nicolelli
Either Mr. Nicolelli or we may terminate Mr. Nicolelli’s employment at any time with 30 days’ notice (or 90 days’ notice if termination is by Mr. Nicolelli). If Mr. Nicolelli is terminated by us without “cause” (other than due to death or disability), or if Mr. Nicolelli resigns for “good reason”, Mr. Nicolelli will receive a cash severance payment equal to twelve months’ of his then-current base salary, with 25% payable on the first payroll date at least 10 days following termination and the remainder payable in nine equal monthly installments.
On a “change in control” (as defined in the 2018 Plan) or death, Mr. Nicolelli’s outstanding equity awards will vest as described below:
| • |
|
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Executive compensation
| • |
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Revenue-Linked PRSUs:
| • | Change in Control: If a change in control occurs prior to the end of the performance period, 100% of Mr. |
| • | Termination in Connection with a |
| • | Death: If Mr. |
| • | Retirement: If Mr. |
| • | Relative TSR-Linked PRSUs: |
| • | Change in Control: |
| • | If a change in control occurs on or prior to the first anniversary of the grant date, 100% of Mr. |
| • | If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation and Talent Management Committee will determine the number of earned Relative TSR-Linked PRSUs based on |
| • | In either scenario, the Relative TSR-Linked PRSUs that are deemed earned will convert to time-vested RSUs. They will retroactively be deemed subject to a three-year ratable vesting schedule, with each deemed vesting date occurring on the last day of each calendar year within the performance period. Any RSUs that are deemed to have vested on a prior date, as well as any RSUs that are deemed scheduled to |
| 92 | / | EXL 2024 Proxy Statement |
Executive compensation
| vest within the next 12 months, will vest upon the change in control. Any remaining RSUs will be subject to time-based vesting through the last day of the original three-year performance period. |
| • | Termination without Cause or Resignation for Good Reason in Connection with a |
| • | Death. If Mr. Kapoor dies prior to the end of the performance period, he will generally become vested in the target number of TSR-Linked PRSUs. |
| • | Retirement: If Mr. Kapoor retires at age 60 or older, his unvested TSR-Linked PRSUs will remain outstanding and eligible to vest for a period of 27 months following his retirement. Because Mr. Kapoor is not yet 60, he is ineligible for retirement treatment with respect to his equity. |
Mr. Kapoor’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. Kapoor is subject to perpetual confidentiality and non-disparagement restrictions as well as noncompetition and non-solicitation restrictions during his employment and for one year thereafter.
Code Section 280G
Mr. Kapoor’s employment agreement also contains a “modified cut-back” provision such that any payments that constitute “excess parachute payments” under Section 280G of the Code will be reduced to an amount that does not trigger the applicable excise taxes, to the extent such reduced amount is larger than the amount Mr. Kapoor would have received on a present value net-after-tax basis (including excise taxes) absent such a reduction.
Payments upon Termination | Death prior to a ($) | Death after a ($) | Disability ($) | Termination for without cause(1) ($) | Change in control ($) | Termination in control or without cause in contemplation of | Retirement | ||||||||||||||||||||||||||||
Base salary payout | — | — | — | 1,630,000 | — | 1,630,000 | — | ||||||||||||||||||||||||||||
Bonus payout | 1,514,253 | 1,514,253 | 1,514,253 | 1,514,253 | — | 1,514,253 | — | ||||||||||||||||||||||||||||
Life insurance | — | — | — | 4,239 | — | 4,239 | — | ||||||||||||||||||||||||||||
Health insurance | — | — | — | 47,070 | — | 47,070 | — | ||||||||||||||||||||||||||||
Restricted stock units | 9,771,583 | 9,771,583 | — | 8,965,781 | 4,048,291 | 9,771,583 | — | ||||||||||||||||||||||||||||
Performance restricted stock units | 10,657,133 | 10,657,133 | — | 10,657,133 | 13,955,847 | 10,657,133 | — | ||||||||||||||||||||||||||||
(1) As described above, upon his termination for good reason or without cause, Mr. Kapoor is treated as having continued his employment for 27 additional months for purposes of his annual equity awards. The information in this table was calculated assuming target performance over the additional 27-month period, however, the actual payment would depend upon the Company’s actual performance following Mr. Kapoor’s termination.
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Executive compensation
All Other NEOs
Either we or the applicable NEO may terminate his or her employment at any time with 30 days’ notice (if termination is by the Company) or 90 days’ notice (if termination is by the NEO). If the NEO is terminated by us without “cause” (other than due to death or disability), or resigns for “good reason”, the NEO will receive a cash severance payment equal to twelve months’ of then-current base salary, with 25% payable on the first payroll date at least 10 days following termination and the remainder payable in nine equal monthly installments.
On a qualifying event described below, the NEOs’ outstanding equity awards will vest as follows:
| • | Time-Vested RSUs: |
| • | Change in Control: If a change in control occurs prior to the end of the four-year vesting period, any portion of the NEO’s Time-Vested RSUs that would have vested within the 12 months following the change in control will accelerate and vest. |
| • | Termination without Cause or Resignation for Good Reason in Connection with a Change in Control: All of the NEO’s outstanding Time-Vested RSUs will become fully vested if, following or in specific contemplation of a change in control, |
| • | Death: If the NEO dies before the end of the four-year vesting period, all of the NEO’s outstanding Time-Vested RSUs will become fully vested. |
| • | Retirement: If the NEO retires at age 60 or older with at least 10 years of service and the applicable award has been outstanding for at least 6 months, the NEO will become vested in all unvested RSUs that would have vested within the next 12 months absent the NEO’s retirement. If the NEO retires at age 60 or older with at least 5 years of service but less than 10 years, the number of Time-Vested RSUs that the NEO will become vested in will be calculated as described in the preceding sentence and then (i) |
| • | Revenue-Linked PRSUs: |
| • | Change in Control: If a change in control occurs prior to the end of the performance period, 100% of the NEO’s Revenue-Linked PRSUs will be deemed earned and converted to time-vested RSUs. They will retroactively be deemed subject to a three-year ratable vesting schedule, with each deemed vesting date occurring on the last day of each calendar year within the performance period. Any RSUs that are deemed to have vested on date prior to the change in control, as well as any RSUs that are deemed scheduled to vest within the next 12 months, will vest upon the change in control. Any remaining RSUs will be subject to time-based vesting through the last day of the original three-year performance period. |
| • | Termination in Connection with a Change in Control: All of the NEO’s outstanding Revenue-Linked PRSUs (which converted to time-vested RSUs on the change in control, in accordance with the explanation provided above) will become fully vested if (i) following or in specific contemplation of a change in control, the NEO is terminated without cause or, following a change in control, resigns for good reason or (ii) |
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| • | Death: If |
| • | Retirement: If the |
| • |
|
| • | Change in Control: |
| • | If a change in control occurs on or prior to the first anniversary of the grant date, 100% of the NEO’s Relative TSR-Linked PRSUs will be deemed earned. |
| • | If a change in control occurs after the first anniversary of the grant date, the performance period will be deemed to end on the date of the change in control and the Compensation and Talent Management Committee will determine the number of earned Relative TSR-Linked PRSUs based on actual performance as of the change in control. |
| • | In |
| • | Termination without Cause or Resignation for Good Reason in Connection with a Change in Control: All of the NEO’s outstanding, |
| • | Death. If the NEO dies prior to the end of the performance period and no change in control has occurred, the NEO will become vested in a pro rata portion of the target number of Revenue-Linked PRSUs. |
| • | Retirement: Relative TSR-Linked PRSUS receive the same treatment as described above for the Revenue-Linked PRSUs. |
| EXL | / | |
Executive compensation
| • | September 2021 RSU Grant: With respect to the restricted stock units granted in September 2021, the grant will only accelerate (i) on the NEO’s death or (ii) if in the twelve months following or in specific contemplation of a change in control, |
| • | Share Matching Program 2022 Awards: All of the NEO’s outstanding SMP RSUs will become fully vested if, following or in specific contemplation of a change in control, the NEO is terminated without cause or, following a change in control, the NEO terminates |
Mr. Nicolelli’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. Nicolelli is subject to confidentiality restrictions at all times, as well as noncompetition and nonsolicitation restrictions for two years following termination of his employment.
Indicative Payouts for Maurizio Nicolelli
| • | Options: |
Payments upon termination | Death prior to a ($) | Death after a ($) | Termination for without cause ($) | Change in control ($) | Termination for good reason in control or termination without cause in specific contemplation of ($) | |||||||||||||||
Base salary payout | — | — | 510,000 | — | 510,000 | |||||||||||||||
Restricted stock units | 4,490,573 | 4,490,573 | — | 892,345 | 4,490,573 | |||||||||||||||
Performance restricted stock units | 1,110,676 | 3,332,010 | — | 3,003,010 | 3,332,010 | |||||||||||||||
| • | Change in Control: If a change in control occurs prior to the end of the four-year vesting period, any portion of the NEO’s options that would have vested within the 12 months following the change in control will accelerate and vest. |
Vikas Bhalla
| • | Termination without Cause or Resignation for Good Reason in Connection with a Change in Control: All of the NEO’s outstanding options will become fully vested if, following or in specific contemplation of a change in control, the NEO is terminated without cause or resigns for good reason. |
Either Mr. Bhalla or we may terminate Mr. Bhalla’s employment at any time (though we must give Mr. Bhalla 30 days’ notice if the termination is without “cause” and Mr. Bhalla must give us 90 days’ advance notice upon his resignation). If Mr. Bhalla’s employment with the Company is terminated by the Company without “cause” (other than due to death or disability) or by Mr. Bhalla for “good reason” (both “cause” and “good reason” as defined below), Mr. Bhalla will receive a cash severance payment equal to 12 months’ annual fixed compensation, with 25% payable as a lump sum payment and the remaining 75% payable in accordance with the Company’s regular payroll practices.
| • | Death: If the NEO dies before the end of the four-year vesting period, all outstanding options will become fully vested. |
On a “change in control” (as defined in the 2018 Plan) or death, Mr. Bhalla’s outstanding equity awards will vest in the same manner as described for Mr. Nicolelli’s outstanding equity awards beginning on page 98, except that his restricted stock units granted in September 2021 will not vest if he terminates his employment for good reason following a change in control.
| • | Retirement: If the NEO retires at age 60 or older with at least 10 years of service and the applicable award has been outstanding for at least 6 months, the NEO will become vested in all unvested options that would have vested within the next 12 months if the NEO had not retired. If the NEO retires at 60 years old or older with at least 5 years of service but less than 10, the number of vested options will be calculated as described in the preceding sentence and then reduced by a pro rata percentage to reflect the NEO’s total years of service to the Company (5 years = 50% reduction, 6 years = 40%, 7 years = 30%, 8 years = 20%, 9 years = 10%). Because none of the NEOs are 60, no NEO is eligible for retirement treatment with respect to his or her options. |
Mr. Bhalla’s severance payments and termination-related equity acceleration are subject to his execution of a waiver and release of claims against us. Mr. Bhalla is subject to confidentiality restrictions at all times, as well as noncompetition and nonsolicitation restrictions for one year following termination of his employment.
| • | Exercise: Generally, vested options are exercisable until the earlier of: (1) 90 days following termination and (2) the date preceding the tenth anniversary of the option grant date. |
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Executive compensation
Indicative payouts for Vikas Bhalla
Payments upon termination | Death prior to a change in control ($) | Death after a change in control ($) | Termination for without cause | Change in control ($) | Termination following change in contemplation of | |||||||||||||||
Base salary payout | — | — | 337,282 | — | 337,282 | |||||||||||||||
Restricted stock units | 5,433,451 | 5,433,451 | — | 1,136,028 | 5,433,451 | |||||||||||||||
Performance restricted stock units | 1,197,423 | 3,592,255 | — | 3,223,951 | 3,592,255 | |||||||||||||||
Government-required payouts(1) | 124,859 | 124,859 | 124,859 | — | 124,859 | |||||||||||||||
(1) Represents distributions under the Gratuity Plan, which is due to Mr. Bhalla because he has earned over five years of credited service.
Vivek Jetley
Either Mr. Jetley or we may terminate Mr. Jetley’s employment at any time (though we must give Mr. Jetley 30 days’ notice if the termination is without “cause” and Mr. Jetley must give us 90 days’ advance notice upon his resignation). If Mr. Jetley’s employment with the Company is terminated by the Company without “cause” (other than due to death or disability) or by Mr. Jetley for “good reason” (both “cause” and “good reason” as defined below), Mr. Jetley will receive a cash severance payment equal to 12 months’ base salary, with 25% payable as a lump sum payment and the remaining 75% payable in accordance with the Company’s regular payroll practices.
On a “change in control” (as defined in the 2018 Plan) or death, Mr. Jetley’s outstanding equity awards will vest in the same manner as described for Mr. Nicolelli’s outstanding equity awards beginning on page 98, except that his restricted stock units granted in September 2021 will not vest if he terminates his employment for good reason following a change in control.
Mr. Jetley’sEach NEO’s severance payments and termination-related equity acceleration are subject to histhe NEO’s execution of a waiver and release of claims against us. Mr. Jetley isThe NEOs are subject to confidentiality restrictions at all times, as well as noncompetition, nondisparagementnon-competition and nonsolicitationnon-solicitation restrictions during his employment and for one year thereafter.two years following termination of employment.
Indicative payoutsPayouts for Vivek JetleyAll Non-CEO NEOs
Payments upon termination | Death prior to a ($) | Death after a ($) | Termination for without cause | Change in control ($) | Termination in control or without cause in contemplation of | |||||||||||||||
Base salary payout | — | — | 500,000 | — | 500,000 | |||||||||||||||
Restricted stock units | 4,705,241 | 4,705,241 | — | 730,752 | 4,705,241 | |||||||||||||||
Performance restricted stock units | 1,014,885 | 3,044,657 | — | 2,702,443 | 3,044,657 | |||||||||||||||
Payments termination | | Death prior to a change in control ($) |
| | Death after a change in control ($) |
| | Termination for good reason or without cause ($) |
| | Change in control ($) |
| | Termination without cause or for good reason in control or termination without cause in specific contemplation of |
| | Retirement ($) |
| ||||||||
Maurizio Nicolelli | Base salary payout | — | — | 510,000 | — | 510,000 | — | |||||||||||||||||||
| Restricted stock units | 2,721,433 | 2,721,433 | — | 939,383 | 2,721,433 | — | ||||||||||||||||||||
| Performance restricted stock units | 853,003 | 1,659,422 | — | 2,163,730 | 1,659,422 | — | ||||||||||||||||||||
| Options | 94,028 | 94,028 | — | 23,507 | 94,028 | — | ||||||||||||||||||||
| Share Match Program | 644,302 | 644,302 | — | — | 644,302 | — | ||||||||||||||||||||
Vikas Bhalla | Base salary payout | — | — | 335,304 | — | 335,304 | — | |||||||||||||||||||
| Restricted stock units | 3,184,954 | 3,184,954 | — | 906,527 | 3,184,954 | — | ||||||||||||||||||||
| Performance restricted stock units | 942,491 | 1,820,459 | — | 2,397,415 | 1,820,459 | — | ||||||||||||||||||||
| Options | 188,055 | 188,055 | — | 47,014 | 188,055 | — | ||||||||||||||||||||
| Government-required payouts | 129,769 | 129,769 | 129,769 | — | 129,769 | — | ||||||||||||||||||||
| Share Match Program | 644,302 | 644,302 | — | — | 644,302 | — | ||||||||||||||||||||
Vivek Jetley | Base salary payout | — | — | 500,000 | — | 500,000 | — | |||||||||||||||||||
| Restricted stock units | 2,890,954 | 2,890,954 | — | 689,613 | 2,890,954 | — | ||||||||||||||||||||
| Performance restricted stock units | 894,980 | 1,749,195 | — | 2,266,052 | 1,749,195 | — | ||||||||||||||||||||
| Options | 188,055 | 188,055 | — | 47,014 | 188,055 | — | ||||||||||||||||||||
| Share Match Program | 644,302 | 644,302 | — | — | 644,302 | — | ||||||||||||||||||||
Anita Mahon | Base salary payout | — | — | 450,000 | — | 450,000 | — | |||||||||||||||||||
| Restricted stock units | 2,148,548 | 2,148,548 | — | 628,723 | 2,148,548 | — | ||||||||||||||||||||
| Performance restricted stock units | 606,751 | 1,208,703 | — | 1,524,565 | 1,208,703 | — | ||||||||||||||||||||
| Options | 94,028 | 94,028 | — | 23,507 | 94,028 | — | ||||||||||||||||||||
| Share Match Program | 464,601 | 464,601 | — | — | 464,601 | — | ||||||||||||||||||||
| EXL | / | |
Executive compensation
Ankor Rai
Either Mr. Rai or we may terminate Mr. Rai’s employment at any time (though we must give Mr. Rai 30 days’ notice if the termination is without “cause” and Mr. Rai must give us 90 days’ advance notice upon any resignation). If Mr. Rai’s employment with the Company is terminated by the Company without “cause” (other than due to death or disability) or by Mr. Rai for “good reason” (both “cause” and “good reason” as defined below), Mr. Rai will receive a cash severance payment equal to 12 months’ base salary, with 25% payable as a lump sum payment and the remaining 75% payable in accordance with the Company’s regular payroll practices.
On a “change in control” (as defined in the 2018 Plan) or death, Mr. Rai’s outstanding equity awards will vest in the same manner as described for Mr. Nicolelli’s outstanding equity awards beginning on page 98.
Mr. Rai’s severance payments and termination-related equity acceleration are subject to his execution of a release of claims against us. Mr. Rai is subject to confidentiality restrictions at all times, as well as noncompetition, nondisparagement and nonsolicitation restrictions during his employment and for one year thereafter.
Mr. Rai resigned from the Company in April 2023.
Indicative payouts for Ankor Rai
Payments upon termination | Death prior to a ($) | Death after a ($) | Termination for without cause | Change in control ($) | Termination in control or without cause in contemplation of | |||||||||||||||
Base salary payout | — | — | 450,000 | — | 450,000 | |||||||||||||||
Restricted stock units | 4,184,582 | 4,184,582 | — | 550,478 | 4,184,582 | |||||||||||||||
Performance restricted stock units | 697,030 | 2,091,105 | — | 1,827,837 | 2,091,105 | |||||||||||||||
Certain defined terms
Definition of cause
The following definition of “cause” generally applies to all named executive officers unless stated otherwise. “Cause” will occur if: (i) there is a final nonappealablenon-appealable conviction of, or pleading of no contest to, (1) a crime of moral turpitude which causes serious economic injury or serious injury to our reputation or (2) a felony; (ii) the executive engages in fraud, embezzlement, gross negligence, self-dealing, dishonesty or other gross and willful misconduct which causes serious and demonstrable injury to us; (iii) the executive materially violates any of our material policies (for Mr. Kapoor, which is not remedied within 15 days of receipt of notice from the Company specifying the breach in reasonable detail); (iv) the executive willfully and continually fails to substantially perform his or her duties (other than for reason of physical or mental incapacity) which continues beyond 15 days after we notify himthe executive in writing of his
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Executive compensation
the need to substantially improve his performance; provided that a failure to achieve performance objectives will not by itself constitute cause and no act or failure to act shall be considered “willful” unless done or failed to be done by the executive in bad faith and without a reasonable belief that his actions or omission was in our best interest; (v) the executive fails to reasonably cooperate in a governmental investigation involving us;the Company; (vi) the executive materially, knowingly and intentionally fails to comply with applicable laws with respect to the execution of the Company’s business operations (subject to a presumption of good faith if the executive is following advice of counsel); (vii) the executive fails to follow his supervisor’s (or, for Mr. Kapoor, our board of directors’) lawful instructions and does not remedy the failure for 15 days after we give him written notice; (viii) the executive’s use of alcohol or drugs materially interferes with the performance of his or her duties; (ix) for Mr. Kapoor only, he fails to take reasonable steps to end certain affiliations specified in his employment agreement within six months after a request by our board of directors; or (x) for Mr. Kapoor only, he materially breaches any material term of his employment agreement which is not remedied within 15 days of receipt of notice from the Company specifying the breach in reasonable detail.
Definition of good reason
For Mr. Kapoor, “good reason” generally means: (i) his duties or responsibilities are substantially reduced, he is required to report to anyone other than our board of directors, or his title as our officer is adversely changed; however, if following a change in control, his new title and authority are similar to his old title and authority, then any change in the executive’s title will not constitute a significant reduction in his duties and authorities, it being understood that “good reason” shall be deemed to exist if Mr. Kapoor is no longer the chief executive officer of the Company or any entity that acquires the Company; (ii) his base salary is reduced, or his target annual bonus opportunity is reduced below 100% of his base salary; (iii) the office or location where he is based in the metropolitan New York City area is moved more than 30 miles, and the new location is more than 30 miles from his primary residence in the metropolitan New York City area; or (iv) we breach any material term of his employment agreement. If Mr. Kapoor plans to terminate his employment for good reason, he must notify us within 45 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem.
The following definition of “good reason” applies to Messrs.Mr. Nicolelli, Bhalla and Jetley and RaiMs. Mahon unless stated otherwise. “Good reason” means, without the executive’s prior written consent: (i) the executive’s duties or responsibilities are substantially reduced, or he or she is required to report to anyone other than our board of directors, or our CEO; (ii) the executive’s title as our officer is adversely changed; however, if following a change in control (as defined in the 2018 Plan), his or her new title and authority are similar to histhe old title and authority, then any change in the executive’s title will not constitute a significant reduction
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Executive compensation
in his duties and authorities; (iii) for Mr. Nicolelli only, there is a change in the office or location where the executive is based of more than 50 miles (100 kilometers for Mr. Bhalla); or (iv) we breach any material term of the executive’s employment agreement or severance agreement. If the executive plans to terminate his or her employment for good reason, he or she must notifyprovide us with a notice of termination within 30 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem.
Definition of change in control
A “change in control” (as generally defined in Mr. Kapoor’s employment agreement and the 2018 Plan, as applicable) generally means any of the following events: (i) subject to certain exceptions, any person, entity or group becomes a beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of more than 50% of either (1) the combined voting power of our then-outstanding voting securities entitled to vote in the election of directors or (2) our outstanding shares of common stock assuming(taking into account as outstanding all rights to acquire common stock through options, warrants, conversion of convertible stock or debt, and the like are exercised;like); (ii) a majority of the members of our
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Executive compensation
board of directors changes from those in office as of the date of Mr. Kapoor’s employment agreement (August 3, 2020) or the effective date of the 2018 Plan (as applicable), except that the election of any new director whose election or nomination was approved by at least two-thirds of our incumbent directors will not be regarded towards a change in the majority for these purposes; (iii) our dissolution or liquidation; (iv) the sale, transfer or other disposition of all or substantially all of our business or our assets; or (v) consummation of a reorganization, recapitalization, merger, consolidation or similar transaction with another entity which requires the approval of our stockholders; however, any such transaction will not be a change in control if after the transaction (1) more than 50% of the total voting power of the resulting entity or its ultimate parent is represented by what were our outstanding voting securities before the transaction in substantially the same proportion among holders; (2) no person or group is or becomes the beneficial owner of more than 50% of the total voting power of the outstanding voting securities eligible to elect members of ourthe board of directors of the parent or surviving company; and (3) at least a majority of the members of our board of directors of the parent or surviving company following the transaction were our board members when our board first approved the transaction.
Definition of retirement
A “retirement” generally means a named executive officer’san NEO’s voluntary termination of employment that is effective after he or she reaches age 60.
Definition of disability
“Disability” generally means the NEO’s incapacity, due to mental, physical or emotional injury or illness, such that the NEO is substantially unable to perform his or her duties hereunder for a period of six (6) consecutive months (or 180 days for Mr. Kapoor).
CEO pay ratio
In accordance with SEC rules and the Dodd-Frank Wall Street Reform and Consumer Protection Act, presented below is an estimate of the ratio of our CEO’s annual total compensation to our median employee’s annual total compensation (our “Pay Ratio”). Due to the size and complexity of our organization, which as of December 31, 2022,2023, was made up of approximately 45,40054,160 professionals throughout the world, with delivery centers in over 10 countries, our Pay Ratio is based on reasonable assumptions and estimates described below.
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Executive compensation
We selected the median employee used for Pay Ratio in 20212023 by looking at our entire full-time and part-time employee population (excluding our CEO) as of December 31, 2021,2023, but excluding leased employees and independent contractors. The median employee used for our Pay Ratio in 2021 changed positions and therefore, was not used for our Pay Ratio in 2022. Instead, and per the SEC rules, we use another employee whose compensation is substantially similar to the 2021 median employee based on each employee’s 2021 “total pay.” Each employee’s “total pay” was calculated using the sum of his or her fixed pay / base salary and variable pay (including any performance bonus, sales commission, and retention or signing bonus). We also annualized total pay for all full-time and part-time employees that were employed for less than the full fiscal year 2021.
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Executive compensation
2023.
For all employees located in jurisdictions other than the United States, a cost-of-living adjustment was made to align their compensation with the higher cost-of-living standards in the United States, the jurisdiction in which our CEO resides. We converted all amounts paid in a foreign currency to U.S. dollars using the exchange rate as of December 29, 2023 for each jurisdiction in which we have employees. Finally, we identified the median employee and calculated his or her annual total compensation and the CEO’s annual total compensation in the manner required by Item 402(u) of Regulation S-K, to determine the pay ratio shown in the table below.
| Pay Ratio – all employees (with COLA)(1) | ||||||||
Chief Executive Officer’s annual total compensation | $ | 11,010,906 | $ | 12,346,006 | ||||
Median employee’s annual total compensation | $ | 14,147 | $ | 13,235 | ||||
Ratio of Chief Executive Officer’s annual total compensation to median employee’s annual total compensation | 778:1 | 933:1 | ||||||
(1) 20222023 Mercer Combined Index. Our median employee, identified without performing a cost-of-living adjustment, is based in India and had an annual total compensation of $6,654,$7,669, resulting in a pay ratio of 1,655:1,610:1.
Approximately 94%95% of our employees are located outside of the United States, primarily in India and the Philippines.Philippines, where the cost of living is lower than in the United States, as is employee compensation. As is common with many global companies, our compensation programs are market based, and as such they may differ for employees based on the country where an employee works. Accordingly, we believe that it is important to show our pay-ratio calculated in a similar manner as described above using the median U.S.-based employee to provide a commensurable view of our pay practices.
| Pay Ratio – United States employees | ||||
Chief Executive Officer’s annual total compensation | $ | 11,010,906 | ||
Median employee’s annual total compensation | $ | 102,618 | ||
Ratio of Chief Executive Officer’s annual total compensation to median employee’s annual total compensation | 107:1 | |||
| Pay Ratio – United States employees | ||||
Chief Executive Officer’s annual total compensation | $ | 12,346,006 | ||
Median employee’s annual total compensation | $ | 105,442 | ||
Ratio of Chief Executive Officer’s annual total compensation to median employee’s annual total compensation | 117:1 | |||
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Year | Summary Compensation Table total for CEO (1) ($) | Avg. Summary Compensation Table total for other NEOs (2) ($) | Compensation actually paid to CEO (1)(3) ($) | Avg. compensation actually paid to other NEOs (2)(3) ($) | TSR (4) ($) | Peer group TSR (4) ($) | Net income ($ in millions) | Company Selected Measure: | Summary Compensation Table total for CEO (1) ($) | Summary Compensation Table total for CEO (1) ($) | Compensation actually paid to CEO (1)(3) ($) | Compensation actually paid to CEO (1)(3) ($) | Avg. Summary Compensation Table total for other NEOs (2) ($) | Avg. Summary Compensation Table total for other NEOs (2) ($) | Avg. compensation actually paid to other NEOs (2)(3) ($) | Avg. compensation actually paid to other NEOs (2)(3) ($) | TSR (4) ($) | TSR (4) ($) | Peer group TSR (4) ($) | Peer group TSR (4) ($) | Net income ($ in millions) | Net income ($ in millions) | Company Selected Measure: | Company Selected Measure: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue ($ in millions) | Revenue ($ in millions) | Revenue ($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 11,010,906 | 2,697,045 | 16,069,419 | 4,081,949 | 244 | 116 | 143 | 1,412 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 10,033,589 | 3,445,143 | 19,117,355 | 5,740,391 | 208 | 130 | 115 | 1,122 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 7,141,267 | 1,913,189 | 8,690,902 | 3,166,120 | 123 | 102 | 89 | 958 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Executive(s) | Summary Compensation Table total ($) | Deduct change in pension value ($) | Add pension service cost ($) | Deduct stock awards ($) | Add year-end value of unvested equity awards granted in year ($) | Add change in value of unvested equity awards granted in prior years ($) | Add change in value of equity awards granted in prior years which vested in year ($) | ||||||||||||||||||||||
| 2022 | CEO | 11,010,906 | 0 | 0 | 8,356,213 | 10,658,841 | 1,995,931 | 759,954 | ||||||||||||||||||||||
| Other NEOs | 2,697,045 | 20,200 | 124,859 | 1,797,927 | 2,336,355 | 635,050 | 106,766 | |||||||||||||||||||||||
| 2021 | CEO | 10,033,589 | 0 | 0 | 7,209,918 | 10,249,716 | 4,905,807 | 1,138,161 | ||||||||||||||||||||||
| Other NEOs | 3,445,143 | 16,865 | 116,473 | 2,420,631 | 3,469,558 | 927,536 | 219,178 | |||||||||||||||||||||||
| 2020 | CEO | 7,141,267 | 0 | 0 | 5,701,209 | 5,633,903 | 1,152,826 | 464,114 | ||||||||||||||||||||||
| Other NEOs | 1,913,189 | 5,527 | 104,557 | 1,164,079 | 1,963,489 | 256,269 | 98,222 | |||||||||||||||||||||||
Year | Executive(s) | Summary Compensation Table total ($) | Deduct change in pension value ($) | Add pension service cost ($) | Deduct equity awards ($) | Add year-end value of unvested equity awards granted in year ($) | Add change in value of unvested equity awards granted in prior years ($) | Add change in value of equity awards granted in prior years which vested in year ($) | Total Compensation Actually Paid ($) | ||||||||||||||||||||||||||||||||||||
| 2023 | CEO | 12,346,006 | 0 | 0 | 9,982,605 | 8,058,020 | (1,219,025 | ) | (525,890 | ) | 8,676,507 | ||||||||||||||||||||||||||||||||||
| Other NEOs | 4,831,740 | 5,643 | 129,782 | 3,965,188 | 1,385,839 | (364,652 | ) | (173,675.00 | ) | 1,838,204 | |||||||||||||||||||||||||||||||||||
| EXL 2024 Proxy Statement | / | 101 |
| Revenue |
| Adjusted Operating Profit Margin |
| Relative TSR |
/ | EXL |
Executive compensation
Director compensation for fiscal year 20222023
The following table sets forth information for compensation earned in fiscal year 20222023 by our non-executive directors who served during fiscal year 2022:2023:
| Name(1) | Fees earned or ($) | Stock awards ($)(2)(3) | All Other compensation ($)(4) | Total ($) | Fees earned or ($) | Fees earned or ($) | Stock awards ($)(2)(3) | Stock awards ($)(2)(3) | All Other compensation ($)(4) | All Other compensation ($)(4) | Total ($) | Total ($) | ||||||||||||||||||||||||
Anne Minto | 85,000 | 190,000 | 13,058 | 230,623 | ||||||||||||||||||||||||||||||||
Andreas Fibig(5) | ||||||||||||||||||||||||||||||||||||
Anne Minto(6) | ||||||||||||||||||||||||||||||||||||
Som Mittal | 85,000 | 190,000 | 2,218 | 277,218 | ||||||||||||||||||||||||||||||||
Clyde Ostler | 87,083 | (5) | 190,000 | — | 277,083 | |||||||||||||||||||||||||||||||
Clyde Ostler(6) | ||||||||||||||||||||||||||||||||||||
Vikram Pandit | 85,000 | 340,000 | (6) | — | 425,000 | |||||||||||||||||||||||||||||||
Kristy Pipes | 95,417 | (5) | 190,000 | — | 285,417 | |||||||||||||||||||||||||||||||
Nitin Sahney | 95,000 | 190,000 | — | 285,000 | ||||||||||||||||||||||||||||||||
Jaynie Studenmund | 95,000 | 190,000 | — | 285,000 | ||||||||||||||||||||||||||||||||
Sarah K. Williamson(7) | ||||||||||||||||||||||||||||||||||||
(1) Mr. Kapoor’s compensation during 20222023 was based solely on his role as CEO, as disclosed in the “Summary compensation table for fiscal year 2022”2023” beginning on page 8784 and discussed in “Compensation Discussion and Analysis” beginning on page 63.60. He does not receive any additional compensation for his services as a director. Mr. Fibig, a current non-executive director, was appointed to the board of directors effective January 10, 2023.
(2) Amounts reflect the aggregate grant date fair value of stock awards recognized for financial statement reporting purposes for the fiscal year ended December 31, 2022,2023, in accordance with FASB ASC Topic 718 (disregarding any forfeiture assumptions). Assumptions used in the calculation of these amounts are included in footnotes 2 and 23 to our audited financial statements for the fiscal year ended December 31, 20222023 included in the 20222023 Form 10-K.
(3) The outstanding equity awards, comprised entirely of unvested restricted stock units, held by each of our non-employee directors on December 31, 2022 is set forth on the table below:2023 are as follows: for each of Ms. Minto and Mr. Ostler: 0; Mr. Fibig: 8,515; for each of Mr. Mittal, Ms. Pipes, Mr. Sahney, Ms. Studenmund, and Ms. Williamson: 6,050; and Mr. Pandit: 9,235.
| Name | No. of securities underlying unexercised options (#) exercisable | No. of securities underlying unexercised options (#) unexercisable | No. of shares or units of stock that have not vested | |||||||||
Anne Minto | 3,093 | 0 | 1,411 | |||||||||
Som Mittal | 0 | 0 | 1,411 | |||||||||
Clyde Ostler | 0 | 0 | 1,411 | |||||||||
Vikram Pandit | 0 | 0 | 2,494 | |||||||||
Kristy Pipes | 0 | 0 | 1,411 | |||||||||
Nitin Sahney | 0 | 0 | 1,411 | |||||||||
Jaynie Studenmund | 0 | 0 | 1,411 | |||||||||
(4) For Ms. Minto and Mr. Mittal, amount reflects our reimbursement to the director for fees associated with tax preparer services.
(5) Amounts reflectMr. Fibig joined the board effective January 10, 2023. The value of his stock award represents a changepro-rated portion of the annual equity award in the Audit Committee Chair rolerespect of his service from Mr. Ostler to Ms. Pipes in March 2022.
(6) Mr. Pandit became Chairman on January 1, 2022. This amount reflects a prorated grant for the six-month interim period from such date10, 2023 through the Company’s 20222023 annual meeting of stockholders, and the annual Chairman grantequity award he received in June 2023.
(6) Ms. Minto and Mr. Ostler retired as directors in June 2023. The amounts included in this table in respect of each such directors’ cash fees reflects a pro-rated amount for 2022-2023,the period during 2023 that each served as a director. Ms. Minto and Mr. Ostler did not receive any stock awards in respect of their 2023 service.
(7) Ms. Williamson joined the standard annual director equity grant.board in June 2023. The amount included in this table in respect of her cash fees reflects a pro-rated amount for the period during 2023 that she served as director.
For 2022,2023, non-executive directors were eligible to receive an annual retainer fee in the amount of $85,000 in cash and $190,000 in equity, granted in the form of time-based restricted stock units, valued at the time of grant. TheAs the non-executive Chairman of our boardBoard Chair during 2023, Mr. Pandit, was eligible to receive an additional $100,000 in equityrestricted stock units valued at the time of grant. New non-employee directors who join our board of directors during a calendar quarter are
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Executive compensation
eligible to receive the full cash fee for such calendar quarter and a pro-rated equity grant. The chair of our Audit Committee was eligible to receive an additional annual fee of $12,500 in cash, and the chairs of our Compensation and Talent Management Committee and Nominating and Governance Committee were each eligible to receive an additional annual fee of $10,000 in cash.
There are no additional fees payable for attendance at our board or committee meetings (whether in person, telephonic or otherwise). We make quarterly cash payments in respect of the director fees to our directors.
Holders of
| EXL 2024 Proxy Statement | / | 103 |
Executive compensation
Directors who hold restricted stock units do not receive the underlying shares of common stock until the units have vested and are settled. UnlessThe restricted stock units granted to directors generally vest upon the earliest of (i) the first anniversary of the date of grant, (ii) the date on which the director’s term on the board expires if the director elects otherwise, theis not subsequently elected to a new term and (iii) a change in control. The restricted stock units issued to each of our non-employee directors will generally settle on the earliest of:
suchof (i) the director’s death;
death, (ii) a change in control, or (iii) 180 days following the end of suchthe director’s term on our board of directors,directors. However, in lieu of settlement 180 days following the director’s term, a director may elect in advance that the units be settled on an alternate delivery date following the director’s service on the board, or if the director has satisfied our stock ownership guidelines, and made an election prior to the grant,upon the vesting date of the award;award.
We maintain a non-employee director stock ownership policy that requires directors to maintain stock ownership of at least five times their respective annual cash retainers (counting common stock, vested restricted stock units and
unvested time-based restricted stock units). New directors have five years from their appointment date to attain the occurrencerequired stock ownership levels, whereas existing directors generally have three years to meet any increased ownership requirements as a result of a “changeannual cash retainer increases.
Common stock is counted toward the ownership requirement if it is owned by or for the benefit of the director, the director’s spouse or the director’s children sharing the same household. During the applicable phase-in period, directors generally must retain at least 50% of shares delivered following the vesting of an equity award until the ownership requirement is met. If the ownership requirement is not met at the end of the phase-in period, directors generally may not sell any shares until the ownership requirement is met. Notwithstanding these share retention requirements, directors may sell shares to satisfy tax obligations arising with respect to equity awards.
As of December 15, 2023, all applicable directors were in control,” as definedcompliance with this policy.
We updated our non-employee director compensation program for 2024 to provide for an increase in the 2006 Plan, 2015 Planannual equity grant to $215,000, while maintaining a cash retainer of $85,000. The Lead Director or 2018 Plan,Independent Chair, as applicable, that satisfiesis also eligible to receive annually an additional $100,000 in restricted stock units valued at the requirementstime of Section 409Agrant. Additionally, the annual fees for the chairs of the Code.Audit Committee and Compensation and Talent Management Committee increased to $17,500 each and the fee for the chair of Nominating and Governance Committee increased to $15,000.
/ | EXL |
Stock ownership of directors, executive officers and certain beneficial owners
Stock ownership of directors, executive officers and certain beneficial owners
Unless otherwise indicated, the table below sets forth information with respect to the beneficial ownership of our common stock by:
each of our directors and each of our named executive officers individually;
each person who is known to be the beneficial owner of more than 5% of our common stock; and
all of our current directors and current executive officers (i.e., not just named executive officers) as a group.
The amounts and percentages of common stock beneficially owned below are as of March 31, 20232024 (the “Determination Date”) and are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of the Determination Date. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. Except as otherwise indicated below, each of the persons named in the table has sole voting and investment power with respect to the securities beneficially owned by such person as set forth opposite such person’s name.
| Name and address(1) | Shares | %(2) | Vested but unsettled RSUs(3) | Total | ||||||||||||||
Named Executive Officers | ||||||||||||||||||
Rohit Kapoor | 748,106 | (4) | 2.25% | — | 748,106 | |||||||||||||
Maurizio Nicolelli | 16,382 | * | — | 16,382 | ||||||||||||||
Vikas Bhalla | 20,345 | * | — | 20,345 | ||||||||||||||
Vivek Jetley | 57,421 | * | — | 57,421 | ||||||||||||||
Ankor Rai(5) | 14,391 | * | — | 14,391 | ||||||||||||||
Directors | ||||||||||||||||||
Andreas Fibig | 600 | * | — | 600 | ||||||||||||||
Anne E. Minto | 3,093 | (6) | * | 22,857 | 25,950 | |||||||||||||
Som Mittal | — | * | 14,453 | 14,453 | ||||||||||||||
Clyde W. Ostler | 17,245 | * | 40,024 | 57,269 | ||||||||||||||
Vikram S. Pandit | 310,394 | (7) | * | 7,118 | 317,512 | |||||||||||||
Kristy Pipes | — | * | 2,069 | 2,069 | ||||||||||||||
Nitin Sahney | — | * | 12,282 | 12,282 | ||||||||||||||
Jaynie M. Studenmund | 3,645 | * | 6,819 | 10,464 | ||||||||||||||
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| All current directors and executive officers as a group (17 people)(8) | 1,249,693 | (9) | 3.75% |
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| Name and address(1) | Shares | %(2) | Vested but unsettled RSUs(3) | Total | ||||||||||||||
Named Executive Officers | ||||||||||||||||||
Rohit Kapoor | 4,225,755 | (4) | 2.60% | — | 4,225,755 | |||||||||||||
Maurizio Nicolelli | 150,985 | * | — | 150,985 | ||||||||||||||
Vikas Bhalla | 127,046 | * | — | 127,046 | ||||||||||||||
Vivek Jetley | 337,847 | * | — | 337,847 | ||||||||||||||
Anita M. Mahon | 94,527 | * | — | 94,527 | ||||||||||||||
Directors | ||||||||||||||||||
Thomas Bartlett | — | — | — | — | ||||||||||||||
Andreas Fibig | 3,000 | * | 2,465 | 5,465 | ||||||||||||||
Som Mittal | — | * | 79,320 | 79,320 | ||||||||||||||
Vikram S. Pandit | 1,551,970 | (5) | * | 46,360 | 1,598,330 | |||||||||||||
Kristy Pipes | — | * | 17,400 | 17,400 | ||||||||||||||
Nitin Sahney | — | * | 68,465 | 68,465 | ||||||||||||||
Jaynie Studenmund | 18,225 | * | 41,150 | 59,375 | ||||||||||||||
Sarah K. Williamson | — | * | — | — | ||||||||||||||
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| All current directors and executive officers as a group (17 people)(6) | 6,751,711 | 4.16% |
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| EXL | / | |
Stock ownership of directors, executive officers and certain beneficial owners
Beneficial ownership
| Name and address(1) | Shares | %(2) |
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5% Beneficial owners | ||||||||||||||||||
Blackrock Inc.(10) | 3,963,940 | 11.90% | ||||||||||||||||
The Vanguard Group, Inc.(11) | 3,350,593 | 10.06% | ||||||||||||||||
FMR LLC(12) | 2,510,025 | 7.53% | ||||||||||||||||
Wellington Management Group LLP(13) | 1,759,889 | 5.28% | ||||||||||||||||
| Name and address(1) | Shares | %(2) |
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5% Beneficial owners | ||||||||||||||||||
Blackrock Inc.(7) | 21,267,361 | 13.09% | ||||||||||||||||
The Vanguard Group, Inc.(8) | 17,015,630 | 10.48% | ||||||||||||||||
FMR LLC(9) | 8,769,272 | 5.40% | ||||||||||||||||
*Less than 1%.
(1) Unless otherwise noted, the business address of each beneficial owner is c/o ExlService Holdings, Inc., 320 Park Avenue, 29th Floor, New York, New York 10022.
(2) Based on 33,321,455162,425,610 shares outstanding as of the Determination Date.
(3) For non-management directors, this column includes restricted stock units (previously granted for service on the Board)board) that have vested but are unsettled. Because vested restricted stock units generally settle 180 days following the director’s term of service (see “Director compensation for fiscal year 2022”2023” for additional details on settlement), the units are not treated as beneficially owned under SEC rules because the holder does not have the right to acquire the underlying stock within 60 days of the Determination Date. However, restricted stock units that are vested but unsettled provide a meaningful alignment with the Company’s stockholders, and they count towards our stock ownership policy for non-employee directors, which requires directors to maintain stock ownership of at least five times their respective annual retainers.
(4) The amount includes: (a) 177,134885,670 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 under a 2005 grantor-retained annuity trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (b) 40,219201,095 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 under a 2013 grantor retained annuity trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (c) 84,000420,000 shares of our common stock owned indirectly by Mr. Kapoor through a spousal lifetime access trust, for which Mr. Kapoor’s spouse and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, (d) 84,000420,000 shares of our common stock owned indirectly by Mr. Kapoor through a spousal lifetime access trust for Mr. Kapoor’s spouse, for which Mr. Kapoor and Mr. Kapoor’s brother are the co-trustees and share dispositive and voting control over the shares in the trust, and (e) 133,185665,925 shares of our common stock owned indirectly by Mr. Kapoor through a family trust created in 2016 for which Mr. Kapoor is the investment advisor to Commonwealth Trust Company, the trustee.
(5) Mr. Rai resigned from the Company effective April 2023.
(6) This amount consists of 3,093 shares of our common stock of which Ms. Minto has the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
(7) Mr. Pandit has shared dispositive and voting control over the reported securities, which are held by Orogen Echo LLC (“OE”). The Orogen Group LLC (“Orogen”) is the sole member of OE and Mr. Pandit is the Chairman and Chief Executive Officer of Orogen. Orogen Holdings LLC and Atairos-Orogen Holdings, LLC are the sole members with joint investment control of Orogen. Mr. Pandit has majority voting control of Orogen Holdings LLC.
(8)(6) Includes all eight current non-employee directors and our nine current executive officers as of the Determination Date.
(9) This amount includes an aggregate of 3,093 shares of our common stock of which our current directors and current executive officers have the right to acquire beneficial ownership within 60 days of the Determination Date pursuant to currently vested and exercisable stock options.
(10)(7) Based on the Schedule 13G/A filed on January 26, 2023, BlackRock,23, 2024, Blackrock, Inc. had sole voting power with respect to 3,897,23620,690,552 shares and sole dispositive power with respect to 3,963,94021,267,361 shares. The business address of Blackrock, Inc. is 55 East 52nd Street, New York, New York 10022.
(11)(8) Based on the Schedule 13G/A filed on February 9, 2023,13, 2024, The Vanguard Group, Inc. had shared voting power with respect to 55,300299,801 shares, sole dispositive power with respect to 3,262,88216,539,920 shares and shared dispositive power with respect to 87,711475,710 shares. The business address of The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, PA 19355.
(12)(9) Based on the Schedule 13G/A filed on February 9, 2023,2024, FMR LLC had sole voting power with respect to 2,508,5748,760,776 shares and sole dispositive power with respect to 2,510,0258,769,272 shares. The business address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
(13) Based on the Schedule 13G filed on February 6, 2023, Wellington Management Group LLP had shared voting power with respect to 1,546,097 shares and shared dispositive power with respect to 1,759,889 shares. The business address of Wellington Management Group LLP is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210.
/ | EXL |
Certain relationships and related person transactions
Certain relationships and related person transactions
Review and approval of related party transactions
We review all relationships and transactions in which we, our directors and executive officers or their immediate family members and our 5% stockholders are participants to determine whether such persons have a direct or indirect material interest in such transactions. Our Code of Conduct and Ethics instructs our directors, officers and employees to report the facts and circumstances of any such transaction or potential transaction to our General Counsel or our Audit Committee. Our board of directors has adopted a policy regarding the review of potential related party transactions. Under this policy, our General Counsel will review the facts and |
Factors used in assessing related party transactions
• The nature of the related party transaction
• The related party’s interest in the transaction
• The material terms of the transaction, including the amount involved and type of transaction
• The importance of the transaction to us and to the related party
• Whether the transaction would impair the judgment of a director or executive officer to act in our best interest
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circumstances of any covered transaction. If our General Counsel determines that the transaction involves a related party transaction and the amount involved does not equal or exceed $120,000, our General Counsel will approve or disapprove the transaction. If our General Counsel determines that the transaction involves a related party transaction and the amount involved equals or exceeds $120,000, our General Counsel will refer the transaction to our Audit Committee for consideration. In the course of reviewing, approving or ratifying a disclosable related party transaction, our General Counsel and Audit Committee considers all factors it considers appropriate, including but not limited to the factors in the box to the right.
Related party transactions
As required under SEC rules, transactions that are determined to be directly or indirectly material to us or a related person and which involve amounts exceeding $120,000 in the previous fiscal year are disclosed in our Proxy Statement. There were no related person transactions in fiscal year 2022.2023.
| EXL | / | |
Audit Committee Report
Audit Committee Report
The Audit Committee of the board of directors of ExlService Holdings, Inc. assists our board of directors in fulfilling its oversight responsibilities with respect to the following:
our accounting and financial reporting processes, including the integrity of the financial statements and other financial information provided by us to our stockholders, the public, stock exchanges and others;
our compliance with legal and regulatory requirements;
our registered independent public accounting firm’s qualifications and independence;
the audit of our financial statements; and
the performance of our internal audit function and independent registered public accounting firm.
In connection with these responsibilities, the Audit Committee met with management and Deloitte & Touche LLP to review and discuss the December 31, 20222023 audited consolidated financial statements. The Audit Committee also discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Audit Committee also received written disclosures and the letter from Deloitte & Touche LLP required by Rule 3526 of the Public Company Accounting Oversight Board (Communications with Audit Committees Concerning Independence), and the Audit Committee discussed with Deloitte & Touche LLP the firm’s independence.
Based on the review and discussions referred to above, the Audit Committee approved the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.2023.
Audit Committee
Ms. Kristy Pipes (Chair)
Mr. Andreas FibigThomas Bartlett
Mr. Clyde W. OstlerAndreas Fibig
Mr. Nitin Sahney
Ms. Jaynie Studenmund
Ms. Sarah K. Williamson
/ | EXL |
Proposal 1 — Election of directors
Proposal 1 — Election of directors
The nominees
Our Nominating and Governance Committee has nominated, and our board of directors has designated, Mses. Pipes, and Studenmund and Williamson and Messrs. Kapoor, Pandit, Kapoor,Bartlett, Fibig, Mittal, and Sahney to stand for election as directors at the Annual Meeting. Two of our current directors, Ms. Minto and Mr. Ostler,Mittal will not be standing for re-election at the Annual Meeting. Mr. FibigBartlett was identified and recommended to the Nominating and Governance Committee by a third-party search firm.
Term of office
If elected, each of the director nominees will serve a term of one year on our board of directors, until our 20242025 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified in accordance with our By-laws.
Voting instructions and substitutes
The proxies given to the proxy holders will be voted or not voted as directed and, if no direction is given, will be voted FOR these seveneight nominees. Our board of directors knows of no reason why any of these nominees should be unable or unwilling to serve. However, if for any reason any nominee should be unable or unwilling to stand for election, the shares represented by proxies will be voted for the election of any substitute nominee designated by our board of directors to fill the vacancy.
General information about nominees
The age as of the date of this Proxy Statement, tenure on our board of directors and committee membership, if any, of each nominee appears below. Information regarding the business experience during at least the last five years and directorships of other publicly owned corporations of each nominee can be found above under “Our board of directors.” Other information required with respect to any solicitation of proxies in connection with the election of directors is found elsewhere in this Proxy Statement.
| EXL | / | |
Proposal 1—1 — Election of directors
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Required vote
The affirmative vote of a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) at the Annual Meeting will elect the seveneight nominees as directors for a term of one year. If any nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, our By-laws provide that such person will tender to the board of directors his or her resignation as a director. Unless marked to the contrary, proxies received will be voted “FOR” the nominees.
Our board recommends that you
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/ | EXL |
Proposal 2 — Ratification of the appointment of independent registered public accounting firm
Proposal 2 — Ratification of the appointment of independent registered public accounting firm
Our Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit the Company’s and its subsidiaries’ books, records and accounts for the fiscal year 2023.2024. Our board of directors has endorsed this appointment. Ratification of the appointment of Deloitte by our stockholders is not required by law. However, as a matter of good corporate practice, such appointment is being submitted to our stockholders for ratification at the Annual Meeting. If our stockholders do not ratify the appointment, our board of directors and our Audit Committee will reconsider whether or not to retain Deloitte, but may nonetheless retain Deloitte. Even if the appointment is ratified, the Audit Committee in its discretion may change such appointment at any time during the year if it determines that such change would be in the best interests of the Company and our stockholders.
In retaining Deloitte as the Company’s independent registered public accounting firm, the Audit Committee considered whether the provision of non-audit services by Deloitte was compatible with maintaining Deloitte’s independence and concluded that it was. Representatives of Deloitte are expected to be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions. Deloitte has served as our independent registered public accounting firm since February 28, 2018.
Audit and non-audit fees
The following is a summary of the fees billed or expected to be billed to us by the Company’s independent registered public accounting firm for professional services rendered in each of the last two fiscal years:
Fee category | Fiscal 2022 | Fiscal 2021 | Fiscal 2023 | Fiscal 2022 | ||||||||||||||||||||
(in thousands)
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Audit fees | ||||||||||||||||||||||||
Audit fees | ||||||||||||||||||||||||
Audit fees | ||||||||||||||||||||||||
Audit fees | $ | 1,529 | $ | 1,601 | $ | 1,550 | $ | 1,529 | ||||||||||||||||
Audit-related fees | ||||||||||||||||||||||||
Audit-related fees | ||||||||||||||||||||||||
Audit-related fees | ||||||||||||||||||||||||
Audit-related fees | — | — | — | — | ||||||||||||||||||||
Tax fees | ||||||||||||||||||||||||
Tax fees | ||||||||||||||||||||||||
Tax fees | ||||||||||||||||||||||||
Tax fees | 45 | 80 | 37 | 45 | ||||||||||||||||||||
All other fees | ||||||||||||||||||||||||
All other fees | ||||||||||||||||||||||||
All other fees | ||||||||||||||||||||||||
All other fees | 33 | 34 | 30 | 33 | ||||||||||||||||||||
Total fees | ||||||||||||||||||||||||
Total fees | ||||||||||||||||||||||||
Total fees | ||||||||||||||||||||||||
Total fees | $ | 1,607 | $ | 1,715 | $ | 1,617 | $ | 1,607 | ||||||||||||||||
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Proposal 2 — Ratification of the appointment of independent registered public accounting firm
Audit fees:
Consist of fees billed or expected to be billed for professional services rendered for the audit of our consolidated financial statements, including (i) the audit of effectiveness of internal control over financial reporting, (ii) review of our consolidated financial statements included in our quarterly reports, and (iii) services that are normally provided by our independent registered public accountants including services in connection with statutory or regulatory filings or engagements for those fiscal years.
Audit-related fees:
Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”
Tax fees:
Consist primarily of fees billed or expected to be billed for other tax filing and advisory projects.
All other fees:
Consist of fees billed or expected to be billed for other permissible work performed by our independent registered public accounting firm that does not meet the above category descriptions.
Our Audit Committee pre-approves and is responsible for the engagement of all auditing services provided by our independent registered public accountants and all non-auditing services to be provided by such accountants to the extent permitted under Section 10A of the Exchange Act, including all fees and other terms of engagement. Our Audit Committee may delegate the authority to pre-approve audit and permitted non-audit services between meetings of our Audit Committee to a designated member of our Audit Committee, provided that the decisions made by such member are presented to our full Audit Committee for ratification at its next scheduled meeting.
All of the fees paid to Deloitte in fiscal year 20222023 were pre-approved by the Audit Committee.
Required vote
The ratification of the appointment of Deloitte as our independent registered public accounting firm requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” ratification of the appointment.
Our board recommends that you vote:
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FOR | the ratification of the appointment of Deloitte as our independent registered public accounting firm
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Proposal 3 — Advisory (non-binding) vote onto approve executive compensation
Proposal 3 — Advisory (non-binding) vote to approve executive compensation
Proposal 3 is a vote, on a non-binding advisory basis, to approve the compensation of our executive officers as described in this Proxy Statement. Although the vote is advisory and is not binding on the board of directors, our Compensation and Talent Management Committee will take into account the outcome of the vote when considering future executive compensation decisions. We refer to this vote as the “say-on-pay” vote.
At the 20172023 Annual Meeting of Stockholders, our stockholders voted on a proposal relating to the frequency of the “say-on-pay” vote. We recommended, and our stockholders approved on a non-binding advisory basis, an annual say-on-pay vote. Accordingly, we include the say-on-pay vote each year as a regular part of each Annual Meeting of Stockholders, and theStockholders. The next such say-on-pay vote will occur at next year’s Annual Meeting of Stockholders. A vote on the frequency of the “say-on-pay” vote is beingwill be held at the 2029 Annual Meeting.Meeting of Stockholders.
Our board of directors is committed to corporate governance best practices and recognizes the significant interest of stockholders in executive compensation matters.
| • | Our board of directors believes that our current executive compensation program directly links executive compensation to our performance and aligns the interests of our executive officers with those of our stockholders. For example, the bulk of our annual incentive awards are earned based on achievement of two core financial metrics: revenues and AOPM. As we discuss in greater detail in our Compensation Discussion and Analysis, these financial metrics focus our named executive officers on top-line revenues and bottom-line earnings that are likely to make meaningful contributions to our future financial performance. We believe rewarding our executives with incentive pay based on achievement of these three financial metrics closely aligns management with the interests of our stockholders. |
In addition, our philosophy places more emphasis on variable elements of compensation (such as annual incentives and equity-based compensation) than fixed remuneration.
Our stockholders have the opportunity to vote for, against or abstain from voting on the following resolution:
“Resolved, that the stockholders approve on an advisory basis the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC (which disclosure shall include the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this Proxy Statement).”
The above-referenced disclosures related to the compensation of our named executive officers appear beginning at page 6061 of this Proxy Statement.
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Proposal 3 — Advisory (non-binding) vote onto approve executive compensation
Required vote
The approval, on an advisory (non-binding) basis, of the compensation of our named executive officers requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” the approval of the compensation of our named executive officers.
Our board recommends that you vote:
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FOR | the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC (including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this Proxy Statement)
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Proposal 4 — Advisory (non-binding) vote on how frequently stockholders should vote to approve compensationFourth Amended and Restated Certificate of the named executive officersIncorporation
Proposal 4 — Advisory (non-binding) vote on how frequently stockholders should voteFourth Amended and Restated Certificate of Incorporation to approve compensation of the named executive officersprovide for, among other things, officer exculpation
Proposal 4 is a vote, on a non-binding advisory basis, to determine how frequently stockholders should vote to approve compensation of the named executive officers. Although the vote is advisory and is not binding on theThe board of directors has unanimously approved and declared advisable, and recommends that our Compensationstockholders adopt, a proposal to amend and Talent Management Committee will take into account the outcomerestate our Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation (the “Officer Exculpation Provisions”) and to effect certain other changes as described below. Set forth in Annex A to this Proxy Statement is a form of the voteproposed Fourth Amended and Restated Certificate of Incorporation that would be adopted should this proposal 4 be approved by stockholders at the Annual Meeting.
Officer Exculpation
Section 7 of our Restated Certificate of Incorporation currently includes a provision, authorized under the General Corporation Law of the State of Delaware (the “DGCL”), that eliminates the personal liability of directors for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL.
Prior to 2022, the DGCL did not allow for similar elimination or limitation of officers’ personal liability. As a result, stockholder plaintiffs employed tactics of bringing certain claims against individual officers when considering how frequentlysuch claims would otherwise be exculpated and dismissed if brought against directors. However, the State of Delaware, which is the Company’s state of incorporation, recently amended Section 102(b)(7) of the DGCL to hold say-on-pay votes. We referenable Delaware corporations to this aslimit the “say-on-frequency” vote. You may choose from the following alternatives: every year, every two years, every three years or you may abstain.personal liability of certain of their officers in limited circumstances (the “Section 102(b)(7) Amendment”). The Section 102(b)(7) Amendment was adopted to address inconsistent treatment between officers and directors and address rising litigation and insurance costs for stockholders.
Thesay-on-frequency vote was last held at our 2017 annual meeting of stockholders and is required at least once every six years thereafter. The next such vote will occur at our annual meeting of stockholders to be held in 2029.
Our board of directors believes that there is a need for directors and officers to remain free of the risk of financial ruin as a result of an annual say-on-pay voteunintentional misstep. The nature of the role of directors and officers often requires them to approvemake decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges in an evolving macroeconomic and regulatory environment, without the compensationbenefit of our named executive officers is appropriate because it will permit ourhindsight. The board of directors believes that exculpation provisions empower both directors and officers to receive current feedback on a timely basisexercise their best judgment in furtherance of stockholder interests. In addition, adopting an exculpation provision that aligns with Delaware law could prevent costly and protracted litigation that distracts our officers from our stockholders regarding our compensation program for our executive officers. Receiving such feedback every year will enable us to implement more quickly any modifications that ourimportant operational and strategic matters.
The board of directors determinesalso expects that exculpation clauses applicable to officers could become widely used by public corporations, including our peers, and that failing to adopt the Officer Exculpation Provisions could negatively impact our ability to recruit and retain exceptional officer candidates who value the protection from potential exposure to liabilities, costs of defense, and other risks of proceedings that would be appropriate.afforded by protection similar to that afforded by the Officer Exculpation Provisions. Additionally, the Officer Exculpation Provisions will align the protections for our officers with those protections already afforded to our directors.
Required vote
The option, if any, that receivesIn light of the affirmative voteSection 102(b)(7) Amendment, we propose to amend and restate our Restated Certificate of Incorporation to add a majorityprovision exculpating certain of shares presentthe Company’s officers from liability, as permitted by Delaware law, similar to the protections currently available for directors of the Company in person or represented by proxy and entitled to vote at the Annual Meeting. Becauseour current Restated Certificate of Incorporation. If this proposal has multiple options, if noneis approved and our current Restated Certificate of Incorporation is amended and restated, the options receives the affirmative vote of a majority of the shares presentCompany’s officers, in person or represented by proxy and entitled to vote at the Annual Meeting, then we will consider the stockholders to have chosen the option selected by the holders of a plurality of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless markedaddition to the contrary, proxies received will be voted “EVERY YEAR” to approve the compensation of our named executive officers.
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Proposal 54 — Charter amendment to effect stock split
Proposal 5 — Approval of an Amendment to ourFourth Amended and Restated Certificate of Incorporation
Company’s directors, would be exculpated from monetary liability for fiduciary duty breaches, solely to effectthe extent permitted under Section 102(b)(7) of the DGCL. With these changes, we aim to strike a 5-for-1 “forward” stock split with a corresponding increasebalance between stockholders’ interest in accountability and their interest in the authorized number of shares ofCompany being able to attract and retain quality officers to work on its behalf. For these reasons, our common stock
The board of directors has unanimously deemeddetermined that it is advisable, and in the best interests of the Company and its stockholders to amendseek to update the Company’s Amended andexculpation provision.
Other Modifications
Our board of directors is also recommending the following changes to our Restated Certificate of Incorporation to effect a 5-for-1 split of our common stock. The trading price of our common stock has experienced significant growth over the past few years. The board of directors regularly evaluates the effect of such growth on liquidity and marketability of our common stock and believes the considerable appreciationremove inapplicable or outdated provisions, which changes are included in the trading price of our common stock makes our common stock less affordable on a per-share basis to certain of our investors and employees. The board of directors believes effecting a 5-for-1 stock split would make our shares more affordable, attract a broader group of potential investors and employees and increase liquidity in the trading of shares of our common stock.
At present, our Amended and Restated Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.001 per share, and 15,000,000 shares of preferred stock, par value $0.001 per share. As of March 31, 2023, 33,321,455 shares of common stock were issued and outstanding, and, of the unissued shares, approximately 792,364 shares of common stock were reserved for issuance under the Company’s 2022 Employee Stock Purchase Plan (the “ESPP”) and approximately 952,074 shares of common stock were reserved for issuance pursuant to awards under our 2018 Plan.
In April 2023, subject to approval by our stockholders, the board of directors approved an amendment to thedraft Fourth Amended and Restated Certificate of Incorporation set forth on in Annex A attached hereto (the “Stock Split Amendment”), which upon filing would effectA:
Removing all references to a 5-for-1 forward stock splitseries of our commoncapital stock designated as Series A Preferred Stock, which were repurchased in 2006 in connection with our initial public offering (the “Stock Split”“IPO”). These references appear in Sections 4, 5.3 and increase the numberAnnex B of authorizedour Restated Certificate of Incorporation.
Removing all references to a series of our capital stock designated as Series B Common Stock, which were automatically converted into our shares of Common Stock in connection with our common stock from 100,000,000IPO. These references appear in Sections 5.1(b) and Annex A of our Restated Certificate of Incorporation.
Proposed Changes
If approved, Section 7 of our current Restated Certificate of Incorporation would be amended to 400,000,000 (the “Share Increase”)read as follows:
7. Limitation of Liability. Other than this Proposal 5 and Proposal 6 below,To the boardfullest extent permitted by the General Corporation Law, as the same exists or may hereafter be amended, a Director or officer of directors hasthe Corporation shall not approved any other changesbe personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director or officer. Any amendment, repeal or modification of the foregoing provision shall not adversely affect any right or protection of a Director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, repeal or modification.
In addition, the Fourth Amended and Restated Certificate of Incorporation.Incorporation would effect the following edits to our Restated Certificate of Incorporation:
The second sentence of Section 4 would be amended to remove the words “, of which 45,833.36 are designated as Series A Preferred Stock (“Series A Preferred Stock”).”
Sections 5.1(b) and 5.3 and Annexes A and B would be deleted in their entireties.
If our stockholders approve this proposal 4, the Stock Split Amendment, the Stock Split and Share Increase wouldchanges described in this proposal 4 will become legally effective without any further action by stockholders, upon the filing of the Stock Split AmendmentFourth Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, subjectwhich is expected to occur shortly following the Annual Meeting. However, even if stockholders approve this proposal 4, our board of directors may, in its sole discretion, abandon this action without further shareholder action prior to the effective date set forth therein. The exact timingeffectiveness of the filing of the Stock Split Amendment will be determined by us based on our evaluation as to when such action will be the most advantageous to us and our stockholders. If we fail to implement the Stock Split by the next Annual Meeting of Stockholders, stockholder approval would be required again prior to implementing any stock split. However, the board of directors or, to the extent delegated, the Company’s management, reserves the right, notwithstanding stockholder approval and without any further action by our stockholders, to elect not to proceed with the Stock Split and the Share Increase if, at any time prior to filing the Stock Split Amendment, the board of directors or, to the extent delegated, the Company’s management, in its sole discretion, determines that it is no longer in our best interest and the best interests of our stockholders to proceed with the Stock Split and Share Increase.
Book-entries dated as of a date prior to the effective time of the Stock Split representing outstanding shares of common stock shall, immediately after the effective time of the stock split, represent a number of shares equal to the same number of shares of common stock as is reflected on the book-entries, multiplied by five.Fourth
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Proposal 54 — Charter amendment to effect stock split
Following the Stock Split, if ultimately implemented, we currently estimate that we will have approximately 166,607,275 shares of common stock outstanding, based on the number of shares of common stock that were issued and outstanding as of March 31, 2023. As of March 31, 2023, we also will have a total of 3,961,820 shares of common stock reserved for issuance under the ESPP, and a total of 4,760,370 shares of common stock reserved for issuance under the 2018 Plan, which reflects an increase in the number of shares of common stock reserved for issuance under such plans based on the Stock Split ratio.
In connection with the Stock Split, we will be required to increase the number of authorized shares of our common stock so as to accommodate the increased number of shares that would be outstanding following the Stock Split, and the number of authorized but unissued shares available for issuance by the board of directors in connection with any future stock dividends or splits, grants under the ESPP, 2018 Plan or other equity compensation plans, financings, mergers or acquisitions and for other general corporate purposes, without the delay and expense associated with convening a special stockholders’ meeting or soliciting stockholders’ written consents. Aside from the shares currently reserved or to be reserved for issuance under the ESPP, the 2018 Plan, or any other equity compensation plans, the board of directors has not authorized the issuance of any additional shares of common stock, and there are no current agreements or commitments for the issuance of additional shares.
Stockholders’ current ownership of common stock will not give them automatic rights to purchase any of the additional authorized shares of common stock as a result of the Stock Split. If the Stock Split Amendment is approved, the additional authorized shares of common stock will be available for issuance from time to time at the discretion of the board of directors without further action by the stockholders, except where stockholder approval is required by Nasdaq or as otherwise provided under applicable laws. Section 5.2 of ourFourth Amended and Restated Certificate of Incorporation authorizes the board of directors, without further stockholder approval, to issue preferred stock having such designations, preferences and rights as may be determined by the board of directors. Any future issuance of additional authorized shares of common stock may, among other things, dilute the earnings per share of the common stock and the equity and voting rights of those holding common stock at the time the additional shares are issued. Issuance of shares of preferred stock would dilute the earnings per share and book value per share of existing shares of common stock. Holders of preferred stock would have such voting rights as may be provided for by law and as determined by the board of directors.
Although an increase in the authorized shares of common stock could, under certain circumstances, be construed as having an anti-takeover effect (for example, by diluting the stock ownership of a person seeking to effect a change in the composition of the board of directors or contemplating a tender offer or other transaction for the combination of our company with another company), the board of directors is not proposing to adopt the Stock Split Amendment in response to any effort to accumulate our stock or obtain control of the Company by means of a merger, tender offer or solicitation in opposition of management. Instead, the increase in authorized shares is directly related to the proposal to effect the Stock Split. The increase is less than the proportional amount that would have resulted based on the Stock Split ratio, effectively reducing amount of post-Stock Split shares authorized for issuance, but our board of directors believes this effective reduction is appropriate based on our prior and forecasted usage.
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Proposal 5 — Charter amendment to effect stock split
Amended and Restated Certificate of Incorporation and, if abandoned, the changes reflected therein, including regarding officer exculpation, will not become effective. If stockholders do not approve this proposal 4, our Restated Certificate of Incorporation will not be amended and restated and the modifications, including the Officer Exculpation Provisions, described in this proposal 4 will not take effect.
Required vote
The approval of the Stock Split AmendmentFourth Amended and Restated Certificate of Incorporation to effect the Stock Split and Share Increaseprovide for, among other things, officer exculpation requires the affirmative vote of the holders of a majority of our outstanding shares of common stock, voting together as a single class. Unless marked to the contrary, proxies received will be voted “FOR” approval of the Stock Split Amendment.Fourth Amended and Restated Certificate of Incorporation.
Our board recommends that you vote:
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FOR | the approval of the | |
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Proposal 6 — Charter amendment to include ability to remove directors with or without cause
Proposal 6 — Approval of an Amendment to our Amended and Restated Certificate of Incorporation to allow for the removal of directors with or without cause by the affirmative vote of holders of a majority of the total outstanding shares of common stock
Under the Company’s current Amended and Restated Certificate of Incorporation, a director may be removed from office only for cause and only by the affirmative vote of at least 66 2/3% of the total voting power of the then outstanding shares of capital stock of the Company entitled to vote generally in the election of our directors, voting together as a single class.
The board of directors has unanimously determined that it is advisable, and in the best interests of the Company and its stockholders, to amend the Amended and Restated Certificate of Incorporation to allow for the removal of directors with or without cause by the affirmative vote of holders of a majority of the total outstanding shares of our common stock. The governing documents of many other companies, as well as Section 141(k) of the Delaware General Corporation Law, allow for the removal of a director with or without cause by a majority of stockholders. To be consistent with market practice, subject to approval by our stockholders, our board of directors approved an amendment to our Amended and Restated Certificate of Incorporation set forth on Annex B attached hereto, which allows for the removal of directors with or without cause by the affirmative vote of holders of a majority of the total outstanding shares of common stock (the “Director Removal Amendment”). Other than this Proposal 6 and Proposal 5 above, the board of directors has not approved any other changes to the Amended and Restated Certificate of Incorporation. If this Proposal 6 is approved by our stockholders, the board of directors will adopt a conforming amendment to our by-laws related to the removal of directors with or without cause by the affirmative vote of holders of a majority of the total outstanding shares of common stock.
If the Director Removal Amendment is approved by the requisite percentages of stockholders at the Annual Meeting, the Director Removal Amendment would become effective upon the filing and effectiveness of the Director Removal Amendment with the Secretary of State of the State of Delaware, which is expected to take place promptly following the stockholders’ approval of the Director Removal Amendment.
Required vote
The approval of the Director Removal Amendment requires the affirmative vote of the holders of at least 66 2/3% of the voting power of the shares of the outstanding voting stock of the Company, voting together as a single class. Unless marked to the contrary, proxies received will be voted “FOR” approval of the Director Removal Amendment.
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Miscellaneous
Miscellaneous
Stockholder proposals and director nominations for the 20242025 Annual Meeting
Stockholder proposals intended to be included in our proxy materials for the 20242025 Annual Meeting of Stockholders (“20242025 Annual Meeting”) must be received by the deadline calculated in accordance with SEC Rule 14a-8, which is 120 days before the anniversary of the date of this year’s Proxy Statement. This year’s deadline is December 30, 2023.2024. Such proposals must include the information required by SEC rules, and should be sent in writing by courier or certified mail to the Corporate Secretary of the Company at 320 Park Avenue, 29th Floor, New York, New York 10022. Stockholder proposals that are sent to any other person or location or by any other means may not be received in a timely manner and thus may be ineligible for inclusion.
Stockholders who intend to submit proposals at the 20242025 Annual Meeting but whose proposals are not included in the proxy materials for the meeting, and stockholders who intend to submit nominations for directors at the 20242025 Annual Meeting, are required to notify the Corporate Secretary of the Company (at the address above) of their proposal or nominations not less than 90 days, nor more than 120 days, before the anniversary of this year’s Annual Meeting of Stockholders, in accordance with our By-laws. Such notices of proposals for the 20242025 Annual Meeting must be delivered between February 21, 202419, 2025 and March 22, 2024.21, 2025. Special notice provisions apply under the By-laws if the date of the 20242025 Annual Meeting is more than 30 days before or 70 days after the anniversary date of this year’s Annual Meeting of Stockholders.
Any notice of proposed business or nomination, whether or not included in our Proxy Statement, must include the information required under our By-laws, including Section 2.11.4, in order for the matter to be eligible for consideration at the 20242025 Annual Meeting. In addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice that sets forth the information required by
Rule 14a-19 under the Exchange Act no later than April 22, 2024.20, 2025.
The presiding officer of the 20242025 Annual Meeting may refuse to acknowledge any matter or nomination not made in compliance with the procedures in our By-laws. Our By-laws can be found on our website and the current SEC rules for submitting stockholder proposals can be obtained from the SEC at: Division of Corporation Finance, 100 F. Street, N.E., Washington, DC 20549, or through the SEC’s Internet website at www.sec.gov.
Delivery of documents to stockholders sharing an address
If you are the beneficial owner, but not the record holder, of shares of our common stock, your broker, bank, trust or other nominee may only deliver one copy of this Proxy Statement and the 20222023 Form 10-K, which serves as our Annual Report to Stockholders under Regulation 14A (the “2022“2023 Annual Report”), to multiple stockholders who share an address unless that nominee has received contrary instructions from one or more of the stockholders. We will deliver promptly, upon written or oral request, a separate copy of this Proxy Statement and the 20222023 Annual Report to a stockholder at a shared address to which a single copy of the documents was delivered. A stockholder who wishes to receive a separate copy of the Proxy Statement and annual report, now or in the future, should submit this request to our investor relations department through the Investor Relations page of our website at https://ir.exlservice.com/. Beneficial owners sharing an address who are receiving multiple copies of proxy
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Miscellaneous
of our website at https://ir.exlservice.com/. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and annual reports and who wish to receive a single copy of such materials in the future will need to contact their broker, bank, trust or other nominee to request that only a single copy of each document be mailed to all stockholders at the shared address in the future.
Electronic access to Proxy Statement and Annual Report
This proxy statement and our 20222023 Annual Report may be viewed on our website at www.exlservice.com and at www.proxyvote.com by following the instructions provided in the Internet Notice. If you are a stockholder of record, you can elect to access future annual reports and proxy statements electronically by marking the appropriate box on your proxy form. If you choose this option, you will receive a proxy form in mid-May listing the website locations and your choice will remain in effect until you notify us by mail that you wish to resume mail delivery of these documents. If you hold your common stock through a bank, broker or another holder of record, refer to the information provided by that entity for instructions on how to elect this option.
Delinquent Section 16(a) reports
Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of the Company’s common stock to file reports with the SEC regarding their ownership and changes in ownership of our securities. Based upon our examination of the copies of Forms 3, 4, and 5, and amendments thereto filed electronically with the SEC and the written representations of our reporting persons, we believe that all reports were filed on a timely basis during fiscal 2022, except that one Form 4 filing for Ms. Studenmund (disclosing a grant of restricted stock units) was filed late due to administrative error.2023.
Forward-looking statements
This Proxy Statement contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this Proxy Statement, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. For a more detailed discussion of these factors, see the information under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 20222023 Form 10-K.
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Non-GAAP Reconciliation
Non-GAAP Reconciliation
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, certain non-GAAP measures have been provided in this Proxy Statement.
These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated.
The Company believes that non-GAAP financial measures – present additional useful comparisons between current results and results in prior operating periods, providing investors with a supplemental view of the underlying trends of the Company’s business. The Company also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance.
Non-GAAP measures/ inputs for Proxy statement 2024
Description of Adjusted Financial Measures to GAAP Measures
Our adjusted net income and adjusted diluted EPS refers to net income as per GAAP, adjusted for non-cash expenses like stock-based compensation expense and amortization of acquisition-related intangible assets and certain non-recurring expenses/(benefits) that the management believe can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s results and comparisons of the Company’s results with the results of other companies. Our adjusted net income and adjusted diluted EPS also excludes the effects of income tax on such adjustments, as applicable.
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Non-GAAP Reconciliation
The following table shows the reconciliation of non-GAAP financial measures for the year ended December 31, 2023 and 2022:
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share
(Amounts in thousands, except per share data)
Year ended December 31, | ||||||||||
| 2023 | 2022 | |||||||||
Net income (GAAP) | $ | 184,558 | $ | 142,968 | ||||||
add: Stock-based compensation expense | 58,437 | 49,366 | ||||||||
add: Amortization of acquisition-related intangibles | 14,678 | 17,109 | ||||||||
add/(subtract): Allowance/(reversal) for expected credit losses(a) | 1,436 | — | ||||||||
add/(subtract): Changes in fair value of contingent consideration | 1,900 | 8,500 | ||||||||
add/(subtract): Other expenses/(benefits)(b) | 1,102 | 635 | ||||||||
subtract: Tax impact on stock-based compensation expense(c) | (17,333 | ) | (9,785 | ) | ||||||
subtract: Tax impact on amortization of acquisition-related intangibles | (3,622 | ) | (4,151 | ) | ||||||
add/(subtract): Tax impact on allowance/(reversal) for expected credit losses | (364 | ) | — | |||||||
add: Tax impact on changes in fair value of contingent consideration | 152 | — | ||||||||
add/(subtract): Tax impact on other expenses/(benefits) | (280 | ) | (29 | ) | ||||||
add/(subtract): Other tax expenses/(benefits)(d) | 223 | (1,079 | ) | |||||||
Adjusted net income (Non-GAAP) | $ | 240,887 | $ | 203,534 | ||||||
Adjusted diluted earnings per share (Non-GAAP) | $ | 1.43 | $ | 1.20 | ||||||
(a) To exclude the effects of material allowance/(reversal) for expected credit losses on accounts receivables related to a customer bankruptcy event.
(b) To exclude provision for litigation matters of $613 and $1,061, effects of lease termination of $489 and ($560) and other items, individually insignificant of $nil and $134 for the year ended December 31, 2023 and 2022, respectively.
(c) Tax impact includes $15,055 and $5,881 for the year ended December 31, 2023 and 2022 respectively related to discrete benefit recognized in income tax expense in accordance with ASU No. 2016-09, Compensation - Stock Compensation.
(d) To exclude other tax expenses/(benefits) related to certain deferred tax assets and liabilities.
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Annual meetingMeeting Q&A
Annual Meeting Q&A
Who is providing this Proxy Statement?
This Proxy Statement is being furnished to you in connection with the solicitation by the board of directors of ExlService Holdings, Inc., a Delaware corporation (“us,” “we,” “our” or the “Company”), of proxies to be used at our 20232024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held in virtual format only via live audio webcast at the website www.virtualshareholdermeeting.com/EXLS2023EXLS2024 on June 20, 20232024 at 8:309:00 AM, Eastern Time, and any adjournments or postponements thereof.
How are the proxy materials being made available?
In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each stockholder of record, the Company furnishes proxy materials via the Internet. If you received a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) by mail, you will not receive a printed copy of our proxy materials other than as described herein. Instead, the Internet Notice will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Internet Notice also instructs you as to how you may submit your proxy over the Internet or by phone. If you received an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting proxy materials included in the Internet Notice.
Our Notice of Annual Meeting, Proxy Statement and form of proxy card are each available at www.proxyvote.com. You may access these materials and provide your proxy by following the instructions provided in the Internet Notice.
When will the internet notice be sent?
We anticipate the Internet Notice will be sent to stockholders on or about April 28, 2023.29, 2024. This Proxy Statement and the form of proxy relating to the Annual Meeting will be made available via the Internet to stockholders on or prior to the date that the Internet Notice is first sent.
Who can vote?
Only stockholders who own shares of our common stock at the close of business on April 21, 2023,23, 2024, the record date for the Annual Meeting, can vote at the Annual Meeting. As of the close of business on April 21, 2023,23, 2024, the record date, we had 33,255,209[__] shares of common stock outstanding and entitled to vote. Each holder of common stock is entitled to one vote for each share held as of the record date for the Annual Meeting.
Is cumulative voting applicable in the election of directors?
There is no cumulative voting in the election of directors.
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Annual meeting Q&A
How do I vote my shares?
If your shares are registered directly in your name with Computershare Trust Company, N.A., our transfer agent (which means you are a “stockholder of record”), you can vote your proxy by (i) Internet, (ii) by phone or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Please refer to the specific instructions set forth in the Internet Notice.
If you are the beneficial owner of shares held in the name of a brokerage, bank, trust or other nominee as a custodian (also referred to as shares held in “street name”), your broker, bank, trustee or nominee will provide you with materials and instructions for voting your shares. In addition to voting by mail, a number of banks and brokerage firms participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that offers telephone and Internet voting options. Votes submitted by telephone or by using the Internet through Broadridge’s program must be received by 11:59 p.m. Eastern Time, on June 19, 2023.2024.
You also have the right to vote electronically at the Annual Meeting if you decide to attend. Our board of directors recommends that you vote by Internet, phone or mail even if you choose to attend the Annual Meeting. If you are a “stockholder of record,” you may vote your shares electronically at the Annual Meeting. If you hold your shares in “street name,” you must obtain a proxy from your broker, bank, trustee or nominee giving you the right to vote the shares electronically at the Annual Meeting or your vote at the Annual Meeting will not be counted.
You will not be able to vote your shares unless you use one of the methods described above to designate a proxy or you vote electronically at the Annual Meeting.
Can I revoke my proxy?
You can revoke your proxy at any time before it is exercised in any of the following ways:
by voting at the Annual Meeting;
by submitting written notice of revocation to the inspector of elections prior to the Annual Meeting; or
by submitting another properly executed proxy of a later date to the inspector of elections prior to the Annual Meeting.
How is a quorum established at the Annual Meeting?
A quorum, which is a majority of the issued and outstanding shares of our common stock as of the record date of April 21, 2023,23, 2024, must be present, in person or by proxy, to conduct business at the Annual Meeting. A quorum is calculated based on the number of shares represented by the stockholders attending the Annual Meeting in person and by their proxy holders. If you indicate an abstention as your voting preference for all matters to be acted upon at the Annual Meeting, your shares will be counted toward a quorum but they will not be voted on any matter. Virtual attendance at our Annual Meeting constitutes presence in person for purposes of quorum at the Annual Meeting.
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Annual meeting Q&A
What is a “broker non-vote”?
If you are the beneficial owner of shares held in “street name” by a broker, then your broker, as the record holder of the shares, must vote those shares in accordance with your instructions. If you fail to provide instructions to your broker, under the New York Stock Exchange rules (which apply to brokers even though our shares are listed on the NASDAQNasdaq Stock Market), your broker will not be authorized to vote your shares on “non-routine” proposals as described below. As a result, a “broker non-vote” occurs. However, without your instructions, your broker has discretionary authority to vote your shares with respect to “routine” proposals only.
How many votes are needed to approve each proposal and what is the effect of abstentions and/or broker non-votes?
If you submit your proxy, but do not mark your voting preference, the proxy holders will vote your shares (i) FOR the election of all seveneight nominees for director, (ii) FOR the ratification of the appointment of our independent registered public accounting firm, (iii) FOR the approval on an advisory (non-binding) basis of the compensation of our named executive officers, (iv) EVERY YEAR on the determination of the frequency of the vote to approve the compensation of the named executive officers of the Company, (v) FOR the approval of the amendment to ourFourth Amended and Restated Certificate of Incorporation effecting the Stock Split (and a corresponding increase in the authorized shares), (vi) FOR the amendment to our Amended and Restated Certificate of Incorporation to allow removal of directors with or without causeIncorporation; and (vii) as described below, in the judgment of the proxy holder on any other matters properly presented at the Annual Meeting.
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Annual meeting Q&A
The chart below summarizes, for each proposal described in this Proxy Statement, the Board’sboard’s voting recommendation, the voting approval standard, and the effect of abstentions and broker non-votes. Virtual attendance at our Annual Meeting will constitute presence “in person” for purposes of voting at the Annual Meeting.
Proposal | Board voting recommendation | Voting approval standard | Effect of abstentions(1) | Routine or non-routine | Effect of broker non- vote(2) | |||||
1: Election of directors | FOR the election of each nominee | Affirmative vote of a majority of votes cast(3) | No effect | Non-routine | No effect | |||||
2: The ratification of the appointment of our independent registered public accounting firm | FOR | Majority of shares present and entitled to vote | Vote against(4) | Routine | N/A | |||||
3: The advisory (non-binding) approval of the compensation of our named executive officers | FOR | Majority of shares present and entitled to vote | Vote against(4) | Non-routine | No effect | |||||
4: The | ||||||||||
| FOR | Affirmative vote of a majority of | ||||||||
| Vote against(4) | Non-routine | Vote against | |||||||
(1) If you wish to abstain from voting on a proposal, you must indicate, or mark ABSTAIN, while voting. If a proxy is submitted with no direction given, the proxies given to the proxy holders will be voted in accordance with the Boardboard recommendations.
(2) As discussed above under “What is a broker non-vote?,” brokers will not be entitled to vote on “non-routine” proposals unless beneficial owners provide voting instructions.
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Annual meeting Q&A
(3) Under our By-Laws, directors who are standing for election at the Annual Meeting will be elected by the affirmative vote of a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) by stockholders in person or represented by proxy and entitled to vote at the Annual Meeting. If any incumbent nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, our By-laws provide that such person will tender to the board of directors his or her resignation as a director. You may cast your vote in favor of electing all of the nominees as directors, against one or more nominees, or abstain from voting your shares.
(4) Under the Delaware General Corporation Law of the State of Delaware, shares that abstain constitute shares that are present and entitled to vote and, accordingly, have the practical effect of being voted “against” these proposals requiring a majority of shares present and entitled to vote or those based on total shares outstanding).
Are there other matters to be acted upon at the meeting?
Our board of directors presently is not aware of any matters, other than those specifically stated in the Notice of Annual Meeting, which are to be presented for action at the Annual Meeting. If any matter other than those described in this Proxy Statement is
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Annual meeting Q&A
presented at the Annual Meeting on which a vote may properly be taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting those shares.
What about adjournments and postponements?
Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting is properly adjourned or postponed.
Who pays for solicitation of proxies?
We will pay the cost of printing and mailing proxy materials and posting them on the Internet. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of shares of our common stock.
How can I attend the Annual Meeting and why is the Company holding the Annual Meeting in a virtual only format?
As we have done in recent years, we will hold a virtual Annual Meeting rather than a meeting at any physical location. We believe that holding a meeting in a virtual format provides an opportunity for broader stockholder participation.
To attend and participate in the Virtual Annual Meeting, stockholders will need to access the live audio webcast of the meeting. To do so, stockholders of record will need to visit www.virtualshareholdermeeting.com/EXLS2023EXLS2024 and use their 16-digit Control Numbers provided in the Internet Notice to log in to this website, and beneficial owners of shares held in street name will need to follow the instructions provided by the broker, bank or other nominee that holds their shares. We encourage stockholders to log in to this website and access the webcast before the Annual Meeting’s start time. Further instructions on how to attend, participate in and vote at the Annual Meeting, including how to demonstrate your ownership of our stock as of the record date, are available at www.virtualshareholdermeeting.com/EXLS2023.EXLS2024. Please note you will only be able to attend, participate and vote in the meeting using this website. All references to attending the Annual Meeting “in person” in this Proxy Statement shall mean attending the live webcast at the Annual Meeting.
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Annual meeting Q&A
How do I submit questions at the Annual Meeting?
We are committed to ensuring that our stockholders will be afforded the same rights and opportunities to participate in a virtual Annual Meeting as they would at a meeting held at a physical location. You will be able to submit questions during our Annual Meeting by visiting www.virtualshareholdermeeting.com/EXLS2023.EXLS2024. We will try to answer as many stockholder-submitted questions as time permits that comply with the meeting rules of conduct as determined by the chair of the meeting. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting
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Annual meeting Q&A
matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.
Will the Annual Meeting be recorded?
A recording of the Annual Meeting will be available online at http://ir.exlservice.comwww.virtualshareholdermeeting.com/EXLS2024 for approximately 12 months following the meeting date.
What if I have technical difficulties or trouble accessing the virtual Annual Meeting?
We will have technicians ready to assist you with any technical difficulties you may have accessing the live webcast of the Annual Meeting. A technical support phone number will be posted on www.virtualshareholdermeeting.com/EXLS2023EXLS2024 that you may call if you experience technical difficulties during the check-in process or during the Annual Meeting.
What if I have further questions?
If you have any further questions about voting your shares or attending the Annual Meeting, please call our Investor Relations Department at (212) 624-5913277-7100 or email at ir@exlservice.com.
Important
Please promptly vote and submit your proxy before the Annual Meeting by (i) Internet (by following the instructions provided in the Internet Notice), (ii) by phone (by following the instructions provided in the Internet Notice) or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. This will not limit your right to attend or vote at the Annual Meeting.
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Other matters
Other matters
Our board of directors does not know of any other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, your proxy holders will vote on it as they think best unless you direct them otherwise in your proxy instructions.
Whether or not you intend to be present at the Annual Meeting, we urge you to submit your signed proxy promptly.
By Order of the Board of Directors,
Ajay Ayyappan
Executive Vice President, General Counsel and Corporate Secretary
New York, New York
April 28, 202329, 2024
We will furnish without charge to each person whose proxy is being solicited, upon the written request of any such person, a copy of the 20222023 Form 10-K, as filed with the SEC, as well as copies of exhibits to the 20222023 Form 10-K, but for copies of exhibits will charge a reasonable fee per page to any requesting stockholder. Stockholders may make such request in writing to ExlService Holdings, Inc., 320 Park Avenue, 29th Floor, New York, New York 10022, Attention: Investor Relations. The request must include a representation by the stockholder that as of April 21, 2023,23, 2024, the stockholder was entitled to vote at the Annual Meeting.
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Annex A
Annex A
CERTIFICATE OF AMENDMENT
TOFOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
EXLSERVICE HOLDINGS, INC.
I,(Pursuant to Sections 242 and 245 of the undersigned, being
General Corporation Law of the officer designated by the boardState of directors to execute this Certificate of Amendment to the Amended and Restated Certificate of Incorporation, as amended (the “Amended and Restated Certificate of Incorporation”), of Delaware)
ExlService Holdings, Inc. (the “Corporation”“Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware do hereby certify:(the “General Corporation Law”),
DOES HEREBY CERTIFY:
FIRST:FIRST By unanimous written consent: That the name of the Corporation’s BoardCorporation is ExlService Holdings, Inc. The original Certificate of Directors, resolutions were duly adopted setting forth a proposed amendment toIncorporation of the Corporation was filed with the Secretary of State of the State of Delaware on the October 29, 2002. The first Amended and Restated Certificate of Incorporation declaring said amendment to be advisable and directing that the amendment be considered at the next annual meeting of the stockholdersCorporation was filed with the Secretary of State of the Corporation.
State of Delaware on December 13, 2002. The amendments to thesecond Amended and Restated Certificate of Incorporation as set forth in such resolutions, are as follows:
1. Section 4.1of the Amended andCorporation was filed with the Secretary of State of the State of Delaware on October 24, 2006. The Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on August 1, 2023.
SECOND: That the Board of Directors of the Corporation duly adopted resolutions proposing to amend and restate the Restated Certificate of Incorporation of the Corporation, declaring said amendment and restatement to be advisable and in the best interests of the Corporation and its stockholders, and authorizing the appropriate officers of the Corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is herebyas follows:
RESOLVED, that the Restated Certificate of Incorporation of the Corporation be amended and restated in its entirety to read as follows:
1. Name. The name of the corporation is “ExlService Holdings, Inc.”
2. Address; Registered Office and Agent. The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, State of Delaware 19801; and the name of its registered agent at such address is The Corporation Trust Company.
3. Purposes. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.
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“4.1
Annex A
4. Number of Shares. The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of all classes of stock which the Corporation shall have authority to issue is 290,000,000415,000,000 shares, consisting of (i) 400,000,000 shares of Common Stock, $0.001 par value per share (“Common Stock”), and (ii) 15,000,000 shares of Preferred Stock, $0.001 par value per share (“Preferred Stock”),.
5. Classes of which 45,833.36 are designated as Series A Preferred Stock (“Series A Preferred StockShares”).”
2. Section 4.2 The designation, relative rights, preferences and limitations of the Amended and Restatedshares of each class are as follows:
5.1 Common Stock. Except as otherwise provided by law or by this Certificate of Incorporation and subject to the express terms of any series of shares of Preferred Stock, the holders of outstanding shares of Common Stock shall exclusively possess voting power for the election of Directors and for all other purposes, each holder of record of shares of Common Stock shall be entitled to one vote for each share of Common Stock standing in his or her name on the books of the Corporation. Except as otherwise provided by law or by this Certificate of Incorporation and subject to the express terms of any series of shares of Preferred Stock, the holders of shares of Common Stock shall be entitled, to the exclusion of the holders of shares of Preferred Stock of any and all series, to receive such dividends as from time to time may be declared by the Board of Directors of the Corporation (the “Board”). In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of shares of Common Stock shall be entitled to share ratably according to the number of shares of Common Stock held by them in all remaining assets of the Corporation available for distribution to its stockholders. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, the number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law or any corresponding provision hereinafter enacted.
5.2 Preferred Stock. The shares of Preferred Stock may be issued from time to time in one or more series of any number of shares, provided that the aggregate number of shares issued and not retired of any and all such series shall not exceed the total number of shares of Preferred Stock hereinabove authorized, and with such powers, including voting powers, if any, and the designations, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, all as shall hereafter be stated and expressed in the resolution or resolutions providing for the designation and issue of such shares of Preferred Stock from time to time adopted by the Board pursuant to authority so to do which is hereby amendedexpressly vested in the Board. The powers, including voting powers, if any, preferences and restatedrelative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Each series of shares of Preferred Stock: (a) may have such voting rights or powers, full or limited, if any; (b) may be subject to redemption at such time or times and at such prices, if any; (c) may be entitled to receive dividends (which may be cumulative or non-cumulative) at such rate or rates, on such conditions and at such times, and payable in its entiretypreference to, read as follows:
“4.2 Stock Split. Withoutor in such relation to, the dividends payable on any other action onclass or classes or series of stock, if any; (d) may have such rights upon the partvoluntary or involuntary liquidation, winding up or dissolution of, upon any distribution of the assets of, or in the event of any merger, sale or consolidation of, the Corporation, if any; (e) may be made convertible into or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation
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Annex A
(or any other securities of the Corporation or any other person, effective (the “Effective Time”), (i) each shareperson) at such price or prices or at such rates of Common Stock issuedexchange and outstanding, and each sharewith such adjustments, if any; (f) may be entitled to the benefit of Common Stock held as treasury stock, asa sinking fund to be applied to the purchase or redemption of shares of such time (the “Pre-Split Common Stock”) shall automatically, without further action onseries in such amount or amounts, if any; (g) may be entitled to the partbenefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any holdersubsidiary, upon the issue of Pre-Split Common Stock, convert into five fully paid and nonassessableany additional shares (including additional shares of Common Stock, $0.001 par value per share, reflecting a 5-for-1 stock split. The conversion described insuch series or of any other series) and upon the foregoing sentencepayment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of, any outstanding shares of the Corporation, if any; (h) may be subject to restrictions on transfer or registration of transfer, or on the amount of shares that may be owned by any person or group of persons; and (i) may have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, if any; all as shall be referred to herein asstated in said resolution or resolutions of the “Stock Split”. No script or fractionalBoard providing for the designation and issue of such shares of CommonPreferred Stock.
6. Board of Directors.
6.1 Number of Directors. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. Unless and except to the extent that the Amended and Restated By-laws of the Corporation, as such By-laws may be amended from time to time (the “By-laws”), shall so require, the election of the Directors of the Corporation need not be by written ballot. Except as otherwise provided for or fixed pursuant to the provisions of Section 5 of this Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock to elect additional Directors, the total number of Directors constituting the entire Board shall be not less than 6 nor more than 12, with the then authorized number of Directors being fixed from time to time by the Board. During any period when the holders of any series of Preferred Stock have the right to elect additional Directors as provided for or fixed pursuant to the provisions of Section 5 hereof, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of Directors of the Corporation shall automatically be increased by such specified number of Directors, and the holders of such Preferred Stock shall be issued uponentitled to elect the additional Directors so provided for or fixed pursuant to said provisions, and (ii) each such additional Director shall serve until such Director’s successor shall have been duly elected and qualified, or until such Director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his or her earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock Split,having such right to elect additional Directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional Directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional Directors, shall forthwith terminate and the par valuetotal and authorized number of Directors of the CommonCorporation shall be reduced accordingly.
6.2 Terms of Directors. Subject to the provisions of this Certificate of Incorporation relating to directors elected by the holders of one or more series of Preferred Stock, voting as a separate series or with one or more other series of Preferred Stock, at each annual meeting of stockholders commencing with the 2019 annual meeting of stockholders, directors of the corporation other than those in the 2020 Class and 2021 Class (each as defined below) shall not be affected. Atelected for a term of one year, expiring at the Effective Time,next succeeding annual meeting of stockholders. Each director of the corporation who was elected at the 2017 annual meeting of stockholders for a three-year term expiring in 2020 (the “2020 Class”), and each holderdirector of Common Stock shall automatically hold the numbercorporation who was elected at the 2018 annual meeting of stockholders for a three-year term expiring in 2021 (the “2021 Class”), including any person appointed to
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Annex A
Pre-Split Common Stock shares held byfill any vacancy occurring with respect to any director in the 2020 Class or the 2021 Class (each of whom shall be deemed to be a member of the class of directors in which the vacancy occurred), shall continue to hold office until the end of the term for which such holder multiplied by five. From and after the Effective Time, any stock certificates that, immediately priordirector was elected or appointed, as applicable. Subject to the Effective Time, representedprovisions of this Certificate of Incorporation relating to directors elected by the sharesholders of Pre-Split Commonone or more series of Preferred Stock, voting as a separate series or with one or more other series of Preferred Stock, (a) commencing with the 2020 annual meeting of stockholders, all directors of the corporation other than those in the 2021 Class will be elected for a term of one year, and (b) commencing with the 2021 annual meeting of stockholders, all directors of the corporation will be elected for a term of one year. In all cases, each director shall serve until such director’s successor has been duly elected and qualified or until such director’s earlier death, disqualification, resignation or removal.
6.3 Vacancies and Newly Created Directorships. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of Directors or any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board. Any Director so chosen shall hold office until the expiration of the term of office of the Director whom he or she has replaced and after the Effective Time, automaticallyuntil his or her successor shall be duly elected and without the necessity of presenting the same for exchange, representqualified or until such Director’s earlier death, disqualification, resignation or removal. No decrease in the number of sharesDirectors shall shorten the term of Common Stock into which such Pre-Split Common Stock has been converted in the Stock Split. Whenever any fractional shares of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction to the nearest whole share of Common Stock (rounded down).”incumbent Director.
SECOND: That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. The foregoing amendments shall be effective upon filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by a duly authorized officer of the Corporation as of this ___ day of _______, 2023.
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Annex B
Annex B
CERTIFICATE OF AMENDMENT
TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EXLSERVICE HOLDINGS, INC.
I, the undersigned, being the officer designated by the board of directors to execute this Certificate of Amendment to the Amended and Restated Certificate of Incorporation, as amended (the “Amended and Restated Certificate of Incorporation”), of ExlService Holdings, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware do hereby certify:
FIRST: By unanimous written consent of the Corporation’s Board of Directors, resolutions were duly adopted setting forth a proposed amendment to the Amended and Restated Certificate of Incorporation, declaring said amendment to be advisable and directing that the amendment be considered at the next annual meeting of the stockholders of the Corporation.
The amendments to the Amended and Restated Certificate of Incorporation as set forth in such resolutions, is as follows:
1. Section 6.4 of the Amended and Restated Certificate of Incorporation, as amended, is hereby amended and restated in its entirety to read as follows:
“6.4 Removal of Directors. Unless otherwise restricted by applicable law and except for such additional Directors, if any, as are elected by the holders of any series of Preferred Stock as provided for or fixed pursuant to the provisions of Section 5 hereof, any Director, or the entire Board, may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class.
7. Limitation of Liability. To the fullest extent permitted by the General Corporation Law, as the same exists or may hereafter be amended, a Director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director or officer. Any amendment, repeal or modification of the foregoing provision shall not adversely affect any right or protection of a Director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, repeal or modification.
8. Indemnification.
8.1 Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a Director or officer of the Corporation or, while a Director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity (an “Other Entity”), including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as
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SECOND:Annex A
otherwise provided in Section 8.3, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.
8.2 Prepayment of Expenses. The Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition, provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Section 8 or otherwise.
8.3 Claims. If a claim for indemnification or advancement of expenses under this Section 8 is not paid in full within 30 days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.
8.4 Nonexclusivity of Rights. The rights conferred on any Covered Person by this Section 8 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the By-laws, That said amendments were dulyagreement, vote of stockholders or disinterested Directors or otherwise.
8.5 Other Sources. The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a Director, officer, employee or agent of an Other Entity shall be reduced by any amount such Covered Person collects as indemnification or advancement of expenses from such Other Entity.
8.6 Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Section 8 shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such repeal or modification.
8.7 Other Indemnification and Prepayment of Expenses. This Section 8 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.
9. Adoption, Amendment and/or Repeal of By-Laws. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board is expressly authorized to make, alter and repeal the By-laws, subject to the power of the Stockholders of the Corporation to alter or repeal any By-laws whether adopted by them or otherwise. Notwithstanding any other provisions of this Certificate of Incorporation or the By-laws (and notwithstanding the fact that a lesser percentage may be permitted by applicable law, this Certificate of Incorporation or the By-laws), but in accordanceaddition to any affirmative vote of the holders
| EXL 2024 Proxy Statement | / | A-5 |
Annex A
of any particular class of stock of the Corporation required by applicable law or this Certificate of Incorporation, the affirmative vote of the holders of at least 66 2/3% of the voting power of the shares of the then outstanding voting stock of the Corporation, voting together as a single class, shall be required to adopt new By-laws or to alter, amend or repeal the By-laws.
10. Certificate Amendments. The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Certificate of Incorporation. In addition, other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by applicable law. All rights, preferences and privileges of whatsoever nature conferred upon stockholders, Directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted and held subject to the rights the Corporation has reserved in this Section 10. Notwithstanding any other provisions of this Certificate of Incorporation or the By-laws (and notwithstanding the fact that a lesser percentage may be permitted by applicable law, this Certificate of Incorporation or the By-laws), but in addition to any affirmative vote of the holders of any particular class of stock of the Corporation required by applicable law or this Certificate of Incorporation, the affirmative vote of the holders of at least 66 2/3% of the voting power of the shares of the then outstanding voting stock of the Corporation, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with Sections 6, 9, 10, 11 or 12 of this Certificate of Incorporation.
11. Written Consent Prohibition. Except as otherwise provided for or fixed pursuant to the provisions of Section 2425 of the General Corporation Law of the State of Delaware. The foregoing amendments shall be effective upon filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of AmendmentIncorporation relating to the rights of holders of any series of Preferred Stock, no action that is required or permitted to be signedtaken by a duly authorized officerthe stockholders of the Corporation asat any annual or special meeting of stockholders may be effected by written consent of stockholders in lieu of a meeting of stockholders, unless the action to be effected by written consent of stockholders and the taking of such action by such written consent have expressly been approved in advance by the Board.
12. Special Meetings of the Corporation’s Stockholders. Unless otherwise provided by applicable law and subject to the express terms of any series of shares of Preferred Stock, a special meeting of the Corporation’s stockholders may be called only by (a) the Corporation’s Chairman of the Board or (b) a majority of the members of the Board, and may not be called by any other person or persons.
WITNESS the signature of this ___Fourth Amended and Restated Certificate of Incorporation this [ ] day of June, 2023.[ ], 2024.
EXLSERVICE HOLDINGS, INC. | ||
| By: | ||
| Name: | Rohit Kapoor | |
| Title: | Chief Executive Officer, | |
/ | EXL 2024 Proxy Statement | |
EXLSERVICE HOLDINGS, INC. 320 PARK AVENUE, 29TH FLOOR NEW YORK, NY 10022 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 19, 2023.2024. 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—Meeting - Go to www.virtualshareholdermeeting.com/EXLS2023EXLS2024 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—PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 19, 2023.2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V08548-P89920V45395-P10181 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY EXLSERVICE HOLDINGS, INC. The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: For Against Abstain The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For Against Abstain and 3, 1 YEAR for proposal 4, and FOR proposals 5 and 6. 1a. Rohit Kapoor 1b. Vikram Pandit ! ! !1c. Thomas Bartlett 1d. Andreas Fibig 1e. Kristy Pipes 1f. Nitin Sahney 1g. Jaynie Studenmund 1h. Sarah K. Williamson 2. The ratification of the selection of Deloitte & Touche LLP as the ! ! ! independent registered public accounting firm of the Company for fiscal year 2023. 1b. Rohit Kapoor ! ! !2024. For Against Abstain 1c. Andreas Fibig ! ! ! 3. The approval, on a non-binding advisory basis, of the compensation ! ! ! of the named executive officers of the Company. 1d. Som Mittal ! ! ! 1 Year 2 Years 3Years Abstain 4. The approval, on a non-binding advisory basis, of the 1e. Kristy Pipes ! ! ! frequency of our future non-binding advisory votes ! ! ! ! approving the compensation of the named executive officers of the Company. 1f. Nitin Sahney ! ! ! For Against Abstain 5.4. The approval of an Amendment to our Amended and Restated 1g. Jaynie Studenmund ! ! ! Certificate of Incorporation to effect a 5-for-1 “forward” stock ! ! ! split with a corresponding increase in the authorized number of shares of our common stock. For Against Abstain 6. The approval of an Amendment to ourFourth Amended and Restated Certificate of Incorporation to allowprovide for, the removal of directors with or without cause by the affirmative vote of holders of a ! ! ! majority of the total outstanding shares of our common stock.among other things, officer exculpation. NOTE: The proxies are authorized to act upon such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or otherot her fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:V08549-P899202023 8:302024 9:00 AM ETEXLS2023,EXLS2024, at 8:309:00 A.M., Eastern Time on June 20, 2023,2024, and any adjournment or postponement thereof.Thethereof.The undersigned hereby also authorize(s) the proxy, in his or her discretion, to vote on any other business that may properly be brought before the meeting or any adjournment or postponement thereof to the extent authorized by Rule 14a-4(c) promulgated by the Securities and Exchange Commission.28, 2023,29, 2024, and the Proxy Statement furnished therewith.Directors’Directors' recommendations, and accordingly, will be voted FOR each of the Board of Directors’Directors' nominees for director specified in Proposal 1 and FOR Proposals 2, 3 and 3, 1 YEAR for Proposal 4, and FOR Proposals 5 and 6, unless a contrary choice is specified, in which case the proxy will be voted as specified.
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