UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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| ☐ | Preliminary Proxy Statement | |
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| ☑ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Under Rule 14a-12 | |
Adtalem Global Education Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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About Us
#WEAREADTALEM
Adtalem Global Education is a workforce solutions provider and the parent organization of Adtalem Educacional do Brasil (IBMEC, Damásio and Wyden institutions), American University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Chamberlain University, EduPristine, OnCourse Learning, Ross University School of Medicine, and Ross University School of Veterinary Medicine.Medicine, and Walden University.
STUDENT FOCUSED
Empowering individuals is the meaning behind our name – Adtalem Global Education. Adtalem (pronunciation: ad TAL em) is Latin for “To Empower.”
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MISSION | VISION | PURPOSE | ||
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We provide global | To create a dynamic global | We empower students, |
WE ARE |   | MORE THAN |   | |
|   | WITH |   |
As of June 30, 2019. The number of colleagues above includes more than 9,000 full- and part-time employees and approximately 2,300 independent contractors. The number of countries above reflects countries where we have locations or corporate entities.September 1, 2021.
| * | Presence indicates employees, students, members or offices. |
Message from our Executive Chairman of the Board President
October 8, 2021 To Our Shareholders: Fiscal year 2021 was a year of significant progress and impact as we strengthened our position as a leading workforce solutions provider and healthcare educator. It is clear from our solid performance, robust educational offerings and partnerships, that our ability to truly make a difference in the lives of our students, add value for our employer partners and positively impact the communities we serve — remains strong and in demand. All of this is possible because of our dedicated colleagues around the world. When the world sheltered from the pandemic, our organizational instincts — resiliency, responsiveness and change agility — carried us forward in an unwavering pursuit of our mission. These key cultural qualities enable us to thrive amidst ongoing changes in the world. |  |
Despite lingering headwinds from COVID-19, our performance for the full year was in line with our outlook. Our medical and CEOhealthcare institutions performed well, as student outcomes continue to drive demand for our programs, and our financial services businesses continued to capitalize on our leading market positions and previous investments to drive operating performance.
Most notably, just after the close of the fiscal year, we finalized our acquisition of Walden University, which represented the culmination of a multi-year strategy to reposition the business as a leading healthcare education provider with unmatched scale and breadth. After several years of streamlining our portfolio through the divestiture of non-core assets, the Walden acquisition further positions Adtalem as a more strategically focused business with a greater emphasis on the rapidly growing healthcare sector.
As the need for more physicians and nurses continues to rise and improving health equity remains a global priority, Adtalem is uniquely positioned to scale sustainable workforce solutions. By engaging and supporting students from historically underrepresented groups and offering learning modalities that meet learners wherever they may be in life, our organization is well equipped to meet the challenges and demands for these critical workforce sectors — and with industry-leading results.
Proudly, across our two medical institutions, we graduated more than 1,000 physicians; first-time residency match rates were 92% for first-time eligible 2020-2021 graduates; more than 70% of our 2019-2020 medical graduates chose to enter critical roles in primary care across all 50 U.S. states and Puerto Rico; and Chamberlain’s first-time NCLEX pass rates were over 91%. These outcomes demonstrate that our dedication has paid off, and we remain committed to building a pipeline of highly qualified talent to solve complex issues in the healthcare industry.
In 2021, 84% of the total student population in our five degree-conferring institutions identified as female and 48% as a minority. Adtalem’s medical institutions graduate more than 100 Black/African American medical students annually, more than any other U.S. medical school. This level of diversity is imperative to the workforce pipeline and to our ability to increase health equity across the communities we serve.
At Chamberlain, we expanded our physical footprint with a new campus in Irwindale, California and built robust employer partnerships to make education more accessible for all. Chamberlain University launched an innovative Called-to-Care Scholars Program with LCMC Health in Louisiana. This program is the first-of-its-kind tuition-free nursing program — funded by LCMC in exchange for employment after graduation and passing the NCLEX. The program offers a targeted approach to strengthening the pipeline of nurses and our increasing scale gives us the ability to service more partnerships like this in the future, a perfect example of our workforce solutions provider strategy in action.
With a concentration of online graduate-level healthcare programs that are complementary to Adtalem’s core offerings, Walden significantly expands our breadth and best-in-class modalities to further enable us to reimagine the future of healthcare education at a critical time in history. Adtalem’s family of institutions have nearly 140,000 total student enrollments, with 82% of students in online learning modalities. The addition of Walden also delivers on our commitment to provide greater access to education, particularly for students of diverse backgrounds and those from underrepresented demographics.
2021 Proxy Statement 1
Message from our Executive Chairman of the Board
October 3, 2019In 2021, we saw continued strong revenue growth in our Financial Services segment, with double-digit increases driven by our ability to capture the demand generated by strong secular tailwinds. More broadly in the segment, we are establishing prominent growth vectors to enable expansion and diversification into new markets, and investments in new offerings are positioning this segment for long-term growth.
Fiscal 2019 wasWith our focus shifting firmly towards the healthcare sector, we announced in August that we are exploring strategic alternatives for our Financial Services businesses. This is a transitionalnatural progression of our workforce solutions strategy and is consistent with our long-standing commitment to delivering long-term shareholder value.
After such a pivotal year for Adtalemand with the need to keep strong momentum as we continue with our next phase of growth, I determined that the time was right for me to transition from my role as chairman and CEO to executive chairman of Adtalem’s board of directors. Steve Beard, previously our chief operating officer, succeeded me as president and CEO and joined our board. This decision followed a thorough board-led succession planning process, with the board unanimously agreeing that Steve is the right choice to provide the continuity and strategic insight needed to lead us through this next phase of our growth.
Steve has played a critical role in refining our leading workforce solutions strategy and repositioning our Financial Services segment for long-term, profitable growth. He has been instrumental in our acquisition of Walden and in the divestitures of DeVry University, Carrington College and Adtalem Brazil. There is no leader better suited than Steve to take us forward with strong momentum as we continue to amplify our social impact, expand access to high-quality education and unlock even more possibilities for all.
Over the past five years during my tenure as CEO, we have made bold movesincredible progress. I am extremely proud and grateful for everyone at Adtalem; for everything we have accomplished and for supporting the repositioning of the company for growth. As executive chairman, I remain actively involved in our mission and will continue to streamlinepartner with Steve, the board and our business intoleadership team to drive results and superior student outcomes.
Together, the strategic actions we took this year represent the beginning of the next chapter for Adtalem. A chapter in which we will continue our positive momentum to expand as a leading workforce solutions provider. provider in a way that will enable us to drive even greater impact for our students, employer partners, communities and shareholders.
We completedare energized by the divestures of DeVry University and Carrington College — critical milestoneseven greater role Adtalem plays in our strategy to refocus our three vertical businesses to better support our employer partners. We also expanded our portfoliosolving these worker shortages through the increased scale and differentiated capabilities made possible by our acquisition of OnCourse Learning, an exciting new financial services company that givesWalden. We hope you join us expanded customer reach in financial services markets. This portfolio repositioning has allowed us to leveragethis excitement for our strengths in the degree offeringnext chapter, and test preparation and certification areas of workforce solutions, narrow our focus to those industries with attractive supply and demand imbalances and pivot ahead of the market with strategic customer relationships. Operationally, despite facing significant headwinds in Brazil, we delivered modest revenue and EPS growth in fiscal year 2019. The progress we made during the year reflects our steadfast commitment to executing on our long-term strategic goals.
At our Investor Day in May 2019, we unveiled a refreshed and updated strategy that will position Adtalem to better address the global workforce skills gap and permit us to better serve our markets in a more competitive and comprehensive way. As part of this strategy, not only will we work to empower students, but we will also form long-lasting partnerships with employers that aim to upskill and augment their workforces. This will reinforce Adtalem’s leadership position as the industry shifts towards providing employer-ready candidates, flexible, ongoing training and lifelong learning for employees. I’m incredibly proud of the traction we’ve already seen as our organization has embraced our vision to become a leading workforce solutions provider.
Our segments largely performed well during the year, as we continued to focus on creating superior student outcomes and improving student diversity, which we believe is an important competitive advantage for Adtalem.
“As we begin fiscal 2020, we remain focused on accelerating growth by executing on our transformational workforce solutions provider strategy which will expand our customer base, product offerings and markets.”
Our Financial Services segment continued its trajectory of remarkable revenue growth, driven not only by sustained, double-digit growth in ACAMS, but also through growing momentum at Becker, a brand we reinvigorated with a strengthened core CPA value proposition, expanded CPE product offerings and more flexible delivery options. Through these efforts, we have been able to broaden our presence as a workforce solutions provider.
We did, however, face a number of challenges within our Business and Law segment in Brazil, such as delays in government funding, unfavorable currency exchange rates and increased pricing competition, which materially impacted our revenue within this segment. As a result, we implemented substantial administrative and back-office cost savings in the segment to mitigate the impact of these factors, and we began to see the benefit of these actions in the fourth quarter of fiscal 2019. At the same time, we did not waver on our commitment to maintaining the quality of student outcomes, which we believe is a testament to the operational strength of our team.
As we begin fiscal 2020, we remain focused on accelerating growth by executing on our transformational workforce solutions provider strategy which will expand our customer base, product offerings and markets. We continue to partner with educational institutions and employer partners to deliver upskilling and more workforce-ready employees, including Northeastern University where we partnered to launch AI for financial services in the fall of 2019, and Oschner Health Systems where we colocated our Chamberlain University campus. We also recently strengthened our experienced, global leadership team with the addition of Mike Randolfi, our Chief Financial Officer. Mike will play a critical role as we build upon our strong foundation to deliver improving and consistent financial performance. Together, our team is committed to unlocking value creation opportunities as a workforce solutions provider and aligning our business with our mission and student commitments to drive long-term growth and enhanced profitability.
On behalf of ourthe entire Adtalem Global Education team and Board of Directors, I would like towe thank you — my fellow shareholders — for your continued support for the work we are doing. The Adtalem community is working to deliver transformative academic outcomes and financial returns, and we truly appreciate your confidence in thisour mission.
Lisa W. Wardell
Executive Chairman of the Board, President & CEO
2019 Proxy Statement 12 Adtalem Global Education Inc.
Notice of Annual Meeting of Shareholders
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DATE AND TIME Online check-in will be available beginning at 8:15 a.m. Central Standard Time. Please allow ample time for the online check-in process. | PLACE | RECORD DATE | ||
| September |
ITEMS OF BUSINESS
| ITEMS OF BUSINESS | |
| Board Voting Recommendation | |
| Proposal No. 1:Elect the directors named in the attached Proxy Statement to serve until the | FOReach director nominee |
| Proposal No. 2:Ratify selection of PricewaterhouseCoopers LLP as independent registered public accounting firm | FOR |
| Proposal No. 3:Say-on-pay: Advisory vote to approve the compensation of our named executive officers | |
| FOR | |
Shareholders will also consider such other business as may come properly before the Annual Meeting or any adjournment thereof.
To participate in the 2021 Annual Meeting, you will need the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials.
This notice and Proxy Statement, voting instructions, and Adtalem Global Education Inc.’s 20192021 Annual Report to Shareholders are being mailed to shareholders beginning on or about October 4, 2019.8, 2021.
Stephen W. BeardDouglas G. BeckChief Operating Officer,Senior Vice President, General Counsel and Corporate Secretary
REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
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| VIA THE INTERNET | ||||||
| Visit the web site listed on your proxy card | BY TELEPHONE Call the telephone number on your proxy card | BY MAIL Sign, date, and return your proxy card in the enclosed envelope | VIRTUALLY Attend the Annual Meeting |
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on November |
2021 Proxy Statement 23 Adtalem Global Education Inc.
This summary highlights selected information about the items to be voted on at the annual meeting. It does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.
| Director Nominees |
Diverse mix of backgrounds, current and former CEOs, marketing and medical professionals, and a former finance executive at a leading global companycompany.
| Director Since | Other Public Company Boards | Committee Memberships | ||||||||||||||||
| Name and Principal Occupation | Age | ACA | AUD | COM | ER | NG | ||||||||||||
 | Steven M. Altschuler, M.D.INDEPENDENT | 65 | 2018 | 2 |  |  | ||||||||||||
 | William W. Burke(1)LEAD INDEPENDENT DIRECTOR | 60 | 2017 | 1 |  |  | ||||||||||||
 | Donna J. HrinakINDEPENDENT | 68 | 2018 |
|  | | ||||||||||||
 | Georgette KiserINDEPENDENT | 51 | 2018 | 2 |  |  | ||||||||||||
 | Lyle LoganINDEPENDENT | 60 | 2007 | 1 | |  | ||||||||||||
 | Michael W. MalafronteINDEPENDENT | 45 | 2016 | |  | | ||||||||||||
 | Lisa W. Wardell(2) | 50 | 2008 | 1 | ||||||||||||||
 | James D. White(3)INDEPENDENT | 58 | 2015 | 1 | |  | ||||||||||||
| Director Since | Other Public Company Boards | Committee Memberships | ||||||||||||
| Name and Principal Occupation | Age | ACA | AUD | COM | ER | NG | ||||||||
 | Stephen W. Beard President and CEO Adtalem Global Education Inc. | 50 | 2021 | |||||||||||
 | William W. Burke LEAD INDEPENDENT DIRECTOR President and Founder, Austin Highlands Advisors, LLC | 62 | 2017 | 2 |  |  | ||||||||
 | Charles DeShazer INDEPENDENT Director, Clinicals Products Google Health | 62 | 2021 |  |  | |||||||||
 | Mayur Gupta1 INDEPENDENT Chief Marketing & Strategy Officer Gannett Co., Inc. | 44 | 2021 | | | |||||||||
 | Donna J. Hrinak INDEPENDENT Senior Vice President, Corporate Affairs, Royal Caribbean Group | 70 | 2018 |  |  | |||||||||
 | Georgette Kiser INDEPENDENT Operating Executive, The Carlyle Group | 53 | 2018 | 3 |  |  | ||||||||
 | Lyle Logan INDEPENDENT Executive Vice President and Managing Director, The Northern Trust Company | 62 | 2007 | 1 |  | | | |||||||
 | Michael W. Malafronte INDEPENDENT Former Managing Partner, International Value Advisers, LLC and President, IVA Funds | 47 | 2016 |  |  | |||||||||
 | Sharon L. O’Keefe INDEPENDENT Retired President, University of Chicago Medical Center | 69 | 2020 | 1 | | | ||||||||
 | Kenneth J. Phelan INDEPENDENT Former Chief Risk Officer., U.S. Department of Treasury | 62 | 2020 | 1 | | | ||||||||
 | Lisa W. Wardell2 Executive Chairman of the Board Adtalem Global Education Inc. | 52 | 2008 | 1 | ||||||||||
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| Academic Quality Committee | Audit and Finance Committee | Compensation Committee | External Relations Committee | Nominating & Governance Committee | Audit Committee Financial Expert | Committee Chair |
2019 Proxy Statement 34 Adtalem Global Education Inc.
Proxy Summary
| Board Highlights |
BOARD INDEPENDENCE
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TENURE
AGE
BOARD DIVERSITY
SKILLS AND EXPERIENCE
2021 Proxy Statement 5
Proxy Summary
CORPORATE GOVERNANCE HIGHLIGHTS
| Shareholder Engagement |
We conduct regular outreach and engagement with our shareholders and value their insight and feedback. Although our 2018 say-on-pay vote received majority shareholder approval, our Board of Directors (“Board”) and management team were disappointed to have not received the robust shareholder support we have enjoyed in the past. During the past 12 months, we have actively sought to understand what actions we could take to address shareholder concerns.
OUR OUTREACH
We reached out to our shareholders representing approximately80% of shares owned.
4 Adtalem Global Education Inc.
Proxy Summary
Our Board continually monitors best practices in corporate governance and, consistent with feedback from shareholders and other stakeholders, has taken the following actions in recent years:
2021 | |||
●Continued to refresh our Board by adding three new directors including our new CEO and directors with significant expertise in healthcare and digital marketing | |||
2020 | |||
●Refreshed our Board by adding two new directors with significant expertise in healthcare and financial services ●Amended the charter of our External Relations Committee to clarify its responsibilities for oversight of our sustainability strategy, including environmental and social policies | |||
2019 | |||
●Appointed a Lead Independent Director when our CEO was appointed as our Chairman of the Board ●Enhanced our proxy statement to focus on disclosures in key areas of investor interest ●Increased stock ownership requirements for our Chief Operating Officer and other executive officers | |||
2018 | |||
●Broadened our shareholder outreach program and increased Board involvement | |||
2017 | |||
●Adopted proxy access (3%, 3 years, group up to 20 shareholders, greater of 2 directors or 20%) ●Amended ●Approved Director resignation requirement upon change of principal job responsibilities ●Added a Lead Independent Director requirement when our Chairman of the Board is not independent ●Adopted outside Board service limits | |||
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2019 Proxy Statement 56 Adtalem Global Education Inc.
Proxy Summary
| Ongoing Best Practices |
| BOARD COMMITTEES | ||
✓We have five Board committees – Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance, each of which typically meets at least four times per year ✓The Chair of each committee, in consultation with the committee members, determines the frequency and length of committee meetings ✓Our Board and each of its committees are authorized to retain independent advisors at Adtalem’s expense | ||
| DIRECTOR STOCK OWNERSHIP | ||
✓60% of our non-employee directors’ annual compensation (excluding fees for other additional roles) is in the form of restricted stock units (“RSUs”) ✓Our non-employee directors (other than those who are affiliated with our shareholders) are subject to a policy requiring their ownership of shares with a value equal to or in excess of three times their annual retainer | ||
| CONTINUOUS IMPROVEMENT | ||
✓New directors receive a tailored, two-day, live training program about Adtalem and its institutions from management ✓Our directors are encouraged to participate in director-oriented training programs ✓The Board annually undergoes a self-assessment process to critically evaluate its performance at a committee and Board level | ||
| COMMUNICATION | ||
✓Our Board promotes open and frank discussions with senior management ✓Our directors have access to all members of management | ||
2021 Proxy Statement 6 7Adtalem Global Education Inc.
Proxy Summary
EXECUTIVE COMPENSATION HIGHLIGHTS
| ● | Strong linkage of pay to individual, institutional, and financial performance |
| ● | Balanced compensation program aligning performance to interests of shareholders, students, and other stakeholders |
| Our Compensation Framework |
2017, 2018 AND 20192021 COMPENSATION SNAPSHOT
| Objective | Time Horizon | Performance Measures | Additional Explanation | |||
| Salary (cash) | Reflect experience, market competition and scope of responsibilities | Reviewed Annually | Assessment of performance in prior year. Given the challenges presented by the pandemic and in response to the unprecedented and evolving business landscape, we took a conservative approach and did not increase salaries for executives during fiscal year 2021. | ●Represents 14% and 28% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively. | ||
Annual | MIP |
| 1 year | ●Revenue* ● ●Individual Goals | ||
Long Term | Stock Options | Reward stock price growth and retain key talent | 4 year ratable | Stock price growth | ● | |
RSUs | Align interests of management and shareholders, and retain key talent | ● | ||||
ROIC PSUs | Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent | 3 year cliff | ● | ● | ||
● | ||||||
| * | A portion of the MIP payout for |
2019 Proxy Statement 78 Adtalem Global Education Inc.
Proxy Summary
SUSTAINABILITY AND COMMUNITY RELATIONS
Adtalem is committed to a holistic approach to our communities, providing quality learning and working opportunities, caring for the places where we operate, and conducting our business in a transparent and responsible manner. We advanced our environmental, social, and governance (“ESG”) strategy during fiscal year 2019,2021 and remained steadfastly focused on our overarching philosophy of stewardship.
| ADTALEM GLOBAL EDUCATION SUSTAINABILITY | ||
 
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| Environmental Practices | Social Practices | Governance Practices | ||
| Our TEACH values—Teamwork, Energy, Accountability, Community, and Heart—shape how we work together to fulfill our promise to students, members, and each other. Adtalem has created diversity and inclusion councils and task forces at its healthcare and medical institutions. These taskforces are addressing racism as a public health crisis. During 2021, diversity, equity and inclusion threads were woven into our healthcare institutions’ curriculums and activities. We |
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Community Investment |
| Empower Scholarship Fund | ||
We contribute to the well-being of local communities through support of philanthropic organizations and student, faculty, and employee volunteer efforts. Through corporate giving efforts, Adtalem provided over $354,000 to global community and civic partners in fiscal year 2021. Independent from the corporate giving efforts, the Adtalem Global Education Foundation |
| The Empower Scholarship Fund increased its total dollars and number of recipients by awarding |
2021 Proxy Statement 8 9Adtalem Global Education Inc.
Proxy Summary
At Adtalem, we are committed to driving diversity at the top and creating an inclusive culture throughout the organization. To us, diversity and inclusion needs to be intentional to be impactful. We don’t just welcome differences, we celebrate them. In fact, we believe bringing together diverse teams and innovative ideas is the best way to serve our diverse students and members, and we work collaboratively, committed to the idea that inclusion leads to innovation and high performance.
| BOARD DATA | LEADERSHIP DATA |
| The composition of our Board reflects our | The Adtalem senior leadership team is |
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EMPLOYEE DATA | STUDENT DATA |
Our global employee base | The student population at our Title IV institutions is similarly diverse in gender and ethnicity. |
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Please note: Adtalem colleague diversity metrics are for U.S. employees only. Board data is as of October 3, 2019; all other1, 2021; leadership and employee data is as of June 30, 2019October 1, 2021 and represents those who chose to report. Student data is for fall 20182021 enrollment at Adtalem’s Title IV institutions.
2019 Proxy Statement 910 Adtalem Global Education Inc.
2021 Proxy Statement 11
10 Adtalem Global Education Inc.
| PROPOSAL NO. 1 Election of Directors |
Following the resignation of Ann Weaver Hart as a director effective August 28, 2019, the size of the Board was reduced to eight directors. The Board has nominated all of Adtalem’s eighteleven sitting directors and recommends their re-election, each for a term to expire in 2020.at the 2022 Annual Meeting. All of the nominees have consented to serve as directors if elected at the Annual Meeting.
It is intended that all shares represented by a proxy in the accompanying form will be voted for the election of each of Steven M. Altschuler, M.D.,Stephen W. Beard, William W. Burke, Charles DeShazer, Mayur Gupta, Donna J. Hrinak, Georgette Kiser, Lyle Logan, Michael W. Malafronte, Sharon L. O’Keefe, Kenneth J. Phelan, and Lisa W. Wardell and James D. White as directors unless otherwise specified in such proxy. A proxy cannot be voted for more than eighteleven persons. In the event that a nominee becomes unable to serve as a director, the proxy committee (appointed by the Board) will vote for the substitute nominee that the Board designates. The Board has no reason to believe that the nominees will become unavailable for election.
Each nominee for election as a director is listed below, along with a brief statement of his or her current principal occupation, business experience and other information, including directorships in other public companies held as of the date of this Proxy Statement or within the previous five years. Under the heading “Relevant Experience,” we describe briefly the particular experience, qualifications, attributes, or skills that led to the conclusion that these nominees should serve on the Board. As explained below under the caption “Director Nominating Process,” the Nominating & Governance Committee looks at the Board as a whole, attempting to ensure that it possesses the characteristics that the Board believes are important to effective governance.
| Approval by Shareholders |
The election of each of the eighteleven nominees for director listed below requires the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Adtalem maintains a majority voting standard for uncontested elections (where the number of nominees is the same as the number of directors to be elected), so for a nominee to be elected as a member of the Board, the nominee must receive the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Shareholders may not cumulate their votes in the election of directors. If a nominee for re-election fails to receive the requisite majority vote where the election is uncontested, such director must promptly tender his or her resignation to Adtalem’s Chairman CEO and President or Adtalem’s Chief Operating Officer, General Counsel and Corporate Secretary, subject to acceptance by the Board.
Unless otherwise indicated on the proxy, the shares will be votedFOReach of the nominees identified above.below.
  | The Board of Directors recommends a voteFOReach of the nominees identified |
2019 Proxy Statement 11
Proposal No. 1 Election of Directors
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12 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
| Director Nominees |
  | Stephen W. Beard, Chief Executive Officer Age: 50 |
Career Highlights Mr. Beard was appointed Adtalem’s President and CEO and a director on our Board in September 2021. Previously, Mr. Beard served as Adtalem’s Chief Operating Officer (COO), responsible for the vision, leadership, and financial performance of Adtalem’s Financial Services vertical. In addition, Mr. Beard led the company’s strategy, corporate development, government and regulatory affairs, investor relations, communications and civic engagement activities and mobilized a variety of operational and corporate initiatives to accelerate Adtalem’s global performance. Prior to taking on the responsibility of COO in 2019 and responsibility for the Financial Services vertical in 2020, Mr. Beard served as senior vice president, general counsel and corporate secretary in 2018. Prior to Adtalem, Mr. Beard was executive vice president, chief administrative officer and general counsel of Heidrick & Struggles International, Inc. (NASDAQ:HSII), where he directed global legal operations for the company and oversaw a variety of enterprise-level functions including strategy and corporate development. Prior to joining Heidrick & Struggles, Mr. Beard was in private practice with Schiff Hardin, LLP in Chicago, where he was a member of the firm’s corporate and securities group, advising public and private companies in mergers and acquisitions, corporate finance and corporate governance matters. Mr. Beard began his legal career as a law clerk for the Honorable Frank Sullivan, Jr. (ret.), associate justice of the Indiana Supreme Court. Mr. Beard has been active in a variety of community and civic matters and currently serves on the board of the venture philanthropy fund, A Better Chicago. Mr. Beard received his bachelor’s degree from the University of Illinois at Urbana-Champaign and his juris doctor degree from the Maurer School of Law at Indiana University. Relevant Experience Mr. Beard’s experience as a senior executive and his prior service as Adtalem’s COO and General Counsel give him deep knowledge of Adtalem’s operations and strategy. Mr. Beard’s experience in refining Adtalem’s portfolio strategy, executing the DeVry University, Carrington College and Adtalem Brazil divestitures, and spearheading the acquisition of Walden University-coupled with his success in leading the Financial Services segment-have played an integral role in positioning Adtalem for long-term growth. | |
2021 Proxy Statement 13
Proposal No. 1 Election of Directors
 | William W. Burke,Lead Independent Director Age: Committees: |
Career Highlights Mr. Burke has been a director of Adtalem since January 2017. He has served as our Lead Independent Director since July 2019. Since November 2015, Mr. Burke has served as President of Austin Highlands Advisors, LLC, a provider of corporate advisory services. He served as Executive Vice President & Chief Financial Officer of IDEV Technologies, a peripheral vascular devices company, from November 2009 until the company was acquired by Abbott Laboratories in August 2013. From August 2004 to December 2007, he served as Executive Vice President & Chief Financial Officer of ReAble Therapeutics, a diversified orthopedic device company which was sold to The Blackstone Group in a going private transaction in 2006 and subsequently merged with DJO Incorporated in November 2007. Mr. Burke remained with ReAble Therapeutics until June 2008. From 2001 to 2004, he served as Chief Financial Officer of Cholestech Corporation, a medical diagnostic products company. Mr. Burke received his bachelor’s degree in Finance from The University of Texas at Austin and an MBA from The Wharton School of the University of Pennsylvania. Board Service Mr. Burke has served on numerous public and private company boards including serving as a board chairman and a lead independent director. He has served on the board of Tactile Systems Technology, Inc. (Nasdaq: TCMD) since 2015 and currently serves as Chairman of the Board. Since 2021, he has served on Relevant Experience Mr. Burke’s experience as a senior executive and board member of multiple public companies, and his extensive understanding of financing, acquisition and operating strategy, enhances the Board’s capabilities from both a strategic and governance perspective. | |
201914 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
 | Dr. Charles DeShazer, Independent Age: 62 Committees: |
Career Highlights Dr. DeShazer is the Director, Clinical Products for Google Health where he helps lead the design and implementation of an intelligent suite of tools that help healthcare providers deliver better patient care. He previously was the Senior Vice President and Chief Medical Officer of Highmark, Inc., one of the largest insurance organizations in the United States from 2017 to 2021. In this role he oversaw the company’s clinical strategy, overall medical leadership and provided oversight of Highmark Inc.’s strategic direction and processes related to health care quality, efficiency and cost improvement. Additionally, as the CMO for the primary division of Highmark Health, Dr. DeShazer also interacted regularly with the smaller health division, Allegheny Health Network, as well as Penn State Health, a large academic health system governed jointly by Penn State University and Highmark Health through a significant minority ownership investment. Prior to joining Highmark, Dr. DeShazer served as the Chief Quality Officer for BayCare Health System from 2012-2016. From 2010-2012 he served as Vice President, Medical Information, Quality and Transformation for Dean Health System. Relevant Experience Dr. DeShazer’s leadership experience across the healthcare services ecosystem, coupled with his background as a board-certified M.D. in internal medicine, assists Adtalem and its Board in executing on the strategy of becoming a leading provider of workforce solutions to the rapidly evolving healthcare industry. | |
2021 Proxy Statement 1315
Proposal No. 1 Election of Directors
  | Mayur Gupta, Independent Age: 44 Committees: |
Career Highlights Mr. Gupta is the Chief Marketing & Strategy Officer for Gannett Co., Inc. (NYSE:GCI), a subscription-led and digitally focused media and marketing solutions company (“Gannett”). Mr. Gupta oversees the marketing strategy and subscription-based transformation for several portfolios, which include USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly owned subsidiary with over 120 local media brands operating in the United Kingdom. Before assuming his current role in September 2020, Mr. Gupta served on the board of directors of Gannett since October 2019. Prior to joining Gannett, Mr. Gupta served as the Chief Marketing Officer for Freshly, a growing food-technology company, from January 2019 until September 2020, where he oversaw all consumer-faced marketing, including driving growth, building the brand, and enhancing the company’s consumer insights. Before joining Freshly, Mr. Gupta led digital initiatives at several companies, including from October 2016 to January 2019 as Vice President, Growth and Marketing at Spotify, the on-demand streaming music giant, and from August 2015 to September 2016 as Executive Vice President, Chief Marketing Officer and earlier as Senior Vice President, Omni-Channel Consumer Marketing and Head of Digital Platforms at Healthgrades, a healthcare scheduling company. From August 2012 through July 2015, Mr. Gupta was the first Chief Marketing Technologist at Kimberly-Clark, one of the largest consumer goods companies. Mr. Gupta was recently named to Forbes World’s Most Influential CMOs list for 2021. Relevant Experience Mr. Gupta’s expertise across the digital marketing space, in combination with his background in technology, will help the Board drive the Company’s next phase of growth and impact. Mr. Gupta’s ability to implement data-driven strategies to drive business growth and increase shareholder value will assist the Company in developing its own growth plans. | |
16 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
 | Donna J. Hrinak,Independent Age: Committees: |
Career Highlights Ms. Hrinak has been a director of Adtalem since October 2018. Before entering the private sector, Ms. Hrinak was a career officer in the U.S. Foreign Service, and served as U.S. Ambassador She holds a bachelor’s degree in Multidisciplinary Social Science from Michigan State University and also attended The George Washington University and the University of Notre Dame School of Law. Relevant Experience Ms. Hrinak’s extensive experience at | |
2021 Proxy Statement 14 17Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
  | Georgette Kiser,Independent Age: Committees: |
Career Highlights Ms. Kiser has been a director of Adtalem since May 2018. She received a bachelor’s degree in Board Service Starting in 2019, Ms. Kiser has served on the boards of Aflac (NYSE: AFL), a leading supplemental insurer, Relevant Experience Ms. Kiser’s experience in information technology at the senior leadership level in organizations with an international reach brings expertise to Adtalem which will enhance both the Board’s oversight of | |
2019 Proxy Statement 1518 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
  | Lyle Logan,Independent Age: Committees: |
Career Highlights Mr. Logan has been a director of Adtalem since November 2007. Mr. Logan has been Executive Vice President and Managing Director, Global Financial Institutions Group of The Northern Trust Company since 2009. He previously served as Senior Vice President and Head of Chicago Private Banking within the Personal Financial Services business unit of The Northern Trust Company from 2000 to 2005. Prior to 2000, he was Senior Vice President in the Private Bank and Domestic Portfolio Management Group at Bank of America. Mr. Logan received his bachelor’s degree in Board Service Mr. Logan has served as a director of Heidrick & Struggles International Inc. (Nasdaq: HSII), an international executive search firm, since 2015. In addition to being the lead independent director at Heidrick & Struggles International Inc., he also serves on its audit and finance committee and nominating and board governance committee. Relevant Experience Mr. Logan’s experience in senior leadership positions with leading banking and investment management organizations adds perspective and an understanding of global investment markets to the Board’s consideration of finance and investment management matters. | |
2021 Proxy Statement 16 19Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
  | Michael W. Malafronte,Independent Age: Committees: |
Career Highlights Mr. Malafronte has been a director of Adtalem since June 2016. Mr. Malafronte is a Founding Partner of International Value Advisers, LLC (“IVA”) and Prior to the First Eagle Funds, Mr. Malafronte worked for nine years as a Portfolio Manager at Oppenheimer & Close, a dually-registered broker dealer and investment adviser; an adviser on three domestic hedge funds, one offshore partnership and a registered investment adviser and broker dealer. While at Oppenheimer & Close, Mr. Malafronte assisted in the launch of a domestic hedge fund in 1996 and an offshore partnership in 1998. Mr. Malafronte was responsible for all facets of portfolio management for the investment partnerships, including idea generation, in-depth research, and stock selection. In addition to that, he was also responsible for hiring and training both operations staff and research analysts. Mr. Malafronte earned his bachelor’s degree in Finance from Babson College. Board Service Mr. Malafronte Relevant Experience Mr. Malafronte’s experience as a financial analyst covering institutions globally, and as a founder of a global investment firm, provides the Board with a firm understanding of Adtalem’s shareholders’ perspective and deeply informs Adtalem’s financial planning. | |
201920 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
 | Sharon L. O’Keefe, Independent Age: 69 Committees: |
Career Highlights Ms. O’Keefe served as the President of the University of Chicago Medical Center from February 2011 through July 2020. From April 2009 through February 2011, Ms. O’Keefe served as President of Loyola University Medical Center. Prior to her role at Loyola, she served from July 2002 to April 2009 as Chief Operating Officer for Barnes Jewish Hospital, a member of BJC Healthcare, St. Louis. In addition, Ms. O’Keefe has served in a variety of senior management roles at The Johns Hopkins, Montefiore Medical Center, University of Maryland Medical System, and Beth Israel Deaconess Medical Center in Boston, a teaching affiliate of Harvard Medical School. She has also served as a healthcare consultant with Ernst & Young. In addition, Ms. O’Keefe has served on the National Institutes of Health Advisory Board for Clinical Research, the Finance Committee of the National Institutes of Health Advisory Board, the Board of Trustees of the Illinois Hospital Association, and an Examiner for the Malcolm Baldridge National Quality Award. Ms. O’Keefe holds a M.S. degree in Nursing from Loyola University of Chicago and a B.S. degree in Nursing from Northern Illinois University. Board Service Since 2012 Ms. O’Keefe has served as a director of Vocera Communications Inc. (NYSE: VCRA), a provider of clinical communications and workforce solutions, where she is a member of the compensation committee. Ms. O’Keefe previously served on the board of Aviv Reit Inc. from 2013 through 2015. Relevant Experience Ms. O’Keefe’s prior leadership roles at University of Chicago Medical Center and Loyola University of Chicago Medical Center provide the Board with insights into how Adtalem can best serve the needs of our employer partners and drive superior student outcomes for our healthcare and medical students and graduates. | |
2021 Proxy Statement 1721
Proposal No. 1 Election of Directors
  | Kenneth J. Phelan, Independent Age: 62 Committees: |
Career Highlights Mr. Phelan served as the first Chief Risk Officer for the United States Department of Treasury (“Treasury”) from 2014 to 2019. As Chief Risk Officer of the Treasury, he was responsible for establishing and building the Treasury’s Office of Risk Management to provide senior Treasury and other administration officials with analysis of key risks including credit, market, liquidity, operational, governance, and reputational risk. From 2018 to 2019, Mr. Phelan also served as Acting Director for the Office of Financial Research, an independent bureau within the Treasury charged with supporting the Financial Stability Oversight Council and conducting research about systemic risk. Prior to joining the Treasury, Mr. Phelan served as the chief risk officer for RBS America from 2011 to 2014, as chief risk officer for Fannie Mae from 2009 to 2011, and as chief risk officer for Wachovia Corporation from 2008 to 2009. Earlier in his career, Mr. Phelan held a variety of senior risk roles at JPMorgan Chase, UBS, and Credit Suisse. Mr. Phelan holds a bachelor’s degree in Business Administration and Finance from Old Dominion University, a M.S. in Economics from Trinity College, and a J.D. from Villanova University. Board Service Since 2019 Mr. Phelan has served as a director of Huntington Bancshares, Inc. (NASDAQ. HBAN), a regional bank holding company whose primary subsidiary is The Huntington National Bank. Mr. Phelan is a member of Huntington’s risk oversight and compensation committees. Relevant Experience Mr. Phelan’s expansive financial and risk management experience assists the Board in its oversight of our risk portfolio and adds valuable perspective as we enhance and expand our global financial services offerings to serve customers’ governance, risk, and compliance needs. | |
22 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
 | Lisa W. Wardell, Age: |
Career Highlights Ms. Wardell has been a director of Adtalem since November Ms. Wardell received her undergraduate bachelor’s degree in Among numerous recognitions, she was Board Service In addition to her work at Adtalem, Ms. Wardell Relevant Experience Ms. Wardell’s prior role as CEO of Adtalem | |
18 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
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20192021 Proxy Statement 1923
Proposal No. 1 Election of Directors
The Nominating & Governance Committee is responsible for making recommendations of nominees for directors to the Board. The Nominating & Governance Committee’s goal is to put before our shareholders candidates who, with the incumbent directors, will constitute a board that has the characteristics necessary to provide effective oversight for the growing, complex, global educational operations of Adtalem and reflectsreflect the broad spectrum of students and members that Adtalem serves. The Nominating & Governance Committee seeks a diversity of thought, background, experience, and other characteristics in its candidates. To this end, Adtalem’s Governance Principles provide that nominees are to be selected on the basis of, among other things, knowledge, experience, skills, expertise, diversity, personal and professional integrity, business judgment, time availability in light of other commitments, absence of conflicts of interest, and such other relevant factors that the Nominating & Governance Committee considers appropriate in the context of the interests of Adtalem, its Board and its shareholders.
We are committed to ensuring that our Board represents the right balance of experience, tenure, independence, age, and diversity. Additionally, our Governance Principles provide that a director is required to retire from our Board when he or she reaches the age of 72, although on the recommendation of the Nominating & Governance Committee, our Board may waive this requirement if a waiver is in the best interests of Adtalem. Over the last fivesix years, our Nominating & Governance Committee has led the gradual transformation of our Board, with sixnine of our eighteleven directors joining the Board since 2015.
When considering nominees, the Nominating & Governance Committee seeks to ensure that the Board as a whole possesses, and individual members possess at least two of, the following characteristics or expertise in the following areas:
| ● | Leadership |
| ● | Strategic vision |
| ● | Business judgment |
| ● | Management experience |
| ● | Experience as a CEO or similar function |
| ● | Experience as a CFO or accounting and finance expertise |
| ● | Industry knowledge |
| ● | Healthcare, medical, and related education and services |
| ● | Education sector and accreditation |
| ● | Financial services |
| ● | Mergers, acquisitions, joint ventures, and strategic alliances |
| ● | Public policy experience, particularly in higher education |
| ● | Regulatory experience |
| ● | Human capital management and/or compensation expertise |
| ● | Global markets and international experience |
| ● | Corporate governance |
BOARD REFRESHMENT
Directors | 
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ANNUAL PROCESS FOR NOMINATION
| 1 | Identify Candidates | ||
 | ●Directors ●Management ●Shareholders ●Independent Search Firm | ||
 | |||
| 2 | Nominating & Governance Committee Review | ||
 | ●Review qualifications ●Consider diversity ●Examine Board composition and balance ●Review independence and potential conflicts ●Meet with potential nominees | ||
| |||
| 3 | Recommend Slate | ||
  | |||
| 4 | Full Board Review and Nomination | ||
  | |||
| 5 | Shareholder Review and Election | ||
2024 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
The Nominating & Governance Committee has implemented this policy by evaluating each prospective director nominee as well as each incumbent director on the criteria described above, and in the context of the composition of the full Board, to determine whether she or he should be nominated to stand for election or re-election. In screening director nominees, the Nominating & Governance Committee also reviews potential conflicts of interest, including interlocking directorships and substantial business, civic, and social relationships with other members of the Board that could impair the prospective nominee’s ability to act independently.
IDENTIFICATION AND CONSIDERATION OF NEW NOMINEES
In identifying potential nominees and determining which nominees to recommend to the Board, the Nominating & Governance Committee has retained the advisory services of Heidrick & Struggles,Russell Reynolds Associates, an international executive search firm. In connection with each vacancy, the Nominating & Governance Committee develops a specific set of ideal characteristics for the vacant director position. The Nominating & Governance Committee looks at director candidates that it has identified and any identified by shareholders on an equal basis using these characteristics and the general considerations identified above.
SHAREHOLDER NOMINATIONS
The Nominating & Governance Committee will not only consider nominees that it identifies, but will consider nominees submitted by shareholders in accordance with the advance notice process for shareholder nominations identified in the By-Laws. Under this process, all shareholder nominees must be submitted in writing to the attention of Adtalem’s Chief Operating Officer, General Counsel and Corporate Secretary, 500 West Monroe Street, Suite 2800, Chicago, IL 60661, not less than 90 days prior to the anniversary of the immediately preceding annual meeting of shareholders. As a result, a shareholder nomination must be submitted by August 7, 2020.12, 2022. Such shareholder’s notice shall be signed by the shareholder of record who intends to make the nomination (or his duly authorized proxy) and shall also include, among other things, the following information:
| ● | the name and address, as they appear on Adtalem’s books, of such shareholder and the beneficial owner or owners, if any, on whose behalf the nomination is made; |
| ● | the number of shares of Adtalem’s Common Stock which are beneficially owned by such shareholder or beneficial owner or owners; |
| ● | a representation that such shareholder is a holder of record entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to make the nomination; |
| ● | the name and residence address of the person or persons to be nominated; |
| ● | a description of all arrangements or understandings between such shareholder or beneficial owner or owners and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination is to be made by such shareholder; |
| ● | such other information regarding each nominee proposed by such shareholder as would be required to be disclosed in solicitations of proxies for elections of directors, or would otherwise be required to be disclosed, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any information that would be required to be included in a proxy statement filed pursuant to Regulation 14A had the nominee been nominated by the Board; and |
| ● | the written consent of each nominee to be named in a proxy statement and to serve as a director if so elected. |
In addition to candidates submitted through this advance notice By-Law process for shareholder nominations, shareholders may also request that a director nominee be included in Adtalem’s proxy materials in accordance with the proxy access provision in the By-Laws. Any shareholder or group of up to 20 shareholders holding both investment and voting rights to at least 3% of Adtalem’s outstanding Common Stock continuously for at least three years may nominate the greater of (i) two or (ii) 20% of the Adtalem directors to be elected at an annual meeting of shareholders. Such requests must be received not less than 120 days nor more than 150 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. As a result, any notice given by or on behalf of a shareholder pursuant to these provisions of the bylawsBy-Laws (and not pursuant to Rule 14a-18 of the Exchange Act) must be received no earlier than June 9, 202013, 2022 and no later than July 9, 2020.13, 2022. However, if we hold our 20202022 Annual Meeting of Shareholders more than 30 days from the first anniversary of this year’s Annual Meeting, then in order for notice by the shareholder to be timely, such notice must be received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.
20192021 Proxy Statement 2125
Proposal No. 1 Election of Directors
In addition to candidates submitted through these By-Lawthe By-Laws process for shareholder nominations, shareholders may also recommend candidates by following the procedures set forth below under the caption “Communications with Directors.”
| Director Independence |
The Board annually reviews the continuing independence of Adtalem’s non-employee directors under applicable laws and rules of the New York Stock Exchange (“NYSE”). The Board, excluding any director who is the subject of an evaluation, reviews and evaluates director transactions or relationships with Adtalem, including the results of any investigation, and makes a determination with respect to whether a conflict or violation exists or will exist or whether a director’s independence is or would be impaired.
The Board has considered whether each director has any material relationship with Adtalem (either directly or as a partner, shareholder, or officer of an organization that has a relationship with Adtalem) and has otherwise complied with the requirements for independence under the applicable listing standards of the NYSE.
As a result of this review, the Board affirmatively determined that, with the exception of Ms. Wardell and Mr. Beard, all of Adtalem’s current directors, and all of Adtalem’s former directors who served as a director during fiscal year 2019,2021, are “independent” of Adtalem and its management within the meaning of the applicable NYSE rules. Mr. Beard is considered an inside director because of his employment as President and CEO of Adtalem. Ms. Wardell is considered an inside director because of her previous employment as President and CEO of Adtalem.
The Board considered the relationship between Adtalem and The Northern Trust Company, a wholly-owned subsidiary of Northern Trust Corporation. Adtalem maintains depository accounts with The Northern Trust Company and conducts a significant portion of its disbursement activity through these accounts. Mr. Logan, one of our directors, is Executive Vice President and Managing Director, Global Financial Institutions Group, with Northern Trust Global Investments, a business unit of The Northern Trust Company. In fiscal year 2019,2021, Adtalem incurred approximately $250,000$184,000 in fees to The Northern Trust Company, which were partially offset against compensating balance credits earned on an average monthly outstanding balance of approximately $16.0$23 million. The Board concluded, after considering (i) that the relationship with The Northern Trust Company predates Mr. Logan joining the Board, (ii) that Mr. Logan has had no involvement in the Adtalem banking transactions, (iii) the lack of materiality of the transactions to Adtalem and to The Northern Trust Company, and (iv) the fact that the terms of the transactions are not preferential either to Adtalem or to The Northern Trust Company, that the relationship is not a material one for purposes of the NYSE listing standards and would not influence Mr. Logan’s actions or decisions as a director of Adtalem.
BOARD STRUCTURE AND OPERATIONS
| Summary of Board and Committee Structure |
Adtalem’s Board held 717 meetings during fiscal year 2019,2021, consisting of 45 regular meetings and 312 special meetings. Currently, the Board has five standing committees: Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance. The following table identifies each standing committee, its members and chairs, its key responsibilities and the number of meetings held during fiscal year 2019.2021. In her role as Executive Chairman, Ms. Wardell is an ex officio member of each committee. Current copies of the charters of each of these committees, a current copy of Adtalem’s Governance Principles, and a current copy of Adtalem’s Code of Conduct and Ethics can be found on Adtalem’s website, www.adtalem.com, and are also available in print to any shareholder upon request from Adtalem’s Chief Operating Officer, General Counsel and Corporate Secretary, 500 West Monroe Street, Suite 2800, Chicago, IL 60661. The Board has determined that each of the members of the Audit and Finance, Compensation, and Nominating & Governance committees is independent within the meaning of applicable laws and NYSE listing standards in effect at the time of determination. The standing Audit and Finance Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act, the rules and regulations of the SEC, and the listing standards of the NYSE.
2226 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
Academic Quality Committee
| Meetings in fiscal year | ||
Sharon L. O’Keefe | 4 |
| * |
Key Responsibilities
| ● | Supports improvement in academic quality and assures that the academic perspective is heard and represented at the highest policy-setting level and incorporated in all of Adtalem’s activities and operations |
| ● | Reviews the academic programs, policies, and practices of Adtalem’s institutions |
| ● | Evaluates the academic quality and assessment process and evaluates curriculum and programs |
Audit and Finance Committee
| Members | Meetings in fiscal year | Report |
| William W. Burke (Chair) Donna J. Hrinak Michael W. Malafronte | Page |
Key Responsibilities
| ● | Monitors Adtalem’s financial reporting processes, including its internal control systems and the scope, approach, and results of audits |
| ● | Selects and evaluates Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders |
| ● | Reviews and recommends to the Board Adtalem’s financing policies and actions related to investment, capital structure, and financing strategies |
| ● | Provide oversight of Adtalem’s policies and processes established by management to identify, assess, monitory, manage and control technology, cyber, information and other security risks |
| ● | Reviews and approves any potential related party transactions |
| The Board has determined that Mr. Burke |
20192021 Proxy Statement 2327
Proposal No. 1 Election of Directors
Compensation Committee
| Members | Meetings in fiscal year | Report |
| Michael W. Malafronte (Chair) William W. Burke Lyle Logan Kenneth J. Phelan | 5 | Page |
Key Responsibilities
| ● | Oversees all compensation practices and reviews eligibility criteria and award guidelines for Adtalem’s compensation program |
| ● | Reviews and approves, following discussions with the other independent members of the Board, CEO annual goals and objectives |
| ● | Evaluates the CEO’s performance against established annual goals and objectives |
| ● | Recommends CEO compensation to the other independent members of the Board for approval |
| ● | Reviews and approves recommendations made by the CEO for executive officers, including base salary, annual incentive, and equity compensation |
| ● | |
| ● | Reviews and recommends to the Board compensation paid to non-employee directors |
External Relations Committee
| Members* | Meetings in fiscal year | |
Mayur Gupta Kenneth J. Phelan | 4 |
| * |
Key Responsibilities
| ● | Provides awareness and oversight of Adtalem’s external relations strategy, policy, and practice |
| ● | Monitors, analyzes, and effectively manages legislative and regulatory policy trends, issues, and risks |
| ● | Develops recommendations to the Board with regard to formulating and adopting policies, programs, and communications strategy related to legislative, regulatory, and reputational risk |
| ● | Oversees risks and exposures related to higher education public policy, as well as compliance with laws and regulations applicable to Adtalem |
| ● | Provides oversight regarding significant public policy issues including environmental, health and safety, and public and community affairs |
| ● | Reviews Adtalem’s sustainability strategy, including initiatives and policies relating to environmental stewardship, corporate social responsibility, and corporate culture |
2428 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
Nominating & Governance Committee
| Members* | Meetings in fiscal year | |
Georgette Kiser Sharon O’Keefe |
| * |
Key Responsibilities
| ● | Reviews Board and committee |
| ● | Assesses Board needs and periodically conducts director searches and recruiting to ensure appropriate Board composition |
| ● | Recommends candidates for nomination as directors to the Board |
| ● | Oversees and conducts planning for CEO and director succession and potential related risks |
| ● | Recommends governance policies and procedures |
| Board Leadership Structure |
Pursuant to our Governance Principles, the Board believes that it should be free to make its selection of the Chairman of the Board and the CEO in the way that it deems best for Adtalem and its shareholders at any given point of time. In order toTo ensure continued Board independence, the Board has adopted a policy that, in the event the Chairman of the Board and CEO roles are combined, or the Chairman of the Board is not otherwise independent, the Board shall appoint a Lead Independent Director. In July 2019, the Board elected Lisa W. Wardell, who has served on our Board since November 2008 and as our President and CEO since May 2016, as Chairman of the Board. In accordance with our Governance Principles, the Board concurrently appointed William W. Burke to serve as our Lead Independent Director. In evaluating the Board’s leadership structure, the Board considered the relevant merits of combining the roles of Chairman of the Board and Chief Executive Officer and appointing a strong Lead Independent Director, compared with keeping the roles of Chairman of the Board and CEO separate. The Board concluded that Ms. Wardell was the person best suited to serve as Chairman of the Board at this time,during fiscal year 2021, providing consistent leadership, alignment between the Board and management, and a unified voice for Adtalem as it continues its transformation to a leading workforce solutions provider. In addition, the Board reaffirmed its commitment to independent board leadership by appointing Mr. Burke as our Lead Independent Director. Prior to
The Board reviews its leadership structure periodically and as circumstances warrant. On September 8, 2021, Mr. Beard was appointed President and CEO and Ms. Wardell’s appointment as our Chairman of the Board, during fiscal year 2019, James White, an independent director, served asWardell was appointed Executive Chairman of the Board. The Board separated the roles of Chairman and CEO at this time to allow our CEO to focus on strategic imperatives, including the integration of Walden University and continuing to drive our business transformation efforts. Meanwhile, in her role as Executive Chairman, Ms. Wardell will focus on leading the Board, the strategic review of Adtalem’s Financial Services business, and furthering Adtalem’s Global Legislative Agenda. Mr. Burke continues to serve as our Lead Independent Director. During fiscal year 2019,2021, the Board met in executive session without employee directors or other employees present at each regular Board meeting. Mr. White,Burke, as Adtalem’s non-executive Chairman of the Board,Lead Independent Director, presided over these sessions.
In furtherance of our Board’s role in overall strategy and succession planning, our Lead Independent Director actively engages with our Executive Chairman or Chairman/CEO, as the case may be, on such matters. In addition, our Governance Principles provide that the Lead Independent Director:
| ● | sets the agenda for, calls meeting of and leads executive sessions of the independent directors and reports to the Executive Chairman of the Board, as appropriate, concerning such meetings; |
| ● | acts as a liaison between the Executive Chairman of the Board and the independent directors; |
| ● | advises the Executive Chairman of the Board as to the quality, quantity, and timeliness of the flow of information from management that is necessary for the independent directors to effectively and responsibly perform their duties; |
2021 Proxy Statement 29
Proposal No. 1 Election of Directors
| ● | when appropriate, makes recommendations to the Executive Chairman of the Board about calling full meetings of the Board; |
| ● | serves as a resource to consult with the Executive Chairman of the Board and other Board members on corporate governance practices and policies and assumes the primary leadership role in addressing issues of this nature if, under the circumstances, it is inappropriate for the Executive Chairman of the Board to assume such leadership; and |
| ● | performs such other duties as requested by the Board or Nominating & Governance Committee and as set forth in the Governance Principles. |
2019 Proxy Statement 25
Proposal No. 1 Election of Directors
| OUR LEAD INDEPENDENT DIRECTOR | ||
| During his career, Mr. Burke has served in executive leadership roles at several companies and, during his service on multiple public company boards, has served as a lead independent director, board chairman, audit committee chairman and compensation committee chairman. Mr. Burke also continues to serve as Chair of our Audit and Finance Committee. |
| Director Attendance |
During fiscal year 2019,2021, our Board met seven (7)seventeen (17) times. Each of Adtalem’s directors attended at least 85%93% of the meetings of the Board and Board committees on which they served that occurred during their respective time of service on the Board in fiscal year 2019.2021.
All of our directors who were directors at the time were presentin attendance at the 20182020 Annual Meeting of Shareholders, held virtually in November 2018.2020. Our Board encourages all of its members to attend the Annual MeetingsMeeting but understands there may be situations that prevent such attendance.
| Director Continuing Education |
Members of the Board are encouraged to participate in continuing education and enrichment classes and seminars. During fiscal year 2019,2021, the following directors attended the following classes and seminars: (i) Mr. Burke a Board Leadership Fellow with theis National Association of Corporate Directors (“NACD”) attended NACD’s conferencesDirectorship Certified. NACD Directorship Certified directors establish themselves as committed to continuing education on (a) Dealing with Disruption: Board Agilityemerging issues and Resiliencehelping to elevate the profession of directorship. Mr. Burke also participates in a VUCA Worldthe PwC Corporate Directors Exchange which aims to give Fortune 1000 directors the tools to lead for long-term success, and (b) Innovation from Within; and attended training hosted by Carnegie Mellon University on, and received a CERT certificate in, Cybersecurity Oversight;the NACD Advanced Director Professionalism course; (ii) Ms. Kiser attended Corporate Board Compensation Committee training by Mercer; (iii) Ms. Wardell completedis a NACD Board Leadership Master Fellowship recertification program;Fellow and (iv) Mr. White attended NACD seminars, including the ESG Continuous Learning Cohort and was a panelist at (a) the Stanford Directors CollegeThe Boards Role in Driving Diversity and (b) the Directors Academy NextGen Directors Program.Inclusion; (iii) Ms. O’Keefe attended NACD seminars on Top Compensation Committee Concerns; and The Future of Healthcare.
| Board Self-Evaluation |
Each year our Board undertakes a self-evaluation process to critically evaluate its performance.performance and effectiveness. Additionally, each committee conducts a self-evaluation to monitor its performance and effectiveness. ResultsThe process is coordinated by Chairman and the chair of the Nominating & Governance Committee using an independent third-party to conduct the evaluation process. Board and committee members are asked to provide commentary about a variety of topics, including the following: overall Board performance, including strategy, challenges and opportunities; Board and committee meeting logistics and materials; Board and committee culture; and human capital and succession planning. The results of the evaluations are aggregated and summarized by the independent third party and discussed at Board and committee meetings.
30 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
| Strategic Oversight |
The Board has an active role in our overall strategies. The Board actively reviews and provides guidance on Adtalem’s long-term strategies and annual operating plan. Management reports its progress in executing on Adtalem’s strategies and operating plan throughout the year. In addition, throughout the year, segment leadership will report to the Board regarding individual segment strategies and operating plans. The Board also periodically reviewsWhile our External Relations Committee has primary responsibility to review and providesprovide oversight to management on Adtalem’sour ESG strategy.
26 Adtalem Global Education Inc.
Proposal No. 1 Election of Directorsstrategy, our Audit and Finance and Nominating & Governance Committees, along with the full Board, also review and provide oversight on our ESG strategies.
| Risk Oversight |
Adtalem’s full Board is responsible for assessing major risks facing Adtalem and overseeing management’s plans and actions directed toward the mitigation and/or elimination of such risk. The Board has assigned specific elements of the oversight of risk management of Adtalem to committees of the Board, as summarized below. Each committee meets periodically with members of management and, in some cases, with outside advisors regarding the matters described below and, in turn, reports to the full Board at least after each regular meeting regarding any findings.
Managing current and emerging business risks from regulatory and market risks to global risks like a pandemic, is an important component of our governance and oversight system. Management undertakes a regular review of a broad set of risks across Adtalem’s business and operations to identify, assess, manage and monitor existing and emerging threats and opportunities. Adtalem’s Enterprise Risk Management (“ERM”) team is responsible for leading our risk management program at the enterprise level. The ERM team places particular focus on key risks that have the potential for the highest impact to Adtalem and its operations, and the highest likelihood of risk occurrence based on Adtalem’s preparedness and potential impact to Adtalem’s strategy. As part of management’s proactive risk identification and mitigation efforts, the ERM team has initiated the development of Risk Appetite Statements for each critical enterprise risk. These Risk Appetite Statements are expected to deepen our understanding of risks, enable effective action to mitigate risks and strengthen our risk culture.
2021 Proxy Statement 31
Proposal No. 1 Election of Directors
| Board/Committee | Primary Areas of Risk Oversight | |
  Full Board | ●Reputation ●Legal and regulatory compliance and ethical business practices ●Strategic planning ●Major organizational actions ●Education public policy | |
  Academic | ●Academic quality ●Accreditation ●Curriculum development and delivery ●Student persistence ●Student outcomes | |
  Audit and | ●Accounting and disclosure practices ●Information technology ●Cybersecurity ●Financial controls ●Risk management policies and procedures ●Legal and regulatory compliance, including compliance and ethics program ●Related party transactions ●Capital structure ●Investments ●Foreign exchange | |
  Compensation | ●Compensation practices ●Talent development ●Retention ●Management succession planning | |
  External | ●Accreditation ●Higher education public policy ●Compliance with laws and regulations applicable to Adtalem ●Sustainability, environmental, corporate social responsibility, and public and community affairs | |
  Nominating & | ●Corporate and institutional governance structures and processes ●Board composition and function ●Board and Chairman of the Board succession |
| Succession Planning and Human Capital Management |
The Board recognizes that one of its most important duties is to ensure continuity in Adtalem’s senior leadership by overseeing the retention and development of executive talent and planning for the effective succession of our CEO, including the recent succession of Mr. Beard as CEO, and the executive leadership team. In order to ensure that the succession planning and leadership development process supports and enhances our long-term strategic objectives, the Board periodically consults with our CEO and Senior Vice President ofChief Human Resources Officer on Adtalem’s business goals, the skills and experience necessary to help Adtalem achieve those goals, our organizational needs, our leadership pipeline, the succession plans for critical leadership positions, and our talent development and leadership initiatives. Talent and leadership development, including succession planning, is a top priority of our CEO and the senior executive team. Our CEO seeks input from members of our Board regarding candidates for executive positions and other key roles.
2019 Proxy Statement 2732 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
| Our Sustainability Commitment |
SAFEGUARDING GLOBAL HEALTH AND THE ENVIRONMENT
We recognize that ESG practices and goals are at the forefront of our shareholders’ minds because our approach to these areas can provide insight into our corporate behavior, long-term performance, and sustainability. Our ESG practices support our purpose -– to empower students and members to achieve their goals, find success, and make inspiring contributions to our global community. We aim to empower and enhance the communities in which we teach, learn, and work by operating sustainably, maintaining responsible governance standards, and supporting our global community. We continue to measure our performance and set new goals in areas including academic and policy standards; diversity and inclusion of Adtalem suppliers; and energy and waste reduction programs.
Adtalem is committed to confronting the challenges of climate change by reducing the impact of our operations. In fiscal year 2020, we launched a multi-year environmental initiative with the following three strategic goals to define our Energy Conservation Measures (“ECMs”) and Green House Gas (“GHG”) reduction activities through 2024:
| 1. | Achieve a ten percent (10%) reduction (when compared to 2019 calendar year levels) of controllable energy use and GHG emission levels across Adtalem’s U.S. properties by 2024 |
| 2. | From 2021 through 2024, aim to initiate an average of one renewable energy project per year at an owned location |
| 3. | By the end of 2024 implement an enhanced waste and recycling initiative across Adtalem’s controllable waste portfolio |
These goals address a set of environmental issues that are important to us, including our impact on climate change and our effect on natural resources. The goals lay the foundation for our environmental vision and solidify our commitment to safeguard the environment. During fiscal year 2021, in accordance with Goal 1, we solidified a clearer picture of our carbon footprint and noted the impact of the ECM’s implemented across our locations. Our energy usage decreased 17.7 percent in fiscal year 2021 to 51,645,663 (kBtu) from 62,715,615 (kBtu). Our GHG emissions decreased 18.6 percent to 6,142 mtCO2e from 7,544 mtCO2e. Throughout 2021, we also made headway toward Goal 3 by strengthening our partnerships for advanced waste management in the recycling, refurbishment and diversion of waste from landfills. We also added to our growing pool of data used to assess risks and opportunities within our waste management systems through audits, pilot initiatives and partnership research. All of these results are through June 2021 and we recognize that COVID-19 restrictions and reduced occupancy impacted these metrics.
EMPOWERING INDIVIDUALS, IMPACTING GLOBAL COMMUNITIES
The principles of access and equity underpin our efforts to empower diverse, vibrant communities across the globe. Guided by our social mission to address critical workforce shortages through the education of diverse students and member populations, we seek to create sustainable workforces that represent the communities they serve. With projected nursing and physician shortages projected for the next decade, we are actively working to address these critical workforce shortages by providing training, expanding access to education and establishing robust employer partnerships. In 2021, 86.1% of the total population in our four degree-conferring institutions identified as female and 45.4% as ethnically diverse. Combined, our institutions graduate more than 100 Black physicians annually, more than any U.S. school. And many of our graduates go on to serve communities that are medically underserved or low-income. Forty-four percent (44%) of our medical school graduates practice in medically underserved or health professional shortage areas and eighty-eight percent (88%) of our medical school graduates practice in low-income communities.
The initiatives described above along with a detailed discussion of our Sustainability Commitment and its core pillars – Operating with Purpose and Responsibility; Safeguarding Global Health and the Environment; and Empowering Individuals, Impacting Global Communities can be found in Adtalem’s 2021 Sustainability Report (https://www.adtalem.com/sites/g/files/krcnkv321/files/2021-10/Adtalem_2021_SustainabilityReport_FINAL.pdf).
2021 Proxy Statement 33
Proposal No. 1 Election of Directors
| Information Security and Cybersecurity |
Adtalem takes seriously the custody of student, colleague, and stakeholder information, and therefore employs strong governance practices regarding information security. For example, Adtalem’s Enterprise Information Security Framework policy and Information Governance and Security procedures are modeled on the National Institute of Standards and Technology (NIST) 800-53 policy framework. We continually evaluate the effectiveness of our security measures.
Some key safeguards include, but are not limited to: regularly scheduled penetration tests & vulnerability assessments and mandatory security awareness training for all users of our systems. Representative training topics include: protection of sensitive information, phishing, and mobile device security.
We utilize advanced security tools and software to protect our systems and information, to detect unauthorized activity, and to take expeditious corrective action, as required.
The Adtalem Audit and Finance Committee, comprised entirely of independent directors, assists the Board in its responsibilities of overseeing that the Company has established, documented, maintained, and periodically reevaluates its CyberSecurity processes. Management reports on the state of the CyberSecurity program to the Audit and Finance Committee on a quarterly basis. Additionally, Adtalem’s IT general controls are audited annually by both the Company’s internal function and the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP.
Adtalem maintains a CyberSecurity insurance policy, which would potentially defray certain costs associated with a breach. In the last three years, Adtalem has not experienced a significant information security breach.
| Outreach and Engagement |
We value the opinions of our shareholders and believe regular, proactive communications with our shareholders to be in the long-term best interests of Adtalem. Our investor communications and outreach include annual investor day meetings, investor conferences, and quarterly conference calls. These calls are open to the public and are available live and as archived webcasts on our website. Additionally, we reach out at least annually to our largest shareholders to invite feedback. We hold individual calls with shareholders who accept our invitation to allow for open, meaningful discussions. As part of our shareholder outreach, we have spoken with shareholders holding approximately 45% of our shares. These included discussions of compensation matters, as well as environmental, social, and governance issues. We share any feedback received from our shareholders with our Board.
COMMUNICATIONS WITH DIRECTORS
Shareholders and other interested parties wishing to communicate with the Board, our Lead Independent Director, or any member or committee of the Board are encouraged to send any communication to our Chief Operating Officer, General Counsel and Corporate Secretary, Adtalem Global Education Inc., 500 West Monroe Street, Suite 2800, Chicago, IL 60661 and should prominently indicate on the outside of the envelope that it is intended for the Board, the independent directors as a group, or a committee or an individual member of the Board. Any such communication must be in writing, must set forth the name and address of the shareholder (and the name and address of the beneficial owner, if different), and must state the form of stock ownership and the number of shares beneficially owned by the shareholder making the communication. Adtalem’s Chief Operating Officer, General Counsel and Corporate Secretary will compile and promptly forward all communications to the Board except for spam, junk mail, mass mailings, resumes, or other forms of job inquiries, surveys, business solicitations, or advertisements.
Communicating Accounting Complaints
Shareholders, Adtalem employees and other interested persons are encouraged to communicate or report any complaint or concern regarding financial statement disclosures, accounting, internal accounting controls, auditing matters, or violations of Adtalem’s Code of Conduct and Ethics (collectively, “Accounting Complaints”) to the General Counsel and Corporate Secretary of Adtalem at the following address:
Chief Operating Officer, General Counsel and Corporate Secretary
Adtalem Global Education
500 West Monroe Street, Suite 2800
Chicago, IL 60661
34 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
Accounting Complaints also may be submitted in a sealed envelope addressed to the Chair of the Audit and Finance Committee, in care of the General Counsel, at the address indicated above, and labeled with a legend such as: “To Be Opened Only by the Audit and Finance Committee.” Any person making such a submission who would like to discuss an Accounting Complaint with the Audit and Finance Committee should indicate this in the submission and should include a telephone number at which he or she may be contacted if the Audit and Finance Committee deems it appropriate.
Adtalem employees and students may also report Accounting Complaints using any of the reporting procedures specified in Adtalem’s Code of Conduct and Ethics. All reports by employees shall be treated confidentially and may be made anonymously. Adtalem will not discharge, demote, suspend, threaten, harass, or in any manner discriminate against any employee in the terms and conditions of his or her employment based upon any lawful actions taken by such employee with respect to the good faith submission of Accounting Complaints.
28 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
| Certain Relationships and Related Person Transactions |
It is Adtalem’s policy that the Audit and Finance Committee review, approve, or ratify all related party transactions in which Adtalem participates and in which any related person has a direct or indirect material interest and the transaction involves or is expected to involve payments of $120,000 or more in the aggregate per fiscal year. Our legal staff is primarily responsible for gathering information from the directors and executive officers, including annual questionnaires completed by all our directors, director nominees, and executive officers. The Audit and Finance Committee will review the relevant facts and circumstances of all related party transactions, including whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related party’s interest in the transaction. No member of the Audit and Finance Committee may participate in any approval of a related party transaction to which he or she is a related party.
Various Adtalem policies and procedures, including the Code of Conduct and Ethics, which applies to Adtalem’s directors, officers, and all other employees, and annual questionnaires completed by all Adtalem directors, director nominees, and executive officers, require disclosure of related person transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable Securities and Exchange Commission (“SEC”) rules.
There were no related party transactions in fiscal year 20192021 that required approval under our policies and procedures or the rules and regulations of the SEC.
| Governance Principles/Code of Ethics |
Our Board has adopted Governance Principles that set forth expectations for directors, director qualifications, director retirement, director independence standards, board committee structure, and functions and other policies for Adtalem’s governance. We have adopted a Code of Conduct and Ethics applicable to all colleagues including directors, officers, and full- and part-time colleagues and faculty of Adtalem Global Education Inc. and its subsidiaries. These documents are available on Adtalem’s website at https://www.adtalem.com/about-us/ organizational-governance.html.media/166/ governance-principles and https://www.adtalem.com/media/156/code_of_conduct.pdf. Any amendments or waivers of the Code of Conduct and Ethics will be disclosed at this website address.
| Compensation Committee Independence and Insider Participation |
During 2021, Michael W. Malafronte, William W. Burke, Lyle Logan, and Kenneth J. Phelan served on the Compensation Committee. No member of the Compensation Committee was, during 2021, an officer or employee of Adtalem, was formerly an officer of Adtalem or had any relationship requiring disclosure by Adtalem as a related person transaction under Item 404 of Regulation S-K. During 2021, none of the Company’s executive officers served on the board of directors of compensation committee of any other entity, any officers of which served on Adtalem’s Board or our Compensation Committee.
2021 Proxy Statement 35
Proposal No. 1 Election of Directors
The director compensation program was reviewed in the second half of fiscal year 2018,2021 and no changes were made for the annual retainer was increased to $85,000 starting in the fourth quarter of fiscal year 2018.year. In fiscal year 2019,2021, non-employee directors continued to receive an annual retainer of $85,000, paid quarterly. In fiscal year 2019, our non-executive Chairman of the Board received an additional annual retainer of $120,000,2021, the Chair of the Audit and Finance Committee received an additional annual retainer of $22,500, the Chair of the Compensation Committee was entitled to receive an additional retainer of $17,500, and the chairs of each of the other committees received an additional annual retainer of $10,000 for their roles as committee chairs. During fiscal year 2020,2021, Ms. Wardell, our Executive Chairman of the Board, and former CEO and President, willdid not receive any additional compensation for her service as Chairman of the Board and Mr. Burke will receivereceived an additional annual retainer of $35,000 for his service as Lead Independent Director. Directors were reimbursed for any reasonable and appropriate expenditures attendant to Board membership. Mr. Malafronte, who was originally appointed to the Board in 2016 pursuant to a Support Agreement, has declined alldid not receive any compensation for his service.service until he retired from IVA Partners in 2021.
Under the Adtalem Nonqualified Deferred Compensation Plan, a director could elect to defer all or a portion of the cash retainer. Any amount so deferred is, at the director’s election, valued as if invested in various investment choices made available by the Compensation Committee for this purpose, and is payable in cash installments, or as a lump-sum on or after termination of service as a director, or at a later date specified by the director. No non-employee directors deferred any portion of their compensation in fiscal year 2019.2021.
As long-term incentive compensation for directors, each non-employee director (other than Mr. Malafronte who did not receive compensation as a director at the time) received RSUs with an approximate value of $125,000 directly following the 20182020 Annual Meeting of Shareholders. Each RSU represents the right to receive one share of Common Stock following the satisfaction of the vesting period. All RSUs granted in November 20182020 vest upon the one-year anniversary of the grant date.
2019 Proxy Statement 29
Proposal No. 1 Election of Directors
This table discloses all director compensation provided in fiscal year 20192021 to the directors of Adtalem for their service as directors (other than Ms. Wardell who received no compensation for her service as a director and will receivereceived no additional compensation as Chairman of the Board; Ms. Wardell’s compensation as President and CEO is set forth in the 2021 Summary Compensation Table).
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | ||||||||
| Steven M. Altschuler, M.D. | 85,000 | 124,969 | 209,969 | |||||||||||
| William W. Burke | 127,500 | (2) | 124,969 | 252,469 | 142,500 | 125,026 | 267,526 | |||||||
| Ann Weaver Hart(3) | 95,000 | 124,969 | 219,969 | |||||||||||
| Charles DeShazer(3) | 35,417 | — | 35,417 | |||||||||||
| Mayur Gupta(4) | — | — | — | |||||||||||
| Donna J. Hrinak | 63,750 | 124,969 | 188,719 | 85,000 | 125,026 | 210,026 | ||||||||
| Georgette Kiser | 85,000 | 124,969 | 209,969 | 92,500 | 125,026 | 217,526 | ||||||||
| Lyle Logan | 119,000 | (5) | 124,969 | 243,969 | 119,000 | (5) | 125,026 | 244,026 | ||||||
| Michael W. Malafronte | — | — | — | 40,666 | — | 40,666 | ||||||||
| Ronald L. Taylor(6) | 89,250 | (7) | — | 89,250 | ||||||||||
| James D. White | 215,000 | 124,969 | 339,969 | |||||||||||
| Sharon L. O’Keefe | 85,000 | 125,026 | 210,026 | |||||||||||
| Kenneth J. Phelan | 85,000 | 125,026 | 210,026 | |||||||||||
| James D. White(7) | 95,000 | 125,026 | 220,026 | |||||||||||
| (1) | Includes all retainer fees paid or deferred pursuant to the Adtalem Global Education Inc. Nonqualified Deferred Compensation Plan. |
| (2) | The amounts reported in the Stock Awards column represent the grant date fair value of |
| (3) | |
| (4) | |
| (5) | This amount includes $24,000 in cash Mr. Logan received as compensation for his services as a member of the board of trustees of an Adtalem institution. |
3036 Adtalem Global Education Inc.
Proposal No. 1 Election of Directors
| (6) | Mr. Malafronte did not receive compensation for his Board service until April 8, 2021 after he retired from IVA. |
| (7) | Mr. White retired from the Board effective April 30, 2021. Mr. White’s stock awards were forfeited upon his retirement. |
The table below discloses the aggregate number of RSUs outstanding at June 30, 2021 for each non-employee director listed above.
| Name | RSUs Outstanding (#) | ||
| William W. Burke | 4,370 | ||
| Charles DeShazer(1) | — | ||
| Mayur Gupta(2) | — | ||
| Donna J. Hrinak | 4,370 | ||
| Georgette Kiser | 4,370 | ||
| Lyle Logan | 4,370 | ||
| Michael W. Malafronte | — | ||
| Sharon L. O’Keefe | 4,370 | ||
| Kenneth J. Phelan | 4,370 | ||
| James D. White(3) | — |
| (1) | Mr. DeShazer was appointed to the Board effective April 2, 2021. | |
| (2) | Mr. Gupta was appointed to the Board effective August 10, 2021. | |
| (3) | Mr. White retired from the Board effective April 30, 2021. Mr. White’s stock awards were forfeited upon his retirement. |
2021 Proxy Statement 37
| PROPOSAL NO. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm |
Subject to shareholder ratification, the Audit and Finance Committee of the Board has reappointed PricewaterhouseCoopers LLP (“PwC”), as independent registered public accounting firm for Adtalem and its subsidiaries for fiscal year 2020.2022. The Board recommends to the shareholders that the selection of PwC as independent registered public accounting firm for Adtalem and its subsidiaries be ratified. If the shareholders do not ratify the selection of PwC, the selection of independent registered public accounting firm will be reconsidered by the Audit and Finance Committee. Representatives of PwC are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and to be available to respond to appropriate questions from shareholders.
APPROVAL BY SHAREHOLDERS
Proposal No. 2 to ratify the selection of PwC as independent registered public accounting firm for Adtalem for fiscal year 20202022 will require the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Unless otherwise indicated on the proxy, the shares will be votedFORratification of the selection of PwC as independent registered public accounting firm for Adtalem for fiscal year 2020.2022.
| The Board of Directors recommends a voteFORthe ratification of the appointment of PwC as Adtalem’s independent registered public accounting firm for fiscal year |
SELECTION AND ENGAGEMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit and Finance Committee, at each of its regularly scheduled meetings, and on an interim basis as required, reviews all engagements of PwC for audit and all other services. Prior to the Audit and Finance Committee’s consideration for approval, management provides the Audit and Finance Committee with a description of the reason for and nature of the services to be provided along with an estimate of the time required and approximate cost. Following such review, each proposed service is approved, modified, or denied as appropriate. A record of all such approvals is maintained in the files of the Audit and Finance Committee for future reference. All services provided by PwC during the past two years were approved by the Audit and Finance Committee prior to their undertaking.
The Audit and Finance Committee has adopted a policy for approving all permitted audit, audit-related, tax, and non-audit services to be provided by PwC in advance of the commencement of such services, except for those considered to be de minimis by law for non-audit services. Information regarding services performed by the independent registered public accounting firm under this de minimis exception is presented to the Audit and Finance Committee for information purposes at each of its meetings. There is no blanket pre-approval provision within this policy. For fiscal years 20182020 and 2019,2021, none of the services provided by PwC were provided pursuant to the de minimis exception to the pre-approval requirements contained in the applicable rules of the SEC. Audit and Finance Committee consideration and approval generally occurs at a regularly scheduled Audit and Finance Committee meeting. For projects that require an expedited decision because the independent registered public accounting firm should begin prior to the next regularly scheduled meeting, requests for approval may be circulated to the Audit and Finance Committee by mail, telephonically or by other means for its consideration and approval. When deemed necessary, the Audit and Finance Committee has delegated pre-approval authority to its Chair. Any engagement of the independent registered public accounting firm under this delegation will be presented for informational purposes to the full Audit and Finance Committee at their next meeting.
2019 Proxy Statement 3138 Adtalem Global Education Inc.
Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm
The Audit and Finance Committee appointed PwC as Adtalem’s independent registered public accounting firm for the fiscal year ended June 30, 2019.2021. Adtalem’s shareholders ratified the engagement at the Annual Meeting of Shareholders on November 6, 2018.17, 2020. In addition to engaging PwC to audit the consolidated financial statements for Adtalem and its subsidiaries for the year and review the interim financial statements included in Adtalem’s Quarterly Reports on Form 10-Q filed with the SEC, the Audit and Finance Committee also engaged PwC to provide various other audit and audit relatedaudit-related services — e.g., auditing of Adtalem’s compliance with student financial aid program regulations.
The Sarbanes-Oxley Act of 2002 prohibits an independent public accountant from providing certain non-audit services for an audit client. Adtalem engages various other professional service providers for these non-audit services as required. Other professional advisory and consulting service providers are engaged where the required technical expertise is specialized and cannot be economically provided by employee staffing. Such services include, from time to time, business and asset valuation studies, and services in the fields of law, human resources, information technology, employee benefits and tax structure, and compliance.
Audit fees declined in 2019 as a result of the divestitures of DeVry University and Carrington College. Additionally, duringIn fiscal year 2018,2020, we incurred significant tax fees related to tax reform and tax planning that did not recur in fiscal year 2019.the divestiture of Adtalem Brazil. The aggregate amounts included in Adtalem’s financial statements for fiscal year 20192021 and 20182020 for fees billed or to be billed by PwC for audit and other professional services, respectively, were as follows:
| Fiscal Year 2019 | Fiscal Year 2018 | Fiscal Year 2021 | Fiscal Year 2020 | |||||||||
| Audit Fees | $ | 3,256,546 | $ | 4,637,875 | $ | 2,628,000 | $ | 2,825,500 | ||||
| Audit-Related Fees | $ | — | $ | — | $ | 850,000 | $ | — | ||||
| Tax Fees | $ | 495,707 | $ | 1,115,000 | $ | 405,881 | $ | 1,102,734 | ||||
| All Other Fees | $ | 18,000 | $ | 58,000 | $ | 18,000 | $ | 18,000 | ||||
| Total | $ | 3,770,253 | $ | 5,810,875 | $ | 3,901,881 | $ | 3,946,234 | ||||
AUDIT FEES— Includes all services performed to comply with generally accepted auditing standardsaccounting principles in conjunction with the annual audit of Adtalem’s financial statements and the audit of internal controls over financial reporting. In addition, this category includes fees for services in connection with Adtalem’s statutory and regulatory filings, consents, and review of filings with the SEC such as the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Also included are services rendered in connection with the required annual audits of Adtalem’s compliance with the rules and procedures promulgated for the administration of federal and state student financial aid programs.
AUDIT-RELATED FEES— No audit-relatedIncludes services performed related to Adtalem’s debt offerings and comfort letters. Audit-related fees of $850,000 were billed to us by PwC for fiscal years 2018 and 2019.year 2021.
TAX FEES— Includes all services related to tax compliance, tax planning, tax advice, assistance with tax audits, and responding to requests from Adtalem’s tax department regarding technical interpretations, applicable laws and regulations, and tax accounting. Adtalem’s Audit and Finance Committee has considered the nature of these services and concluded that these services may be provided by the independent registered public accounting firm without impairing its independence.
ALL OTHER FEES— Includes subscriptions for online accounting research services, fees for access to disclosure checklist, and fees to prepare a human resource benchmarking study, and fees for a Carrington College Federal Perkins Loan close-out audit.study.
2021 Proxy Statement 32 39Adtalem Global Education Inc.
Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm
AUDIT AND FINANCE COMMITTEE REPORT
To Our Shareholders:
The Audit and Finance Committee of Adtalem consists of fourthree independent directors. The members of the Audit and Finance Committee meet the independence and financial literacy requirements of the NYSE and additional heightened independence criteria applicable to members of the Audit and Finance Committee under SEC and NYSE rules. In fiscal year 2019,2021, the Audit and Finance Committee held nineeight meetings. The Audit and Finance Committee has adopted, and annually reviews, a charter outlining the practices it follows. The charter conforms to the SEC’s implementing regulations and to the NYSE listing standards.
Management is responsible for Adtalem’s internal controls and the financial reporting process by which it prepares the financial statements. Adtalem’s independent registered public accounting firm is responsible for performing an independent audit of the annual financial statements of Adtalem and expressing an opinion on those statements. The principal duties of the Audit and Finance Committee include:
| ● | Monitoring Adtalem’s financial reporting processes, including its internal control systems; |
| ● | Selecting Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders; |
| ● | Evaluating the independent registered public accounting firm’s independence; |
| ● | Monitoring the scope, approach, and results of the annual audits and quarterly reviews of financial statements, and discussing the results of those audits and reviews with management and the independent registered public accounting firm; |
| ● | Overseeing the effectiveness of Adtalem’s internal audit function and overall risk management processes; |
| ● | Discussing with management and the independent registered public accounting firm the nature and effectiveness of Adtalem’s internal control systems; and |
| ● | Reviewing and recommending to the Board Adtalem’s financing policies and actions related to investment, capital structure, and financing strategies. |
During fiscal year 2019,2021, at each of its regularly scheduled meetings, the Audit and Finance Committee met with the senior members of the Adtalem’s financial management team. Additionally, the Audit and Finance Committee had separate private sessions, on a quarterly basis, with Adtalem’s independent registered public accounting firm, Adtalem’s Chief Operating Officer, General Counsel and Corporate Secretary, Adtalem’s Chief Financial Officer and Treasurer,or Interim Chief Financial Officer, and Adtalem’s Senior Director, Internal Audit.
The Audit and Finance Committee is updated periodically on the process management uses to assess the adequacy of Adtalem’s internal control systems over financial reporting, the framework used to make the assessment and management’s conclusions on the effectiveness of Adtalem’s internal controls over financial reporting. The Audit and Finance Committee also discusses with Adtalem’s independent registered public accounting firm Adtalem’s internal control assessment process, management’s assessment with respect thereto and the evaluation by Adtalem’s independent registered public accounting firm of its system of internal controls over financial reporting.
The Audit and Finance Committee annually evaluates the performance of Adtalem’s independent registered public accounting firm, including the senior audit engagement team, and determines whether to reengage the current independent registered public accounting firm. As a threshold matter, the Audit and Finance Committee satisfies itself that the most recent Public Company Accounting Oversight Board (“PCAOB”) inspection report pertaining to the current firm does not contain any information that would render inappropriate its continued service as Adtalem’s independent public accountants, including consideration of the public portion of the report and discussion in general terms of the types of matters covered in the non-public portion of the report. The Audit and Finance Committee also considers the quality and efficiency of the previous services rendered by the current auditors and the auditors’ technical expertise and knowledge of Adtalem’s global operations and industry. Based on this evaluation, the Audit and Finance Committee decided to reengage, and recommend ratification of, PwC as Adtalem’s independent registered public accounting firm for fiscal year 2020.2022. The Audit and Finance Committee reviewed with members of Adtalem’s senior management team and PwC the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and PwC of Adtalem’s internal controls over financial reporting, and the quality of Adtalem’s financial reporting. Although the Audit and Finance Committee has the sole authority to appoint Adtalem’s independent registered public accounting firm, the Audit
2019 Proxy Statement 3340 Adtalem Global Education Inc.
Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm
Committee has the sole authority to appoint Adtalem’s independent registered public accounting firm, the Audit and Finance Committee recommends that the Board ask the shareholders, at their annual meeting, to ratify the appointment of Adtalem’s independent registered public accounting firm. With respect to Adtalem’s audited financial statements for fiscal year 2019,2021, the Audit and Finance Committee has:
| ● | Reviewed and discussed the audited financial statements with management; |
| ● | Met with PwC, Adtalem’s independent registered public accounting firm, and discussed the matters required to be discussed by the |
| ● | Received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit and Finance Committee concerning independence, and has discussed its independence with PwC. |
In reliance upon the Audit and Finance Committee’s reviews and discussions with both management and PwC, management’s representations and the report of PwC on Adtalem’s audited financial statements, the Audit and Finance Committee recommended to the Board that the audited financial statements for the fiscal year ended June 30, 20192021 be included in Adtalem’s Annual Report on Form 10-K filed with the SEC.
In addition, the Audit and Finance Committee has re-appointed, subject to shareholder ratification, PwC as Adtalem’s independent registered public accounting firm for fiscal year 2020.2022.
This Audit and Finance Committee Report is not to be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, except to the extent that Adtalem specifically incorporates this Audit and Finance Committee Report by reference, and is not otherwise to be deemed filed under such acts.
William W. Burke, ChairSteven M. Altschuler, M.D.
Donna J. Hrinak
Michael W. Malafronte
2021 Proxy Statement 34 41Adtalem Global Education Inc.
| PROPOSAL NO. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) |
Pursuant to Section 14A of the Exchange Act, we are required to submit to shareholders a resolution subject to an advisory vote to approve the compensation of our NEOs. The current frequency of the advisory vote on executive compensation is annually, with the vote for the current year being taken pursuant to this Proposal No. 3. The next such vote will occur at Adtalem’s 2020 Annual Meeting of Shareholders.
The Board encourages shareholders to carefully review the “Executive Compensation Tables” section of this Proxy Statement beginning on page 59 and the “Compensation Discussion & Analysis” beginning on page 36 for a thorough discussion of our compensation program for NEOs. The overall goals of our compensation program are to serve the essential purposes of the organization, which are to empower students to achieve their educational and career goals, and to maximize the long-term return to our stakeholders. We designed our program to:
The key elements of our executive compensation program are:
Adtalem aims to provide total compensation to each NEO that is market-competitive, combining a stable base salary element with two at-risk elements (annual cash incentive awards and long-term incentive awards) available to be earned based upon individual and organizational performance. We believe this approach helps reinforce a culture of performance by recognizing individual potential and rewarding results. As part of our compensation philosophy, we believe we should provide our NEOs with total compensation opportunities that are competitive with other alternatives available to them in the marketplace and that a significant portion of each NEO’s total compensation should be variable — with both upside potential and downside risk — depending upon the performance of Adtalem and of the individual. In addition, we believe we should maintain a clear, straightforward and transparent approach to our executive compensation program.
Accordingly, the following resolution is submitted for an advisory shareholder vote at the Annual Meeting:
RESOLVED, that the compensation paid to Adtalem’s NEOs, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and narrative discussion, is hereby approved.
APPROVAL BY SHAREHOLDERS
The approval of the compensation of Adtalem’s NEOs will require the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. As this is an advisory vote, the result will not be binding on Adtalem, the Board or the Compensation Committee, although management, the Board and the Compensation Committee will carefully consider the outcome of the vote when evaluating our compensation program. Unless otherwise indicated on a shareholder’s proxy, the shares will be votedFORthe approval of the compensation of Adtalem’s NEOs.
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2019 Proxy Statement 35
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
COMPENSATION DISCUSSION & ANALYSIS
The following pages summarize our executive compensation program for our NEOs. Our 20192021 NEOs are: were:
  |  |   |  |  |   | ||||
| Lisa W. | |||||||||
| Wardell* Chairman of the Board, President and Chief Executive Officer | Robert J. Phelan Interim Chief Financial Officer | Chief Operating Officer | Douglas G. Beck Senior Vice President, | General Counsel and Corporate Secretary |
Former Executives (not pictured):
Kathy Boden Holland, Former Group President, Medical and Healthcare through September 30, 2021
Michael O. Randolfi, Former Senior Vice President and Chief Financial Officer through April 23, 2021
| Executive Summary |
Adtalem’s executive compensation program is designed to reward leaders for delivering strong financial results and building shareholder value. We firmly believe that academic quality and a strong student-centric focus lead to growth and, therefore, we have incorporated measures into our executive compensation program to recognize leadership for their roles in improving student academic performance and outcomes.
This executive compensation program structure enables us to provide a competitive total compensation package while aligning our leaders’ interests with those of our shareholders and other stakeholders. The following chart highlights key objectives behind the development, review and approval of our NEOs’ compensation.
Effective September 8, 2021 the Company entered into new Executive Employment Agreements with Ms. Wardell and Mr. Beard for their new roles as Executive Chairman and President and CEO, respectively. The Company filed (i) a Current Report on Form 8-K on August 6, 2021 providing the details of Mr. Beard’s Executive Employment Agreement as President and CEO; and (ii) a Form 8-K/A on September 13, 2021 providing the details of Ms. Wardell’s Executive Employment Agreement as Executive Chairman.
| * | Effective September 8, 2021, Ms. Wardell was appointed Executive Chairman and Mr. Beard was appointed President and CEO. |
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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
COMPENSATION OBJECTIVES
Our executive compensation program is designed to:
| ALIGN INCENTIVES | COMPETE FOR TALENT | REWARD PERFORMANCE | |||||||||||
| Our purpose is to empower our students to achieve their goals, find success and make inspiring contributions to the global community. Success in realizing our purpose drives growth, which leads to the creation of sustainable, long-term value for our shareholders.Our compensation program is distinguished by its alignment not only with our shareholders, but also with our students, whose success is critical to our organization’s success. | Our compensation program is designed to attract, retain and motivate high-performing employees, particularly our key executives who are critical to our operations. Our compensation decisions take into account the competitive landscape for talent. | We reward outstanding performance through: ●A short-term incentive program focusing our executives on achieving strong financial results and superior academic and student outcomes, through individual performance objectives, and ●A long-term incentive program providing a mix of equity vehicles designed to reward long-term financial performance and shareholder value creation. | |||||||||||
Our executive compensation program is founded on aligning the attainment of our business transformation and growth objectives with commensurate rewards based on results achieved over both short- and long-term performance periods. The Compensation Committee believes this approach appropriately focuses executives on achieving our strategic priorities and provides appropriate upside and downside potential based on actual performance and results achieved over time.
Our program, particularly how we measure performance through both annual incentives and our long-term performance share plan, employs measures that support our fundamental shift in strategic focus for management and our organization at large.
36 Fiscal year 2021 highlights underscored by our commitment to business transformation and growth
| Key Achievements |  | How this positions us for growth |
Announcing the purchase of Walden University | ●Reinvests capital (following the divestiture of Adtalem Brazil) via inorganic growth to expand market share of our medical and healthcare business while harnessing synergies to accelerate returns and position us for short- and long-term growth; and ●Complements existing portfolio while adding substantial scale as a workforce solutions provider with innovative online capabilities | |
Focus on integration readiness as a segue to realizing value capture | ●Established integration synergy plans for post-close execution securing our commitment to deliver a $60 million contribution to free cash flow and $1.15 in EPS accretion from continuing operations (excluding special items) in year one following acquisition close | |
Strengthening our bench and focus on excellence in talent | ●Strengthened bench and supported long-term growth by investing in several key leadership hires with emphasis on general management, strategic marketing and growth-oriented roles, improving the succession pipeline in key functional and operational areas | |
Maintained Focus on Business Continuity ~ Normalized and prepared to expand business during Pandemic | ●Demonstrated agility with limited time and resources and despite the uncertainty during unprecedented times; ●Rebounded with strong financial performance despite significant challenges to the business; ●Managed through times of extreme uncertainty for Chamberlain and the medical schools where clinical experience is key for student success; and ●Consolidated brick and mortar administrative offices and managed a complete remote workforce while significantly expanding our remote work capabilities for the longer term. |
Adtalem Global Education Inc.2021 Proxy Statement 43
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
During fiscal year 2018, the Compensation Committee, in consultation with its independent advisor FW Cook, conducted a comprehensive review of the current executive compensation program and assessed the extent to which the current program was aligned with shareholder interests and maximized focus on the key strategic priorities as Adtalem moves forward. The Compensation Committee also considered shareholder feedback received through Adtalem’s ongoing shareholder outreach efforts conducted over the last several years.
Based on this review, at the August 2018 meeting, the Compensation Committee approved certain changes to the design of our executive compensation program for fiscal year 2019 and forward, which are intended to:
1. Shifted Focus on Mission-Based Goals to Management Incentive Plan (“MIP”NEOs”)
The Compensation Committee decided to more effectively emphasize academic quality and academic student outcomes by shifting such measures from being a component of our PSU long-term incentives to the annual short-term MIP. The Compensation Committee believes the annual short-term MIP is the best compensation component to drive focus from year-to-year on these key performance measures. Considering how quickly academic standards and measurement mechanisms change, we believe the quality of goal setting on these academic measures will be stronger with the increased ability to understand and set expectations and appropriately elevate goals on an annual basis. The performance goals established each year are directly overseen by the Academic Quality Committee to ensure appropriate goals are set for each institution within Adtalem’s portfolio. Starting in fiscal year 2019, the entirety of the 30% weighting on individual goals for each of our higher education institutional leaders is solely focused on these academic performance measures.
2. Introduction of Free Cash Flow (“FCF”) per Share as Long-Term Incentive Measure
Starting with the August 2018 (fiscal 2019) grants, 50% of the PSU grants is based on FCF per share; the remaining 50% is based on three-year average return on invested capital (“ROIC”), consistent with prior PSU grants. The Compensation Committee believes these two performance measures create better alignment with shareholder interests and the appropriate long-term focus on sustainable value creation for the organization. The Compensation Committee and the organization believe that consistently strong academic quality and strong student outcomes drive the long-term success of the organization. In order to achieve the long-term financial goals associated with the PSUs, management must maintain high academic quality and strong student outcomes each year.
SUBSEQUENTCONTINUED SHAREHOLDER OUTREACH
Adtalem employs a proactive investor relations approach, involving management and the Board, with ongoing outreach and interactive dialogue with investors to seek input on topics including corporate governance, executive compensation, diversity, equity and inclusion, and strategy. Our goal is to provide transparency to ensure there is a clear understanding of our business and our operating and financial performance – as set forth in our public filings, through one-on-one discussions, non-deal road shows, and investor conferences.
2019 Proxy Statement 37
Proposal No. 3 Say-on-pay: Advisory VoteWhile we are very pleased by the positive response to Approve the Compensation of Our Named Executive Officers
We valueexecutive compensation program substantiated by our shareholders’ opinions92% ‘say on the design and effectivenesspay’ approval rating, our ongoing commitment included proactive outreach to our top shareholders in 2021. Those shareholders that did provide feedback (which collectively hold approximately 45% of our executive compensation program. Despite our ongoing engagement with shareholders and the Compensation Committee’s best intentions forshares) responded favorably to our executive compensation program, to support our business strategydid not express any particular areas of concern and strongly align with shareholders’ interests, at our Annual Meeting of Shareholders in November 2018, only 55% of the votes cast in our advisory say-on-pay shareholder vote approved our executive compensation package. In response to the lower level ofreiterated their support for say-on-pay, the Compensation Committee led an extensive shareholder outreach initiative over the course of the past twelve months.
This outreach initiative was designed to assist our Compensation Committee in fully understanding the perspectives of our shareholders, including those that supported and those that did not support our say-on-pay vote in November 2018, with respect to executive compensation. During this engagement, we reached out to shareholders that collectively owned approximately 80% of our outstanding Common Stock and had discussions with shareholders owning more than 40% of our outstanding Common Stock. Given that Institutional Shareholder Services (“ISS”) recommended an against vote on our say-on-pay advisory vote in November 2018, we also engaged ISS to better understand their vote recommendation policies and their comments on our program as highlighted in their report following our 2018 proxy statement. This effort supplemented the ongoing communications between our management and shareholders, as well as contact with shareholders prior to our 2018 annual meeting, through various engagement channels including in-person or telephonic meetings. We have continued our shareholder outreach efforts throughout fiscal year 2019 and into fiscal year 2020.
Present at these meetings was a mix of executive leadership, including representation from our Legal, Investor Relations and Human Resources functions, and in many cases, our Compensation Committee Chair, Michael Malafronte.
Shareholders that provided feedback were supportive of our overall compensation program design. The majority of the shareholders we met with were supportive of the metrics for the PSUs which include ROIC and FCF per share. Some of our shareholders suggested we consider relative metrics in the future, but no shareholder identified the PSU metrics as problematic. The majority of the shareholders who provided feedback were supportive of our current equity mix. Shareholders were positive about moving our academic metrics to the MIP. They were also supportive of our use of revenue and earnings per share as MIP performance measures.
While shareholders were generally favorable about the overall design of our compensation program, some of our shareholders expressed a desire to better understand the Compensation Committee’s rationale behind the fiscal year 2018 two-year grant to our CEO and what impact one feature of our PSU design had over several years. During the course of these discussions, some shareholders suggested we provide more detail on our CEO’s performance against her individual MIP objectives.
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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
We have addressed these three themes below and throughout this disclosure and will continue to engage our shareholder base and consider our shareholders’ feedback in our ongoing evaluation of the overall executive compensation program design:
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Shareholders have responded positively to these changes during our discussions.
Adtalem and the Compensation Committee will continue to engage its shareholder base in the future to understand shareholder concerns, particularly in connection with potential changes to its compensation or governance practices.
Impact of COVID-19 on our Executive Compensation Program
The Adtalem organization remained agile, innovative, and dedicated to our mission, vision, and values, successfully weathering the continued impacts of the pandemic in fiscal year 2021. Payouts under our annual Management Incentive Plan (MIP), as well as performance shares (PSU) vesting in 2021, reflected actual performance despite the effects of the pandemic on our business.
PAY-FOR-PERFORMANCE FOCUS
We use both short- and long-term incentives to reward NEOs for delivering strong business results, increasing shareholder value and improving student outcomes. With our pay-for-performance philosophy, an executive can earn in excess of target levels when his or her performance exceeds established objectives. And, if performance falls below established objectives, our incentive plans pay below target levels, which in some cases could be nothing at all.
2019 Proxy Statement 39
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
| OTHER NEO COMPENSATION MIX(1)(2) | ||
  |   |
| (1) | Excludes perquisites. |
| (2) |
Program Design:
| ● | The actual value realized from the annual MIP award can range from zero, if threshold performance targets are not met, to up to 200% of targeted amounts for exceptional organizational performance. |
| ● | Our long-term incentive program consists of equity-based awards whose value ultimately depends on our |
44 Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
Performance Assessment:Our Compensation Committee uses a comprehensive, well-defined and rigorous process to assess organizational and individual performance. We believe the performance measures for our incentive plans focus management on the appropriate objectives for the creation of short- and long-term shareholder value as well as academic quality and organizational growth.
20192021 COMPENSATION DECISIONS AND ACTIONS
Key Fiscal Year 20192021 Compensation Decisions
| BASE SALARY Page | ||
40 Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
| ANNUAL INCENTIVES Page | ||
For
|
| LONG-TERM INCENTIVES Page | ||
In fiscal year Performance share awards granted in |
| 1 | excluding Ms. Wardell, who did not receive a grant of LTI in August 2018 and Douglas Beck and Robert Phelan who were not employed by Adtalem at the time of grant. |
Factors Guiding our Decisions
| ● | Executive compensation program objectives, philosophy and principles; |
| ● | Shareholder input, including say-on-pay vote; |
| ● | Adtalem’s mission, vision, purpose and “TEACH” values; |
| ● |
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| ● | Financial performance of Adtalem and its individual institutions; and |
| ● | Advice of our independent outside compensation |
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The following provides a more in-depth discussion of our performance in these areas that helped drive the Compensation Committee’s evaluation of performance, and ultimately, compensation decisions for fiscal year 2019.
2019 Financial and Operational Highlights
Adtalem’s fiscal year 2019 financial results reflect continued growth in its Medical and Healthcare and Financial Services segments, with revenue increasing 4.2% and 13.6%, respectively. Business and Law revenue decreased 16.6%, primarily due to headwinds in Brazil, including a delay in funding under the “Fundo de Financiamento Estudantil” or “Students Financing Fund” program and negative foreign currency exchange. Nonetheless, through substantial expense reduction initiatives, Adtalem achieved fiscal year 2019 earnings per share, excluding special items, of $2.84. See Appendix A for a reconciliation to reported results.
Significant progress was made in transforming Adtalem into a leading workforce solutions provider in fiscal 2019. We completed the divestitures of DeVry University and Carrington College, streamlined our three core verticals to support our enterprise growth strategy and expanded the financial services customer base through our acquisition of OnCourse Learning (“OCL”).2021.
20192021 Proxy Statement 4145
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
The2021 Financial and Operational Highlights
Adtalem’s fiscal year 2021 financial results reflect continued growth in its Medical and Healthcare and Financial Services segments, with revenue increasing 4.7% and 10.7%, respectively, despite the effects of DeVry University and Carrington College are presented as discontinued operations within Adtalem’s Annual Report on Form 10-K attached herein. Also see “Note 2: Discontinued Operations” to the consolidated financial statements for further discussion. On May 31, 2019, Adtalem completed the acquisitionCOVID-19. COVID-19 resulted in estimated revenue losses of 100% of the equity interests of OCL. DeVry University, Carrington College and OCL’s revenue andapproximately $47 million, operating income were not includedlosses of approximately $33 million and loss of earnings per share of approximately $0.50 in actual fiscal year 2019 results for MIP performance purposes.2021. Through efforts to manage salary, travel, and discretionary spending, Adtalem was able to partially offset the effects of COVID-19 and achieve fiscal year 2021 earnings per share, excluding special items, of $2.98. See Appendix A for a reconciliation to reported results.
WhileSignificant progress was made in executing our workforce solutions strategy in fiscal year 20192021; a strategy designed to drive superior student outcomes, meet the critical workforce needs of our employer partners and drive value for our shareholders. We entered into an agreement to acquire Walden University to further position us as a leading healthcare education provider with market-leading scale and breadth. We successfully completed the acquisition of Walden University in August, 2021.
Fiscal year 2021 revenue was below our expectations while earnings per share excluding special items and OCL results, exceeded our expectations, each as reflected in our fiscal year 20192021 operating plan, which served as the basis for our fiscal year 20192021 MIP financial performance targets. As a result, the portions of executive officer MIP awards based on Adtalem revenue and earnings per share paid out at 81.6%98.0% and 115.9%136.5% of target, respectively.
| FY | FY | |
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 |   |
| * | Adjusted results |
EXECUTIVE COMPENSATION GOVERNANCE AND PRACTICES
| WHAT WE DO | WHAT WE DON’T DO | |||||
✓Pay for economic and academic performance ✓Solicit and value shareholder opinions about our compensation practices ✓Deliver total direct compensation primarily through variable pay ✓Set challenging short- and long-term incentive award goals ✓Provide strong oversight that ensures adherence to incentive grant regulations and limits ✓Maintain robust stock ownership requirements ✓Adhere to an incentive compensation recoupment (clawback) policy ✓Offer market-competitive benefits ✓Consult with an independent advisor on executive pay practices, plan designs and assessing external competitive pay levels | ✕Provide guaranteed salary increases ✕Provide tax gross-ups ✕Provide single-trigger change-in-control severance ✕Re-price stock options or exchange underwater options for other awards or cash ✕Pay dividends on unvested performance-based ✕Provide excessive perquisites ✕Offer a defined benefit pension or supplemental executive retirement plan ✕Permit hedging or pledging of Adtalem Common Stock ✕Reward executives without a link to performance | |||||
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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
| Executive Compensation |
PRINCIPLES OF EXECUTIVE COMPENSATION
The Compensation Committee uses the following Principles of Executive Compensation to assess Adtalem’s executive compensation program and to provide guidance to management on the Compensation Committee’s expectations for the overall executive compensation structure:
| Principle | Purpose | |
Stewardship/Sustainability | ●Reinforce Adtalem’s purpose and long-term vision ●Motivate and reward sustained long-term growth in shareholder value ●Uphold long-term interests of all stakeholders (including students, employees, employers, shareholders and taxpayers) ●Focus on sustaining and enhancing the quality and outcomes of education programs ●Promote continued differentiation and expansion of Adtalem’s programs | |
Accountability | ●Ensure financial interests and rewards are tied to executive’s area of impact and responsibility (division, geography and function) ●Require timing of performance periods to match timing of employee’s impact and responsibility (short-, medium- and long-term) ●Emphasize quality, service and academic and career results ●Articulate well defined metrics, goals, ranges, limits and results ●Motivate and reward achievement of strategic goals, with appropriate consequences for failure ●Comply with | |
Alignment | ●Promote commonality of interest with all stakeholders (including students, employees, employers, owners and taxpayers) ●Reflect and reinforce Adtalem’s values and culture ●Promote commonality of interests across business units, geography and up, down and across the chain of command ●Provide a balance between short- and long-term performance | |
Engagement | ●Attract and retain high quality talent and provide for organizational succession ●Provide market competitive total compensation and benefits packages at all levels ●Promote consistent employee development at all levels ●Motivate urgency, creativity and dedication to Adtalem’s purpose ●Clearly communicate the link between pay and performance | |
Transparency | ● ● ● ● |
20192021 Proxy Statement 4347
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
20192021 EXECUTIVE COMPENSATION FRAMEWORK
Adtalem’s fiscal year 20192021 incentive compensation program for executives was designed to link compensation performance with the full spectrum of our business goals, some of which are short-term, while others take several years or more to achieve:
COMPENSATION SNAPSHOT
| Objective | Time Horizon | Performance Measures | Additional Explanation | |||
| Salary (cash) | Reflect experience, market competition and scope of responsibilities | Reviewed Annually | Assessment of performance in prior year. Given the challenges presented by the pandemic and in response to the unprecedented and evolving business landscape, we took a conservative approach and did not increase salaries for executives during fiscal year 2021. | ●Represents 14% and 28% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively. | ||
Annual | MIP |
| 1 year | ●Revenue* ●Adjusted Earnings Per ●Individual Goals | ||
Long Term | Stock Options | Reward stock price growth and retain key talent | 4 year ratable | ●Stock price growth | ● | |
RSUs | Align interests of management and shareholders, and retain key talent | ● | ||||
ROIC PSUs FCF PSUs | Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent | 3 year cliff | ●ROIC ● | ● | ||
| * | A portion of the MIP payout for executive leadership of business segments and business units is also based on the revenue and operating income at such executive’s business segment or business unit. |
ANALYSIS OF 20192021 EXECUTIVE COMPENSATION
Annual Base Salary Review
Annual base salaries for NEOs are intended to reflect the scope of their responsibilities, the experience they bring to their roles, and the current market compensation for similar roles outside of Adtalem. Once established, and under normal business conditions, base salaries are reviewed annually for adjustment to reflect the executive’s prior performance and respond to changes in market conditions. The table below lists the seven criteria the Compensation Committee uses to determine changes to salary from one year to the next.
| Base salary adjustments are made based on seven criteria: | |
1. | Adtalem’s overall financial performance compared to operating plan |
2. | Executive’s performance against established individual goals and objectives |
3. | Executive’s effectiveness in instilling a culture of academic quality, teamwork, student service and integrity |
4. | Executive’s expected future contributions |
5. | Comparison to peer group and other available market data |
6. | Merit increase parameters set for all colleagues in the organization |
7. | Discretion based on interaction and observation through the year |
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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
Fiscal Year 20192021 Base Salary Decisions
InGiven the unprecedented challenges presented by the pandemic and in response to the evolving business landscape, in August 2018,2020 management, together with the Board,Compensation Committee and based on input from F.W. Cook, made the Compensation Committee’s recommendation in consultation with FW Cook increased thedecision that base salary of Ms. Wardell, Adtalem’s Presidentsalaries for NEOs would not be adjusted; and CEO, by 8%all were maintained at current levels for fiscal year 2019, bringing her salary to $1,100,000, effective September 2018 for fiscal year 2019. The increase was intended to ensure Ms. Wardell’s compensation was competitive with compensation practices at Adtalem’s peer companies and to reward her strong performance. The Compensation Committee wanted to recognize the CEO’s successful recruitment of several key executives who were seen as pivotal for the transformation and growth of the organization; the successful negotiation of agreements to transition DeVry University and Carrington College to new owners; and her success in leading Adtalem through the recovery from the fall 2017 hurricanes that devastated the islands of Dominica and St. Maarten. Of particular note, the Compensation Committee wanted to recognize the CEO’s pace, energy and drive in helping Adtalem navigate through a tumultuous period and set the stage for transformation and growth.2021.
Based upon relevant, available market data and Ms. Wardell’s assessment of each NEO’s performance for the prior year, Ms. Wardell recommended to the Compensation Committee the annual base salary of each of the other NEOs at the outset of fiscal year 2019. Ms. Wardell’s recommendations regarding the NEOs were made in consultation with the Senior Vice President of Human Resources and the Chief Financial Officer. These recommendations were based upon their experience with and analysis of the market at that time, their monitoring of the compensation levels at other organizations in Adtalem’s market and Ms. Wardell’s assessment of each NEO’s performance for the prior year. Our CEO does not participate in discussions regarding her own compensation.ANNUAL BASE SALARY
| FY2018 | FY2019 | Percent Change | ||||||
| Lisa W. Wardell | $ | 1,015,000 | $ | 1,100,000 | 8% | |||
| Patrick J. Unzicker | $ | 512,500 | $ | 525,313 | 2.5% | |||
| Stephen W. Beard(1) | $ | 475,000 | $ | 546,250 | 13% | |||
| Kathy Boden Holland(2) | $ | 575,000 | $ | 575,000 | 0% | |||
| Mehul R. Patel | $ | 430,000 | $ | 447,200 | 4% | |||
| FY2021 | |||
| Lisa W. Wardell | $ | 1,100,000 | |
| Robert J. Phelan | $ | 350,000 | |
| Stephen W. Beard | $ | 600,020 | |
| Douglas G. Beck(1) | $ | 500,000 | |
| Kathy Boden Holland | $ | 592,250 | |
| Michael O. Randolfi(2) | $ | 600,000 | |
| (1) | Mr. |
| (2) |
Annual Cash Incentive Compensation
How The MIP Works
MIP target award opportunities for each NEO are set by the Compensation Committee based on factors including external surveys of practices for positions with similar levels of responsibility. These targets, which are expressed as a percentage of base salary, are then reviewed at the beginning of each fiscal year based on updated market compensation data.
The MIP provided Adtalem’s CEO with a target award opportunity of 105% of base salary and other NEOs with a target award opportunity of 70% of base salary. For fiscal year 2019, the target award opportunity for Mr. Beard increased to 70% (from 60%). No other changes were made to the MIP target award opportunity as a percentage of base salary for the other NEOs.
The annual cash incentive, delivered through the MIP, provides NEOs with the opportunity to earn rewards based on the achievement of organizational and institutional performance, as well as individual performance. How the MIP Works MIP target award opportunities for each NEO are set by the Compensation Committee based on factors including external surveys of practices for positions with similar levels of responsibility. These targets, which are expressed as a percentage of base salary, are then reviewed at the beginning of each fiscal year based on updated market compensation data. For fiscal year 2021, the MIP provided Adtalem’s NEOs (other than Ms. Wardell) with a target award opportunity ranging from 50% to 80% of base salary. For this period, the target award opportunity for Ms. Wardell was set at 110% of base salary (consistent with fiscal year 2020). Additionally, the award opportunity for Mr. Phelan was adjusted mid-year to 80% (from 50%) during the period which he served as interim CFO in addition to his role as Vice President and Chief Accounting Officer. No other changes were made to the MIP target award opportunity as a percentage of base salary for the other NEOs. | Creating a Strong Link to Pay-for-Performance We believe the MIP payouts made to our NEOs for fiscal year |
Actual awards can be higher or lower than the target opportunity based on the results for each performance measure. Performance below the threshold for the goal will result in no payment for that performance goal. Performance at or above threshold can earn an award ranging from 50% to 200% of the target amount. The maximum amount of 200% of target rewards exceptional performance compared to expectations, over-delivery of strategic initiatives, and/or achievement of initiatives not contemplated at the time goals were set.
Actual earned awards are determined after the fiscal year has ended and audited financial results have been completed (i.e., in the first quarter of the next fiscal year). Thus, MIP awards for fiscal year 2021 were determined and paid in the early part of fiscal year 2022, after the results for the fiscal year ended June 30, 2021 were confirmed. The payout is based on Adtalem adjusted earnings per share and Adtalem revenue, and as applicable, institution operating income and institution revenue measures. MIP measures and goals are typically set by the Compensation Committee in the first quarter of the year in which the performance is measured, in addition to individual performance.
MIP Performance Measures
The Compensation Committee determined that Adtalem adjusted earnings per share and revenue, along with institution operating income and revenue, effectively balance top line revenue growth and bottom-line profitability and results and are the most appropriate short-term metrics to support our business objectives.
20192021 Proxy Statement 4549
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
In measuring performance, the Compensation Committee may adjust results for certain unusual, non-recurring or other items to ensure the MIP rewards true operational performance as it is perceived by investors and as consistently measured. Appendix A details the adjustments made in the last three fiscal years.
|
In instances where an institution has not demonstrated performance commensurate with the potential award, the Compensation Committee may exercise negative discretion and reduce MIP payouts for individuals with oversight over the applicable institution. In the case of acquisitions and dispositions, the Compensation Committee generally does not include revenue, and corresponding earnings per share or operating income, from acquisitions in their evaluation of achievement against targets unless such expected revenue, and corresponding earnings per share or operating income, had been factored into the performance target. Similarly, revenue, and corresponding earnings per-share or operating income performance is adjusted for dispositions during the year.
In addition to the actual results achieved, the Compensation Committee also considers individual performance over the course of that fiscal year for each NEO. Individual performance goals reflect functional results and/or institution performance appropriate for the executive, as well as academic outcomes, organizational strength and the advancement of Adtalem’s core values. Individual performance goals are designed to drive initiatives that support Adtalem’s strategy and further align leadership with Adtalem’s student-focused purpose.
The relative percentages assigned to the measures for each NEO(1) for fiscal year 20192021 are as follows:
| Organizational, Institution and Individual Performance Measure Allocation | Organizational, Institution and Individual Performance Measure Allocation | |||||||||||||||||||
| Adtalem Earnings Per Share | Adtalem Revenue | Institution Operating Income | Institution Revenue | Individual Performance | Adtalem Adj. Earnings Per Share | Adtalem Revenue | Institution Operating Income | Institution Revenue | Individual Performance | |||||||||||
| Lisa W. Wardell | 45% | 40% | 15% | 45% | 40% | 15% | ||||||||||||||
| Patrick J. Unzicker | 40% | 30% | 30% | |||||||||||||||||
| Robert J. Phelan | 40% | 30% | 30% | |||||||||||||||||
| Stephen W. Beard | 40% | 30% | 30% | 40% | 30% | 30% | ||||||||||||||
| Douglas G. Beck | 40% | 30% | 30% | |||||||||||||||||
| Kathy Boden Holland | 20% | 10% | 25% | 15% | 30% | 20% | 10% | 25% | 15% | 30% | ||||||||||
| Mehul R. Patel | 20% | 10% | 25% | 15% | 30% | |||||||||||||||
| (1) | Mr. Randolfi did not receive an incentive payment under the FY21 MIP and is therefore excluded from the above table. |
20192021 Performance Goals
Financial goals set for our MIP participants are derived from Adtalem’s fiscal year operating plans, which are recommended by Adtalem’s executive management team and approved by the Board at the beginning of each fiscal year. For fiscal year 2019,2021, these plans translated to financial performance goals of $2.67$1,116.9 million of earnings per sharerevenue and revenue$2.60 of $1,285.1 million.adjusted EPS.
The table below shows the threshold, target, and maximum goals for revenue and adjusted earnings per share and revenue under the fiscal 20192021 MIP, the performance achieved, and the resulting payout.
| Plan | Actual Results (excluding special items)(1) | Performance Relative to Plan | Plan | Actual Results (excluding special items)(1) | Performance Relative to Plan | |||||||||||||||||||||||||||
| Metric | Threshold | Target | Maximum | Payout % | Threshold | Target | Maximum | Payout % | ||||||||||||||||||||||||
| Adtalem Revenue | $ | 1,156.59 | $ | 1,285.10 | $ | 1,542.12 | $ | 1,237.93 | 96.30% | 81.60% | $ | 1,005.2 | $ | 1,116.9 | $ | 1,340.3 | $ | 1,112.4 | 99.6% | 98.0% | ||||||||||||
| Adtalem Earnings Per Share | $ | 2.14 | $ | 2.67 | $ | 3.74 | $ | 2.84 | 106.40% | 115.90% | ||||||||||||||||||||||
| Adtalem Adj. Earnings Per Share | $ | 2.08 | $ | 2.60 | $ | 3.64 | $ | 2.98 | 114.6% | 136.5% | ||||||||||||||||||||||
| (1) | See Appendix A for a reconciliation to reported results. |
The fiscal year 2021 revenue target under the MIP was 5.7% higher than fiscal year 2020 actual results of $1,052.0 million, which reflected expected growth in the Medical and Healthcare and Financial Services segments. The 2021 adjusted earnings per share target goal under MIP was 30.7% higher than 2020 actual results of $2.28, which, again reflected expected growth in the Medical and Healthcare and Financial Services segments and cost control measures across all segments and home office.
4650 Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
Performance below the threshold level results in no payout for that measure. Payout for performance between levels is interpolated, and payout is capped at 200% of target for each measure.
The fiscal year 2019 revenue target under the MIP was 4.4% higher than fiscal year 2018 actual results of $1,239.7 million (as restated from $1,715.5 million reported in last year’s proxy to reflect the completed divestitures of DeVry University and Carrington College) which reflected expected growth in the Medical and Healthcare and Financial Services segments, offset by a decline in the Business and Law segment. The 2019 earnings per share target goal under MIP was set lower than 2018 actual results, due to expected lower operating margins driven by costs reallocated to continuing operations that were previously allocated to DeVry University and Carrington College and expected higher interest and taxes.
The focus in fiscal year 2019 was to align Adtalem’s portfolio to be positioned for growth as a leading workforce solutions provider and to complete the divestitures of DeVry University and Carrington College. Adtalem does not disclose the particular institutionalinstitution or segment performance goals utilized in its MIP due to the confidential nature of such information and the competitive harm that could result from its disclosure. The Compensation Committee considers the organization’s performance goals to represent the best estimate of what the organization could deliver if management, individually and collectively, were to materially satisfy its goals and objectives for the year. All goals are designed to be aggressive yet achievable, with the expectation that it would take extraordinary performance on the part of management to exceed them to the extent necessary to yield maximum incentive payouts under the MIP.
The Compensation Committee approves individual performance goals and objectives for the CEO at the beginning of each fiscal year. The CEO also works collaboratively with the other NEOs in developing their respective individual performance goals and in assigning weightings to such goals to place additional emphasis on tactical priorities. Individual performance goals are factors in determining base salary adjustments, annual cash incentive compensation and future awards of long-term incentive compensation. Individual performance goals intentionally include elements that can be rated objectively as well as, to a lesser extent, elements that are of a subjective nature. Individual performance goals are used to drive stretch performance across a broad range of areas considered critical to our strategy and purpose. This mix of objective and subjective criteria allows the evaluator — the independent members of the Board in the case of the CEO, and the CEO with input and approval from the Compensation Committee in the case of the other NEOs — to assess the individual’s performance against objective criteria, while utilizing his or her discretion to make adjustments based on the individual’s perceived contributions and other subjective criteria.
A summary of the primary individual performance goals and objectives established for each of our NEOs follows:
Lisa W. Wardell | ● ●Implement Workforce Solutions Provider Strategy across portfolio ●Continue building High Performance Team and ●Academic Outcomes and Student Success ●Continue Board and Committee Succession Planning | |
Robert Phelan | ● ●Drive the Talent First Agenda ●Maintain and ●Support Adtalem’s Growth Strategy | |
Stephen W. Beard | ● ●Successful execution of Financial Services vertical (financial plan and succession planning) ●Implement Workforce Solutions Provider Strategy across portfolio ●Successfully navigate the COVID-19 pandemic | |
Kathy Boden Holland | ● | |
● | ||
● | ||
● | ||
● | ||
in collaboration with Corporate | ||
20192021 Proxy Statement 4751
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
Fiscal Year 20192021 MIP Decisions
Based on an evaluation of organizational performance relative to MIP measures set at the beginning of fiscal year 2019,2021, the final MIP awards were partially based on the following financial results, as adjusted for special items described in Appendix A:
| ● | Adtalem achieved |
| ● | Adtalem achieved |
In addition, a portion of the MIP awards for Mr. Patel and Ms. Boden Holland werewas based on results from the performance of the institutions they oversee.she oversees. Final MIP award calculations also took into consideration evaluations of individual performance for each NEO during the course of the fiscal year. Based on all of thisthese applicable factors, the Compensation Committee approved the following MIP awards to the NEOs:
| Annual Target as a Percentage of Base Salary | FY2019 Target Award Opportunity | FY2019 Actual Award | Percent of Target Paid Based on FY2019 Performance | Annual Target as a Percentage of Base Salary | FY2021 Target Award Opportunity | FY2021 Actual Award | Percent of Target Paid Based on FY2021 Performance | ||||||||||||||
| Lisa W. Wardell | 105% | $ | 1,155,000 | $ | 1,135,605 | 98% | 110% | $ | 1,210,000 | $ | 1,489,813 | 123% | |||||||||
| Patrick J. Unzicker | 70% | $ | 367,719 | $ | 370,808 | 101% | |||||||||||||||
| Robert J. Phelan(1) | 50% and 80% | $ | 201,753 | $ | 242,104 | 120% | |||||||||||||||
| Stephen W. Beard | 70% | $ | 385,673 | $ | 388,913 | 101% | 80% | (1) | $ | 480,016 | $ | 619,200 | 129% | ||||||||
| Douglas G. Beck(2) | 70% | $ | 15,342 | $ | 17,490 | 114% | |||||||||||||||
| Kathy Boden Holland | 70% | $ | 402,500 | $ | 405,226 | 101% | 70% | $ | 414,575 | $ | 458,727 | 111% | |||||||||
| Mehul R. Patel | 70% | $ | 313,040 | $ | 344,772 | 110% | |||||||||||||||
| (1) | |
| (2) | Douglas Beck’s award was approved by the committee for delivery on a |
Set forth below, as an example of the MIP calculation for NEOs, is a summary of the calculation of the fiscal year 20192021 award for Ms. Wardell:
| Target Award Opportunity (Weighting) | Target | Performance Achieved (Excluding Special Items) | Performance Relative to Target | Payout as a % of Target Award Opportunity based on Performance Relative to Target | Target Award Opportunity ($ Amount) | Actual Award | |||||||||||
| Adtalem Earnings | 45% | $ | 2.67 | $ | 2.84 | 106.4% | 115.9% | $ | 519,750 | $ | 602,482 | ||||||
| Per Share | |||||||||||||||||
| Adtalem Revenue | 40% | $ | 1,285.1M | $ | 1,237.9M | 96.3% | 81.6% | $ | 462,000 | $ | 377,198 | ||||||
| Individual Performance | 15% | 90% | $ | 173,250 | $ | 155,925 | |||||||||||
| TOTAL | 98% | $ | 1,155,000 | $ | 1,135,605 | ||||||||||||
| Target Award Opportunity (Weighting) | Target | Performance | Performance | Payout as a % of Target Award Opportunity based on Performance Relative to Target | Target Award Opportunity ($ Amount) | Actual Award | ||||||||||||
| Adtalem Adj. Earnings Per Share | 45% | $ | 2.60 | $ | 2.98 | 114.6% | 136.5% | $ | 544,500 | $ | 743,243 | |||||||
| Adtalem Revenue | 40% | $ | 1,116.9 | $ | 1,112.4 | 99.6% | 98.0% | $ | 484,000 | $ | 474,320 | |||||||
| Individual Performance | 15% | 150.0% | $ | 181,500 | $ | 272,250 | ||||||||||||
| Total | 123.1% | $ | 1,210,000 | $ | 1,489,813 | |||||||||||||
In reviewing the CEO’sMs. Wardell’s performance, the Compensation Committee evaluated Ms. Wardell’sher performance against each of her individual goals and determined a 90%150% payout for the individual performance component of her MIP award (which represents 15% of the total MIP opportunity) was appropriate. Specifically, the Compensation Committee believedwanted to recognize Ms. Wardell was successfulWardell’s continued role in developing a new enterprise strategy process; securing accreditor approval for the DeVry Universitytransformation of the Company, and Carrington College divestitures and successfully transitioning both DeVry University and Carrington College to new owners; relocating RUSM to a new campus on the island of Barbados; driving a focus on academic quality that resulted in achievement of targets for first-time pass rates for Chamberlain University nursing students on the National Council Licensure Examination students and first-time pass rates for RUSM and AUC students on the U.S. Medical Licensing Examination tests;particular, successfully completing the OCL acquisition; andacquisition of Walden University. Additionally, the Committee believes Ms. Wardell had exceeded expectations in continuing to drive greater pace, agility and accountabilitylead the company through the cultureglobal pandemic and preserving the organization’s financial performance, while at the same time, over-delivering in terms of academic outcomes and succession planning for the organization. The Compensation Committee identified Ms. Wardell’s individual goal relating to settingBoard and achieving external targets for growth as not fully attained during fiscal year 2019.management.
48 52Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
The Compensation Committee evaluated the other NEOs against their individual goals taking into consideration the following performance highlights:
Mr. Phelan was instrumental in achieving the | ||
| Stephen W. Beard | The Committee recognized Mr. Beard’s exceptional performance in the Financial Services vertical by building out a successful management team and overdelivering on segment revenue growth. In addition, Mr. Beard spearheaded the Walden transaction and managed the integration strategy plan and new operating model to allow for greater execution on the workforce solutions strategy. | |
| Douglas G. Beck | Although Mr. Beck started at Adtalem on June 14, 2021, the | |
| Kathy Boden Holland | Ms. Boden Holland was recognized by the Committee for achieving growth across medical and healthcare while maintaining and improving academic | |
Long-Term Incentive Compensation
Long-term incentive compensation at Adtalem consists of PSUs, stock options RSUs, and PSUs.RSUs. The Compensation Committee targets the value of long-term incentive compensation for NEOs to represent a substantial percentage of their total compensation opportunity. These incentives are intended to serve three complementary objectives of our compensation program:
| ● | Align executives’ long-term interests with those of our shareholders; |
| ● | Drive achievement of and reward executives for the delivery of long-term business results; and |
| ● | Promote long-term retention of key executives who are critical to our |
How Thethe Long-Term Incentive Plan Works
The Compensation Committee granted equity awards to each of the NEOs other than the CEO(except Mr. Beck) in August 20182020 (RSUs and stock options) and November 2020 (PSUs) based on both retrospective and prospective considerations and organizational and individual considerations. PSU grants were delayed until November in order to give the leadership team and the Compensation Committee time to evaluate the ongoing impacts of COVID-19 on the business and set goals that properly aligned management and shareholder interests. The Compensation Committee took into account the same seven criteria described in the “Annual Base Salary” section above in determining the amount of these awards. Awards were delivered through a mix of stock-based vehicles to provide a reasonable balance to the equity portfolio:portfolio.
| Tier | Name | Stock Options | RSUs | PSUs | ||||
| CFO and Group Presidents | Patrick J. Unzicker | 40% | 20% | 20% ROIC/20% FCF | ||||
| Kathy Boden Holland | per share | |||||||
| Mehul R. Patel | ||||||||
| Home Office Functional Leaders | Stephen W. Beard | 40% | 30% | 15% ROIC/15% FCF | ||||
| per share |
| Tier | Name | Stock Options | RSUs | PSUs | ||||
| CEO, CFO, COO, and Group President | Lisa W. Wardell | 33.3% | 33.3% | 16.7% ROIC/16.7% | ||||
| Robert J. Phelan | FCF per share | |||||||
| Stephen W. Beard | ||||||||
| Kathy Boden Holland |
Stock Options:Stock options reward long-term value creation through increases in stock price. To promote retention, stock option grants vest in equal annual installments over a four-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem. The Compensation Committee granted incentive stock options (“ISOs”) with a value of up to the $100,000 Internal Revenue Service (“IRS”) limitation applicable to each one-year vesting period. To the extent this limitation was met for any NEO, the remaining portion of the stock option award was issued in the form of non-qualified stock options. The Compensation Committee recognizes that Adtalem may not receive a tax deduction for ISOs, but weighed this consideration against the tax benefit ISOs provide to employees and the additional enhancement to Adtalem’s ability to attract and retain executives. The Compensation Committee determined it was in Adtalem’s best interest to continue utilizing ISOs in the manner described.
Focusing on Long-Term Results The Compensation Committee believes that long-term equity compensation is an important retention tool and, therefore, chose to use a four-year ratable vesting schedule for grants of stock options and RSUs and a three-year cliff vesting schedule for PSUs, to encourage longer-term focus and retention. |
20192021 Proxy Statement 4953
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
In addition to the annual equity awards made to the NEOs, an RSU grant was awarded to Mr. Phelan in recognition of his appointment to Interim Chief Financial Officer effective April 24, 2021. The grant will vest 100% on the three-year anniversary of the grant date. Mr. Beck received a sign-on equity award, delivered in RSUs, which will vest ratably over a four-year period consistent with other RSUs granted to the NEOs.
Restricted Stock Units (RSUs):RSUs align the interests of management with those of shareholders and reward long-term value creation. To promote retention, RSUs vest in equal annual installments over a four-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem.
Performance Share Units (PSUs):PSUs are designed to reward strong performance based on two financial indicators, ROIC and FCF per share, to focus executives on profitability and effective capital allocation. In fiscal year 2019,2021, PSUs granted to Mr. Unzicker, Mr. Beard, Ms. Boden Holland, and Mr. Patelthe NEOs were split equally among these two components. These PSUs vest after three years based on ROIC and FCF per share performance, respectively, as compared to the goals outlined in the following tables:
| ROIC Performance Goals (FY19-21) | ||||||
| Performance Period | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | |||
| Fiscal Year 2019 | 7.50% | 10.00% | 12.50% | |||
| Fiscal Year 2020 | 8.50% | 11.00% | 13.50% | |||
| Fiscal Year 2021 | 9.50% | 12.00% | 14.50% | |||
| 3-Year Goal | 8.50% | 11.00% | 13.50% | |||
| FCF Per Share Performance Goals (FY19-21) | |||||||||
| Performance Period | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | ||||||
| Fiscal Year 2019 | $ | 1.61 | $ | 2.30 | $ | 2.99 | |||
| Fiscal Year 2020 | $ | 2.13 | $ | 3.04 | $ | 3.95 | |||
| Fiscal Year 2021 | $ | 3.05 | $ | 4.36 | $ | 5.66 | |||
| 3-Year Goal | $ | 2.26 | $ | 3.23 | $ | 4.20 | |||
| ROIC Performance Goals (FY21-23) | ||||||
| Performance Period | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | |||
| 1-Year Goal for Fiscal Year 2021 | 8.0% | 8.8% | 9.6% | |||
| FCF Per Share Performance Goals (FY21-23) | ||||||
| Performance Period | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | |||
| 1-Year Goal for Fiscal Year 2021 | $2.59 | $2.88 | $3.17 | |||
At the start of the performance period annualfor fiscal year 2021, the average ROIC and FCF per share goals arewere set for each fiscal year,a one-year period as an exception to our normal three-year goal setting process due to challenges in goal setting arising from the COVID-19 pandemic. The Committee further agreed to review and three-year average ROICset goals are set for the fullremaining two years of the three-year performance period. Similar to goals for the MIP, these goals are based on the multi-year strategic plan. In some cases, stretch goals are built in to help bridge to out-yearanticipated future year targets to ensure we are appropriately working towards our long-term strategic plan. In addition, in some cases,at the onset of fiscal year 2021 we conductalso conducted a “nearest neighbor”comprehensive analysis, examining our payout history, changes to our strategic plan accounting for recent and anticipated corporate transactions and events as well as the target ranges of our closest competitorscompetitors. This year we also considered the additional challenges as presented by the global pandemic and its impact the business landscape to ensure we are positioning ourselves appropriately inconsidering the market and compared to peers in the industry.
Vesting of the 2019 PSUs are determined as the greater of the sum of the individual payout for each of the three years in the cycle, or the payout based on the three-year average ROIC performance. Vesting for performance between threshold and target and between target and maximum is determined by straight-line interpolation.
The 2019 PSUs grants were made prior our receipt of shareholder feedback regarding2021 PSU grant design is consistent with the design feature calculating payouts based on the greater of the sum of individual annual performance or performance averaged over three years. In response to shareholder feedback, beginning with grants madechange introduced in fiscal year 2020 PSUsuch that vesting will be based only on performance averaged over three-years.the three-year period. This design change was introduced in 2019 following shareholder questions regarding the need for the previous plan design that used two separate performance calculations to determine funding and also serves to preserve the simplified PSU construct introduced in fiscal year 2020.
Fiscal Year 2019 Long-Term Incentive Decisions
For fiscal year 2019, NEOs received the following stock-based awards:
| Stock Options | RSUs | PSUs | Total Value of 2019 Long-Term Incentive Grant | ||||||||||
| Lisa W. Wardell | – as reported | $ | — | — | $ | — | $ | — | |||||
| – LTI normalized(1) | $ | 2,457,657 | — | $ | 2,249,943 | $ | 4,707,600 | ||||||
| Patrick J. Unzicker | $ | 303,161 | $ | 139,793 | $ | 279,586 | $ | 722,540 | |||||
| Stephen W. Beard | $ | 324,666 | $ | 225,140 | $ | 224,649 | $ | 774,456 | |||||
| Kathy Boden Holland | $ | 324,666 | $ | 150,093 | $ | 300,186 | $ | 774,945 | |||||
| Mehul R. Patel | $ | 251,236 | $ | 115,758 | $ | 231,516 | $ | 598,510 | |||||
5054 Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
CEOFiscal Year 2021 Long-Term Incentive CompensationDecisions
The CEO’s equity grant forFor fiscal year 2018 (granted in August 2017) was a front-loaded, two-year award valued at approximately $9.4 million. This 2018 grant represented Ms. Wardell’s long-term incentive awards for both fiscal year 2018 and fiscal year 2019. Therefore, Ms. Wardell did not receive any form of long-term incentive award in fiscal year 2019. This grant was determined by2021, NEOs received the Board and Compensation Committee to drive Ms. Wardell’s focus on critically important academic and financial metrics over the next several years, given the divestitures of DeVry University and Carrington College and the transformative nature of the corporate changes.following stock-based awards:
Impact of 2018 grant on total compensation for fiscal years 2018 and 2019:
| Lisa Wardell Compensation | Salary | Stock Awards | Option Awards | Non-Equity Incentive Compensation | All Other Compensation | Total | ||||||||||||
| 2018 – LTI as reported | $ | 1,000,529 | $ | 4,499,886 | $ | 4,915,314 | $ | 1,190,869 | $ | 115,611 | $ | 11,722,209 | ||||||
| 2018 – LTI normalized(1) | $ | 1,000,529 | $ | 2,249,943 | $ | 2,457,657 | $ | 1,190,869 | $ | 115,611 | $ | 7,014,609 | ||||||
| 2019 – No LTI grant | $ | 1,083,654 | $ | — | $ | — | $ | 1,135,605 | $ | 153,935 | $ | 2,373,194 | ||||||
| 2019 – LTI normalized(1) | $ | 1,083,654 | $ | 2,249,943 | $ | 2,457,657 | $ | 1,135,605 | $ | 153,935 | $ | 7,080,794 | ||||||
| Stock Options | RSUs | PSUs | 2021 Long-Term Incentive Grant | |||||||||
| Lisa W. Wardell | $ | 1,785,580 | $ | 1,999,953 | $ | 1,999,840 | $ | 5,785,373 | ||||
| Robert Phelan(1) | $ | 47,697 | $ | 253,628 | $ | 53,214 | $ | 354,539 | ||||
| Stephen W. Beard | $ | 461,377 | $ | 516,644 | $ | 516,696 | $ | 1,494,717 | ||||
| Douglas Beck(2) | — | $ | 1,199,824 | — | $ | 1,199,824 | ||||||
| Kathy Boden Holland | $ | 327,458 | $ | 366,744 | $ | 366,780 | $ | 1,060,982 | ||||
| Michael O. Randolfi(3) | $ | 327,458 | $ | 366,744 | $ | 366,780 | $ | 1,060,982 | ||||
| (1) | |
| (2) | Reflects the |
| (3) | Mr. Randolfi forfeited these awards when he resigned from Adtalem effective April 23, 2021. |
On a normalized basis,Payouts from Fiscal Year 2019 Performance Share Awards
Performance share awards granted in August 2018 to Mr. Beard and Ms. Boden Holland, which included both financial-based PSUs, vested in 2021. The PSU awards were split evenly between ROIC and Free Cash Flow per share targets over the three-year performance period. Final funding is based upon the “better of” either, the 3-year average goal achievement, or the sum of each year’s “banked” results divided by 3. The other NEOs did not receive PSUs for fiscal yearthe 2018 cycle.
For the FY2019-2021 Plan, the funded result for ROIC is the same in either case at 64.3%, while the “better of result for FCF/share favors the sum of each year’s banked results at 93.8%. The tables below show the performance measures and fiscal year 2019,targets established for the amount of Ms. Wardell’s total compensation was consistent withAugust 2018 PSUs, the external market and our goal to incentivize Ms. Wardell to deliver strategic corporate results.
The Compensation Committee believed the front-loaded equity award strengthened alignment between the CEO’s earned compensationperformance achieved, and the shareholder value that would be created if she delivered on the transformation, particularly since several of the key strategic initiatives needed to happen in fiscal year 2018. To increase the focus on long-term growth, the 2018 grant deviated from our standard annual equity mix by not granting any time-vesting RSUs and instead granting 50% PSUs and 50% stock options. Additionally, while our typical annual LTI plan includes stock options vesting equally over four years, vesting of the 2018 stock options was back-end loaded, with 50% vesting on each of the third and fourth anniversaries of the grant date.resulting payout.
| Performance Goals | Payout (as a % of Target) | |||||||||
| Goal | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | |||||||
| Financial-Based PSUs | ||||||||||
| ROIC | FY2019 |  | 84.8% | |||||||
| ROIC | FY2020 |  | 56% | |||||||
| ROIC | FY2021 |  | 52% | |||||||
| ROIC | FY2019-2021 (3-year average) |  | 64.3% | |||||||
| Fiscal Year 2019-2021 PSU ROIC Total Payout as a % of Target: | 64.3% | |||||||||
20192021 Proxy Statement 5155
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
Review of Performance Share Payouts from Fiscal Year 2016 Awards
Performance share awards granted in August 2016 to Ms. Wardell and Mr. Unzicker, which included both financial and mission-based PSUs, vested in 2019. The financial measure was ROIC, and the academic measures were based on achieving various academic milestones. The tables below show the performance measures and targets established for the August 2016 PSUs, the performance achieved, and the resulting payout.
| Performance Goals | Payout (as a % of Target) | |||||||||||
| Goal | Weighting | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | ||||||||
| Financial-Based PSUs | ||||||||||||
| ROIC | 100% |  | 117.7% | |||||||||
| Academic-Based PSUs | ||||||||||||
| DeVry University - Undergraduate Session to Session Persistence(1) | 20% |  | 150.0% | |||||||||
| Chamberlain - BSN NCLEX 1st Time Pass Rate(2) | 25% |  | 26.3% | |||||||||
| RUSM & AUC - USMLE 1st Time Pass Rate (Step1)(3) | 10% |  | 138.5% | |||||||||
| RUSM & AUC - USMLE 1st Time Pass Rate (Step2 - CK)(3) | 10% |  | 91.3% | |||||||||
| RUSM & AUC - USMLE 1st Time Pass Rate (Step2 - CS)(3) | 10% |  | 107.4% | |||||||||
| Carrington - Retention(1) | 10% |  | 119.7% | |||||||||
| Adtalem Brasil - General Course Index (“IGC”) | 15% |  | 142.2% | |||||||||
Total Payout as a % of Target (Academic PSUs): | 103.6% | |||||||||||
| Performance Goals | Payout (as a % of | ||||||||
| Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | |||||||
| Free Cash Flow per Share - FY2019 |  | 131.2% | |||||||
| Free Cash Flow per Share - FY2020 |  | 74.7% | |||||||
| Free Cash Flow per Share - FY2021 |  | 75.6% | |||||||
| Free Cash Flow per Share - FY2019-2021 (3-year average) |  | 88.7% | |||||||
| Fiscal Year 2019-2021 PSU Free Cash Flow Total Payout as a % of Target: | 93.8% | ||||||||
COMPENSATION SETTING PROCESS
Role of the Compensation Committee
The Compensation Committee determines the appropriate level of compensation for the CEO and other NEOs. The Compensation Committee reviews and approves all components of annual compensation (base salary, annual cash incentive and long-term incentive) to ensure they align with the principles of Adtalem’s compensation program.Inprogram. In addition, the Compensation Committee meets periodically to review the design of the overall compensation program, approve performance targets and review management performance, and it assists in establishing CEO goals and objectives.
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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
Each year, the Compensation Committee recommends CEO compensation to the independent members of the Board, taking into consideration the CEO’s performance evaluation and advice from the independent executive compensation consulting firm engaged by the Compensation Committee. In determining the CEO’s long-term incentive compensation, the Compensation Committee considers Adtalem’s absolute and relative performance, incentive awards to CEOs at comparable companies, past awards and the CEO’s expected future contributions, as well as other factors it deems appropriate.
The Compensation Committee approves base salary, annual cash incentive and long-term incentive compensation for Adtalem’s NEOs, except for the CEO whose compensation package is recommended by the Compensation Committee and approved by the independent members of the Board during executive session.
Role of the Executive Officers and Management
The CEO, in consultation with the Senior Vice President, Chief Human Resources and the Chief Financial Officer, provides the Compensation Committee with compensation recommendations for the other NEOs, including recommendations for annual base salary increases, annual cash incentive awards, and long-term incentive awards. Our Chief Financial Officer does not participate in discussions regarding his compensation. These recommendations are based on market-competitive compensation data and the CEO’s assessment of each NEO’s performance in the prior year. While these recommendations are given significant weight, the Compensation Committee retains full discretion when determining compensation.
The Compensation Committee reviews and approves, with any modifications it deems appropriate, base salary, annual cash incentive awards and long-term incentive awards for Adtalem’s NEOs. The compensation package for the CEO is recommended by
56 Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation Committee and approved by the independent members of the Board during executive session.Our Named Executive Officers (“NEOs”)
Role of the Compensation Consultant
The Compensation Committee retains ultimate responsibility for compensation-related decisions. To add objectivity to the review process and inform the Compensation Committee of market trends and practices, the Compensation Committee engages the services of an independent executive compensation advisory firm. For fiscal year 2019,2021, the Compensation Committee engaged FW CookMeridian Compensation Partners, LLC (“Meridian”) as its independent executive compensation consultant. F.W. Cook, the Compensation Committee’s previous compensation consultant attended the August 2020 meeting of the Compensation Committee. Meridian attended the meetings from November 2020 through the end of fiscal year 2021.
FW Cook analyzedMeridian reviewed Adtalem’s executive compensation structure and incentive plan designs and assessed whether the executive compensation program is competitive and supports the Compensation Committee’s goal to align the interests of executive officers with those of shareholders, students and other stakeholders.
For fiscal year 2019, FW Cook’s2021, Meridian’s primary areas of assistance were:
| ● | Gathering information related to current trends and practices in executive compensation, including peer group and broader market survey data; |
| ● | Reviewing, analyzing and providing recommendations for Adtalem’s list of peer group companies; |
| ● | Benchmarking competitive pay levels for NEOs and other executives |
| ● | Reviewing information developed by management for the Compensation Committee and providing input on such information to the Compensation Committee; |
| ● | Attending and participating in all Compensation Committee meetings and most non-employee director executive sessions, as well as briefings with the Compensation Committee chair and management prior to meetings; and |
| ● | Reviewing with management and the Compensation Committee the materials to be used in Adtalem’s Proxy Statement. |
In the second half of fiscal year 2018, FW Cook2021, Meridian also conducted a review of our non-employee director compensation program and recommended anthat we maintain our annual retainer rate that was applicable throughout fiscal year 2019.2021. Refer to “Director Compensation” beginning on page 2936 for more detail.
The Compensation Committee has the sole authority to approve the independent compensation consultant’s fees and terms of the engagement. Thus, the Compensation Committee annually reviews its relationship with, and assesses the independence of, FW Cookits independent consultant to ensure executive compensation consulting independence. The process includes a review of the services FW Cookthe independent consultant provides, the quality of those services, and fees associated with the services during the fiscal year. The Compensation Committee has assessed the independence of FW Cookits independent consultants pursuant to applicable SEC rules and NYSE listing standards and has concluded that FW Cook’sthe independent consultants’ work for the Compensation Committee does not raise any conflict of interest.
2019 Proxy Statement 53
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
Executive Compensation Peer Group
To ensure Adtalem continues to provide total executive compensation that is fair and competitively positioned in the marketplace, the Compensation Committee reviews the pay level, mix and practices of peer group companies. The Compensation Committee does not target any specific percentile levels in establishing compensation levels and opportunities.
While including all large publicly-held, private sector higher education schools, Adtalem’s peer group also includes a broader group of organizations in order to provide more comprehensive compensation data. Adtalem’s expanded peer group includes publicly-held organizations that provide services over an extended period of time. In consideration of Adtalem’s significant focus on healthcare education, which requires attracting and retaining seasoned healthcare professionals and executives, the peer group also includes healthcare services companies. Revenue of most of the peer group organizations is generally between one-half and two times Adtalem’s revenue.
Based on the recommendation2021 Proxy Statement 57
Table of FW Cook, in February 2019,Contents
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation Committee approved changes to the peer group. of Our Named Executive Officers (“NEOs”)
The Compensation Committee removed the following companies from the prior year analysis due to their disparate size and/or lack of customer or human resources market alignment:
Additionally, the Compensation Committee added the following companies to the prior year analysis, due to their stronger market alignment for executive talent and business focus:
Adtalem’s resulting peer group is composed of:was used for fiscal 2021:
| Cross Country Healthcare | Laureate Education | |
| Ensign Group | MEDNAX, Inc. | |
| AMN Healthcare | Graham Holdings Company | Perdoceo Education |
| Bright Horizons Family Solutions LLC | ||
| Grand Canyon Education, Inc. | Strategic Education | |
| Houghton Mifflin Harcourt | Tivity Health | |
| Chegg | John Wiley & Sons | |
| Chemed | K12 |
ADDITIONAL EXECUTIVE COMPENSATION PRACTICES
Deferred Compensation
Adtalem maintains the Nonqualified Deferred Compensation Plan that allows certain employees, including the NEOs, to defer up to 50% of salary and 100% of the MIP compensation until termination of service or certain other specified dates. Adtalem credits matching contributions to participants’ accounts to the extent they have elected to defer the maximum contributions under Adtalem’s Success Sharing Retirement Plan, which is a 401(k) plan, and their matching contributions are limited by the Internal Revenue Code of 1986, as amended (the “Code”) provisions.
The Nonqualified Deferred Compensation Plan enables the NEOs and other eligible employees with a certain level of annual compensation to save a portion of their income for retirement on a scale consistent with other employees not subject to IRS limits.
54 Adtalem Global Education Inc.
Proposal No. 3 Say-on-pay: Advisory Votehas elected to Approve the Compensation of Our Named Executive Officers
Thefund its Nonqualified Deferred Compensation Plan obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of an insolvency, but the assets held in the rabbi trust are not 100% funded by Adtalem and participantsavailable for general corporate purpose. Participants have an unsecured contractual commitment by Adtalem to pay the amounts due under such plan.the Nonqualified Deferred Compensation Plan.
The value of deferred compensation amounts is quantified each year and this program is periodically reviewed for its competitiveness.
Other Benefits
NEOs are eligible to participate in a number of broad-based benefit programs, which are the same ones offered to most employees at Adtalem, including health, disability and life insurance programs.
We do not offer a defined benefit pension plan, and, therefore, our Success Sharing Retirement Plan and the Nonqualified Deferred Compensation Plan are the only retirement savings vehicles for executives.
In general, we do not provide benefits or perquisites to our NEOs that are not available to other employees, with the exception of personal financial planning services.
Benefits and perquisites make up the smallest portion of each NEO’s total compensation package. The nature and quantity of perquisites provided by Adtalem did not change materially in fiscal year 20182021 versus 2019,2020, consistent with our philosophy that benefits and perquisites should not represent a meaningful component of our compensation program. The Compensation Committee periodically reviews the benefit and perquisite program to determine if adjustments are appropriate.
The “All Other Compensation” column of the 20192021 Summary Compensation Table shows the amounts of benefit and perquisite compensation we provided for fiscal years 2017, 20182019, 2020 and 20192021 to each of the NEOs.
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Employment Agreements
Adtalem has entered into employment agreements with each employed NEO that provide for:
| ● | Initial annual base salary, subject to annual increases (no decreases except in the case of an across-the-board reduction affecting all executives equally); |
| ● | Annual cash incentive opportunity under the MIP, targeted at a percentage of base salary; |
| ● | Benefits and perquisites generally available to senior management; |
| ● | Reimbursement of expenses consistent with Adtalem’s policy in effect at the time; and |
| ● | Severance benefits that will be provided upon certain terminations of employment, as further described on |
Employment Agreements Employment agreements provide NEOs with a guaranteed level of financial protection upon loss of employment. Adtalem believes that providing for such income continuity results in greater management stability and lower unwanted management turnover. The Compensation Committee believes that agreements provide: ●Greater ability for Adtalem to retain key executives following an extraordinary corporate transaction; and ●Benefits to Adtalem including non-competition and non-solicitation covenants by NEOs. |
2019 Proxy Statement 55Separation Agreements
TableAdtalem has entered into a separation agreement with Ms. Boden Holland in connection with her resignation as Group President, Medical and Healthcare effective September 30, 2021. Ms. Boden Holland’s severance benefits were conditioned on signing a release of Contentsclaims which she executed, and Ms. Boden Holland is subject to non-compete and non-solicitation provisions.
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive OfficersAdtalem did not enter into a separation agreement with Mr. Randolfi in connection with his resignation as CFO effective April 23, 2021.
Change-in-Control
Adtalem provides benefits to its NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (e.g., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, as of November 8, 2017, when our shareholders approved the Fourth Amended and Restated Incentive Plan of 2013 (the “2013 Incentive Plan”), Adtalem’s equity compensation plans, and the award agreements used to implement them, provide for accelerated vesting of outstanding equity awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding Awardsawards or to issue new awards in replacement of outstanding Awards,awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control. Awards issued prior to November 8, 2017 provide for accelerated vesting in the event of a change-in-control.
See “2019“2021 Potential Payments Upon Termination or Change-in-Control” beginning on pages 65-67page 69 for a detailed description of potential payments and benefits to the NEOs under Adtalem’s compensation plans and arrangements upon termination of employment or a change of control of Adtalem.
2021 Proxy Statement 59
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
OTHER EXECUTIVE COMPENSATION CONSIDERATIONS AND POLICIES
Stock Ownership Guidelines
Stock ownership guidelines have been in place for our directors and executive officers since 2010 and are intended to align their interests with our shareholders by requiring them to be subject to the same long-term stock price volatility our shareholders experience. Each of our non-employee Board members except for Mr. Malafronte, are expected to maintain ownership of Adtalem Common Stock valued at or equal to threefive times their annual retainer. Mr. Malafronte, who was appointed to the Board pursuant to a Support Agreement between Adtalem and a shareholder, IVA, and who has declined all compensation for his service, is not subject to the ownership guidelines.
In February 2019, our Board increased theFor fiscal year 2021, required ownership valuelevels for certain executive officers including certain of our NEOs, to better reflect market practice and the scope of their rolesremained consistent with those put in place in fiscal year 2020 as described in the table below:
Linking Compensation to Stock Performance Stock ownership guidelines tie the compensation of the NEOs to our stock performance, since the increase or decrease in our stock price impacts their personal holdings. Currently, all NEOs and directors who are no longer subject to a phase-in period have met the minimum ownership requirements. |
| Position | NEOs | Number of Shares Equivalent to: | ||||
| CEO | Lisa W. Wardell | 5 times base salary | ||||
| CFO | 3 times base salary | |||||
| COO | Stephen W. Beard | 3 times base salary | ||||
| Key operational leaders | Kathy Boden Holland | 2 times base salary | ||||
| All other executive officers | Douglas Beck and Robert Phelan | 1 |
Our directors and executive officers have five years following their election, date of appointment or promotion to an executive officer position, as the case may be to achieve their stock ownership level. Additionally, our executive officers have until the later of five years from their appointment or adoption of the increased guidelines to achieve the new stock ownership levels.
Shares that count toward satisfaction of the guidelines include Adtalem’s Common Stock directly and/or beneficially owned, Adtalem’s Common Stock held in Adtalem’s Success Retirement Plan, Adtalem’s Common Stock held in Adtalem’s Nonqualified Deferred Compensation Plan, and the after-tax value of unvested RSUs and PSUs and/or vested in-the-money options, provided that these make up no more than 50% of the ownership expectation.
Our stock ownership guidelines are deemed to continue to be met by an individual who has achieved the required ownership level but then falls below solely due to a decline in Adtalem’s Common Stock price. Absent exigentextenuating circumstances, executives who have not yet met the guidelines at the end of their five-year phase-in period are required to retain, until the guidelines are satisfied, 100% of the after-tax shares received from option exercises or the vesting of RSUs or PSUs.
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Incentive Compensation Recoupment Policy
Adtalem has adopted an incentive compensation recoupment policy that applies to all executive officers. The policy provides that, in addition to any other remedies available to Adtalem (but subject to applicable law), if the Board or any committee of the Board determines that it is appropriate, Adtalem may recover (in whole or in part) any incentive payment, commission, equity award or other incentive compensation received by an executive officer of Adtalem to the extent that such incentive payment, commission, equity award or other incentive compensation is or was paid on the basis of any financial results that are subsequently restated due to executive officer conduct that is determined by the independent directors to have been knowingly or intentionally, fraudulent or illegal.
Deductibility of Compensation
Adtalem analyzes the overall expense arising from aggregate executive compensation, as well as the accounting and tax treatment of such programs. Section 162(m) of the Code generally disallows a tax deduction to publicly traded companies for certain compensation in excess of $1 million per year paid to “covered employees.” Prior to“Covered employees” include the recent enactment ofChief Executive Officer, the Tax Cuts and Jobs Act, “covered employees” were defined as the CEOChief Financial Officer and the three other most highly compensated officers, other thanofficers. Once an executive officer qualifies as a covered employee, he or she will continue to be treated as a covered employee indefinitely, even after ceasing to serve as an executive officer or separating from Adtalem. Historically, the CFO, employed at year-end,company’s compensation plans were structured so that compensation would be performance-based and compensation that satisfieddeductible under Section 162(m) of the Code’s requirements for performance-based compensation was not subject to the deduction limitation.Code. However, the performance-based exception from the deduction limitation has now been repealed under theThe Tax Cuts and Jobs Act enacted on December 22, 2017 eliminated the performance-based compensation exemption
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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)
from the Section 162(m) $1 million per year dollar deduction limit, with an exception for certain “grandfathered agreements” in effect on November 2, 2017. The company intends to administer outstanding “grandfathered agreements” and plans to the definition of “covered employees” has been expandedextent compatible with business needs to include, among others, the CFO and certain former executive officers, effective for taxable years beginning after December 31, 2017, subject to certain transition relief.preserve potential deductions.
From and after January 21, 2018, compensation awarded in excess of $1,000,000 to our NEOs will generally not be deductible. The Compensation Committee views the tax deductibility of executive compensation as one factor to be considered in the context of its overall compensation philosophy. The Compensation Committee reviews each material element of compensation on a continuing basis and believes that shareholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in crafting compensation programs, even though such programs may result in certain non-deductible compensation expenses. Accordingly, the Compensation Committee has approved and may in the future approve compensation arrangements for executive officers that are not fully deductible.
Compensation Risk Analysis
The Compensation Committee, with the assistance of its consultant, FW Cook,Meridian Compensation Partners, LLC, conducted an annual assessment of our compensation program to ensure it does not encourage unnecessary or excessive risk taking that could have an adverse effect on Adtalem.
The risk assessment covered all compensation programs, including those in which our top executives and NEOs participate.
Through this process, FW CookMeridian and the Compensation Committee have concluded that Adtalem’s compensation programs do not encourage behaviors that could create material risk to the organization. More specifically, the Compensation Committee concluded that:
| ● | Adtalem’s compensation programs are well-designed to encourage behaviors aligned with the long-term interests of shareholders. |
| ● | There is appropriate balance in the executive compensation program structure to mitigate compensation-related risk with fixed and variable pay, cash and equity, corporate and business unit goals, financial and non-financial goals, and formulas and discretion. |
| ● | The Compensation Committee has approved policies to mitigate compensation risk, including stock ownership guidelines, insider-trading prohibitions, and clawbacks. |
| ● | Additionally, the Compensation Committee exercises an appropriate level of independent oversight into compensation decisions and related risk. |
Prohibition on Hedging and Pledging
Our insider trading policy prohibits employees and directors from engaging in any transaction that is designed to hedge or offset any decrease in the market value of equity securities issued by Adtalem. In addition, except as expressly approved by our general counsel, employees and directors may not hold Adtalem securities in a margin account or pledge Adtalem securities as collateral for a loan. None of our executive officers or directors have requested approval to hold Adtalem securities in a margin account or to pledge Adtalem securities.
2019 Proxy Statement 57
Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers
The Compensation Committee of the Board hereby furnishes the following report to the shareholders of Adtalem in accordance with rules adopted by the SEC. The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis of this Proxy Statement with Adtalem’s management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis be included in this Proxy Statement.
This report is submitted on behalf of the members of the Compensation Committee:
Michael W. Malafronte, Chair
William W. Burke
Lyle Logan
Kenneth J. Phelan
2021 Proxy Statement 58 61Adtalem Global Education Inc.
20192021 SUMMARY COMPENSATION TABLE
This table shows the compensation of each of our NEOs for fiscal years ended June 30, 2019,2021, June 30, 20182020 and June 30, 2017,2019, respectively.
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation(6) ($) | Total ($) | ||||||||||
| Lisa W. Wardell Chairman of the Board, Chief Executive Officer and President | 2019 | 1,083,654 | — | — | (7) | — | (7) | 1,135,605 | 153,935 | 2,373,194 | ||||||||
| 2018 | 1,000,529 | — | 4,499,886 | (7) | 4,915,314 | (7) | 1,190,869 | 115,611 | 11,722,209 | |||||||||
| 2017 | 929,423 | — | 2,684,087 | 1,741,417 | 1,000,485 | 41,668 | 6,397,080 | |||||||||||
| Patrick J. Unzicker(8) Former Senior Vice President, Chief Financial Officer and Treasurer | 2019 | 522,849 | — | 419,379 | 303,161 | 370,808 | 51,545 | 1,667,742 | ||||||||||
| 2018 | 492,788 | — | 540,027 | 393,181 | 407,289 | 42,733 | 1,876,018 | |||||||||||
| 2017 | 410,000 | — | 298,338 | 193,389 | 294,483 | 31,419 | 1,227,629 | |||||||||||
| Stephen W. Beard(9) Chief Operating Officer, General Counsel and Corporate Secretary | 2019 | 535,700 | — | 449,790 | 324,666 | 388,913 | 23,341 | 1,722,410 | ||||||||||
| Kathy Boden Holland(10) Group President, Medical and Healthcare | 2019 | 575,000 | — | 450,279 | 324,666 | 405,226 | 39,054 | 1,794,225 | ||||||||||
| Mehul R. Patel Group President, Financial Services | 2019 | 443,892 | — | 347,274 | 251,236 | 344,772 | 46,337 | 1,433,511 | ||||||||||
| 2018 | 337,385 | 250,000 | 529,816 | — | 215,827 | 13,490 | 1,346,518 | |||||||||||
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation(6) ($) | Total ($) | ||||||||
| Lisa W. Wardell Chairman of the Board, Chief Executive Officer and President | 2021 | 1,100,000 | — | 3,999,793 | 1,785,580 | 1,489,813 | 153,247 | 8,528,433 | ||||||||
| 2020 | 1,100,000 | — | 2,819,481 | 1,720,074 | 1,198,082 | 133,442 | 6,971,079 | |||||||||
| 2019 | 1,083,654 | — | — | — | 1,135,605 | 153,935 | 2,373,194 | |||||||||
| Robert J. Phelan(7) Interim Chief Financial Officer | 2021 | 350,000 | 60,000 | 306,842 | 47,697 | 242,104 | 37,493 | 1,044,136 | ||||||||
| Stephen W. Beard Chief Operating Officer | 2021 | 600,020 | — | 1,033,340 | 461,377 | 619,200 | 87,943 | 2,801,880 | ||||||||
| 2020 | 597,558 | — | 600,084 | 365,919 | 562,723 | 40,534 | 2,166,818 | |||||||||
| 2019 | 535,700 | — | 449,790 | 324,666 | 388,913 | 23,341 | 1,722,410 | |||||||||
| Douglas G. Beck(8) Senior Vice President, General Counsel and Corporate Secretary | 2021 | — | — | 1,199,824 | — | 17,490 | — | 1,217,314 | ||||||||
| Kathy Boden Holland Group President, Medical and Healthcare Education | 2021 | 592,250 | — | 733,524 | 327,458 | 458,727 | 60,034 | 2,171,993 | ||||||||
| 2020 | 588,933 | — | 540,207 | 329,412 | 378,611 | 52,527 | 1,889,690 | |||||||||
| 2019 | 575,000 | — | 450,279 | 324,666 | 405,226 | 39,054 | 1,794,225 | |||||||||
| Michael O. Randolfi(9) Former Senior Vice President and Chief Financial Officer | 2021 | 519,231 | — | 733,524 | 327,458 | — | 19,292 | 1,599,505 | ||||||||
| 2020 | 484,615 | 400,000 | 2,499,697 | 457,611 | 354,640 | 14,895 | 4,211,458 |
| (1) | This column shows the salaries paid by Adtalem to its NEOs in fiscal years |
| (2) | This column includes (i) the |
| (3) | This column includes a sign-on grant value of $1,199,824 to Mr. Beck delivered in restricted shares in fiscal year 2021 and a sign-on grant value of $1,749,919 to Mr. Randolfi delivered in restricted shares in fiscal year 2020. The amounts reported in the Stock Awards column represents the grant date fair value of awards of both PSUs and RSUs, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal years |
62 Adtalem Global Education Inc.
Executive Compensation Tables
| (4) | The amounts reported in the Options Awards column | |
2019 Proxy Statement 59
Executive Compensation Tables
| (5) | The MIP compensation reported in this column was earned in fiscal years | |
| (6) | The amounts indicated in the “all other compensation” column for | |
● | Matching | |
| ● | Company contributions credited under the Nonqualified Deferred Compensation Plan for Ms. Wardell ($ | |
| ● | Group life insurance premiums paid by Adtalem for Ms. Wardell ($ | |
| ● | Personal financial planning services for Ms. Wardell ($16,000); Mr. Beard ($16,000); and Mr. Randolfi ($8,000). | |
| ● | Monthly stipend of $10,000 per month paid to Mr. Phelan in his role as interim Chief Financial Officer for Mr. Phelan ($20,000). | |
| ● | Lump sum payout of unused vacation days for Mr. Randolfi ($2,299). | |
| (7) | ||
| (8) | Mr. | |
| (9) | Mr. | |
| Employment Agreements with Chief Executive Officer and Other Named Executive Officers |
Adtalem has entered into employment agreements with each of its NEOs, which are described on pages 65-6669-70 under the caption “Employment Agreements.”
2021 Proxy Statement 60 63Adtalem Global Education Inc.
Executive Compensation Tables
20192021 GRANTS OF PLAN-BASED AWARDS
This table sets forth information regarding non-equity incentive plan awards, equity incentive plan awards, RSUs and stock options granted to the NEOs in fiscal year 2019.2021.
| Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(5) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#)(6) | Exercise or Base Price of Option Awards ($/sh)(7) | Grant Date Fair Value of Stock and Option Awards(8) | |||||||||||||||
| Threshold ($)(2) | Target ($)(3) | Maximum ($)(4) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||
| Lisa W. Wardell | |||||||||||||||||||||
| 577,500 | 1,155,000 | 2,310,000 | |||||||||||||||||||
| Patrick J. Unzicker | |||||||||||||||||||||
| 183,860 | 367,719 | 735,438 | |||||||||||||||||||
| 8/22/2018 | 2,850 | 5,700 | 8,550 | $279,586 | |||||||||||||||||
| 8/22/2018 | 14,450 | 49.05 | $303,161 | ||||||||||||||||||
| 8/22/2018 | 2,850 | $139,793 | |||||||||||||||||||
| Stephen W. Beard | |||||||||||||||||||||
| 192,837 | 385,673 | (9) | 771,346 | ||||||||||||||||||
| 8/22/2018 | 2,290 | 4,580 | 6,870 | $224,650 | |||||||||||||||||
| 8/22/2018 | 15,475 | 49.05 | $324,666 | ||||||||||||||||||
| 8/22/2018 | 4,590 | $225,140 | |||||||||||||||||||
| Kathy Boden Holland | |||||||||||||||||||||
| 201,250 | 402,500 | 805,000 | |||||||||||||||||||
| 8/22/2018 | 3,060 | 6,120 | 9,180 | $300,186 | |||||||||||||||||
| 8/22/2018 | 15,475 | 49.05 | $324,666 | ||||||||||||||||||
| 8/22/2018 | 3,060 | $150,093 | |||||||||||||||||||
| Mehul R. Patel | |||||||||||||||||||||
| 156,520 | 313,040 | 626,080 | |||||||||||||||||||
| 8/22/2018 | 2,360 | 4,720 | 7,080 | $231,516 | |||||||||||||||||
| 8/22/2018 | 11,975 | 49.05 | $251,236 | ||||||||||||||||||
| 8/22/2018 | 2,360 | $115,758 | |||||||||||||||||||
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(5) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#)(6) | Exercise or Base Price of Option Awards ($/sh)(7) | Grant Date Fair Value of Stock and Option Awards(8) | |||||||||||||||||
| Grant Date | Threshold ($)(2) | Target ($)(3) | Maximum ($)(4) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||
| Lisa W. Wardell | ||||||||||||||||||||||
| 605,000 | 1,210,000 | 2,420,000 | ||||||||||||||||||||
| 11/17/2020 | 34,950 | 69,900 | 104,850 | $ | 1,999,840 | |||||||||||||||||
| 8/26/2020 | 146,000 | 32.03 | $ | 1,785,580 | ||||||||||||||||||
| 8/26/2020 | 62,440 | $ | 1,999,953 | |||||||||||||||||||
| Robert J. Phelan(9) | ||||||||||||||||||||||
| 100,877 | 201,753 | 403,506 | ||||||||||||||||||||
| 11/17/2020 | 930 | 1,860 | 2,790 | $ | 53,214 | |||||||||||||||||
| 8/26/2020 | 3,900 | 32.03 | $ | 47,697 | ||||||||||||||||||
| 8/26/2020 | 1,670 | $ | 53,490 | |||||||||||||||||||
| 5/12/2021 | 5,440 | (9) | $ | 200,138 | ||||||||||||||||||
| Stephen W. Beard | ||||||||||||||||||||||
| 240,008 | 480,016 | 960,032 | ||||||||||||||||||||
| 11/17/2020 | 9,030 | 18,060 | 27,090 | $ | 516,696 | |||||||||||||||||
| 8/26/2020 | 37,725 | 32.03 | $ | 461,377 | ||||||||||||||||||
| 8/26/2020 | 16,130 | $ | 516,644 | |||||||||||||||||||
| Douglas G. Beck(10) | ||||||||||||||||||||||
| 7,671 | 15,342 | 30,684 | ||||||||||||||||||||
| 6/14/2021 | 31,140 | (10) | $ | 1,199,824 | ||||||||||||||||||
| Kathy Boden Holland | ||||||||||||||||||||||
| 207,288 | 414,575 | 829,150 | ||||||||||||||||||||
| 11/17/2020 | 6,410 | 12,820 | 19,230 | $ | 366,780 | |||||||||||||||||
| 8/26/2020 | 12,820 | 32.03 | $ | 327,459 | ||||||||||||||||||
| 8/26/2020 | 11,450 | $ | 366,744 | |||||||||||||||||||
| Michael O. Randolfi | ||||||||||||||||||||||
| 195,945 | 391,890 | 783,780 | ||||||||||||||||||||
| 11/17/2020 | 6,410 | 12,820 | 19,230 | $ | 366,780 | |||||||||||||||||
| 8/26/2020 | 26,775 | 32.03 | $ | 327,458 | ||||||||||||||||||
| 8/26/2020 | 11,450 | $ | 366,744 | |||||||||||||||||||
| (1) | Payouts under the MIP were based on performance in fiscal year |
| (2) | Pursuant to the MIP, performance below a performance goal threshold will result in no payment with respect to that performance goal. If a performance goal threshold is met, then the amount shown in this column represents the minimum incentive payment, 50% of the target. |
| (3) | The amount shown in this column represents the target incentive payment under the MIP, which is calculated as a set percentage of base salary. |
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| (4) | Pursuant to the MIP, the amount shown in this column represents the maximum incentive payment, 200% of the target. |
| (5) | PSUs were granted under the 2013 Incentive Plan. The awards consist of 50% with a target based on ROIC over a period of three fiscal years and 50% with a target based on FCF per share over a period of three fiscal years. PSUs will pay out |
| (6) | Stock option awards on August |
| (7) | All options granted on August |
| (8) | This column shows the grant date fair value of PSUs (assuming payout at target value) |
| (9) | These RSUs were granted in connection with Mr. |
| (10) | These RSUs were granted in connection with Mr. Beck’s onboarding package when joining Adtalem to replace awards he forfeited when he resigned from his |
20192021 Proxy Statement 6165
Executive Compensation Tables
20192021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
This table sets forth information for each NEO with respect to stock options, RSUs and PSUs held by the NEOs as of June 30, 2019.2021.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) | ||||||||||||||||
| Lisa W. Wardell | 127,813 | 66,756 | 17.54 | 5/26/2026 | 179,589 | — | 17.54 | 5/26/2026 | ||||||||||||||||||||||||
| 95,787 | 95,788 | 23.78 | 8/25/2026 | 180,318 | — | 23.78 | 8/25/2026 | |||||||||||||||||||||||||
| — | 335,975 | 33.90 | 8/23/2027 | 167,988 | 167,987 | 33.90 | 8/23/2027 | |||||||||||||||||||||||||
| 32,110 | 1,446,556 | 208,430 | 9,389,772 | 25,325 | 75,975 | 43.39 | 8/28/2029 | |||||||||||||||||||||||||
| Patrick J. Unzicker | 3,225 | — | 38.71 | 8/27/2020 | ||||||||||||||||||||||||||||
| — | 146,000 | 32.03 | 8/26/2030 | 78,685 | 2,804,333 | 113,220 | 4,035,161 | |||||||||||||||||||||||||
| Robert J. Phelan | — | 3,900 | 32.03 | 8/26/2030 | ||||||||||||||||||||||||||||
| 12,957 | 461,787 | 1,860 | 66,290 | |||||||||||||||||||||||||||||
| Stephen W. Beard | 7,737 | 7,738 | 49.05 | 8/22/2028 | ||||||||||||||||||||||||||||
| 3,775 | — | 41.87 | 8/24/2021 | 5,387 | 16,163 | 43.39 | 8/28/2029 | |||||||||||||||||||||||||
| 6,472 | — | 18.60 | 8/29/2022 | — | 37,725 | 32.03 | 8/26/2030 | |||||||||||||||||||||||||
| 7,125 | — | 28.32 | 8/21/2023 | 23,231 | 827,953 | 31,860 | 1,135,490 | |||||||||||||||||||||||||
| Douglas G. Beck | 31,140 | 1,109,830 | — | — | ||||||||||||||||||||||||||||
| Kathy Boden Holland | 7,737 | 7,738 | 49.05 | 8/22/2028 | ||||||||||||||||||||||||||||
| 4,875 | — | 43.47 | 8/20/2024 | 4,850 | 14,550 | 43.39 | 8/28/2029 | |||||||||||||||||||||||||
| 6,693 | 2,232 | 26.23 | 8/26/2025 | — | 26,775 | 32.03 | 8/26/2030 | |||||||||||||||||||||||||
| 10,637 | 10,638 | 23.78 | 8/25/2026 | 17,451 | 621,954 | 32,670 | 1,164,359 | |||||||||||||||||||||||||
| 6,718 | 20,157 | 33.90 | 8/23/2027 | |||||||||||||||||||||||||||||
| — | 14,450 | 49.05 | 8/22/2028 | |||||||||||||||||||||||||||||
| 9,378 | 422,479 | 24,730 | 1,114,087 | |||||||||||||||||||||||||||||
| Stephen W. Beard | — | 15,475 | 49.05 | 8/22/2028 | ||||||||||||||||||||||||||||
| 8,633 | 388,917 | 4,580 | 206,329 | |||||||||||||||||||||||||||||
| Kathy Boden Holland | — | 15,475 | 49.05 | 8/22/2028 | ||||||||||||||||||||||||||||
| 7,133 | 321,342 | 11,550 | 520,328 | |||||||||||||||||||||||||||||
| Mehul R. Patel | — | 11,975 | 49.05 | 8/22/2028 | ||||||||||||||||||||||||||||
| 7,723 | 347,921 | 11,870 | 534,744 | |||||||||||||||||||||||||||||
| Michael O Randolfi | 6,737 | — | 43.39 | 4/24/2022 | — | — | — | — | ||||||||||||||||||||||||
| (1) | The table below details the vesting schedule for stock option grants based on the termination date of the relevant grant. In general, option grants vest 25% on each of the first four anniversaries of the date of grant, except for Ms. |
| Option Expiration Dates | Grant Dates | ||||||||||||||||
| 8/ | 8/22/2018 | 8/22/2019 | 8/22/2020 | 8/ | |||||||||||||
| 8/22/2022 | |||||||||||||||||
| 8/28/2029 | 8/28/2019 | 8/28/2020 | 8/28/2021 | 8/28/2022 | 8/28/2023 | ||||||||||||
| 8/26/2030 | 8/26/2020 | 8/26/2021 | 8/26/2022 | 8/26/2023 | 8/26/2024 | ||||||||||||
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| (2) | The table below details the vesting schedule for RSUs, which vest 25% on each of the first four anniversaries of the date of grant, except for Mr. Phelan’s February 12, 2020 and May 12, 2021 dated grants. In addition to the annual grant, Mr. Phelan received a RSU grant on February 12, 2020 as part of an initial sign-on award granted upon his appointment as Chief Accounting Officer, which vests 33% on each of the first, second, and third anniversaries of the date of grant and a RSU grant on May 12, 2021 as part of compensation upon his appointment as Interim Chief Financial Officer, which vests 100% on the third anniversary of the date of grant. |
| Name | Grant Date | Number of RSUs Vesting | ||||||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Total | ||||||||
| Lisa W. Wardell | 5/26/2016 | — | — | — | 13,185 | 13,185 | ||||||
| Lisa W. Wardell | 8/25/2016 | — | — | 9,462 | 9,463 | 18,925 | ||||||
| Patrick J. Unzicker | 8/26/2015 | — | — | — | 440 | 440 | ||||||
| Patrick J. Unzicker | 8/25/2016 | — | — | 1,052 | 1,053 | 2,105 | ||||||
| Patrick J. Unzicker | 8/23/2017 | — | 1,328 | 1,327 | 1,328 | 3,983 | ||||||
| Patrick J. Unzicker | 8/22/2018 | 712 | 713 | 712 | 713 | 2,850 | ||||||
| Stephen W. Beard | 2/13/2018 | — | 1,348 | 1,347 | 1,348 | 4,043 | ||||||
| Stephen W. Beard | 8/22/2018 | 1,147 | 1,148 | 1,147 | 1,148 | 4,590 | ||||||
| Kathy Boden Holland | 5/9/2018 | — | 1,358 | 1,357 | 1,358 | 4,073 | ||||||
| Kathy Boden Holland | 8/22/2018 | 765 | 765 | 765 | 765 | 3,060 | ||||||
| Mehul R. Patel | 11/7/2017 | — | 1,788 | 1,787 | 1,788 | 5,363 | ||||||
| Mehul R. Patel | 8/22/2018 | 590 | 590 | 590 | 590 | 2,360 | ||||||
| Name | Grant Date | Number of RSUs Vesting | |||||||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Total | |||||||||
| Lisa W. Wardell | 8/28/2019 | — | 5,415 | 5,415 | 5,415 | 16,245 | |||||||
| Lisa W. Wardell | 8/26/2020 | 15,610 | 15,610 | 15,610 | 15,610 | 62,440 | |||||||
| Robert J. Phelan | 2/12/2020 | — | 2,923 | 2,924 | — | 5,847 | |||||||
| Robert J. Phelan | 8/26/2020 | 417 | 418 | 417 | 418 | 1,670 | |||||||
| Robert J. Phelan | 5/12/2021 | — | — | 5,440 | — | 5,440 | |||||||
| Stephen W. Beard | 2/13/2018 | — | — | — | 1,348 | 1,348 | |||||||
| Stephen W. Beard | 8/22/2018 | — | — | 1,147 | 1,148 | 2,295 | |||||||
| Stephen W. Beard | 8/28/2019 | — | 1,153 | 1,152 | 1,153 | 3,458 | |||||||
| Stephen W. Beard | 8/26/2020 | 4,032 | 4,033 | 4,032 | 4,033 | 16,130 | |||||||
| Douglas G. Beck | 6/14/2021 | 7,785 | 7,785 | 7,785 | 7,785 | 31,140 | |||||||
| Kathy Boden Holland | 5/9/2018 | — | — | — | 1,358 | 1,358 | |||||||
| Kathy Boden Holland | 8/22/2018 | — | — | 765 | 765 | 1,530 | |||||||
| Kathy Boden Holland | 8/28/2019 | — | 1,038 | 1,037 | 1,038 | 3,113 | |||||||
| Kathy Boden Holland | 8/26/2020 | 2,862 | 2,863 | 2,862 | 2,863 | 11,450 | |||||||
| (3) | Represents the value derived by multiplying the number of shares of Common Stock covered by RSUs granted by |
| (4) | The table below details the vesting schedule for PSUs. In general, PSUs vest following the third anniversary of their grant date. |
| Name | Grant Date | Vesting Date | Number of PSUs | ||||
| Lisa W. Wardell | 8/ | 8/ | |||||
| 8/ | |||||||
| 8/ | |||||||
| Stephen W. Beard | 8/22/2018 | 8/22/2021 | 4,580 | ||||
| Stephen W. Beard | 8/28/2019 | 8/28/2022 | 9,220 | ||||
| Stephen W. Beard | 11/17/2020 | 8/26/2023 | 18,060 | ||||
| Kathy Boden Holland | 5/9/2018 | 8/22/2021 | 5,430 | ||||
| Kathy Boden Holland | 8/22/2018 | 8/22/2021 | 6,120 | ||||
| 8/28/2019 | 8/28/2022 | 8,300 | |||||
| Kathy Boden Holland | 11/ | ||||||
| (5) | Represents the value derived by multiplying the number of shares of Common Stock covered by the PSUs by |
20192021 Proxy Statement 6367
Executive Compensation Tables
20192021 OPTIONS EXERCISES AND STOCK VESTED
This table provides information for the NEOs concerning stock options that were exercised and PSUs and RSUs that vested during fiscal year 2019.2021.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||||||||
| Lisa W. Wardell | 9,200 | 180,119 | 59,915 | 2,863,660 | 26,237 | 971,525 | 141,120 | 4,676,918 | ||||||||
| Patrick J. Unzicker | 4,928 | 83,654 | 10,303 | 526,665 | ||||||||||||
| Robert J. Phelan | — | — | 2,923 | 118,849 | ||||||||||||
| Stephen W. Beard | — | — | 1,347 | 64,979 | — | — | 3,647 | 131,325 | ||||||||
| Kathy Boden Holland(3) | — | — | 4,657 | 251,520 | ||||||||||||
| Mehul R. Patel | — | — | 1,787 | 103,449 | ||||||||||||
| Douglas G. Beck | — | — | — | — | ||||||||||||
| Kathy Boden Holland | — | — | 3,159 | 110,073 | ||||||||||||
| Michael O. Randolfi | — | — | 17,572 | 587,081 | ||||||||||||
| (1) | Value Realized on Exercise. If the exercise was executed as part of a cashless transaction where the shares acquired were immediately sold, this represents the difference between the sales price of the shares acquired and the option exercise price multiplied by the number of shares of Common Stock covered by the options exercised. If the exercise was executed as part of a buy and hold transaction, this represents the difference between the closing market price of the Common Stock for the date of exercise of the option and the option exercise price multiplied by the number of shares of Common Stock covered by the options held. |
| (2) | Value Realized on Vesting. For Ms. Wardell, this amount |
20192021 NONQUALIFIED DEFERRED COMPENSATION
This table sets forth information about activity for NEOs in our Nonqualified Deferred Compensation Plan during fiscal year ended June 30, 2019.2021.
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Balance at Last Fiscal Year End ($)(4) | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Balance at Last Fiscal Year End ($)(4) | ||||||||
| Lisa W. Wardell | 151,596 | 125,746 | 28,062 | 873,206 | 309,132 | — | 360,967 | 1,803,407 | ||||||||
| Patrick J. Unzicker | 10,457 | 31,916 | 15,499 | 327,020 | ||||||||||||
| Robert J. Phelan | — | — | — | — | ||||||||||||
| Stephen W. Beard | — | — | — | — | 144,477 | — | 657 | 155,720 | ||||||||
| Douglas G. Beck | — | — | — | — | ||||||||||||
| Kathy Boden Holland | 93,574 | 26,391 | 4,268 | 210,867 | 263,714 | — | 332,762 | 1,295,963 | ||||||||
| Mehul R. Patel | 13,317 | 28,720 | 1,843 | 54,028 | ||||||||||||
| Michael O. Randolfi | — | — | — | — | ||||||||||||
| (1) | Executive Contributions in Last Fiscal Year. The amount of executive contributions made by each NEO and reported in this column is included in each NEO’s compensation reported on the |
| (2) | Registrant Contributions in Last Fiscal Year. The amount of Adtalem contributions made and reported in this column is included in each NEO’s compensation reported on the |
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| (3) | Aggregate Earnings in Last Fiscal Year. These amounts represent the earnings in the Nonqualified Deferred Compensation Plan for fiscal year |
| (4) | Aggregate Balance at Last Fiscal Year End. The aggregate balance as of June 30, |
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The Nonqualified Deferred Compensation Plan covers directors and selected key employees approved for participation by the Compensation Committee. All of the NEOs are eligible to participate in the Nonqualified Deferred Compensation Plan. Under the Nonqualified Deferred Compensation Plan as it applies to employees, participants may make an advance election to defer up to 50% of salary and up to 100% of MIP compensation until termination of service with Adtalem or certain other specified dates. Adtalem credits matching contributions to participants’ accounts under the Nonqualified Deferred Compensation Plan to the extent they have elected to defer the maximum amount under Adtalem’s Success Sharing Retirement Plan, and their matching contributions to the Success Sharing Retirement Plan are limited by applicable Code provisions. Adtalem may also credit participants’ accounts with discretionary success sharing contributions. Participants are fully vested in their own deferral and matching contributions, plus earnings, and will vest in discretionary contributions, if any, as determined by the Compensation Committee. Participants may elect to have their Nonqualified Deferred Compensation Plan accounts credited with earnings based on various investment choices made available by the Compensation Committee for this purpose. Participants may elect to have account balances paid in a lump sum or in installments. Distributions are generally made or commence in January of the year following termination of employment (but not earlier than six months after termination) or January of the year in which the specified payment date occurs. In the event of death before benefits commence, participants’ accounts will be paid to their beneficiaries in a lump sum.
20192021 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
Adtalem provides benefits to the NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (i.e., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, Adtalem’s equity compensation plans and the stock award agreements used to implement them provide for accelerated vesting of outstanding stock awards in the event of a change-in-control of Adtalem, regardlessonly in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of whether a termination of employment occursoutstanding awards, or (c) if the participant is terminated without cause or resigns for awards granted prior to November 8, 2017.good reason within two years following the change-in-control.
| Employment Agreements |
MS. WARDELL
Adtalem entered into an employment agreement with Ms. Wardell effective as of her May 24, 2016 appointment as President and CEO. The employment agreement provides, among other things, that if her employment is terminated by Adtalem without “cause” or by Ms. Wardell with “good reason,” and if she executes a release of claims, she will be entitled to a lump sum payment equal to 12 months of base salary and a prorated MIP award based on actual performance for the fiscal year and paid in a lump sum at the same time MIP awards are paid to other employees.
If such termination of employment occurs within 12 months of a “change-in-control,” and she executes a release of claims, she will be entitled to (i) a lump sum payment equal to two times base salary and the average of the MIP award paid to her for the prior two fiscal years; and (ii) accelerated vesting of all outstanding stock options.
Effective September 8, 2021, Adtalem entered into a new employment agreement with Ms. Wardell in connection with her appointment as Executive Chairman.
| 3 | Effective September 8, 2021, Adtalem entered into a new employment agreement in connection with Mr. Beard’s appointment as President and Chief Executive Officer. |
20192021 Proxy Statement 6569
Executive Compensation Tables
OTHER NEOs
During 2021, Adtalem has entered intowas party to similar employment arrangements with each of the other NEOs,NEOs: Mr. Unzicker,Beard3, Mr. Beard,Beck, and Ms. Boden HollandHolland. Adtalem and Mr. Patel.Phelan are parties to a Letter Agreement. Adtalem also had an employment agreement with Mr. Randolfi. These employment agreements provide, among other things, that if the NEO’s employment with Adtalem is terminated by Adtalem without “cause” or by the NEO with “good reason”, and the NEO executes a release of claims, then the NEO will be entitled to the following benefits:
| ● | One and one-half times the sum of their base salary plus target MIP award, payable in 18 equal monthly |
| ● | A pro-rated MIP award (if employed for at least six months in the fiscal year during which termination occurs) based on actual performance for the relevant fiscal year, paid in a lump sum at the time MIP awards are paid to other employees; |
| ● | 18 months of continued health benefit plan coverage for Mr. Beard, Mr. Beck, and Ms. Boden Holland at active employee rates following the termination date; and |
| ● | Access to a senior executive level outplacement program for 9 |
In addition, the employment arrangements provide that if such termination occurs within 12 months of a “change-in-control”“change-incontrol”, and the NEO executes a release of claims, then the NEO will be entitled to the following benefits:
| ● | Two times the sum of their base salary plus target MIP award, payable in 24 equal monthly |
| ● | A pro-rated MIP award (if employed for at least six months in the fiscal year during which termination occurs) based on actual performance for the relevant fiscal year, paid in a lump sum at the time MIP awards are paid to other employees; |
| ● | 24 months of continued health benefit plan coverage for Mr. Beard, Mr. Beck, and Ms. Boden Holland at active employee rates following the termination date; and |
| ● | Access to a senior executive level outplacement program for 12 |
For purposes of all of the employment agreements:
| ● | “cause” means (i) the commission of a felony or other crime involving moral turpitude or the commission of any other act or omission involving misappropriation, dishonesty, fraud, illegal drug use or breach of fiduciary duty, (ii) willful failure to perform duties as reasonably directed by the CEO, (iii) the NEO’s gross negligence or willful misconduct with respect to the performance of the NEO’s duties under the employment agreement, (iv) obtaining any personal profit not fully disclosed to and approved by Adtalem’s Board in connection with any transaction entered into by, or on behalf of, Adtalem, or (v) any other material breach of the employment agreement or any other agreement between the NEO and Adtalem; |
| ● | “change-in-control” shall have the meaning set forth in the 2013 Incentive Plan; and |
| ● | “good reason” means, without the NEO’s consent, (i) material diminution in title, duties, responsibilities or authority, (ii) reduction of base salary, MIP target or employee benefits except for across-the-board changes for executives at the NEO’s level, (iii) exclusion from executive benefit/compensation plans, (iv) material breach of the employment agreement that Adtalem has not cured within 30 days after the NEO has provided Adtalem notice of the material breach which shall be given within 60 days of the NEO’s knowledge of the occurrence of the material breach, or (v) resignation in compliance with securities, corporate governance or other applicable law (such as the US Sarbanes-Oxley Act) as specifically applicable to the NEO. For Mr. Beard and Ms. Boden Holland, the definition of “good reason” also includes, without the NEO’s consent, requiring the NEO to relocate to an employment location more than 50 miles from the NEO’s current employment location. |
EQUITY AWARD PLANS
The equity award agreements under which options, RSUs and PSUs are held by employees, including the NEOs, provide for the immediate vesting of unvested options and RSUs and of PSUs at the target levels in the event of a change-in-control of Adtalem. Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control.
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The provisions of the equity award agreements under which options, PSUsRSUs and RSUsPSUs were granted to employees, including the NEOs, provide the following:
| ● | If the participant’s employment is terminated due to death or disability (as defined in the agreement), options will become fully vested and exercisable for the remaining term of the option, RSUs will fully vest, and PSUs will continue to vest in accordance with their terms. |
| ● | If the participant’s employment terminates due to mutual agreement, the participant will be credited with one additional year of service for the purpose of determining vesting of options, |
| ● | If the participant’s employment terminates due to retirement, options will continue to vest and be exercisable, and RSUs and PSUs will continue to vest in accordance with their respective terms. Retirement means the participant’s termination without cause after age 55 when the sum of his or her age and full years of service equals or exceeds 65. |
66 Adtalem Global Education Inc.
Executive Compensation Tables
In August 2017, the Board adopted double-trigger vesting of equity awards as part of the 2013 Incentive Plan. In November 2017, Adtalem’s shareholders approved the 4th Amended 2013 Incentive Plan. As a result, vesting of future grants of equity awards granted since November 2017 (the “Awards”) will accelerate upon a change-in-control only in the event Adtalem (or its successor) ceases to be publicly traded, or the successor to Adtalem fails to assume outstanding Awards or to issue new awards in replacement of outstanding Awards. Under the new double-trigger vesting rules, newly issued Awards will vest if a participant is terminated without cause or resigns for good reason within two years following a change-in-control. All Awards issued prior to shareholder approval in November 2017 will continue to have a single-trigger vesting rules as described above.
The tables set forth below quantify the additional benefits as described above that would be paid to each NEO under the following termination of employment or change-in-control events, had such an event occurred on June 30, 2019.2021.
TERMINATION OF EMPLOYMENT — NO CHANGE-IN-CONTROL
| Name: | Lisa W. Wardell | Patrick J. Unzicker | Stephen W. Beard | Kathy Boden Holland | Mehul R. Patel | Lisa W. Wardell | Robert J. Phelan | Stephen W. Beard | Douglas G. Beck | Kathy Boden Holland | Michael O. Randolfi(1) | ||||||||||||||||||||||
| Salary: | $ | 1,100,000 | $ | 787,969 | $ | 880,828 | $ | 862,500 | $ | 670,800 | $ | 1,100,000 | $ | 33,654 | $ | 900,030 | $ | 750,000 | $ | 888,375 | $ | — | |||||||||||
| MIP Target Amount: | — | $ | 551,578 | $ | 616,580 | $ | 603,750 | $ | 469,560 | $ | — | $ | — | $ | 720,024 | $ | 23,013 | $ | 621,863 | $ | — | ||||||||||||
| Pro-Rated MIP: | $ | 1,135,605 | $ | 370,808 | $ | 388,913 | $ | 405,226 | $ | 344,772 | $ | 1,489,813 | $ | 242,104 | $ | 619,200 | $ | 17,490 | $ | 458,727 | $ | — | |||||||||||
| Continued Health Coverage: | — | $ | 25,380 | $ | 25,380 | $ | 25,038 | $ | 25,380 | $ | — | $ | 9,084 | $ | 27,252 | $ | 26,694 | $ | 26,694 | $ | — | ||||||||||||
| Outplacement Services: | — | $ | 11,250 | $ | 11,250 | $ | 11,250 | $ | 11,250 | $ | — | $ | 10,000 | $ | 15,000 | $ | 11,250 | $ | 11,250 | $ | — | ||||||||||||
| TOTAL | $ | 2,235,605 | $ | 1,746,985 | $ | 1,922,951 | $ | 1,907,764 | $ | 1,521,762 | $ | 2,589,813 | $ | 294,842 | $ | 2,281,506 | $ | 828,447 | $ | 2,006,909 | $ | — | |||||||||||
| (1) | Mr. Randolfi received no compensation in connection with his voluntary separation from the Company in April 2021. |
TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE-IN-CONTROL
| Name: | Lisa W. Wardell | Patrick J. Unzicker | Stephen W. Beard | Kathy Boden Holland | Mehul R. Patel | Lisa W. Wardell | Robert J. Phelan | Stephen W. Beard | Douglas G. Beck | Kathy Boden Holland | ||||||||||||||||||||
| Salary: | $ | 2,200,000 | $ | 1,050,625 | $ | 1,174,438 | $ | 1,150,000 | $ | 894,400 | $ | 2,200,000 | $ | 33,654 | $ | 1,200,040 | $ | 1,000,000 | $ | 1,184,500 | ||||||||||
| MIP Target Amount: | 1,163,237 | $ | 735,438 | $ | 822,106 | $ | 805,000 | $ | 626,080 | $ | 1,343,947 | $ | — | $ | 960,032 | $ | 30,684 | $ | 829,150 | |||||||||||
| Pro-Rated MIP: | $ | — | $ | 370,808 | $ | 388,913 | $ | 405,226 | $ | 344,772 | $ | — | $ | 242,104 | $ | 619,200 | $ | 17,490 | $ | 458,727 | ||||||||||
| Continued Health Coverage: | — | $ | 33,840 | $ | 33,840 | $ | 33,384 | $ | 33,840 | $ | — | $ | 9,084 | $ | 36,336 | $ | 35,592 | $ | 35,592 | |||||||||||
| Outplacement Services: | — | $ | 15,000 | $ | 15,000 | $ | 15,000 | $ | 15,000 | $ | — | $ | 10,000 | $ | 20,000 | $ | 15,000 | $ | 15,000 | |||||||||||
| Value of Vesting of Unvested Stock | $ | 18,456,317 | $ | 2,029,591 | $ | 595,246 | $ | 841,669 | $ | 882,665 | ||||||||||||||||||||
| Options, RSUs and PSUs(1): | ||||||||||||||||||||||||||||||
| TOTAL: | $ | 21,819,554 | $ | 4,235,302 | $ | 3,029,543 | $ | 3,250,279 | $ | 2,796,757 | ||||||||||||||||||||
| Value of Vesting of Unvested Stock Options, RSUs, and PSUs(1) | $ | 7,658,851 | $ | — | $ | 2,099,630 | $ | 1,109,830 | $ | 1,882,970 | ||||||||||||||||||||
| TOTAL | $ | 11,202,798 | $ | 294,842 | $ | 4,935,238 | $ | 2,208,596 | $ | 4,405,939 | ||||||||||||||||||||
| (1) | The value of the unvested stock options is based on the difference between the exercise price and |
2021 Proxy Statement 71
Executive Compensation Tables
CHANGE-IN-CONTROL — NO TERMINATION OF EMPLOYMENT
| Name: | Lisa W. Wardell | Patrick J. Unzicker | Stephen W. Beard | Kathy Boden Holland | Mehul R. Patel | ||||||||||
| Value of Vesting of Unvested Stock | $ | 18,456,317 | $ | 2,029,591 | $ | 595,246 | $ | 841,669 | $ | 882,665 | |||||
| Options, RSUs and PSUs(1): | |||||||||||||||
| Name: | Lisa W. Wardell | Robert J. Phelan | Stephen W. Beard | Douglas G. Beck | Kathy Boden Holland | ||||||||||
| Value of Vesting of Unvested Stock Options, RSUs, and PSUs(1) | $ | 7,658,851 | $ | — | $ | 2,099,630 | $ | 1,109,830 | $ | 1,882,970 | |||||
| (1) | The value of the unvested stock options is based on the difference between the exercise price and |
2019 Proxy Statement 67
Executive Compensation Tables
Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the median of the annual total compensation of all our employees (except our CEO) and the ratio of the annual total compensation of our President and CEO, Ms. Wardell, as disclosed in the 20192021 Summary Compensation Table, to the annual total compensation of our median employee.
In 2018,2021, we identified the median employee by comparing the annual salary rate of pay for all individuals, excluding our CEO, who were employed by Adtalem on June 30, 20182021 using information from our company payroll system. We included all full-time and part-time employees, including adjunct faculty and federal work-study student workers, but did not include independent contractors and leased workers. Compensation was annualized for all employees who were hired by us in fiscal year 20182021 but did not work for us for the entire year. No annualization was applied to any adjunct faculty or federal work-study student workers as permitted under the rules. Fiscal year 20192021 annual total compensation for the median employee identified in 2018 was calculated in the same manner as reflected in the 20192021 Summary Compensation Table for our CEO.
Based on the methodology described above, we have determined that our estimation of the fiscal year 20192021 annual total compensation of our median employee was $33,781 and$76,663. The annual total compensation of our CEO for fiscal year 2021 was $8,528,433, which is the same amount reported for 2021 as Total Compensation in the Summary Compensation Table. Our estimation of the ratio of our CEO’s fiscal year 20192021 annual total compensation to the fiscal year 20192021 annual total compensation of our median employee is 70:1 (210:1 on a normalized basis reflecting the annualized value of LTI for the CEO provided in fiscal year 2018).111:1.
This CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. The CEO pay ratio reported by other companies may not be comparable to our CEO pay ratio reported above, because SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their compensation practices.
68 Adtalem Global Education Inc.
Since 1993, Adtalem has offered its employees the ability to purchase Adtalem Common Stock through an Employee Stock Purchase Plan. The most recent Employee Stock Purchase Plan was approved by shareholders on November 9, 2005 and effective January 1, 2006, authorizing 200,000 shares of Common Stock for issuance thereunder (the “2005 ESPP”). From January 1, 2006 to February 28, 2019, eligible participants in the 2005 Plan purchased 450,095 shares of Common Stock causing the 2005 ESPP to be over-subscribed by 250,095 shares. Adtalem terminated the ability to purchase shares of Common Stock under the 2005 ESPP and the last purchase made through the 2005 ESPP was made on February 28, 2019. Additionally, effective March 31, 2019, Adtalem reduced the number of shares of Common Stock available under the 2013 Incentive Plan by 250,095 shares of Common Stock to reduce any potential dilution to shareholders.
The Board has adopted, subject to shareholder approval, the Adtalem Global Education Inc. Employee Stock Purchase Plan (“2019 ESPP”), under which an aggregate of five hundred thousand (500,000) shares of our Common Stock has been reserved for issuance. The 2019 ESPP is intended to qualify as an “employee stock purchase plan” under the Code. The purpose of the 2019 ESPP is to provide eligible employees with an opportunity to increase their proprietary interest in the success of Adtalem by purchasing shares of Common Stock on favorable terms and to pay for such purchases through payroll deductions. Executive officers and directors of Adtalem are not eligible to participate in the 2019 ESPP.
The Board believes that the 2019 ESPP promotes the interests of Adtalem and its shareholders by encouraging employees of Adtalem and its participating subsidiaries to become shareholders, and therefore promotes Adtalem’s growth and success. The Board also believes that the opportunity to acquire a proprietary interest in the success of Adtalem through the acquisition of shares of Common Stock pursuant to the 2019 ESPP is an important aspect of Adtalem’s ability to attract and retain highly qualified and motivated employees. A copy of the 2019 ESPP, as proposed, is attached to this proxy statement as Appendix B.
The following summary description of the 2019 ESPP is a summary of certain provisions and is qualified in its entirety by reference to Appendix B.
SUMMARY DESCRIPTION OF THE 2019 ESPP
Our Board has adopted, subject to shareholder approval, our 2019 ESPP. The ESPP is intended to give eligible employees an opportunity to acquire shares of our Common Stock and promote our best interests and enhance our long-term performance.
Purpose.The 2019 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. We may also authorize offerings under the 2019 ESPP that are not intended to comply with the requirements of Section 423 of the Code, which may, but are not required to, be made pursuant to any rules, procedures or sub-plans adopted by the Compensation Committee for such purpose.
Shares Reserved for the 2019 ESPP. The aggregate number of shares of our Common Stock that may be issued under the 2019 ESPP may not exceed 500,000 shares.
Administration.The 2019 ESPP will be administered by the Compensation Committee. The Compensation Committee may appoint one or more agents to assist in the administration of the 2019 ESPP and may delegate certain responsibilities or powers subject to ESPP terms and applicable law. Subject to ESPP terms and applicable law, the Compensation Committee will have full and final authority to take any action with respect to the 2019 ESPP, including, without limitation, the authority to: (a) establish, amend and rescind rules and regulations for administration of the 2019 ESPP; (b) prescribe the form(s) of any agreements or other instruments used in connection with the 2019 ESPP; (c) determine the terms and provisions of the purchase rights granted under the 2019 ESPP; (d) determine eligibility and adjudicate all disputed claims filed under the 2019 ESPP; and (e) construe and interpret the 2019 ESPP, purchase rights, the rules and regulations, and the agreements or other written instruments, and to make all other determinations deemed necessary or advisable for the administration of the 2019 ESPP. The Compensation Committee may also adopt sub-plans relating to the operation and administration of the 2019 ESPP to accommodate the specific
2019 Proxy Statement 69
Proposal No. 4 Approval of Adtalem Global Education, Inc. 2019 Employee Stock Purchase Plan
requirements of local laws and procedures for jurisdictions outside the United States, the terms of which sub-plans may take precedence over the terms of the 2019 ESPP, to the extent provided in the 2019 ESPP. To the extent inconsistent with the requirements of Section 423 of the Code, purchase rights offered under any such sub-plan will not be required by the terms of the 2019 ESPP to comply with Section 423 of the Code.
Term. The term of the 2019 ESPP will continue until terminated by the Board or until the date on which all shares available for issuance under the 2019 ESPP have been issued.
Eligible Participants. Subject to the Compensation Committee’s ability to exclude certain groups of employees on a uniform and nondiscriminatory basis, including Section 16 officers, generally, all of our employees will be eligible to participate in the 2019 ESPP if they are employed by us or by a designated company (as defined below) except for (a) any employee who has been employed for less than 90 days, (b) any employee whose customary employment is for not more than five months in any calendar year, or (c) any employee who is a Section 16(a) officer and/or is subject to the disclosure requirements of the Exchange Act;providedthat the Compensation Committee may determine prior to any purchase period start date that employees outside of the United States who are participating in a separate offering will be “eligible employees” even if they do not meet the requirements of (a), (b) or (c) above if and to the extent required by applicable law. No employee will be eligible to participate if, immediately after the purchase right grant, the employee would own stock (including any stock the employee may purchase under outstanding purchase rights) representing 5% or more of the total combined voting power or value of our Common Stock. A “designated company” is any subsidiary or affiliate of Adtalem Global Education Inc., whether now existing or existing in the future, that has been designated by the Compensation Committee from time to time in its sole discretion as eligible to participate in the 2019 ESPP. The Compensation Committee may designate subsidiaries or affiliates of Adtalem Global Education Inc. as designated companies in an offering that does not satisfy the requirements of Section 423 of the Code.
Contributions. A participant may acquire Common Stock under the 2019 ESPP by authorizing the use of contributions to purchase shares of Common Stock. Contributions must be at a rate of not less than 1% nor more than 15% (in whole percentages only) of the participant’s total compensation (with certain exclusions as set forth in the 2019 ESPP or as otherwise determined by the Compensation Committee). All contributions made by a participant will be credited (without interest) to his or her account. A participant may discontinue plan participation as provided in the 2019 ESPP, but a participant may not alter the amount of his or her contributions during a purchase period. However, a participant’s contribution election may be decreased to 0% at any time during a purchase period to the extent necessary to comply with Section 423 of the Code or the terms of the 2019 ESPP. A participant may not make separate cash payments into his or her account except in limited circumstances when the participant is on leave of absence or unless otherwise required by applicable law. A participant may withdraw contributions credited to his or her account during a purchase period at any time before the applicable purchase period end date.
Purchase Periods and Purchase Price. The 2019 ESPP provides for quarterly offering periods, with one purchase period in each offering period. The purchase periods shall begin and end on dates as determined by the Compensation Committee. The Compensation Committee has the authority to change the duration of a purchase period, provided that the change is announced a reasonable period of time prior to its effective date and the purchase period is not greater than 27 months.
On the first day of a purchase period, a participant will be granted a purchase right to purchase on the purchase period end date, at the applicable purchase price, the number of shares of Common Stock as is determined by dividing the amount of the participant’s contributions accumulated as of the last day of the purchase period by the applicable purchase price;providedthat (a) no participant may purchase shares of Common Stock with a fair market value (as of the date of purchase right grant) in excess of $25,000 per calendar year. The maximum number of shares that may be purchased by any single participant during any offering period shall not exceed 5,000, unless otherwise determined by the Compensation Committee.
In connection with each offering under the 2019 ESPP, the maximum number of shares that may be purchased during any single offering period shall not exceed 50,000, and, if the number of shares subject to purchase rights that would otherwise be granted during an offering period exceeds 50,000 shares, then Adtalem shall make a pro rata allocation of the number of shares subject to each participant’s purchase right for that offering period in as uniform a manner as practicable and as Adtalem shall determine to be equitable, so as not to exceed the 50,000 share limitation for any offering period.
The purchase price will be no less than 85% (or such greater percentage as may be determined by the Compensation Committee prior to the start of any purchase period) of the lesser of (i) the fair market value per share of our Common Stock as determined on the applicable purchase period end date or (ii) the fair market value per share of our Common Stock as determined on the applicable purchase right grant date (provided that, in no event may the purchase price be less than the par value per share of our Common Stock). The Compensation Committee may determine prior to a purchase period to calculate the purchase price for such period solely by reference to the fair market value of a share on the applicable purchase period end date or purchase period start date, or based on the greater (rather than the lesser) of such values. It is the current intent of the Compensation Committee to set the purchase price at 90% of the lesser of (i) the fair market value per share of our Common Stock as determined on the applicable purchase period end date or (ii) the fair market value per share of our Common Stock as determined on the applicable purchase right grant date.
7072 Adtalem Global Education Inc.
Proposal No. 4 Approval of Adtalem Global Education, Inc. 2019 Employee Stock Purchase PlanVoting Securities and Principal Holders
A participant’s purchase rightEQUITY COMPENSATION PLAN INFORMATION
Adtalem currently maintains two equity compensation plans: the Amended and Restated Incentive Plan of 2005 (the “2005 Incentive Plan”) and the Fourth Amended 2013 Incentive Plan. Adtalem’s shareholders have approved each of these plans.
The following table summarizes information, as of June 30, 2021, relating to purchasethese equity compensation plans under which Adtalem’s Common Stock is authorized for issuance.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, awards, warrants and rights (a)(1) | Weighted-average exercise price of outstanding options, awards, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(2) | ||||
| Equity compensation plans approved by security holders | 2,449,054 | $ | 32.05 | 3,688,061 | |||
| Equity compensation plans not approved by security holders | — | — | — | ||||
| Total | 2,449,054 | $ | 32.05 | 3,688,061 | |||
| (1) | The number shown in column (a) is the number of shares that may be issued upon exercise of outstanding options and other equity awards granted under the shareholder-approved Amended and Restated Incentive Plan of 2005 (78,427 shares) and the Fourth Amended 2013 Incentive Plan (2,370,627 shares). |
| (2) | The number shown in column (c) is the number of shares that may be issued upon exercise of options or stock appreciation rights and other equity awards granted in the future under the Fourth Amended 2013 Incentive Plan. All of the shares remaining available for the grant of future awards of options, warrants, and rights are available under the Fourth Amended 2013 Incentive Plan. No new awards may be granted under the Amended and Restated Incentive Plan of 2005. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth the number and percentage of outstanding shares of Common Stock during a purchase period will be exercised automatically on the purchase period end date for that purchase period unless the participant withdraws at least thirty days priorbeneficially owned by each person known by Adtalem to the end of the purchase period or his or her participation is terminated. On the purchase period end date, a participant’s purchase right will be exercised to purchase that number of shares which the accumulated contributions in his or her account at that time will purchase at the applicable purchase price, but not in excess of the number of shares subject to the purchase right or other ESPP terms. Subject to the terms of the 2019 ESPP, a purchase right will generally terminate on the earlier of the date of the participant’s termination of employment or the last day of the applicable purchase period.
Rights as Shareholder. A participant will have no rights as a shareholder with respect to our shares that the participant has a purchase right to purchase in any offering until those shares are issued to the participant.
Rights Not Transferable. A participant’s rights under the 2019 ESPP will be exercisable only by the participant and are not transferable otherown beneficially more than by will or the laws of descent or distribution.
Effect of a Change-In-Control; Adjustments. If there is any change in the outstanding shares5% of our Common Stock, becausein each case as of a change-in-control, consolidation, recapitalization or reorganization involving Adtalem Global Education Inc., or if the Board declares a stock dividend, stock split distributable in shares of Common Stock or reverse stock split, other distribution or combination or reclassification of our Common Stock, or if there is a similar change in the capital stock structure of Adtalem Global Education Inc. affecting our Common Stock, then the number and type of shares of our Common Stock reserved for issuance under the 2019 ESPP will be correspondingly adjusted and, subject to applicable law, the Compensation Committee will make such adjustments to purchase rights or to any ESPP provisionSeptember 24, 2021, except as the Compensation Committee deems equitable to prevent dilution or enlargement of purchase rights or as may otherwise be advisable. In addition, in the event of a change-in-control, the Compensation Committee’s discretion includes, but is not limited to, the authority to provide for any of, or a combination of any of, the following:noted.
| Name | Amount and Nature of Beneficial Ownership | Percentage Ownership(1) | |||
| BlackRock, Inc. | 5,750,474 | (2) | 11.5% | ||
| The Vanguard Group | 4,480,054 | (3) | 9.0% | ||
| Dimensional Fund Advisors LP | 3,974,832 | (4) | 7.9% | ||
| WEDGE Capital Management L.L.P. | 2,622,070 | (5) | 5.3% | ||
Amendment; Termination. The 2019 ESPP may be amended, altered, suspended and/or terminated at any time by the Board;provided, that approval of an amendment to the 2019 ESPP by our shareholders will be required to the extent, if any, that shareholder approval of such amendment is required by applicable law. The Compensation Committee may (subject to the provisions of Section 423 of the Code and the 2019 ESPP) amend, alter, suspend and/or terminate any purchase right granted under the 2019 ESPP, prospectively or retroactively, but (except as otherwise provided in the 2019 ESPP) such amendment, alteration, suspension or termination of a purchase right may not, without the written consent of a participant with respect to an outstanding purchase right, materially adversely affect the rights of the participant with respect to the purchase right. In addition, the Compensation Committee has unilateral authority to (a) subject to the provisions of Section 423 of the Code, amend the 2019 ESPP and any purchase right (without participant consent) to the extent necessary to comply with applicable law or changes in applicable law and (b) make adjustments to the terms and conditions of purchase rights in recognition of unusual or nonrecurring events affecting us or any parent or subsidiary corporation (each as defined under Section 424 of the Code), or our financial statements (or those of any parent or subsidiary corporation), or of changes in applicable law, or accounting principles, if the Compensation Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of benefits intended to be made available under the 2019 ESPP or necessary or appropriate to comply with applicable accounting principles or applicable law.
Because participation in the 2019 ESPP by Adtalem’s employees is entirely discretionary and benefits under the 2019 ESPP depend on the fair market value of Adtalem’s Common Stock at future dates, it is not possible to determine the benefits that will be received by Adtalem’s employees. Please see the disclosure under “Purchase Periods and Purchase Price” above for the maximum number of shares a participant may purchase in any single offering. Executive officers and directors of Adtalem are not eligible to participate in the 2019 ESPP.
| these shares. The |
20192021 Proxy Statement 7173
Voting Securities and Principal Holders
EQUITY COMPENSATION PLAN INFORMATION
Adtalem currently maintains two equity compensation plans: the Amended and Restated Incentive Plan of 2005 (the “2005 Incentive Plan”) and the 2013 Incentive Plan. Adtalem’s shareholders have approved each of these plans.
The following table summarizes information, as of June 30, 2019, relating to these equity compensation plans under which Adtalem’s Common Stock is authorized for issuance.
Plan Category | Number of securities to be issued upon exercise of outstanding options, awards, warrants and rights (a)(1) | Weighted-average exercise price of outstanding options, awards, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(c)(2) | |||
| Equity compensation plans approved by security holders | 2,366,508 | $31.33 | 4,736,148 | |||
| Equity compensation plans not approved by security holders | — | — | — | |||
| Total | 2,366,508 | $31.33 | 4,736,148 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by each person known by Adtalem to own beneficially more than 5% of our Common Stock, in each case as of September 17, 2019, except as otherwise noted.
| (4) | The information shown was provided by Dimensional Fund Advisors LP in a Schedule 13G/A it filed with the SEC on February |
72 Adtalem Global Education Inc.
Voting Securities and Principal Holders
| (5) | The information shown was provided by |
SECURITY OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by (1) each director of Adtalem, (2) each NEO listed on page 36,42, and (3) all directors and executive officers of Adtalem as a group, in each case as of September 17, 2019.24, 2021. Adtalem believes that each individual named has sole investment and voting power with respect to the shares of Common Stock indicated as beneficially owned by such person, except as otherwise noted. Unless otherwise indicated, the address of each beneficial owner in the table below is care of Adtalem Global Education Inc. 500 West Monroe Street, Suite 2800, Chicago, Illinois 60661.
| Name of Beneficial Owner | Common Stock Beneficially Owned Excluding Options and RSUs(1) | Stock Options Exercisable, PSUs and RSUs Scheduled to Vest within 60 days of September 17, 2019(1) | Total Common Stock Beneficially Owned | Percentage Ownership(2) | Common Stock Beneficially Owned Excluding Options and RSUs(1) | Stock Options Exercisable as of September 24, 2021 and PSUs and RSUs Scheduled to Vest within 60 days of September 24, 2021(1) | Total Common Stock Beneficially Owned | Percentage Ownership(2) | |||||||||
| Non-Employee Directors | |||||||||||||||||
| Steven M. Altschuler, M.D. | — | 2,230 | 2,230 | * | |||||||||||||
| William W. Burke | 2,574 | 2,230 | 4,804 | * | 8,071 | 4,370 | 12,441 | * | |||||||||
| Charles DeShazer(3) | — | — | — | ||||||||||||||
| Mayur Gupta(4) | — | — | — | ||||||||||||||
| Donna J. Hrinak | — | 2,230 | 2,230 | * | 5,010 | 4,370 | 9,380 | * | |||||||||
| Georgette Kiser | — | 2,230 | 2,230 | * | 4,925 | 4,370 | 9,295 | * | |||||||||
| Lyle Logan | 18,160 | 2,230 | 20,390 | * | 23,416 | 4,370 | 27,786 | * | |||||||||
| Michael W. Malafronte | — | — | — | * | 22,200 | — | 22,200 | * | |||||||||
| James D. White | 4,293 | 2,230 | 6,523 | * | |||||||||||||
| Sharon L. O’Keefe | — | 4,370 | 4,370 | * | |||||||||||||
| Kenneth J. Phelan | 2,500 | 4,370 | 6,870 | * | |||||||||||||
| James D. White(5) | 8,782 | — | 8,782 | * | |||||||||||||
| Named Executive Officers | |||||||||||||||||
| Lisa W. Wardell | 141,152 | 271,494 | 412,646 | * | 239,906 | 423,124 | 761,830 | 1.53 | |||||||||
| Patrick J. Unzicker(3) | 28,746 | 68,840 | 97,586 | * | |||||||||||||
| Robert J. Phelan | 2,233 | 975 | 17,298 | * | |||||||||||||
| Stephen W. Beard | 1,811 | 3,868 | 5,679 | * | 9,682 | 31,812 | 175,253 | * | |||||||||
| Douglas G. Beck | — | — | 36,080 | * | |||||||||||||
| Kathy Boden Holland | 3,849 | 3,868 | 7,717 | * | 19,363 | 27,999 | 60,148 | * | |||||||||
| Mehul R. Patel | 1,049 | 4,781 | 5,830 | * | |||||||||||||
| All directors and executive officers as a group (19 Persons) | 264,591 | 539,402 | 803,993 | 1.46 | % | ||||||||||||
| Michael O. Randolfi(6) | 70,007 | 6,737 | 76,744 | * | |||||||||||||
| All directors and executive officers as a group (23 Persons) | 504,609 | 666,976 | 1,369,333 | 2.75 | |||||||||||||
| * | Represents less than 1% of the outstanding Common Stock. |
| (1) | “Common Stock Beneficially Owned Excluding Options and RSUs” includes stock held in joint tenancy, stock owned as tenants in common, stock owned or held by spouse or other members of the holder’s household, and stock in which the holder either has or shares voting and/or investment power, even though the holder disclaims any beneficial interest in such stock. Options exercisable as of September 24, 2021 and PSUs and RSUs that are scheduled to vest within 60 days after September |
| (2) | In accordance with SEC rules, the securities reflected in the “Stock Options Exercisable as of September 24, 2021 and PSUs and RSUs Scheduled to Vest within 60 days of September |
| (3) | Dr. DeShazer was appointed to the Board effective April 2, 2021. |
| (4) | Mr. |
| (5) | Mr. White resigned from the Board effective April 30, 2021. |
| (6) | Mr. Randolfi resigned effective |
DELINQUENT SECTION 16(a) REPORTS74
Section 16(a) of the Exchange Act requires that Adtalem’s directors and executive officers file reports of ownership and changes in ownership of Common Stock with the SEC. Based solely upon a review of copies of such reports and written representations regarding the timely filing, each of Adtalem’s executive officers and directors complied with all Section 16(a) filing requirements applicable to them during fiscal year 2019, with the exception of Ms. Hrinak, Mr. Unzicker and Mr. Beard. Ms. Hrinak’s initial ownership report on Form 3 was inadvertently untimely when filed on October 19, 2018. Each of Mr. Unzicker and Mr. Beard inadvertently were not timely when reporting one transaction on August 24, 2018 and August 27, 2018, respectively.
2019 Proxy Statement Adtalem Global Education Inc.73
You may vote shares of Common Stock that you owned as of September 17, 2019,24, 2021, which is the record date for the Annual Meeting. You may vote the following ways:
  |   |   |   | |||
| BY TELEPHONE | BY INTERNET | BY MAIL | ||||
| In the United States or Canada, you can vote your shares by calling 1-800-690-6903 | You can vote your shares online at www.proxyvote.com | You can vote by mail by | ||||
| marking, dating and signing | ||||||
| your proxy card or voting | ||||||
| instruction form and returning | ||||||
| it in the accompanying | ||||||
| postage-paid envelope | Attend the Annual Meeting online at www.virtualshareholdermeeting.com/ATGE2021. |
For telephone and internet voting, you will need the 12-digit16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials.
Telephone and internet voting are available through 11:59 p.m. Eastern Time on Tuesday, November 5, 2019.9, 2021.
| Attending the Annual Meeting |
To join the Annual Meeting, login at www.virtualshareholdermeeting.com/ATGE2021. You will need the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials. The Annual Meeting will begin at 8:30 a.m. Central Standard Time. Online check-in will be available beginning at 8:15 a.m. Central Standard Time to allow for shareholders to log in and test the computer audio system. Please allow ample time for the online check-in process. A replay of the Annual Meeting will also be posted on our website at for at least thirty (30) days after the meeting concludes.
| Voting at the Annual Meeting |
The way you vote your shares prior to the Annual Meeting will not limit your right to change your vote at the Annual Meeting if you attend in personvirtually and vote by ballot. If you hold shares in street name and you want to vote in person at the Annual Meeting, you must obtain a valid legal proxy from the record holder of your shares at the close of business on the record date indicating that you were a beneficial owner of shares, as well as the number of shares of which you were the beneficial owner, on the record date, and appointing you as the record holder’s proxy to vote these shares. You should contact your bank, broker or other intermediary for specific instructions on how to obtain a legal proxy.
| Record Date |
You may vote all shares of Common Stock that you owned as of the close of business on September 17, 2019,24, 2021, which is the record date for the Annual Meeting. On the record date, we had 55,069,84649,750,810 shares of Common Stock outstanding and entitled to vote. Each share of Common Stock is entitled to one vote on each matter properly brought before the Annual Meeting.
| Submitting A Question at the Annual Meeting |
You may submit a question before the meeting or during the meeting via our virtual shareholder meeting website, www.virtualshareholdermeeting.com/ATGE2021. If your question is properly submitted, we intend to respond to your question during the Annual Meeting. Questions on similar topics will be combined and answered together.
2021 Proxy Statement 75
Additional Information
| Technical Difficulties During the Annual Meeting |
If we experience technical difficulties during the Annual Meeting (e.g. a temporary or prolonged power outage), our Chairman will determine whether the meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the meeting will need to be reconvened on a later date (if the technical difficulty is more prolonged). In any situation, we will promptly notify shareholders of the decision via www.virtualshareholdermeeting.com/ATGE2021.
If you encounter technical difficulties accessing our Annual Meeting or asking questions during the Annual Meeting, a support line will be available on the login page of the virtual shareholder meeting website: www.virtualshareholdermeeting.com/ATGE2021.
| Ownership of Shares |
You may own shares of Common Stock in one or more of the following ways:
| ● | Directly in your name as the shareholder of record, including shares purchased through our Colleague Stock Purchase Plan or restricted stock unit awards issued to employees under our long-term incentive plans. |
| ● | Indirectly through a broker, bank or other intermediary in “street name.” |
| ● | Indirectly through the Adtalem Stock Fund of our |
Your shares are registered directly in your name, you are the holder of record of these shares and we are sending proxy materials directly to you. As the holder of record, you have the right to give your proxy directly to our tabulating agent. If you hold your shares in street name, your broker, bank, or other intermediary is sending proxy materials to you and you may direct them how to vote on your behalf by completing the voting instruction form that accompanies your proxy materials.
74 Adtalem Global Education Inc.
Additional Information
| Revocation of Proxies |
You can revoke your proxy at any time before your shares are voted at the Annual Meeting if you:
| ● | Submit a written revocation to our |
| ● | Submit a later-dated proxy or voting instruction form, |
| ● | Provide subsequent telephone or Internet voting instructions, or |
| ● | Vote |
If you sign and return your proxy card or voting instruction form without any voting instructions with respect to a matter, your shares will be voted by the proxy committee appointed by the Board (and each of them, with full powers of substitution) in accordance with the Board’s recommendation. With respect to any other matters properly presented at the Annual Meeting, the proxy committee appointed by the Board (and each of them, with full powers of substitution) will vote in accordance with the Board’s recommendation, or if no recommendation is given, in their own discretion.
| Effect of Not Casting Your Vote |
If you hold your shares in street name, you will receive a voting instruction form that lets you instruct your bank, broker, or other nominee how to vote your shares. Under NYSE rules, brokers are permitted to exercise discretionary voting authority on “routine” matters when voting instructions are not received from a beneficial owner ten days prior to the shareholder meeting. The only “routine” matter on this year’s Annual Meeting agenda is Proposal No. 2 (Ratify selection of PwC as independent registered public accounting firm).
If you hold your shares in street name, and you wish to have your shares voted on all matters in this Proxy Statement, please complete and return your voting instruction form. If you do not return your voting instruction form, your shares will not be voted on any matters with the exception that your broker may vote in its discretion on Proposal No. 2. If you are a shareholder of record and you do not cast your vote, your shares will not be voted on any of the proposals at the Annual Meeting, which will have no the effect on the outcome.
76 Adtalem Global Education Inc.
Additional Information
If you are the holder of record of your shares, if you return your proxy to us by any of these means outlined above under the heading “Voting Instructions” without choices for each proposal, the proxy committee appointed by the Board will vote your shares on the unmarked proposals in the same proportion as shares for which instructions have been received. Abstentions, directions to withhold authority and broker non-votes (where a named entity holds shares for a beneficial owner who has not provided voting instructions) will be considered present at the Annual Meeting for purposes of a quorum.
2019 Proxy Statement 75
Additional Information
| Quorum and Required Vote |
We will have a quorum and will be able to conduct the business of the Annual Meeting if the holders of a majority of the votes that shareholders are entitled to cast are present at the Annual Meeting, either in personvirtually or by proxy. For the 20192021 Annual Meeting, to elect directors and adopt the other proposals, the following votes are required under our governing documents and Delaware corporate law:
| PROPOSAL | VOTE REQUIRED | EFFECT OF ABSTENTION | EFFECT OF BROKER NON-VOTE* | ||||
| 1 | Election of directors | Approval of the majority of shares represented at the Annual Meeting | Treated as vote against | No effect on the outcome | |||
| 2 | Ratify selection of PwC as independent registered public accounting | Approval of the majority of shares represented at the Annual Meeting | Treated as vote against | No effect on the outcome | |||
| 3 | Advisory vote to approve the compensation of our named executive officers** | Approval of the majority of shares represented at the Annual Meeting | Treated as vote against | No effect on the outcome | |||
| * | A broker non-vote occurs when a broker submits a proxy but does not vote for an item because it is not a “routine” item and the broker has not received voting instructions from the beneficial owner. As described under “Effect of Not Casting Your Vote” above, your broker may vote in its discretion only on Proposal No. 2, ratify selection of PwC as independent registered public accounting firm. Because brokers are entitled to vote on Proposal No. 2 without voting instructions from the beneficial owner, there will be no broker non-votes on this proposal. |
| ** | Advisory/Non-binding. In accordance with Adtalem’s Restated Certificate of Incorporation, a majority of the shares represented at the Annual Meeting must be voted “FOR.” Notwithstanding the foregoing, Adtalem will take into account the weight of investor support for the compensation for its NEOs based on the percentage of shares that are present |
Officers and other employees of Adtalem may solicit proxies by mail, personal interview, telephone, facsimile, electronic means, or via the Internet without additional compensation. None of these individuals will receive special compensation for soliciting votes, which will be performed in addition to their regular duties, and some of them may not necessarily solicit proxies. Adtalem also has made arrangements with brokerage firms, banks, record holders, and other fiduciaries to forward proxy solicitation materials to the beneficial owners of shares they hold on your behalf. Adtalem will reimburse these intermediaries for reasonable out-of-pocket expenses. We have hired Alliance Advisors,Innisfree M&A Incorporated to help us distribute and solicit proxies. Adtalem will pay them $24,000Innisfree $20,000 plus expenses for these services. Adtalem will pay the cost of all proxy solicitation.
SHAREHOLDER PROPOSALS FOR 20202022 ANNUAL MEETING
Shareholder proposals intended to be presented at the 20202022 Annual Meeting of Shareholders in reliance on Rule 14a-8 under the Exchange Act must be received by Adtalem no later than June 6, 2020,10, 2022, to be eligible for inclusion in the proxy statement and form of proxy for the meeting. Any such proposal also must meet the other requirements of the rules of the SEC relating to shareholder proposals. Also, under Adtalem’s By-Laws, other proposals and director nominations by shareholders that are not included in the proxy statement will be considered
2021 Proxy Statement 77
Additional Information
timely and may be eligible for presentation at that meeting only if they are received by Adtalem in the form of a written notice, directed to the attention of Adtalem’s General Counsel and Corporate Secretary, not later than August 7, 2020.12, 2022. The notice must contain the information required by the By-Laws.
76 Adtalem Global Education Inc.
Additional Information
A copy of Adtalem’s 20192021 Annual Report on Form 10-K (including the financial statements and financial statement schedules), as filed with the SEC, may be obtained without charge upon written request to the attention of Adtalem’s Chief Operating Officer, General Counsel and Corporate Secretary at Adtalem Global Education Inc., 500 West Monroe Street, Suite 2800, Chicago, IL 60661. A copy of Adtalem’s Form 10-K and other periodic filings also may be obtained on Adtalem’s investor relations website at investors.adtalem.cominvestors.adtalem.com/financials/sec-filing and from the SEC’s EDGAR database at www.sec.gov.
Adtalem delivers only one Notice of Annual Meeting and Proxy Statement and the 2021 Annual Report to multiple shareholders sharing the same address unless it has received different instructions from one or more of them. This method of delivery is known as “householding.” Householding reduces the number of mailings you receive, saves on printing and postage costs and helps the environment. Adtalem will, upon written or oral request, promptly deliver a separate copy of the Notice of Annual Meeting and Proxy Statement and 2021 Annual Report to a shareholder at a shared address. If you would like to change your householding election, request that a single copy of this or future proxy materials be sent to your address, or request a separate copy of this or future proxy materials, you should submit this request by writing Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717 or calling 1-866-540-7095.
DELINQUENT SECTION 16(a) REPORTS
Under U.S. securities laws, directors, certain officers and persons holding more than 10% of our common stock must report their initial ownership of our common stock and any changes in their ownership to the SEC. The SEC has designated specific due dates for these reports and we must identify in this Proxy Statement those persons who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC and the written representations of our directors and executive officers, we believe that all reporting requirements for fiscal year 2021 were complied with by each person who at any time during the 2021 fiscal year was a director or an executive officer or held more than 10% of our common stock except for the following: Due to the late receipt of a report, Ms. Boden Holland inadvertently filed a Form 4 four days late on May 19, 2021 to report the vesting of a previously reported restricted stock award on May 9, 2021. Due to the late receipt of a report, Ms. Wardell, Ms. Jennings, Mr. Nash and Mr. Lau each inadvertently filed a Form 4 two days late on August 28, 2020 to report the vesting of a previously reported restricted stock award on August 23, 2020. In addition, following a review of our stock records, it was discovered that Mr. Robert Phelan did not report a transaction in which shares were withheld for taxes on vesting shares. Such transaction was subsequently reported in a Form 5 that was filed on August 16, 2021.
The Board is aware of no other matter that will be presented for action at this Annual Meeting. If any other matter requiring a vote of the shareholders properly comes before the Annual Meeting, the proxy committee will vote and act according to their best judgment.
By Order of the Board of Directors
Stephen W. BeardDouglas G. BeckChief Operating Officer,Senior Vice President, General Counsel and Corporate Secretary
2019 Proxy Statement 7778 Adtalem Global Education Inc.
Appendix A – Summary of Special Items Excluded for Performance Assessment
The Compensation Committee has the discretion to adjust the financial inputs used in calculating the target award percentages for the MIP and long-term incentive plans. The Compensation Committee evaluates potential adjustments using the following framework:
| 1. | Align treatment with shareholders’ view of results; | ||
| 2. | Encourage management to make the best long-term decisions for Adtalem’s stakeholders; and | ||
| 3. | Remain generally consistent with past practice. | ||
Return on Invested Capital (“ROIC”), which is used as a performance threshold for PSUs granted in fiscal years 2017, 20182019, 2020 and 20192021 and is expressed as a percentage, is calculated as Adjusted Net Income divided by the average of the beginning and ending balances of the summation of Long-term Debt and Shareholders’ Equity.
RECONCILIATION OF FISCAL YEAR 2021 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE
For fiscal year 2021, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC and Adjusted Earnings per Share, which is a performance metric factoring in the determination of MIP payouts, were adjusted from reported Net Income and Earnings per Share for the following special items:
| ● | Exclusion of restructuring charges primarily related to Adtalem’s home office and ACAMS real estate consolidations, and a write-down of EduPristine’s assets; |
| ● | Exclusion of business acquisition and integration expense, which includes expenses related to the Walden University acquisition; |
| ● | Exclusion of pre-acquisition interest expense, which relates to financing arrangements in connection with the Walden University acquisition; and |
| ● | Exclusion of discontinued operations including the operations of Adtalem Brazil, Carrington College and DeVry University. |
In addition, the amount of pre-acquisition debt was adjusted from the long-term debt and shareholders’ equity calculation.
The following table reconciles these adjustments to the most directly comparable GAAP information:
| in thousands | per share | |||||||
| Net Income, as reported | $ | 76,909 | $ | 1.49 | ||||
| Exclusions: | ||||||||
| Restructuring charges (pretax) | $ | 9,804 | $ | 0.19 | ||||
| Business acquisition and integration expense (pretax) | $ | 31,593 | $ | 0.61 | ||||
| Pre-acquisition interest expense (pretax) | $ | 26,746 | $ | 0.52 | ||||
| Income tax impact of above exclusions | $ | (16,501 | ) | $ | (0.32 | ) | ||
| Discontinued operations (after tax) | $ | 25,127 | $ | 0.49 | ||||
| Adjusted Net Income | $ | 153,678 | $ | 2.98 | ||||
| Long-term Debt and Shareholder’s Equity: | ||||||||
| Fiscal year 2021, as reported | $ | 2,392,070 | ||||||
| Exclusion of pre-acquisition debt | $ | (800,000 | ) | |||||
| Fiscal year 2021, as adjusted | $ | 1,592,070 | ||||||
| Fiscal year 2020, as reported | $ | 1,604,421 | ||||||
| Average for determination of ROIC | $ | 1,598,246 | ||||||
| ROIC | 9.6% | |||||||
2021 Proxy Statement A-1
Appendix A – Summary of Special Items Excluded for Performance Assessment
For the fiscal year 2021 ROIC award only, Adtalem’s calculation of long-term debt and shareholders’ equity was further adjusted for the following items:
| ● | Exclusion of the net income impact from special items (as discussed above); and |
| ● | Exclusion of share repurchases. |
The following table reconciles these adjustments to the most directly comparable GAAP information:
| in thousands | per share | |||||||
| Net Income, as reported | $ | 76,909 | $ | 1.49 | ||||
| Exclusions: | ||||||||
| Restructuring charges (pretax) | $ | 9,804 | $ | 0.19 | ||||
| Business acquisition and integration expense (pretax) | $ | 31,593 | $ | 0.61 | ||||
| Pre-acquisition interest expense (pretax) | $ | 26,746 | $ | 0.52 | ||||
| Income tax impact of above exclusions | $ | (16,501 | ) | $ | (0.32 | ) | ||
| Discontinued operations (after tax) | $ | 25,127 | $ | 0.49 | ||||
| Adjusted Net Income | $ | 153,678 | $ | 2.98 | ||||
| Long-term Debt and Shareholder’s Equity: | ||||||||
| Fiscal year 2021, as reported | $ | 2,392,070 | ||||||
| Exclusion of pre-acquisition debt | $ | (800,000 | ) | |||||
| Exclusion of special items | $ | 76,769 | ||||||
| Exclusion of share repurchases | $ | 100,000 | ||||||
| Fiscal year 2021, as adjusted | $ | 1,768,839 | ||||||
| Fiscal year 2020, as reported | $ | 1,604,421 | ||||||
| Average for determination of ROIC | $ | 1,686,630 | ||||||
| ROIC | 9.1% | |||||||
FISCAL YEAR 2021 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS
For fiscal year 2021, Adtalem’s calculation of Adjusted Free Cash Flow was adjusted for the cash impact from special items (as discussed above).
| (in thousands, except per share amounts) | ||||
| Net cash provided by operating activities-continuing operations | $ | 223,158 | ||
| Capital Expenditures | $ | (48,664 | ) | |
| Free Cash Flow (“FCF”) | $ | 174,494 | ||
| Cash impact from special items | $ | 17,803 | ||
| FCF, as adjusted for determination of FCF | $ | 192,297 | ||
| Diluted shares | 51,645 | |||
| FCF per Share | $ | 3.72 | ||
RECONCILIATION OF FISCAL YEAR 2020 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE
For fiscal year 2020, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC and Adjusted Earnings per Share, which is a performance metric factoring in the determination of MIP payouts, were adjusted from reported Net Loss and Loss per Share for the following special items:
| ● | Exclusion of restructuring charges primarily related to the sale of Becker Professional Education’s courses for healthcare students, Adtalem’s home office and ACAMS real estate consolidations and workforce reductions across the organization, which were not primarily related to COVID-19; |
| ● | Exclusion of a gain related to the sale of Adtalem’s Columbus, Ohio campus facility; |
| ● | Exclusion of a gain on the deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk; |
A-2 Adtalem Global Education Inc.
Appendix A – Summary of Special Items Excluded for Performance Assessment
| ● | Exclusion of adjustments to the income tax charges related to implementation of the Tax Cuts and Jobs Act of 2017; |
| ● | Exclusion of a net tax benefit for a former subsidiary investment loss; |
| ● | Exclusion of discontinued operations including the operations of Adtalem Brazil, Carrington College and DeVry University; and |
| ● | Inclusion of the first three quarter of income for actual performance of Adtalem Brazil prior to its sale in April 2020 and three months of forecasted income of Adtalem Brazil to annualize Adtalem Brazil’s results (for ROIC payout only). |
The following table reconciles these adjustments to the most directly comparable GAAP information:
| in thousands | per share | |||||||
| Net Loss, as reported | $ | (85,334 | ) | $ | (1.58 | ) | ||
| Exclusions: | ||||||||
| Restructuring charges (pretax) | $ | 28,628 | $ | 0.53 | ||||
| Gain from real estate sale (pretax) | $ | (4,779 | ) | $ | (0.09 | ) | ||
| Gain on derivative (pretax) | $ | (110,723 | ) | $ | (2.05 | ) | ||
| Tax Cuts and Jobs Act of 2017 | $ | (2,230 | ) | $ | (0.04 | ) | ||
| Net tax benefit for a former subsidiary investment loss | $ | (25,668 | ) | $ | (0.47 | ) | ||
| Income tax impact of above exclusions | $ | (5,648 | ) | $ | (0.10 | ) | ||
| Discontinued operations (after tax) | $ | 329,315 | $ | 6.09 | ||||
| Net Income, as adjusted for determination of MIP payout | $ | 123,541 | $ | 2.28 | ||||
| Inclusion of Adtalem Brazil | $ | 26,341 | ||||||
| Net Income, as adjusted for determination of ROIC | $ | 149,882 | ||||||
| Long-term Debt and Shareholder’s Equity: | ||||||||
| Fiscal year 2021, as reported | $ | 1,604,421 | ||||||
| Fiscal year 2020, as reported | $ | 1,798,530 | ||||||
| Average for determination of ROIC | $ | 1,701,476 | ||||||
| ROIC | 8.8% | |||||||
FISCAL YEAR 2020 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS
| (in thousands, except per share amounts) | ||||
| Net cash provided by operating activities-continuing operations | $ | 149,565 | ||
| Capital Expenditures | $ | (44,137 | ) | |
| Free Cash Flow (“FCF”) | $ | 105,428 | ||
| Inclusion of Adtalem Brazil | $ | 34,714 | ||
| FCF, as adjusted for determination of FCF | $ | 140,142 | ||
| Diluted shares | $ | 54,094 | ||
| FCF per Share | $ | 2.59 | ||
RECONCILIATION OF FISCAL YEAR 2019 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE
For fiscal year 2019, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC and Adjusted Earnings per Share, which is a performance metric factoring in the determination of MIP payouts, were adjusted from reported Net Income and Earnings per Share for the following special items:
| ● | Exclusion of restructuring charges, including asset write-offs, primarily related to the closing of the Ross University School of Medicine campus in Dominica, and real estate consolidations and workforce reductions at Adtalem Brazil and Adtalem’s home office; |
| ● | Exclusion of insurance settlement gain related to the final proceeds received for damages from Hurricanes Irma and Maria at American University of the Caribbean School of Medicine and Ross University School of Medicine; |
2021 Proxy Statement A-3
Appendix A – Summary of Special Items Excluded for Performance Assessment
| ● | Exclusion of a gain related to a lawsuit settlement against the Adtalem Board; |
| ● | Exclusion of adjustments to the preliminary income tax charges related to implementation of the Tax Cuts and Jobs Act of 2017 and tax charges relating to the sale of DeVry University; |
| ● | Exclusion of discontinued |
| ● | Exclusion of the results of OCL acquired in the second half of fiscal year 2019 (for MIP payout only). |
The following table reconciles these adjustments to the most directly comparable GAAP information:
| in thousands | per share | in thousands | per share | |||||||||||||
| Net Income and Earnings per Share, as reported | $ | 95,168 | $ | 1.60 | ||||||||||||
| Net Income, as reported | $ | 95,168 | $ | 1.60 | ||||||||||||
| Exclusions: | ||||||||||||||||
| Restructuring charges (pretax) | $ | 55,925 | $ | 0.94 | $ | 55,925 | $ | 0.94 | ||||||||
| Settlement Gains (pretax) | $ | (26,178 | ) | $ | (0.44 | ) | ||||||||||
| Tax cuts and jobs act of 2017 and tax charges relating to divestiture of DeVry University | $ | 3,584 | $ | 0.06 | ||||||||||||
| Settlement gains (pretax) | $ | (26,178 | ) | $ | (0.44 | ) | ||||||||||
| Tax Cuts and Jobs Act of 2017 and tax charges relating to divestiture of | ||||||||||||||||
| DeVry University | $ | 3,584 | $ | 0.06 | ||||||||||||
| Income tax impact of above exclusions | $ | (1,732 | ) | $ | (0.03 | ) | $ | (1,732 | ) | $ | (0.03 | ) | ||||
| Discontinued operations (after tax) | $ | 40,443 | $ | 0.68 | $ | 40,443 | $ | 0.68 | ||||||||
| Net Income and Earnings Per Share, as adjusted for determination of ROIC | $ | 167,210 | $ | 2.82 | ||||||||||||
| Net Income, as adjusted for determination of ROIC | $ | 167,210 | $ | 2.82 | ||||||||||||
| Net Loss from OCL acquired in the second half of fiscal year 2019 | $ | 944 | $ | 0.02 | $ | 944 | $ | 0.02 | ||||||||
| Net Income and Earnings Per Share, as adjusted for determination of MIP payout | $ | 168,154 | $ | 2.84 | ||||||||||||
| Net Income, as adjusted for determination of MIP payout | $ | 168,154 | $ | 2.84 | ||||||||||||
| Long-term Debt and Shareholder’s Equity: | ||||||||||||||||
| Fiscal year 2020, as reported | $ | 1,798,530 | ||||||||||||||
| Fiscal year 2019, as reported | $ | 1,798,530 | $ | 1,819,286 | ||||||||||||
| Fiscal year 2018, as reported | $ | 1,819,286 | ||||||||||||||
| Average for determination of ROIC | $ | 1,808,908 | $ | 1,808,908 | ||||||||||||
| ROIC | 9.2% | 9.2% | ||||||||||||||
A-1FISCAL YEAR 2019 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS
| (in thousands, except per share amounts) | ||||
| Net cash provided by operating activities-continuing operations | $ | 226,449 | ||
| Capital Expenditures | $ | (64,751 | ) | |
| Free Cash Flow (“FCF”) | $ | 161,698 | ||
| Diluted shares | 59,330 | |||
| FCF per Share | $ | 2.73 | ||
A-4 Adtalem Global Education Inc.
Appendix A – Summary of Special Items Excluded for Performance Assessment
FISCAL YEAR 2019 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS
| (in thousands, except per share amounts) | ||||
| Net Cash Provided by Operating Activities-Continuing Operations | $ | 226,449 | ||
| Capital Expenditures | $ | (64,751 | ) | |
| Free Cash Flow (“FCF”) | $ | 161,698 | ||
| Diluted Shares | 59,330 | |||
| FCF per Share | $ | 2.73 | ||
RECONCILIATION OF FISCAL YEAR 2018 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE
For fiscal year 2018, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC, and Adjusted Earnings per Share, which is a performance metric factoring in determination of MIP payouts, were adjusted from reported Net Income and Earnings per Share for the following special items:
| |
| |
| |
| |
|
The following table reconciles these adjustments to the most directly comparable GAAP information:
| in thousands | per share | |||||||
| Net Income and Earnings per Share, as reported | $ | 33,769 | $ | 0.54 | ||||
| Exclusions: | ||||||||
| Restructuring charges (pretax) | $ | 23,804 | $ | 0.38 | ||||
| Tax cuts and jobs act of 2017 | $ | 103,878 | $ | 1.67 | ||||
| Net tax benefit on Carrington College loss | $ | (48,903 | ) | $ | (0.79 | ) | ||
| Asset impairment charges (pretax) | $ | 96,013 | $ | 1.54 | ||||
| Income tax impact of above exclusions | $ | (41,011 | ) | $ | (0.66 | ) | ||
| Hurricane deductibles (after tax) | $ | 11,567 | $ | 0.19 | ||||
| DeVry University separation costs (after tax) | $ | 11,154 | $ | 0.18 | ||||
| Adjusted Net Income and Earnings per Share | $ | 190,271 | $ | 3.06 | ||||
| Long-term Debt and Shareholder’s Equity: | ||||||||
| Fiscal year 2018, as reported | $ | 1,819,286 | ||||||
| Fiscal year 2017, as reported | $ | 1,794,039 | ||||||
| Average for determination of ROIC | $ | 1,806,663 | ||||||
| ROIC | 10.5% | |||||||
2019 Proxy Statement A-2
Appendix A – Summary of Special Items Excluded for Performance Assessment
RECONCILIATION OF FISCAL YEAR 2017 ADJUSTED NET INCOME FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME
For fiscal year 2017, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in the determination of MIP payouts and long-term incentive plans, were adjusted from reported Net Income for the following special items:
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The following table reconciles these adjustments to the most directly comparable GAAP information:
| in thousands | ||||
| Net Income, as reported | $ | 122,283 | ||
| Exclusions: | ||||
| Loss from real estate held for sale (pretax) | $ | 4,764 | ||
| Restructuring charges (pretax) | $ | 29,825 | ||
| Regulatory settlements (pretax) | $ | 56,252 | ||
| Income tax impact of above exclusions | $ | (34,721 | ) | |
| Net Income, as adjusted for determination of ROIC and MIP Payout | $ | 178,403 | ||
| Long-term Debt and Shareholder’s Equity: | ||||
| Fiscal year 2017, as reported | $ | 1,794,039 | ||
| Fiscal year 2016, as reported | $ | 1,582,087 | ||
| Average for determination of ROIC | $ | 1,688,063 | ||
| ROIC | 10.6% | |||
A-3 Adtalem Global Education Inc.
Appendix B – Adtalem Global Education Inc.Employee Stock Purchase Plan
Transfer Agent and Registrar Independent Registered Public Accounting Firm Financial Information and Reports | |||
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2019 Proxy Statement B-1
Appendix B – Adtalem Global Education Inc. Employee Stock Purchase Plan
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B-2 Adtalem Global Education Inc.
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Investor Relations Annual Meeting | ||
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2019 Proxy Statement B-3
Appendix B – Adtalem Global Education Inc. Employee Stock Purchase Plan
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B-4 Adtalem Global Education Inc.
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2019 Proxy Statement B-5
Appendix B – Adtalem Global Education Inc. Employee Stock Purchase Plan
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| Corporate Governance | |
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B-6 Adtalem Global Education Inc.
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2019 Proxy Statement B-7
Appendix B – Adtalem Global Education Inc. Employee Stock Purchase Plan
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B-8 Adtalem Global Education Inc.
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2019 Proxy Statement B-9
Appendix B – Adtalem Global Education Inc. Employee Stock Purchase Plan
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B-10 Adtalem Global Education Inc.
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2019 Proxy Statement B-11
Appendix B – Adtalem Global Education Inc. Employee Stock Purchase Plan
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B-12 Adtalem Global Education Inc.
500 WEST MONROE STREET, SUITE 2800
CHICAGO, IL 60661
Before The Meeting - Go to www.proxyvote.com
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on November
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: | |
| KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY | |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
| ADTALEM GLOBAL EDUCATION INC. | ADTALEM GLOBAL EDUCATION INC. | For | Withhold | For All | ADTALEM GLOBAL EDUCATION INC. | For | Withhold | For All | ||||||
| The Board of Directors recommends that you vote FOR all of the nominees listed in Item 1. | The Board of Directors recommends that you vote FOR all of the nominees listed in Item 1. | All | Except | The Board of Directors recommends that you vote FOR all of the nominees listed in Item 1. | All | Except | ||||||||
| Vote on Directors | ☐ | |||||||||||||
| The Board of Directors recommends that you vote FOR all of the nominees listed in Item 1. | The Board of Directors recommends that you vote FOR all of the nominees listed in Item 1. | ☐ | ||||||||||||
| Election of Directors | ||||||||||||||
| Nominees: | Nominees: | |||||||||||||
| 01) | Steven M. Altschuler | 05) | Lyle Logan | 01) | Stephen W. Beard | 07) | Lyle Logan | |||||||
| 02) | William W. Burke | 06) | Michael W. Malafronte | 02) | William W. Burke | 08) | Michael W. Malafronte | |||||||
| 03) | Donna J. Hrinak | 07) | Lisa W. Wardell | 03) | Charles DeShazer | 09) | Sharon O’Keefe | |||||||
| 04) | Georgette Kiser | 08) | James D. White | 04) | Mayur Gupta | 10) | Kenneth J. Phelan | |||||||
| 05) | Donna J. Hrinak | 11) | Lisa W. Wardell | |||||||||||
| 06) | Georgette Kiser | |||||||||||||
To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. | ||
| The Board of Directors recommends you vote FOR the following proposals: | For | Against | Abstain | |||||
| 2. | Ratify selection of PricewaterhouseCoopers LLP as independent registered public accounting firm. | ☐ | ☐ | ☐ | ||||
| 3. | Say-on-pay: Advisory vote to approve the compensation of our named executive officers. | ☐ | ☐ | ☐ | ||||
| NOTE:Such other business as may properly come before the meeting or any adjournment thereof. |
| No | |||
| Please indicate if you plan to attend this meeting. | ☐ | ☐ | |
Please date and sign below exactly as your name(s) appear(s) hereon. Joint owners should all sign. When signing in a representative capacity (such as for an estate, trust, corporation or partnership), please indicate title or capacity. | |||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
| PROXY | ADTALEM GLOBAL EDUCATION INC. Annual Meeting of Shareholders November | PROXY |
Via live webcast at www.virtualshareholdermeeting.com/ATGE2021.
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Stephen W. BeardDouglas G. Beck and Michael RandolfiRobert J. Phelan as proxies, each with the power to act alone and with full power of substitution and revocation, to represent and vote, as specified on the other side of this Proxy, all shares of Common Stock of Adtalem Global Education Inc. that the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held on Wednesday, November 6, 2019, at 8:00 a.m. Mountain Standard Time at Pointe Hilton Tapatio Cliffs Resort, 11111 North 7thStreet, Phoenix, Arizona 85020 and all adjournments thereof.10, 2021, or any adjournment of the meeting. You can virtually attend the meeting online by visiting www.virtualshareholdermeeting.com/ATGE2021.
The shares represented by this Proxy will be voted as specified. If no choice is specified, this Proxy will be voted "FOR ALL" in Item 1 and "FOR" Items 2 3 and 4.3.
The proxies are authorized, in their discretion, to vote such shares upon any other business that may properly come before the Annual Meeting.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED PREPAID ENVELOPE.