| Additional Committee Members: Richard A. Goodman, Betsy D. Holden, Timothy P. Murphy, Angela A. Sun, and Solomon D. Trujillo Meetings Held in 2021: 8 Primary Responsibilities: Pursuant to its charter, the Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to: ● | •integrity of the Company’s consolidated financial statements; | ● | •compliance with legal and regulatory requirements; | ● | • review the Company's guidelines and policies that govern the process by which the Company goes about assessing and managing its exposure to risks; •the independent registered public accounting firm’s qualifications, independence and compensation; and | ● | •performance of the Company’s internal audit function and independent registered public accounting firm. Independence: Each member of the Audit Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as the Board has determined, has no material relationship with the Company. Each member of the Audit Committee is financially literate, knowledgeable, and qualified to review financial statements. The Board has designated each of Mr. Goodman and Mr. Siegmund as a “financial expert” as defined by Item 407(d) of Regulation S-K. Service on Other Audit Committees: No director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit Committee. Currently, none of the Audit Committee members serve on more than two other public company audit committees. | |
2022 Proxy Statement Independence:| Each member of the Audit Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as the Board has determined, has no material relationship with the Company. Each member of the Audit Committee is financially literate, knowledgeable, and qualified to review financial statements. The Board has designated each of Mr. Goodman and Mr. Siegmund as a “financial expert” as defined by Item 407(d) of Regulation S-K.19 Service on Other Audit Committees: No director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit Committee. Currently, none of the Audit Committee members serve on more than two other public company audit committees.
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| | | The Western Union Company |
Table of Contents CORPORATE GOVERNANCE
Compensation and Benefits Committee | | | |
| “In 2020,2021, the Compensation and Benefits Committee continued to focus on pay-for-performance to set the foundation for the long-term strength and performance of the Company through the Company’s executive compensation program. The Compensation and Benefits Committee also continued to focus on organizational health, with emphasis onassisted the impact ofBoard in the COVID-19 pandemic, with a view to maintainingCEO succession process and enhancing employee well-being and overall effectiveness ofin establishing compensation arrangements for the Company.new CEO.”
Michael A. Miles, Jr., Committee Chair |  | 
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Additional Committee Members: Martin I. Cole, Richard A. Goodman, Betsy D. Holden, and Joyce A. Phillips
Meetings Held in 2020:
| Additional Committee Members: Martin I. Cole, Richard A. Goodman, Betsy D. Holden, and Joyce A. Phillips Meetings Held in 2021: 6 Primary Responsibilities: Pursuant to its charter, the Compensation Committee has the authority to administer, interpret, and take any actions it deems appropriate in connection with any incentive compensation or equity-based plans of the Company, any salary or other compensation plans for officers and other key employees of the Company, and any employee benefit or fringe benefit plans, programs, or policies of the Company. Among other things, the Compensation Committee is responsible for: ● | •in consultation with senior management, establishing the Company’s general compensation philosophy, and overseeing the development and implementation of compensation and benefits policies; | ● | •reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluating the performance of the CEO and other executive officers in light thereof, and setting compensation levels and other benefits for the CEO (with the ratification by the independent directors of the Board) and other executive officers based on this evaluation; | ● | •overseeing the Company’s regulatory compliance with respect to compensation matters; | ● | •reviewing and making recommendations to the Board regarding severance or similar termination agreements with the Company’s CEO or to any person being considered for promotion or hire into the position of CEO; | ● | •approving grants and/or awards of options, restricted stock, restricted stock units, and other forms of equity-based compensation under the Company’s equity-based plans; | ● | •reviewing with management and preparing an annual report regarding the Company’s Compensation Discussion and Analysis to be included in the Company’s Proxy Statement and Annual Report; | ● | •in consultation with the CEO, reviewing management succession planning; | ● | •reviewing and recommending to the Board of Directors compensation for non-employee directors; and | ● | •periodically reviewing the overall effectiveness of the Company’s principal strategies related to human capital management, recruiting, retention, career development, and diversity. The Compensation Committee has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee and, in some situations, may also delegate its authority and responsibility with respect to certain compensation and benefit plans and programs to one or more employees. Independence: Each member of the Compensation Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE, the Exchange Act and such other independence or other requirements as may be applicable from time to time, and as the Board has determined, has no material relationship with the Company. | |
20 |The Compensation Committee has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee and, in some situations, may also delegate its authority and responsibility with respect to certain compensation and benefit plans and programs to one or more employees.Western Union Company Independence: Each member of the Compensation Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE, the Exchange Act and such other independence or other requirements as may be applicable from time to time, and as the Board has determined, has no material relationship with the Company.
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CORPORATE GOVERNANCE | “The Compliance Committee shares with regulators the goals of protecting consumers and the integrity of the global money transfer network and remains at the forefront of the Company’s focus on the execution and enhancement of the Company’s compliance policies and procedures. ThisIn 2021, the Compliance Committee continued to focus was reflected in the dismissal in 2020 ofon sustaining and enhancing the Company’s 2017 Deferred Prosecution Agreement withcompliance programs in light of increasing regulatory requirements around the United States Department of Justice and the completion of the term of the independent compliance auditor appointed under the 2017 Consent Order with the United States Federal Trade Commission.globe.”
Timothy P. Murphy, Committee Chair |  | 
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Additional Committee Members: Martin I. Cole, Jan Siegmund, Angela A. Sun, and Solomon D. Trujillo
Meetings Held in 2020:
| Additional Committee Members: Martin I. Cole, Jan Siegmund, Angela A. Sun, and Solomon D. Trujillo Meetings Held in 2021: 4 Primary Responsibilities: Pursuant to its charter, the Compliance Committee assists the Audit Committee and the Board in fulfilling the Board’s oversight responsibility for the Company’s compliance with legal and regulatory requirements. Among other things, the Compliance Committee is responsible for reviewing and discussing with management: ● | •the Company’s compliance programs, policies and key risk exposures relating to AML, laws, sanctions, anti-corruption, fraud prevention, consumer protection, and privacy laws, including establishing procedures to be apprised of material investigations or other material matters that may arise in relation to such laws; and | ● | •legal, compliance or other regulatory matters that may have a material effect on the Company’s business, financial statements or compliance policies, including material notices to or inquiries received from governmental agencies. Independence: Each voting member of the Compliance Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE, and the Exchange Act, and as the Board has determined, has no material relationship with the Company. The Board may appoint non-voting members to the Compliance Committee that are not independent from the Company. | |
Independence: Each voting member of the Compliance Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company. The Board may appoint non-voting members to the Compliance Committee that are not independent from the Company.
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| | | The Western Union Company |
2022 Proxy Statement | 21
Table of Contents CORPORATE GOVERNANCE
Corporate Governance, ESG, and Public Policy Committee | | | |
| “With a continued focus on board refreshment,In 2021, the Committee successfully added and on-boarded two new directors toassisted the Board in 2020,recruiting, appointing, and onboarding the Company’s new CEO and Board member, with the objective of furtherfurthering the Company’s strategic objectives and enhancing the skills, experience, diversity, and effectiveness of the Board. The Committee also continued to focus on oversight of the Company’s ESG disclosures and strategy development.”
Jeffrey A. Joerres, Committee Chair | 
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| Additional Committee Members: Michael A. Miles, Jr., and Joyce A. Phillips Meetings Held in 2021: 5 Meetings Held in 2020: 5
Primary Responsibilities: Pursuant to its charter, the Corporate Governance, ESG, and Public Policy Committee is responsible for: ● | •recommending to the Board of Directors criteria for Board and committee membership; | ● | •considering, in consultation with the ChairmanChair of the Board and the CEO, and recruiting candidates to fill positions on the Board of Directors; | ● | •evaluating current directors for re-nomination to the Board of Directors; | ● | •recommending director nominees to the Board of Directors; | ● | •recommending to the Board of Directors appointments to committees of the Board of Directors; | ● | •recommending to the Board of Directors corporate governance guidelines, reviewing the Corporate Governance Guidelines at least annually, and recommending modifications to the Corporate Governance Guidelines to the Board of Directors; | ● | •advising the Board of Directors with respect to the charters, structure, and operations of the various committees of the Board of Directors and qualifications for membership thereon; | ● | •overseeing the development and implementation of an orientation and continuing education program for directors; | ● | •establishing and implementing self-evaluation procedures for the Board of Directors and its committees; | ● | •reviewing stockholder proposals submitted for inclusion in the Company’s Proxy Statement; | ● | •reviewing the Company’s related persons transaction policy, and as necessary, reviewing specific related person transactions; and | ● | •reviewing and advising the Board of Directors regarding public policy and ESG matters that are relevant to the Company or the industries in which the Company operates. Independence: Each member of the Corporate Governance, ESG, and Public Policy Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company. | |
Independence: Each member of the Corporate Governance, ESG, and Public Policy Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company.
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22 | The Western Union Company
Table of Contents
CORPORATE GOVERNANCE CHIEF EXECUTIVE OFFICEROFFICER SUCCESSION PLANNING The Company’s Board of Directors has developed a governance framework for CEO succession planning that is intended to provide for a talent-rich leadership organization that can drive the Company’s strategic objectives. Under its governance framework, the Board of Directors: - | Reviews succession planning for the CEO on an annual basis. As part of this process, the CEO reviews the annual performance of each member of the management team |
•Reviews succession planning for the CEO on an annual basis. As part of this process, the CEO reviews the annual performance of each member of the management team | with the Board and the Board engages in a discussion with the CEO and the Chief People Officer regarding each team member and the team member’s development;
with the Board and the Board engages in a discussion with the CEO and the Chief People Officer regarding each team member and the team member’s development; •Maintains a confidential plan to address any unexpected short-term absence of the CEO and identifies candidates who could act as interim CEO in the event of any such unexpected absence; and •Ideally three to five years before the retirement of the current CEO, manages the succession process and determines the current CEO’s role in that process. | - | Maintains a confidential plan to address any unexpected short-term absence of the CEO and identifies candidates who could act as interim CEO in the event of any such unexpected absence; and
| - | Ideally three to five years before the retirement of the current CEO, manages the succession process and determines the current CEO’s role in that process.
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COMMUNICATIONS WITH THE BOARD OF DIRECTORS Any stockholder of the Company or other interested party who desires to contact the non-management directors either as a group or individually, or Mr. ErsekMcGranahan in his capacity as a director, may do so by writing to: The Western Union Company, Board of Directors, 7001 E. Belleview Avenue, Denver, Colorado 80237. Communications that are intended specifically for non-management directors should be addressed to the attention of the ChairpersonChair of the Corporate Governance, ESG, and Public Policy Committee. All communications will be forwarded to the ChairpersonChair of the Corporate Governance, ESG, and Public Policy Committee unless the communication is specifically addressed to another member of the Board, in which case, the communication will be forwarded to that director.
BOARD ATTENDANCE AT ANNUAL MEETING OF STOCKHOLDERS Although the Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company’s Annual Meeting of Stockholders, it encourages directors to attend. All Eight out of eleven of the members of the Board of Directors serving at the time attended the Company’s 20202021 Annual Meeting of Stockholders.
PRESIDING DIRECTOR OF NON-MANAGEMENT DIRECTOR MEETINGS The non-management directors meet in regularly scheduled executive sessions without management. The ChairmanChair of the Board of Directors is the presiding director at these meetings. NOMINATION OF DIRECTORS The Company’s Board of Directors is responsible for nominating directors for election by the stockholders and filling any vacancies on the Board that may occur. The Corporate Governance, ESG, and Public Policy Committee is responsible for identifying, screening, and recommending candidates to the Board for Board membership. The Corporate Governance, ESG, and Public Policy Committee does not have any single method for identifying director candidates, but will consider candidates suggested by a wide range of sources, including by any stockholder, director, or officer of the Company. Ms. Phillips,Mr. McGranahan, who was appointed as a member of the Board in July 2020,December 2021, was recommended to the Corporate Governance, ESG, and Public Policy Committee by a third-party executive search firm.
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| | | The Western Union Company |
2022 Proxy Statement | 23
Table of Contents CORPORATE GOVERNANCE
DIRECTOR QUALIFICATIONS, REQUIREMENTS, AND EVALUATIONS |
General criteria for the nomination of director candidates include experience, high ethical standards and integrity, skills, diversity, ability to make independent analytical inquiries, understanding of the Company’s business environment, and willingness to devote adequate time to Board duties–all in the context of an assessment of the perceived needs of the Board at that point in time. In exercising its director nomination responsibilities, the Corporate Governance, ESG, and Public Policy Committee considers diversity in gender, ethnicity, geography, background, and cultural viewpoints when considering director nominees, given the global nature of the Company’s business. However, the Board has not adopted a formal policy governing director diversity. Our Corporate Governance Guidelines also require that a director retire effective at the next annual meeting of stockholders following the time such director reaches the age of 74. The Board may waive this requirement for one year if it determines it is in the best interests of our Company. Each director is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a Board or Committee member.
The Corporate Governance, ESG, and Public Policy Committee will consider candidates for election to the Board suggested in writing by a stockholder and will make a recommendation to the Board using the same criteria as it does in evaluating candidates submitted by members of the Board of Directors. Any such suggestions should be submitted to the Corporate Secretary, The Western Union Company, 7001 E. Belleview Avenue, Denver, Colorado 80237. If the Company receives such a suggestion, the Company may request additional information from the candidate to assist in its evaluation. Pursuant to our Corporate Governance Guidelines, we evaluate the overall effectiveness of the Board annually. The Board together with the Corporate Governance, ESG, and Public Policy Committee conducts annual self-evaluations of Board and committee performance, including an evaluation of the effectiveness of the nomination process. In addition, the Board conducts annual evaluations of each individual independent director.
Stockholders may submit nominations for director candidates by giving notice to the Corporate Secretary, The Western Union Company, 7001 E. Belleview Avenue, Denver, Colorado 80237. The requirements for the submission of such stockholder nominations are set forth in Article II of the Company’s By-Laws, which are available on the “Investor Relations, Corporate Governance” section of the Company’s website, www.westernunion.com.www.westernunion.com.
SUBMISSION OF STOCKHOLDER PROPOSALS Stockholder proposals, including stockholder director nominations, requested to be included in the Company’s Proxy Statement for its 20222023 Annual Meeting of Stockholders must be received by the Company not later than November 29, 2021December 5, 2022 and comply with the requirements of Rule 14a-8, if applicable, and the Company’s proxy access By-laws, as applicable. Even if a proposal or director nomination is not submitted in time to be considered for inclusion in the Company’s Proxy Statement for its 20222023 Annual Meeting of Stockholders, a proper stockholder proposal or director nomination may still be considered at the Company’s 20222023 Annual Meeting of Stockholders, but only if the proposal or nomination is received by the Company no sooner than January 14, 202219, 2023 and no later than February 13, 202218, 2023 and otherwise complies with the Company’s By-Laws. All proposals or nominations a stockholder wishes to submit at the meeting should be directed to the Corporate Secretary, The Western Union Company, 7001 E. Belleview Avenue, Denver, Colorado 80237.In addition to satisfying the foregoing requirements and those under the Company’s By-Laws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 20, 2023.
24 | The Western Union Company
Table of Contents CORPORATE GOVERNANCE CODE OF ETHICS The Company’s Director’s Code of Conduct, Code of Ethics for Senior Financial Officers, Reporting Procedure for Accounting and Auditing Concerns, Attorney’s Professional Conduct Policy, for Attorneys, and the Code of Conduct are available without charge through the “Investor Relations, Corporate Governance” section of the Company’s website, www.westernunion.com, orby writing to the attention of: Investor Relations, The Western Union Company, 7001 E. Belleview Avenue, WU-HQ-14,WU-HQ-10, Denver, Colorado 80237. In the event of an amendment to, or a waiver from, the Company’s Code of Ethics for Senior Financial Officers, the Company intends to post such information on its website, www.westernunion.com.
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2022 Proxy Statement | 25
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COMPENSATION OF DIRECTORS The following table provides information regarding the compensation of our outside directors for 2020.2021. Mr. Ersek, our former President and CEO, doesand Mr. McGranahan, our current President and CEO, did not receive additional compensation in 2021 for his servicetheir services as a directordirectors, and hashave been excluded from the table. Please see the “2021 Summary Compensation Table” for the compensation received by Messrs. Ersek and McGranahan with respect to 2021. | 2020 DIRECTOR COMPENSATION | | NAME | | FEES EARNED
OR PAID IN
CASH ($000) | | STOCK
AWARDS
($000)(2) | | OPTION
AWARDS
($000)(3) | | ALL OTHER
COMPENSATION
($000)(4) | | TOTAL
($000)(5) | | Martin I. Cole | | $110.0 | | $160.0 | | — | | $45.0 | | $315.0 | | Richard A. Goodman | | $115.0 | | $160.0 | | — | | $25.0 | | $300.0 | | Betsy D. Holden | | $115.0 | | $160.0 | | — | | $30.0 | | $305.0 | | Jeffrey A. Joerres | | $125.0(1) | | $360.0 | | — | | $2.0 | | $487.0 | | Roberto G. Mendoza(6) | | $38.7 | | $160.0 | | — | | — | | $198.7 | | Michael A. Miles, Jr. | | $115.0 | | $160.0 | | — | | — | | $275.0 | | Timothy Murphy(7) | | $81.2 | | $61.6 | | $61.6 | | $2.0 | | $206.4 | | Joyce A. Phillips(8) | | $52.8 | | $80.4 | | — | | — | | $133.2 | | Jan Siegmund | | $120.0 | | — | | $160.0 | | $15.0 | | $295.0 | | Angela A. Sun | | $110.0 | | $120.0 | | $40.0 | | $25.0 | | $295.0 | | Frances Fragos Townsend(9) | | $46.1 | | $160.0 | | — | | — | | $206.1 | | Solomon D. Trujillo | | $110.0 | | $80.0 | | $80.0 | | — | | $270.0 |
2021 DIRECTOR COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | | FEES EARNED | | STOCK | | | OPTION | | | ALL OTHER | | | | | | | | OR PAID IN | | AWARDS | | | AWARDS | | | COMPENSATION | | | TOTAL | | NAME | | CASH ($000) | | ($000)(2) | | | ($000)(3) | | | ($000)(4) | | | ($000)(5) | | Martin I. Cole | | | 105.7 | | | | | 160.0 | | | | — | | | | — | | | | 265.7 | | Richard A. Goodman | | | 110.0 | | | | | — | | | | 160.0 | | | | 25.0 | | | | 295.0 | | Betsy D. Holden | | | 110.0 | | | | | 160.0 | | | | — | | | | 25.0 | | | | 295.0 | | Jeffrey A. Joerres | | | 125.0 | | (1) | | | 360.0 | | | | — | | | | — | | | | 485.0 | | Michael A. Miles, Jr. | | | 120.0 | | | | | 160.0 | | | | — | | | | 25.0 | | | | 305.0 | | Timothy Murphy | | | 128.0 | | | | | 160.0 | | | | — | | | | — | | | | 288.0 | | Joyce A. Phillips | | | 105.0 | | | | | 160.0 | | | | — | | | | 15.0 | | | | 280.0 | | Jan Siegmund | | | 125.0 | | | | | — | | | | 160.0 | | | | — | | | | 285.0 | | Angela A. Sun | | | 110.0 | | | | | 160.0 | | | | — | | | | 25.0 | | | | 295.0 | | Solomon D. Trujillo | | | 110.0 | | | | | 80.0 | | | | 80.0 | | | | — | | | | 270.0 | |
Footnotes: Footnotes:
| (1) | Mr. Joerres elected to receive his annual retainer fee for 20202021 in the form of equity compensation as described below under “—“Compensation of Directors—Equity Compensation.”
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(2) | The amounts in this column represent the value of stock units granted to director as annual equity grants. Stock awards consist of fully vested stock units that are settled in shares of Common Stock and may be subject to a deferral election consistent with Section 409A of the Internal Revenue Code. The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). See Note 17 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20202021 for a discussion of the relevant assumptions used in calculating these amounts.
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(3) | The amounts in this column represent the value of stock options granted to directors as an annual equity grant. The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See Note 17 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20202021 for a discussion of the relevant assumptions used in calculating these amounts.
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(4) | All Other Compensation represents matches under the Company’s gift matching program that the Company made in 2020.2021. Outside directors are eligible to participate in the Company’s gift matching program on the same terms as Western Union’s executive officers and employees. As noted below, contributions made or directed to be made to an eligible organization, up to an aggregate amount of $25,000 per calendar year, will be matched by the Company. Matching contributions to various charities were made in 20202021 on behalf of the following directorsdirectors: Messrs. Cole, Goodman, Joerres, Murphy, and Siegmund,Miles, Ms. Holden, Ms. Phillips, and Mss. Holden andMs. Sun. Contributions up to $100,000 per calendar year that a director makes to the Western Union Foundation (the “Foundation”) without designating a recipient organization will be matched by the Company $2 for every $1 contributed.
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(5) | As of December 31, 2020,2021, each outside director had outstanding the following number of stock units and options:
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| NAME | | STOCK UNITS | | OPTIONS | | Martin I. Cole | | 8,686 | | 9,208 | | Richard A. Goodman | | 58,849 | | 36,814 | | Betsy D. Holden | | 95,498 | | — | | Jeffrey A. Joerres | | 108,708 | | 11,448 | | Roberto G. Mendoza | | 73,868 | | 79,178 | | Michael A. Miles, Jr. | | 133,491 | | — | | Timothy Murphy | | 3,237 | | 20,084 | | Joyce A. Phillips | | 3,709 | | — | | Jan Siegmund | | — | | 40,599 | | Angela A. Sun | | 13,624 | | 22,620 | | Frances Fragos Townsend | | 51,012 | | 39,833 | | Solomon D. Trujillo | | 33,652 | | 157,756 |
(6) | Mr. Mendoza retired from the Board effective May 14, 2020.
| (7) | Mr. Murphy was appointed to the Board effective March 24, 2020.
| (8) | Ms. Phillips was appointed to the Board effective July 1, 2020.
| (9) | Ms. Fragos Townsend did not stand for reelection at the Company’s 2020 Annual Meeting of Stockholders and ceased to be a director on May 14, 2020. |
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| | | The Western Union Company |
| | | | | | | | | | | NAME | | STOCK UNITS | | | OPTIONS | | | Martin I. Cole | | | 15,378 | | | | 9,208 | | | Richard A. Goodman | | | 58,849 | | | | 75,462 | | | Betsy D. Holden | | | 102,190 | | | | — | | | Jeffrey A. Joerres | | | 128,993 | | | | 11,448 | | | Michael A. Miles, Jr. | | | 140,183 | | | | — | | | Timothy Murphy | | | 9,929 | | | | 20,084 | | | Joyce A. Phillips | | | 10,401 | | | | — | | | Jan Siegmund | | | — | | | | 79,247 | | | Angela A. Sun | | | 20,316 | | | | 22,620 | | | Solomon D. Trujillo | | | 36,998 | | | | 177,080 | |
26 | The Western Union Company
Table of Contents COMPENSATION OF DIRECTORS COMPENSATION OF DIRECTORS
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DETERMINATION OF DIRECTOR COMPENSATION |
The Compensation Committee is responsible for recommending to the Board the compensation of the Company’s outside directors. As part of this process, the Compensation Committee reviews the outside director compensation program annually to evaluate whether it is competitive with market practices by considering input from Meridian, the Compensation Committee’s independent compensation consultant, regarding the Company’s historical practices with respect to outside director compensation as well as market data for the same peer group used for determining executive compensation. In 2020,2021, each outside director (other than our Non-Executive Chairman)Chair) received the following cash compensation for service on our Board and committees of our Board (prorated for partial years of service): - | an annual Board retainer fee of $85,000; | | | - | an annual committee chair retainer fee of $30,000 for the chairpersons of the Audit Committee and the Compliance •an annual Board retainer fee of $85,000; •an annual committee chair retainer fee of $30,000 for the chairs of the Audit Committee and the Compliance Committee and $25,000 for the chairs of the Compensation Committee and the Corporate Governance, ESG and Public Policy Committee; and •an annual committee member retainer fee of $15,000 for non-chair members of the Audit Committee and $10,000 for non-chair members of each other committee of our Board. | chairpersons of the Compensation and Benefits Committee and the Corporate Governance, ESG and Public Policy Committee; and | | | - | an annual committee member retainer fee of $15,000 for non-chair members of the Audit Committee (increased from $10,000, effective January 1, 2020) and $10,000 for non-chair members of each other committee of our Board. |
The 20202021 outside director equity awards were granted pursuant to our Long-Term Incentive Plan. The purpose of these awards is to advance the interests of the Company and its stockholders by encouraging stock ownership by our outside directors and by helping the Company attract, motivate, and retain highly qualified outside directors. In 2020,2021, all of our outside directors (other than our Non-Executive Chairman)Chair) were eligible to receive an annual equity grant with a value of $160,000 for service on our Board and committees of our Board (prorated for incoming directors joining during the year). After considering market data from Meridian, the annual equity grant value was increased from $140,000 in 2019 in order to further align the Company’s director compensation with the median of the peer group used for evaluating 2019 executive compensation decisions.Board. The 20202021 equity grant will be settled in shares of common stock. Beginning in 2021, the annual equity grants to the outside directors willstock and have a one-year vesting requirement, subject to pro-rata vesting for a qualifying departure from the Board. This change was made after the Committee reviewed relevant market data as part of its regular evaluation of Board pay practices. For 2020,2021, each outside director hashad the choice of electing to receive such director’s annual retainer fees described above in the form of (a) all cash, (b)equity or a combination of cash, fully vested stock options, and/or fully vested stock units, (c) all fully vested stock options, (d) all fully vested stock units, (e) a combination of 75% fully vested stock options and 25% fully vested stock units, (f) a combination of 50% fully vested stock options and 50% fully vested stock units, or (g) a combination of 75% fully vested stock units and 25% fully vested stock options. Eachthereof. For 2021, each outside director may also electhad the choice of election to receive such director’s annual equity grant in the form (a) all stock options, (b) all restricted stock units, (c) a combination of any75% stock options and 25% restricted stock units, (d) a combination of the above alternatives, other than alternatives that include cash.50% stock options and 50% restricted stock units, or (e) a combination of 75% restricted stock units and 25% stock options.
COMPENSATION OF OUR NON-EXECUTIVE CHAIRMAN CHAIR |
In 2020,2021, our Non-Executive ChairmanChair received the following compensation in lieu of the compensation described above for our other outside directors: •an annual retainer fee of $125,000; and •an annual equity grant with a value of $360,000. - | an annual retainer fee of $125,000; and | | | - | an annual equity grant with a value of $360,000. |
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COMPENSATION OF DIRECTORS
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Our Non-Executive ChairmanChair has the choice to receive his annual retainer fee in the forms discussed above under “—“Compensation of Directors—Equity Compensation.” Beginning in 2021, theThe Non-Executive Chairman Chair annual equity grant will also havehas a one-year vesting condition, subject to pro-rata vesting for a qualifying departure from the Board.
2022 Proxy Statement | 27
Table of Contents COMPENSATION OF DIRECTORS Outside directors may participate in the Company’s gift matching program on the same terms as the Company’s executive officers and employees. Under this program, contributions up to $100,000 per calendar year that the director makes to the Western Union Foundation (the “Foundation”) without designating a recipient organization will be matched by the Company $2 for every $1 contributed. Contributions made or directed to be made to an eligible organization, as defined in the program, up to an aggregate amount of $25,000 per calendar year will be equally matched by the Company through the Foundation. Directors are reimbursed for their expenses incurred by attending Board, committee, and stockholder meetings, including those for travel, meals, and lodging. Occasionally, a spouse or other guest may accompany directors on corporate aircraft when the aircraft is already scheduled for business business purposes and can accommodate additional passengers. In those cases, there is no aggregate incremental cost to the Company and, as a result, no amount is reflected in the 20202021 Director Compensation table. INDEMNIFICATION AGREEMENTS |
Each outside director has entered into a Director Indemnification Agreement with the Company to clarify indemnification procedures. Consistent with the indemnification rights already provided to directors of the Company in the Company’s Certificate of Incorporation, each agreement provides that the Company will indemnify and hold harmless each outside director to the fullest extent permitted or authorized by the General Corporation Law of the State of Delaware in effect on the date of the agreement or as such laws may be amended or replaced to increase the extent to which a corporation may indemnify its directors. EQUITY OWNERSHIP GUIDELINES |
Each outside director is expected to maintain an equity investment in Western Union equal to five times his or her annual cash retainer, which must be achieved within five years of the director’s initial election to the Board. The holdings that generally may be counted toward achieving the equity investment guidelines include outstanding stock awards or units, shares obtained through stock option exercises, shares owned jointly with or separately by the director’s spouse, and shares purchased on the open market, and outstanding stock options received in lieu of cash retainer fees.market. As of the Record Date, all outside directors have met or, within the applicable period, are expected to meet, these equity ownership guidelines. PROHIBITION AGAINST PLEDGING AND HEDGING OF THE COMPANY’S SECURITIES |
The Company’s Insider Trading Policy prohibits the Company’s directors from pledging the Company’s securities or engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. 28
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Table of Contents
REPORT OF THE AUDIT COMMITTEE The Audit Committee is currently comprised of six independent directors and operates under a written charter adopted by the Board. The Audit Committee reviews the charter at least annually, reviewing it last in FebruaryDecember 2021. The charter is available through the “Investor Relations, Corporate Governance” portion of the Company’s website www.westernunion.com. The Board has the ultimate authority for effective corporate governance, including the role of oversight of the management of the Company. The Audit Committee’s purpose is to assist the Board in fulfilling its oversight responsibilities with respect to the Company’s consolidated financial statements, independent registered public accounting firm qualifications and independence, performance of the Company’s internal audit function and independent registered public accounting firm, and other matters identified in the Audit Committee Charter. The Audit Committee relies on the expertise and knowledge of management, the internal auditors and the independent registered public accounting firm in carrying out its responsibilities. Management is responsible for the preparation, presentation, and integrity of the Company’s consolidated financial statements, accounting and financial reporting principles, internal control over financial reporting and disclosure controls, and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. In addition, management is responsible for objectively reviewing and evaluating the adequacy, effectiveness, and quality of the Company’s system of internal control. The Company’s independent registered public accounting firm, Ernst & Young LLP, is responsible for performing an independent audit of the consolidated financial statements and for expressing an opinion on the conformity of those financial statements with United States generally accepted accounting principles. The Company’s independent registered public accounting firm is also responsible for expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee engages in an annual evaluation of the independent public accounting firm’s qualifications, assessing the firm’s quality of service, the firm’s sufficiency of resources, the quality of the communication and interaction with the firm, and the firm’s independence, objectivity, and professional skepticism. In evaluating and selecting the Company’s independent registered public accounting firm, the Audit Committee considers, among other things, historical and recent performance of the firm, an analysis of known significant legal or regulatory proceedings related to the firm, recent Public Company Accounting Oversight Board (the “PCAOB”) reports regarding the firm, industry experience, audit fee revenues, audit approach, and the independence of the firm. The Audit Committee also periodically considers the advisability and potential impact of selecting a different independent public accounting firm. In addition, the Audit Committee is involved in the lead audit partner selection process. During fiscal year 2020,2021, the Audit Committee fulfilled its duties and responsibilities as outlined in its charter. Specifically, the Audit Committee, among other actions: - | reviewed and discussed with management and the independent registered public accounting firm the Company’s quarterly earnings press releases, consolidated financial statements, and related periodic reports filed with the SEC; | | | - | reviewed with management, the independent registered public accounting firm and the internal auditor, management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the effectiveness of the Company’s internal control over financial reporting; | | | - | reviewed with the independent registered public accounting firm, management, and the internal auditor, as appropriate, the audit scope and plans of both the independent registered public accounting firm and internal auditor; | | | - | reviewed with the independent registered public accounting firm the critical audit matters expected in their report for the 2020 audit; | | | - | met in periodic executive sessions with each of the independent registered public accounting firm, management, and the internal auditor; | | | - | received the written disclosures and the annual letter from Ernst & Young LLP provided to us pursuant to PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, concerning their independence and discussed with Ernst & Young LLP their independence; and | | | - | reviewed and pre-approved all fees paid to Ernst & Young LLP, as described in Proposal 3–Ratification of Selection of Auditors, and considered whether Ernst & Young LLP’s provision of non-audit services to the Company was compatible with the independence of the independent registered public accounting firm. |
• reviewed and discussed with management and the independent registered public accounting firm the Company’s quarterly earnings press releases, consolidated financial statements, and related periodic reports filed with the SEC; • reviewed with management, the independent registered public accounting firm and the internal auditor, management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the effectiveness of the Company’s internal control over financial reporting; • reviewed with the independent registered public accounting firm, management, and the internal auditor, as appropriate, the audit scope and plans of both the independent registered public accounting firm and internal auditor; • reviewed with the independent registered public accounting firm the critical audit matters expected in their report for the 2021 audit; • met in periodic executive sessions with each of the independent registered public accounting firm, management, and the internal auditor; • received the written disclosures and the annual letter from Ernst & Young LLP provided to us pursuant to PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, concerning their independence and discussed with Ernst & Young LLP their independence; and • reviewed and pre-approved all fees paid to Ernst & Young LLP, as described in Proposal 3–Ratification of Selection of Auditors, and considered whether Ernst & Young LLP’s provision of non-audit services to the Company was compatible with the independence of the independent registered public accounting firm. The Audit Committee has reviewed and discussed with the Company’s management and independent registered public accounting firm the Company’s audited consolidated financial statements and related footnotes for the fiscal year ended December 31, 2020,2021, and the independent registered public accounting firm’s report on those financial statements. Management represented to the Audit Committee that the Company’s financial statements were prepared in accordance with United States generally accepted accounting principles. 2021 Proxy Statement
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Table of Contents REPORT OF THE AUDIT COMMITTEE
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REPORT OF THE AUDIT COMMITTEE We have discussed with Ernst & Young LLP the matters required to be discussed with the Audit Committee by the applicable requirements of the PCAOB and the SEC. Such communications include, among other items, matters relating to the conduct of an audit of the Company’s consolidated financial statements under the standards of the PCAOB. This review included a discussion with management and the independent registered public accounting firm about the quality (not merely the acceptability) of the Company’s accounting principles, the reasonableness of significant estimates and judgments, and the disclosures in the Company’s financial statements, including the disclosures relating to critical accounting policies. In reliance on the review and discussions described above, we recommended to the Board of Directors, and the Board approved, that the audited consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20202021 for filing with the SEC.
Audit Committee*Committee Jan Siegmund (Chairperson)
Martin I. Cole
Richard A. Goodman
Betsy D. Holden
Angela A. Sun
| Jan Siegmund (Chair) | Richard A. Goodman | Betsy D. Holden | Timothy P. Murphy | Angela A. Sun | Solomon D. Trujillo * | Mr. Cole left the Audit Committee after the approval of the Report of the Audit Committee, and Timothy P. Murphy joined the Audit Committee after such approval. |
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COMPENSATION AND BENEFITS
COMMITTEE REPORT The Compensation and Benefits Committee has reviewed and discussed the Company’s Compensation Discussion and Analysis with management and based on such review and discussion, the Compensation and Benefits Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement and its Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2021.
Compensation and Benefits Committee* Michael A. Miles, Jr. (Chair)
Martin I. Cole Betsy D. Holden
Richard A. Goodman
Joyce Phillips * | Martin I. Cole joined the Compensation and Benefits Committee after the approval of this Compensation and Benefits Committee Report. |
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COMPENSATION DISCUSSIONDISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. Western Union offers its services in more than 200 countries and territories. Our business is complex: our regulatory environment is disparate and developing; our consumers are different from those addressed by traditional financial services firms; and our agent and client relationships are numerous and varied. Managing these complexities is at the center of Western Union’s success, and our leadership must be capable of supporting our Company’s goals amid this complexity. The Company’s key strategic priorities for 20202021 are set forth in the chart below. The performance goals and objectives under our annual incentive and long-term incentive programs were designed to support these strategic priorities.  1 
Please see our 20202021 Annual Report on Form 10-K for more information regarding our performance. (1) | Our results during 2020 were negatively impacted by the COVID-19 pandemic, which led to various government instituted actions such as lockdowns, stay-at-home orders, travel restrictions, and closures of non-essential businesses in an effort to reduce the spread of the virus. | (2) | See Annex A for a reconciliation of measures that are not based on accounting principles generally accepted in the United States (“GAAP”) to the comparable GAAP measure. | (3) | In May 2019, we sold our United States electronic bill payments business known as “Speedpay” and Paymap Inc. (“Paymap”). For the year ended December 31, 2019, Speedpay revenues included in our results were $125.4 million and direct operating expenses were $98.2 million. For the year ended December 31, 2019, Paymap revenues included in our results were $5.3 million and direct operating expenses were $2.2 million. |
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(4)(2) | Consumer-to-Consumer segment money transfer transactions conducted and fundedinitiated through websites and mobile applications marketed under our brands (“westernunion.com”) and transactions initiated on the internet and mobile applications hosted by our third-party white label or co-branded digital partners. |
EXECUTIVE COMPENSATION FRAMEWORK | |
32 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION FRAMEWORK The Company’s executive compensation framework reinforces our executive compensation philosophy and objectives and includes the following: WHAT WE DO | ✓ |  Pay-for-performance and at-risk compensation.
| | A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”), with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by our Company’s strategy. For 2020,2021, performance-based compensation comprised approximately 83% of the targeted annual compensation for our CEOMr. Ersek and, on average, approximately 62%64% of the targeted annual compensation for our other NEOs.NEOs (excluding new hire NEOs). The remaining components of oursuch NEOs’ 20202021 targeted annual compensation consisted of base salary and service-based RSUs, with the Compensation Committee viewing RSUs as at-risk as their value fluctuates based on our stock price performance. | ✓ |  Align compensation with stockholder interests.
| | Performance measures for incentive compensation are linked to the overall performance of the Company and are designed to be aligned with the creation of long-term stockholder value. | ✓ |  Emphasis on future pay opportunity vs. current pay.
| | Our long-term incentive awards are equity-based, use performance and multi-year vesting provisions to encourage retention, and are designed to align our NEOs’ interests with long-term shareholderstockholder interests. For 2020,2021, long-term equity compensation comprised approximately 74% of the targeted annual compensation for our CEOMr. Ersek and, on average, approximately 59%64% of the targeted annual compensation for our other NEOs. | ✓ | NEOs (excluding new hire NEOs).  Mix of performance metrics.
| | The Company utilizes a mix of performance metrics that emphasize both absolute performance goals, which provide the primary links between incentive compensation and the Company’s strategic operating plan and financial results, and a relative performance goal, which measures Company performance in comparison to the S&P 500 Index. | ✓ |  Stockholder engagement.
| | The Compensation Committee chair and members of management engage with stockholders regularly to discuss and understand their perceptions or concerns regarding our executive compensation program. | ✓ |  “Clawback” “Clawback” policy.
| | The Company may recover incentive compensation paid to certain officers in the event of an accounting restatement or if such officers engaged in detrimental conduct, as defined in the clawback policy. In addition, the Company may recover incentive compensation paid to certain officers for conduct that is determined to have contributed to material compliance failures, subject to applicable laws. | ✓ |  Robust stock ownership guidelines.
| | We require our executive officers to own a meaningful amount of Company stock to align them with long-term stockholder interests (6x base salary in the case of our CEO and 3x base salary for our other NEOs). | ✓ |  Consider Include ESG metrics in compensation program.
| | Our annual incentive program incorporates ESG metrics, relating to employee engagementwhich qualitatively assess progress towards the Company’– three pillars - Integrity of Global Money Movement, Economic Prosperity, and compliance. With respect toDiversity, Equity and Inclusion. In addition, our annual incentive program incorporates compliance each NEO is evaluated on what the NEO has done to ensure that the NEO’s business and leadership metrics.  Multi-year vesting and/or department is in compliance with applicable U.S. laws, with a failing score in compliance resulting in bonus ineligibilityperformance periods for the NEO for the applicable year.
| ✓ | long-term incentive awards.  Three-year performance period for PSUs.
| ✓ | Outside and independent Independent compensation consultant retained by the Compensation Committee. | ✓ |  “Double “Double trigger” severance benefits in the event of a change-in-control.
| ✓ |  Maximum payout caps for annual cash incentive compensation and PSUs.
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSIS
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WHAT WE DON’T DO | ✕ |  No repricing or buyout of underwater stock options.
| | None of our equity plans permit the repricing or buyout of underwater stock options or stock appreciation rights without stockholder approval, except in connection with certain corporate transactions involving the Company. | ✕ | approval.  No change-in-control tax gross-ups for individuals promoted or hired after April 2009.gross-ups.
| | Following Mr. Ersek is the onlyErsek’s retirement as CEO, no Company employee who remainsis eligible for change-in-control tax gross-up payments based on Compensation Committee action in 2009. | ✕ | payments.  Prohibition against pledging and hedging of Company securities by senior executives and directors.
| | Please see “Summary of Corporate Governance Practices” for additional details. | ✕ |  No dividends or dividend equivalents paid on unvested or unearned PSUs or RSUs.
| ✕ |  No service-based defined benefit pension plan.
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MANAGEMENT TRANSITION On December 27, 2021, Devin McGranahan succeeded Hikmet Ersek as the Company’s new President and Chief Executive Officer. Upon Mr. McGranahan’s start date, Mr. Ersek assumed the role as Special Advisor to the Chief Executive Officer, with such service expected to continue through June 30, 2022. Please see the section below entitled “CEO Transition Compensation” for a description of the compensation arrangements entered into with Messrs. McGranahan and Ersek in connection with the CEO transition. FORMER CHIEF EXECUTIVE OFFICER COMPENSATION |
In February 2020,Because Mr. Ersek served as CEO of the Company until late December 2021, this section describes the compensation paid or granted to Mr. Ersek in 2021. Mr. Ersek’s 20202021 base salary and annual and long-term incentive award target were increased as compared to 2019. Specifically, Mr. Ersek’s base salary was increased by 5% and the target grant value of his long-term incentive award was increased from $7,000,000 to $8,200,000. Mr. Ersek’s annual incentive target opportunity, as a percentage of base salary,targets remained unchanged from 2019. Prior to 2020,the levels set in 2020. Mr. Ersek’s annual base salary was last increased in 2012 and his target grant value for his long-term incentive award was last increased in 2016. The Compensation Committee approved (and the independent members of the Board ratified) these increases, with emphasis on long-term incentive compensation, to reflect Mr. Ersek’s performance and to bring his compensation further in line with peer market data. Following Mr. Ersek’s 2020 compensation increases, Mr. Ersek’s 20202021 compensation continued to be aligned with median compensation for chief executive officers in the 20202021 peer group, based on the most recent publicly available information, as compiled by the Compensation Committee’s independent compensation consultant.
For 20202021 performance, Mr. Ersek received an annual incentive payout of $874,700,$1,392,300, reflecting achieved performance of 49%78% of target, as further described on pages 43-45. Mr. Ersek’s annual incentive payout was based on (i) the Company not achieving the revenue and operating income performance goals under the 2020 Annual Incentive Plan due to the impact of the COVID-19 pandemic, and (ii) the Company’s outperformance in 2020 relative to pre-established strategic performance metrics related to WU.com revenue, digital revenue, and the 2019 Board-approved plan to improve the Company’s operating model, business processes, and cost structure (the “WU Way Next Generation Initiative”). The Committee believed the Company’s strategic achievements were reflective of the Company’s successful execution of its strategic operating plan with respect to these objectives, including multi-year investments made by the Company in its digital platform and offerings that enabled the Company to adapt to changes in its business in response to the COVID-19 pandemic. In addition, 20202021 was the final performance year of the 20182019 PSU grants, withgrants. Primarily, due to the impact of COVID-19 on the Company’s operations in 2020 and 2021, the TSR PSUs did not vest, while the Financial PSUs and TSR PSUs vestingvested at 60% and 79%28% despite achieving close to target performance for the first year of target, respectively.the three-year performance period.
In 2020,2021, Mr. Ersek’s long-term incentive allocation continued to be comprised of 50% Financial PSUs, 20% TSR PSUs, 20% stock options and 10% service-based RSUs. Further information with respect to the 20202021 long-term incentive awards can be found on pages 45-49. Mr. Ersek’s 20202021 total target direct compensation (which includes base salary, target bonus opportunity and the 2020 LTI2021 long-term incentive grant value) was weighted significantly toward variable and performance-based incentive pay over fixed pay, and long-term, equity-based pay over annual cash compensation, because the Compensation Committee desired to tie a significant level of Mr. Ersek’sthe CEO’s compensation to the performance of the Company. The percentage of compensation delivered in the form of performance-based compensation iswas higher for Mr. Ersek thanas compared to our other NEOs because the Compensation Committee believes that the CEO’s leadership is one of the key drivers of the Company’s success and that a greater percentage of the CEO’s total compensation should be variable as a reflection of the Company’s level of performance. Market data provided by the Compensation Committee’s independent compensation consultant supported this practice as well. The following chart illustrates our CEO pay philosophy of heavily weighting targeted CEO compensation toward variable, performance-based pay elements. 
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSIS
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CEO 2020 TOTAL TARGET DIRECT COMPENSATION
Since a significant portion of Mr. Ersek’s compensation is both performance-based and at-risk, we are providing the following supplemental graph to compare Mr. Ersek’s total
target direct compensation to the compensation “realizable” by him for each of 2018, 2019 and 2020. For the cumulative period of 2018 to 2020, realizable pay was approximately 33% lower than total target direct compensation for that period primarily due to lower achievement against pre-established performance targets, including as a result of the impact of the COVID-19 pandemic.
We believe the “realizable” compensation and its relationship to total target direct compensation in each of the years and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance” in that differences between realizable pay and total target direct compensation, as well as fluctuations year-over-year, are primarily the result of our stock performance and our varying levels of achievement against pre-established performance goals under our Annual Incentive Plan and our Long-Term Incentive Plan.
CEO TOTAL TARGET DIRECT COMPENSATION
VERSUS TOTAL REALIZABLE COMPENSATION(1)
 (1) | This graph and the total target direct compensation and total realizable compensation reported in this graph provide supplemental information regarding the compensation paid to Mr. Ersek and should not be viewed as a substitute for the 2020 Summary Compensation Table.
| (2) | Amounts reported in the calculation of total target direct compensation consist of (a) annualized base salary, (b) target annual incentive opportunities for Mr. Ersek under the Annual Incentive Plan with respect to each of the years shown and (c) the target grant values of the long-term incentives granted to Mr. Ersek under the Long-Term Incentive Plan with respect to each of the years shown.
| (3) | Amounts reported in the calculation of total realizable compensation consist of (a) annualized base salary, (b) actual annual incentive payments received by Mr. Ersek under the Annual Incentive Plan with respect to each of the years shown, (c) the value realized from the exercise of stock options and for unexercised stock options, the difference between the exercise price and the closing stock price on the last trading day of 2020, reported in the year granted, (d) the value realized upon vesting of PSUs on the vesting date and the value of unvested PSUs based on the closing stock price on the last trading day of 2020 and estimated performance as of December 31, 2020, each reported in the year granted, and (e) the value of unvested RSUs based on the closing stock price on the last trading day of 2020, each reported in the year granted. |
The Company received approximately 89%94% support for its “say on pay” vote at the Company’s 20202021 Annual Meeting of Stockholders and an average support level of 93% for the Company’s “say on pay” votes over the last five years. After considering the 20202021 “say on pay” results, the committee determined that the Company’s executive compensation philosophy, compensation objectives, and compensation elements continued to be appropriate and did not make any specific changes to the Company’s executive compensation program in response to the 20202021 “say on pay” vote. 2021 Proxy Statement
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Management and the Compensation Committee Chair regularly reach out to stockholders to better understand their views on the Company’s executive compensation program, the “say on pay” vote and our executive compensation disclosure. In 2020,2021, the Company reached out to stockholders who held approximately 78%70% of the Company’s outstanding common stock to discuss the Company’s executiveexecutive compensation program and held discussions with all stockholders who accepted the Company’s invitation. Over the past few years, the committee and management have found these discussions to be very helpful in their ongoing evaluation of the Company’s executive compensation program, and intend to continue to obtain this feedback in the future.
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS ESTABLISHING AND EVALUATINGEVALUATING EXECUTIVE COMPENSATION This Compensation Discussion and Analysis describes how the Compensation Committee determined 20202021 executive compensation, the elements of our executive compensation program and the compensation of each of our NEOs. The information provided should be read together with the information presented in the “Executive Compensation” section of this Proxy Statement. For 2020,2021, the NEOs were:  
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| Devin McGranahan
President and Chief Executive Officer | Hikmet Ersek
Senior Advisor to
Chief Executive Officer(1) | Raj Agrawal
Chief Financial
Officer | Michelle Swanback
President, Product
and Platform (2) | Jean Claude Farah |
Khalid Fellahi | President and | Chief Financial | President, Product | President, Global
EMEA/APACRegion | Gabriella Fitzgerald
President, Consumer | Chief Executive Officer | Officer | and Platform | Network | Money TransferAmericasRegion |
On December 27, 2021, Mr. Ersek retired as the Company’s President and Chief Executive Officer and assumed the role of Special Advisor to the CEO, with such service scheduled to terminate on June 30, 2022. 36
(1) | | | The Western Union CompanyOn March 31, 2022, Michelle Swanback separated from the Company. |
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Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSIS
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OUR EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES |
The Compensation Committee has adopted the following compensation objectives and guiding principles to align the Company’s incentive compensation program with the Company’s overall executive compensation philosophy: Our Executive Compensation Philosophy
| Our Executive Compensation Philosophy The Compensation Committee believes the Company’s executive compensation program should reward actions and behaviors that build a foundation for the long-term strength and performance of the Company, while also rewarding the achievement of short-term performance goals informed by the Company’s strategy. | 
Objectives | 
Objectives | ●•Align executive goals and compensation with stockholder interests
• ●Attract, retain and motivate outstanding executive talent• ●Pay-for-performance – Hold executives accountable and reward them for achieving financial,strategic and operating goals
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Guiding
Principles
| | ●•Pay-for-Performance: Pay is significantly performance-based and at-risk, with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by the Company’s strategy.
• ●Align Compensation with Stockholder Interests: Link incentive payouts with the overall performance of the Company, including achievement of financial and strategic objectives, as well as individual performance and contributions, to create long-term stockholder value.• ●Stock Ownership Guidelines: Our program requires meaningful stock ownership by our executives to align them with long-term stockholder interests.• ●Emphasis on Future Pay Opportunity vs. Current Pay: Our long-term incentive awards are delivered in the form of equity-based compensation with multi-year vesting provisions to encourage retention.• ●Hire, Retain and Motivate Top Talent: Offer market-competitive compensation which clearly links payouts to actual performance, including rewarding appropriately for superior results, facilitating the hire and retention of high-caliber individuals with the skills, experience and demonstrated performance required for our Company.• ●Principled Programs: Structure our compensation programs considering corporate governance best practices and in a manner that is understandable by our participants and stockholders.
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THE BOARD OF DIRECTORS AND THE COMPENSATION COMMITTEE |
The Board of Directors oversees the goals and objectives of the Company and the CEO, evaluates succession planning with respect to the CEO and evaluates the CEO’s performance. The Compensation Committee supports the Board by: ● | Establishing the Company’s compensation philosophy;
| ● | Overseeing the development and implementation of the Company’s compensation and benefits policies;
| ● | Reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers; |
•Establishing the Company’s compensation philosophy; •Overseeing the development and implementation of the Company’s compensation and benefits policies; •Reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers; ● | Approving the compensation levels of each of the executive officers;
| ● | Approving the compensation of the CEO, with ratification by the independent directors of the Board; and
| ● | Overseeing critical role development and succession efforts by providing strategic direction as the Board identifies key executive skills and experience priorities. |
•Approving the compensation levels of each of the executive officers; •Approving the compensation of the CEO, with ratification by the independent directors of the Board; and •Overseeing critical role development and succession efforts by providing strategic direction as the Board identifies key executive skills and experience priorities. The Compensation Committee’s responsibilities under its charter are further described in the “Corporate Governance—Committees of the Board of Directors” section of this Proxy Statement.
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COMPENSATION DISCUSSION AND ANALYSIS The CEO,Mr. Ersek, while not a member of the Compensation Committee, attended portions of each meeting of the Compensation Committee in 20202021 to contribute to and understand the committee’s oversight of, and decisions relating to, executive compensation. The CEOMr. Ersek did not attend portions of the meetings relating to his compensation. The Compensation Committee regularly conducts executive sessions without management present. The Compensation Committee also engages in an ongoing dialog with the CEO and the committee’s independent compensation consultant in the evaluation and establishment of the elements of our executive compensation program. Further, the committee received input from employees in the Company’s human resources department, including the Chief People Officer, in making executive compensation decisions. During 2020,2021, Meridian continued to provide executive and director compensation consulting services to the Compensation Committee. Meridian is retained by and reports directly to the Compensation Committee and participates in committee meetings. Meridian informs the committee on market trends, as well as regulatory issues and developments and how they may impact the Company’s executive compensation program. Meridian also: ● | Participates in the design of the executive compensation program to help the committee evaluate the linkage between pay and performance;
| ● | Reviews market data and advises the committee regarding the compensation of the Company’s executive officers;
| ● | Reviews and advises the committee regarding outside director compensation; and |
•Participates in the design of the executive compensation program to help the committee evaluate the linkage between pay and performance; •Reviews market data and advises the committee regarding the compensation of the Company’s executive officers; •Reviews and advises the committee regarding outside director compensation; and ● | Performs an annual risk assessment of the Company’s compensation program, as described in the “Executive Compensation—Risk Management and Compensation” section of this Proxy Statement. |
•Performs an annual risk assessment of the Company’s compensation program, as described in the “Executive Compensation—Risk Management and Compensation” section of this Proxy Statement. Meridian does not provide any other services to the Company. The Compensation Committee has assessed the independence of Meridian pursuant to the NYSE rules and the Company concluded that the work performed by Meridian for the Compensation Committee did not raise any conflict of interest. During 2020,2021, management retained the services of Willis Towers Watson PLC (“WTW”) to assist the Company in evaluating the Company’s annual and long-term incentive programs. The Compensation Committee has assessed the independence of WTW pursuant to the NYSE rules and the Company concluded that WTW’s work did not raise any conflict of interest.
SETTING 20202021 COMPENSATION |
In late 2019,2020, the Compensation Committee, working with Meridian and the CEO, engaged in a detailed review of the Company’s executive compensation program to evaluate whether the design and levels of each compensation element were: ● | Appropriate to support the Company’s strategic performance objectives;
| ● | Consistent with the philosophy and objectives described under “—Our Executive Compensation Philosophy and Objectives” above; and
| ● | Reasonable when compared to market pay practices (see “—Market Comparison” below).
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•Appropriate to support the Company’s strategic performance objectives; •Consistent with the philosophy and objectives described under “—Our Executive Compensation Philosophy and Objectives” above; and •Reasonable when compared to market pay practices (see “—Market Comparison” below). For 2020,2021, the Compensation Committee retained the overall structure and design of the 20192020 executive compensation program. Accordingly,program, except that the committee approved the use of three one-year performance periods for the Financial PSUs in light of the economic uncertainty caused by the ongoing COVID-19 pandemic. All of the one-year performance goals for the 2021-2023 Financial PSUs were set at the beginning of the performance period and any earned PSUs do not vest until the three-year anniversary of the grant date. Consistent with the 2020 executive compensation program, the Company’s 2021 executive compensation program was compensation program continued to be significantly weighted towards performance-based compensation and continued to includeincluded a diversified mix of long-term incentive awards.
The Compensation Committee set the annual and long-term incentive targets for the 20202021 executive compensation program in February 2020.2021. The Compensation Committee believed at the time that the performance targets were rigorous yet achievable, and therefore established the targets so that they would be achieved, at the target performance level, if the Company successfully executed against its operating plan for 20202021 and the 2020-20222021-2023 performance period. Because these targets were set in February 2020, these targets were set prior to the time when the Company could have anticipated or known the impact of the impending COVID-19 pandemic. The Compensation Committee did not make any changes in these targets in response to the COVID-19 pandemic. 38
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With respect to setting 20202021 compensation levels, Mr. Ersek presented to the Compensation Committee his evaluation and recommendation for each of the other then-serving NEOs and their respective salary, annual bonus targets, and long-term incentive award targets. Mr. Ersek based his assessments on a number of factors, including but not limited to: individual performance and relative contributions to the Company’s success; the performance of the executive’s respective business unit or functional area; retention considerations; market data; compensation history; and internal equity. After consideration and discussion, the 38 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS Committee reviewed and approved Mr. Ersek’s 20202021 recommendations for the then-serving NEOs other than himself. Also in early 2020,2021, Mr. Ersek submitted a self-evaluation to the Compensation Committee. The committee shared Mr. Ersek’s goals for the year and his self-evaluation with the independent members of the Board, who then evaluated Mr. Ersek’s performance in 20192020 based on his actual performance versus such goals. In setting Mr. Ersek’s 20202021 compensation, the committee considered this evaluation, market data regarding chief executive officer compensation levels provided by Meridian, and a tally sheet of Mr. Ersek’s historical and current compensation data.data, among other information. No member of management including Mr. Ersek, made any recommendations regarding Mr. Ersek’s compensation or, except for the Company’s Chief People Officer, participated in the portions of the Compensation Committee meeting or in the meeting of the independent directors of the Board during which Mr. Ersek’s compensation was determined or ratified. For 2020,2021, the Compensation Committee considered market pay practices when setting executive compensation, but did not target percentile ranks of specific compensation elements or total target direct compensation against the market data. Instead, the committee used market data to assess the overall competitiveness and reasonableness of the Company’s executive compensation program. While the Compensation Committee considers relevant market pay practices when setting executive compensation, it does not believe it is appropriate to establish compensation levels based only on market practices. The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company and individual performance and peer compensation levels. The factors that influence the amount of compensation awarded include, but are not limited to: ● | Market competition for a particular position;
| ● | Experience and past performance inside or outside the Company;
| ● | Role and responsibilities within the Company;
| ● | Tenure with the Company and associated institutional knowledge;
| ● | Long-term potential with the Company;
| ● | Innovative thinking and leadership;
| ● | Money transfer or financial services industry expertise;
| ● | Personal performance and contributions;
| ● | Succession planning;
| ● | Past and future performance objectives; and
| ● | Value of the position within the Company. |
•Market competition for a particular position; •Experience and past performance inside or outside the Company; •Role and responsibilities within the Company; •Tenure with the Company and associated institutional knowledge; •Long-term potential with the Company; •Innovative thinking and leadership; •Money transfer or financial services industry expertise; •Personal performance and contributions; •Succession planning; •Past and future performance objectives; and •Value of the position within the Company. As further discussed below, the committee considered market data from both an executive compensation peer group and a general industry compensation survey, but did not assign a specific weight to either data source. The Compensation Committee believes that the Company’s executive compensation peer group should reflect the markets in which the Company competes for business, executive talent and capital. Accordingly, the Company’s peer group includes companies meeting either of the following criteria: ● | Global brands providing virtual products or services; or
| ● | •Global brands providing virtual products or services; or •Companies involved with payment and/or processing services. |
In 2019, Meridian was asked to re-evaluate the Company’s peer group. Based on this review, in September 2019, the Compensation Committee approved changes to the Company’s peer group to further align the median revenues of the peer group with the Company’s revenues and to include additional peers that, similar to the Company, have significant non-U.S. revenues. As a result, the Compensation Committee added eBay Inc., Intercontinental Exchange, Inc., and Sabre Corporation and removed Intuit Inc. and Navient Corporation. The Compensation Committee also approved the removal of Worldpay, Inc. due to its acquisition in 2019.payment and/or processing services.
The executive compensation peer group used for evaluating 20202021 compensation decisions consisted of the companies below.below, which did not change from the executive compensation peer group used to evaluate 2020 compensation decisions. Meridian compiled compensation information from the peer group based on the publicly filed documents of each member of the peer group. Based on the information below, the Company estimates that it is between the 50th25th and 75th50th percentile of the peer group in terms of revenues, belowabove the 25th75th percentile of the peer group in terms of operating income,percentage of total revenues outside of the US, and below the 25th percentile of the peer group in terms of market capitalization. 2021 Proxy Statement | | | 39 |
2022 Proxy Statement | 39
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | | | | | PEER GROUP | | 2020 REVENUES* (IN MILLIONS) | | | 2020 INTERNATIONAL BUSINESS (% OF TOTAL REVENUES OUTSIDE OF THE US) | | | MARKET CAP (AS OF 12/31/2020) (IN MILLIONS) | | Ameriprise Financial | | $ | 11,958 | | | ** | | | $ | 35,239 | | Broadridge Financial Solutions, Inc. | | $ | 4,529 | | | 12% | | | $ | 21,220 | | CME Group Inc. | | $ | 4,870 | | | 0% | | | $ | 81,379 | | Comerica Incorporated | | $ | 2,375 | | | 0% | | | $ | 12,110 | | Discover Financial Services | | $ | 5,954 | | | 0% | | | $ | 35,357 | | eBay Inc. | | $ | 10,271 | | | 59% | | | $ | 40,371 | | Euronet Worldwide, Inc. | | $ | 2,483 | | | 70% | | | $ | 6,451 | | Fidelity National Information Services, Inc. | | $ | 12,552 | | | 24% | | | $ | 70,959 | | Fiserv, Inc. | | $ | 14,852 | | | 13% | | | $ | 71,543 | | FleetCor Technologies, Inc. | | $ | 2,389 | | | 39% | | | $ | 19,268 | | Global Payments Inc. | | $ | 7,424 | | | 22% | | | $ | 42,484 | | Intercontinental Exchange, Inc. | | $ | 6,036 | | | 35% | | | $ | 74,589 | | MoneyGram International, Inc. | | $ | 1,217 | | | 55% | | | $ | 690 | | Nasdaq, Inc. | | $ | 5,627 | | | 17% | | | $ | 32,612 | | Northern Trust Corporation | | $ | 5,976 | | | 23% | | | $ | 25,839 | | PayPal Holdings, Inc. | | $ | 21,454 | | | 49% | | | $ | 219,900 | | Sabre Corporation | | $ | 1,334 | | | 52% | | | $ | 2,898 | | State Street Corporation | | $ | 11,615 | | | 45% | | | $ | 35,521 | | 25th Percentile | | $ | 2,994 | | | 13% | | | $ | 19,756 | | 50th Percentile | | $ | 5,965 | | | 24% | | | $ | 35,298 | | 75th Percentile | | $ | 11,279 | | | 49% | | | $ | 63,841 | |
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| PEER GROUP | | 2019
REVENUES*
(IN MILLIONS) | | 2019
OP INCOME*
(IN MILLIONS) | | MARKET CAP
(AS OF 12/31/2019)
(IN MILLIONS) | | Ameriprise Financial | | $12,890 | | $3,038 | | $21,105 | | Broadridge Financial Solutions, Inc. | | $4,353 | | $574 | | $14,163 | | CME Group Inc. | | $4,858 | | $2,656 | | $71,931 | | Comerica Incorporated | | $3,275 | | $1,570 | | $10,343 | | Discover Financial Services | | $8,228 | | $3,931 | | $26,588 | | eBay Inc. | | $10,800 | | $2,398 | | $29,376 | | Euronet Worldwide, Inc. | | $2,750 | | $475 | | $8,513 | | Fidelity National Information Services, Inc. | | $10,333 | | $1,760 | | $85,485 | | Fiserv, Inc. | | $10,187 | | $1,884 | | $78,616 | | FleetCor Technologies, Inc. | | $2,649 | | $1,289 | | $24,969 | | Global Payments Inc. | | $4,912 | | $1,047 | | $54,868 | | Intercontinental Exchange, Inc. | | $5,202 | | $2,720 | | $51,536 | | MoneyGram International, Inc. | | $1,285 | | $36 | | $150 | | Nasdaq, Inc. | | $4,262 | | $1,137 | | $17,555 | | Northern Trust Corporation | | $6,088 | | $1,944 | | $22,510 | | PayPal Holdings, Inc. | | $17,772 | | $2,790 | | $127,012 | | Sabre Corporation | | $3,975 | | $380 | | $6,146 | | State Street Corporation | | $11,702 | | $3,091 | | $28,763 | | Total System Services, Inc.** | | N/A | | N/A | | N/A | | 25th Percentile | | $4,047 | | $1,070 | | $15,011 | | 50th Percentile | | $5,057 | | $1,822 | | $25,779 | | 75th Percentile | | $10,297 | | $2,704 | | $54,035 |
* | All data was compiled by Meridian who obtained peer company financial market intelligence from S&P CapitalIQ. The data generally represents revenue and operating income for the most recent four quarters available to Meridian at the time Meridian compiled the data in January 2020.2021. Operating income may reflect measures not in conformity with GAAP.
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** | While compensation data for Total Systems Services, Inc. was included in our peer group analysis, full-year 2019 financial and employee dataData was not compiledavailable for Total System Services, Inc. due to its acquisition in September 2019.this metric. |
The Compensation Committee also referenced general industry compensation survey data in evaluating executive pay in order to consider a broader perspective on market practices. To assist the committee in its review of the general industry compensation survey data, Meridian extracts compensation information from the surveys with respect to companies with annual revenues generally ranging from $3 billion to $6 billion. For the 20202021 compensation review, Meridian compiled compensation data from general industry compensation surveys provided by WTW (which included data from companies with annual revenues between $3 billion and $6 billion), and peer group data taken directly from peer group proxy statements or from the Equilar Top 25 database. Executive positions were matched to the peer group proxy data and third-party survey data based on job title, functional matches, and pay rank.
In 2021, Meridian was asked to re-evaluate the Company’s peer group. Based on this review, in December 2021, the Compensation Committee approved changes to the Company’s peer group to further align the median revenues of the peer group with the Company’s revenues. As a result, the Compensation Committee approved the removal of Ameriprise Financial, Inc., Comerica Incorporated, Northern Trust Corporation, Sabre Corporation, and State Street Corporation, and the addition of Alliance Data Systems Corporation, Genpact Limited, Jack Henry & Associates, Inc., Paychex, Inc., and SS&C Technologies Holdings, Inc. to the Company’s peer group. The revised peer group will be used to evaluate 2022 compensation decisions. Use of Tally Sheets The Compensation Committee reviews tally sheets that present historical and current compensation data, valuations of future equity vesting, value of option exercises in the past five years, as well as analyses for hypothetical terminations and retirements to allow the Compensation Committee to consider the Company’s obligations under such circumstances. The tally sheets provide additional context for the committee in determining and assessing NEO compensation. 40
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COMPENSATION DISCUSSION AND ANALYSIS THE WESTERN UNION 2020 EXECUTIVE2021 EXECUTIVE COMPENSATION PROGRAM Pay-For-Performance and At-Risk Compensation The principal components of the Company’s 20202021 annual executive compensation program were annual base salary, annual incentive awards, and long-term incentive awards in the form of PSUs, stock options (for the CEO)Mr. Ersek) and RSUs. The Compensation Committee designed the 20202021 executive compensation program so that performance-based pay elements (Annual Incentive Plan awards, PSUs and, if applicable, stock options) would constitute a significant portion of the executive compensation awarded, determined at target levels. The following charts illustrate the mix of the targeted annual compensation for the CEOMr. Ersek and the average targeted annual compensation for the other NEOs (excluding Mr. McGranahan and Ms. Fitzgerald), and the portion of that compensation that is performance-based and/or at-risk. For purposes of these charts, the percentage of targeted annual compensation was determined based on the annual base salary and target incentive opportunities applicable to the NEO as of December 31, 2020.2021. Mr. McGranahan and Ms. Fitzgerald are excluded from the chart below in light of the fact that they commenced employment with the Company late in 2021 and, in light of their employment commencement dates, their 2021 compensation did not reflect a typical NEO compensation mix. For further information regarding Mr. McGranahan’s and Ms. Fitzgerald’s compensation, please see the sections below entitled the “CEO Transition Compensation” and “Employment Arrangements” within the Compensation Discussion and Analysis section of this Proxy Statement. CEO 2020 TOTAL TARGET DIRECT COMPENSATION
 NEO 2020 TOTAL TARGET DIRECT COMPENSATION
 2021 Proxy Statement
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ELEMENTS OF 20202021 EXECUTIVE COMPENSATION PROGRAM |
The following table lists the material elements of the Company’s 20202021 executive compensation program for the Company’s NEOs. The committee believes that the design of the Company’s executive compensation program focuses on performancebasedperformance based compensation elements, provides alignment with the Company’s short- and long-term financial and strategic priorities at the time through the annual and long-term incentive programs, and provides alignment with stockholder interests. | Fixed | | At-Risk /
Performance-Based | | | | | | | | | | | | Base Salary |  
| Annual Incentive Awards |  
| PSUs |  
| Stock Options (CEO only) |  
| RSUs | | | | | | | | | | |  
| Fixed compensation component payable in cash. | | Variable compensation component payable in cash based on performance against annually established performance objectives. | | PSUs vest based on the Company’s achievement of multi-year financial performance objectives and the Company’s relative TSR performance. The value of PSUs is also dependent on our stock price over the performance period. Financial PSUs accrue dividend equivalents, with dividend equivalents paid only to the extent the underlying shares vest. TSR PSUs do not accrue andor pay dividend equivalents. | | Non-qualified stock options granted with an exercise price equal to fair market value on the date of grant that expire 10 years after grant and become exercisable in 25% annual increments over a four-year vesting period based on continued service during the vesting period. The value of stock options is dependent on our stock price over the option term. | | RSUs generally cliff vest on the third anniversary of the date of grant based on continued service during the vesting period. The value of RSUs is dependent on our stock price over the vesting period. RSUs accrue dividend equivalents, with dividend equivalents paid only to the extent the underlying shares vest. |  
| Establish a pay foundation at competitive levels to attract and retain talented executives. | | Motivate and reward executives for performance on key financial, strategic and/or individual performance goals over the year. Hold our executives accountable, with payouts based on actual performance against pre-established and communicated performance goals. | | Align the interests of executives with those of our stockholders by focusing the executives on the Company’s financial and TSR performance over a multi-year period. Hold our executives accountable, with payouts varying from target based on actual performance against pre-established and communicated performance goals. | | Align interests of the CEO with those of our stockholders by focusing on long-term stock price appreciation over the option term. | | Competitive with market practices in order to attract and retain top executive talent. Align the interests of executives with those of our stockholders by focusing the executives on long-term objectives over a multiyearmulti-year vesting period, with the value of the award fluctuating based on stock price performance. |  
| Experience, job scope, responsibilities, market data, internal equity, and individual performance. | | Internal pay equity, market practice, corporate and individual performance. Cash payouts ranging from 0% to 175% of target based on the achievement of financial and strategic goals, with an additional +/- 25% modifier for participants other than the CEOMr. Ersek based on individual performance with respect to a metric supporting key ESG initiatives, leadership and a personalized objectives, including business unit goals.objective for each NEO. | | Internal pay equity, market practice and individual performance. Financial PSUs: Vesting ranging from 0% to 200% of target based on revenue and operating margin overduring the 2020-20222021-2023 performance period. TSR PSUs: Vesting ranging from 0% to 200% of target based on the Company’s TSR performance relative to the S&P 500 Index over the 2020-20222021-2023 performance period. | | Internal pay equity, market practice and individual performance. | | Internal pay equity, market practice and individual performance. |
* | See the “Setting 20202021 Compensation” section for further information regarding the determination of 20202021 compensation levels. |
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Each of Western Union’s 20202021 executive compensation program elements is described in further detail below. Base Salary Our philosophy is that base salaries should meet the objectives of attracting and retaining the executives needed to lead the business. Base salary is a fixed compensation component payable in cash. In February 2020, Messrs. Ersek and Agrawal2021, Ms. Swanback received a base salary increasesincrease of approximately 5% and 3%, respectively,4% in order to further align theirher total compensation levelslevel with the market data. Mr. Ersek’s last increase in base salary was in 2012. None of our other NEOs received a base salary increase during 2020.2021. Mr. McGranahan’s base salary was established at the time he agreed to join the Company in November 2021 based on market data, considering the scope of his role and responsibilities within the organization. Similarly, Ms. Swanback’sFitzgerald’s base salary was established at the time she joined the Company in January 2020September 2021 based on market data, considering the scope of her role and responsibilities within the organization. The following table sets forth each NEO’s 20192020 and 20202021 base salary levels as of December 31 of each year: | | | | | | | | | EXECUTIVE | | 2019 BASE
SALARY ($000) | | 2020 BASE
SALARY ($000) | | 2020 BASE SALARY ($000) | | 2021 BASE SALARY ($000) | | Devin McGranahan | | | N/A | | | 1,000.0 | | | Hikmet Ersek | | $1,000.0 | | $1,050.0 | | 1,050.0 | | | 1,050.0 | | | Raj Agrawal | | $630.0 | | $650.0 | | 650.0 | | | 650.0 | | | Michelle Swanback | | N/A | | $625.0 | | 625.0 | | | 650.0 | | Gabriella Fitzgerald | | | N/A | | | 550.0 | | | Jean Claude Farah | | $500.0 | | $500.0 | | 500.0 | | | 500.0 | | | Khalid Fellahi | | $500.0 | | $500.0 | |
Annual Incentive Compensation Our Annual Incentive Plan is designed to motivate and reward our NEOs for achieving short-term performance objectives. We believe the program supports our “pay-for-performance” culture. Target payout opportunities under the Annual Incentive Plan are expressed as a percentage of a participant’s annual base salary. For 2020,2021, the Compensation Committee increased the target bonus opportunity for Mr. Farah from 90% to 110% of base salary and for Mr. FellahiMs. Swanback from 100% to 110% of base salary to further align their short-termher annual incentive compensationtarget with market data and the Company’s internal pay practices. As a percentage of base salary, noneNone of our other NEOs received an Annual Incentive Plan target increase with respect to 2020.2021. Ms. Swanback’sFitzgerald’s target bonus opportunity was established at the time she joined the Company in January 2020September 2021 based on market data, considering the scope of her role and responsibilities within the organization. Mr. McGranahan did not participate in the 2021 Annual Incentive Plan because he commenced employment with the Company in late December 2021. Potential payouts rangeranged from 0% to 175% of target based on the achievement of pre-established financial and strategic goals. BecauseTo measure individual performance against key objectives for the committee believes that individual objectives are indicators ofCompany as well as the executive’s success in fulfilling the executive’s responsibilities, the total payout under the Annual Incentive Plan for the participating NEOs other than the CEO isMr. Ersek was subject to a +/- 25% modifier based on the committee’s assessment versus a leadership metric and an individual performance goals.goal tailored to each participating NEO’s functional area. Finally, consistent with prior years, the Annual Incentive Plan incorporated compliance-related metrics, with each NEO evaluated based on what the NEO has done to ensure that the NEO’s business or department is in compliance with applicable U.S. laws, with a failing score in compliance resulting in bonus ineligibility for the NEO for the applicable year. The Compensation Committee believes the compliance and leadership metrics support key ESG initiatives for the Company. Payouts for the NEOs (other than the CEO) areMr. Ersek) were capped at 200% of each individual’s target bonus opportunity, with the CEO’sMr. Ersek’s payout capped at 175% of his target bonus opportunity. The Annual Incentive Plan iswas based on the achievement of financial and strategic goals weighted at 70% and 30%, respectively. The weighting of the performance measures reflects the desire of the Compensation Committee to tie a significant portion of annual incentive compensation to performance measures that the committee believes are meaningful to and readily accessible by our investors, while at the same time emphasizing strategic performance objectives focused on the Company’s growth imperatives. Financial Performance and Goal Setting. Consistent with prior years, the Compensation Committee set the annual incentive targets for the 20202021 Annual Incentive Plan in February 2020. Under2021. In light of the uncertainty due to the ongoing COVID-19 pandemic, for 2021, the committee approved two refinements to the financial component of the Annual Incentive Plan,Plan. First, to recognize the economic uncertainty caused by the pandemic, the committee approved a target payout range instead of its prior practice of having one performance goal equating to target payout. As a result of this design change, the committee required a year-over-year growth rate of 2.8%ranging between 6.6% and 7.3% for total revenue and 7.0%8.3% and 9.0% for operating profit in order for the NEOs to earn a target payout with respect to the financial component of the Annual Incentive Plan. Second, the committee reduced the threshold payout level for achieving both the minimum performance levels for the revenue and operating income goals from the 50% payout level used in prior years to a 30% payout level. This change was made to account for the significant revenue and operating profit growth required and the continued uncertainty of the impacts 2022 Proxy Statement | 43
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS from COVID-19. The Compensation Committee believed at the time that the performance targets were rigorous yet achievable, and therefore established the targets so that they would be achieved, at the target performance level, if the Company successfully executed against its operating plan for 2020. Because these targets were set in February 2020, these targets were set prior to the time when the Company could have anticipated or known the impact of the impending COVID-19 pandemic. As a result, due to the impact of the COVID-19 pandemic, the Company did not achieve the revenue and operating income performance goals under the 2020 Annual Incentive Plan.2021. | | | | | | | | | | | | | | | 2020 ACTUAL RESULTS* | | TARGET GROWTH RATE FROM 2020 RESULTS | | 2021 Proxy StatementTARGET* | | | 43
2021 ACTUAL RESULTS* | | ACHIEVEMENT (%) | | Total Revenue | | $4,918M | | 6.6% - 7.3% | | $5,154M - $5,188M | | $5,012M | | 43% | | Operating Income | | $1,031M | | 8.3% - 9.0% | | $1,090M - $1,097M | | $1,100M | | 107% | | Overall Achievement | | | | | | | | | | 75% | |
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| | 2019
COMPARATIVE
RESULTS* | | TARGET GROWTH RATE
FROM 2019 RESULTS | | 2020 TARGET* | | 2020 ACTUAL
RESULTS* | | ACHIEVEMENT(%) | | Total Revenue | | $5,161M | | 2.8% | | $5,305M | | $4,918M | | 0% | | Operating Income | | $1,035M | | 7.0% | | $1,107M | | $1,031M | | 0% | | Overall Achievement | | | | | | | | | | 0% |
* | 20202021 target and actual results exclude Argentina inflation and are shown aton a constant currency basis, calculated assuming no changes in the currency exchange rates from 20192020 currency exchange rates. For comparative purposes, the 2019 Comparative Results for Revenue and Operating Income represent 2019 actual results under the Annual Incentive Plan, but adjusted to exclude Speedpay and Paymap due to the 2019 dispositions of such businesses. The performance grid provided payout opportunities for performance ranging from $5,202M$4,980M to $5,460M$5,319M for revenue and $1,076M$1,054M to $1,138M$1,124M for operating profit. |
When the financial and strategic performance measures were established, and consistent with prior years, the committee determined that the effect of currency fluctuations,acquisitions and divestitures, including related costs, restructuring, and other significant charges not included in the Company’s internal 20202021 financial plan should be excluded from both the establishment of goals as well as the determination of payout calculations to more closely align with the underlying operating performance of the business. As it had in previous years, the Compensation Committee set the 20202021 financial performance goals by establishing a grid based on the Company’s revenue and operating income. These performance measures were used in order to tie annual incentive compensation to measures of the Company’s financial performance that the committee deemed meaningful to and readily accessible by our investors. The Compensation Committee established the performance goal grid and corresponding payout percentages based upon input from management regarding the Company’s expected performance in the upcoming year which did not take into accountand considering the impact ofcontinued uncertainty caused by the ongoing COVID-19 global pandemic, the extent of which was not foreseen at the time.pandemic. The committee designed the grid to encourage strong, focused performance by our executives. The 20202021 performance goal grid provided a payout of 100% of target if the Company achieved between 99.6% and 100.3% of its internal operating plan at the time for operating income and revenue, with a maximum initial payout level of 175% of target if revenue and operating income grew by 5.8%10.0% and 10.0%11.7%, respectively, as compared to 20192020 actual performance. Strategic Performance and Goal Setting. Participants in the 20202021 Annual Incentive Plan had 30% of their award opportunity tied to the achievement of pre-established performance objectives based upon the Company’s strategic operating plan, with a focus on the Company’s growth imperatives (as measured by WU.comyear-over-year revenue and digital revenue generated from third parties providinggrowth with respect to the Company’s money transfer services,enterprise partners consisting primarily of third-party white label or co-branded digital partners and year-over-year growth in average monthly active WU.com customers, each weighted 10%), and implementation and execution of global compliance execution objectives (weighted 10%) and corporate efficiency and cost-savings under the WU Way Next Generation Initiativepriorities (weighted 10%). Performance levels of the objectives were designed to be achievable, but required the coordinated, cross-functional focus and effort of the executives. For 2020, the Company outperformed the strategic performance metrics with respect to WU.com revenue, digital revenue, and the WU Way Next Generation Initiative. The Committee believed the Company’s strategic achievements were reflective of the Company’s successful execution of its strategic operating plan with respect to these objectives, including multi-year investments made by the Company in its digital platform and offerings that enabled the Company to adapt to changes in its business in response to the COVID-19 pandemic. Based on the achievement of the strategic performance objectives, the committee certified a payout equal to 163%85% of each NEO’s target allocated to the strategic performance objectives.
Individual Performance Modifier and Goal Setting. Other than for Mr. Ersek, each participating NEO’s payout under the 20202021 Annual Incentive Plan was subject to a +/- 25% modifier based on the committee’s assessment of individual and business unit performance. In making its assessment, the committee considered the recommendations of the CEOMessrs. McGranahan and Ersek based on histheir review of the performance of each NEO against the individual objectives established by the committee at the beginning of the year.year with respect to the individual performance modifier. For 2021, the application of the individual performance modifier was determined based on performance with respect to leadership objectives, an individualized key performance indicator for each NEO, and an ESG metric, which qualitatively assesses progress towards the Company’s three pillars - Integrity of Global Money Movement, Economic Prosperity, and Diversity, Equity and Inclusion. The committee believes that the performance objectives established for each NEOthe application of the individual performance modifier are indicators of the executive’sour executives’ success in fulfilling the executive’stheir responsibilities to the Company, and supportsupporting the Company’s strategic operating plan.plan and executing on key Company initiatives. The committee also believes that including an assessment of contributions towards the Company’s WU Way Next Generation Initiative, compliance initiatives and leadership objectivesthe Company’s progress towards the Company’s three pillars (Integrity of Global Money Movement, Economic Prosperity, and Diversity, Equity and Inclusion) reinforces these objectives as priorities throughout the organization. The performance levels ofrequired to receive a positive adjustment under the individual and business unit objectives wereperformance modifier was designed to be achievable, but required strong and consistent performance by the executive. In early 2021, the Compensation Committee approved the application of the individual performance modifier for each of the NEOs other than Mr. Ersek. Specific achievements considered by the Compensation Committee in applying the individual modifier included business continuity planning and execution, the Company’s strong employee engagement surveys, expansion of the Western Union network, increased operational efficiencies, management of agent closures during the pandemic, execution of emergency regulatory approvals for product offerings needed by customers during the pandemic, execution of transition to work from home in many different countries, and enhancement to the agent contract renewal process. Based on the committee’s
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assessment of individual and business unit performance, the committee approveddid not approve individual performance modifiers for the NEOs other than Mr. Ersek ranging from -4% to 11%.participating NEOs. Compliance Evaluation. The Company considers evaluation criteria related to compliance in its executive bonus system so that each Company executive is evaluated on what the executive has done to ensure that the executive’s business or department is in compliance with applicable U.S. laws. A failing score in compliance, including with respect to anti-money laundering and anti-fraud programs, will make the executive ineligible for any bonus for that year. In addition, the 20202021 award agreements under the Annual Incentive Plan are subject to the Company’s clawback policy, which specifically authorizes the clawback of annual incentive 44 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS payments due to compliance failures. In early 2021,2022, the Compensation Committee determined that each participating NEO met the compliance-related evaluation criteria established by the Company and therefore determined that each NEO remained eligible for a bonus with respect to 2020.2021. NEO Payouts Under the 20202021 Annual Incentive Plan. The following table sets forth each participating NEO’s 20202021 target award opportunity expressed (i) as a percentage of 20202021 base salary and (ii) in dollars and the annual incentive payouts received by each participating NEO. | EXECUTIVE | | TARGET
BONUS
AS A %
OF BASE
SALARY | | TARGET
AWARD
OPPORTUNITY
($000) | | CORPORATE
OBJECTIVES
PAYOUT
($000) | | STRATEGIC
OBJECTIVES
PAYOUT AT
163% OF TARGET
($000) | | FINAL
BONUS
($000)* | | Hikmet Ersek | | 170% | | $1,785.0 | | $0 | | $874.7 | | $874.7 | | Raj Agrawal | | 100% | | $650.0 | | $0 | | $318.5 | | $377.0 | | Michelle Swanback | | 100% | | $625.0 | | $0 | | $306.3 | | $375.0 | | Jean Claude Farah | | 110% | | $550.0 | | $0 | | $269.5 | | $324.5 | | Khalid Fellahi | | 110% | | $550.0 | | $0 | | $269.5 | | $247.5 |
* | Includes application of individual performance modifier noted above. |
| | | | | | | | | | | | | | | | | | | | | EXECUTIVE | | TARGET BONUS AS A % OF BASE SALARY | | | TARGET AWARD OPPORTUNITY ($000) | | | CORPORATE OBJECTIVES PAYOUT ($000) | | | STRATEGIC OBJECTIVES PAYOUT AT 85% OF TARGET ($000) | | | FINAL BONUS ($000) | | Hikmet Ersek | | 170% | | | | 1,785.0 | | | | 937.1 | | | | 455.2 | | | | 1,392.3 | | Raj Agrawal | | 100% | | | | 650.0 | | | | 341.3 | | | | 165.7 | | | | 507.0 | | Michelle Swanback | | 110% | | | | 715.0 | | | | 375.4 | | | | 182.3 | | | | 557.7 | | Gabriella Fitzgerald | | 110% | | | | 605.0 | | | | 317.6 | | | | 154.3 | | | | 471.9 | | Jean Claude Farah | | 110% | | | | 550.0 | | | | 288.8 | | | | 140.2 | | | | 429.0 | |
Long-Term Incentive Compensation The objectives for the long-term incentive awards for 20202021 were to: ● | Align the interests of our executives with the interests of our stockholders by focusing on objectives that result in stock price appreciation; | | | ● | Increase cross-functional executive focus in the coming years on key performance metrics through Financial PSUs; | | | ● | Amplify executive focus on stockholder returns through TSR PSUs; and | | | ● | Retain the services of executives through multi-year vesting provisions. |
•Align the interests of our executives with the interests of our stockholders by focusing on objectives that result in stock price appreciation; •Increase cross-functional executive focus in the coming years on key performance metrics through Financial PSUs; •Amplify executive focus on stockholder returns through TSR PSUs; and •Retain the services of executives through multi-year vesting provisions. The Company’s shareholder-approvedstockholder-approved long-term incentive plan allows the Compensation Committee to award various forms of long-term incentive grants, including stock options, RSUs, and performance-based equity and performance-based cash awards. The Compensation Committee approves all equity grants made to our senior executives, with the equity grants made to the CEO ratified by the independent directorsmembers of the Board. When making regular annual equity grants, the Compensation Committee’s practice is to approve them during the first quarter of each year as part of the annual compensation review. In addition to the factors listed in the table under “Elements of 20202021 Executive Compensation Program,,” the Compensation Committee also considers dilution of the Company’s outstanding shares when making equity grants. 20202021 Annual Long-Term Incentive Awards. In early 2020,2021, the Compensation Committee granted the NEOs long-term incentive awards under the Long-Term Incentive Plan. For 2020, the Compensation Committee approved (and the independent members of the Board ratified) an increase in the target grant value of Mr. Ersek’s long-term incentive award in order to more closely align his compensation with the market data and reflect his performance. Mr. Ersek’s target grant value for his long-term incentive award had not been adjusted since 2016. In addition, for 2020,2021, the Compensation Committee approved an increase in the target grant value of Mr. Fellahi’sthe long-term incentive award as his 2019awards for Messrs. Agrawal and Farah and Ms. Swanback, with the 2021 long-term incentive award was sized based on the position he held at the time of the 2019 grant, with the 2020 long-term incentive awardawards sized based on market data as well as internal pay equity. None of our other NEOs received a long-term incentive award target increase with respect to 2020. Ms. Swanback’s target grant value was established at the time she joined the Company in January 2020 based on market data, considering the scope of her role and responsibilities within the organization.2021.
The following table sets forth the target award value, as of the date of grant, of the 20202021 long-term incentive awards received by each NEO:NEO other than Mr. McGranahan and Ms. Fitzgerald: 2021 Proxy Statement
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| | | EXECUTIVE (1) | | TARGET GRANT VALUE ($000) | | Hikmet Ersek | | | 8,200.0 | | Raj Agrawal | | | 2,800.0 | | Michelle Swanback | | | 2,500.0 | | Jean Claude Farah | | | 1,500.0 | |
(1) | Mr. McGranahan and Ms. Fitzgerald did not receive 2021 annual long-term incentive awards in light of their December 2021 and September 2021 employment commencement dates, respectively. For a description of the equity awards received by Mr. McGranahan and Ms. Fitzgerald in connection with their commencements of employment, please see the sections below entitled the “CEO Transition Compensation” and “Employment Arrangements.” |
2022 Proxy Statement | 45
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION DISCUSSION AND ANALYSIS
|
EXECUTIVE | | TARGET GRANT
VALUE ($000) | Hikmet Ersek | | $8,200.0 | Raj Agrawal | | $2,400.0 | Michelle Swanback | | $2,200.0 | Jean Claude Farah | | $1,050.0 | Khalid Fellahi | | $1,500.0 |
Once the target grant value iswas set for each NEO, the grant value iswas then allocated among PSUs, RSUs and stock options, as applicable. In 2020,2021, the committee granted the long-term incentive allocation indicated below: CEO 2020 LONG-TERM INCENTIVE AWARDS
 OTHER NEO 2020 LONG-TERM INCENTIVE AWARDS
 The committee believes that this mix is appropriate because it is designed to align the interests of our NEOs with the interests of our stockholders, drive long-term performance with respect to strategic measures, support retention of our NEOs and align with market practices as reported by Meridian. The committee believes that this mix also represents a balanced reflection of stockholder returns and financial performance. Financial PSUsPSUs. . The 20202021 Financial PSU awards will vest ifbased on performance metrics relating to a targeted constant currency compound annual growth rate (“CAGR”) for revenue, excluding the impact of Argentina inflation, and only tooperating margin (each weighted 50%), measured annually during each year of the extent thatthree-year performance period, with each performance year equally weighted. The performance goals for each year of the three-year performance period were set at the time of the grant. This represents a change from the 2020 Financial PSUs, which vest based on achievement of specific performance goals for revenue and operating margin are met during theover a cumulative three-year cumulative performance period. This represents a modification from the 2019 Financial PSUs, which vest based on achievement of performance goals for revenue and EBIT. The committee approved this design change in light of the use of revenue and operating margin, with each goal weighted evenly, in order to ensure balance of both revenue and efficient long-term profit growth and shareholder value creation. The Company replacedcontinued economic uncertainty caused by the EBIT metric used in 2019 with operating margin as such goal was viewed as more strongly aligned withongoing COVID-19 pandemic. While performance will be measured on an annual basis, the Company’s corporate strategy and provided an appropriate balance to the Company’s other performance metrics in both the annual incentive and long-term incentive programs. The performance objectives under the 2020 Financial PSUs are based on:
● | a targeted constant currency compound annual growth rate (“CAGR”) for revenue, excluding the impact of Argentina inflation; and | | | ● | operating margin, each measured over the cumulative three-year performance period. |
Under the termsremain subject to a full three-years of stock price fluctuations as the awards as much as 200% of the targeted Financial PSUs may be earned based on the Company’s performance with respect to the revenue and operating margin performance objectives over the three-year performance period. In addition, in order todo not vest in the award, the award recipient must remain employed throughuntil the third anniversary of the grant date (February 2023)2024), except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to receive prorated vesting of his 2021 Financial PSUs based upon his period of service during the vesting period.
Because these targets were setFor the first year of the three-year performance period, the committee required a CAGR ranging between 6.6% and 7.3% for total revenue and an operating margin goal ranging between 21.4% and 21.6% in February 2020, these targets were set priororder for the NEOs to earn a target payout with respect to the time whenfirst year of the three-year
performance period for the 2021 Financial PSUs. Similar to the Annual Incentive Plan design, to recognize the economic uncertainty caused by the pandemic, the committee approved a target payout range instead of its prior practice of having one performance goal equating to target payout. Based on 2021 performance, the Company could have anticipated or known the impactachieved a CAGR of 3.7% for total revenue and operating margin of 22.5%, resulting in 121% of the impending COVID-19 pandemic.portion of the 2021 Financial PSUs attributable to the first year of the three-year performance period eligible for vesting based on the NEO’s continued service through February 2024. The PSU performance goals for the second and third years of the three-year performance period were designed at the time to be challenging butrigorous yet achievable, with target payout achievable if the coordinated, cross-functional focusCompany successfully executed against its operating plan for 2021-2023. Consistent with the 2020 design, the committee approved the use of revenue and effortoperating margin in order to ensure balance of the executives. both revenue and efficient long-term profit growth and stockholder value creation. The Compensation Committee utilized revenue as an element in both the Company’s Annual Incentive Plan and long-term incentive program. When designing the Company’s 20202021 executive compensation program, the Compensation Committee evaluated a range of performance metrics for purposes of the Company’s incentive programs and considered input from management and Meridian. Based on such review, the Compensation Committee determined that revenue continues to be viewed as a core driver of the Company’s performance and stockholder value creation and should remain a component in both the Annual Incentive 46
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Plan (measured over one year) and long-term incentive program (measured over three years).program. In recognition of the Company’s use of revenue in both the annual and long-term incentive programs, the Compensation Committee continued its historical practice of supplementing the primary performance measures under the Annual Incentive Plan and long-term incentive program with additional performance measures in order to strike an appropriate balance with respect to incentivizing top-line growth, profitability, non-financialnon- 46 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS financial business imperatives and stockholder returns over both the short-term and long-term horizons. Similar to the Annual Incentive Plan, when the financial performance objectives were established for the Financial PSUs, the committee determined that the effect of currency fluctuations, acquisitions and divestitures, including related costs, restructuring, and other significant charges not included in the Company’s internal financial plans should be excluded from the payout calculations. Consistent with the Company’s historical practices, under this plan design, the performance results for the Financial PSUs will be calculated using the prior year’s currency exchange rates. The following table sets forth each participating NEO’s threshold, target and maximum award opportunity with respect to the 20202021 Financial PSU:PSUs: | | 2020 FINANCIAL PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD | | TARGET | | MAXIMUM | | Hikmet Ersek | | 77,359 | | 154,717 | | 309,434 | | Raj Agrawal | | 22,884 | | 45,767 | | 91,534 | | Michelle Swanback | | 20,977 | | 41,953 | | 83,906 | | Jean Claude Farah | | 10,012 | | 20,023 | | 40,046 | | Khalid Fellahi | | 14,303 | | 28,605 | | 57,210 |
| | | | | | | | | | | | | | | 2021 FINANCIAL PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD (#) | | | TARGET (#) | | | MAXIMUM (#) | | Hikmet Ersek | | | 85,739 | | | | 171,477 | | | | 342,954 | | Raj Agrawal | | | 29,788 | | | | 59,575 | | | | 119,150 | | Michelle Swanback | | | 26,596 | | | | 53,192 | | | | 106,384 | | Jean Claude Farah | | | 15,958 | | | | 31,915 | | | | 63,830 | |
TSR PSUs. In 2020,2021, the Company continued to grant TSR PSUs to enhance focus on stockholder returns. These TSR PSUs require the Company to achieve 60th percentile relative TSR performance versus the S&P 500 Index over a three-year performance period in order to earn target payout, with 30th percentile relative TSR performance resulting in threshold payout and 90th percentile relative TSR performance resulting in maximum payout. This portion of the award is also subject to the participant’s continued service through the third anniversary of the grant date (February 2023)2024), except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to receive prorated vesting of his 2021 TSR PSUs based upon his period of service during the vesting period. The following table sets forth each participating NEO’s threshold, target and maximum award opportunities with respect to the 20202021 TSR PSUs: | | 2020 TSR PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD | | TARGET | | MAXIMUM | | Hikmet Ersek | | 36,092 | | 72,184 | | 144,368 | | Raj Agrawal | | 10,979 | | 21,958 | | 43,916 | | Michelle Swanback | | 10,065 | | 20,129 | | 40,258 | | Jean Claude Farah | | 4,804 | | 9,607 | | 19,214 | | Khalid Fellahi | | 6,862 | | 13,724 | | 27,448 |
| | | | | | | | | | | | | | | 2021 TSR PSU AWARD OPPORTUNITY | | EXECUTIVE | | THRESHOLD (#) | | | TARGET (#) | | | MAXIMUM (#) | | Hikmet Ersek | | | 32,069 | | | | 64,138 | | | | 128,276 | | Raj Agrawal | | | 11,318 | | | | 22,636 | | | | 45,272 | | Michelle Swanback | | | 10,106 | | | | 20,211 | | | | 40,422 | | Jean Claude Farah | | | 6,064 | | | | 12,127 | | | | 24,254 | |
Annual RSU Awards. Service-vesting RSUs are granted to our NEOs to support retention and alignment of our NEOs’ interests with the interests of our stockholders. The annual RSU grants vest 100% on the third anniversary of the grant date, subject to the NEO’s continued service or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to receive prorated vesting of his 2021 RSUs based upon his period of service during the vesting period. 2022 Proxy Statement | 47
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS The following table sets forth each participating NEO’s 20202021 annual RSU grant: EXECUTIVE | | | EXECUTIVE | | ANNUAL RSU GRANT (#) | Hikmet Ersek | | 30,94434,296 | Raj Agrawal | | 27,46035,745 | Michelle Swanback | | 25,17231,915 | Jean Claude Farah | | 12,014 | Khalid Fellahi | | 17,16319,149 |
2021 Proxy Statement
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Stock Option Award. With respect to Mr. Ersek, stock options arewere granted to further emphasize the achievement of long-term objectives and encourage long-term value creation as the stock options will have value to Mr. Ersek only if the Company’s stock price appreciates from the date of grant. The stock options have a 10-year term and vest in 25% annual increments over four years, subject to Mr. Ersek’s continued service or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement, and have a 10-year term. The committee believes that the Company’s 2020 long-term incentive design supports retention and represents a balanced reflection of stockholder returns and financial performance.agreement. For 2020,2021, Mr. Ersek received optionsa stock option award representing the right to purchase 414,142400,000 shares of the Company’s common stock, subject to the satisfaction of the underlying service-based vesting conditions. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek will be eligible to 2018receive prorated vesting of his 2021 stock option award based upon his period of service during the vesting period.
2019 PSU AwardsAwards. . Under the terms of the 20182019 PSUs, 20202021 represented the final year of the three-year performance period for the 20182019 Financial PSUs and the 20182019 TSR PSUs. The 20182019 Financial PSUs vested based on the extent to which the Company’s CAGR for revenue and EBIT (each weighted 50%) met certain goals over a cumulative three-year performance period (weighted 70% and 30%, respectively).period. The 20182019 TSR PSUs vestedwere scheduled to vest based on the Company’s achievement of relative TSR performance versus the S&P 500 Index over a three-year performance period. Based on performance over the three-year performance period, as described further below, the 20182019 PSUs vested as follows for each of the participating NEOs: | EXECUTIVE(1) | | 2018 TARGET
FINANCIAL PSUs
(#) | | 2018 EARNED
FINANCIAL PSUs
(#) | | 2018 TARGET
TSR PSUs
(#) | | 2018 EARNED
TSR PSUs
(#) | | Hikmet Ersek | | 174,217 | | 104,531 | | 66,163 | | 52,269 | | Raj Agrawal | | 59,732 | | 35,840 | | 22,663 | | 17,904 | | Jean Claude Farah | | 26,133 | | 15,680 | | 9,916 | | 7,834 | | Khalid Fellahi | | 17,422 | | 10,454 | | 6,611 | | 5,223 |
| | | | | | | | | EXECUTIVE(1) | | 2019 TARGET FINANCIAL PSUs (#) | | 2019 EARNED FINANCIAL PSUs (#) | | 2019 TARGET TSR PSUs (#) | | 2019 EARNED TSR PSUs (#) | Hikmet Ersek | | 198,526 | | 55,588 | | 105,343 | | — | Raj Agrawal | | 67,265 | | 18,835 | | 34,783 | | — | Jean Claude Farah | | 29,429 | | 8,241 | | 15,218 | | — |
(1) | (1) | Mr. McGranahan, Ms. Swanback and Ms. Fitzgerald commenced employment with the Company in early 2020following the commencement of the performance period and, accordingly, did not receive 20182019 PSUs. |
The 20182019 Financial PSU and 20182019 TSR PSU performance objectives and the achievement levels are set forth in the tables below. While the performance periods for the 20182019 PSUs concluded as of December 31, 2020,2021, these awards remained subject to service-based vesting conditions until the third anniversary of the grant date (February 2021)2022). Pursuant to the terms of the underlying award agreements and consistent with the adjustment methodology used in prior years, the Compensation Committee excluded from the 20182019 Financial PSU payout calculations charges incurred pursuant to settlement agreements with the United States Department of Justice, certain United States Attorney’s Offices, the United States Federal Trade Commission, the Financial Crimes Enforcement Network of the United States Department of the Treasury, and various state attorneys general (the “Joint Settlement Agreements”) and costs associated with a January 4, 2018 consent order, which resolved a matter with the New York Department of Financial Services relating to facts set forth in the Joint Settlement Agreements after considering that the conduct at issue occurred mainly from 2004 to 2012 and that the Company had since taken substantial remedial measures and implemented compliance enhancements to improve its anti-fraud and anti-money laundering programs. In addition, the committee excluded from the payout calculations costs incurred in connection with the Company’s WU Way program in 2017 and the WU Way Next Generation Initiative in 2019 and 2020, the savings associated with the
WU Way Next Generation Initiative in 2020 and a 2017 goodwill impairment relating2021, expenses incurred in connection with the Company’s acquisition and divestiture activity from 2018 through 2021, debt extinguishment costs associated with the early repayment of debt in 2021, and costs to our Business Solutions reporting unit.settle and terminate the Company’s frozen defined benefit plan in 2021. The committee viewed these as significant items not indicative of the Company’s day-to-day performance. Finally, for the 20182019 payout calculation, revenue and operating income were adjusted to exclude Speedpay and Paymap due to the 2019 dispositions of these businesses.businesses as well as the gain on those dispositions. 48 | The Western Union Company
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS 20182019 FINANCIAL PSUs
(PERFORMANCE PERIOD 2018-2020) 2019-2021) | PERFORMANCE OBJECTIVES | | 20182019 FINANCIAL PSU PERFORMANCE GOALS | | ACTUAL PERFORMANCE * | Targeted constant currency compound annual growth rate for revenue and EBIT over the three-year performance period | | Revenue growth rate: 3.5%
3.1%
EBIT growth rate: 4.0%4.3% | | Revenue growth
rate = 1.1%0.2% achievement EBIT growth
rate = 3.0%3.0% achievement | | | | | Overall Attainment Level 60%28 % |
* | At constant currency, calculated assuming no changes in the currency exchange rates from the prior year’s currency exchange rates. |
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20182019 TSR PSUs
(PERFORMANCE PERIOD 2018-2020) 2019-2021) | PERFORMANCE GOALS | PERFORMANCE OBJECTIVE | | THRESHOLD | | TARGET | | MAXIMUM | | ACTUAL PERFORMANCE | TSR relative to S&P 500 Index* | | 30th percentile | | 60th percentile | | 90th percentile | | 4812th percentile | | | | | | | | | Overall Attainment Level 79%0 % |
* | Relative TSR performance for purposes of the 20182019 TSR PSUs was calculated based on the terms of the 20182019 TSR PSU award agreement, which requires using a beginning stock price calculated as the average company closing stock price for all trading days during December 20172018 and an ending stock price calculated as the average company closing stock price for all trading days during December 2020.2021. In determining the TSR for the companies in the S&P 500 Index, the S&P companies comprising the S&P Index on December 31, 20202021 were used. |
CEO Transition Compensation In connection with Mr. McGranahan joining the Company as CEO, on November 12, 2021, the Company entered into an offer letter agreement with Mr. McGranahan describing the terms of his employment with Western Union, LLC, an affiliate of the Company (the “McGranahan Letter Agreement”). The terms of the McGranahan Letter Agreement were determined after considering the input of Meridian, market data for the CEO role, the compensation received by Mr. McGranahan at his prior employer, including the compensation that would be forfeited upon him joining the Company, and the compensation received by Mr. Ersek in the CEO role. Pursuant to the McGranahan Letter Agreement, Mr. McGranahan’s compensation includes: an annual base salary of $1,000,000; beginning with the 2022 performance year, participation in the Annual Incentive Plan with a target short-term incentive award opportunity equal to 170% of Mr. McGranahan’s annual base salary and any payout determined based on performance and the terms of such plan; beginning in 2022, participation in the Company’s long-term incentive program, with a target grant date fair value for Mr. McGranahan’s annual equity grant which is no less than $8,000,000; | • | a one-time sign-on equity award of service-vesting RSUs with a grant date fair value of $6,500,000, which will vest in two substantially equal installments on August 1, 2022 and February 1, 2023, subject to his continued service except as otherwise provided under the Company’s Executive |
| | Severance Policy or the Long-Term Incentive Plan and related award agreement; |
a one-time sign-on equity award of service-vesting stock options with a grant date fair value of $6,600,000, which shall vest in 25% installments on each of the first four anniversaries of the grant date, subject to his continued service except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement; a one-time sign-on cash bonus of $1,000,000, which was payable within 30 days of Mr. McGranahan’s start date (the “McGranahan Sign-On Bonus”), and participation in the Company’s health, welfare, retirement and financial security benefit programs and the Company’s Executive Severance Poligy on the same terms as similarly-situated senior executives of the Company. The sign-on equity awards and McGranahan Sign-On Bonus were intended to compensate Mr. McGranahan for compensation that he forfeited at his prior employer by accepting the position with the Company. While these sign-on awards were deemed necessary to attract a candidate of Mr. McGranahan’s experience, the Committee believes these stock-settled awards provide immediate and direct alignment with stockholders through the risks and rewards of equity ownership. Future equity awards to Mr. McGranahan are expected to be delivered through the same general equity vehicles as granted to the Company’s other executive officers and, consistent with our historical practices, are expected to include performance-based long-term incentives. 2022 Proxy Statement | 49
COMPENSATION DISCUSSION AND ANALYSIS While continuing to support the Company as Special Advisor to the CEO, Mr. Ersek’s base salary and benefits will continue, with an annual incentive opportunity under the Annual Incentive Plan that is prorated for his period of service during 2022, except that Mr. Ersek will not participate in the Company’s long-term incentive program for 2022. In addition, the Company agreed to provide Mr. Ersek with a lump sum payment equal to COBRA premiums for continued healthcare coverage through December 31, 2023, tax filing support services for 2022 and 2023, and repatriation support for Mr. Ersek’s repatriation to Austria in accordance with the Company’s repatriation policy. Finally, due to his satisfaction of the age and servicerequirements under his outstanding equity award agreements, Mr. Ersek will be eligible for retirement vesting in accordance with their terms. Other Elements of Compensation To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees, we provide the benefits listed in the following table to our U.S.-based employees: BENEFIT OR PERQUISITE | | NAMED
EXECUTIVE
OFFICERS | | OTHER
OFFICERS
AND KEY
EMPLOYEES | | ALL FULL-TIME
AND REGULAR
PART-TIME
EMPLOYEES | 401(k) Plan | | ✓
| | ✓
| | ✓
| Supplemental Incentive Savings Plan (a nonqualified defined
contribution plan) | | ✓
| | ✓
| | | Severance and Change-in-Control Benefits (Double-Trigger) | | ✓
| | ✓
| | ✓
| Health and Welfare Benefits | | ✓
| | ✓
| | ✓
| Limited Perquisites | | ✓
| | ✓
| | |
Severance and Change-in-Control Benefits. The Company has an Executive Severance Policy for our executive officers. The policy helps accomplish the Company’s compensation philosophy of attracting and retaining exemplary talent. The committee believes it is appropriate to provide executives with the rewards and protections afforded by the Executive Severance Policy. The policy reduces the need to negotiate individual severance arrangements with departing executives and protects our executives from termination for circumstances not of their doing. The committee also believes the policy promotes management independence and helps retain, stabilize, and focus the executive officers in the event of a change-in-control. In the event of a change-in-control, the policy’s severance benefits are payable only upon a “double trigger.” This means that severance benefits are triggered only when an eligible executive is involuntarily terminated (other than for cause, death, or disability), or terminates his or her own employment voluntarily for “good reason” (including a material reduction in title or position, reduction in base salary or bonus opportunity or an increase in the executive’s commute to his or her current principal working location of more than 50 miles without consent) within 24 months after the date of a change-in-control. Severance benefits under the policy are conditioned upon the executive executing an agreement and release that includes, among other things, non-competition and non-solicitation restrictive covenants and a release of claims against the Company. Due to Mr. Ersek’s retirement from the Company, Mr. Ersek will not receive severance benefits under the Executive Severance Policy. In addition, the Executive Severance Policy prohibits excise tax gross-up payments on change-in-control benefits for those individuals who became executivesexecutive officers of the Company after April 2009. Following Mr. Ersek is the onlyErsek’s retirement as CEO, no Company employee who remainsis eligible for these excise tax gross-up payments because he became an executive of the Company prior to 2009.payments. As noted below, Mr. Farah is subject to an employment agreement, which is a customary practice for executives located in the United Arab Emirates (“UAE”). Under the terms of Mr.Farah’sMr. Farah’s employment agreement,he is required to receive three months’ notice of termination of employment or, in lieu of such notice, three months of pay. In addition, Mr. Farah is also eligible for statutory end of service gratuity/severance amounts in accordance with local law. Any amounts due to Mr. Farah under the Executive Severance Policy will be reduced by any end of service gratuity/severance paid under the terms of his employment agreement or as required by local law. As noted above, Ms. Swanback separated from the Company, effective as of March 31, 2022. In connection with Ms. Swanback’s departure, the Company and Ms. Swanback entered into a mutual separation agreement, which includes a customary release of claims and provides for a separation payment of $1,565,000, payable in nine equal monthly installments from April 2022 through December 2022. In connection with her departure, Ms. Swanback will not receive a bonus for 2022 under the Company’s Annual Incentive Plan, her outstanding and unvested equity awards were forfeited, and she was not eligible for any severance benefits under the Executive Severance Policy. Ms. Swanback remains subject to restrictive covenants, including covenants relating to non-competition, non-solicitation, and non-disclosure. 50 | The Western Union Company
Table of Content COMPENSATION DISCUSSION AND ANALYSIS Please see the “Executive“Executive Compensation—Potential Payments Upon Termination or Change-in-Control”Change-in-Control” section of this Proxy Statement for further information regarding the Executive Severance Policy, including the treatment of awards upon qualifying termination events or a change-in-control. 2021 Proxy Statement
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COMPENSATION DISCUSSION AND ANALYSIS
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Employment Arrangements. The Company generally executes an offer of employment before an executive joins the Company. This offer describes the basic terms of the executive’s employment, including his or her start date, starting salary, annual incentive target and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will apply as warranted. In late 2019,August 2021, the Company and Ms. SwanbackFitzgerald entered into an offer of employment outlining the basic of terms of Ms. Swanback’sFitzgerald’s employment. In addition to setting forth Ms. Swanback’sFitzgerald’s start date,starting salary,annual incentive target, 2022 long-term incentive award target and eligibility to participate in the Executive Severance Policy, Ms. Swanback’sFitzgerald’s offer of employment also included cash and RSU sign-on awards. Ms. SwanbackFitzgerald received a cash sign-on award in the amount of $500,000, which was$200,000, payable in two equal installments, with the first installment to be paid within 30 days of Ms. Fitzgerald’s start date, and the second installment to be paid following the six-month anniversary of her start date. This cash sign-on award is subject to pro-rata repayment in the event Ms. SwanbackFitzgerald voluntarily resignedresigns from the Company or wasis terminated for cause prior to the one-year anniversary of her start date. Ms. SwanbackFitzgerald also received a one-time RSU award of 94,34092,166 RSUs with a target grant date fair value of $2,500,000,$2,000,000, with the RSUs scheduled to vest in twothree substantially equal installments on the first, second, and secondthird anniversaries of the grant date, subject to Ms. Swanbank’sFitzgerald’s continued employment through the applicable vesting date or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and the related award agreement. Ms. Swanback’s new hireFitzgerald’s sign-on cash and equity award wasawards were granted as compensation for comparable amounts that she would forfeit withhave otherwise earned from her prior employer by acceptingand to provide a competitive offer for her to accept a position with the Company. Under certain circumstances, the Compensation Committee recognizes that special arrangements with respect to an executive’s employment may be necessary or desirable. For example, Mr. Ersek, the Company, and a subsidiary of the Company entered into agreements in November 2009 relating to his 2009 promotion to Chief Operating Officer, which were amended effective September 2010 to reflect his 2010 promotion to President and CEO. Employment contracts arewere a competitive market practice in Austria where Mr. Ersek resided at the time he assumed his position as Chief Operating Officer and the Compensation Committee believes the terms of his agreements arewere consistent with those for similarly situated executives in Austria. Additionally, Mr. Farah and a subsidiary of the Company entered into an employment contract in June 2008 with respect to Mr. Farah’s employment with the Company. Employment contracts are a competitive market practice in the UAE where Mr. Farah resides, and the Compensation Committee believes the terms of his contract are consistent with those for similarly situated executives in the UAE. Please see the “Executive Compensation—Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Arrangements” section of this Proxy Statement for a description of the material terms of the employment agreements with Messrs. Ersek and Farah. Please see the “CEO Transition Compensation” section of this Proxy Statement above for a description of the compensation arrangements entered into with Messrs. McGranahan and Ersek in connection with the CEO transition. Retirement Savings Plans. The Company executives on U.S. payroll are eligible for retirement benefits through a qualified defined contribution 401(k) plan, the Incentive Savings Plan, and a nonqualified defined contribution plan, the Supplemental Incentive Savings Plan (“SISP”). The SISP provides a vehicle for additional deferred compensation with matching contributions from the Company. We maintain the Incentive Savings Plan and the SISP to encourage our employees to save some percentage of their cash compensation for their eventual retirement. Mr. Ersek participates in the qualified defined contribution retirement plan made available to eligible employees in Austria. The committee believes that these types of savings plans are consistent with competitive pay practices, and are an important element in attracting and retaining talent in a competitive market. Please see the 20202021 Nonqualified Deferred Compensation Table in the “Executive Compensation” section of this Proxy Statement for further information regarding the Company’s retirement savings plans. Benefits and Perquisites. The Company’s global benefit philosophy for employees, including executives, is to provide a package of benefits consistent with local practices and competitive within individual markets. While employed with the Company, each of our NEOs participates in the health and welfare benefit plans and fringe benefit programs generally available to all other Company employees in the individual market in which they are located. For example, Mr. Farah resides in the UAE where it is customary to provide certain fringe benefits, including annual housing, education, transportation, health and wellness and technology allowances. The Company provided its NEOs with limited, yet competitive perquisites and other personal benefits that the Compensation Committee believes are consistent with the Company’s philosophy of attracting and retaining exemplary executive talent and, in some cases, such as the annual physical examination, the Company provides such personal benefits because the committee believes they are in the interests of the Company and its stockholders. The committee periodically reviews the levels of perquisites and other personal benefits provided to NEOs. During 2018, the Company hired an outside security provider to perform a comprehensive security assessment with 2022 Proxy Statement | 51
Table of Contents COMPENSATION DISCUSSION AND ANALYSIS respect to certain Company personnel, including Mr. Ersek.Ersek. Based on its security assessment, the outside security provider recommended certain home security services continue to be provided to Mr. Ersek and that Mr. Ersek continue to use corporate aircraft for certain business and personal travel. Accordingly, the Company paid for certain security services for Mr. Ersek and corporate aircraft for certain personal travel. Because the Company believesbelieved it isto be in the best interests of the Company and its stockholders to protect Mr. Ersek against possible security threats to him and his family members, the Company requiresrequired that Mr. Ersek accept such personal 50
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security protection. The Company also believes that the costs of this security are appropriate and necessary. Although the Company does not consider Mr. Ersek’s security services to be a perquisite or other personal benefit for the reasons described above, the Company has reported the costs related to security services for Mr. Ersek as well as the costs of corporate aircraft for personal travel in the “2020“2021 All Other Compensation Table.” Occasionally, Mr. Ersek’s spouse or other guests may accompanyaccompanied him on corporate aircraft when the aircraft iswas already scheduled for business purposes and cancould accommodate additional passengers. In those cases, there iswas no additional aggregate incremental cost to the Company and, as a result, no amount is reflected in the “2020“2021 All Other Compensation Table.” Also, in connection with the Company’s sponsorship of certain events and partnerships with various organizations and venues, certain perquisites, including tickets and parking access, are made available to officers and employees of the Company, including Mr. Ersek and the other NEOs. These perquisites have no additional aggregate incremental cost to the Company, and therefore, no amount is reflected in the “2020“2021 All Other Compensation Table.” Please see the “2020 All Other Compensation Table” in the “Executive Compensation” section of this Proxy Statement for further information regarding benefits and perquisites received by our NEOs in 2020.
Stock Ownership Guidelines To align our executives’ interests with those of our stockholders and to assure that our executives own meaningful levels of Company stock throughout their tenures with the Company, the Compensation Committee established stock ownership guidelines that require each of the NEOs to own shares of the Company’s common stock worth a specified multiple of base salary. Under the stock ownership guidelines, the executives must retain, until the required ownership guideline levels have been achieved and thereafter if required to maintain the required ownership levels, at least 50% of after-tax shares resulting from the vesting of RSUs, including PSUs. The chart below shows the salary multiple guidelines and the equity holdings that count towards the requirement as of the Record Date. Each continuing NEO has met, or is progressing towards meeting, his or her respective ownership guideline.guideline EXECUTIVE | | GUIDELINE | | STATUS | Hikmet ErsekDevin McGranahan | | 6x salary | | Meets guideline | Raj Agrawal | | 3x salary | | Meets guideline | Michelle Swanback | | 3x salary | | Must hold 50% of after-tax shares until guideline is met | Raj Agrawal | | 3x salary | | Meets guideline | Jean Claude Farah | | 3x salary | | Meets guideline | Khalid FellahiGabriella Fitzgerald | | 3x salary | | MeetsMust hold 50% of after-tax shares until guideline is met |
WHAT COUNTS TOWARD
THE GUIDELINE | | WHAT DOES NOT COUNT
TOWARD THE GUIDELINE | ✓ Company securities owned personally
| | ✘ Stock options
| ✓ Shares held in any Company benefit plan
| | ✘ PSUs
| ✓ After-tax value of service-based restricted stock awards and RSUs
| | |
Prohibition Against Pledging and Hedging of the Company’s Securities The Company’s insider trading policies prohibit the Company’s executive officers and directors from pledging the Company’s securities, and prohibit all Company employees, including executive officers, and directors from engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. Clawback Policy The Company maintains a clawback policy under which the Company may, in the Committee’s discretion and subject to applicable law, “clawback” incentive compensation paid to certain officers of the Company (generally defined as an individual subject to Section 16 of the Exchange Act as well as the Company’s CCO) in the event of an accounting restatement or if such officer engaged in detrimental conduct, as defined in the clawback policy. In addition, the Company is permitted under the clawback policy, in the Committee’s discretion and subject to applicable laws, to clawback incentive compensation paid to such officers for conduct that is determined to have directly contributed to material compliance failures resulting in a failure to comply with applicable laws or regulations. Under this policy, if the Committee determines that incentive compensation is subject to clawback, the Company, subject to the direction of the Committee, has broad discretion to effect recovery of such amounts, including requiring a cash payment, canceling outstanding or deferred awards, reducing future compensation, seeking recovery of any gain or profit realized by the officer on the sale or other disposition of any equity-based awards, or other appropriate means. The Company continues to monitor this policy to ensure that it is consistent with applicable laws, including any requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). 2021 Proxy Statement
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EXECUTIVE COMPENSATION The following table contains compensation information for our NEOs for the fiscal year ended December 31, 20202021 and, to the extent required under the SEC executive compensation disclosure rules, the fiscal years ended December 31, 20192020 and December 31, 2018.2019. 20202021 SUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | NAME AND PRINCIPAL POSITION | | YEAR | | SALARY ($000)(1) | | BONUS ($000)(2) | | STOCK AWARDS ($000)(3) | | OPTION AWARDS ($000)(3) | | NON-EQUITY INCENTIVE PLAN COMPENSATION ($000)(4) | | CHANGE IN PENSION VALUE AND NON- QUALIFIED DEFERRED COMPENSATION EARNINGS ($000) | | ALL OTHER COMPENSATION ($000)(5) | | TOTAL ($000) | Devin McGranahan | | 2021 | | 17.4 | | 1,000.0 | | 6,500.0 | | 6,600.0 | | — | | — | | — | | 14,117.4 | President and Chief | | 2020 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Executive Officer | | 2019 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Hikmet Ersek(6) | | 2021 | | 1,050.0 | | — | | 6,560.0 | | 1,640.0 | | 1,392.3 | | — | | 192.3 | | 10,834.6 | Senior Advisor and Former President | | 2020 | | 1,041.7 | | — | | 6,560.0 | | 1,640.0 | | 874.7 | | — | | 220.0 | | 10,336.4 | and Chief Executive Officer | | 2019 | | 1,000.0 | | — | | 5,600.0 | | 1,400.0 | | 1,700.0 | | — | | 399.5 | | 10,099.5 | Raj Agrawal | | 2021 | | 650.0 | | — | | 2,800.0 | | — | | 507.0 | | — | | 48.2 | | 4,005.2 | Chief Financial | | 2020 | | 646.7 | | — | | 2,400.0 | | — | | 377.0 | | — | | 86.7 | | 3,510.4 | Officer | | 2019 | | 630.0 | | — | | 2,400.0 | | — | | 718.2 | | — | | 56.5 | | 3,804.7 | Michelle Swanback | | 2021 | | 645.8 | | — | | 2,500.0 | | — | | 557.7 | | — | | 44.7 | | 3,748.2 | President, Product | | 2020 | | 606.1 | | 500.0 | | 4,700.0 | | — | | 375.0 | | — | | 44.4 | | 6,225.5 | and Platform | | 2019 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Gabriella Fitzgerald | | 2021 | | 166.7 | | 100.0 | | 2,000.0 | | — | | 471.9 | | — | | 11.7 | | 2,750.3 | President, | | 2020 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Americas Region | | 2019 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Jean Claude Farah(7) | | 2021 | | 500.0 | | — | | 1,500.0 | | — | | 429.0 | | — | | 175.7 | | 2,604.7 | President, Global | | 2020 | | 500.0 | | — | | 1,050.0 | | — | | 324.5 | | — | | 174.4 | | 2,048.9 | EMEA/APAC Region | | 2019 | | 500.0 | | — | | 1,050.0 | | — | | 486.0 | | — | | 179.4 | | 2,215.4 |
Footnotes: NAME AND
PRINCIPAL
POSITION | YEAR | SALARY
($000)(1) | BONUS
($000)(2) | STOCK
AWARDS
($000)(3) | OPTION
AWARDS
($000)(3) | NON-EQUITY
INCENTIVE
PLAN
COMPENSATION
($000)(4) | CHANGE IN
PENSION VALUE
AND NON-
QUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($000) | ALL OTHER
COMPENSATION
($000)(5) | TOTAL
($000) | | Hikmet Ersek(6) | 2020 | 1,041.7 | — | 6,560.0 | 1,640.0 | 874.7 | — | 220.0 | 10,336.4 | | President and Chief | 2019 | 1,000.0 | — | 5,600.0 | 1,400.0 | 1,700.0 | — | 399.5 | 10,099.5 | | Executive Officer | 2018 | 1,000.0 | — | 5,148.5 | 1,400.0 | 1,390.6 | — | 236.2 | 9,175.3 | | Raj Agrawal | 2020 | 646.7 | — | 2,400.0 | — | 377.0 | — | 86.7 | 3,510.4 | | Chief Financial | 2019 | 630.0 | — | 2,400.0 | — | 718.2 | — | 56.5 | 3,804.7 | | Officer | 2018 | 630.0 | — | 2,193.6 | — | 534.2 | — | 73.7 | 3,431.5 | | Michelle Swanback | 2020 | 606.1 | 500.0 | 4,700.0 | — | 375.0 | — | 44.4 | 6,225.5 | | President, Product | 2019 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | and Platform | 2018 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | Jean Claude Farah(7) | 2020 | 500.0 | — | 1,050.0 | — | 324.5 | — | 174.4 | 2,048.9 | | President, Global | 2019 | 500.0 | — | 1,050.0 | — | 486.0 | — | 179.4 | 2,215.4 | | Network | 2018 | 500.0 | — | 959.7 | — | 354.6 | — | 176.3 | 1,990.6 | | Khalid Fellahi | 2020 | 500.0 | — | 1,500.0 | — | 247.5 | — | 234.3 | 2,481.8 | | President, | 2019 | 451.7 | 27.8 | 1,200.0 | — | 427.9 | — | 128.1 | 2,235.5 | | Consumer Money | 2018 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | Transfer | | | | | | | | | |
Footnotes:
(1) | Except with respect to salary adjustments in connection with promotions, any salary adjustments are effective as of March of each reporting year. |
(2) | The amount reported in this column for Mr. McGranahan for 2021 represents a cash sign-on bonus in the amount of $1,000,000, which was paid within 30 days of Mr. McGranahan’s employment start date. This cash sign-on bonus is subject to pro-rata repayment in the event Mr. McGranahan voluntarily resigns from the Company (other than due to good reason) or is terminated for cause prior to the one-year anniversary of his start date. The amount reported in this column for Ms. SwanbackFitzgerald for 20202021 represents the first installment of a cash sign-on bonus,award in the amount of $200,000, payable in two equal installments, the first installment of which was paid within 30 days of Ms. Fitzgerald’s employment start date. This cash sign-on bonus is subject to pro-rata repayment in the event Ms. SwanbackFitzgerald voluntarily resignedresigns from the Company or wasis terminated for cause prior to the one-year anniversary of her start date. |
(3) | The amounts reported in these columns for 20202021 represent equity grants to the NEOs under the Long-Term Incentive Plan. The amounts reported in these columns are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The amounts included in the Stock Awards column for the PSUs granted during 20202021 are calculated based on the probable satisfaction of the performance conditions for such awards as of the date of grant. Assuming the highest level of performance is achieved for the 20202021 Financial PSUs, the maximum value of the 20202021 Financial PSUs would be as follows: Mr. Ersek - $8,200;-$8,200,0; Mr. Agrawal - $2,400;$2,800.0; Ms. Swanback - $2,200,$2,500.0, and Mr. Farah - $1,050; and Mr. Fellahi - $1,500. $1,500.0. Under FASB ASC Topic 718, the vesting condition related to the TSR PSUs is considered a market condition and not a performance condition. Accordingly, there is no grant date fair value below or in excess of the amount reflected in the table above for the NEOs that could be calculated and disclosed based on achievement of the underlying |
2022 Proxy Statement | 53
Table of Contents EXECUTIVE COMPENSATION | market condition. Dividend equivalents with respect to the 20202021 Financial PSUs and 20202021 RSUs will be paid to the extent the underlying PSUs and RSUs are earned. See Note 17 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively, for a discussion on the relevant assumptions used in calculating the amounts reported for the applicable year. In connection with her separation, Ms. Swanback forfeited her outstanding equity awards. |
(4) | For 2020,2021, the amounts reflect the actual cash bonus received under the Annual Incentive Plan. |
(5) | Amounts included in this column for 20202021 are set forth by category in the 20202021 All Other Compensation Table below. |
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(6) | For 2020,2021, Mr. Ersek’s salary iswas denominated in U.S. dollars but iswas paid to or on behalf of Mr. Ersek in euros, based on a conversion rate determined prior to payment each quarter. Contributions made to the Austrian retirement plan on behalf of Mr. Ersek arewere denominated in euros and converted to U.S. dollars for disclosure in the proxy. The conversion rates of .894374, .895656, .888968,0.822571, 0.838574, 0.824878, and .841680.845809 were applied for quarters one, two, three, and four, respectively. Mr. Ersek retired from his position as an executive officer, effective as of December 26, 2021, and will continue to support the Company as Special Advisor to the CEO until June 30, 2022. |
(7) | For 2020,2021, Mr. Farah’s salary iswas denominated in U.S. dollars but iswas paid to or on behalf of Mr. Farah in Emirati dirham, based on a conversion rate of 0.272242. Contributions made to the CFE retirement fund on behalf of Mr. Farah arewere denominated in euros and converted to U.S. dollars for disclosure in the proxy. The conversion rates of 1.093514, 1.099771, 1.181927,1.21372224, 1.193599661, 1.180234087, and 1.163379 1.158947513 were applied for quarters one, two, three, and four, respectively. |
20202021 ALL OTHER COMPENSATION TABLE
| NAME | | PERQUISITES
& OTHER
PERSONAL
BENEFITS
($000)(1) | | TAX
REIMBURSEMENTS
($000) | | COMPANY
CONTRIBUTIONS
TO DEFINED
CONTRIBUTION
PLANS
($000)(2) | | INSURANCE
PREMIUMS
($000) | | TOTAL
($000) | | Hikmet Ersek | | 117.3 | | — | | 77.4 | | 25.3 | | 220.0 | | Raj Agrawal | | 26.4 | | 1.7 | | 55.6 | | 3.0 | | 86.7 | | Michelle Swanback | | — | | — | | 42.9 | | 1.5 | | 44.4 | | Jean Claude Farah | | 145.1 | | — | | 8.3 | | 21.0 | | 174.4 | | Khalid Fellahi | | 60.5 | | 91.4 | | 80.1 | | 2.3 | | 234.3 |
| | | | | | | | | | | NAME | | PERQUISITES & OTHER PERSONAL BENEFITS ($000)(1) | | TAX REIMBURSEMENTS ($000) | | COMPANY CONTRIBUTIONS TO DEFINED CONTRIBUTION PLANS ($000)(2) | | INSURANCE PREMIUMS ($000) | | TOTAL ($000) | Devin McGranahan | | — | | — | | — | | — | | — | Hikmet Ersek | | 87.5 | | — | | 77.6 | | 27.2 | | 192.3 | Raj Agrawal | | 3.7 | | 0.3 | | 41.1 | | 3.1 | | 48.2 | Michelle Swanback | | 2.2 | | 0.1 | | 40.8 | | 1.6 | | 44.7 | Gabriella Fitzgerald | | 1.4 | | 0.5 | | 9.5 | | 0.3 | | 11.7 | Jean Claude Farah | | 144.6 | | — | | 8.7 | | 22.4 | | 175.7 |
Footnotes: (1) | Amounts shown in this column for Mr. Ersek include the incremental cost or valuation of personal jet usage ($113.2)81.2), car service/allowances, and executive security costs. Following a comprehensive security assessment conducted by an independent security firm in 2018, the Board of Directors advised Mr. Ersek to utilize the Company’s leased aircraft for personal travel at the Company’s expense. Those personal travel expenses reported in this column were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid directly to the third-party vendor from which the Company leases corporate aircraft. For Mr. Agrawal, the amounts in this column include PTO Payout ($24.2). For Mr. Farah, the amounts in this column include housing ($108.9), education, Company reimbursement of gym expenses and transportation allowances. For Mr. Fellahi, the amounts in this column include costs related to reward and recognition point cards and PTO payout ($56.3). |
(2) | Amounts shown in this column represent (i) contributions made by the Company on behalf of each of the NEOs, except for Messrs. McGranahan, Ersek and Farah, to the Company’s Incentive Savings Plan and/or the Supplemental Incentive Savings Plan,SISP, (ii) contributions made by the Company on behalf of Mr. Ersek to the Company’s defined contribution plan in Austria, the Victoria Volksbanken Pensionskassen AG, and (iii) contributions made by the Company on behalf of Mr. Farah to the CFE retirement fund. |
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54 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION
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The following table summarizes awards made to our NEOs in 2020.2021. 20202021 GRANTS OF PLAN-BASED AWARDS TABLE
| | | | | | ESTIMATED
POSSIBLE
PAYOUTS UNDER
NON-EQUITY
INCENTIVE PLAN
AWARDS(1) | | ESTIMATED FUTURE
PAYOUTS UNDER EQUITY
INCENTIVE PLAN AWARDS | | ALL OTHER
STOCK
AWARDS:
NUMBER
OF SHARES
OF STOCK
OR UNITS
(#) | | ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
(#)(2) | | EXERCISE
OR BASE
PRICE OF
OPTION
AWARDS
($/Sh) | | GRANT
DATE FAIR
VALUE OF
STOCK
AND
OPTION
AWARDS
($000)(3) | | NAME | | GRANT
DATE | | APPROVAL
DATE | | TARGET
($000) | | MAXIMUM
($000) | | THRESHOLD
(#) | | TARGET
(#) | | MAXIMUM
(#) | | | Hikmet | | | | | | 1,785.0 | | 3,123.8 | | | | | | | | | | | | | | | | Ersek | | 2/20/2020 | | 2/20/2020 | | | | | | 77,359(4) | | 154,717(4) | | 309,434(4) | | | | | | | | $4,100.0 | | | 2/20/2020 | | 2/20/2020 | | | | | | 36,092(5) | | 72,184(5) | | 144,368(5) | | | | | | | | $1,640.0 | | | 2/20/2020 | | 2/20/2020 | | | | | | | | | | | | 30,944(6) | | | | | | $820.0 | | | 2/20/2020 | | 2/20/2020 | | | | | | | | | | | | | | 414,142 | | $26.50 | | $1,640.0 | | Raj | | | | | | 650.0 | | 1,300.0 | | | | | | | | | | | | | | | | Agrawal | | 2/19/2020 | | 2/19/2020 | | | | | | 22,884(4) | | 45,767(4) | | 91,534(4) | | | | | | | | $1,200.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | 10,979(5) | | 21,958(5) | | 43,916(5) | | | | | | | | $480.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | | | | | | | 27,460(6) | | | | | | $720.0 | | Michelle | | | | | | 625.0 | | 1,250.0 | | | | | | | | | | | | | | | | Swanback | | 2/19/2020 | | 2/19/2020 | | | | | | 20,977(4) | | 41,953(4) | | 83,906(4) | | | | | | | | $1,100.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | 10,065(5) | | 20,129(5) | | 40,258(5) | | | | | | | | $440.0 | | | 1/13/2020 | | 12/20/2019 | | | | | | | | | | | | 94,340(6) | | | | | | $2,500.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | | | | | | | 25,172(6) | | | | | | $660.0 | | Jean | | | | | | 550.0 | | 1,100.0 | | | | | | | | | | | | | | | | Claude | | 2/19/2020 | | 2/19/2020 | | | | | | 10,012(4) | | 20,023(4) | | 40,046(4) | | | | | | | | $525.0 | | Farah | | 2/19/2020 | | 2/19/2020 | | | | | | 4,804(5) | | 9,607(5) | | 19,214(5) | | | | | | | | $210.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | | | | | | | 12,014(6) | | | | | | $315.0 | | Khalid | | | | | | 550.0 | | 1,100.0 | | | | | | | | | | | | | | | | Fellahi | | 2/19/2020 | | 2/19/2020 | | | | | | 14,303(4) | | 28,605(4) | | 57,210(4) | | | | | | | | $750.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | 6,862(5) | | 13,724(5) | | 27,448(5) | | | | | | | | $300.0 | | | 2/19/2020 | | 2/19/2020 | | | | | | | | | | | | 17,163(6) | | | | | | $450.0 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GRANT | | | | | | | ESTIMATED | | | | | | | | ALL OTHER | | ALL OTHER | | | | DATE | | | | | | | POSSIBLE | | | | | | | | STOCK | | OPTION | | | | FAIR | | | | | | | PAYOUTS UNDER | | | | | | | | AWARDS: | | AWARDS: | | EXERCISE | | VALUE OF | | | | | | | NON-EQUITY | | ESTIMATED FUTURE | | NUMBER | | NUMBER OF | | OR BASE | | STOCK | | | | | | | INCENTIVE PLAN | | PAYOUTS UNDER EQUITY | | OF SHARES | | SECURITIES | | PRICE OF | | AND | | | | | | | AWARDS(1) | | INCENTIVE PLAN AWARDS | | OF STOCK | | UNDERLYING | | OPTION | | OPTION | | | GRANT | | APPROVAL | | TARGET | | MAXIMUM | | THRESHOLD | | TARGET | | MAXIMUM | | OR UNITS | | OPTIONS | | AWARDS | | AWARDS | NAME | | DATE | | DATE | | ($000) | | ($000) | | (#) | | (#) | | (#) | | (#)(2) | | (#)(3) | | ($/Sh) | | ($000)(4) | Devin | | | | | | | | | | | | | | | | | | | | | | | McGranahan | | 12/27/2021 | | 11/11/2021 | | | | | | | | | | | | 367,232 | | | | | | 6,500.0 | | | 12/27/2021 | | 11/11/2021 | | | | | | | | | | | | | | 2,149,838 | | 17.70 | | 6,600.0 | | | | | | | | �� | | | | | | | | | | | | | | | | Hikmet | | | | | | 1,785.0 | | 3,123.8 | | | | | | | | | | | | | | | Ersek | | 2/19/2021 | | 2/19/2021 | | | | | | 85,739(5) | | 171,477(5) | | 342,954(5) | | | | | | | | 4,100.0 | | | 2/19/2021 | | 2/19/2021 | | | | | | 32,069(6) | | 64,138(6) | | 128,276(6) | | | | | | | | 1,640.0 | | | 2/19/2021 | | 2/19/2021 | | | | | | | | | | | | 34,296 | | | | | | 820.0 | | | 2/19/2021 | | 2/19/2021 | | | | | | | | | | | | | | 400,000 | | 23.91 | | 1,640.0 | Raj | | | | | | 650.0 | | 1,300.0 | | | | | | | | | | | | | | | Agrawal | | 2/18/2021 | | 2/18/2021 | | | | | | 29,788(5) | | 59,575(5) | | 119,150(5) | | | | | | | | 1,400.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | 11,318(6) | | 22,636(6) | | 45,272(6) | | | | | | | | 560.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | | | | | | | 35,745 | | | | | | 840.0 | Michelle | | | | | | 715.0 | | 1,430.0 | | | | | | | | | | | | | | | Swanback | | 2/18/2021 | | 2/18/2021 | | | | | | 26,596(5) | | 53,192(5) | | 106,384(5) | | | | | | | | 1,250.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | 10,106(6) | | 20,211(6) | | 40,422(6) | | | | | | | | 500.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | | | | | | | 31,915 | | | | | | 750.0 | Gabriella | | | | | | 605.0 | | 1,210.0 | | | | | | | | | | | | | | | Fitzgerald | | 9/13/2021 | | 8/31/2021 | | | | | | | | | | | | 92,166 | | | | | | 2,000.0 | | | | | | | | | | | | | | | | | | | | | | | | Jean | | | | | | 550.0 | | 1,100.0 | | | | | | | | | | | | | | | Claude | | 2/18/2021 | | 2/18/2021 | | | | | | 15,958(5) | | 31,915(5) | | 63,830(5) | | | | | | | | 750.0 | Farah | | 2/18/2021 | | 2/18/2021 | | | | | | 6,064(6) | | 12,127(6) | | 24,254(6) | | | | | | | | 300.0 | | | 2/18/2021 | | 2/18/2021 | | | | | | | | | | | | 19,149 | | | | | | 450.0 |
Footnotes: (1) | These amounts consist of the target and maximum cash award levels set in 20202021 under the Annual Incentive Plan. The amount actually paid to each NEO is included in the Non-Equity Incentive Plan Compensation column in the 20202021 Summary Compensation Table. Please see “Compensation Discussion and Analysis” for further information regarding the Annual Incentive Plan. |
(2) | These amounts represent RSUs granted under the Long-Term Incentive Plan to the NEOs as follows: (i) Mr. McGranahan’s RSUs vest in two substantially equal installments on August 1, 2022 and February 1, 2023; (ii) Ms. Fitzgerald’s RSUs vest in three substantially equal installments on the first, second and third anniversaries of the grant date; and (iii) the remaining RSUs reported in this column vest 100% on February 18, 2024 (or, in the case of Mr. Ersek, February 19, 2024), in each case, provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the underlying equity award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive prorated vesting of his 2021 RSUs based on his period of service during the vesting period. In connection with her separation, Ms. Swanback forfeited these RSUs. Please see |
2022 Proxy Statement | 55
Table of Contents EXECUTIVE COMPENSATION | “Compensation Discussion and Analysis” for further information regarding these RSU grants. Each RSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to the Company common stock subject to the award during the RSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying RSUs. |
(3) | This amount represents stock options granted under the Long-Term Incentive Plan to Mr.Messrs. McGranahan and Ersek. These options vest were granted subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant;grant, in each case, provided that Mr. Ersekthe executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, orthe Long-Term Incentive Plan.Plan or the underlying equity award agreement. In connection with his departure and as a result of satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive prorated vesting of his 2021 option award based on his period of service during the vesting period. Please see “Compensation Discussion and Analysis” for further information regarding this award.these awards. |
(3)(4) | The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and, in the case of the PSUs, are based upon the probable outcome of the applicable performance conditions.718. See Note 17 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20202021 for a discussion of the relevant assumptions used in calculating the amounts. |
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(4)(5) | These amounts represent the threshold, target and maximum Financial PSUs granted under the Long-Term Incentive Plan. These Financial PSUs are generally scheduled to vest on February 19, 202318, 2024 (or, in the case of Mr. Ersek, February 20, 2023)19, 2024), subject to the achievement of thresholdperformance metrics related to revenue and operating margin, performance goals over ameasured annually during each year of the three-year performance period, with each performance year equally weighted. In connection with Mr. Ersek’s departure and as a result of him satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive pro-rated vesting of his 2021 Financial PSUs based on actual performance results and his period of service during the vesting period. In connection with her separation, Ms. Swanback forfeited these PSUs. Please see “Compensation Discussion and Analysis” for further information regarding this award. The Financial PSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to Company common stock subject to the award during the PSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying Financial PSUs. |
| | (5)(6) | These amounts represent the threshold, target and maximum TSR PSUs granted under the Long-Term Incentive Plan. These TSR PSUs are generally scheduled to vest on February 19, 202318, 2024 (or, in the case of Mr. Ersek, February 20, 2023)19, 2024) based on the Company’s relative TSR performance versus the S&P 500 Index over a three-year performance period. In connection with Mr. Ersek’s departure and as a result of him satisfying the age and service requirements for retirement vesting treatment, Mr. Ersek is eligible to receive pro-rated vesting of his 2021 TSR PSUs based on actual performance results and his period of service during the vesting period. In connection with her separation, Ms. Swanback forfeited these PSUs. Please see “Compensation Discussion and Analysis” for further information regarding this award. | | | (6) | These amounts represent RSUs granted under the Long-Term Incentive Plan to the NEOs. Ms. Swanback’s RSUs granted on January 13, 2020 vest 50% on each of the first and second anniversaries of the date of grant, and the remaining RSUs reported in this column vest 100% on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023), in each case provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. Please see “Compensation Discussion and Analysis” for further information regarding these RSU grants. Each RSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to the Company common stock subject to the award during the RSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying RSUs.
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NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE EMPLOYMENT ARRANGEMENTS As noted in the “Compensation Discussion and Analysis,” the Company generally executes an offer of employment prior to the time an executive joins the Company which describes the basic terms of the executive’s employment, including his or her start date, starting salary, bonus target, and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will determine the benefits to be received by senior executives, including our NEOs, upon termination of employment from the Company. Please see the “—Potential Payments Upon Termination or Change-in-Control” section for a description of the policy. As noted in the “Compensation Discussion and Analysis,” under certain circumstances, the Compensation Committee recognizes that special arrangements with respect to an executive’s employment may be necessary or desirable. Accordingly, during 2020,2021, Messrs. Ersek and Farah were each party to an employment agreement, which reflects competitive practices in the employment locations of Messrs. Ersek and Farah at the time the respective agreement became effective. The terms of Messrs. Ersek andMr. Farah’s employment agreementsagreement provide for, and Mr. Ersek’s agreement provided for, (i) eligibility to participate in an annual incentive program and Long-Term Incentive Plan and (ii) eligibility to participate in retirement, health, and welfare benefit programs on the same basis as similarly situated employees in Austria and the UAE and Austria, respectively. Messrs. Ersek andMr. Farah’s employment agreementsagreement also includeincludes, and Mr. Ersek’s employment agreement included, non-competition, non-solicitation, and confidentiality provisions. Mr. Ersek’s employment agreement has been superseded by the terms of his 56 | The Western Union Company
EXECUTIVE COMPENSATION transition agreement with the Company, although the restrictive covenants set forth in his employment agreement survive the termination of his employment agreement. AWARDS In 2020,2021, the Compensation Committee granted annual equity grants under the Long-Term Incentive Plan consisting of (i) 50% Financial PSUs (vesting based on both revenue and operating margin goals), 20% TSR PSUs, 20% stock options, and 10% service-based RSUs for Mr. Ersek, and (ii) 50% Financial PSUs (vesting based on both revenue and operating margin goals), 20% TSR PSUs, and 30% service-based RSUs for the other NEOs.NEOs (excluding Mr. McGranahan and Ms. Fitzgerald). Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for further information regarding the 20202021 long-term incentive awards, including the performance metrics applicable to the 20202021 PSUs. Mr. McGranahan and Ms. SwanbackFitzgerald also received a one-time RSU awardequity awards in connection with hertheir commencement of employment with the Company. Please see the sections entitled “CEO Transition Compensation” and “Employment Arrangements” within the “Compensation Discussion and Analysis” section of this Proxy Statement for additional information regarding the one-time equity awards. At its February 20202021 meeting, the Compensation Committee established performance objectives to be considered under the Annual Incentive Plan for the 20202021 plan year. 2021 Proxy Statement
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As discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, participants are eligible to receive a cash payout ranging from 0% to 175% of target based on the achievement of pre-established corporate financial and strategic goals. The total payout under the Annual Incentive Plan for the participating NEOs other than Mr. Ersek is subject to a +/- 25% modifier based on the committee’s assessment of individual performance with respect to key performance indicators relating to individual business unit transformation goals, ESG initiatives, leadership and compliance. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for more information regarding the annual incentive awards, including the performance metrics applicable to such awards. SALARY AND BONUS IN PROPORTION TO TOTAL COMPENSATION |
As noted in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Compensation Committee heavily weighted total direct compensation toward performance-based elements, which include annual incentive compensation, PSUs and stock options, in order to hold executives accountable and reward them for the results of the Company. Our Compensation Committee structured the compensation program to give our NEOs substantial alignment with stockholders, while also permitting the committee to incentivize the NEOs to pursue performance that it believes increases stockholder value. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for a description of the objectives of our compensation program and overall compensation philosophy. 56
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57 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION
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The following table provides information regarding outstanding option awards and unvested stock awards held by each of the NEOs on December 31, 2020.2021. 20202021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | 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 | | | NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#) | | MARKET
VALUE OF
SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED
($000)(1) | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED (#) | | EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED
($000)(1) | | Hikmet Ersek | | — | | 414,142(2) | | 26.50 | | 2/20/2030 | | | 30,944(6) | | $678.9 | | 154,717(13) | | $3,394.5 | | | 137,255 | | 411,765(3) | | 17.63 | | 2/21/2029 | | | 39,706(7) | | $871.1 | | 72,184(14) | | $1,583.7 | | | 191,781 | | 191,781(4) | | 20.09 | | 2/22/2028 | | | 34,844(8) | | $764.5 | | 198,526(15) | | $4,355.7 | | | 310,651 | | 103,551(5) | | 19.99 | | 2/22/2027 | | | 104,531(9) | | $2,293.4 | | 105,343(16) | | $2,311.2 | | | 422,961 | | | | 18.19 | | 2/19/2026 | | | 52,269(10) | | $1,146.8 | | | | | | | 336,135 | | | | 19.27 | | 2/19/2025 | | | | | | | | | | | | 303,798 | | | | 15.99 | | 2/20/2024 | | | | | | | | | | | | 400,810 | | | | 17.86 | | 2/23/2022 | | | | | | | | | | | | 233,859 | | | | 21.00 | | 2/24/2021 | | | | | | | | | | | Raj Agrawal | | 84,034 | | | | 19.27 | | 2/19/2025 | | | 27,460(6) | | $602.4 | | 45,767(13) | | $1,004.1 | | | 65,823 | | | | 15.99 | | 2/20/2024 | | | 40,359(7) | | $885.5 | | 21,958(14) | | $481.8 | | | 134,063 | | | | 14.00 | | 2/20/2023 | | | 35,839(8) | | $786.3 | | 67,265(15) | | $1,475.8 | | | 86,843 | | | | 17.86 | | 2/23/2022 | | | 35,840(9) | | $786.3 | | 34,783(16) | | $763.2 | | | 24,796 | | | | 16.49 | | 9/15/2021 | | | 17,904(10) | | $392.8 | | | | | | | 16,895 | | | | 21.00 | | 2/24/2021 | | | | | | | | | | Michelle
Swanback | | | | | | | | | | | 25,172(6) | | $552.3 | | 41,953(13) | | $920.5 | | | | | | | | | | | 94,340(17) | | $2,069.8 | | 20,129(14) | | $441.6 | Jean Claude
Farah | | 44,818 | | | | 19.27 | | 2/19/2025 | | | 12,014(6) | | $263.6 | | 20,023(13) | | $439.3 | | 10,127 | | | | 15.99 | | 2/20/2024 | | | 17,657(7) | | $387.4 | | 9,607(14) | | $210.8 | | 33,401 | | | | 17.86 | | 2/23/2022 | | | 15,680(8) | | $344.0 | | 29,429(15) | | $645.6 | | 28,157 | | | | 21.00 | | 2/24/2021 | | | 15,680(9) | | $344.0 | | 15,218(16) | | $333.9 | | | | | | | | | | | 7,834(10) | | $171.9 | | | | |
| | | | | | | | | | | | | | | | | | | | OPTION AWARDS | | | STOCK AWARDS | | | | | | | | | | | | | | | | | | EQUITY | | | | | | | | | | | | | | | | | | INCENTIVE | | | | | | | | | | | | | | | | | | PLAN | | | | | | | | | | | | | | | | EQUITY | | AWARDS: | | | | | | | | | | | | | | | | INCENTIVE | | MARKET | | | | | | | | | | | | | | | | PLAN | | OR PAYOUT | | | | | | | | | | | | | | | | AWARDS: | | VALUE OF | | | | | | | | | | | | | | | | NUMBER OF | | UNEARNED | | | | | | | | | | | | | | MARKET | | UNEARNED | | SHARES, | | | | | | | | | | | | | | VALUE OF | | SHARES, | | UNITS OR | | | NUMBER OF | | NUMBER OF | | | | | | | NUMBER OF | | SHARES | | UNITS OR | | OTHER | | | SECURITIES | | SECURITIES | | | | | | | SHARES OR | | OR UNITS | | OTHER | | RIGHTS | | | UNDERLYING | | UNDERLYING | | | | | | | UNITS OF | | OF STOCK | | RIGHTS | | THAT | | | UNEXERCISED | | UNEXERCISED | | OPTION | | OPTION | | | STOCK THAT | | THAT HAVE | | THAT | | HAVE NOT | | | OPTIONS (#) | | OPTIONS (#) | | EXERCISE | | EXPIRATION | | | HAVE NOT | | NOT VESTED | | HAVE NOT | | VESTED | NAME | | EXERCISABLE | | UNEXERCISABLE | | PRICE ($) | | DATE | | | VESTED (#) | | ($000)(1) | | VESTED (#) | | ($000)(1) | Devin | | | | 2,149,838(2) | | 17.70 | | 12/27/2031 | | | 367,232(7) | | 6,551.4 | | | | | McGranahan | | | | | | | | | | | | | | | | | | Hikmet Ersek | | — | | 400,000(3) | | 23.91 | | 2/19/2031 | | | 34,296(8) | | 611.8 | | | | | | | 103,535 | | 310,607(4) | | 26.50 | | 2/20/2030 | | | 30,944(9) | | 552.0 | | | | | | | 274,510 | | 274,510(5) | | 17.63 | | 2/21/2029 | | | 39,706(10) | | 708.4 | | | | | | | 287,671 | | 95,891(6) | | 20.09 | | 2/22/2028 | | | 55,588(11) | | 991.7 | | | | | | | 414,202 | | | | 19.99 | | 2/22/2027 | | | | | | | | | | | | 422,961 | | | | 18.19 | | 2/19/2026 | | | | | | | 154,717(12) | | 2,760.2 | | | 336,135 | | | | 19.27 | | 2/19/2025 | | | | | | | 72,184(13) | | 1,287.8 | | | 303,798 | | | | 15.99 | | 2/20/2024 | | | | | | | 171,477(14) | | 3,059.1 | | | 400,810 | | | | 17.86 | | 2/23/2022 | | | | | | | 64,138(15) | | 1,144.2 | Raj Agrawal | | | | | | | | | | | 35,745(8) | | 637.7 | | 45,767(12) | | 816.5 | | | 84,034 | | | | 19.27 | | 2/19/2025 | | | 27,460(9) | | 489.9 | | 21,958(13) | | 391.7 | | | 65,823 | | | | 15.99 | | 2/20/2024 | | | 40,359(10) | | 720.0 | | 59,575(14) | | 1,062.8 | | | 134,063 | | | | 14.00 | | 2/20/2023 | | | 18,835(11) | | 336.0 | | 22,636(15) | | 403.8 | Michelle | | | | | | | | | | | 31,915(8) | | 569.4 | | 41,953(12) | | 748.4 | Swanback | | | | | | | | | | | 25,172(9) | | 449.1 | | 20,129(13) | | 359.1 | | | | | | | | | | | | 47,170(16) | | 841.5 | | 53,192(14) | | 948.9 | | | | | | | | | | | | | | | | 20,211(15) | | 360.6 | Gabriella | | | | | | | | | | | 92,166(17) | | 1,644.2 | | | | | Fitzgerald | | | | | | | | | | | | | | | | | | Jean Claude | | | | | | | | | | | 19,149(8) | | 341.6 | | | | | Farah | | 44,818 | | | | 19.27 | | 2/19/2025 | | | 12,014(9) | | 214.3 | | 20,023(12) | | 357.2 | | | 10,127 | | | | 15.99 | | 2/20/2024 | | | 17,657(10) | | 315.0 | | 9,607(13) | | 171.4 | | | 33,401 | | | | 17.86 | | 2/23/2022 | | | 8,241(11) | | 147.0 | | 31,915(14) | | 569.4 | | | | | | | | | | | | | | | | 12,127(15) | | 216.3 |
Footnotes: 2021 Proxy Statement
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Table of Contents
(1) | | 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 | | | NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#) | | MARKET
VALUE OF
SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED
($000)(1) | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED (#) | | EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT
HAVE NOT
VESTED
($000)(1) | | Khalid Fellahi | | 28,012 | | | | 19.27 | | 2/19/2025 | | | 17,163(6) | | $376.5 | | 28,605(13) | | $627.6 | | | 16,895 | | | | 21.00 | | 2/24/2021 | | | 11,772(7) | | $258.3 | | 13,724(14) | | $301.1 | | | | | | | | | | | | 10,453(8) | | $229.3 | | 19,619(15) | | $430.4 | | | | | | | | | | | | 10,454(9) | | $229.4 | | 10,145(16) | | $222.6 | | | | | | | | | | | | 5,223(10) | | $114.6 | | | | | | | | | | | | | | | | 7,179(11) | | $157.5 | | | | | | | | | | | | | | | | 2,824(12) | | $62.0 | | | | |
Footnotes:
(1) | The market value of shares or units of stock that have not vested reflects the closing stock price of $21.94$17.84 per share on December 31, 2020.2021. |
| | (2) | These options were awarded on December 27, 2021, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
58 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION (3) | These options were awarded on February 20, 2020, and vest19, 2021, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In connection with his separation from the Company, Mr. Ersek’s 2021 options will vest on a pro-rated basis based on an anticipated departure date of June 30, 2022, due to his satisfaction of the age and service requirements for retirement vesting. Please see page 66 for additional information related to the post-termination exercise period for stock options in the event of retirement. |
| | (3)(4) | These options were awarded on February 21, 2019, and vest20, 2020, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In connection with his separation from the Company, Mr. Ersek’s 2020 options will vest on a pro-rated basis based on an anticipated departure date of June 30, 2022, due to his satisfaction of the age and service requirements for retirement vesting. Please see page 66 for additional information related to the post-termination exercise period for stock options in the event of retirement. |
| | (4)(5) | These options were awarded on February 22, 2018, and vest21, 2019, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In connection with his separation from the Company, Mr. Ersek’s 2019 options will vest on a pro-rated basis based on an anticipated departure date of June 30, 2022, due to his satisfaction of the age and service requirements for retirement vesting. Please see page 66 for additional information related to the post-termination exercise period for stock options in the event of retirement. |
| | (5)(6) | These options vested on February 22, 2021.2022. |
(7) | Represents RSUs that are scheduled to vest in two substantially equal installments on August 1, 2022 and February 1, 2023; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
(6)(8) | Represents RSUs that are scheduled to vest on February 19, 2023 (or,18, 2024 (or, in the case of Mr. Ersek, February 20, 2023)19, 2024); provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In connection with his separation from the Company, Mr. Ersek’s RSU awards will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These RSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
| | (7)(9) | Represents RSUs that are scheduled to vest on February 20, 2022 (or,19, 2023 (or, in the case of Mr. Ersek, February 21, 2022)20, 2023); provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In connection with his separation from the Company, Mr. Ersek’s RSU awards will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These RSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
| | (8)(10) | Represents RSUs that vested on February 21, 202120, 2022 (or, in the case of Mr. Ersek, February 22, 2021)21, 2022). |
| | (9)(11) | Represents PSUs that vested on February 21, 202120, 2022 (or, in the case of Mr. Ersek, February 22, 2021)21, 2022) based on the Company’s revenue and EBIT performance duringover the 2018-20202019–2021 performance period. | | | (10) | Represents PSUs that vested on February 21, 2021 (or, in the case of Mr. Ersek, February 22, 2021) based on the Company’s TSR performance relative to the S&P 500 Index over the 2018–2020 performance period.
| | | (11) | Represents RSUs that were awarded on November 7, 2019 and which vest on the second year anniversary of the date of grant; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan.
| | | (12) | Represents RSUs that were awarded on March 7, 2019 and which vest on the second year anniversary of the date of grant; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan.
|
58
| | | The Western Union Company |
Table of Contents
(13)(12) | Represents PSUs that are scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023) based on the Company’s revenue and operating margin performance over the 2020–2022 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals. In connection with his separation from the Company, Mr. Ersek’s Financial PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(13) | | (14) | Represents PSUs that are scheduled to vest on February 19, 2023 (or, in the case of Mr. Ersek, February 20, 2023) based on the Company’s TSR performance relative to the S&P 500 Index over the 2020–2022 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals. In connection with his separation from the Company, Mr. Ersek’s TSR PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(14) | | (15) | Represents PSUs that are scheduled to vest on February 20, 202218, 2024 (or, in the case of Mr. Ersek, February 21, 2022)19, 2024) based on the Company’s revenue and EBIToperating margin performance, measured annually during the 2021-2023 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC |
2022 Proxy Statement | 59
Table of Contents EXECUTIVE COMPENSATION | executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals. In connection with his separation from the Company, Mr. Ersek’s Financial PSUs will vest on a pro-rated basis due to the satisfaction of the age and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(15) | Represents PSUs that are scheduled to vest on February 18, 2024 (or, in the case of Mr. Ersek, February 19, 2024) based on the Company’s TSR performance relative to the S&P 500 Index over the 2019–20212021–2023 performance period; provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals. | | | (16) | Represents In connection with his separation from the Company, Mr. Ersek’s TSR PSUs that are scheduled towill vest on February 20, 2022 (or, in the case of Mr. Ersek, February 21, 2022) based on the Company’s TSR performance relativea pro-rated basis due to the S&P 500 Index oversatisfaction of the 2019–2021 performance period; providedage and service requirements for retirement vesting. These PSUs were forfeited in connection with Ms. Swanback’s 2022 separation. |
(16) | Represents RSUs that the executive is still employed by the Companyvested on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. In accordance with the SEC executive compensation disclosure rules, the amounts reported are based on achieving the target performance goals.January 13, 2022. |
(17) | | (17) | Represents RSUs that were awarded on JanuarySeptember 13, 2020, and2021, which vest in 50% incrementsthree substantially equal installments on each of the first, second and second yearthird anniversaries of the date of grant;grant date; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy or Long-Term Incentive Plan. |
60 2021 Proxy Statement59| The Western Union Company
Table of Contents EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION
|
The following table provides information concerning the exercise of stock options and vesting of stock awards during 20202021 for each of the NEOs. 20202021 OPTION EXERCISES AND STOCK VESTED TABLE
| | OPTION AWARDS | | STOCK AWARDS | | NAME | | NUMBER OF
SHARES
ACQUIRED ON
EXERCISE
(#) | | VALUE
REALIZED
ON
EXERCISE
($) | | NUMBER OF
SHARES
ACQUIRED ON
VESTING
(#) | | VALUE
REALIZED
ON VESTING
($) | | Hikmet Ersek | | — | | — | | 292,902 | | $7,548,085 | | Raj Agrawal | | 24,553 | | $268,584 | | 105,311 | | $2,713,864 | | Michelle Swanback | | — | | — | | — | | — | | Jean Claude Farah | | — | | — | | 55,290 | | $1,424,823 | | Khalid Fellahi | | — | | — | | 46,863 | | $1,160,818 |
| | | | | | | | | | | OPTION AWARDS | | STOCK AWARDS | NAME | | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | | VALUE REALIZED ON VESTING ($) | Devin McGranahan | | — | | — | | — | | — | Hikmet Ersek | | 233,859 | | 681,073 | | 191,644 | | 4,580,292 | Raj Agrawal | | 128,534 | | 866,741 | | 89,583 | | 2,141,930 | Michelle Swanback | | — | | — | | 47,170 | | 1,056,136 | Gabriella Fitzgerald | | — | | — | | — | | — | Jean Claude Farah | | 28,157 | | 69,023 | | 39,194 | | 937,129 |
The following table provides information regarding compensation that has been deferred by our NEOs pursuant to the terms of our Supplemental Incentive Savings Plan.SISP. 20202021 NONQUALIFIED DEFERRED COMPENSATION TABLE
| NAME | | EXECUTIVE
CONTRIBUTIONS
IN LAST FY
($000)(1) | | REGISTRANT
CONTRIBUTIONS
IN LAST FY
($000)(2) | | AGGREGATE
EARNINGS
IN LAST FY
($000) | | AGGREGATE
WITHDRAWALS/
DISTRIBUTIONS
($000) | | AGGREGATE
BALANCE
AT LAST
FYE
($000)(3) | | Hikmet Ersek | | — | | — | | — | | — | | — | | Raj Agrawal | | 69.5 | | 44.2 | | 272.4 | | — | | 1,772.0 | | Michelle Swanback | | 53.6 | | 31.5 | | 7.0 | | — | | 92.1 | | Jean Claude Farah | | — | | — | | — | | — | | — | | Khalid Fellahi | | — | | — | | — | | — | | — |
| | | | | | | | | | | NAME | | EXECUTIVE CONTRIBUTIONS IN LAST FY ($000)(1) | | REGISTRANT CONTRIBUTIONS IN LAST FY ($000)(2) | | AGGREGATE EARNINGS IN LAST FY ($000) | | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($000) | | AGGREGATE BALANCE AT LAST FYE ($000)(3) | | | | | | | | | | | | Hikmet Ersek | | — | | — | | — | | — | | — | Raj Agrawal | | 51.4 | | 29.5 | | 530.6 | | — | | 2,394.9 | Michelle Swanback | | 51.0 | | 29.2 | | 10.2 | | — | | 182.6 | Jean Claude Farah | | — | | — | | — | | — | | — |
Footnotes: (1) | These amounts represent deferrals of the NEO’s salary and compensation received under the Annual Incentive Plan and are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the 20202021 Summary Compensation Table. |
(2) | | (2) | These amounts are included in the “All Other Compensation” column in the 20202021 Summary Compensation Table. |
(3) | | (3) | Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for 20192020 and 20182019 (in $000s): Mr. Agrawal–$207.9.207.3; and Ms. Swanback-$85.1. |
2022 Proxy Statement 60 The Western Union Company| 61
Table of Contents EXECUTIVE COMPENSATION INCENTIVE SAVINGS PLAN We maintain a defined contribution retirement plan (the “Incentive Savings Plan” or “ISP”) for our employees on United States payroll, including each of our NEOs other than Messrs. Ersek and Farah. The ISP is structured with the intention of qualifying under Section 401(a) of the Internal Revenue Code. Under the ISP, participants are permitted to make contributions up to the maximum allowable amount under the Internal Revenue Code. In addition, we make matching contributions equal to 100% of the first 3% of eligible compensation contributed by participants and 50% of the next 2% of eligible compensation contributed by participants. For 2020,2021, each participating NEO was eligible to receive a Company contribution equal to 4% of his or her eligible compensation. During 2020,2021, Mr. Ersek participated in the qualified retirement savings plan made available to eligible employees in Austria. During 2020,2021, Mr. Farah and Mr. Fellahi participated in the Caisse des Français de l’Etranger (the “CFE Retirement Fund”), which provides for continued coverage under the French State Social Security System for French citizens who work outside of France. On behalf of the employee, the CFE Retirement Fund contributes to the National Retirement Insurance Fund (“CNAV”) allowing the employee to receive pension benefits from the CNAV upon retirement. SUPPLEMENTAL INCENTIVE SAVINGS PLAN |
SUPPLEMENTAL INCENTIVE SAVINGS PLAN We maintain a nonqualified supplemental incentive savings plan (the “SISP”) for certain of our employees on U.S. payroll, including each of our NEOs other than Messrs. Ersek and Farah. Under the SISP, participants may defer up to 80% of their salaries, including commissions and incentive compensation (other than annual bonuses), and may make a separate election to defer up to 80% of any annual bonuses and up to 100% of any performance-based cash awards they may earn. The SISP also provides participants the opportunity to receive credits for matching contributions equal to the difference between the matching contributions that a participant could receive under the ISP but for the contribution and compensation limitations imposed by the Internal Revenue Code, and the matching contributions allowable to the participant under the ISP. Participants are generally permitted to choose from among the mutual funds available for investment under the ISP for purposes of of determining the imputed earnings, gains, and losses applicable to their SISP accounts. The SISP is unfunded. Participants may specify the timing of the payment of their accounts by choosing either a specified payment date or electing payment upon separation from service (or a date up to five years following separation from service), and in either case may elect to receive their accounts in a lump sum or in annual or quarterly installments over a period of up to ten years. With respect to each year’s contributions and imputed earnings, the participant may make a separate distribution election. Subject to the requirements of Section 409A of the Internal Revenue Code, applicable Internal Revenue Service guidance, and the terms of the SISP, participants may receive an early payment in the event of a severe financial hardship and may make an election to delay the timing of their scheduled payment by a minimum of five years.
POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL EXECUTIVE SEVERANCE POLICY |
EXECUTIVE SEVERANCE POLICY We maintain the Executive Severance Policy for the payment of certain benefits to senior executives, including our NEOs, upon termination of employment from the Company and upon a change-in-controlchange in control of the Company. Under the Executive Severance Policy, an eligible executive will become eligible for benefits if (i) prior to a change-incontrol,change-in-control, he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or (ii) after a change-in-control, he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or he or she terminates employment voluntarily for “good reason” (which may arise from a material reduction in title or position, reduction in base salary or bonus opportunity or an increase in the executive’s commute to his or her current principal working location of more than 50 miles 2021 Proxy Statement 61
Table of Contents
24 months after the date of the change-in-control. Under the Executive Severance Policy, a change-in-control is generally defined to include: ● | The acquisition by a person or entity of 35% or more of either the outstanding shares of the Company or the combined voting power of such shares, with certain exceptions; | | | ● | An unapproved change in a majority of the Board members within a 24-month period; and | | | ● | Certain corporate restructurings, including certain mergers, dissolution and liquidation. |
• The acquisition by a person or entity of 35% or more of either the outstanding shares of the Company or the combined voting power of such shares, with certain exceptions; • An unapproved change in a majority of the Board members within a 24-month period; and • Certain corporate restructurings, including certain mergers, dissolution and liquidation. 62 | The Western Union Company
Table of Contents EXECUTIVE COMPENSATION The Executive Severance Policy provided for the following severance and change-in-control benefits as of December 31, 2020:2021: ● | A severance payment equal to the senior executive’s base pay plus target bonus for the year in which the termination occurs (the “base severance pay”) multiplied by 1.5 (multiplied by two in the case of the CEO and all senior executives who terminate for an eligible reason within 24 months following a change-in-control). For terminations prior to a change-in-control a senior executive employed by the Company for 12 months or less would be entitled to receive a severance payment equal to the base severance pay and, for every month employed in excess of 12 months, an additional severance payment equal to a pro rata portion of the base severance pay, up to a maximum severance payment equal to the senior executive’s base severance pay, multiplied by 1.5 (multiplied by two in the case of the CEO). | | | ● | A cash payment equal to the lesser of (i) the senior executive’s prorated target bonus under the Annual Incentive Plan for the year in which the termination occurs and (ii) the maximum bonus which could have been paid to the senior executive under the Annual Incentive Plan for the year in which the termination occurs, based on actual Company performance during such year. No bonus will be payable unless the Compensation Committee certifies that the performance goals under the Annual Incentive Plan have been achieved for the year in which the termination occurs (except for eligible terminations following a change-in-control). | | | ● | A lump sum payment equal to the difference between active employee health care premiums and continuation coverage premiums for 18 months of coverage. | | | ● | At the discretion of the Compensation Committee, outplacement benefits may be provided to the executive. | | | ● | All awards made pursuant to our Long-Term Incentive Plan, including those that are performance-based, generally will become fully vested and exercisable if a |
• A severance payment equal to the senior executive’s base pay plus target bonus for the year in which the termination occurs (the “base severance pay”) multiplied by 1.5 (multiplied by two in the case of the CEO and all senior executives who terminate for an eligible reason within 24 months following a change-in-control). For terminations prior to a change-in-control a senior executive employed by the Company for 12 months or less would be entitled to receive a severance payment equal to the base severance pay and, for every month employed in excess of 12 months, an additional severance payment equal to a pro rata portion of the base severance pay, up to a maximum severance payment equal to the senior executive’s base severance pay, multiplied by 1.5 (multiplied by two in the case of the CEO). • A cash payment equal to the lesser of (i) the senior executive’s prorated target bonus under the Annual Incentive Plan for the year in which the termination occurs and (ii) the maximum bonus which could have been paid to the senior executive under the Annual Incentive Plan for the year in which the termination occurs, based on actual Company performance during such year. No bonus will be payable unless the Compensation Committee certifies that the performance goals under the Annual Incentive Plan have been achieved for the year in which the termination occurs (except for eligible terminations following a change-in-control). • A lump sum payment equal to the difference between active employee health care premiums and continuation coverage premiums for 18 months of coverage. • At the discretion of the Compensation Committee, outplacement benefits may be provided to the executive. • All awards made pursuant to our Long-Term Incentive Plan, including those that are performance-based, generally will become fully vested and exercisable if a senior executive is involuntarily terminated without cause or terminates employment for good reason, in either case, within 24 months following a change-in-control. In such event, the right to exercise stock options will continue for 24 months (36 months in the case of the CEO) after the senior executive’s termination (but not beyond the applicable expiration date for the stock options). • If a senior executive is involuntarily terminated without cause and no change-in-control has occurred, awards granted pursuant to our Long-Term Incentive Plan generally will vest on a prorated basis based on the period served during the vesting period, and stock options will remain exercisable until the end of severance period under the Executive Severance Policy, but not beyond the applicable expiration date for the stock options. • Any benefits triggered by a change-in-control are subject to an automatic reduction to avoid the imposition of | senior executive is involuntarily terminated without cause or terminates employment for good reason, in either case, within 24 months following a change-in-control. In such event, the right to exercise stock options will continue for 24 months (36 months in the case of the CEO) after the senior executive’s termination (but not beyond the applicable expiration date for the stock options). | | | ● | If a senior executive is involuntarily terminated without cause and no change-in-control has occurred, awards granted pursuant to our Long-Term Incentive Plan generally will vest on a prorated basis based on the period served during the vesting period, and stock options will remain exercisable until the end of severance period under the Executive Severance Policy, but not beyond the applicable expiration date for the stock options. | | | ● | With respect to all executives other than the CEO, any benefits triggered by a change-in-control are subject to an automatic reduction to avoid the imposition of excise taxes under Section 4999 of the Internal Revenue Code in the event such reduction would result in a better after-tax result for the executive. | | | ● | For individuals who were senior executives on or before April 30, 2009 (only our CEO), if benefits payable after a change-in-control exceed 110% of the maximum amount of such benefits that would not be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, an additional cash payment in an amount that, after payment of all taxes on such benefits (and on such amount), provides the senior executive with the amount necessary to pay such tax. If the benefits so payable do not exceed such 110% threshold, the amount thereof will be reduced to the maximum amount not subject to such excise tax. Mr. Ersek is the only Company employee who remains eligible for excise tax gross-up payments. |
excise taxes under Section 4999 of the Internal Revenue Code in the event such reduction would result in a better after-tax result for the executive. The provision of severance benefits under the Executive Severance Policy is conditioned upon the executive executing an agreement and release which includes, among other things, non-competition and non-solicitation restrictive covenants, as well as a release of claims against the Company. These restrictive covenants vary in duration, but generally do not exceed two years. As noted earlier, Mr. Farah is subject to an employment agreement, which is a customary practice for executives located in the UAE. Under the terms of Mr.Farah’sMr. Farah’s employment agreement, he is required to receive three months’ notice of termination of employment or, in lieu of such notice, three months of pay. In addition, Mr. Farah is also eligible for statutory end of service gratuity/severance amounts in accordance with local law. Any amounts due to Mr. Farah under the Executive Severance Policy will be reduced by any end of serviceend-of-service gratuity/severance paid under the terms of his employment agreement or as required by local law. As noted in the “Compensation Discussion and Analysis” section of this Proxy Statement, effective as of December 26, 2021, Mr. Ersek retired from the position of President and CEO of the Company, and will continue to support the Company as a Special Advisor to the Company’s new CEO until June 30, 2022, during which time his current base salary of $1,050,000 and benefits will continue, with an annual incentive opportunity under the Annual Incentive Plan of 170% of base salary that is prorated for his period of service during 2022. In addition, the Company has agreed to provide Mr. Ersek with a lump sum payment equal to COBRA premiums for continued healthcare coverage through December 31, 2023 (estimated value $48,000), tax filing support services for 2022 and 2023 (estimated value $10,000), continued home monitoring services for the duration of his service as Special Advisor to the CEO (estimated value $300), and repatriation support, including related tax reimbursements, for Mr. Ersek’s repatriation to Austria in accordance with the Company’s repatriation policy (estimated value $100,000) and reimbursement of up to $10,000 in attorneys’ fees for negotiation of the terms of Mr. Ersek’s transition agreement. Finally, due to his satisfaction of the age and service requirements under his outstanding equity award agreements, Mr. Ersek will be eligible for retirement vesting in accordance with the terms of these agreements (estimated value $5,800,000, based on the closing stock price on December 31, 2021 and assuming target payout for the PSUs). On March 31, 2022, Ms. Swanback separated from the Company. In connection with Ms. Swanback’s departure, the Company and Ms. Swanback entered into a mutual separation agreement, which includes a customary release of claims and provides for a separation payment of $1,565,000, payable in nine equal monthly installments from April 2022 through December 2022. In connection with her departure, Ms. Swanback will not receive a bonus for 2022 2022 Proxy Statement 62 The Western Union Company| 63
Table of Contents EXECUTIVE COMPENSATION under the Company’s Annual Incentive Plan, her outstanding and unvested equity awards were forfeited, and she was not eligible for any severance benefits under the Executive Severance Policy. Ms. Swanback remains subject to restrictive covenants, including covenants relating to non-competition, non-solicitation, and non-disclosure. WeFor NEOs serving as executive officers as of December 31, 2021, we have quantified the potential payments to our NEOs upon termination under various termination circumstances in the tables set forth below. These tables assume that the covered termination took place on December 31, 2020.2021.
PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL TABLES TERMINATION FOLLOWING A CHANGE-IN-CONTROL(1) | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000)(2) | | WELFARE BENEFITS ($000)(3) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Devin McGranahan | | 2,700.0 | | — | | 301.0 | | — | | 6,551.4 | | — | | 9,552.4 | Raj Agrawal | | 3,107.0 | | 25.2 | | — | | 3,010.8 | | 1,847.6 | | 508.5 | | 8,499.1 | Michelle Swanback | | 2,953.5 | | 25.2 | | — | | 2,417.0 | | 1,860.0 | | 290.3 | | 7,546.0 | Gabriella Fitzgerald | | 1,626.9 | | 25.2 | | — | | — | | 1,644.2 | | 43.3 | | 3,339.6 | Jean Claude Farah | | 2,529.0 | | — | | — | | 1,461.3 | | 870.9 | | 231.3 | | 5,092.5 |
INVOLUNTARY TERMINATION OTHER THAN FOR DEATH, DISABILITY, OR CAUSE | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000)(2) | | WELFARE BENEFITS ($000)(3) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Devin McGranahan | | 2,700.0 | | — | | 301.0 | | — | | 6,551.4 | | — | | 9,552.4 | Raj Agrawal | | 2,457.0 | | 25.2 | | — | | 1,494.3 | | 1,174.9 | | 258.6 | | 5,410.0 | Michelle Swanback | | 2,432.7 | | 25.2 | | — | | 688.2 | | 1,105.6 | | 162.0 | | 4,413.7 | Gabriella Fitzgerald | | 1,626.9 | | 25.2 | | — | | — | | — | | — | | 1,652.1 | Jean Claude Farah | | 2,004.0 | | — | | — | | 468.7 | | 433.6 | | 101.8 | | 3,008.1 |
DEATH OR DISABILITY | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000) | | WELFARE BENEFITS ($000) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Devin McGranahan | | — | | — | | 301.0 | | — | | 6,551.4 | | — | | 6,852.4 | Raj Agrawal | | — | | — | | — | | 3,010.8 | | 1,847.6 | | 508.5 | | 5,366.9 | Michelle Swanback | | — | | — | | — | | 2,417.0 | | 1,860.0 | | 290.3 | | 4,567.3 | Gabriella Fitzgerald | | — | | — | | — | | — | | 1,644.2 | | 43.3 | | 1,687.5 | Jean Claude Farah | | — | | — | | — | | 1,461.3 | | 870.9 | | 231.3 | | 2,563.5 |
64 | The Western Union Company | TERMINATION FOLLOWING A CHANGE-IN-CONTROL(1) | | | | | | | LONG-TERM INCENTIVES(5) | | | | | | | | NAME | | SEVERANCE
($000)(2) | | WELFARE
BENEFITS
($000)(3) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | DEU
ACCRUAL
($000) | | GROSS-UP
($000)(4) | | TOTAL
($000) | | Hikmet Ersek | | 6,544.6 | | 41.7 | | 2,331.4 | | 15,085.3 | | 2,314.5 | | 572.1 | | — | | 26,889.6 | | Raj Agrawal | | 2,977.0 | | 25.2 | | — | | 4,904.0 | | 2,274.2 | | 248.9 | | — | | 10,429.3 | | Michelle Swanback | | 1,625.0 | | 25.2 | | — | | 1,362.1 | | 2,622.1 | | 145.3 | | — | | 5,779.7 | | Jean Claude Farah | | 2,424.5 | | — | | — | | 2,145.5 | | 995.0 | | 103.8 | | — | | 5,668.8 | | Khalid Fellahi | | 2,347.5 | | 25.2 | | — | | 1,925.7 | | 1,083.6 | | 107.3 | | — | | 5,489.3 |
| INVOLUNTARY TERMINATION OTHER THAN FOR DEATH, DISABILITY, OR CAUSE | | | | | | | LONG-TERM INCENTIVES(5) | | | | | | NAME | | SEVERANCE
($000)(2) | | WELFARE
BENEFITS
($000)(3) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | DEU
ACCRUAL
($000) | | TOTAL
($000) | | Hikmet Ersek | | 6,544.6 | | 41.7 | | 1,175.6 | | 8,835.0 | | 1,462.4 | | 298.9 | | 18,358.2 | | Raj Agrawal | | 2,327.0 | | 25.2 | | — | | 2,940.8 | | 1,472.1 | | 132.5 | | 6,897.6 | | Michelle Swanback | | 1,625.0 | | 25.2 | | — | | — | | — | | — | | 1,650.2 | | Jean Claude Farah | | 1,899.5 | | — | | — | | 1,099.2 | | 568.1 | | 49.7 | | 3,616.5 | | Khalid Fellahi | | 1,822.5 | | 25.2 | | — | | 1,000.6 | | 561.6 | | 50.1 | | 3,460.0 | | | | DEATH OR DISABILITY | | | | | | | LONG-TERM INCENTIVES(5) | | | | | | NAME | | SEVERANCE
($000) | | WELFARE
BENEFITS
($000) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | DEU
ACCRUAL
($000) | | TOTAL
($000) | | Hikmet Ersek | | — | | — | | 2,331.4 | | 15,085.3 | | 2,314.5 | | 572.1 | | 20,303.3 | | Raj Agrawal | | — | | — | | — | | 4,904.0 | | 2,274.2 | | 248.9 | | 7,427.1 | | Michelle Swanback | | — | | — | | — | | 1,362.1 | | 2,622.1 | | 145.3 | | 4,129.5 | | Jean Claude Farah | | — | | — | | — | | 2,145.5 | | 995.0 | | 103.8 | | 3,244.3 | | Khalid Fellahi | | — | | — | | — | | 1,925.7 | | 1,083.6 | | 107.3 | | 3,116.6 | | | | RETIREMENT(6) | | | | | | | LONG-TERM INCENTIVES(5) | | | | | | NAME | | SEVERANCE
($000) | | WELFARE
BENEFITS
($000) | | STOCK
OPTIONS
($000) | | PSUs
($000) | | RSUs
($000) | | DEU
ACCRUAL
($000) | | TOTAL
($000) | | Hikmet Ersek | | — | | — | | 1,175.6 | | 8,835.0 | | 1,462.4 | | 298.9 | | 11,771.9 | | Raj Agrawal | | — | | — | | — | | 2,940.8 | | 1,472.1 | | 132.5 | | 4,545.4 | | Khalid Fellahi | | — | | — | | — | | 1,000.6 | | 561.6 | | 50.1 | | 1,612.3 |
Table of Contents EXECUTIVE COMPENSATION RETIREMENT(5) | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVES(4) | | | | | NAME | | SEVERANCE ($000) | | WELFARE BENEFITS ($000) | | STOCK OPTIONS ($000) | | PSUs ($000) | | RSUs ($000) | | DEU ACCRUAL ($000) | | TOTAL ($000) | Raj Agrawal | | — | | — | | — | | 1,494.3 | | 1,174.9 | | 258.6 | | 2,927.8 |
Footnotes: Footnotes: | | (1) | Under the Executive Severance Policy, following a change-in-control, an eligible executive will become entitled to severance benefits if he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or he or she terminates employment voluntarily for good reason within 24 months after the date of the change-in-control. |
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(2) | In accordance with the Executive Severance Policy, amounts in this column represent severance payments equal to (i) the lesser of the NEO’s (x) 20202021 target bonus and (y) 20202021 bonus based on actual performance, plus (ii) 1.5 times (two times in the case of the CEO and in the case of all senior executives who terminate for an eligible reason within 24 months following a change-in-control) the sum of the NEO’s base salary and target bonus, with the exception of Mr. McGranahan, Ms. Swanback, and Ms. Fitzgerald, who hashave each been with the Company for less than two years as of December 31, 2020.2021. Due to this fact, in accordance with the Executive Severance Policy in effect on December 31, 2020,2021, the amounts for Mr. McGranahan and Ms. Fitzgerald represent payments equal to 1 time, and the amount for Ms. Swanback representsrepresent payments equal to one1.9 times, respectively, the sum of his or her base salary and target bonus for the current year in the case of an involuntary termination not in connection with a change in control.
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(3) | Amounts in this column represent a lump sum cash payment equal to the product of (i) the difference in cost between the NEO’s actual health premiums and COBRA health premiums (if applicable) as of December 31, 2020,2021, and (ii) 18, the number of months of continuing COBRA coverage.
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(4) | As noted above, for individuals who were senior executives on or before April 30, 2009 (only our CEO), if benefits payable after a change-in-control exceed 110% of the maximum amount of such benefits that would not be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, the executive would receive an additional cash payment for such taxes. If the benefits do not exceed the 110% threshold, the change-in-control benefits will be reduced to the maximum amount not subject to the excise tax. As of December 31, 2020, the change-in-control benefits payable with respect to Mr. Ersek would have been subject to a cut-back under the terms of the Executive Severance Policy. The amounts reflected in this table do not reflect the application of any reduction in change-in-control benefits pursuant to the terms of the Executive Severance Policy.
| (5) | Amounts in these columns reflect the long-term incentive awards to be received upon a termination or a change-in-control calculated in accordance with the Executive Severance Policy and the Long-Term Incentive Plan. In the case of stock grants, the equity value represents the value of the shares determined by multiplying the closing stock price of $21.94$17.84 per share on December 31, 20202021 by the number of unvested RSUs or, in the case of PSUs, by the number of shares to be awarded based on target achievement. In the case of option awards, the equity value was determined by multiplying (i) the spread between the exercise price and the closing stock price of $21.94$17.84 per share on December 31, 20202021 and (ii) the number of unvested option shares that would vest following a qualifying termination or termination due to death or disability. The calculation with respect to unvested long-term incentive awards reflects the following additional assumptions under the Executive Severance Policy and the Long-Term Incentive Plan: |
EVENT | | STOCK OPTIONS OPTIONS** | | RSUsRSUs** | | PSUs | Change-in-control and qualifying termination within subsequent 24-month period | | Accelerate | | Accelerate Accrued dividend equivalents would be distributed on accelerated RSUs. | | Accelerated vesting and award is payable to the extent earned based on actual performance results Accrued dividend equivalents would be distributed on accelerated Financial PSUs. | Change-in-control (without termination of employment) | | Vesting continues under normal terms | | Vesting continues under normal terms | | Vesting continues under normal terms | Involuntary termination without cause (outside the 24-month period following a change-in-control)* *If the NEO would satisfy the age and service requirements for retirement, then the NEO would receive retirement vesting under this termination scenario. | | Prorated vesting by grant based on period served during vesting period | | Prorated vesting by grant based on period served during vesting period; if termination occurs prior to the one-year anniversary of the grant date, the awards are forfeited Accrued dividend equivalents would be distributed on accelerated RSUs. | | Prorated vesting by grant based on actual performance results and period served during vesting period; if termination occurs prior to the one-year anniversary of the grant date, the awards are forfeited Accrued dividend equivalents would be distributed on accelerated Financial PSUs. |
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Table of Contents EXECUTIVE COMPENSATION EVENT | | STOCK OPTIONS** | | RSUs** | | PSUs | Death or disability | | Accelerate | | Accelerate Accrued dividend equivalents would be distributed on accelerated RSUs. | | Accelerated vesting and award is payable to the extent earned based on actual performance results Accrued dividend equivalents would be distributed on accelerated Financial PSUs. | Retirement | | Prorated vesting by grant based on period served during vesting period, with an exercise period equal to the earlier of (i) two years post-termination (three years, in the case of the CEO if termination is a severance-eligible event) and (ii) the expiration date | | Prorated vesting by grant based on period served during vesting period Accrued dividend equivalents would be distributed on accelerated RSUs. | | Prorated vesting by grant based on actual performance results and period served during vesting period Accrued dividend equivalents would be distributed on accelerated Financial PSUs. |
**The new hire awards for Mr. McGranahan provide for accelerated vesting in the event of a termination by the Company other than for cause or by Mr. McGranahan for good reason or in the event of a change in control in which the awards are not assumed by the surviving company. (6)(5) | Messrs. Ersek,Mr. Agrawal and Fellahi areis the only NEOscurrent NEO eligible for retirement as of December 31, 2020,2021, as defined under the Long-Term Incentive Plan. |
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RISK MANAGEMENT AND COMPENSATION Appropriately incentivizing behaviors which foster the best interests of the Company and its stockholders is an essential part of the compensation-setting process. The Company believes that risk-taking is necessary for continued innovation and growth, but that risks should be encouraged within parameters that are appropriate for the long-term health and sustainability of the business. As part of its compensation setting process, the Company evaluates the merits of its compensation programs through a comprehensive review of its compensation policies and programs to determine whether they encourage unnecessary or inappropriate risk-taking by the Company’s executives and employees below the executive level. Based on this review, the Company has concluded that the risks arising from its compensation programs are not reasonably likely to have a material adverse effect on the Company. | | Management and the independent compensation consultant review the Company’s compensation programs, including the broad-based employee programs and the programs tied to the performance of individual business units. The team maps the level of “enterprise” risk for each business area, as established | |
Management and the Compensation Consultant review the Company’s compensation programs, including the broad-based employee programs and the programs tied to the performance of individual business units. The team maps the level of “enterprise” risk for each business area, as established
through the Company’s enterprise risk management oversight process, with the level of compensation risk for the associated incentive programs. In developing the risk assessment, the team reviews the compensation programs within each business area for: | ● | •The mix of fixed versus variable pay;
| | ● | •The performance metrics to which pay is tied;
| | ● | •Whether the pay opportunity is capped; | |
● | •The timing of payout;
| | ● | •Whether “clawback” adjustments are permitted;
| | ● | •The use of equity awards; and
| | ● | •Whether stock ownership guidelines apply. | |
Annual incentive awards and long-term incentive awards granted to executives are tied primarily to corporate performance goals, including revenue and operating margin growth, and strategic performance objectives.
66 | The Compensation Committee believes that these metrics encourage performance that supports the business as a whole. The executive annual incentive awards include a maximum payout opportunity equal to 175% of target, subject to a +/-25% individual performance-based modifier for NEOs other than Mr. Ersek. Our executives are also expected to meet share ownership guidelines in order to align the executives’ interests with those of our stockholders. Further, the Company’s clawback policy permits theWestern Union Company to recover incentive compensation paid to designated executives (including our officers who are subject to Section 16 of the Exchange Act as well as the Company’s CCO) in the event of an accounting restatement or if the executive engaged in detrimental conduct, as defined in the clawback policy. This policy helps to discourage inappropriate risks, as executives will be held accountable for misconduct which is harmful to the Company’s financial and reputational health. In addition, the Company’s clawback policy and specific clawback provisions in its annual and long-term incentive award agreements allow the Company to “claw back” executive pay if the executive engages in conduct that is determined to have contributed to material compliance failures, subject to applicable law.
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Table of Contents EXECUTIVE COMPENSATION
Annual incentive awards and long-term incentive awards granted to executives are tied primarily to corporate performance goals, including revenue and operating margin growth, and strategic performance objectives. The Compensation Committee believes that these metrics encourage performance that supports the business as a whole. The executive annual incentive awards include a maximum payout opportunity equal to 175% of target, subject to a +/-25% individual performance-based modifier for NEOs other than Mr. Ersek. Our executives are also expected to meet share ownership guidelines in order to align the executives’ interests with those of our stockholders. Further, the Company’s clawback policy permits the Company to recover incentive compensation paid to | |
designated executives (including our officers who are subject to Section 16 of the Exchange Act as well as the Company’s CCO) in the event of an accounting restatement or if the executive engaged in detrimental conduct, as defined in the clawback policy. This policy helps to discourage inappropriate risks, as executives will be held accountable for misconduct which is harmful to the Company’s financial and reputational health. In addition, the Company’s clawback policy and specific clawback provisions in its annual and long-term incentive award agreements allow the Company to “claw back” executive pay if the executive engages in conduct that is determined to have contributed to material compliance failures, subject to applicable law. | |
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Table of Contents CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Ersek, our former CEO. Under the SEC pay ratio rules, in the case of a CEO transition during the year, the Company is permitted to calculate the CEO pay ratio based on the annualized compensation of the CEO serving on the median employee identification date. Because Mr. Ersek was serving as our CEO on November 1, 2021, the pay ratio is calculated based on his compensation. The total compensation used for purposes of the pay ratio calculation is the same compensation amount reported in the 2021 Summary Compensation Table as there was no impact on Mr. Ersek’s compensation with respect to the annualization of his compensation since he continues to serve as an advisor to the Company with the same base salary level and his annual incentive compensation and equity awards were not adjusted to reflect his transition to the role of senior advisor. To understand this disclosure, we think it is important to give context to our operations. As noted above, The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. As a global organization, approximately 84% of our employees are located outside of the United States, with our employees located in a total of 52 countries. We strive to create a competitive global compensation program in terms of both the position and the geographic location in which the employee is located. As a result, our compensation program varies amongst each local market, in order to allow us to provide a competitive total rewards package. Given the leverage of our executive compensation program towards performance-based elements, we expect that our pay ratio disclosure will fluctuate year-to-year based on the Company’s performance against the pre-established performance goals. Ratio For 2020,2021, ● | The median of the annual total compensation of all of our employees, other than Mr. Ersek, was $30,515.
| ● | Mr. Ersek’s annual total compensation, as reported in the Total column of the 2020 Summary Compensation Table, was $10,336.4 thousands.
| ● | Based on this information, the ratio of the annual total compensation of Mr. Ersek to the median of the annual total compensation of all employees is estimated to be 339 to 1.
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• The median of the annual total compensation of all of our employees, other than Mr. Ersek, was $36,393. • Mr. Ersek’s annual total compensation, as reported in the Total column of the 2021 Summary Compensation Table, was $10,834.6 thousand. • Based on this information, the ratio of the annual total compensation of Mr. Ersek to the median of the annual total compensation of all employees is estimated to be 298 to 1. Identification of Median Employee We selected November 1, 20202021 as the date on which to determine our median employee. As of that date, we had approximately 11,00010,650 employees. For purposes of identifying the median employee, we considered the aggregate of the following compensation elements for each of our employees, as compiled from the Company’s payroll records: ● | Base Salary
| ● | Target Annual Bonus
| ● | Actual Equity Awards
| ● | Target Commissions |
• Base Salary • Target Annual Bonus • Actual Equity Awards • Target Commissions We selected the above compensation elements as they represent the Company’s principal broad-based compensation elements. In addition, we measured compensation for purposes of determining the median employee using the 12-month period ending December 31, 2020.2021. Using this methodology, we determined that our median employee was a full-time, salaried employee working in Europe. For purposes of this disclosure, we converted such employee’s compensation from the employee’s local currency to U.S. dollars using an exchange rate as of December 31, 2020.2021. In determining the annual total compensation of the 20202021 median employee, we calculated such employee’s 20202021 compensation in accordance with Item 402(c)(2)(x) of Regulation S-K as required pursuant to SEC executive compensation disclosure rules. This calculation is the same calculation used to determine total compensation for purposes of the 20202021 Summary Compensation Table with respect to each of the NEOs. 66
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PROPOSALPROPOSAL 2
ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
The Company is providing stockholders an advisory vote to approve executive compensation as required by Section 14A of the Exchange Act. Section 14A was added to the Exchange Act by Section 951 of the Dodd-Frank Act. The advisory vote to approve executive compensation is a nonbinding vote on the compensation of the Company’s NEOs, as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure set forth in this Proxy Statement. The advisory vote to approve executive compensation is not a vote on the Company’s general compensation policies or the compensation of the Company’s Board of Directors. The Dodd-Frank Act requires the Company to hold the advisory vote to approve executive compensation at least once every three years. At the 2017 Annual Meeting of Stockholders, the Company asked stockholders to indicate if it should hold an advisory vote to approve the compensation of named executive officers every one, two or three years, with the Board recommending an annual advisory vote. Our stockholders approved this recommendation. Accordingly, the Company is again asking stockholders to approve the compensation of NEOs as disclosed in this Proxy Statement. At the 20202021 Annual Meeting of Stockholders, the Company provided stockholders with the opportunity to cast an advisory vote to approve the compensation of the Company’s NEOs as disclosed in the Proxy Statement for the 2020 Annual the 2021 Annual Meeting of Stockholders, and the Company’s stockholders overwhelmingly approved the proposal, with approval by approximately 89%94% of the votes cast for the proposal at the 20202021 Annual Meeting of Stockholders. The Company believes that its compensation policies and procedures, which are outlined in the “Compensation Discussion and Analysis” section of this Proxy Statement, support the goals of: - | Aligning our executives’ goals with our stockholders’ interests; | | | - | Attracting, retaining, and motivating outstanding executive talent; and | | | - | “Pay-for-performance” - Holding our executives accountable and rewarding their achievement of financial, strategic and operating goals. |
• Aligning our executives’ goals with our stockholders’ interests; • Attracting, retaining, and motivating outstanding executive talent; and • Pay-for-performance” - Holding our executives accountable and rewarding their achievement of financial, strategic and operating goals. The Compensation Committee of the Board continually reviews the Company’s executive compensation and benefits program to evaluate whether it supports these goals and serves the interests of the Company’s stockholders. The Company’s executive compensation practices include the following, as discussed in more detail in the “Compensation Discussion and Analysis” section of this Proxy Statement: WHAT WE DO | | WHAT WE DON’T DO |  ✓Pay-for-performance and at-risk compensation.
 ✓Align compensation with stockholder interests.
 ✓Emphasis on future pay opportunity vs. current pay.
 ✓Mix of performance metrics.
 ✓Stockholder engagement.
 ✓“Clawback” “Clawback” policy.
 ✓Robust stock ownership guidelines.
 ✓ Include ESG metrics in compensation program.
 Three-year Multi-year vesting and/or performance periodperiods for PSUs.long-term incentive awards.
 ✓Outside Independent compensation consultant retained by the Compensation Committee.
 ✓“Double “Double trigger” severance benefits in the event of a change-in-control.
 ✓Maximum payout caps for annual cash incentive compensation and PSUs.
✓Consider ESG metric in compensation program.
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|  ✘No repricing or buyout of underwater stock options.options without stockholder approval.
 ✘No change-in-control tax gross ups for individuals promoted or hired after April 2009.
 ✘No dividends or dividend equivalents paid on unvested or unearned PSUs or RSUs.
 ✘Prohibition against pledging and hedging of Company securities by senior executives and directors.
 ✘No service-based defined benefit pension plan.
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Table of Contents PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
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PROPOSAL 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION We believe that our executive compensation practices, in combination with a competitive market review, limited executive perquisites, and reasonable severance pay multiples contribute to an executive compensation program that is competitive yet strongly aligned with stockholder interests. The Board recommends that you vote in favor of the following “say-on-pay” resolution: RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, each as set forth in the Company’s Proxy Statement for its 20212022 Annual Meeting of Stockholders. The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter is required to approve this Proposal 2. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee may take into account the outcome of the vote when considering future executive compensation arrangements. Stockholders attending the Annual Meeting via webcast are deemed to be present “in person”. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 2. |
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RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors and the Audit Committee believe it is in the best interest of the Company and its stockholders to recommend to the stockholders the ratification of the selection of Ernst & Young LLP, independent registered public accounting firm, to audit the accounts of the Company and its subsidiaries for 2021.2022. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since the Company became a public company in 2006. Consistent with the regulations Sarbanes-Oxley Act of 2002, the lead audit partner having primary responsibility for the audit and the concurring audit partner are rotated every five years. A representative of Ernst & Young LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions. SUMMARY OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES FOR 20202021 AND 2019 2020 |
Fees for professional services provided by our independent auditors, Ernst & Young LLP, for fiscal years 20202021 and 2019,2020, respectively, included the following (in millions): | | | | | | | | 2020 | | 2019 | | 2021 | | 2020 | | Audit Fees(1) | | $6.1 | | $5.9 | | $7.5 | | $6.1 | | Audit-Related Fees(2) | | $1.0 | | $1.4 | | $1.1 | | $1.0 | | Tax Fees(3) | | $0.6 | | $0.7 | | $0.8 | | $0.6 | | All Other Fees(4) | | $— | | $— | | $0.1 | | $— |
(1) | “Audit Fees” primarily include fees related to (i) the integrated audit of the Company’s annual consolidated financial statements and internal controls over financial reporting; (ii) the review of its quarterly consolidated financial statements; (iii) statutory audits required domestically and internationally; (iv) comfort letters, consents and assistance with and review of documents filed with the SEC; and (v) other accounting and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the PCAOB (United States). |
(2) | | (2) | “Audit-Related Fees” primarily include fees, not included in “Audit Fees” above, related to (i) service auditor examinations; (ii) attest services that are not required by statute or regulation; and (iii) consultation concerning financial accounting and reporting standards that are not classified as “Audit Fees.” |
(3) | | (3) | “Tax Fees,” which incorporate both tax advice and tax planning services, primarily include fees related to (i) consultations, analysis and assistance with domestic and foreign tax matters, including value-added and goods and services taxes; (ii) local tax authority audits; and (iii) other miscellaneous tax consultations, including tax services requested as part of the Company’s procedures for commercial agreements, the acquisition of new entities, and other potential business transactions. |
(4) | | (4) | “All Other Fees” consist of fees for professional services other than the services reported above. |
During 20202021 and 2019,2020, all audit and non-audit services provided by the independent registered public accounting firm were pre-approved, consistent with the pre-approval policy of the Audit Committee. The pre-approval policy requires that all services provided by the independent registered public accounting firm be pre-approved by the Audit Committee or one or more members of the Audit Committee designated by the Audit Committee. 2021 Proxy Statement
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Table of Contents PROPOSAL 3 RATIFICATION OF SELECTION OF AUDITORS PROPOSAL 3 RATIFICATION OF SELECTION OF AUDITORS
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The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter is required to approve this Proposal 3. Stockholders attending the Annual Meeting via webcast are deemed to be present “in person”. In the event the stockholders fail to ratify the selection of Ernst & Young LLP, the Audit Committee of the Board of Directors will consider it a direction to select another independent registered public accounting firm for the subsequent year. Even if the selection is ratified, the Audit Committee, in its discretion, may select a new independent registered public accounting firm at any time during the year, if it feels that such a change would be in the best interest of the Company and its stockholders. THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND THAT YOU VOTE FOR PROPOSAL 3. |
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| | | The Western Union Company |
72 | The Western Union Company
Table of Contents PROPOSAL 4 PROPOSAL 4
STOCKHOLDER PROPOSAL REGARDING
MODIFICATION TO STOCKHOLDER RIGHT TO ACT
BY WRITTEN CONSENTCALL A SPECIAL MEETING
John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, owner of more than $2,000 worth of shares of the Company’s Common Stock, has notified the Company that he intends to present a proposal for consideration at the Annual Meeting. As required by the Exchange Act, the text of the stockholder proposal and supporting statement appear as submitted to the Company by the proponent. The Board and the Company accept no responsibility for the contents of the proposal or the supporting statement. PROPOSAL 4 - SPECIAL SHAREHOLDER MEETING IMPROVEMENT 
| Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. One of the main purposes of this proposal is to give shareholders the right to formally participate in calling for a special shareholder meeting regardless of their length of stock ownership to the fullest extent possible. It is important to adopt this proposal because of the hidden fact that all Western Union shares not held for one continuous year are now 100% disqualified form formally participating in the call for a special shareholder meeting. Under this secretive and ill-conceived Western Union rule management discriminates against shareholders who bought WU stock during the past 12 months. Such shareholders are now second-class shareholders as far as having input to management. And shareholders who recently made the investment decision to buy Western Union stock or increase their holdings can be the most informed shareholders. It currently takes 10% of shares that are owned for more than one continuous year to call a special shareholder meeting. The owners of 10% of shares held for more than a continuous year could determine that they own 20% of our stock when length of stock ownership is factored out. | | And this 20% figure equals 24% of the shares that vote at the annual meeting. It would be hopeless to think that the shares, that do not have the time to vote, would go out of their way to take the special procedural steps to call for a special shareholder meeting. Thus for practical purposes we may be left with a 24% stock ownership threshold to call a special shareholder meeting. It is also important to adopt this proposal to make up for our complete lack of a shareholder right to act by written consent. Many companies provide for a shareholder right to call a special shareholder meeting and a shareholder right to act by written consent. Western Union shareholders gave 51%-support to a shareholder right to act by written consent at a previous Western Union annual meeting. But Western Union is the poster company on abusing shareholder engagement. WU used its so-called shareholder engagement to flip shareholder votes. For example, WU management said that when shareholders gave majority 'support for a shareholder right to act by written consent that the WU shareholder engagement supposedly showed that shareholders did not care about written consent. WU shareholder engagement instead claimed that shareholders wanted a tweak to something other than written consent in spite of their majority vote for written consent. | Please vote yes: Special Shareholder Meeting Improvement -- Proposal 4 |
2022 Proxy Statement | 73
Table of Contents PROPOSAL 4 SHAREHOLDERSTOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT Shareholders request that our board of directors take such steps as may be necessary to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. This includes shareholder ability to initiate any appropriate topic for written consent.
Taking action by written consent in place of a meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle like the election of a new director. For instance Mr. Michael Miles was rejected by 25 million votes in 2020. And Ms. Betsy Holden was rejected by 21 million votes. Management pay was rejected by 40 million votes.
This proposal topic won 95%-support at Dover Corporation and 88%-support at AT&T.
The Bank of New York Mellon Corporation (BK) said it adopted written consent in 2019 after 45%-support for a written consent shareholder proposal. This was significantly less that our 51% support for this same topic in 2017. And this BK action was a year before the pandemic put an end to in-person shareholder meetings — perhaps forever. An end to in-person shareholder meetings makes a right to act by written consent more valuable.
A shareholder right to act by written consent still affords WU management strong protection for a management holdout mentality for the status quo during the current rapidly changing business environment. Any action taken by written consent would still need 58% supermajority
approval from the shares that normally cast ballots at the WU annual meeting to equal the required majority vote from all WU shares outstanding.
With the avalanche of bare bones online shareholder meetings in 2020 shareholder engagement and management transparency have taken a big hit. Shareholders are so restricted in online meetings that management will never want a return to the much more transparent in-person shareholder meeting format. This is all the more reason to support this corporate governance enhancement.
Shareholders are restricted in making their views known at online shareholder meetings because all constructive questions and comments can be screened out by management. For instance the Goodyear shareholder meeting was spoiled by a trigger-happy management mute button for shareholders. And AT&T would not even allow shareholders to speak.
The sole content of an online special shareholder meeting can be a few stilted formalities and the announcement of the vote with an almost total absence of communication, outreach or engagement with shareholders.
Now more than ever shareholders need to have the option to take action outside of a shareholder meeting and send a wake-up call to management, if need be, since tightly controlled online shareholder meetings are the Death Valley of shareholder engagement and management transparency.
Please vote yes:
Shareholder Right to Act by Written Consent -- Proposal 4
2021 Proxy StatementBOARD’S STATEMENT OPPOSING THE PROPOSAL
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PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT
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BOARD’S STATEMENT OPPOSING THE PROPOSAL
After careful consideration, and for the following reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders, and the Board recommends voting “AGAINST” this proposal. Stockholder engagement efforts suggest limited stockholder support for the proposal. After a proposal to establish the right of stockholders to act by written consent received approximately 51% approval at the 2017 annual meeting of stockholders, the Board engaged with the Company’s top 25 stockholders to solicit input regarding the most appropriate response to the approval of the proposal. The stockholders in this group who agreed to speak with the Company are believed by the Company to have held approximately 49% of the Company’s outstanding stock as of December 31, 2017.
- | A significant majority of thesethe Company or its stockholders, (representing approximately 31%and the Board recommends voting “AGAINST” this proposal.Our special meeting right is already aligned with best practices and balances the interests of our broader stockholder base against potential abuse by stockholders with narrow short-term interests. Under our current Charter and By-Laws, one or more stockholders of record that together have continuously held, for their own account or on behalf of others, beneficial ownership of at least a 10% aggregate “net long position” of the Company’s outstanding capital stock as of December 31, 2017) indicated that a reduction infor at least one year prior to the ownership threshold required underdate such request is delivered can require the Company’s existing special meeting right was preferable to implementing a right for stockholders to act by written consent. | | | - | In response, the Board reduced the ownership threshold for stockholdersCompany to call a special meeting of its stockholders. Stock ownership is determined under a “net long position” standard to provide assurance that stockholders seeking to call a special meeting possess both (i) full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares.The ownership requirement to exercise the special meeting right was lowered from 20% to 10%, subject to stockholder approval. | | | - | Stockholders voted on an after stockholders approved the corresponding amendment to the Company’s Amended and Restated Certificate of Incorporation to approve the reduced special meeting ownership thresholdour Charter at the 2018 annual meeting of stockholders. This lower threshold was recommended by the Board after careful consideration and engagement with our stockholders. In discussions with and outreach to stockholders, the one-year holding requirement to call a special meeting has not been identified as a concern.In its consideration of this proposal, passedthe Board evaluated a number of factors, including the interests of our stockholders, the resources required to convene a special meeting, the existing opportunities for stockholders to engage with the favorable voteBoard and management between annual meetings, and the characteristics and composition of 83.3%our stockholder base. The Board also considered that our special meeting provision is more permissive than those adopted by a majority of all outstanding shares. |
The Company believes that permitting stockholder action by written consent could lead to substantial confusion and disruption for stockholders. The board believes that permitting stockholder action by written consent is not an appropriate corporate governance model for a widely-held public company like Western Union. Consider the following:S&P 500 companies that provide stockholders with the right to call special meetings. Specifically, of the 324 S&P 500 companies that provide stockholders with the right to call special meetings, approximately 82.4% of those companies have a higher ownership threshold than our 10% threshold. Approximately 16.7% of those S&P 500 companies have adopted a 10% threshold.
- | Currently, any matter
| The Board believes that Western Unionthe current special meeting right, including the one-year holding period and other procedural requirements, is consistent with best market practices while also protecting the Company and its broader stockholder base against risks that a small minority of stockholders will use special meetings to advance short-term initiatives and special interests, which may not be in the long-term interests of the Company or its stockholders. The one-year holding requirement to call a special meeting protects the Company and its stockholders wishfrom the significant time, financial, and administrative burdens of excessive special meetings. The Board recognizes the right for its stockholders to present forcall special meetings in appropriate circumstances. Given the size of the Company and its large stockholder base, a special meeting of stockholders is a significant undertaking that requires substantial time, financial, and administrative commitments. For every special meeting, the Company is required to provide each stockholder a notice of meeting and proxy materials, which results in significant legal, printing, and mailing and administrative expenses, as well as other costs normally associated with holding a stockholder vote must be presented at a meetingmeeting. Additionally, preparing for stockholder meetings requires significant attention of the stockholders, thus allowing all stockholdersCompany’s directors, officers, and employees, diverting their attention away from performing their primary function, which is to consider, discussoperate the Company’s business in the best interests of the stockholders. If the one-year holding period requirement is eliminated from the special meeting ownership threshold, the Company could be subject to regular disruptions by special-interest stockholder groups with agendas that are not in the best interests of the Company or its stockholders. The Board believes that the one-year holding period requirement is part of a reasonable balance between enhancing stockholder rights and vote onprotecting against the pending matter. |
- | In contrast, the written consent proposal at issue would permitrisk that a groupsmall minority of stockholders, including stockholders with no fiduciary dutiesshort-term special interests, could call one or more special meetings that could result in unnecessary financial expense and disruption to otherour business.
The Board is already highly accountable to stockholders. Our current governance structure and policies implement the goal of accountability to stockholders to initiate action without prior notice, either to the other stockholders orrisks outlined above to the Company and its stockholders associated with removing the one-year holding period required for stockholders to meet the 10% ownership threshold necessary to call a special meeting. | |
74 | The Western Union Company
Table of Contents PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT The Company has implemented a comprehensive package of corporate governance practices and policies that enable stockholders to hold the Board accountable and, where necessary, take quick action to support their interests. Elements of this comprehensive package include: | | | 
| No supermajority voting provisions. Our Charter and By-Laws have no supermajority voting provisions. | | 
| No “poison pill.” Our Company does not have a stockholder rights plan, known as a “poison pill.” | 
| Engagement with stockholders. The Company regularly seeks to engage with its stockholders to better understand their perspectives. | | 
| Annual election of directors. The Board of Directors is declassified. | We believe that this comprehensive package of governance practices and policies, including our existing special meeting right, provides strong stockholder protections without giving allneeding to remove the one-year holding period requirement for stockholders an opportunity to participate and consider arguments, including thosemeet the ownership threshold necessary to call a special meeting, as requested by the proposal. Required Vote; Recommendation Only The affirmative vote of the Company, forholders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and againstentitled to vote on the action.subject matter is required to approve this Proposal. Stockholders should be aware that this stockholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may not result in the requested action being taken by the Board, and therefore, its approval would not effectuate the actions requested by the proposal. | | 
| Majority vote standard in uncontested elections. In an uncontested election, each director must be elected by a majority of votes cast, rather than by a plurality. | - | Stockholder action by written consent would allow for the solicitation
| Independent Board, except our CEO. Our Board is comprised of multiple, even conflicting, written consents by multiple stockholder groups, potentially creating substantial confusion and disruption for stockholders.all independent directors, except our CEO. |
The Board | 
| Independent non-executive chair. The Chair of Directors is already highly accountable to stockholders. The proposal suggests that the written consent right is necessary to keep the Board accountable to stockholders. Our current policies, however, implement the goal of accountability without the governance risk to stockholders and the Company associated with action by written consent as contemplated by the proposal. The Company has implemented a comprehensive package of corporate governance practices and policies that enable stockholders to hold the Board accountable and, where necessary, take quick action to support their interests. Elements of this comprehensive package include: - | the Board of Directors is declassified, with majority voting for uncontested Director elections;a non-executive independent director. | | | - | the
| Proxy access. The Company was among the first U.S. companies to adopt the “proxy access” right for its stockholders;stockholders that permits qualifying stockholders or groups of qualifying stockholders that have each beneficially owned at least 3% of the Company’s Common Stock for three years to nominate up to the greater of (x) two or (y) an aggregate of 20% of the members of the Board and have information and supporting statements regarding those nominees included in the Company’s Proxy Statement. | | | -
| Special Meeting Right. As discussed above, a stockholder or group of stockholders holding 10% or more of our outstanding shares for at least one year may call a special meeting;meeting. | | THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 4. |
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Table of Contents - | our Amended and Restated Certificate of Incorporation and By-Laws have no supermajority provisions; and
| | | - | the Company regularly seeks to engage with its stockholders to better understand their perspectives.EQUITY COMPENSATION PLAN INFORMATION
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The Board has repeatedly responded to stockholder concerns and the Company’s existing corporate governance practices and policies give stockholders sufficient means to take actions which might otherwise be taken by written consent. There is, accordingly, no need for stockholders to be given the right to act by written consent.
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PROPOSAL 4 STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT
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Required Vote; Recommendation Only
The affirmative vote of the holders of a majority of shares of the Company’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter is required to approve this Proposal. Stockholders should be aware that this
stockholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may not result in the requested action being taken by the Board, and therefore, its approval would not effectuate the actions requested by the proposal. Stockholders attending the Annual Meeting via the live webcast are deemed to be present “in person”.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 4.
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EQUITY COMPENSATION PLAN INFORMATION
The following table gives information, as of December 31, 2020,2021, about our Common Stock that may be issued upon the exercise of options and settlement of other equity awards under all compensation plans under which equity securities are reserved for issuance. The Company’s 2015 Long-Term Incentive Plan, 2006 Long-Term Incentive Plan and 2006 Non-Employee Director Equity Compensation Plan are our only equity compensation plans pursuant to which our equity securities are authorized for issuance. | | | | | | | PLAN CATEGORY | | NUMBER OF SECURITIES
TO
BE ISSUED UPON
EXERCISE
OF OUTSTANDING
OPTIONS,
WARRANTS AND RIGHTS | | WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS | | NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION
PLANS (EXCLUDING
SECURITIES REFLECTED IN
COLUMN (a)) | | | (a) | | (b) | | (c) | Equity compensation plans
approved by security holders | | 11,728,52214,425,469(1) |
| $19.1118.98(2) |
| 21,060,61815,703,710(3) | Equity compensation plans not
approved by security holders | | — |
| N/A | | — | Total | | 11,728,52214,425,469(1) |
| $19.1118.98(2) |
| 21,060,61815,703,710(3) |
Footnotes: (1) | Includes 6,876,8817,526,681 restricted stock units, PSUs, deferred stock units, and bonus stock units that were outstanding on December 31, 20202021 under the Company’s 2015 Long-Term Incentive Plan, 2006 Long-Term Incentive Plan, and 2006 Non-Employee Director Equity Compensation Plan. Restricted stock unit awards, deferred stock unit awards and bonus stock units may be settled only for shares of Common Stock on a one-for-one basis. The number included for PSUs reflects grant date units awarded. Assuming maximum payout for PSU grants that have not completed the required performance period, the number of securities to be issued would increase by 1,821,350.1,896,640. Please see the “Compensation Discussion and Analysis” section of this Proxy Statement for further information regarding the 2018 PSUs, including the performance metrics applicable to such awards. |
| | (2) | Only option awards were used in computing the weighted-average exercise price. |
| | (3) | This amount represents shares of Common Stock available for issuance under the Company’s 2015 Long-Term Incentive Plan. Awards available for grant under the Company’s 2015 Long-Term Incentive Plan include stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, bonus stock units, deferred stock units, performance grants, and any combination of the foregoing awards. |
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STOCK BENEFICIALLY OWNED BY DIRECTORS,
EXECUTIVE OFFICERS AND OUR LARGEST
STOCKHOLDERS The following table sets forth the beneficial ownership of Common Stock by each person or group that is known by us to be the beneficial owner of more than 5% of our Common Stock, all directors and nominees, each of the executive officers named in the 20202021 Summary Compensation Table contained in this Proxy Statement, and all directors and executive officers as a group. Except as otherwise noted, (i) the information is as of March 24, 2021,23, 2022, (ii) each person has sole voting and investment power of the shares, and (iii) the business address of each person shown below is 7001 East Belleview Avenue, Denver, Colorado 80237. | NAME OF BENEFICIAL OWNER | | ADDRESS | | AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP | | PERCENTAGE
OF
OUTSTANDING
SHARES | | 5% Owners | | | | | | | | BlackRock, Inc. | | 55 East 52nd Street,
New York, NY 10055 | | 48,871,150(1) | | 11.9%(1) | | The Vanguard Group | | 100 Vanguard Blvd.,
Malvern, PA 19355 | | 47,792,244(2) | | 11.62%(2) | | Capital Research Global Investors | | 333 South Hope Street,
55th Fl, Los Angeles,
CA 90071 | | 32,979,147(3) | | 8%(3) | | State Street Corporation | | State Street
Financial Center
One Lincoln Street
Boston, MA 02111 | | 22,394,787(4) | | 5.45%(4) | | DIRECTORS AND NAMED EXECUTIVE OFFICERS(5) | | | | | | | | Martin I. Cole | | | | 37,854 | | * | | Hikmet Ersek | | | | 3,617,942 | | * | | Richard A. Goodman | | | | 36,931 | | * | | Betsy D. Holden | | | | 5,000 | | * | | Jeffrey A. Joerres | | | | 15,998 | | * | | Michael A. Miles, Jr. | | | | — | | * | | Timothy P. Murphy | | | | 20,084 | | * | | Joyce A. Phillips | | | | — | | * | | Jan Siegmund | | | | 50,599 | | * | | Angela A. Sun | | | | 22,620 | | * | | Solomon D. Trujillo | | | | 169,556(6) | | * | | Raj Agrawal | | | | 726,970 | | * | | Jean Claude Farah | | | | 363,870 | | * | | Khalid Fellahi | | | | 139,471 | | * | | Michelle Swanback | | | | 32,870 | | * | All directors and executive officers as a group
(19 persons) | | | | 5,461,724 | | 1.33% |
| | | | | | | | | NAME OF BENEFICIAL OWNER | | ADDRESS | | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | | PERCENTAGE OF OUTSTANDING SHARES | | 5% Owners | | | | | | | | | BlackRock, Inc. | | 55 East 52nd Street, New York, NY 10055 | | 60,702,355(1) | | 15.1%(1) | | The Vanguard Group | | 100 Vanguard Blvd., Malvern, PA 19355 | | 41,754,123(2) | | 10.4%(2) | | Capital Research Global Investors | | 333 South Hope Street, 55th Fl, Los Angeles, CA 90071 | | 22,206,325(3) | | 5.5%(3) | | DIRECTORS AND NAMED EXECUTIVE OFFICERS(4) | | | | | | | | | Martin I. Cole | | | | 44,546 | | * | | Hikmet Ersek | | | | 3,707,942(5) | | * | | Richard A. Goodman | | | | 75,579 | | * | | Betsy D. Holden | | | | 5,000 | | * | | Jeffrey A. Joerres | | | | 15,998 | | * | | Devin B. McGranahan | | | | — | | | | Michael A. Miles, Jr. | | | | 10,078 | | * | | Timothy P. Murphy | | | | 26,776 | | * | | Joyce A. Phillips | | | | 6,692 | | * | | Jan Siegmund | | | | 89,247 | | * | | Angela A. Sun | | | | 29,312 | | * | | Solomon D. Trujillo | | | | 192,226(6) | | * | | Raj Agrawal | | | | 649,341(7) | | * | | Jean Claude Farah | | | | 328,210 | | * | | Gabriella Fitzgerald | | | | — | | * | | Michelle Swanback | | | | 66,089 | | * | | All directors and executive officers as a group (19 persons) | | | | 5,472,602 | | 1.41% | |
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STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS
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(1) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 1012 to Schedule 13G filing with the Securities and Exchange Commission filed January 27, 2021,2022, which reports ownership as of December 31, 2020.2021. The Schedule 13G filing indicates that the holder had sole voting power over 44,757,57656,883,488 shares, sole dispositive power over 48,871,15060,702,355 shares, shared voting power over 0 shares, and shared dispositive power over 0 shares. |
| (2) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 89 to Schedule 13G filing with the Securities and Exchange Commission filed February 10, 2021,2022, which reports ownership as of December 31, 2020.2021. The Schedule 13G filing indicates that the holder had sole voting power over 0 shares, sole dispositive power over 45,841,75640,851,990 shares, shared voting power over 805,241357,840 shares, and shared dispositive power over 1,950,488902,133 shares. |
| (3) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Amendment No. 89 to Schedule 13G filing with the Securities and Exchange Commission filed February 16, 2021,11, 2022, which reports ownership as of December 31, 2020.2021. The Schedule 13G filing indicates that the holder had sole voting and sole dispositive power over 32,979,14722,206,325 shares, and shared voting power over 0 shares, and shared dispositive power over 0 shares. |
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Table of Contents STOCK BENEFICIALLY OWNED BY DIRECTORS, EXECUTIVE OFFICERS AND OUR LARGEST STOCKHOLDERS | (4) | The number of shares held and percentage of outstanding shares were obtained from the holder’s Schedule 13G filing with the Securities and Exchange Commission filed February 11, 2021, which reports ownership as of December 31, 2020. The Schedule 13G filing indicates that the holder had shared voting power over 18,692,422 shares, shared dispositive power over 22,313,765 shares and sole voting power over, and sole dispositive power over, 0 shares. | | (5) | The number of shares reported includes shares covered by options that are exercisable within 60 days of March 24, 202123, 2022 as follows: Mr. Cole, 9,208; Mr. Ersek, 2,543,622;2,579,494; Mr. Goodman, 36,814;75,462; Ms. Holden, 0; Mr. Joerres, 11,448; Mr. McGranahan, 0; Mr. Miles, 0; Mr. Murphy, 20,084; Ms. Phillips, 0; Mr. Siegmund, 79,247; Ms. Sun 22,620; Mr. Trujillo, 157,756; Mr. Siegmund 40,599;177,080; Mr. Agrawal (Chief Financial Officer), 395,559;283,920; David Cebollero (Interim Chief Legal Officer), 0; Mr. Farah (President, Global Network)EMEA/APAC Region), 116,503; Mr. Fellahi54,945; Ms. Fitzgerald (President, Consumer Money Transfer)Americas Region), 28,012;0; Ms. Molnar (Chief Transformation Officer), 0; Andrew Summerill (President, Payments), 0; Michelle Swanback (President, Product and Platform), 0; Ms. Tsai (Chief Legal Officer and Corporate Secretary), 0; Richard Williams (Chief People Officer), 53,329; and all directors and executive officers as a group, 3,435,554.3,366,837. |
(5) | The number of shares reported includes 680,790 shares held jointly with Mr. Ersek’s spouse. |
(6) | Mr. Trujillo shares with his spouse through a family trust the power to vote or direct the vote of, and the power to dispose or direct the disposition of, 11,800 shares. |
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(7) | | | The Western Union Companynumber of shares reported includes 331,411 shares held jointly with Mr. Agrawal’s spouse. |
78 | The Western Union Company
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CERTAIN TRANSACTIONSTRANSACTIONS AND OTHER MATTERS We or one of our subsidiaries may occasionally enter into transactions with certain “related persons.” Related persons include our executive officers, directors, nominees for directors, 5% or more beneficial owners of our Common Stock, and immediate family members of these persons. We refer to transactions involving amounts in excess of $120,000 and in which the related person has a direct or indirect material interest as “related person transactions.” Each related person transaction must be approved or ratified in accordance with the Company’s written Related Person Transactions Policy by the Corporate Governance, ESG, and Public Policy Committee of the Board of Directors or, if the Corporate Governance, ESG, and Public Policy Committee of the Board of Directors determines that the approval or ratification of such related person transaction should be considered by all disinterested members of the Board of Directors, by the vote of a majority of such disinterested members. Other than as described below, there have been no related person transactions since January 1, 2021.During 2020,2021, N.A. Zeid, the brother-in-law of Mr. Farah served as the principal executive officer of one of the Company’s money transfer agents in the Middle East region. In 2020,2021, the agent generated approximately 1%1% of the Company’s overall revenue and was paid approximately $13$15.8 million in commissions for its services as a money transfer agent. Mr. Farah does not receive any direct benefit from the Company’s relationship with the agent. Internal controls are in place to preclude Mr. Farah from making decisions on behalf of the Company with respect to the agent or otherwise being involved in the Company’s relationship with the agent. Pursuant to the Company’s Related Person Transactions Policy, the relationship was ratifiedapproved by the Corporate Governance, ESG, and Public Policy Committee. The Corporate Governance, ESG, and Public Policy Committee considers all relevant factors when determining whether to approve or ratify a related person transaction, including, without limitation, the following: - | • the size of the transaction and the amount payable to a related person; • the nature of the interest of the related person in the transaction; • whether the transaction may involve a conflict of interest; and • whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. the size of the transaction and the amount payable to a related person;
| - | the nature of the interest of the related person in the transaction;
| - | whether the transaction may involve a conflict of interest; and
| - | whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties.
|
The Company’s Related Person Transactions Policy is available through the “Investor Relations, Corporate Governance” portion of the Company’s website, www.westernunion.com. 2021* * * This Proxy Statement Darren Dragovich,
Interim Secretary | | | 77
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Table of Contents ANN * * *
This Proxy Statement is provided to you at the direction of the Board of Directors.
Caroline Tsai,
Chief Legal Officer and Corporate
Secretary
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Table of ContentsEX A
ANNEX A
RECONCILIATION OF NON-GAAP MEASURES Western Union’s management believes the non-GAAP financial measures presented provide meaningful supplemental information regarding our operating results to assist management, investors, analysts, and others in understanding our financial results and to better analyze trends in our underlying business, because they provide consistency and comparability to prior periods. A non-GAAP financial measure should not be considered in isolation or as a substitute for the most comparable GAAP financial measure. A non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliation to the corresponding GAAP financial measure, provides a more complete understanding of our business. Users of the financial statements are encouraged to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included below. All adjusted year-over-year changes were calculated using prior year amounts. REVENUES | | | REVENUES | | 2020 | | | 2021 | Revenues, as reported (GAAP) | | $4,835.05,070.8 | Foreign currency translation impact(a) | | 157.2(18.3) | Revenues, constant currency adjusted | | $4,992.25,052.5 | | | 20192020 | Revenues, as reported (GAAP) | | $5,292.14,835.0 | Divestitures impact(b) | | (130.7) | Revenues, excluding divestitures | | $5,161.4 | Revenue change, as reported (GAAP) | | (9%)5% | Revenue change, constant currency adjusted and excluding divestitures | | (3%)4% | OPERATING INCOME | | | | | 2020 | OPERATING INCOME | | | | | 2021 | Operating income, as reported (GAAP) | | $967.31,123.1 | Foreign currency translation impact(a) | | 44.4(30.5) | Restructuring-related expenses(c) | | 36.8 | Acquisition and divestiture costs(d)(c) | | 2.515.7 | Operating income, constant currency adjusted, excluding restructuring-related expenses and | | $1,051.0 | | acquisition and divestiture costs | | $1,108.3 | Operating income margin, as reported (GAAP) | | 20%22.1% | Operating margin, excluding restructuring-related expenses and acquisition and divestiture costs | | 20.8%22.5% | | | 20192020 | Operating income, as reported (GAAP) | | $934.0967.3 | Restructuring-related expenses(c)(b) | | 115.536.8 | Acquisition and divestiture costs(d)(c) | | 16.02.5 | Operating income, adjusted, excluding restructuring-related expenses acquisition and divestiture costs | | $1,065.51,006.6 | Operating income margin, as reported (GAAP) | | 17.6%20.0% | Operating margin, adjusted, excluding restructuring-related expenses and acquisition and divestiture costs | | 20.1%20.8% |
2021 Proxy Statement
(a) | | | A-1
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(a) | Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States dollar, net of foreign currency hedges, which would not have occurred if there had been a constant exchange rate. We believe that this measure provides management and investors with information about operating results and trends that eliminates currency volatility and provides greater clarity regarding, and increases the comparability of, our underlying results and trends. |
(b) | | (b) | Represents the revenue generated by the Speedpay and Paymap businesses which were divested in 2019. We have included this information because management believes that presenting revenues as adjusted to exclude divestitures will provide investors with a more meaningful comparison of results within the periods presented. | | | (c) | Represents the impact from expenses incurred in connection with an overall restructuring plan, approved by the Board of Directors on August 1, 2019, to improve our business processes and cost structure by reducing headcount and consolidating various facilities. While these expenses are specific to this initiative, the types of expenses related to this initiative are similar to expenses that we have previously incurred and can reasonably be expected to incur in the future. We believe that, by excluding the effect of these charges associated with restructuring-related activities that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results. |
(c) | | (d) | Represents the impact from expenses incurred in connection with our acquisition and divestiture activity, including for the Speedpayreview and Paymap divestitures.closing of these transactions. We believe that, by excluding the effect of these charges that can impact operating trends, management and investors are provided with a measure that increases the comparability of our underlying operating results. |
A-2
| | | The Western Union Company |
2022 Proxy Statement | A-1
Table of Contents | | | | | |  | Shareowner Services
P.O. Box 64945
St. Paul, MN 55164-0945
| | | Address Change? Mark box, sign, and indicate changes below: ☐
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| | | TO VOTE BY INTERNET OR
TELEPHONE, SEE REVERSE SIDE
OF THIS PROXY CARD.
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WesternUnion\\WU Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 Address Change? Mark box, sign, and indicate changes below: TO VOTE BY INTERNET OR TELEPHONE, SEE REVERSE SIDE OF THIS PROXY CARD. FPO TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD. The Board of Directors Recommends a Vote FOR Items 1, 2 and 3. Election of directors: FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN 1a. Martin I. Cole ■ ■ ■ 1g. Timothy P. Murphy ■ ■ ■ 1b. Richard A. Goodman ■ ■ ■ 1h. Joyce A. Phillips ■ ■ ■ 1c. Betsy D. Holden ■ ■ ■ 1i. Jan Siegmund ■ ■ ■ 1d. Jeffrey A. Joerres ■ ■ ■ 1j. Angela A. Sun ■ ■ ■ 1e. Devin B. McGranahan ■ ■ ■ 1k. Solomon D. Trujillo ■ ■ ■ 1f. Michael A. Miles, Jr. ■ ■ ■ Other Matters: 2. Advisory Vote to Approve Executive Compensation ■ For ■ Against ■ Abstain 3. Ratification of Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for 2022 ■ For ■ Against ■ Abstain The Board of Directors Recommends a Vote AGAINST Item 4. 4. Stockholder Proposal Regarding Modification to Stockholder Right to Call a Special Meeting ■ For ■ Against ■ Abstain THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1, 2 AND 3, AND AGAINST ITEM 4. For shares held in The Western Union Company Incentive Savings Plan (the Plan), the Plan’s Trustee will vote the shares as directed. If no direction is given on how to vote the shares to the Trustee by mail on or before May 16, 2022 or by Internet or phone by 11:59 p.m. (EDT) on May 16, 2022, the Plan’s Trustee will vote your shares held in the Plan in the same proportion as the shares for which it receives instructions from all other participants in the Plan. Please fold here – Do not separate Date Signature(s) in Box Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. Election of directors:
| | | | | | | | | | | | | | | | FOR | | AGAINST | | ABSTAIN | | | FOR | | AGAINST | | ABSTAIN | 1a. Martin I. Cole
| | ☐ | | ☐ | | ☐ | 1g. Timothy P. Murphy
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1b. Hikmet Ersek
| | ☐ | | ☐ | | ☐ | 1h. Joyce A. Phillips
| | ☐ | | ☐ | | ☐ | |  Please fold here – Do not separate
| | 1c. Richard A. Goodman
| | ☐ | | ☐ | | ☐ | 1i. Jan Siegmund
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1d. Betsy D. Holden
| | ☐ | | ☐ | | ☐ | 1j. Angela A. Sun
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1e. Jeffrey A. Joerres
| | ☐ | | ☐ | | ☐ | 1k. Solomon D. Trujillo
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 1f. Michael A. Miles, Jr.
| | ☐ | | ☐ | | ☐ | | | | | | | |
Other Matters:
| | | | | | | | | | | 2. | Advisory Vote to Approve Executive Compensation | | ☐ | For | | ☐ | Against | | ☐ | Abstain | | | | | | | | | | | | 3. | Ratification of Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for 2021 | | ☐ | For | | ☐ | Against | | ☐ | Abstain | | | | | | | | | | | | The Board of Directors Recommends a Vote AGAINST Item 4. | | 4. | Stockholder Proposal Regarding Stockholder Right to Act by Written Consent | | ☐ | For | | ☐ | Against | | ☐ | Abstain |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1, 2 AND 3, AND AGAINST ITEM 4. For shares held in The Western Union Company Incentive Savings Plan (the Plan), the Plan’s Trustee will vote the shares as directed. If no direction is given on how to vote the shares to the Trustee by mail on or before May 11, 2021 or by Internet or phone by 11:59 p.m. (EDT) on May 13, 2021, the Plan’s Trustee will vote your shares held in the Plan in the same proportion as the shares for which it receives instructions from all other participants in the Plan.
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Date | | | | | | | Signature(s) in Box
| | | | | | Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
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Table of Contents
THE WESTERN UNION COMPANY ANNUAL MEETING OF STOCKHOLDERS May 14, 2021
8:00 a.m. (MDT)
Online via live webcast: Pre-register before19, 2022 8:00 a.m. (MDT) on May 14, 2021 at
www.proxydocs.com/wu to receive your unique link to access the webcast.
The Western Union Company
7001 East Belleview Avenue
Denver, Colorado 80237
| proxy |
The Western Union Company Corporate Headquarters 7001 East Belleview Avenue Denver, Colorado 80237 The Western Union Company 7001 East Belleview Avenue Denver, Colorado 80237 proxy This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 14, 2021. 19, 2022. The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted “FOR” Items 1, 2 and 3, and “AGAINST” Item 4. By signing the proxy, you revoke all prior proxies and appoint Hikmet ErsekDevin McGranahan and Caroline Tsai,Darren Dragovich and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments and postponements thereof.
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.  |  |  | INTERNET
www.proxypush.com/wu
Use the Internet to vote your proxy.
Scan the QR code on front for mobile voting.
| PHONE
1-866-883-3382
Use a touch-tone telephone to
vote your proxy.
| MAIL
Mark, sign and date your proxy card
and return it in the
postage-paid envelope provided in time
to be received by May 13, 2021.
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: ( * INTERNET PHONE MAIL www.proxypush.com/wu 1-866-883-3382 Mark, sign and date your proxy Use the Internet to vote your proxy Use a touch-tone telephone to card and return it in the until 11:59 p.m. (EDT) on May 18, 2022. vote your proxy until 11:59 p.m. postage-paid envelope provided in time Scan the QR code on front for mobile voting. (EDT) on May 18, 2022. to be received by May 18, 2022. If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.
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Majority Vote Standard in Uncontested Elections
Pay-for-performance and at-risk compensation.
Align compensation with stockholder interests.
Emphasis on future pay opportunity vs. current pay.
Mix of performance metrics.
Stockholder engagement.
“Clawback” policy.
Robust stock ownership guidelines.
“Double trigger” severance benefits in the event of a change-in-control.
Maximum payout caps for annual cash incentive compensation and PSUs.
No repricing or buyout of underwater stock 
No change-in-control tax gross 
Prohibition against pledging and hedging of Company securities by senior executives and directors.
No dividends or dividend equivalents are paid on unvested or unearned PSUs or RSUs.
No service-based defined benefit pension plan.
By Tablet or Smartphone—If you are a Beneficial Holder, you may vote your shares online with your tablet or smartphone by scanning the QR code above. If you are a Registered Holder, you may vote your shares online with your tablet or smartphone by scanning the QR code on your Proxy Card. The ability to vote in this way by tablet or smartphone will expire at 11:59 p.m., Eastern Time, on May 18, 2022.
At the Annual Meeting–
CEO Experience
Regulated
Financial Literacy
Emerging Markets
Global Operational
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
CFO Experience
Financial Literacy
Eligible for Audit
Emerging Markets
Global Operational
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
CFO Experience
Eligible for Audit
CEO Experience
Financial Literacy
Global Operational
Regulated Industry/
Emerging Markets
CEO Experience
Regulated Industry/
Financial Literacy
Global Operational
Financial Literacy
Global Operational
CEO Experience
CFO Experience
Financial Literacy
Regulated Industry/
CEO Experience
Financial Literacy
Regulated Industry/
Emerging Markets
Global Operational
CFO Experience
Financial Literacy
Eligible for Audit
Global Operational
Financial Literacy
Regulated Industry/
CEO Experience
Regulated Industry/
Financial Literacy
Emerging Markets
Global Operational
Annual election of directors.
Proxy access. Our By-Laws permit qualifying stockholders or groups of qualifying stockholders that have each beneficially owned at least 3% of the Company’s Common Stock for three years to nominate up to the greater of (x) two or (y) an aggregate of 20% of the members of the Board and have information and supporting statements regarding those nominees included in the Company’s Proxy Statement.
Majority vote standard in uncontested elections. In an uncontested election, each director must be elected by a majority of votes cast, rather than by a plurality.
Stockholder right to call special meetings at 10% ownership threshold.
No stockholder rights plan (“poison pill”).
No supermajority voting provisions in the Company’s organizational documents.
Independent Board, except our CEO. Our Board is comprised of all independent directors, except our CEO.
Independent non-executive chair. The Chair of the Board of Directors is a non-executive independent director.
Independent Board committees. All of our Board Committees are made up of independent directors. Each standing committee operates under a written charter that has been approved by the Board.
Confidential stockholder voting
Board Committee authority to retain independent advisors. Each Board Committee has the authority to retain independent advisors.
Board oversight of ESG matters. The Board oversees Western Union’s ESG strategy development and relevant ESG matters. To assist the Board with its oversight duties:
The Corporate Governance, ESG, and Public Policy Committee is responsible for reviewing and advising the Board with respect to ESG matters related to the Company.
The Audit Committee oversees ESG internal controls and process as well as integration of ESG risks in the Company’s enterprise risk management framework.
The Compensation Committee oversees the alignment of the Company’s ESG strategy with compensation practices.
The Compliance Committee evaluates executive performance of the Company’s ESG compensation metric related to compliance.
Robust stock ownership guidelines for senior executives and directors. Robust stock ownership requirements for our senior executives and directors strongly link the interests of management and the Board with those of stockholders.
Prohibition against pledging and hedging of Company stock. The Company’s insider trading policies prohibit the Company’s executive officers and directors from pledging the Company’s securities and prohibit all employees (including executive officers) and directors from engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. Please see “Compensation of Directors—Prohibition Against Pledging and Hedging of
Regular stockholder engagement. The Company regularly seeks to engage with its stockholders to better understand their perspectives.
