PROPOSAL 1
Election of Directors
 The board unanimously recommends a vote FOR all the director nominees listed.
WHAT ARE YOU VOTING ON?
At the annual meeting, 10 directors are to be elected to hold office until the 2022 annual meeting and until their successors have been duly elected and qualified. All nominees are current directors. All nominees were elected by shareholders at the 2020 annual meeting.
In the event any of the nominees should become unable to serve or for good cause will not serve as a director, it is intended that votes will be cast for a substitute nominee designated by the board or the board may elect to reduce its size. The board
The Board unanimously recommends a vote FOR all the director nominees listed. What are you voting on? At the annual meeting, 12 directors are to be elected to hold office until the 2025 annual meeting and until their successors have been duly elected and qualified. All nominees are current directors and all nominees were elected by shareholders at the 2023 annual meeting. In the event any of the nominees should become unable to serve or for good cause will not serve as a director, it is intended that votes will be cast for a substitute nominee designated by the Board, or the Board may elect to reduce its size. The Board has no reason to believe that the nominees named herein will be unable to serve if elected. Each of the nominees has consented to being named in this proxy statement and to serve if elected. Director nominees Presented on the following pages are the 12 director nominees recommended by the Board for election at the 2024 annual meeting. Director attendance There were 15 meetings of the Board in 2023. Each director in 2023 attended at least 75% of the aggregate of (i) all meetings of the Board held during the period in which he or she served as a director and (ii) the total number of meetings held by the committees on which he or she served during the period, if applicable. All committee meeting numbers and attendance percentages include attendance at any applicable sub-committee meetings. Weighted average attendance of directors at 2023 meetings | | 98% | 94% | 100% | 96% | 96% | | | |  | Board of Directors | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | | | | | | | | | | | | | |
Our corporate governance guidelines provide that directors are expected to attend the annual meeting of shareholders. For the 2023 annual meeting, which was virtual, Mr. Kumar acted as Chair and all of the other 12 then-current non-employee directors attended virtually. Board diversity matrix (as of April , 2024)As part of our commitment to diversity, we prioritize diversity on our Board of Directors. | Total Number of Directors: 12 | | Part 1: Gender Identity* | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 3 | 9 | — | — | | Part 2: Demographic Background* | Female | Male | Non-Binary | Did Not Disclose Demographic Background | | African American or Black | — | 1 | — | — | | Alaskan Native or American Indian | — | — | — | — | | Asian (including South Asian) | 2 | 1 | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 1 | 6 | — | — | | Two or More Races or Ethnicities | — | 1* | — | — | | Did Not Disclose Demographic Background | — | — | — | — | | LGBTQ+ | — | — | — | — | | Military Veterans | — | 1 | — | — | | * Information was voluntarily provided by directors and reflects self-identified attributes. The director who self-identified as two or more races or ethnicities did not disclose the specific races or ethnicities |
Cognizant 2024 Proxy statement 17 Key governance practices Presented on the following pages are the 10 director nominees recommended by the board for election at the 2021 annual meeting.
DIRECTOR ATTENDANCEThere were 22 meetings of the board in 2020. Each director standing for election at the annual meeting attended at least 87% of the aggregate of (i) all meetings of the board held during the period in which he or she served as a directorShareholder rights and (ii) the total number of meetings held by the committees on which he or she served during the period, if applicable.
Weighted Average Attendance of Director Nominees at 2020 Meetings
engagement |
| 93% | 94% | 91% | 100% | 96% | | B | Board of Directors | A | Audit
Committee | C | Compensation Committee | F | Finance Committee | G | Governance Committee | Our corporate governance guidelines provide that directors are expected to attend the annual meeting of shareholders. For the 2020 annual meeting, Mr. Humphries acted as chair and all of the other 10 then-current directors attended by teleconference. |
| | Board of Directors | | | | |  | KEY GOVERNANCE PRACTICES
SHAREHOLDER RIGHTS AND ENGAGEMENT
Annual director elections / no classified board
Board | | | Majority of independent directors (11 of 12 director nominees) | | Proxy access
| | | Separate independent Board Chair and CEO positions since 2003 | | Shareholder right to call a special meeting (10% threshold)
| | | Annual Board and committee self-assessments | | Annual vote to ratify executive compensation | | | Majority voting in director elections | | Annual vote to ratify selection of independent
registered public accounting firm
| | | A director who experiences a material change in job responsibilities (other than retirement) is required to offer to resign | | No poison pill BOARD OF DIRECTORS
Majority
| | | Regular executive sessions of independent directors (9 | | Each share of 10 director nominees)company common stock is entitled to one vote on matters put to a shareholder vote Separate chair and CEO positions since 2003
Annual board and committee self-assessments
| | | Directors limited to service on no more than three other public company boards (one other board if the director is a public company CEO)NEO) | | | | | |
Board member independence
Majority voting in director elections
Regular executive sessions of independent directors
A director who experiences a material change in job responsibilities (otherOther than retirement) is required to offer to resign
Annual review of skills, expertise, diversity and other characteristics of individual board membersMr. Kumar as part of overall analysis of board composition
| | BOARD MEMBER INDEPENDENCE.
Eachour CEO, each of our director nominees other than our CEO, Mr. Humphries, has been determined by the boardBoard to be an “independent director” under the rules of Nasdaq, which require that, in the opinion of the board,Board, such person not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition, the board hasBoard determined that Mr. Fox is also an “independent director”each of Maureen Breakiron-Evans and that John KleinNella Domenici was an “independent director” while hethey served on the boardBoard through March 1, 2020.their retirement on June 6, 2023 and resignation on January 17, 2024, respectively.
| | | | DIRECTOR RETIREMENTCommitment to Board gender diversity
John N. Fox, Jr. is not standingOn January 17, 2024, Nella Domenici resigned from the Board in order to run for reelection at the 2021 annual meeting. OverU.S. Senate for the last 13 years, he has brought toState of New Mexico. With her departure, the board, among other things, his technology, consulting and talent management experience from over 30 years of serving clients as a senior executive of Deloitte Consulting. As recent chairsize of the CompensationBoard was decreased to 12 directors and the Board’s ratio of women directors decreased from 31% to 25%. The Governance Committee he ledis currently evaluating potential candidates for an additional Board position with a focus on women candidates. We believe strongly that greater diversity of the committee’s effortsBoard improves the effectiveness of the Board for the benefit of the company and its shareholders. As such, the Governance Committee remains committed to Board diversity and is actively seeking highly qualified individuals from a variety of backgrounds. We consider gender diversity a high priority and we are actively engaged in identifying candidates with the appropriate skills and experience. We expect that culminated inwe will be able to complete the significant revisions to our performance-based compensation structure in 2020. We are grateful to Mr. Fox for his many yearssearch and appoint a new director before the end of service.the year.
| | | | | | | Director time commitments Serving on the Board requires significant time and attention. Directors must spend the time needed and meet as often as necessary to properly discharge their responsibilities. Each Board member is expected to ensure that his or her existing or future commitments do not interfere with such service. Our Corporate Governance Guidelines establish limits on our directors serving on public company boards: • A director who serves as a named executive officer of the company or any other public company is not permitted to serve on the board of more than one other public company in addition to the company’s Board • All other directors are not permitted to serve on the boards of more than three other public companies in addition to the company’s Board The Board may grant exceptions on a case-by-case basis, taking into consideration whether doing so will not impair the director’s ability to effectively serve on the Board. Directors are expected to advise the Chair of the Board prior to accepting an invitation to serve on another public or private board. The Governance Committee annually reviews outside director time commitments, including compliance with the requirements set forth above, the nature of and time involved in service on other boards and any other existing or anticipated outside directorship and leadership commitments. Based on its review, the Governance Committee has confirmed that all director nominees are in compliance, having demonstrated that they have committed and expect to commit appropriate time to serve effectively on the Board and its committees. | | | | Director tenure considerations The Governance Committee annually reviews each director’s continuation on the Board and considers a variety of factors in conducting its annual review, including the mix of capabilities on the Board, the need to ensure appropriate refreshment and change on the Board, the diversity of the Board in terms of backgrounds, expertise, capabilities and leadership, the degree of engagement and effectiveness of Board members and confirmation of interest in continuing to serve as a director. The Board believes that the director nominees for 2024 have the right balance of skill sets, experiences and fresh perspectives to guide our management team in executing our long-term strategy for the benefit of our shareholders. Our nominees bring extensive and diverse business, financial, operating, regulatory and technology backgrounds from a variety of industries to our Board. We also have a good balance of tenures on our Board, with a mix of both newer directors and more long-standing directors who have in-depth and historical knowledge of our company. Since 2020, we have brought six new independent directors onto our Board. |
Table of Contents
Corporate Governance > Director Nominees
Zein Abdalla Former President of PepsiCo CognizantDirector Since 2015 Committees Birthplace Sudan Age 62 Independent Key Qualifications Executive Experience 2014 1995 Present 2012 PepsiCo, Inc. (PEP), a multinational food, snack and beverage company (1995 – 2014) • President (2012 – 2014) • CEO, European Region (2009 – 2012) • President, European Region (2006 – 2009) • Various senior executive positions (1995 – 2006) Public company leadership and experience leading and shaping large scale operations across the world from his global President role and decades of executive experience at a leading Fortune 50, Nasdaq-listed global company. Public Company Boards The TJX Companies, Inc. (TJX), a retailer of apparel and home fashions (since 2012) Select Board and Other Positions Mastercard Foundation – board member (since 2017) and chair (since 2020) Kuwait Food Company K.S.C.P. – board member (since 2017) Imperial College Business School Advisory Board – member (since 2016) Mars, Incorporated – board advisor (since 2016) Education Imperial College, London University – B.S.Vinita Bali Former CEO and Managing Director of Britannia Industries and Former VP, The Coca-Cola Company Director Since 2020 Committees Birthplace India Age 65 Independent Key Qualifications Executive Experience Britannia Industries, an international food products company based in India and listed on the National Stock Exchange and Bombay Stock Exchange in India (2005 – 2014) • Chief Executive Officer and Managing Director Public company CEO experience directing and shaping strategy for an international food products company. The Zyman Group, a marketing and communications strategy firm (2003 – 2005) • Managing Principal and Head of Business Strategy Practice, USA The Coca-Cola Company (KO), a multinational beverage company (1994 – 2003) • Vice President and Head, Corporate Strategy (2001 – 2003) • President, Andean Division (1999 – 2000) • Worldwide Marketing Director (1994 – 1998) Executive-level business, operational and marketing leadership roles, based in the United States and Chile, for key divisions around the globe for a then Fortune 100, NYSE listed company. Cadbury Schweppes Plc, a multinational confectionery company (1980 – 1994) • Senior marketing roles across a number of geographies, including South Africa, Nigeria, India and the U.K. Senior business, operational and marketing leadership roles across a number of geographies for a leading multinational confectionery company. Public Company Boards Bunge Ltd. (BG), an agribusiness and food company (since 2018; retiring in May 2021) Syngene International Ltd., a research and manufacturing company listed on the National Stock Exchange (“NSE”) and Bombay Stock Exchange (“BSE”) in India (since 2017) CRISIL Ltd., a global analytical company providing ratings, research and risk and policy advisory services listed on the NSE and BSE (since 2014) Past Director Positions Smith & Nephew Plc (SNN), a global portfolio medical technology business (2014 – 2020) Select Other Positions Board of Governors of the Indian Institute of Management (Bangalore) – member Education University of Delhi, India – B.A. Jamnalal Bajaj Institute of Management Studies in India – M.B.A. 2014 2005 2003 1994 1980 Present 2018 2017 2014
Key Technology and Talent Operations
Qualifications Consulting Services Management Security Regulated Industries Management
International Business Public Company Public Company Finance, Accounting
Development Leadership Governance and Risk Management
2024 Proxy statement 18  |  | Zein Abdalla Former President of PepsiCo Director Since2015 Age 65 Independent | Committees  | Birthplace Sudan  | | Education Imperial College, London University – B.S. |
Table
Mr. Abdalla brings to Cognizant’s Board of Contents 
Maureen Breakiron-Evans Former CFODirectors decades of Towers Perrin Director Since 2009 Committees Birthplace USA Age 66 Independent Key Qualifications Executive Experience Towers Perrin, a global professional services company (2007 – 2008) • Chief Financial Officer Insight intoexperience having led and shaped large-scale operations across the particular financial and operational challenges of a global business like Cognizant where talent is a key asset gained through her roleworld as CFO of a global company. CIGNA Corporation (CI), a health insurance services company (2005 – 2006) • Vice President and General Auditor Accounting, auditing and enterprise risk management experience in the regulated healthcare industry for a top 10 U.S. health insurance company. Inovant, LLC, the captive technology development and transaction processing companymanager of Visa, Inc. (V) (2001 – 2004) • Executive Vice President and Chief Financial Officer Accounting, auditing and enterprise risk management experience in the financial services sector with expertise in information security matters, having overseen the information security function in her roles as EVP and CFO. Transamerica Corp., a financial services company (1994 – 1999) • Various executive positions Expertise in information security matters as VPkey divisions of control and services and President of Transamerica Business Technologies. Accounting, auditing, risk management and regulated industry experience as General Auditor. Arthur Andersen LLP, a global accounting firm (1978 – 1994) 16 years of accounting and auditing experience in public accounting, including as a partner. Public Company Boards Cubic Corporation (CUB), a provider of systems and services to transportation and defense markets worldwide (since 2017) Ally Financial Inc. (ALLY), an Internet bank (since 2015) Select Past Director Positions Federal Home Loan Bank of Pittsburgh, a private government-sponsored enterprise (2011 – 2014) Heartland Payment Systems, Inc. (HPY), a provider of payment processing services (2012 – 2016) ING Direct, an Internet bank (2007 – 2008) Education Stetson University – B.B.A. Harvard Business School – M.B.A. Stanford University – M.L.A. Certifications CPA in Florida Carnegie Mellon University – NACD certificate in cybersecurity
Chief Information Officer of Intel Director Since 2020 Committees Birthplace India Age 55 Independent Key Qualifications Executive Experience Intel Corporation (INTC), a technology company (since January 2020) • Senior Vice President, Chief Information Officer Hewlett-Packard Enterprise Company (HPE), an information technology company (2017 – 2020) • Senior Vice President, Chief Information Officer Baker Hughes Incorporated, an oilfield services company acquired by General Electric in 2017 (2013 – 2017) • Vice President, Chief Information Officer Ingersoll Rand Inc. (IR), an industrial manufacturing company (2011 – 2012) • Vice President, Chief Information Officer Timex Group USA, Inc., a watch manufacturing company (2006 – 2011) • Vice President, Chief Information Officer Carrier Corporation (CARR), a heating, air-conditioning and refrigeration solutions company (2003 – 2006) • Vice President, Chief Information Officer Extensive experience as a senior leader, setting and leading technology and information security strategy for a number of large, global technology companies across a diverse set of industries. Public Company Boards East West Bancorp, Inc. (EWBC), the holding company for East West Bank, the largest independent bank in Southern California; also on the board of subsidiary East West Bank (since 2019) Select Past Positions IBM Global Technology Services – customer advisory board member (2016 – 2017) Junior Achievement of Southeast Texas – board member (2014 - 2017) Data Science Institute of the University of Houston – advisory board member (2018 – 2020) Education Boston University – B.S. Rensselaer Polytechnic Institute – M.B.A. Present 2020 2017 2013 2012 2011 2006 2003 Present 2019 2008 2007 2006 2004 2005 2001 1999 1994 1978 Present 2017 2015
CommitteesAAudit CommitteeCCompensation CommitteeCommittee Chair
FFinance CommitteeGGovernance Committee+ Audit Committee Financial ExpertPepsiCo.
14Period | CognizantRelevant experience | Key Qualifications | | 1995-2014 | PepsiCo, Inc. (PEP), a multinational food, snack and beverage company President (2012 – 2014) CEO, PepsiCo Europe (2009 – 2012) President, PepsiCo Europe (2006 – 2009) Various senior executive positions (1995 – 2006) Public company leadership and experience leading and shaping large scale operations across the world from his global President role and decades of executive experience at a leading Fortune 50, Nasdaq-listed global company. |  | | 2012-2022 | Past director positions The TJX Companies, Inc. (TJX), a retailer of apparel and home fashions |  | Since: 2017 2017 2016 2016 | Select board and other positions Mastercard Foundation – board member and chair (since 2020) Kuwait Food Company K.S.C.P. – board member Imperial College Business School Advisory Board – member Mars, Incorporated – board advisor | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee |  | Committee Chair | + | Audit Committee financial expert |
Key qualifications : |  | Technology and consulting services |  | Talent management |  | Security |  | Regulated industries |  | Operations management |  | International business development |  | Public company leadership |  | Public company governance |  | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 19 |  | Vinita Bali Former CEO and Managing Director of Britannia Industries and Former VP, The Coca-Cola Company Director Since2020 Age 68 Independent | Committees  | Birthplace India 
| Education University of Delhi, India – B.A. Jamnalal Bajaj Institute of Management Studies in India – M.B.A. |
Table of Contents
Corporate Governance > Director Nominees
JohFormer PresidentMs. Bali brings experience to the Cognizant Board of Directors gained through leading large multinationals in CEO and CEO of GE Healthcare Director Since 2017 Committees Birthplace USA Age 58 Independent Key Qualifications Executive Experience Clayton, Dubilier & Rice LLC, an investment firm (since 2015) • Operating Advisor (Healthcare sector) General Electric Company (GE), a global digital industrial company (1986 – 2014) • Presidentsenior marketing and Chief Executive Officer, GE Healthcare (2008 – 2014) • Chief Executive Officer, GE Transportation (2005 – 2008) Broad-based leadership, operations management, regulated industry and international business experience gained during his 28 years in leadershipsales roles managing several key business divisions of GE, a then Fortune 20 business. Most recently he was president and CEO of London-based GE Healthcare, a leading provider of medical imaging, diagnostics and other health information technology and then $18 billion annual revenue enterprise with 50,000 employees around the world. He also served in several international management roles in Asiaglobe, having worked for over three decades with companies like Britannia Industries, The Coca-Cola Company and Europe. Public Company Boards Syneos Health, Inc. (SYNH), a biopharmaceutical solutions organization (since 2018) Select Past Director Positions Merrimack Pharmaceuticals, Inc. (MACK), a pharmaceutical company specializing in the development of drugs for the treatment of cancer (2015 – 2019) Education University of Vermont – B.S. Present 2015 2014 1986 Present 2018 Brian Humphries CEO of Cognizant Director Since 2019 Birthplace Ireland Age 47 Key Qualifications Executive Experience Cognizant (since 2019) • Chief Executive Officer Vodafone Group plc (VOD), one of the world’s largest publicly listed telecommunications companies (2017 – 2019) • Chief Executive Officer, Vodafone Business Dell Technologies Inc. (DELL), a leading technology company (2013 – 2017) • President and Chief Operating Officer, Infrastructure Solutions Group (2016 – 2017) • President, Global Enterprise Solutions (2014 – 2016) • Vice President and General Manager, EMEA Enterprise Solutions (2013 – 2014) Hewlett-Packard (HPQ), a leading technology company (2002 – 2013) • Senior Vice President, Emerging Markets (2011 – 2013) • Senior Vice President, Strategy and Corporate Development (2008 – 2011) Significant senior leadership, technology, consulting, talent management, operations management and international experience as CEO of Cognizant since April 2019 and, prior to that, through progressively more senior executive leadership roles at three of the world’s most well-known global, publicly-listed technology companies, Vodafone, Dell and Hewlett-Packard. At Vodafone Group, he led Vodafone Business, a division encompassing the business-to-business fixed and mobile customers segment. During his tenure, Vodafone Business accounted for nearly a third of Vodafone Group’s service revenue with €12 billion in global annual sales. He also led Vodafone’s Internet of Things (IoT) business, Cloud & Security and Carrier Services. In addition to his Vodafone experienced based in London, he oversaw key divisions with geographically diverse operations and had experience developing business in emerging markets through his roles with Dell and Hewlett-Packard. Compaq Computer Corporation (1998 – 2002) and Digital Equipment Corporation (1994 – 1998) • Various senior finance, investor relations and internal audit positions Education University of Ulster, Northern Ireland – B.A. Present 2019 2017 2013 2002 1997 Key Technology and Talent Operations Qualifications Consulting Services Management Security Regulated Industries Management International Business Public Company Public Company Finance, Accounting Development Leadership Governance and Risk ManagementCadbury Schweppes plc.
2021 Proxy StatementPeriod | 15Relevant experience | Key qualifications | | 2005-2014 | Britannia Industries, an international food products company based in India and listed on the National Stock Exchange and Bombay Stock Exchange in India Chief Executive Officer and Managing Director Public company CEO experience directing and shaping strategy for an international food products company. |  | | 2003-2005 | The Zyman Group, a marketing and communications strategy firm Managing Principal and Head of Business Strategy Practice, USA | | | 1994-2003 | The Coca-Cola Company (KO), a multinational beverage company Officer, Vice President and Head, Corporate Strategy (2001 – 2003) President, Andean Division (1999 – 2000) Vice President, Marketing for Latin America (1997 – 1998) Worldwide Marketing Director (1994 – 1997) Executive-level business, operational and marketing leadership roles, based in the United States and Chile, for key divisions around the globe for a then Fortune 100, NYSE listed company. |
 | | 1980-1994 | Cadbury Schweppes plc, a multinational confectionery company Senior marketing roles across a number of geographies, including South Africa, Nigeria, India and the U.K. Senior business, operational and marketing leadership roles across a number of geographies for a leading multinational confectionery company. | Since: 2024 2021 2017 | Current public company boards Bajaj Auto Ltd. (BAJAJ-AUTO), a multinational automotive manufacturing company listed on the National Stock Exchange (“NSE”) in India SATS Ltd. (S58), a leading provider of food solutions and gateway services and listed on the Singapore Stock Exchange Syngene International Ltd., a research and manufacturing company listed on the NSE and Bombay Stock Exchange (“BSE”) in India | | 2014-2024 2018-2021 2014-2020 | Past director positions CRISIL Ltd., a global analytical company providing ratings, research and risk and policy advisory services listed on the NSE and BSE Bunge Ltd. (BG), an agribusiness and food company Smith & Nephew Plc (SNN), a global portfolio medical technology business | | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 20 |  | Eric Branderiz Former Executive Vice President and Chief Financial Officer of Enphase Energy Director Since2023 Age 59 Independent | Committees
 | Birthplace Argentina 
| Education University of Alberta – BCom | Certifications CPA in California |
Mr. Branderiz brings to Cognizant’s Board of Directors experience in finance, accounting, M&A execution, risk management, ESG and corporate governance across various energy, semiconductor and technology sectors, including Enphase Energy and Tesla. | Period | Relevant experience | Key qualifications | | 2018-2022 | Enphase Energy, Inc. (ENPH), a renewable energy and semiconductor technology company Executive Vice President and Chief Financial Officer Insight into the particular financial and operational challenges of a global business gained through his role as CFO of a public company. |  | | 2016-2018 | Tesla, Inc. (TSLA), an automotive, software, semiconductor and renewable energy company Chief Accounting Officer and Corporate Controller | | 2010-2016 | SunPower Corporation (SPWR), a solar energy system design and manufacturing company Various senior roles, including Senior Vice President, Corporate Controller and Chief Accounting Officer and Senior Vice President, Head of Global Residential and Light Commercial Operations and Finance |  | | 2009-2010 | Knowledge Learning Corporation (now KinderCare Learning Centers, LLC), an operator of child care and early childhood education facilities Vice President, Corporate Controller, Corporate Treasurer, and Head of Subsidy Business Operations |  | | 2007-2009 | Spansion, Inc. (Now Infineon Technologies, AG), a semiconductor manufacturer of flash memory, microcontrollers, mixed-signal and analog products, and system-on-chip solutions Senior Vice President, Corporate Controller, Head of Sales & Marketing Finance, Tax and Treasury |  | | 2002-2005 | Advanced Micro Devices, Inc. (AMD), a multinational semiconductor company Americas Controller |  | | 1996-2002 | Ernst & Young LLP, a multinational professional services partnership Auditor | Since 2023 | Current public company boards Fortive Corporation (FTV), a provider of essential technologies for connected workflow solutions across a range of end-markets |  | Since 2023 Since 2022 | Select other director positions UNIVERS, a leading net zero technology provider AESC, a leading battery technology company | | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
TableCognizant 2024 Proxy statement 21
|  | Archana Deskus Chief Technology Officer of PayPal Director Since2020 Age 58 Independent | Committees
 | Birthplace India
| Education Boston University – B.S. Rensselaer Polytechnic Institute – M.B.A. |
Ms. Deskus brings CTO and CIO experience to Cognizant’s Board of Contents 
| Period | Relevant experience | Key qualifications | | 2022 to present | PayPal Holdings, Inc. (PYPL), a digital payments company Executive Vice President, Chief Technology Officer (2023 – Present) Executive Vice President, Chief Information Officer (2022 – 2023) Extensive experience as a senior leader, setting and leading technology and information security strategy for a number of large, global technology companies across a diverse set of industries. |  | | 2020-2022 | Intel Corporation (INTC), a technology company Senior Vice President, Chief Information Officer |  | | 2017-2020 | Hewlett Packard Enterprise Company (HPE), an information technology company Senior Vice President, Chief Information Officer | | 2013-2017 | Baker Hughes Incorporated, an oilfield services company acquired by General Electric in 2017 Vice President, Chief Information Officer |  | | 2011-2012 | Ingersoll Rand Inc. (IR), an industrial manufacturing company Vice President, Chief Information Officer | | 2006-2011 | Timex Group USA, Inc., a watch manufacturing company Vice President, Chief Information Officer | | 1987-2006 | United Technologies Corporation, a provider of high technology products and services, and various affiliated entities Vice President, Chief Information Officer of Carrier Corporation, a heating, air conditioning and refrigeration solutions company (2003 – 2006) Various other positions (1987 –2003) | Since 2019 | Current public company boards East West Bancorp, Inc. (EWBC), the holding company for East West Bank, the largest independent bank in Southern California; also on the board of subsidiary East West Bank (since 2019) | | 2018-2020 2016-2017 2014-2017 | Select past positions Data Science Institute of the University of Houston – advisory board member IBM Global Technology Services – customer advisory board member Junior Achievement of Southeast Texas – board member | | Since 2022 | Select other director positions DataStax, a real-time data for artificial intelligence company | | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Leo S. Mackay, Jr. SVP, Ethics and Enterprise AssuranceCognizant 2024 Proxy statement 22
|  | John M. Dineen Former President and CEO of GE Healthcare Director Since2017 Age 61 Independent | Committees
 | Birthplace USA 
| Education University of Vermont – B.S. |
Mr. Dineen brings to Cognizant’s Board of Lockheed Martin Director Since 2012 Committees Birthplace USA Age 59 Independent Key Qualifications Executive Experience Lockheed Martin Corporation (LMT), a Fortune 100 global security and aerospace company (since 2007) • Senior Vice President, Ethics and Enterprise Assurance (since 2018) • Senior Vice President, Internal Audit, Ethics and Sustainability (2016 – 2018) • Vice President, Ethics and Sustainability (2011 – 2016) • Vice President, Corporate Business Development and various other positions (2007 – 2011) Extensive expertise in security, government contracting, auditing and compliance from his senior executive roles at one of the world’s largest and most well-known security and aerospace companies. Integrated Coast Guard Systems LLC, a joint venture between Lockheed Martin and Northrop Grumman Corporation (NOC) (2005 – 2007) • President Operations managementDirectors experience from his senior leadership roles. ACS State Healthcare LLC (now parthaving managed several key business divisions of Conduent), an IT/BPO services companyGeneral Electric and in the healthcare space (2003 – 2005) • Chief Operations Officer Technology consulting and operations management experience specific to the healthcare industry from having served as President and CEO of GE Healthcare. | Period | Relevant experience | Key qualifications | | 2015-2022 | Clayton, Dubilier & Rice LLC, an investment firm Operating Advisor (Healthcare sector) |  | | 1986-2014 | General Electric Company (GE), a global digital industrial company President and Chief Executive Officer, GE Healthcare (2008 – 2014) Chief Executive Officer, GE Transportation (2005 – 2008) Broad-based leadership, operations management, regulated industry and international business experience gained during his 28 years in leadership roles managing several key business divisions of GE, a then Fortune 20 business. Most recently he was president and CEO of London-based GE Healthcare, a leading provider of medical imaging, diagnostics and other health information technology and then $18 billion annual revenue enterprise with 50,000 employees around the world. He also served in several international management roles in Asia and Europe. |  | Since 2023 | Current public company boards Lam Research Corporation (LRCX), a supplier of wafer-fabrication equipment and related services to the semiconductor industry | | 2018-2023 2015-2019 | Select past director positions Syneos Health, Inc. (SYNH), a biopharmaceutical solutions organization Merrimack Pharmaceuticals, Inc. (MACK), a pharmaceutical company specializing in the development of drugs for the treatment of cancer |
| Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 23 |  | Ravi Kumar S CEO of Cognizant Director Since2023 Age 52 | | Birthplace India
| Education Shivaji University – B.E. Xavier Institute of Management, India – M.B.A. |
Ravi Kumar Singisetti (also referred to as Ravi Kumar S or Ravi Kumar) was appointed Chief Executive Officer of Cognizant in January 2023. In his role as COO. United States Department of Veterans Affairs • Deputy Secretary and Chief Operating Officer (2001 – 2003) Operations management experience from having served as Deputy Secretary and COOCEO, Mr. Kumar sets the strategic direction of the U.S. Departmentcompany, promotes Cognizant’s client-first culture, and focuses on ensuring sustainable growth and driving long-term shareholder value. He is a highly accomplished services industry executive with experience across digital transformation, traditional technology and engineering services, data and analytics, cloud and infrastructure, and consulting. | Period | Relevant experience | Key qualifications | | 2023 to present | Cognizant Chief Executive Officer Senior leadership, technology, consulting, talent management, operations management and international experience as CEO of Cognizant since January 2023 |  | | 2002-2022 | Infosys Limited (INFY), a global managing consulting, technology services and outsourcing company President (2016 – 2022) Various other positions (2002 – 2016) Highly accomplished services industry executive with experience across digital transformation, traditional technology and engineering services, data and analytics, cloud and infrastructure, and consulting gained through progressively more senior executive leadership roles at Infosys, where, as President, he led the global services organization across all industry segments. | 2002 | Sapient (Now Publicis Sapient), a digital consulting company Director |  | 2001-2002 | Oracle Corporation (ORCL), a multinational computer technology company Business manager | 2000-2001 | Cambridge Technology Partners, a multinational professional services company that specializes in business and IT consulting AVP | 1996-2000 | PricewaterhouseCoopers, an international professional services brand of firms Senior consultant | Since: 2022 | Current public company boards TransUnion (TRU), a global information and insights company | | 2021-2023 | Past director positions Digimarc Corporation (DMRC), company that provides digital watermarking solutions | Since: 2024 2021 2020 | Select other positions US-India Strategic Partnership Forum - Board member U.S. Chamber of Commerce – Board member New York Academy of Sciences – Board of Governors | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 24 |  | Leo S. Mackay, Jr. SVP, Ethics and Enterprise Assurance of Lockheed Martin Director Since2012 Age 62 Independent | Committees
 | Birthplace USA 
| Education United States Naval Academy – B.S. Harvard University – M.P.P. Harvard University – Ph.D. |
Dr. Mackay brings expertise in auditing and compliance, security, government contracting, and federal government senior policymaking to Cognizant’s Board of Veterans Affairs. Bell Helicopter, a helicopter and tiltrotor craft manufacturer (1997 – 2001) Public Company Boards Ameren Corporation (AEE), a public utility holding company (since 2020) Select Other Director PositionsDirectors through his positions at Lockheed Martin Ventures,and in the venture capital arm of Lockheed Martin (since 2018) Bush administration. | Period | Relevant experience | Key qualifications | | 2007 to present | Lockheed Martin Corporation (LMT), a Fortune 100 global security and aerospace company Senior Vice President, Ethics and Enterprise Assurance (since 2018) Senior Vice President, Internal Audit, Ethics and Sustainability (2016 – 2018) Vice President, Ethics and Sustainability (2011 – 2016) Vice President, Corporate Business Development and various other positions (2007 – 2011) Extensive expertise in security, government contracting, auditing and compliance from his senior executive roles at one of the world’s largest and most well-known security and aerospace companies. |  | | 2005-2007 | Integrated Coast Guard Systems LLC, a joint venture between Lockheed Martin and Northrop Grumman Corporation (NOC) President Operations management experience from his senior leadership roles. |  | | 2003-2005 | ACS State Healthcare LLC (now part of Conduent), an IT/BPO services company in the healthcare space Chief Operations Officer Technology consulting and operations management experience specific to the healthcare industry from his role as COO. |  | | 2001-2003 | United States Department of Veterans Affairs Deputy Secretary and Chief Operating Officer Operations management experience from having served as Deputy Secretary and COO of the U.S. Department of Veterans Affairs. |  | | 1997-2001 | Bell Helicopter, a helicopter and tiltrotor craft manufacturer | | Since 2020 | Current public company boards Ameren Corporation (AEE), a public utility holding company | | Since 2018 | Select other positions Lockheed Martin Ventures, the venture capital arm of Lockheed Martin – investment committee member | | 2016-2023 | Select past director positions USAA Federal Savings Bank, a federal savings bank (since 2016) Education United States Naval Academy – B.S. Harvard University – M.P.P. Harvard University – Ph.D. Present 2007 2005 2003 1997 Present 2020 | | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 25 |  | Michael Patsalos-Fox Former Chairman, the Americas of McKinsey & Company and Former
CEO of Stroz Friedberg Director Since2012Committees Birthplace Cyprus Age 71
Independent | 68 Independent Committees
| Birthplace Cyprus 
| Education University of Sydney – B.S. International Institute for Management Development, Lausanne, Switzerland – M.B.A. |
Mr. Patsalos-Fox brings decades of experience counseling clients in the technology and consulting space to Cognizant’s Board of Directors, gained from his 32-year tenure in senior roles with McKinsey & Company and his role as CEO for Vidyo, as well as expertise in the cybersecurity space from his experience as CEO of Stroz Friedberg. Mr. Patsalos-Fox served as Chair of Cognizant’s Board of Directors from September 2018 until January 2023. | Period | Relevant experience | Key Qualifications Executive Experience qualifications | | 2017-2019 | Vidyo,, a cloud-based video conferencing services company (2017 – 2019) • Chairman and Chief Executive Officer | | | 2013-2017 | Stroz Friedberg,, a global investigation and cybersecurity firm (2013 – 2017) • Chief Executive Officer Expertise and insight in the cybersecurity space from his experience as CEO. |  | | 1981-2013 | McKinsey & Company,, a global management consulting company (1981 – 2013) • Senior Partner (1992 – 2013) • Board of Directors (1998 – 2010) • Chairman, the Americas (2003 – 2009) • Member of the Operating Committee (2003 – 2012) • Managing Partner of the New York (2001 – 2003) and New Jersey (1996 – 2001) offices, North American Corporate Finance and Strategy practice and European Telecoms practice Decades of experience counseling clients in the technology and consulting space gained from his 32-year tenure with McKinsey & Company, where he also served in various senior leadership roles. Among other things, he brings talent management experience from leading a global professional services business and extensive experience developing a technology consulting business from leading the firm’s new business growth opportunities around data, analytics and software. |  | Since 2020 | Select Other Director Positions other director positions MIO Partners, Inc., an investment subsidiary of McKinsey & Company, (since 2020) • Chairman of the board | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 26 |  | Stephen “Steve” J. Rohleder Chair of the Board of Directors Former Group Chief Executive, North America and Chief Operating Officer of Accenture plc Director Since2022 Age 66 Independent | Committees
 | Birthplace USA
| Education University of Sydney Texas, Austin – B.S. International Institute for Management Development, Lausanne, Switzerland – M.B.A. Chair Committees A Audit Committee C Compensation Committee Committee Chair F Finance Committee G Governance Committee + Audit Committee Financial ExpertB.B.A. Mr. Rohleder brings decades of experience overseeing operations, developing strategy, counseling clients and developing teams in the technology space to Cognizant’s Board of Directors, gained from his 35-year tenure in senior roles with Accenture and his roles as a board member and later CEO of GTY Technology Holdings. | Period | Relevant experience | Key qualifications |
| | 2015 to present | SGR Equity Investments, a private equity and venture capital company Principal Owner Oversight and direction of personal and family investments in private equity and venture capital opportunities. |
| | 2019-2020 | GTY Technology Holdings Inc. (GTYH), a software as a service company that offers a cloud-based suite of solutions for the public sector in North America Chairman, CEO and President Public company CEO experience directing and shaping strategy for a North America technology company following several years of service as a member of the Board of Directors. |  |
| | 1981-2015 | Table of ContentsAccenture plc (formerly Anderson Consulting) (ACN), a global managing consulting, technology services and outsourcing company
Corporate GovernanceGroup Chief Executive, North America (2014 – 2015)
Group Chief Executive, Health & Public Service (2009 – 2014) Global Chief Operating Officer (2004 – 2009) Various other roles (1981 – 2004) Extensive experience counseling clients in the technology and consulting space gained from his 35-year tenure with Accenture, a leading NYSE-listed global management consulting, technology services and outsourcing company. Gained senior leadership, technology, consulting, talent management, operations management, strategy, international business development and health and public service experience through progressively more senior leadership roles and experiences. While COO, he was responsible for leading Accenture’s strategic direction and overall operational performance and for all global operations in approximately 50 countries and 175 cities. |  | Since: 2016 | Select other positions > Director NomineesKungFu.AI, a professional services firm focusing on AI solutions for businesses – strategic advisor
| | 2018-2020 2017-2020 
2015-2019 | Select past director and other positions University of Texas Health Advisory Committee – member Apogee, Inc., the largest provider of on-campus residential networks and video solutions in higher education – advisory board member GTY Technology Holdings Inc. (GTYH), a software as a service company – director Kony, Inc., a cloud-based enterprise mobility solutions company and mobile application development platform provider – advisory board member | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 27 |  | Abraham “Bram” Schot Former Chairman and CEO of Audi AG Director Since2023 Age 62 Independent | Committees
 | Birthplace Netherlands 
| Education University of Bradford, England – Masters in Business Administration |
Mr. Schot brings international strategic, leadership and transformational expertise to Cognizant’s Board of Directors from more than three decades of experience in the automotive industry, including management positions at DaimlerChrysler, Mercedes-Benz, Volkswagen Group and Audi. | Period | Relevant experience | Key qualifications | | 2011-2020 | Volkswagen AG, a global manufacturer of automotive and commercial vehicles Chairman & CEO of the Board of Management (Audi AG) (2018 – 2020) Leadership experience for a significant business unit of a public company leading and shaping large scale operations across the world for a leading automotive manufacturer. Responsible for the transition of the established business model to improve sustainability and continue the push for electrification. |  | | Member of the Board of Management (Volkswagen Group) (2018 – 2020) Member of the Board of Management (Audi AG) (2017 – 2018) Member of the Board of Management and Executive Vice President of Volkswagen Commercial Vehicles group (2011 – 2016) Responsible for global marketing, sales and services for new business model vehicles. |  | 2006-2011 | Daimler AG/Mercedes-Benz Italia, Italian arm of Mercedes-Benz Group, a global automotive company President and CEO Executive level business and operational role, focusing on innovation, cost-optimization, and organizational effectiveness within the broader international company. | | 1998-2006 | DaimlerChrysler Nederland and Mercedes-Benz Nederland, Netherlands arm of the Mercedes-Benz Group President and CEO (2003 – 2006) Various leadership roles, including previous responsibility as Marketing Director and for heading the Corporate Strategy and Planning department(1998 – 2003) | Since: 2023 2022 2020 | Current public company boards Compagnie Financière Richemont SA (Richemont), a luxury goods holding company Signify NV, a multinational lighting company Shell plc (SHEL), a global energy company | | Since: 2022 2022 2022 2021 2021 2021 2020 | Select other positions ADS-Tec Holding – senior advisor Laureus Foundation –senior advisor Next Mobility Labs GmbH – partner and senior advisor SDA Bocconi School of Management in Milan, Italy – Associate Professor of Practice in Corporate Strategy The Carlyle Group – senior advisor Global Cleantec Management B.V. – senior advisor TomTom, N.V. – senior advisor | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 28 |  | Joseph M. Velli Former Senior EVP of
The Bank of New York Director Since2017Committees Birthplace USA Age 66
Independent | 63 Independent Committees
 | Birthplace USA
| Education William Paterson University – B.A. Fairleigh Dickinson University – M.B.A. |
Mr. Velli brings experience to Cognizant’s Board of Directors in creating, building and leading global large-scale technology, processing and software platform businesses as a Senior EVP for The Bank of New York and as CEO of ConvergEx Group. | Period | Relevant experience | Key Qualifications Executive Experience qualifications | | 2016 to present | Lovell Minnick Partners, LLC,, a private equity firm (since 2016) • Advisory Council Member | | Convergex2006-2014 | ConvergEx Group, LLC,, a provider of software platforms and technology-enabled brokerage services Board Director (2014) Chairman and CEO (2006 – 2013) • Chairman and CEO Significant experience in creating, building and leading large-scale technology, processing and software platform businesses for a broker-dealer in the financial services industry. |  | | 1984-2006 | The Bank of New York (now(now BNY Mellon) (BK), a financial services institution (1984 – 2006) • Senior Executive Vice President and member of the Senior Policy CommitteeCommittee; various leadership roles, including CEO of BNY Securities, Head of Investor Services and Head of Consumer Banking (1998 – 2006) • Executive Vice President (1992 – 1998) • Other leadership positions, including Head of Issue Services (1984 – 1992) Senior executive leadership, technology, regulated industries and operations management experience from over two decades in senior business roles at a leading global financial institution. Among other things, he was involved in creating, building and leading large-scale technology, processing and software platform businesses and leading several key business lines, including global issuer services, global liquidity services, pension and 401(k) services, consumer and retail banking, correspondence clearing and securities services. His leadership positions also provided company turnaround and mergers and acquisitions experience. |  | Since: 2020 2014 2007 | Current public company boards Public Company Boards AssetMark Financial Holdings, Inc.(AMK), a provider of financial, investment and consulting services (since 2020)
Computershare Limited, a global provider of corporate trust, stock transfer, employee share plan and mortgage servicing services listed on the Australian Securities Exchange (since 2014) Paychex, Inc.(PAYX), a provider of payroll, human resource and benefits outsourcing services (since 2007) | | 2010-2014 | Select Past Director Positions past director positions E*Trade Financial Corporation(2010 – 2014) Education William Paterson University – B.A. Fairleigh Dickinson University – M.B.A. Present 2016 2013 2006 1984 Present 2020 2014 2007 | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations management | | International business development | | Public company leadership | | Public company governance | | Finance, accounting and risk management |
Cognizant 2024 Proxy statement 29 |  | Sandra S. Wijnberg Former CFO of Marsh & McLennan Companies Director Since2019Committees Birthplace USA Age 67
Independent | Committees 64 Independent 
| Birthplace USA
| Education University of California, Los Angeles – B.A. University of Southern California, Marshall School of Business – M.B.A. |
Ms. Wijnberg brings to Cognizant’s Board of Directors expertise in managing a large global professional services business from her role as CFO of Marsh & McLennan Companies, as well as a private equity perspective from her position as Partner and CAO of Aquiline Holdings. | Period | Relevant experience | Key Qualifications Executive Experience qualifications | | 2007-2019 | Aquiline Holdings, LLC,, a registered investment advisory firm (2007 – 2019) • Executive Advisor (2015 – 2019) • Partner, Chief Administrative Officer (2007 – 2014) Expertise Private equity insights and expertise in the investment management sector and with registered investment company regulations from having served in executive and advisory capacities for an investment advisory firm. | | | 2000-2006 | Marsh & McLennan Companies, Inc. (MMC), a global professional services company (2000 – 2006) • Senior Vice President and Chief Financial Officer Extensive technology and consulting services, talent management, regulated industries, international business development and finance, accounting and risk management experience from her experienceposition as CFO of Marsh & McLennan, a then $11 billion annual revenue enterprise with 55,000 employees around the world providing risk and insurance services, risk consulting and technology and other consulting and investment management services. |  | | 1997-1999 | Yum! Brands, Inc. (YUM), a global operator and franchisor of quick service restaurants (1997 – 1999) • Senior Vice President, Treasurer and ultimately interim Chief Financial Officer International business development and finance, accounting and risk management experience from her senior finance roles, including as interim CFO, at a large, global enterprise. | | | 1994-1997 | PepsiCo, Inc. (PEP) (1994 – 1997) • Chief Financial Officer, KFC Corporation (1996 – 1997) • Vice President and Assistant Treasurer (1994 – 1996) International business development and finance, accounting and risk management experience from her senior finance roles, including as CFO of a significant subsidiary, at a leading Fortune 50, Nasdaq-listed global company. |  | Since: 2021 2016 2016 | Current public company boards Public Company Boards Hippo Holdings, Inc. (HIPO), a homeowners’ insurance company
T. Rowe Price Group, IncInc.. (TROW), a global asset management firm (since 2016) Automatic Data Processing, Inc.(ADP), a provider of human resources management software and services (since 2016) | | 2014-2016 2003-2016 | Select Past Directorpast director and Other Positions other positions Office of the Quartet, U.S. Department of StateDeputy Head of Mission, Jerusalem recruited to advance the Quartet’s Palestinian economic development mandate (2014 – 2016) Tyco International plc(now (now Johnson Controls International plc) (2003 – 2016) – directorEducation University of California, Los Angeles – B.A. University of Southern California, Marshall School of Business – M.B.A. | |
Committees | A | Audit Committee | C | Compensation and Human Capital Committee | F | Finance and Strategy Committee | G | Governance and Sustainability Committee | | Committee Chair | + | Audit Committee financial expert |
Key qualifications : | | Technology and consulting services | | Talent management | | Security | | Regulated industries | | Operations Qualifications Consulting Services Management Security Regulated Industries Management management | | International Business business development | | Public Company company leadership | | Public Company company governance | | Finance, Accounting Development Leadership Governanceaccounting and Risk Managementrisk management |
Cognizant 2024 Proxy statement 30 Committees of the Board 
Board Table of Contents
Board Structure and Operations
The Board exercises its oversight responsibilities both directly and through its committees. The same oversight structure is utilized with respect to the company’s enterprise risk management (“ERM”) program. The Board believes that its role in the oversight of the company, including its business, strategy and risks, is facilitated by our current Board leadership structure, with a strong independent Chair, as well as our committee structure, as it allows our four standing Board committees to play an active role in the oversight of the actions of management, including with respect to identifying risks and implementing effective risk management policies and controls. Meetings in 2023: 15 Board
Weighted average 2023 attendance of directors: 98% Recent key focus areas The board exercises its oversight responsibilities both directly and through its committees. The same oversight structure is utilized with respect to the company’s enterprise risk management (“ERM”) program. The board believes that its role in the oversight of the company, including its business, strategy and risks, complements our current board leadership structure, with a strong independent chair, as well as our committee structure, as it allows our four standing board committees to play an active role in the oversight of the actions of management, including with respect to identifying risks and implementing effective risk management policies and controls.
| • | Strategic priorities | | • | Leadership transitions | | • | Artificial intelligence and re-skilling employees | | • | IT and security modernization | | • | Evolving employee expectations |
| | | | | | | Audit Committee | Meetings in 2023: 11 Weighted average 2023 attendance of directors: 94% | Key responsibilities and areas of risk oversight • Financial statements and publicly reported financial information • Internal controls over financial reporting • Company’s independent registered public accounting firm, including appointment, qualifications, independence and performance • Internal audit • Ethics and compliance • Enterprise risk management program • Security (including cybersecurity) and data privacy risks • Tax planning and strategy • Third party risks • Business continuity management | Recent activities and key focus areas • Reviewing and approving the 2023 financial statements and disclosure enhancements • Reviewing and selecting the independent auditor for the year ending December 31, 2024 • Overseeing the internal audit department’s annual audit plan and budget • Overseeing the company’s continued IT and security modernization agenda • Overseeing material litigation and potential litigation • Overseeing compliance with legal and regulatory requirements, as well as the company’s code of ethics | | 7 members | 
Wijnberg 
| 
Branderiz | 
Deskus | 
Dineen | 
Mackay, Jr. | 
Rohleder | 
Velli | | Audit Committee financial experts and financial literacy Mr. Branderiz and Ms. Wijnberg are “audit committee financial experts” (per SEC rules), and all members of the committee can “read and understand fundamental financial statements” (per Nasdaq rules). |
Cognizant 2024 Proxy statement 31 | | | | | | | Finance and Strategy Committee (“Finance Committee”) | Meetings in 2023: 7 Weighted average 2023 attendance of directors: 96% | Key responsibilities and areas of risk oversight • Assisting the Board with respect to corporate plans, strategies and objectives, including innovation strategies related to emerging technologies (including genAI), market and industry trends and allocation of funds for major expenditures • Capital structure and allocation • Dividend policies and stock repurchase programs • Enterprise resource planning and management • Growth and scalability of corporate processes and systems • Assisting the Board with respect to mergers and acquisitions strategy and execution • Capacity and effectiveness of service delivery operations, including the impact of emerging technologies such as genAI • Investor relations • Treasury matters, including hedging strategies | Recent activities and key focus areas • Overseeing the capital structure and allocation program, with approximately $1.6 billion in share repurchases and dividends in 2023 (see page 5) • Overseeing the deployment or potential deployment of capital for acquisitions aligned with our strategic priorities (see page 4) • Real estate strategy, including overseeing management’s plan for reducing annual real estate operating costs by rationalizing the company’s global real estate footprint • Overseeing the company’s responsible AI practices that are key to driving benefits and mitigating risks | | 6 members |
Dineen
|
Deskus | 
Patsalos-Fox |
Rohleder | 
Schot |
Wijnberg Meetings in 2020:
22
Weighted average 2020 attendance of director nominees:
93%
Recent Key
Focus Areas
• Strategic priorities
• Leadership transitions
• Mergers and acquisitions
• Covid-19 pandemic
• April 2020 ransomware attack
• IT and security infrastructure
| | | Committees of the Board | | | | | Audit Committee
|
| | | | | | | Compensation and Human Capital Committee (“Compensation Committee”) | Meetings in 2023: 7 Weighted average 2023 attendance of directors: 100% | Key responsibilities and areas of risk oversight • Evaluation and compensation of the CEO and other executive officers • Director compensation recommendations to the Board • Performance-based compensation arrangements • Equity-based compensation plans • Employment and severance agreements and other arrangements with executive officers • General talent engagement • Diversity and inclusion • Assessment of shareholder “say-on-pay” and “say-on-pay” frequency votes • Stock ownership guidelines • Clawback policies | Recent activities and key focus areas • Undertaking a detailed review of our talent engagement and diversity and inclusion efforts (see page 36), including continued oversight of the company’s efforts to empower and promote women leaders • Developing revised metrics and other design features for the 2024 ACI and 2024-2026 PSUs as described on page 54 • Monitoring management’s efforts to reduce and mitigate previously experienced high levels of attrition in our organization | | 7 members |
Mackay, Jr. 
| 
Abdalla | 
Bali |
Branderiz |
Deskus |
Patsalos-Fox |
Velli Meetings in 2020: 15
Weighted average 2020 attendance
of director nominees: 94%
| | Key Responsibilities and Areas of Risk Oversight
• Financial statements and publicly reported financial information
• Internal controls over financial reporting
• Company’s independent registered public accounting firm, including appointment, qualifications, independence and performance
• Internal audit
• Ethics and compliance
• Enterprise risk management program
• Security (including cybersecurity) and data privacy risks
• Tax planning and strategy
• Third party risks
• Business continuity management
| | |
Cognizant 2024 Proxy statement 32 | | | | | | | Governance and Sustainability Committee | Meetings in 2023: 5 Weighted average 2023 attendance of directors:96% | Key responsibilities and areas of risk oversight • Nominations to the Board and Board committees, including evaluation of any shareholder nominees • Director independence recommendations to the Board • Annual Board self-evaluation process • Macro environment and geo-political risks, including immigration law changes and physical climate risk • Legal and regulatory risks, including intellectual property • Reviewing corporate governance structure and practices, including the company’s corporate governance guidelines • Public affairs and public policy initiatives • ESG (“Sustainability”) strategy, initiatives and policies including in the areas of climate change, environmental protection and sustainability, employee health and safety and corporate social responsibility programs • Director time commitments | Recent activities and key focus areas • Overseeing the Board’s 2023 self-evaluation process (see page 14) • Reviewing the company’s exposure to potential changes in immigration laws and regulations • Reviewing and approving the 2023 political spend disclosures and 2024 U.S. political contributions budget (only committee members who are U.S. citizens) • Overseeing the company’s enhancement of its Sustainability program and material Sustainability-related public disclosures • Overseeing the company’s roadmap and efforts towards reducing greenhouse gas emissions (see page 37) and mitigating physical climate risk | | 5 members |
Abdalla 
|
Bali |
Mackay, Jr. |
Rohleder |
Schot
| | | | | | Finance and Strategy Committee
|
 Management Management is responsible for the day-to-day management of the company, including its business, strategy execution and risk management. As part of the committee oversight and risk management responsibilities under the committee charters, management provides regular updates to the Board and relevant committees. Committee charters and composition changes Each of the Board’s four standing committees — the Audit Committee, Finance Committee, Compensation Committee and Governance Committee —operates under a charter that has been approved by the Board and is available on the company’s website. See “Helpful Resources” on page 103. As discussed in the proxy statement relating to our 2023 annual meeting of shareholders, filed with the SEC on April 21, 2023, the Board undertook an evaluation of, and effectuated certain changes to, the composition of its committees in March 2023. In addition, following his appointment to the Board in April, Mr. Schot was appointed to the Finance Committee in May 2023. In December 2023, the Board made changes to the composition of its committees as follows: (1) moved Mr. Abdalla from the Finance Committee onto the Compensation Committee, (2) appointed Ms. Deskus to the Finance Committee and (3) appointed Mr. Schot to the Governance Committee. The Board is expected to re-assess committee composition after the appointment of any new directors, including appointment of any candidate identified as part of the process described on page 18. Meetings in 2020: 8
Cognizant 2024 Proxy statement 33 Board engagement activities Shareholder engagement Our Board values the input of our shareholders. It receives quarterly or more frequent updates on shareholder communications and is directly involved in responding to communications where appropriate. It also undertakes a formal governance-focused engagement process where select directors meet directly with a number of our large shareholders to solicit the input of shareholders on a proactive basis. We consider the valuable feedback and perspectives of our shareholders, which helps inform our decisions and our strategy, when appropriate. In late 2023 and early 2024, the topics in our formal engagement discussions with our large shareholders mostly focused on the company’s progress since Mr. Kumar was appointed as the new CEO in early 2023, large deal execution, generative AI, talent retention, succession planning, executive compensation, diversity and inclusion and other governance topics. Winter 2023-2024 formal engagement Weighted average 2020 attendance of
director nominees: 100%
| | | | | Attendance |  |
Steve Rohleder B Chair |
| | Key Responsibilities and Areas of Risk Oversight
• Assisting the board with respect to corporate plans, strategies and objectives
• Targeted financial model
• Capital structure and allocation
• Dividend policies and stock repurchase programs
• Enterprise resource planning and management
• Growth and scalability of corporate processes and systems
• Assisting the board with respect to mergers and acquisitions strategy and execution
| | | | | | | | Management Development and
Compensation Committee
Meetings in 2020: 7
Weighted average 2020 attendance
of director nominees: 91%
| | Key Responsibilities and Areas of Risk Oversight
• Evaluation and compensation of the CEO and other executive officers
• Director compensation recommendations to the board
• Performance-based compensation arrangements
• Equity-based compensation plans
• Employment and severance agreements and other arrangements with executive officers
• Management development program
• Talent engagement
• Diversity and inclusion
• Assess shareholder “say-on-pay” and “say-on-pay” frequency votes
• Stock ownership guidelines
• Clawback policy
| | | | | | | | Governance and
Sustainability Committee
Meetings in 2020: 7
Weighted average 2020 attendance
of director nominees: 96%
| | Key Responsibilities and Areas of Risk Oversight
• Nominations to the board and board committees, including evaluation of any shareholder nominees
• Director independence recommendations to the board
• Annual board self-evaluation process
• Succession planning for the CEO and other senior executives
• Macro environment and geo-political risks, including immigration law changes
• Legal and regulatory risks, including with respect to intellectual property
| | | | | | |
Table of Contents
Corporate Governance > Board Structure and Operations
| | | | | | | | Management | | | Recent Activities and Key Focus Areas
• Reviewing and approving the 2020 financial statements and disclosure enhancements
• Reviewing and selecting the independent auditor for the year ending December 31, 2021
• Overseeing the internal audit deparment’s annual audit plan and budget
• Assisting the board with respect to overseeing the company’s response to the April 2020 ransomware attack
• Overseeing the company’s security remediation and IT and security infrastructure enhancement activities
• Overseeing material litigation and potential litigation
• Approving a new company code of ethics
| | • Transitioning committee chair from Maureen Breakiron-Evans to Sandra Wijnberg
Audit Committee Financial Experts and Financial Literacy
Ms. Breakiron-Evans and Ms. Wijnberg are “audit committee financial experts” (per SEC rules), and all members of the committee can “read and understand fundamental financial statements” (per Nasdaq rules).
| | | | | Management is responsible for the day-to-day management of the company, including its business, strategy execution and risk management. As part of the ERM program and committee oversight responsibilities under the committee charters, management provides regular updates to the board and relevant committees.
| | | | | | | | | | | | • Treasury matters, including hedging strategies
• Service delivery
• Investor Relations
• Insurance
Recent Activities and Key Focus Areas
• Overseeing the capital structure and allocation program, with $1.6 billion in share repurchases in 2020 (see page 3)
| | • Overseeing the deployment of $1.2 billion in capital in 2020 for 9 acquisitions aligned with our digital and globalization strategic priorities (see page 3)
• Overseeing tax strategy and planning, including the $2.1 billion dividend from our India operating subsidiary in October 2020, which was enabled by recent tax law changes and resulted in a net $2.0 billion increase in cash available for deployment outside of India
| | | | | | | | | | | | | | | | | | | | | | | | | | | Recent Activities and Key Focus Areas
• Developing a revised incentive compensation program for 2020 (see page 28)
• Granting additional equity awards to select officers for retention purposes (see page 28)
• Revising the targets for the 2020 annual cash incentive (ACI) program in July 2020 in light of the unanticipated business impact of the Covid-19 pandemic (see page 28)
• Undertaking a detailed review of our management development program, talent engagement and diversity and inclusion efforts
• Transitioning committee chair from John N. Fox, Jr. to Leo S. Mackay, Jr.
| | Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 2020, Ms. Bali, Messrs. Fox, Mackay, Patsalos-Fox and Velli and Mr. John Klein, who served on our board through March 1, 2020, served on the Compensation Committee. No member of the Compensation Committee was or is a current or former officer or employee of the company or any of its subsidiaries.
None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of Cognizant’s board or Compensation Committee.
| | | | | COMMITTEE CHARTERS
Each of the board’s four standing committees — the Audit Committee, Finance and Strategy Committee (“Finance Committee”), Management Development and Compensation Committee (“Compensation Committee”) and Governance and Sustainability Committee (“Governance Committee”) — operates under a charter that has been approved by the board and is available on the company’s website. See “Helpful Resources” on page 73.
| | | | | | | | | | | | | | | | | | | | • Corporate governance structure and practices, including the company’s corporate governance guidelines
• Public affairs and public policy initiatives
• Environmental, social and governance (ESG) program
Recent Activities and Key Focus Areas
• Overseeing the board’s 2020 self-evaluation process (see page 8)
• Reviewing the company’s exposure to potential changes in immigration laws and regulations
| | • Reviewing and approving the 2020 political spend disclosures and 2021 U.S. political contributions budget
• Overseeing the company’s enhancement of its ESG program and disclosures
| | | | | | | | | | | | | | |
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Board Engagement Activities
Shareholder EngagementOur board values the input of our shareholders. It receives quarterly or more frequent updates on shareholder communications and is directly involved in responding to communications where appropriate. It also engages in a formal governance-focused engagement process where select directors meet directly with a number of our large shareholders to solicit the input of shareholders on a proactive basis.Fall 2020 EngagementATTENDANCEMichael Patsalos-Fox Leo S. Mackay, Jr. Our board chair and
C Chair |
Sandra Wijnberg A Chair | Mr. Rohleder (our Board Chair), Mr. Mackay (our Compensation Committee chair ledChair) and Ms. Wijnberg (our Audit Committee Chair) participated in the engagement process and meetings with shareholders, supported by representatives from the company’s legal and investor relations functions.FORMATVideoconference; 30 minutes – 1 hourTOPICS DISCUSSED AND FEEDBACK RECEIVED Business and StrategyMost meetings involved significant focus on the progress of the company’s transformation agenda since our CEO joined in 2019, the impact of the Covid-19 pandemic and the April 2020 ransomware incident on the business, the company’s four strategic priorities designed to enable continued success in the evolving enterprise digital market, the company’s recent digital acquisitions and overall acquisition strategy, and the board’s engagement with management and oversight of the foregoing. Shareholders expressed general satisfaction with the direction of the business, strategy and execution.Board Composition and RefreshmentBoard composition and refreshment was a frequent topic, including recent board additions, changes in committee chairs, changes in committee composition and our ongoing process to ensure that the board continues to have the right skills, expertise and diversity of thought and experiences to fulfill its strategic and oversight responsibilities going forward. Shareholders were generally supportive of the board’s approach and recent changes with respect to composition and refreshment.Executive CompensationAll of the meetings touched upon the company’s executive compensation program, with much of the focus on the significant changes made to the performance-based compensation components (Annual Cash Incentive (ACI) and PerformanceStock Units (PSUs)) for 2020 to better align the program with our short and long-term strategic goals. As noted in our 2020 proxy statement, these changes were discussed with shareholders in our 2019 shareholder engagement process and were made with consideration given to the feedback received from shareholders. Also discussed was the mid-2020 adjustment to the 2020 ACI program in light of the unanticipated business impact of the Covid-19 pandemic. Shareholders gave positive feedback with respect to the revised design of the performance-based compensation components for 2020 and were generally supportive of the company’s intention to maintain substantially the same design for 2021. Some shareholders suggested the inclusion of environmental and social metrics, including with respect to diversity and inclusion, in the executive compensation program design. The Compensation Committee is evaluating potential metrics for 2022 (see page 29).SustainabilityMost meetings involved significant focus on the company’s human capital management, diversity and inclusion efforts and environmental, social and governance (ESG) program, including the company’s plans to increase its disclosures in these areas in 2021. Shareholders were supportive of such plans, noting in many cases their desire for increased disclosure aligned to established standards, company-defined metrics and targets, and reporting against such targets.Evaluate Annual Meeting ResultsThe board |
Shareholder proposals at annual meeting The Board reviews and takes positions with respect to any shareholder proposals submitted for consideration at the annual meeting. The Board also evaluates the voting results from the annual meeting, including with respect to shareholder proposals.Response to 2020 Proposal – Shareholder Action by Written ConsentNo ActionOur board continues to believe that the proposed addition of a written consent process is not in the best interests of all shareholders, and that: • the proponent wastes shareholder time and company resources in continuing to submit substantially the same proposal year after year notwithstanding its having been repeatedly rejected by shareholders; • the company is aligned with market practice (69% of S&P 500 companies effectively do not permit shareholder action by written consent); and • the company’s 10% threshold for a shareholder-called special meeting ensures shareholder democracy and board accountability. Table of Contents
Corporate Governance > Board Engagement Activities
2023 Proposal – fair elections For the 2023 annual meeting, we received a proposal requesting that the Board amend the by-laws to require shareholder approval for any advance notice by-law amendments that: (1) require the nomination of candidates more than 90 days before the company’s annual meeting, (2) impose new disclosure requirements for director nominees, including disclosures related to past and future plans, or (3) require nominating shareholders to disclose limited partners or business associates, except to the extent such investors own more than 5% of the company’s shares. In light of the voting results below, the Board did not take any action regarding this proposal. 2023 Proposal – shareholder ratification of termination pay For the 2023 annual meeting, we also received a proposal requesting that the Board seek shareholder approval of any senior manager’s new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus. In light of the voting results below, and the fact the Board had already adopted a cash severance policy in March 2023 that caps the amount of any cash severance benefits to executive officers at 2.99 times annual salary and bonus (see page 67), the Board did not take any further action regarding this proposal. |  | Employee Engagement and Global Delivery Operations Review8.7%Travel to India Every other year, our board travels to India, where 2/3rds of our employees and the core of our global delivery operations are located. Over the course of a week, directors meet with employees in a variety of forums, tour a number of our global delivery centers and engage in an in-depth review of our people and operations in India. The board’s most recent visit to India was in February 2020. Keeping Up-to-Date with Trends and Legal DevelopmentsFOR | NACD Membership The company maintains a subscription for board members to the National Association of Corporate Directors (“NACD”), a recognized authority focused on advancing board leadership and establishing leading boardroom practices. Our board members attend programs sponsored by the NACD as well as events and summits sponsored by various universities, accounting firms, law firms and other governance firms, and speak on various topics at these events. | Corporate Governance Policymaking91.3% Certain of our board members are actively involved in shaping policy around public company governance. For example, Ms. Breakiron-Evans, one of our Audit Committee financial experts, sits on the NACD Audit Committee Chairs Advisory Board, a group of Fortune 500 audit committee chairs that meets with Public Company Accounting Oversight Board (“PCAOB “) members, the SEC Chief Accountant and the head of the Center for Audit Quality. Updates from Advisors Our board members receive periodic updates on corporate governance and executive compensation developments, accounting standards changes and various legal and other topics from internal and external counsel, our independent registered public accounting firm and third-party advisors. Employee Engagement1-on-1 Meetings At our quarterly in-person board meetings, our directors engage in 1-on-1 meetings, typically over breakfast or lunch, with members of management and high-performing employees. With quarterly board meetings held virtually since the start of the Covid-19 pandemic, the 1-on-1 meetings have been held via videoconference. Shareholder Proposals at Annual Meeting The board reviews and takes positions with respect to any shareholder proposals submitted for consideration at the annual meeting. 2020 Proposal – Shareholder Action byWritten Consent For the 2020 annual meeting, we received a proposal requesting that the board undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. The proposal, which was advisory to our board, received the for / against vote split as set out below. 17.1% For 82.9% Against 2021 Proposal – ShareholderAction by Written Consent As in 2020, for the 2021 annual meeting, we received a proposal requesting that the board undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. See page 62 for the proposal and the board’s statement of opposition.AGAINST | |
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Sustainability2024 Proposal, if properly presented at the meeting
For the 2024 annual meeting, we received one shareholder proposal. See page 90 for the proposal and the Board’s statement of opposition explaining why it has recommended that shareholders vote against the proposal. We are focused on embedding environmental, social and governance (ESG) considerations into our thinking, decisions, and actions.
Supporting Our People | | | RECOMMEND VOTE AGAINST | |
Employee engagement and global delivery operations review Travel to IndiaTypically, our Board travels to India, where more than 70% of our employees and the core of our global delivery operations are located, every other year. Over the course of a week, directors meet with employees in a variety of forums, tour a number of our global delivery centers and engage in a review of our operations in India. Following a delay due to COVID-19, the Board’s most recent visit to India was in February and March 2023. Cognizant 2024 Proxy statement 34 Talent Development
As a professional services company, our continued success depends on our ability
1-on-1 meetings At our quarterly Board meetings, our directors typically engage in 1-on-1 meetings with members of management and high-performing employees. When possible, these meetings are held in-person rather than virtually. Keeping up-to-date with trends and legal developments NACD membership The company maintains a subscription for Board members to the National Association of Corporate Directors (“NACD”), a recognized authority focused on advancing board leadership and establishing leading boardroom practices. Our Board members attend programs sponsored by the NACD as well as events and summits sponsored by various universities, accounting firms, law firms and other governance firms, and speak on various topics at these events. Updates from advisors Our Board members periodically meet with advisors to discuss corporate governance and executive compensation developments, accounting standards changes and various legal and other topics from internal and external counsel, our independent registered public accounting firm and third-party advisors. Sustainable outcomes We recognize that our business operates within a larger context, including communities and the physical world, necessitating a broad view of how our business affects people’s lives economically, environmentally and socially and how social and environmental considerations impact our business. We strive to embed Sustainability considerations into our thinking, decisions and actions. Supporting our people Talent development As a professional services company, our continued success depends on our ability to attract, develop and retain top talent. The Board is actively involved in overseeing our talent management and development, including the company’s diversity and inclusion efforts, as an integral part of its oversight of our business and strategy. Our focus on talent management and development stretches from the Board level to our more than 345,000 associates through programs overseen by management and reported on to the Board and its committees that are designed to identify, train and grow future leaders. | Board | | Management | | Executive officers | LEADERSHIP AND TECHNICAL TRAINING•
We provide our associates with opportunities to develop throughCompensation Committee oversees the evaluation process.
• Board oversees CEO and senior executive succession planning. | | • CEO and Chief People Officer, as appropriate, participate in and assist the Compensation Committee and the Board in executive officer evaluations. | | Senior leadership | • The Board oversees management’s strategies for and progress in building a robust learning ecosystem that includes our award-winning Global Academy and Global Leadership Development programsdiverse leadership pipeline, including hiring, development and My.Learning.Studio.movement of senior talent. • HIGH PERFORMANCE CULTUREThe Board periodically reviews the pipeline of potential internal successors to the members of the Executive Committee.
| | • We continue to make strong progress in our evolution towards a high performance culture. In 2020 we made changes to further shift to a performance-based system for promotions and merit increases.
COVID-19
We equipped our associates for virtual working, instituted a paid leave program for those affected by Covid-19 and paid additional bonuses to a large portionExecutive Committee (consisting of our associates in IndiaCEO and his direct reports) meets monthly, reviews VP+ leadership and oversees global leadership development strategies and approach for managing senior talent.
• Fast-track development for high-performing and high-potential leadership talent through personalized assessments, executive coaching and executive education programs. | | Leadership pipeline and professionals | • Compensation Committee oversees the Philippines to support families and enable delivery operations to continue uninterrupted. EMPLOYEE WELLNESS
We are committed to caring for our associates and their families through multiple stages of life. Select wellness benefits include: paid parental leave, back-up childcare, adoption and surrogacy programs, flexible work arrangements, counseling and relationship support, and work-life balance services.
| Board | Management | | | | | | Executive Officers | | | | | | • Compensation Committee oversees the evaluation process and management development program for senior executives. | • CEO, CFO and chief people officer, as appropriate, participate in and assist the Compensation Committee in executive officer evaluations. | | | • Governance Committee oversees CEO and senior executive succession planning. | | | | | | | | | | | Senior Leadership | | | | | | •
The Compensation Committee oversees management’s strategies for and progress in building a robust and diverse leadership pipeline, including hiring, development and movement of senior talent (AVP+, top ~1,000 leaders).
•
The Governance Committee periodically reviews the pipeline of potential internal successors to the members of the Executive Committee (~50 leaders).
| •
Executive Committee (consisting of our CEO and his direct reports) meets monthly, reviews VP+ leadership (including diversity of executive candidate slates) and oversees global leadership development strategies and approach for managing senior talent (AVP+, top ~1,000 leaders).
•
Fast-track development for high- performing and high-potential leadership talent through personalized assessments, executive coaching and executive education programs.
| | | | | | | | | | | | | | Leadership Pipeline and Professionals | | | | | | • The Compensation Committee oversees the Company’s management development,company’s general talent engagement (including retention, development and training) and diversity and inclusion programs and policies. | • Executive Committee includes talent management and development as an agenda item at its monthly meetings, which includes deep dives on senior leadership talent, voluntary and involuntary attrition, areas of talent for investment, performance management and meritocracy, diversity and inclusion and driving high performing teams.
• Annual global talent review of our leadership pipeline, plus a diverse set of leadership development opportunities, with targeted investments for our ~4,000 director and above leaders.
| | | | | |
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Corporate Governance > Sustainability
| | Running a Responsible Business |
Diversity and Inclusion
At Cognizant, we believe diversity and inclusion areprograms and policies.
• Board oversees the company’s management development. • Board has also had a recent focus on the employee attrition prevalent in industry, its impact on the company, and efforts to mitigate it. | | • Executive Committee includes talent management and development as an agenda item at the heartperiodic meetings, including deep dives on senior leadership talent, voluntary and involuntary attrition, areas of our ability to execute successfullytalent for investment, performance management and consistently over the long term. We continue to drivemeritocracy, diversity and inclusion throughout our organization to unlock the insights, imagination and innovationdriving high performing teams. • Annual global talent review of our leadership pipeline, plus a diverse set of leadership development opportunities, with targeted investments for our director level and above leaders. |
Cognizant 2024 Proxy statement 35 Leadership and technical training From campus hire training to providing capability assurance programs for professional practitioners, our learning ecosystem fuels growth for associates at all levels. We look to empower our associates with the expertise needed to excel beyond their current roles. For example, we offer our associates continuous sustainability learning to help ensure that they are equipped to successfully develop their careers as opportunities emerge in the transition to lower carbon emissions. Our approach to talent development has been recognized by leading learning and development organizations. Employee wellbeing We are committed to fostering a culture of wellbeing, enabling care for our associates and their families through multiple stages of life. Cognizant’s inclusive wellbeing program, designed to increase access and awareness, includes: flexible work arrangements, financial wellbeing resources, mental health and resilience offerings including counseling, mindfulness and relationship support, health benefits supporting both preventative and critical care, and life-work balance services. Associate engagement in wellbeing is encouraged through manager training, wellbeing champions and executive sponsorship. Diversity and inclusion (D&I) At Cognizant, we are working every day to create conditions for our employees to thrive. We are continually improving our efforts over the long term to provide a diverse and inclusive workforce, which strengthens our ability to innovate, understand, and better meet our clients’ needs and aspirations, while reflecting the diversity of our clients and communities. We have D&I training and other programs in every geography where our employees are located, fostering inclusivity throughout our organization and culture. We are focused on elevating the experience of work for women. In December 2023, we launched Shakti, a unified framework of women-centric programs and policies to accelerate careers and boost women leadership in technology. Through Shakti, the company plans to reframe current programs and policies and bring all women-centric initiatives under one umbrella for greater impact, including the women’s global leadership development program, Propel, which is designed to help shape and mobilize the careers of women in leadership roles across our organization. By the end of 2023, more than 1,600 women leaders from around the world had completed the Propel program. Shakti also includes RISE, a leadership development program for mid-level women associates in India, Returnship, a 12-week paid program focused on upskilling to return to work after a career break, and Be Gritty, a program that trains campus hires to develop a growth mindset. Global affinity groups that are sponsored by Cognizant’s executive committee members and open to all associates welcome, nurture and provide safe spaces in which our employees can share their unique interests and aspirations. | • | Black, Latinx and Indigenous Groupsupports programming and initiatives that promote career development, mentoring, recruitment, retention and community building. | | • | Embrace (LGBTQ+)provides a positive, supportive environment for lesbian, gay, bisexual, transgender, queer and other (“LGBTQ+”) colleagues to be their authentic selves at work and creates a strong community among LGBTQ+ associates and reflectallies, including connecting with our clients’ LGBTQ+ networks to strengthen our client relationships. | | • | Pan-Asian Groupfosters a safe environment for open dialogue, provides resources to the diversity of our clientscommunity for career growth and communities. We have diversityleadership development and inclusion trainingcelebrates Pan-Asian heritage. | | • | Race Equality Network empowers, assists, represents and other programs in every geography where our employees are located, fostering inclusivity throughout our organization and culture. In recognition of our efforts, we are proud to have been certified as a 2021 top employer in 17 countries.Cognizant is proud to be a founding member of the World Economic Forum’s Partnership for Racial Justice in Business. This initiative, which was launched in January 2021, brings together a global coalition of companies to tackle racism in business, with a starting point on Black inclusion and addressing anti-Blackness. We also recently joined the Valuable 500, a CEO community working to revolutionize disability inclusion through business leadership and opportunity.
One of the ways we are elevatingimproves the experience of workCognizant’s minority associates in Europe, the Middle East, Africa and Latin America.
| | • | Unite (Persons with Disabilities & Caregivers)brings together persons with disabilities and elevates the dialogue amongst the disabled and caregivers. | | • | Veterans Networkis committed to hiring and helping to prepare transitioning service members, veterans and military spouses for women is through our global new jobs by, among other things, participating in national and local partnerships, job fairs, career conferences and sponsorships, and providing an internal network for military employees and veterans. | | • | Women Empowered (“WE”) program. WE is committed to developing more women leaders at all levels of ourthe company, providing career growth and leadership development opportunities, and building a community of women across all industries in business and technology. For example, | | • | Working Parent Groupprovides a place to share experiences, resources, and voice support for all types of families. |
Additional highlights of our D&I efforts include: | • | A Global D&I organization embedded within our women’s global leadership development program, Propel, is designedHR function to help shapedrive accountability through our people processes and mobilize the careers of women in leadership roles across our organization. | 2019: Targeted employing 100,000 women around the world by the end of 2020, a milestone that was reached ahead of schedule. | |  | 2020 – 2021: On track to put 1,000 high performing women in leadership levelsthrough Propel—our signature women’s global leadership initiative—by the end of 2021. In 2020, we hit the half-way mark, with 500 women completing Propel.systems. | | • | Global D&I training and programs, including allyship, psychological safety, and inclusive mindset training for leaders. | | • | Thoughtful hiring policies, practices and initiatives: |
We strive to provide
| • | a diverse candidate pipeline initiative aimed at building a more diverse interview slate at the Vice President level and above. | | • | our diverse talent with the supportReturnship Program, a 3-month paid, immersive training and tools needed to thrive through affinity groups in our organization. Executive Committee sponsors and executive leaders help shape the strategy and direction of each group.• | AALG (African American and Latinx Group) supports programming and initiatives that promote career development, mentoring, recruitment, retention and community building. | • | Embrace (LGBTQ+) provides a positive, supportive environment for lesbian, gay, bisexual, transgender, queer and other (“LGBTQ+”) colleagues to be their authentic selves at work and creates a strong community among LGBTQ+ associates and allies, including by connecting with our clients’ LGBTQ+ networks to strengthen our client relationships. | • | Pan-Asian Group fosters a safe environment for open dialogue, provides resources to the community for career growth and leadership development and celebrates Pan-Asian heritage. | • | Unite (People with Disabilities & Caregivers) brings together people with disabilities and elevates the dialogue amongst the disabled and caregivers. | • | Veterans Network is committed to hiring and helping to prepare transitioning service members, veterans and military spouses for new jobs. We participate in national and local partnerships, job fairs, career conferences and sponsorships, and have an internal network of military employees and veterans. | • | Working Parent Group provides a place to share experiences, resources, and voice support for all types of families. |
Board and Management Oversight
| Running a responsible business starts with our board and management setting a cultural “tone at the top.”on-boarding experience for experienced professionals who have taken an extended career break. |
Our board takes
| • | Executive committee compensation includes a metric focused on gender diversity globally and developing and retaining talent. In addition, every leader at the level of director and above has a goal, relative to their business area, for improving female representation in mid- and senior-level roles. | | • | In 2023, Cognizant earned a number of accolades for our efforts to create an active roleinclusive workplace. This included Newsweek’s America’s Greatest Workplaces for Diversity 2023, a perfect score on the Human Rights Campaign Foundation’s 2023 Corporate Equality Index in the oversightU.S., a gold award from the India Workplace Equality Index, Inclusion & Diversity team of our environmentalthe year from World 50, and sustainability initiatives, ethicsrecognition as a “Best Place to Work for the LGBTQ+ Equality” by HRC Equidad MX in Mexico and compliance and risk management, and our management promotes and monitors implementation of such initiatives and provides regular progress reportsHRC Equidade BR in Mexico, all foremost benchmarking surveys related to LGBTQ+ workplace equality. |
Cognizant 2024 Proxy statement 36 Running a business with sustainable value Board and management oversight Running a business in accordance with our stated ethics and company values starts with our Board and management setting a cultural “tone at the top”. Our Board takes an active role in the oversight of our social and sustainability initiatives, ethics and compliance and risk management and how all these elements interact to impact our business. Our management promotes and monitors implementation of such initiatives and provides regular progress reports to the Board. Environmental impact and sustainable business Our Governance Committee is responsible for overseeing our Sustainability program. We have continued to pursue platforms to enhance our Sustainability program to, among other things, set a greenhouse gas emissions reduction goal and provide more relevant Sustainability disclosures to our shareholders. In 2023, we published our annual Sustainability report incorporating what we consider the most applicable elements of key third-party Sustainability reporting frameworks, including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board standards (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) recommendations. We outlined the company’s approach to integrating Sustainability considerations into our business strategy while navigating an ever-changing world, including addressing our investment in and perspective on associate wellbeing and emissions reducing actions as well as physical climate risk. Learn more about our Sustainability platform at https://www.cognizant.com/us/en/about-cognizant/esg; information which appears on the website is not part of, and is not incorporated by reference into, this proxy statement. In 2021, the company announced a net zero emissions reduction goal and laid out a roadmap that calls for reducing absolute emissions by 50 percent from the company’s global operations and supply chain by 2030, and by 90 percent by 2040 with plans to offset any remaining, unavoidable emissions, in both the 2030 and 2040 goals, by using credibly certified carbon offsets. We continue to make progress on our 2030 and 2040 GHG emissions targets. We believe third-party validation is a hallmark for the legitimacy of a company’s focus on an emissions reduction goal. Cognizant is currently utilizing the Science Based Targets Initiative (SBTi) as the outside reviewer of our goal and our near-term and long-term targets have both been validated by SBTi. Ethics and compliance Our commitment to clients, associates, investors and communities is to act with integrity at all times. This guides everything we do — the way we serve our clients and the work we do to help them build better businesses. We believe it is critical to maintain the highest ethical standards. Our code of ethics applies to all of our directors, officers and employees and is available on our website. See “Helpful resources” on page 103. We post on our website all disclosures that are required by law or Nasdaq rules concerning any amendments to, or waivers from, any provision of our code of ethics. In order to foster a culture of ethics and compliance, we conduct annual trainings for associates on regulatory compliance topics such as global data privacy, anti-bribery and the prevention of discrimination and harassment. We also make a compliance hotline available to our employees. The hotline is serviced by a third-party provider that is available by phone or online 24 hours a day, 7 days a week to help ensure any compliance concerns can be reported and addressed in a timely and appropriate manner. Cognizant 2024 Proxy statement 37 Investing in our communities through strategic philanthropy At Cognizant, we care deeply about unlocking human potential and living out our purpose to improve everyday life. We know that our success depends on delivering value to all our stakeholders. We contribute to the progress and prosperity of communities across the globe through our corporate foundations, philanthropic initiatives and associate volunteering efforts. We believe providing our associates with volunteer opportunities and encouraging volunteerism is an important part of our company’s culture as well as the value proposition of working at Cognizant, demonstrably helping to retain our talent. Building on our longstanding investments in corporate social responsibility, Cognizant supports initiatives to advance economic mobility, educational opportunity, diversity and inclusion, and health and well-being in communities around the world. Learn more about our work to support communities around the globe at https://www.cognizant.com/impact; information which appears on the website is not part of, and is not incorporated by reference into, this proxy statement. | | | 1 Million
individuals ...that Cognizant aims to empower with technology skills through the board.Synapse Initiative | | Environmental ImpactGlobal impact and Sustainable Businesscorporate philanthropy
Our GovernanceIn 2023, the company provided more than $7.5 million in grants and Sustainability Committee is responsible gifts to more than 125 organizations around the world to improve economic mobility and community resilience through strategic programmatic giving, local community support and disaster relief.
In late 2023, Cognizant launched the Synapse Initiative aimed at empowering more than one million individuals with cutting-edge technology skills—like generative artificial intelligence (AI)—for overseeing our ESG program. We recently hired a new chief sustainability officerthe digital age. Together with governments, academic institutions, businesses, and are undertaking investments to enhance our ESGother strategic partners, Cognizant’s program to, among other things, consider climate change in our business thinking and provide more comprehensive ESG disclosures to our shareholders. In 2021, we intend to publish an ESG report inclusive of the most applicable elements of third-party ESG reporting frameworks, enhance our infrastructure for future reporting and evaluate potential future short and long-term greenhouse gas emissions reduction targets. Ethics and Compliance
Our commitment to customers, employees, shareholders and society is to act with integrity at all times. This guides everything we do — the way we serve our clientswill leverage evolving AI technology and the work we docompany’s premier tech services to help themup-prepare individuals for the future workforce. Cognizant also intends to build better businesses. We believe it is critical to maintaina consortium of partners for training and jobs which then will employ individuals who are upskilled through the highest ethical standards.Synapse program.
| 2 Focus Areas Our code…for support of ethics applies to all of our directors, officers and employees and is available on our website. See “Helpful Resources” on page 73. We post on our website all disclosures that are required by law or Nasdaq rules concerning any amendments to, or waivers from, any provision of our code of ethics. In order to foster a culture of ethics and compliance, we conduct annual trainings for employees on regulatory compliance topics such as global data privacy and anti-bribery. We also make a compliance hotline available to our employees. The hotline is serviced by a third party provider that is available by phone or online 24 hours a day, 7 days a week to help ensure any compliance concerns can be reported and addressedprojects in a timely and appropriate manner.
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Supporting Our Communities
At Cognizant, we care deeply about unlocking human potential and living out our purposeIndia to improve everyday life. We know that our success depends on delivering valueeducation and skilling, as well as access to all of our stakeholders. We contribute to the progress and prosperity of communities across the globe through our corporate foundations, philanthropic efforts and associate volunteering efforts. Building on our longstanding investments in corporate social responsibility, Cognizant recently announced a new, five-year $250 million initiative to advance economic mobility, educational opportunity, diversity and inclusion, and health and well-being in communities around the world. Learn more about our work to build resilient communities around the globe at https://www.cognizant.com/impact.quality healthcare
| | $50 Million
…committed to date to organizations working to educate and train the workforce of today and tomorrow
Covid-19
…relief in the form of protective gear and critical medical equipment provided to 90 frontline departments across India
$10 Million
…philanthropic commitment to support communities addressing the immediate and long-term impacts of Covid-19
31,000 Volunteers
…in 40 locations globally invested over 221,000 volunteering hours in 2020
Corporate Foundations
UNITED STATES
Cognizant U.S. Foundation was launched in 2018 with an initial $100 million grant and works to inspire, educate and prepare individuals across the country for success in the workforce of today and tomorrow. Through its grantmaking, including approximately $50 million committed to date, the foundation supports those working to advance technical education, workforce training and research and thought leadership designed to ensure all communities have equitable opportunities in the digital economy. In 2020, the foundation specifically dedicated additional resources to Covid-19 relief and to support communities of color.
INDIA
The Cognizant Foundation launchedIndia (the “Foundation”) helps Cognizant to channel its Corporate Social Responsibility contributions in 2005, focusesIndia. At the Foundation, we are building an ecosystem at the intersection of inclusion, technology, and collaboration. The Foundation’s initiatives are along the two program themes of (a) Future4All – creating a better tomorrow through education and skilling, and (b) Health4All – enhancing accessibility to quality healthcare with a focus on fulfillingpromoting inclusion for persons with disabilities, holistic child development and gender equality. In 2023, the education, healthcare and livelihood needs ofFoundation supported 101 projects under the underprivileged sections of society. In 2020, the foundation supported over 70 projectsabove two program themes in partnership with over 40 not-for-profit organizations aimed atwith some scholarship programs implemented by the Foundation directly. Future4All – Creating a better tomorrow through education and skilling. The Foundation, under its Excellence4All program, supports equitable access to higher education; under its Tech4All program, provides skilling for employability and vocational education; and under its STEAM4All program, promotes digital, science, technology, engineering, arts, math and inclusive education. Key programs in education support access to higher education for underprivileged youth and the visually impaired through scholarships and provide meaningful ways of inclusion for people with disabilities through appropriate learning materials, vocational and technical education training. Health4All – enhancing accessibility to quality educationhealthcare. The Foundation, under its Sight4All program, supports preventing avoidable blindness, under its Care4All program, works to promote women and child health and under its Support4All program, supports mental health and early intervention for children with special needs. Key programs in healthcare work to make timely and improved livelihood.quality health care accessible and affordable to underserved communities in India. They have a special focus on promoting health and wellbeing among children and women and supporting people with disabilities. |
Cognizant Outreach and employee engagement At the heart of Cognizant’s volunteering program (which we call Outreach) lies our commitment to creating a positive and lasting influence that supports both business and society. Our volunteering focuses on two core themes: increasing inclusion in technology and using technology for good to increase community impact. • | Healthcare. The foundation enables access to quality healthcare for the under-privileged, focusing on preventing avoidable blindness and promoting women and children’s health. In 2020, the foundation’s Covid-19 relief focused on protecting the frontline workers and strengthening healthcare systems.Digital expertise is vital across a growing spectrum of jobs. While companies have spent heavily on digital skilling, a technology talent gap remains in many communities and geographies – impacting our talent pipeline. At the same time, many of the non-governmental organizations designed to address the issues of underserved communities lack access to digital services and technical skills. Skilling and upskilling are key to both addressing our business needs and increasing prosperity in underserved communities where Cognizant and our clients do business. We believe Cognizant has an opportunity to lead in this space – especially in partnership with clients, which is why we launched our Synapse Initiative in 2023. Our diverse associate community is working together to help transform the companies that are leading the world and driving impact. When we’re not developing industry-leading digital solutions for clients, our associates are participating in Outreach, and mentorship and philanthropy efforts that also help to support historically disadvantaged groups through technological training and other resources. At the same time, we strive to help lift communities through access to education and skilled work while helping to address the widening talent gap of qualified professionals with digital skills. These programs also deliver business benefits: between 2019 and 2023, the average annual attrition rate of our full-time employees who engaged in Outreach activities was lower than the average annual attrition rate of non-Outreach engaged full-time employees; our outreach and philanthropy initiatives have also provided additional candidate pools for certain hiring initiatives. During 2023, approximately 50,500 Cognizant volunteers devoted 162,000 hours to volunteering, supporting a variety of efforts including technical skills development, education, health and wellness, and entrepreneurship. Cognizant 2024 Proxy statement 38 | • | Education. The foundation focuses on enabling access to quality education for students from under-served communities through scholarships for higher education, digital learning, science, technology, engineering and math (STEM) and vocational-technical education. |
Share ownershipCommon stock and total stock-based holdings tableThe following table sets forth the Cognizant stock-based holdings of our directors, named executive officers for fiscal 2023 (“NEOs”), and directors and executive officers as a group. Information is as of April 8, 2024, except for Mr. Humphries, Mr. Siegmund and Ms. Schmitt, for whom the information is based on the most recent information available to the company (including, for Mr. Humphries and Mr. Siegmund, shares that vested following the date each ceased to be designated as an executive officer of the company and, for Mr. Siegmund, shares sold after the date he ceased to be designated as an executive officer of the company for which the company received documentation of such sale). The table also sets forth the stock-based holdings of beneficial owners of more than 5% of our common stock as of December 31, 2023. Furthermore, the table includes shares of our current directors and executive officers as a group and, as such, this group does not include Mr. Humphries’, Mr. Siegmund’s and Ms. Schmitt’s shares as they were no longer executive officers of the company after January 12, 2023, December 3, 2023 and May 5, 2023, respectively. Unless otherwise indicated, the address for the individuals below is our address. Each of our directors and NEOs owns less than 1% of the total outstanding shares of our common stock. The current directors and executive officers as a group do not own more than 1% of the total outstanding shares. | Directors | Common Stock | Unvested
Awards | Deferred RSUs
and DSUs | Total | Direct
Holdings | Awards
Vesting | Options | Indirect
Holdings | | Zein Abdalla | 15,575 | 3,566 | — | — | — | — | 19,141 | | Vinita Bali | 10,590 | 3,566 | — | — | — | — | 14,156 | | Eric Branderiz | — | — | — | 45 | — | 4,525 | 4,570 | | Archana Deskus | 10,602 | 3,566 | — | — | — | — | 14,168 | | John M. Dineen | 1,827 | — | — | — | — | 23,140 | 24,967 | | Leo S. Mackay, Jr. | 26,671 | 3,566 | — | — | — | 4,541 | 34,778 | | Michael Patsalos-Fox | 54,695 | 3,566 | — | 10,000 | — | 5,622 | 73,883 | | Steve Rohleder | — | — | — | — | — | 15,995 | 15,995 | | Bram Schot | 2,826 | 3,566 | — | — | — | — | 6,392 | | Joseph M. Velli | 19,801 | 3,566 | — | — | — | — | 23,367 | | Sandra S. Wijnberg | — | — | — | — | — | 20,686 | 20,686 | | Total | 142,587 | 24,962 | — | 10,045 | — | 74,509 | 252,103 | | | | | | | | | | | Named Executive Officers | Common Stock | Unvested
Awards | Deferred RSUs
and DSUs | Total | Direct
Holdings | Awards
Vesting | Options | Indirect
Holdings | | Ravi Kumar S | 48,137 | 11,085 | — | — | 350,690 | — | 409,912 | | Jatin Dalal | 5,479 | 8,985 | — | — | 119,363 | — | 133,827 | | Surya Gummadi | 25,834 | 6,810 | — | — | 89,619 | — | 122,263 | | John Kim | 35,655 | 6,133 | — | — | 94,715 | — | 136,503 | | Ganesh Ayyar | 75,194 | 3,100 | — | — | 54,528 | — | 132,822 | | Former Executives | | | | | | | | | Brian Humphries | 322,286 | — | — | — | — | — | 322,286 | | Jan Siegmund | 18,527 | — | — | — | — | — | 18,527 | | Becky Schmitt | 34,238 | — | — | — | — | — | 34,238 | | Total | 565,350 | 36,113 | — | — | 708,915 | — | 1,310,378 | | | | | | | | | | | | Common Stock | | | | Current Directors and
Executive Officers | Stock | Awards
Vesting | Options | Indirect
Holdings | Unvested
Awards | Deferred RSUs
and DSUs | Total | | As a group (18 people) | 373,243 | 65,019 | — | 10,845 | 775,085 | 74,509 | 1,298,701 |
Common Stock. These columns show beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, each person included in the table has sole voting and investment power over the shares reported. None of the shares is pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights. Cognizant 2024 Proxy statement 39 | • | Livelihood. The foundation’s initiatives in livelihood enable disadvantaged youth, women and the disabled to gain employment through short-term skills training programs. |
Corporate Philanthropy
Cognizant’s Making the Future initiative strengthens the K-12 STEM pipeline by advancing maker-centered learning as the catalyst for life-long learning and an equitable, inclusive future-ready workforce. To date, Making the Future has invested $16 million in youth-serving non-profit organizations in communities across 42 states in the United States, providing hands-on learning focused on computational making skills and creative problem solving. National Making the Future partners include the New York Hall of Science, Engineering is Elementary, Maker Education Initiative, FIRST Robotics Equity and Inclusion grants and the Boy Scout Jamboree.
Volunteering
The Cognizant Outreach program mobilizes our associates’ expertise and enthusiasm through volunteer work. We believe our community work is a key value proposition for our associates. Associates leverage their professional skills and personal talents
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The Awards Vesting column includes shares underlying RSUs that will vest within 60 days of April 8, 2024 (except, in the case of directors, for such RSUs with respect to which the settlement has been deferred). This also includes additional deferred RSUs (which may include fractional units, which have been rounded down to the nearest whole share) granted to non-employee directors in lieu of cash dividend equivalents beginning in the fourth quarter of 2023. Table of Contents
Corporate Governance > Share Ownership
Share Ownership
Common Stock and Total Stock-Based Holdings Table
The following table sets forth the Cognizant stock-based holdings of our directors, named executive officers for fiscal 2020 (“NEOs”), and directors and executive officers as a group. Information is as of March 31, 2021 except for Karen McLoughlin and Matthew W. Friedrich, for whom the information is based on the most recent information available to the company. The table also sets forth the stock-based holdings of beneficial owners of more than 5% of our common stock as of December 31, 2020. Unless otherwise indicated, the address for the individuals below is our address. Each of our directors and NEOs owns less than 1% of the total outstanding shares of our common stock.
| | | | | | | | | Common Stock | | | | | Directors | Stock | Options | Total | | | | Zein Abdalla | 8,672 | 11,294 | 23,905 | | | | Vinita Bali | 868 | - | 4,807 | | | | Maureen Breakiron-Evans | 3,063 | 13,297 | 49,852 | | | | Archana Deskus | 880 | - | 4,819 | | | | John M. Dineen | - | 1,827 | 15,464 | | | | John N. Fox, Jr. | 36,628 | - | 48,189 | | | | Leo S. Mackay, Jr. | 21,703 | 7,797 | 37,945 | | | | Michael Patsalos- Fox | 59,363 | 21,764 | 91,583 | | | | Joseph M. Velli | 10,079 | - | 14,018 | | | | Sandra S. Wijnberg | - | - | 6,766 | | | | Total | 141,256 | 55,979 | 297,348 | | | | | | | | | | | Named Executive | Common Stock | | | | | Officers | Stock | Options | Total | | | | Brian Humphries | 64,974 | - | 522,931 | | | | Jan Siegmund | 15,626 | - | 138,259 | | | | Karen McLoughlin | 132,801 | - | 132,801 | | | | Becky Schmitt | 27,689 | | 127,701 | | | | Malcolm Frank | 45,894 | - | 187,145 | | | | Matthew W. Friedrich | 5,043 | | 5,043 | | | | Total | 292,027 | - | 1,113,880 | | | | | | | | | | | Current Directors and | Common Stock | | | | | Executive Officers | Stock | Options | Total | | | | As a group (20 people) | 356,316 | 55,979 | 1,664,569 | | | | | | | | |
| | | | | | | | | 5% Beneficial Owners | Common Stock | %
Outstanding | | | | BlackRock, Inc. | | 51,047,733 | 9.5% | | | | The Vanguard Group | | 41,515,977 | 7.8% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock. This column shows beneficial ownership of our common stock as calculated under SEC rules. Except to the extent noted below, each person included in the table has sole voting and investment power over the shares reported. None of the shares is pledged as security by the named person, although standard brokerage accounts may include non-negotiable provisions regarding set-offs or similar rights. The Stock subcolumn includes shares directly or indirectly held and shares underlying RSUs that will vest within 60 days of March 31, 2021. Mr. Patsalos-Fox’s stock holdings include 10,000 shares of common stock over which there is shared voting and investment power by Mr. Patsalos-Fox through family trusts or other accounts. Ms. McLoughlin’s stock holdings include PSUs and RSUs that vested upon her retirement on December 31, 2020 and will settle on later dates in accordance with the applicable terms of the company’s retirement, death and disability policy (see page 47). For Ms. Mcloughlin and Mr. Friedrich, their stock holdings exclude PSUs and RSUs that were forfeited upon their departure from the company. The Options subcolumn includes shares that may be acquired under stock options that were exercisable as of or within 60 days of March 31, 2021.
Total. This column shows the individual’s total Cognizant stock-based holdings, including securities shown in the Common Stock column (as described above), plus non-voting interests that cannot be converted into shares of Cognizant common stock within 60 days of March 31, 2021, including, as appropriate, PSUs and RSUs.
Current Directors and Executive Officers as a Group.
The Optionscolumn includes shares that may be acquired under stock options that were exercisable as of or within 60 days of April 8, 2024. The Indirect Holdings column includes shares of common stock over which there is shared voting and investment power by each of Mr. Branderiz and Mr. Patsalos-Fox through family trusts or other accounts. For Mr. Humphries, Mr. Siegmund and Ms. Schmitt, their stock holdings exclude any PSUs and RSUs that were forfeited upon their departure from the company. The Unvested Awards column shows non-voting interests that are not convertible into shares of Cognizant common stock within 60 days of April 8, 2024, including, as appropriate, PSUs and RSUs. The Deferred RSUs and DSUs column includes RSUs with respect to which settlement has been deferred. For Mr. Rohleder and Ms. Wijnberg, this also includes deferred stock units representing shares received in lieu of their respective cash Board and committee retainers (“DSUs”). See pages 41 to 43 for additional details. This also includes additional deferred RSUs and DSUs (which may include fractional units, which have been rounded down to the nearest whole share) granted to non-employee directors in lieu of cash dividend equivalents beginning in the fourth quarter of 2023. Current Directors and Executive Officers as a Group.This table includes shares of our current directors and executive officers as of the date of this proxy statement. In addition to holdings for executive officers who are not NEOs similar to the types of holdings described above, this includes 800 shares of common stock over which there is shared voting and investment power by Robert Telesmanic, our Senior Vice President, Controller and Chief Accounting Officer, through family trusts or other accounts. 5% Beneficial OwnersThis table shows shares beneficially owned by BlackRock, Inc. and affiliated entities, 50 Hudson Yards, New York, NY 10001 and The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, as follows: | 5% Beneficial Owners | Common Stock | | % Outstanding | | Sole Voting
Power | | Shared Voting
Power | | Sole Dispositive
Power | | Shared Dispositive
Power | | BlackRock, Inc. | 55,692,900 | | 11.2% | | 51,309,433 | | — | | 55,692,900 | | — | | The Vanguard Group | 51,111,498 | | 10.3% | | — | | 633,302 | | 48,981,564 | | 2,129,934 | | | | | | | | | | | | | |
The information in this table is based solely on a Schedule 13G/A filed by BlackRock with the SEC on February 2, 2024 and a Schedule 13G/A filed by Vanguard with the SEC on January 10, 2024. Delinquent Section 16(a) reportsSection 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors, executive officers and any holders of more than 10% of our voting stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock or other equity securities. Based on a review of those forms provided to us and any written representations, we believe that during the year ended December 31, 2023, our directors, executive officers and holders of more than 10% of our voting stock filed the required reports on a timely basis under Section 16(a). Related person transactionsUnder the Audit Committee’s charter, the committee is responsible for reviewing and approving all transactions between the company and any related person that are required to be disclosed pursuant to Item 404(a) of Regulation S-K. Related persons include our nominees, directors and executive officers, certain of our shareholders and immediate family members of the foregoing. The company’s legal staff is responsible for monitoring and obtaining information from our directors and executive officers with respect to potential related person transactions, and for then determining, based on the facts and circumstances, whether the related person has a direct or indirect material interest in any transaction with us. Each year, to help our legal staff identify related person transactions, we require each of our directors, director nominees and executive officers to complete a disclosure questionnaire identifying any transactions with the company in which the director or officer or their family members have an interest. In addition, our code of ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to, in the case of employees, notify our chief compliance officer, or, in the case of directors and executive officers, notify our chief legal officer. There have been no transactions that require disclosure with any related person since January 1, 2023. Cognizant 2024 Proxy statement 40 Director compensationDiscussion and analysisWe use cash and stock-based compensation to attract and retain qualified individuals to serve on the Board. We set compensation for our non-employee directors taking into account the time commitment and experience level expected of our directors. A director who is an employee of the company receives no cash or stock-based compensation for serving as a director. 2023 Non-employee director compensation structure Annual Cash Retainer for
serving on the Board | $100,000 | | Additional Annual Cash Retainers | | | For serving as Chair of the Board | | $150,000 | For serving as a Member or
Chair of a Board Committee | Committee
Member | Committee
Chair | | Audit Committee | $20,000 | $35,000 | | Finance and Strategy Committee | $15,000 | $20,000 | | Compensation and Human Capital Committee | $15,000 | $25,000 | | Governance and Sustainability Committee | $10,000 | $20,000 | | Annual RSU Award | Board
Member | Board
Chair | | | $220,000 | $270,000 | | | | |
The annual RSU award is made on or as soon as practicable following the date of the annual meeting of shareholders with a grant date fair value as set out above. 100% of the RSUs vest on the one-year anniversary of the date of this proxy statement and, asthe award. | Retirement Upon a director’s retirement while in good standing, the Board’s intent is to accelerate the vesting of such does not include Ms. McLoughlin’s and Mr. Friedrich’s shares as they were no longer executive officers of the company after August 31, 2020 and January 1, 2021, respectively. This table includes: (i) 36,411 RSUs that vest within 60 days of March 31, 2021 (Stock subcolumn and Total column), (ii) 10,000 shares of common stock over which there is shared voting and investment power by Mr. Patsalos-Fox through family trusts or other accounts (Stock subcolumn and Total column), (iii) 800 shares of common stock over which there is shared voting and investment power by Robert Telesmanic, our Senior Vice President, Controller and Chief Accounting Officer, through family trusts or other accounts (Stock subcolumn and Total column), and (iv) 55,979 shares that may be acquired under stock options that are exercisable as of or within 60 days of March 31, 2021 (Options subcolumn and Total column). The current directors and executive officers as a group do not own more than 1% of the totaldirector’s outstanding shares.equity awards. 5% Beneficial Owners. This table shows shares beneficially owned by BlackRock, Inc. and affiliated entities, 55 East 52nd Street, New York, NY 10055, and The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, as follows:
| (# of shares) | BlackRock | Vanguard | | Sole voting power | 44,803,028 | 0 | | Shared voting power | 0 | 900,580 | | Sole dispositive power | 51,047,733 | 39,148,745 | | Shared dispositive power | 0 | 2,367,232 |
The information in this table is based solely on a Schedule 13G/A filed by BlackRock with the SEC on January 29, 2021 and a Schedule 13G/A filed by Vanguard with the SEC on February 10, 2021.
Table of Contents
Director Compensation
Discussion and Analysis
We use cash and stock-based compensation to attract and retain qualified individuals to serve on the board. We set compensation for our non-employee directors taking into account the time commitment and experience level expected of our directors. A director who is an employee of the company receives no cash or stock-based compensation for serving as a director.
| | | | | | | | | | | 2020 NON-EMPLOYEE DIRECTOR
COMPENSATION STRUCTURE | | | | | | | | | | | | | | | | Annual Cash Retainer for serving on the Board | | $90,000 | | | | | | | | | | | | | | | | | | | | | | Additional Annual Cash Retainers | | | | | | | | For serving as Chair of the Board | | $150,000 | | | | | | | | | | | | | | For serving as a Member or Chair of a Board Committee | Committee
Member | Committee
Chair | | | | | | Audit Committee | $20,000 | $35,000 | | | | | | | | | | | | | | Finance and Strategy Committee | $10,000 | $20,000 | | | | | | | | | | | | | | Management Development and Compensation Committee | $15,000 | $25,000 | | | | | | | | | | | | | | Governance and Sustainability Committee | $7,500 | $20,000 | | | | | | | | | | | | | | | | | | | | | | Annual RSU Award | Board
Member | Board
Chair | | | | | | | $210,000 | $260,000 | | | | | | Annual restricted stock unit award on or as soon as practicable following the date of the annual meeting of shareholders with a grant date fair value as set out above. 100% of the restricted stock units vest on the 1st anniversary of the date of the award. Retirement Upon a director’s retirement while in good standing, the board’s intent is to accelerate the vesting of such director’s outstanding equity awards. Advance Payment and Partial Year Service For new members of the boardBoard or of a committee or a new chairChair of the boardBoard or a committee, compensation in the initial year of service is prorated based on the length of service during the twelvemonth12-month period following the company’s most recent annual meeting. All cash retainers are paid in advance on an annual basis following the annual meeting or other triggering event. | | Stock Elections in lieu of Cash Retainers Non-employee directors may elect to have all or a portion of their cash retainers paid in fully vested common stock in lieu of cash. | | | | | | | | | | Payment Deferral Elections Cash retainers, annual RSU awards and common stock received in lieu of cash retainers may be eligible for payment deferral elections in accordance with applicable tax laws and, for annual RSU awards, the applicable Incentive Award Plan. |
Director Compensationcompensation vs. Peer Grouppeer groupFor purposes of establishing 20202023 non-employee director compensation, the Compensation Committee engaged Pay Governance, LLC (“Pay Governance”), an independent executive compensation advisory firm, to review all elements of director compensation, benchmark such compensation in relation to other comparable companies with which we compete for board talent and provide recommendations to ensure that our director compensation program remains competitive. Pay Governance benchmarked our director compensation against the same group of technology-related firms used by Pay Governance in preparing its recommendations to the Compensation Committee for executive officers for 2020.2023. See “Peer Group Review”group review” on page 3247. The Compensation Committee considered the benchmarking data and recommendations of Pay Governance in recommending to the boardBoard the cash and stock-based compensation of non-employee directors that became effective following the 20202023 annual meeting. Based on the 2020 analysis:2023 analysis, the Board approved an increase to the annual RSU award for the members of the Board from $210,000 to $220,000 and for the Board Chair from $260,000 to $270,000. • | Our overall director compensation arrangements were generally consistent with our peer group; | • | Our additional annual board and committee chair retainers were low relative to our peer group; and | • | Our use of meeting fees was atypical among our peer group. |
As a result, for the director year starting with the 2020 annual meeting, we made the following changes to better align with peer group practices:
• | Increased the annual RSU award for the board chair and additional annual committee chair retainers; and | • | Eliminated the use of meeting fees and replaced them with additional annual committee member retainers. |
DIRECTOR STOCK OWNERSHIP GUIDELINESDirector stock ownership guidelines
Under our stock ownership guidelines, each non-employee director is required over time to hold a number of shares (including shares underlying deferred stock units and restricted stock units) with a value, measured as of the time the revised guidelines were put in place (March 2017) or, for later joining directors, the time a director joins the board,Board, equal to five times the annual cash retainer received by non-employee directors at the time they joined the Board (i.e., $450,000$500,000 in shares of common stock)stock for non-employee directors who joined the Board after June 7, 2022). Compliance with the guidelines is required within five years of a director joining the board.Board. As of March 31, 2021,April 8, 2024, all of our directors were in compliance withwho joined the Board prior to January 1, 2023 had satisfied the requirement under our stock ownership guidelines.guidelines and the remaining directors are on track to do so within the required time period. |  5x annual cash
retainer |
NO HEDGING, SHORT SALES, MARGIN ACCOUNTS OR PLEDGINGNo hedging, short sales, margin accounts or pledging
All directors are subject to the same company insider trading policies of the company that apply to employees and provide for: X | No hedging or speculation with respect to Cognizant securities | X | No short sales of Cognizant securities | X | No margin accounts with Cognizant securities | X | No pledging of Cognizant securities |
See “Hedging, Short Sale, Margin Accountshort sale, margin account and Pledging Prohibitions”pledging prohibitions” on page 4866 for additional information on these restrictions.
Cognizant 2024 Proxy statement 41 2023 director compensation developments Dividend equivalent make-whole agreements with Mr. Rohleder and Ms. Wijnberg | • | In 2021, the Board amended its non-employee director compensation guidelines to allow non-employee directors to elect to receive DSUs in lieu of cash retainers. At the time, such DSUs were not eligible to receive dividend equivalents. By comparison, non-employee directors who elect to defer their annual RSU awards do receive dividend equivalents on such deferred RSUs. The Board reconciled the discrepancy in how DSUs and deferred RSUs are treated in May 2023 so that DSUs would also receive dividend equivalents going forward, but did not retroactively apply dividend equivalents to DSUs that had already been issued. | | • | At the time the DSU dividend equivalent discrepancy was reconciled, Mr. Rohleder and Ms. Wijnberg were the only two directors who had received DSUs. Because the difference in treatment between DSUs and deferred RSUs was not intended, the Board authorized entry into dividend equivalent make-whole agreements with each of Mr. Rohleder and Ms. Wijnberg to provide them with credit for dividend equivalents on previously issued DSUs from the date of grant until the awards are ultimately settled. As of the date the company entered into the make-whole agreements with Mr. Rohleder and Ms. Wijnberg, they received credit in the amount of approximately $2,001 and $1,680, respectively for their previously issued DSUs, which are reflected as an additional cash award in the Director compensation table on page 43 and, going forward, each of Mr. Rohleder and Ms. Wijnberg will be entitled to receive future dividend equivalents on these DSU awards (i.e., they will accrue earnings on the awards equal to dividends paid on shares of our common stock). |
Reinvestment of dividend equivalents | • | Historically, dividend equivalents due to non-employee directors were credited in the form of cash. | | • | Cognizant’s equity plans give the Board discretion to designate that dividend equivalents be credited in the form of cash or additional RSUs or DSUs, as applicable, resulting in “dividend reinvestment” with the additional units vesting and settling in tandem with the underlying award. Such additional RSUs or DSUs will themselves accrue future dividend equivalents. | | • | In September 2023, the Board determined that all dividend equivalent rights on outstanding and any future RSUs (including DSUs and RSUs with deferred and non-deferred settlement) granted to current and future non-employee directors that relate to ordinary cash dividends with a record date on or after September 7, 2023 will be credited in the form of additional RSUs that are subject to vesting and settlement upon the same terms as the RSUs to which they relate. |
Table
Deferral of Contentsrestricted stock unitsCorporate Governance > Related Person TransactionsIn late 2022, non-employee directors were provided an option to elect to defer settlement of RSUs that were granted in 2023. The following table sets forth for 2023 the two deferral options available and the directors that elected such deferral options.
| RSUs Deferred Until Earliest to Occur of | Directors
Electing Option | | Company Change in Control or Director’s Death
or Permanent Disability | Director Leaves the Board | | Option 1 | Immediate settlement | 100% settles on next July 1st | Rohleder, Wijnberg | | Option 2 | Immediate settlement | 1/3rd settles on each of next three July 1sts | Branderiz, Dineen | | | | |
Cognizant 2024 Proxy statement 42 Director Compensation Tablecompensation tableThe following table sets forth certain information regarding the compensation of each of our non-employee directors who served during 2020.2023. The table also sets forth the aggregate number of RSUs and the aggregate number of stock options held by each such non-employee director aton December 31, 2020 (for2023. Maureen Breakiron-Evans did not stand for re-election at our 2023 annual meeting of shareholder and, accordingly, did not receive any compensation in 2023. | Name | 2023 Director Compensation | | Director Stock and Option Awards Outstanding | | Fees Earned or
Paid in Cash | Stock
Awards | Total | Aggregate
Number of Stock
Awards | Aggregate
Number of Stock
Options | | | Zein Abdalla | $135,000 | $219,957 | $354,957 | | 3,552.58 | — | | | Vinita Bali | $125,000 | $219,957 | $344,957 | | 3,552.58 | — | | | Eric Branderiz | $173,329 | $281,514 | $454,843 | | 4,508.50 | — | | | Maureen Breakiron-Evans (retired June 6, 2023) | — | — | — | | 18,353.00 | — | | | Archana Deskus | $142,459 | $219,957 | $362,416 | | 3,552.58 | — | | | John M. Dineen | $140,000 | $219,957 | $359,957 | | 23,052.60 | — | | | Nella Domenici | $160,753 | $281,514 | $442,267 | | 4,508.50 | — | | | Leo S. Mackay, Jr. | $155,000 | $219,957 | $374,957 | | 8,077.15 | — | | | Michael Patsalos-Fox | $130,000 | $219,957 | $349,957 | | 9,153.56 | — | | | Steve Rohleder | $359,987 | $290,058 | $650,045 | | 15,934.39 | — | | | Bram Schot | $138,959 | $257,884 | $396,843 | | 4,173.12 | — | | | Joseph M. Velli | $135,000 | $219,957 | $354,957 | | 3,552.58 | — | | | Sandra S. Wijnberg | $151,680 | $219,957 | $371,637 | | 20,607.56 | — | |
Fees Earned or Paid in Cash. Mr. D’SouzaRohleder and Ms. Wijnberg elected to receive DSUs in lieu of their 2023 Board and committee cash fees, resulting in grants of 4,745 and 2,412 DSUs, respectively, with a grant date fair value of $62.17 per share on June 6, 2023. The value of such shares is included in this column. For Mr. Klein, who leftRohleder, this also includes additional DSUs in lieu of pro rata cash fees for his service (i) as the board during 2020,Chair of the information is basedBoard from the date of his appointment to the 2023 annual meeting of shareholders, resulting in a grant of 927 DSUs with a grant date fair value of $65.10 per share on January 12, 2023, and (ii) on the most recent information availableGovernance Committee from the date of his appointment to the company)2023 annual meeting, resulting in a grant of 41 DSUs with a grant date fair value of $62.61 per share on March 6, 2023. Mr. Schot elected to receive his annual cash retainer in the form of fully vested shares of common stock in lieu of cash, resulting in a grant of 1,849 shares with a grant date fair value of $62.17 per share on June 6, 2023. In addition, he received additional vested RSUs in lieu of pro rata cash fees for his service on (i) the Board from the date of his appointment to the 2023 annual meeting of shareholders, resulting in a grant of 294 RSUs with a grant date fair value of $61.37 per share on April 3, 2023, (ii) the Finance Committee from the date of his appointment to the 2023 annual meeting, resulting in a grant of 14 RSUs with a grant date fair value of $62.76 per share on May 17, 2023, and (iii) the Governance Committee, resulting in a grant of 70 RSUs with a grant date fair value of $70.33 per share on December 8, 2023. The number of shares reported herein for Mr. Schot do not reflect the withholding of shares for the payment of taxes. For Mr. Rohleder and Ms. Wijnberg, this also includes $2,001 and $1,680, respectively, that each received in May 2023 as credit for dividend equivalents they did not previously receive on their outstanding DSUs (see page42 for additional information on these dividend equivalent payments). | | | 2020 Director Compensation | | Director Stock and Option
Awards Outstanding | | | | Name | Fees Earned
or Paid in
Cash | Stock
Awards | Total | | Aggregate
Number of
Stock Awards | Aggregate
Number of
Stock Options | | | | Zein Abdalla | $129,000 | $209,949 | $338,949 | | 3,939 | 11,294 | | | | Vinita Bali | $135,808 | $268,469 | $404,277 | | 4,807 | — | | | | Maureen Breakiron-Evans | $144,500 | $209,949 | $354,449 | | 33,492 | 13,297 | | | | Archana Deskus | $132,623 | $262,687 | $395,310 | | 4,819 | — | | | | John M. Dineen | $142,000 | $209,949 | $351,949 | | 13,637 | 1,827 | | | | Francisco D’Souza | $ 3,000 | — | $ 3,000 | | — | — | | | | John N. Fox, Jr. | $128,500 | $209,949 | $338,449 | | 11,561 | — | | | | John E. Klein | $ 6,000 | — | $ 6,000 | | 11,871 | — | | | | Leo S. Mackay, Jr. | $145,651 | $209,949 | $355,600 | | 8,445 | 7,797 | | | | Michael Patsalos-Fox | $284,500 | $259,997 | $544,497 | | 10,456 | 21,764 | | | | Joseph M. Velli | $138,500 | $209,949 | $348,449 | | 3,939 | — | | | | Sandra S. Wijnberg | $142,726 | $209,949 | $352,675 | | 6,766 | — | | | | | | | | Stock Awards. Represents the aggregate grant date fair value of RSUs granted in the 2020 fiscal year under the 2017 Incentive Award Plan approved by shareholders, determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. All directors listed except Mr. D’Souza, Mr. Klein and Mr. Patsalos-Fox received an award of 3,939 RSUs with a grant date fair value of $53.30 per share on June 2, 2020. As board chair, Mr. Patsalos-Fox received an award of 4,878 RSUs with a grant date fair value of $53.30 per share on June 2, 2020. Ms. Bali received an additional award of 868 RSUs with a grant date fair value of $67.42 per share upon her joining the board on February 24, 2020. Ms. Deskus received an additional award of 880 RSUs with a grant date fair value of $59.93 per share upon her joining the board on March 5, 2020. The reported dollar amounts do not take into account any estimated forfeitures related to continued service vesting requirements. For information regarding assumptions underlying the valuation of equity awards, see Note 17 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“2020 Annual Report”). Aggregate Number of Stock Awards. Includes the RSUs granted in 2020 with respect to which the settlement has been deferred for some directors, as set forth in “Deferral of Restricted Stock Units” below. Also includes deferred RSUs granted in prior years held by Ms. Breakiron-Evans (29,553), Mr. Dineen (9,698), Mr. Fox (7,622), Mr. Mackay (4,506), Mr. Patsalos-Fox (5,578) and Ms. Wijnberg (2,827) to be settled upon the director’s termination of service on the board. | | | | | |
DeferralThe Stock Awards column represents the aggregate grant date fair value of Restricted Stock Units
Non-employee directors may on a yearly basis elect to defer settlement of RSUs that are granted in the subsequent2023 fiscal year under the company’s 2017 Incentive Award Plan for awards issued prior to June 6, 2023 and the company’s 2023 Incentive Award Plan (the “2023 Plan”) for all remaining awards, determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. All directors listed except Ms. Breakiron-Evans, who did not receive any compensation for 2023 due to her retirement, and Mr. Rohleder, received an award of 3,538 RSUs with a grant date fair value of $62.17 per share on June 6, 2023. As Board Chair, Mr. Rohleder received an award of 4,342 RSUs with a grant date fair value of $62.17 per share on June 6, 2023. Mr. Rohleder also received 309 RSUs awarded at the time of his appointment to the Chair of the Board with a grant date fair value of $65.10 per share on January 12, 2023. In addition, each of Mr. Branderiz and Ms. Domenici received an award of 952 RSUs at the time of their appointment to the Board with a grant date fair value of $64.66 on February 21, 2023. Mr. Schot also received an award of 618 RSUs at the time of his appointment to the Board with a grant date fair value of $61.37 on April 3, 2023. The reported dollar amounts do not take into account any estimated forfeitures related to continued service vesting requirements. For information regarding assumptions underlying the valuation of equity awards, see Note 17 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”).
The Aggregate Number of Stock Awards column includes the RSUs granted in 2023 which remained unvested as of December 31, 2023, including those with respect to which the settlement has been deferred for some directors, as set forth in “Deferral of restricted stock units” above. The column also includes deferred RSUs granted in prior years held by Mr. Dineen (19,420), Mr. Mackay (4,506), Mr. Patsalos-Fox (5,578), Mr. Rohleder (11,218) and Ms. Wijnberg (16,985) to be settled following the director’s termination of service on the Board in accordance with the previously elected deferral option. In addition, this column also includes the RSUs or DSUs received in lieu of dividend equivalents held by Mr. Abdalla (14.58), Ms. Bali (14.58), Mr. Branderiz (18.50), Ms. Deskus (14.58), Mr. Dineen (94.60), Ms. Domenici (18.50), Mr. Mackay (33.15), Mr. Patsalos-Fox (37.56), Mr. Rohleder (65.39), Mr. Schot (17.12), Mr. Velli (14.58) and Ms. Wijnberg (84.56) (see page42 for additional information). Cognizant 2024 Proxy statement 43 Compensation (Say-on-pay)
Proposal 2: Advisory vote to approve executive compensation (say-on-pay)The Board unanimously recommends a vote FOR the approval, on an advisory (non-binding) basis, of our executive compensation. What are you voting on? As required by Section 14A of the Exchange Act, we are asking shareholders to vote on an advisory basis to approve the compensation paid to our named executive officers, as described in this proxy statement. We currently hold annual say-on-pay votes and expect that our next say-on-pay vote after the 2024 annual meeting will occur at the 2025 annual meeting. Resolution shareholders are being asked to approve Resolved, that the shareholders of Cognizant Technology Solutions Corporation 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 company’s definitive proxy statement for the 2024 annual meeting of shareholders. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that our shareholders have the opportunity to cast an advisory vote on executive compensation, commonly referred to as a “say-on-pay” vote, at least once every three years. In accordance with the results of the advisory vote at the 2023 annual meeting on the frequency of the say-on-pay vote, the say-on-pay vote is held every year. The following table sets forthvote solicited by Proposal 2 is advisory, and therefore is not binding on the company, the Board or the Compensation Committee. The outcome of the vote will not require the company, the Board or the Compensation Committee to take any actions, and will not be construed as overruling any decision by the company or the Board. However, the Board, including the Compensation Committee, values the opinions of our shareholders and will carefully consider the outcome of the Say-on-Pay vote and shareholder engagement program when making future compensation decisions. Cognizant 2024 Proxy statement 44 Compensation discussion and analysis (CD&A) This compensation discussion and analysis section describes the general objectives, principles and philosophy of the company’s executive compensation program, focused primarily on the compensation of our named executive officers for 2020fiscal 2023 (the “NEOs”). 2023 NEOsFor 2023, our NEOs include our current CEO, Mr. Kumar, our former CEO (who was succeeded by Mr. Kumar on January 12, 2023), our current CFO, Mr. Dalal, our former CFO (who was succeeded by Mr. Dalal on December 4, 2023), each of our three other most highly compensated executive officers who were serving as executive officers at the two deferral options availableend of the 2023 fiscal year, and Ms. Schmitt, who would have been one of the directors that elected such deferral options.three most highly compensated executive officers for 2023 had her employment with the company not terminated.  | |  | |  | |  | |  | |  | |  | |  | Ravi Kumar Current CEO | | Brian
Humphries Former CEO1 | | Jatin Dalal Current CFO | | Jan Siegmund Former CFO2 | | Surya
Gummadi EVP &
President,
Americas | | John Kim EVP, Chief
Legal
Officer, Chief
Administrative
Officer and
Corporate
Secretary | | Ganesh Ayyar EVP &
President,
Intuitive
Operations
and
Automation
and Industry
Solutions | | Becky Schmitt Former Chief
People Officer3 |
| 1 | Mr. Humphries ceased to serve as CEO effective January 12, 2023. He served as a special advisor to, and an employee of, the company until March 15, 2023. | | 2 | Mr. Siegmund ceased to serve as CFO effective December 4, 2023. He served as a special advisor to, and an employee of, the company until March 31, 2024. | | 3 | Ms. Schmitt ceased to be an employee of the company effective May 5, 2023. |
Key compensation program features | | What we do | | | | | What we don’t do | | | | RSUs Deferred Until Earliest to Occur of | | | | | | Company Change in Control or | | | | | | | Director’s Death or Permanent Disability | Director Leaves the Board | | Directors Electing Option | | | Option 1 | Immediate settlement | 100% settles on next July 1st | | Dineen, Wijnberg | | | Option 2 | 1/3rd settles on each of next three July 1sts | | Breakiron-Evans | | | | | | | | |
Related Person Transactions
Under the Audit Committee’s charter, the committee is responsible for reviewing and approving all transactions between the company and any related person that are required to be disclosed pursuant to Item 404(a) of Regulation S-K. Related persons include our directors and executive officers, certain of our shareholders and immediate family members of the foregoing. The company’s legal staff is primarily responsible for monitoring and obtaining information from our directors and executive officers with respect to potential related person transactions, and for then determining, based on the facts and circumstances, whether the related person has a direct or indirect material interest in any transaction with us. Each year, to help our legal staff identify related person transactions, we require each of our directors, director nominees and executive officers to complete a disclosure questionnaire identifying any transactions with us in which the director or officer or their family members have an interest. In addition, our code of ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to, in the case of employees, notify our chief compliance officer, or, in the case of directors and executive officers, notify our general counsel. There have been no related person transactions since January 1, 2020.
Table of Contents
Compensation
| | | Letter from the Management Development and Compensation Committee
Key 2020 Financial Highlights
$16.7B
Revenue
$2.57 (GAAP)
$3.42 (Adjusted)
Diluted earnings per share
12.7% (GAAP)
14.4% (Adjusted)
Operating margin
$3.3B (GAAP)
Net cash provided by operating activities
$2.9B (Non-GAAP)
Free cash flow
$2.1B
Returned to our shareholders through share purchases and dividends
$1.1B
for 9 acquisitions in digital and cloud
Our Compensation Program Objectives
See our Compensation Program Objectives on pages 30 and 31.
• Alignment with Corporate Strategies
• Short and Long-Term Performance Objectives
• Long-Term Continued Employment
• Balanced Mix
• Competitive
• No Unnecessary Risk-Taking
| | Dear Shareholder,
An active 2020 started with a revised performance-based compensation structure developed with shareholder input and designed to align with company strategy and shareholder preferences. With our new CEO aggressively pursuing a transformation agenda to reposition the company for accelerated growth and leadership with respect to today’s advanced digital technologies, and the unanticipated business impact of the Covid-19 pandemic, committee action was also required to ensure the continued retention and engagement of key executives.
Revised 2020 Performance-Based Compensation Structure
For 2020, the committee revised the performance-based compensation structure to better align with the company’s strategy, peer group, competitor and industry practices, the recommendations of the committee’s independent compensation consultant and feedback from shareholders. We reviewed the 2020 program with a number of our largest shareholders in our fall 2020 shareholder engagement and received positive feedback, including general support of the committee’s intention to maintain substantially the same program design for 2021 (see page 20). Key 2020 changes included:
ANNUAL CASH INCENTIVE (ACI)
The committee eliminated days sales outstanding (“DSO”) as a performance metric, having determined it to be effectively monitored by the board through other means. This enabled an increase in the weighting of revenue from 50% to 60% for corporate leaders, aligning with the company’s strategic focus on revenue growth. Adjusted income from operations remained at a weighting of 40% for corporate leaders. The committee also created more individualized awards for business unit (“BU”) leaders, with 60% of the award based on performance of the applicable BU – 35% BU revenue and 25% BU adjusted income from operations – and 40% of the award based on overall company performance – 25% company revenue and 15% company adjusted income from operations.
REVISED PERFORMANCE STOCK UNIT (PSU) AWARDS
The committee changed from 2 years to 3 years the performance measurement period for the performance stock units (“PSUs”) that are part of executives’ target direct compensation, better aligning the awards with peer group and competitor practices and shareholder preferences. The committee also added a relative TSR metric (25% weighting) to further align management and shareholder interests. While adding relative TSR, revenue remained at a 50% weighting and adjusted diluted earnings per share (“EPS”) was decreased from 50% to 25% weighting, reflecting the company’s strategic priority of increased revenue growth.
Additional Equity Awards
In March 2020, the committee granted additional equity awards to longer-serving SVP+ associates due to the additional efforts required during the ongoing changes in company leadership and transformation initiatives underway, the need to bridge the transition from 2-year to 3-year PSUs that occurred between 2019 and 2020 and the retention concerns presented by the 0% payout for the 2018/19 PSUs and anticipated 0% payout for the 2019/20 PSUs. These awards were part of a broader retention program for AVP+ associates. The CEO did not receive such an award, but three other 2020 named executive officers (“NEOs”) received such awards: Ms. McLoughlin, Mr. Frank and Mr. Friedrich (see pages 43, 45 and 46). Ms. McLoughlin retired at the end of 2020 and Mr. Friedrich left the company (forfeiting most of such awards) in January 2021.
ACI – Covid-19 Adjustment and 2020 Payout
In mid-2020, to maintain the incentive value of the ACI awards in light of the unanticipated business impact of the Covid-19 pandemic, the committee revised the ACI program to measure Q1 performance (25% weighting) based on the original pre-Covid-19 targets established in early 2020 and Q2 through Q4 performance (75% weighting) based on revised targets. The committee simultaneously established a maximum payout of 85% of
| | | |
Table of Contents
Compensation > Letter from the Management Development and Compensation Committee
| | | | | | | | | | Guide to Compensation | | | | | | | | Compensation Program Objectives | 30 | | Performance-Based Compensation – by Award | 38 | | | | Compensation Calendar | 32 | | Compensation of CEO and other NEOs | 40 | | | | Shareholder Engagement | 32 | | Perquisites | 48 | | | | Peer Group | 32 | | Executive Stock Ownership Guidelines | 48 | | | | Independent Compensation Consultant | 33 | | Clawback Policy | 49 | | | | Say-on-Pay | 33 | | Executive Compensation Tables | 51 | | | | Primary Compensation Elements | 34 | | CEO Pay Ratio | 57 | | | | Performance-Based Compensation – by Metric | 36 | | Termination and Change in Control Payments | 58 | | | | | | | | | |
target to ensure the lowered expectations for the year did not result in an above-target payout and a minimum payout of 50% of target to ensure at least the threshold level of payout in a year of extraordinary business challenges. The company’s ultimate 2020 performance would have resulted in a 0% payout based on the original targets but exceeded the revised targets (including as to Mr. Frank’s BU-specific targets), resulting in our NEOs receiving the maximum 85% payout.
PSU Achievement
The committee did not adjust any of the PSU awards for Covid-19. In February 2021, the committee determined a 0% achievement for the 2019/20 PSUs (performance measurement period covering 2019 through 2020) as the threshold levels of performance were not achieved. The committee also determined, based on company performance, that the 2020/21 PSUs (2-year) and 2020/22 PSUs (3-year) should have a 0% achievement for year 1 (2020) with respect to the company performance metrics: revenue (50% weighting) and adjusted diluted EPS (25% weighting). Performance for each year for such PSUs is measured separately, with equal weighting, against targets set upfront in 2020. The relative TSR metric (25% weighting) for such PSUs is not determined until the end of the respective performance periods, though as of March 31, 2021 the company was at the 39.7th percentile relative to the peer group, between the threshold and target.
New Compensation Committee Chair and Member
In September 2020, Leo S. Mackay, Jr. succeeded John N. Fox, Jr. as chair of the committee, a planned rotation of committee leadership following over three years of service by Mr. Fox. Also in September 2020, Vinita Bali joined the committee as a member.
Consideration of Environmental and Social (E&S) Metrics
In our fall 2020 shareholder engagement, some shareholders suggested the inclusion of environmental and social (E&S) metrics, including diversity and inclusion goals, in the executive compensation program design (see page 20). The committee did not include such metrics in the 2021 program design due to significant enhancements to the company’s E&S efforts in process for 2021 (see page 23). However, the committee has an ongoing evaluation underway for the potential inclusion of such metrics in the 2022 program design as new long-term company E&S goals are established.
The committee believes the compensation program design is essential to attracting top talent, driving company performance in alignment with corporate strategies and ensuring the appropriate level of risk-taking in pursuit of long-term shareholder value creation.
Performance-Based Compensation
See Performance-Based Compensation on pages 36 to 39.
2020 ACI
| Completed | Target | Achieved | Achievement
(% earned) | | Revenue | | | 85% Maximum established with Covid-adj. in mid-2020 | | Initial | 3.7% | -2.0% | | Covid-adj | -4.5% | | Adj. Income from Operations | | Initial | 3.1% | -14.2% | | Covid-adj | -17.8% |
| 2019/20 PSUs | | Completed | Target | Achieved | Achievement
(% earned) | | Revenue | 8.0% | 1.4% | 0% | | Adj. EPS | 9.4% | -3.7% | | | | | | | 2020/21 PSUs (2-year) and 2020/22 PSUs (3-year) |
| Year 1 | Target | Achieved | Achievement
(% earned) | | Revenue | 3.7% | -2.0% | 0% | | Adj. EPS | 3.3% | -12.5% | | Relative TSR to date | 39.7th percentile | | | |
2019/23 CEO PSUs (New Hire) | Absolute TSR to date | 9.8% | Relative TSR to date | 15.4th percentile |
 | |  | |  | |  | |  | LEO S. MACKAY, JR. | | VINITA BALI | | JOHN N. FOX, JR. | | MICHAEL PATSALOS-FOX | | JOSEPH M. VELLI | Chair | | Member | | Member | | Member | | Member | | | | | | | | | |
Table of Contents
Table of Contents
Compensation > CD&A > Compensation Program Objectives
Key Compensation Program Features
WHAT WE DO | | | WHAT WE DON’T DO | 
| | See page 49 | | |  | | No dividends or dividend equivalents paid until equity awards have vested | | | | Use appropriate peer groups and market data when establishingcompensation
| | See page 47 | | | | | No repricing of underwater stock options | | | | Retain an independent external compensation consultant (PayGovernance)
| | See page 47 | | | | | No hedging, speculation, short sales, margin accounts or pledging of Cognizant securities | | | | Set significant stock ownership requirements for executives
| | See page 66 | | | | | No tax “gross ups” on severance or other change in control benefits | | | | Maintain a strong clawback policy policies that provide for recoupment of time-based and performance-based incentive compensation, including in the event of executive misconduct
| | See page 66 | | | | | | | | | Utilize “double trigger” change in control provisions in plans thatonly provide benefits upon qualified terminations in connection with a change in control | 
| Seepage 3478 See page 32
See page 33
See page 48
See page 49
See page 58
| | 
No hedging, speculation, short sales, margin accounts or pledging of Cognizant securities
No tax “gross ups” on severance or other change in control benefits
|  See page 48
See page 50
| | |
| 3 | 4 | 5 | 6 | | | | | | Long-Term Continued Employment Provide an incentive for long-term continued employment with our company | Balanced Mix Create an appropriate balance between current and long-term compensation and between performance and non-performance-based compensation | Competitive Provide competitive compensation packages in order to attract, retain and motivate top executive talent | No Unnecessary Risk-Taking Ensure that compensation arrangements do not encourage unnecessary risk-taking | | | | | | | LONG-TERM EQUITY | PERFORMANCE-BASED | PEER GROUP POSITIONING | CEO |  |  |  |  | | | | | | | A substantial percentage of our NEOs’ target direct compensation consists of long-term equity: (i) restricted stock units (“RSUs”), which vest quarterly over a 3-year period, to reward continued service and long-term performance of our common stock, and (ii) PSUs that have a 3-year performance period with vesting shortly thereafter (►see pages 34 and 35). | Our NEOs’ target direct compensation includes current compensation in the form of cash, divided between base salary and ACI, and long-term compensation in the form of equity, divided between PSUs and RSUs. Both current and long-term compensation are mixed between stable (base salary and RSUs) and performance-based (ACI and PSUs) compensation (►see pages 34 and 35). | To ensure our compensation remains competitive, the Compensation Committee engaged Pay Governance as its independent consultant in 2020 and prior years to review and benchmark the compensation we provide relative to our peer group and other market data. Our 2020 peer group was comprised of 17 technology, software and professional service companies selected based on industry, comparable business operations and scale (►see pages 32 and 33). | We set stock ownership guidelines to help mitigate potential compensation risk and further align the interests of our NEOs with those of shareholders (►see page 48). We also create a balance between performance and non-performance-based compensation and set performance targets that we believe are aspirational but achievable (►see pages 34 to 39). |
Cognizant 2024 Proxy statement 45 Compensation program objectivesTable
The Compensation Committee designed the 2023 executive compensation program with the objectives and key features to meet those objectives as set out below. The Compensation Committee believes that the design of Contentsthe compensation program, including having the appropriate mix of compensation elements and performance metrics and targets, has a significant impact on driving company performance. 
1 Alignment with corporate strategies
Ensure compensation program incentives are aligned with our corporate strategies and business objectives Our strategic priorities: 32• | CognizantAccelerate growth | | • | Become the employer of choice | | • | Simplify operations |
We set performance metrics for our performance-based compensation program that align with our strategic priorities and that we believe are aspirational but achievable. In 2023, the performance metrics included revenue growth (measured through revenue adjusted for currency fluctuations), profitability (measured through adjusted operating margin and adjusted diluted earnings per share (“EPS”)) and total shareholder return relative to a peer group of companies (“relative TSR”) (revenue, adjusted operating margin and adjusted EPS are further adjusted for acquisitions, as applicable; see pages 49 to 54). 2 Short and long-term performance objectives
Tie a substantial portion of compensation to both short and long-term performance objectives that enhance shareholder value 2023 ACI 
This applies to the CEO, CFO and other corporate executives. Executives overseeing business units have a portion of their metrics related to the performance of their specific business unit or integrated practice. 2023-2025 PSUs 
A substantial percentage of our NEO compensation is performance-based. The annual cash incentive (“ACI”) measures performance over a one-year period and rewards are tied to short-term company financial objectives. Performance stock units (“PSUs”) measure multi-year performance and reward the achievement of long-term company financial objectives, including relative TSR (see pages 49 and 50). 3 Long-term continued employment Provide an incentive for long-term continued employment with our company 
A substantial percentage of our NEOs’ target direct compensation consists of long-term equity: (i) restricted stock units (“RSUs”), which vest quarterly over a 3-year period, to reward continued service and long-term performance of our common stock, and (ii) PSUs that have a 3-year performance period with vesting shortly thereafter (see pages 49 and 50). Actual compensation received by the NEOs may be higher or lower than target amounts due to the performance criteria in the PSUs. 4 Balanced mix Create an appropriate balance between current and long-term compensation and between performance and non-performance-based compensation 
Our NEOs’ target direct compensation includes current compensation in the form of cash, divided between base salary and ACI, and long-term compensation in the form of equity, divided between PSUs and RSUs. Both current and long-term compensation are mixed between fixed (base salary) and at-risk (ACI, RSUs and PSUs) compensation (see pages 49 and 50). 5 Competitive Provide competitive compensation packages in order to attract, retain and motivate top executive talent 
To ensure our compensation remains competitive, the Compensation Committee engaged Pay Governance as its independent consultant in 2023 and prior years to review and benchmark the compensation we provide relative to our peer group and other market data. Our 2023 peer group was comprised of 18 technology, software and professional service companies selected based on industry, comparable business operations and scale (see page 47). 6 No unnecessary risk-taking
Ensure that compensation arrangements do not encourage unnecessary risk-taking We set stock ownership guidelines to help mitigate potential compensation risk and further align the interests of our NEOs with those of shareholders (see page 66). 
We also create a balance between performance and non-performance-based compensation and set performance targets that we believe are aspirational but achievable (see pages 49 to 54). Cognizant 2024 Proxy statement 46 Compensation setting processTable
Compensation consultantFor 2023, the Compensation Committee engaged Pay Governance to review all elements of Contentsour executive compensation, benchmark such compensation against the compensation packages of other comparable companies with which we compete for executive talent, and provide recommendations to ensure that our executive compensation program continues to enable us to attract and retain qualified executives through competitive compensation packages that incentivize the attainment of our short and long-term strategic objectives. Pay Governance also provides information to the Compensation Committee related to the compensation for new executives, including Mr. Kumar’s compensation when he was appointed in early 2023 and Mr. Dalal’s compensation as CFO when he was appointed in late 2023. Pay Governance reports directly to the Compensation Committee, regularly participates in committee meetings and advises the Compensation Committee with respect to compensation trends and best practices, plan design and the reasonableness of individual compensation awards. Pay Governance does not provide services to the company (directly or indirectly through affiliates) other than those provided to the Compensation Committee. In 2023, the Compensation Committee undertook its annual assessment of the independence of Pay Governance and concluded that no conflict of interest exists that would prevent Pay Governance from providing independent advice regarding executive and director compensation matters. Peer group reviewOn an annual basis, the Compensation > CD&A >Committee, with assistance from Pay Governance, reviews and determines the company’s peer group that will be used, together with other market data, for market comparisons and benchmarking of the compensation of executive officers in the next fiscal year. The 2023 target direct compensation and other compensation of our NEOs was set with reference to a peer group determined by the Compensation Setting ProcessCommittee in late 2022. This peer group was comprised of 18 technology, software and professional services companies selected based on industry, comparable business operations and scale, including with respect to revenue, market capitalization and headcount. The 2023 peer group as compared to the peer group for 2022 included the addition of Hewlett Packard Enterprises and Adobe and excluded Bread Financial (formerly Alliance Data), which was removed based on its low market capitalization. Data in the chart below was reviewed by the Compensation Committee in late 2022 for 2023 compensation decisions.  
2021 Proxy Statement* | 33Trailing 12-months (as of last quarterly filing prior to September 2022) | | ** | As of July 31, 2022 | | *** | As of the end of the last completed fiscal year ended on or prior to July 31, 2022 |
Compensation design and target compensation levels for next yearThe Compensation Committee annually evaluates the executive compensation program with the goal of setting compensation at levels it believes are competitive with those of other companies that compete with us for executive talent. The Compensation Committee continues to strive to improve the executive compensation program and will seek on an annual basis from Pay Governance benchmark compensation data and/or review management’s recommendations for year-over-year compensation adjustments, including a review for general market competitiveness and competitiveness with the company’s peer group. The 2023 executive compensation program followed the same compensation structure as the 2022 executive compensation program. Cognizant 2024 Proxy statement 47 Annual compensation evaluation and finalization of compensationThe Compensation Committee utilizes target direct compensation as the principal manner in which it reviews, evaluates and makes decisions with respect to executive compensation. Target direct compensation is the annual compensation that would be delivered to an NEO in a theoretical, steady-state environment where the same annual compensation was granted in multiple years and the company’s performance was at target across all such years. The Compensation Committee believes this approach is most appropriate for its decision-making, including evaluation against the compensation practices of comparable companies with which we compete for talent, as it is designed to capture the annual compensation an NEO would be expected to earn, assuming company performance at target, based on the decisions of the Compensation Committee made at the beginning of the performance period. The Compensation Committee reviews the target direct compensation of our NEOs on an annual basis and makes periodic adjustments based on individual performance and contributions, market trends and competitive environment for talent, peer group data, internal pay equity, the scope, responsibility and business impact of the individual’s position, the individual’s potential for increased responsibility and promotion over the award term, and the value of equity compensation that the individual has previously been awarded. No specific weight is assigned to any of the above criteria relative to the others, but rather the Compensation Committee uses its judgment in combination with market and other data. The Compensation Committee evaluates the total mix of cash versus equity-based compensation, short-term versus long-term compensation and performance-based versus fixed compensation with reference to market practices and compensation program objectives. Target direct compensation excludes additional awards that may be made from time to time for individual achievement. It also excludes new hire awards upon joining the company, such as sign-on bonuses or one-time equity grants, that are not intended to be recurring, that are designed to compensate a new hire for compensation being lost as a result of leaving a prior employer or additional costs of joining the company, or are needed as additional incentive for a new hire to join the company. Equity vesting acceleration upon retirement similarly is not included in target direct compensation. See pages 55 to 64 for additional details on target direct compensation and any excluded awards. Our CEO, aided by our Chief People Officer (“CPO”), among others, provides statistical data and makes recommendations to the Compensation Committee to assist it in determining compensation levels for other executive officers. The CEO and CPO recuse themselves from any matters dealing with their own compensation. In addition, our CEO provides the Compensation Committee and other non-employee directors with a review of the performance of other executive officers. While the Compensation Committee utilizes this information and values management’s observations with regard to compensation, it makes the ultimate decisions regarding executive compensation. The Compensation Committee finalizes the executive compensation program design and NEO compensation early in the year. For 2023, NEO target direct compensation included base salary, an ACI opportunity, and 2023-2025 PSUs and RSUs. Because the Board had already terminated Mr. Humphries from his role as CEO in January 2023 before annual target direct compensation amounts were established, the Compensation Committee did not set a 2023 target direct compensation amount for Mr. Humphries, and he did not receive a 2023 ACI award or new awards of RSUs or PSUs. As such, discussions of the Committee’s compensation-setting process in early 2023 through early 2024 generally do not apply to Mr. Humphries. Determination of achievement of prior year performance for performance-based awardsThe Compensation Committee determines the prior year performance. In February 2024, the Compensation Committee determined achievements for ACI and PSUs and approved payouts as follows for the following performance-based awards: | • | Annual bonus amounts under the 2023 ACI program |
| • | 30.3% for corporate leaders | | • | 15.8% for Mr. Gummadi and 44.9% for Mr. Ayyar, as a portion of the business unit and integrated practice leaders’ 2023 ACI results are derived from the performance of their respective business unit or integrated practice area |
| • | PSUs as follows: | | final achievement and payout for the 2021-2023 PSUs (3-year) granted in 2021 (payout at approximately 91.4%) | | for in-cycle grants that have yet to pay out separately, the Compensation Committee determined payout/achievements for the 2022-2024 PSUs granted in 2022 with respect to the revenue and adjusted diluted EPS components for the 2023 performance year (0% and 0%, respectively) and 2023-2025 PSUs granted in 2023 with respect to the revenue and adjusted diluted EPS components for the 2023 performance year (approximately 0% and 76.2%, respectively) |
Our NextGen program and ACI and PSU achievement In the second quarter of 2023, we initiated the NextGen program aimed at simplifying our operating model, optimizing corporate functions and consolidating and realigning office space to reflect the post-pandemic hybrid work environment. Our drive for simplification includes operating with fewer layers in an effort to enhance agility and enable faster decision making. In connection with the NextGen program, in 2023 we incurred costs totaling $229 million. While these costs negatively impacted our 2023 GAAP operating margin and GAAP diluted EPS, they were excluded from our 2023 adjusted operating margin and 2023 adjusted diluted EPS reported to investors. These adjusted metrics are included in the components we use to determine ACI and PSU payouts. Adjusted operating margin and adjusted diluted EPS are not measurements of financial performance prepared in accordance with GAAP. See “Forward-looking statements and non-GAAP financial measures” on page 98 for more information. |
Say-on-pay vote at annual meeting and shareholder engagementIn making its decisions regarding executive compensation for 2023, the Compensation Committee considered the significant level of shareholder support our executive compensation program received from shareholders in 2023 (92% support), 2022 (90% support) and prior years. We also prioritize regular engagement with our shareholders regarding a number of governance matters, including executive compensation. Cognizant 2024 Proxy statement 48 Primary compensation elementsTable
Base salaryStable source of Contentscash income at competitive levels Primary
The base salary component of an NEO’s target direct compensation is included to provide financial stability and certainty to balance against the performance-based compensation elements. The salary is intended to reflect the individual’s experience, contributions to the company and scope of responsibilities. Annual cash incentive (ACI)Motivate and reward based on short-term company objectives The Compensation ElementsCommittee designed our 2023 ACI program to stimulate and support a high-performance environment by tying such incentive compensation to the attainment of short-term goals across four metrics aligned with our company’s objectives that it believes are valued by our shareholders:
Restricted Stock Units (RSUs)
Reward continued service•
| revenue growth (measured as revenue adjusted for currency fluctuations and long-term performanceacquisitions; 55% weighting); | | • | adjusted operating margin (further adjusted for acquisitions; 35% weighting); | | • | two strategic objectives: |
| • | gender diversity rate for employees at the senior manager level and above (5% weighting); and | | • | the percentage of revenue aligned with our common stockWe grant RSUs, which typically vest quarterly over a three-year period,strategic services delivery model (5% weighting).
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For executives overseeing a business unit or integrated practice (including Mr. Gummadi and Mr. Ayyar), 60% of the award was based on performance of the applicable business unit – 35% business unit revenue and 25% business unit profit – and 40% of the award was based on overall company performance as described above. The maximum award each NEO could receive was 200% of target. Achieving target performance (before taking into account the adjustments described above) generally requires exceeding prior year results. For revenue growth, target reflected a 5.4% increase compared to 2022 actual results. For adjusted operating margin, target required maintaining 2022 actual results as the economic environment across the industry had begun to deteriorate. The targets for gender diversity and revenue from aligned services were set based on targeted improvements in the business. The Compensation Committee determines the level of achievement, if any, with respect to the performance metrics based on actual company results for the year. See page 52 for further details. Cognizant 2024 Proxy statement 49 Restricted stock units (RSUs)Reward continued service and long-term performance of our common stock We grant RSUs, which typically vest quarterly over a 3-year period, to reward continued service and long-term performance of our common stock. However, the awards made each year may also include transition grants.Our NEOs (other than our CEO) and other employees who receive annual RSU grants periodically receive transition grants. Transition grants are utilized to ensure that new employees receiving RSU grants begin to vest the full targeted quarterly compensation value of their awards one quarter after the initial grant date instead of having to wait for multiple annual award cycles and vesting periods to pass. As a result, the number of RSUs that vest under transition grants are higher in the initial year to cover a larger proportion of an employee’s target, and gradually taper off over time as subsequent annual RSU grants supplement the initial transition grant. Transition grants are also awarded in the case of an NEO (other than the CEO) or other employee who receives an increase in their annual targeted compensation value for RSUs due to promotion or salary increase. Transition grants do not increase the intended annual target amounts for RSU vestings or diminish the long-term nature of granting equity awards. We believe this approach of receiving a recipient’s full targeted quarterly value for RSU grants over the vesting period provides a competitive advantage as the structure is highly valued by our employees and serves to more quickly align senior leader and shareholder interests. Performance stock units (PSUs)Incentivize shareholder return and reward achievement of long-term company financial objectives and performance of our common stock Our Compensation Committee designed the 2023-2025 PSU awards granted to our NEOs to tie a substantial portion of executive compensation to the attainment of long-term goals across three metrics that it believes are valued by our shareholders: • constant currency | revenue growth (50%(measured as revenue adjusted for currency fluctuations and acquisitions; 50% weighting); | | • | adjusted diluted EPS (25%(further adjusted for acquisitions; 25% weighting); and | | • | total shareholder return (TSR) (25% weighting) of our common stock on a relative basis as compared to a peer group detailed incomprised of the “Total Shareholder Return (TSR)” graphic on page 37. | 
S&P 500 Index. |
As further described in “Performance-Based Compensation – Performance by Award” on page 3854, the 2020/222023-2025 PSU awards have a 3-year performance measurement period. The Compensation Committee established all of the applicable growth targets for the revenue and adjusted diluted EPS components upfront in March 2020February 2023 as three separate 1-year goals, one for each fiscal year during the performance period (1/3rd3rd weighting each), in each case measured as a percentage increase over prior year actuals. For 2020, theThe Compensation Committee believes this approach of a 3-year performance measurement period (with corresponding 3-year service requirement) with one-year growth targets were for 3.3% constant currency revenueprovides a balanced and steady approach between growth and a 3.7% increase in adjusted diluted EPS as compared to 2019.strategic priorities while aligning with the company’s targeted performance over the longer period. The relative TSR component is measured over the full 3-year performance period, with payout with respect to the metric capped at 100%target in the event the TSR of the company’s common stock on an absolute basis of share price growth and dividends over the performance period is negative. The relative TSR target was set at the 50th percentile vis-à-vis the comparator group of companies. The maximum possible number of2023-2025 PSUs that may vest ishave a payout range from 0% to 200% of the target. The Compensation Committee established the 2020/222023-2025 PSU targets to incentivize the company’s management to prioritize continued growth in revenue, increased levels of adjusted diluted EPS and favorable TSR relative to other technology and consulting companies.peer group companies comprising the S&P 500 Index. There was substantial uncertainty at the time the committeeCompensation Committee established the targets as to the likelihood of the company’s attainment of the targeted levels of performance and vesting of the PSUs. WhetherFor the 2023-2025 PSUs granted in March 2023, the 2023 targets (prior to the adjustments described above) were for 4.5% revenue growth and a 4.5% increase in adjusted diluted EPS as compared to what extent2022. Similarly, for the 2021-2023 PSU grants awarded in early 2021 and settled in March 2024, the 2023 targets were for 6% revenue growth and a 6% increase in adjusted diluted EPS as compared to 2022, which amounts reflected the more robust macroeconomic environment in which the targets were set. The relative TSR target was set at the 50th percentile vis-à-vis the peer group of companies comprising the S&P 500 Index. The Compensation Committee determines the level of achievement, if any, with respect to the performance is achieved is determined by the committee in its sole discretionmetrics based on actual company results for the 2020, 20212023, 2024 and 20222025 fiscal years and relative TSR results for the full 2023-2025 period. See pages 51, 53 and 54 for further details. New hire PSU awards to Mr. Kumar In connection with the January 12, 2023 appointment of Ravi Kumar S as the company’s CEO, the Board granted Mr. Kumar a CEO New Hire Award of PSUs. These PSUs have a target value of $3,000,000, a payout range from 0% to 250% of the target and a longer performance period than our regular annual PSU grants to strengthen alignment between shareholder interests and the new CEO. The PSUs are earned based on the company’s absolute total shareholder return (measured as a compound annual growth rate (“CAGR”)) over the four-year performance period starting on January 12, 2023. This design was selected to focus Mr. Kumar on continued and sustained year-over-year improvement in the return received by the company’s shareholders. The company must achieve a threshold stock price CAGR of 10% in order to earn 50% of the target amount, a target of 15% stock price CAGR in order to earn 100% of the target amount, an “above target” of 17% stock price CAGR in order to earn 200% of the target amount, and a greater than or equal to 20% stock price CAGR in order to earn 250% of the target amount. These amounts would correlate to an absolute growth rate for the company’s common stock across the four-year measurement period of 46% for threshold performance, 75% for target performance, 87% for above target performance and 107% for maximum performance. Cognizant 2024 Proxy statement 50 Performance-based compensation – key performance metricsThe graphs below show actual company performance versus the corresponding performance targets for the performance-based compensation elements making up the majority of the company’s awards paid in 2023 or early 2024. 
Note: In 2023 we incurred costs relating to our NextGen program totaling $229 million. While these costs negatively impacted our GAAP operating margin and GAAP diluted EPS, they were excluded from our adjusted operating margin and adjusted diluted EPS reported to investors, which form the basis for certain metrics in our performance-based compensation. Adjusted operating margin and adjusted diluted EPS are not measurements of financial performance prepared in accordance with GAAP. See “Forward-looking statements and non-GAAP financial measures” on page 98 for more information. Relative total shareholder return (TSR) To incentivize shareholder return, relative TSR is utilized as a performance metric for our PSU awards, although the peer groups for comparison of relative TSR vary. Shown below is the 3-year cumulative TSR on our common stock with the cumulative TSR of the S&P 500 Index and the S&P 500 Information Technology Index. The company recognizes that its relative TSR performance has not met expectations. In fact, our relative TSR under our 2020-2022 period. PSUs placed us at the 21.6th percentile and under our 2021-2023 PSUs placed us at the 22.4th percentile of the relevant peer groups, resulting in no payout for the relative TSR portion of each award. The Board recognized the need for Cognizant to make progress faster and accelerate revenue growth and, in January 2023, appointed Ravi Kumar S to succeed Brian Humphries as the company’s CEO. Because relative TSR is a 3-year measure in our PSUs, any benefits from the CEO change will take a period of time to result in improved performance relative to the TSR targets and higher payouts for our executives. However, we are encouraged by our one-year relative TSR for 2023 of the 81.4th percentile compared to the companies in the S&P 500 Index. 
Cognizant 2024 Proxy statement 51 Performance-based compensation – performance by awardThe information below shows the awards granted in 2023 and prior years with performance periods covering 2023. Presentation notes | • | Revenue targets are initially set assuming constant currency. For the ACI, all targets are initially set assuming no acquisitions beyond those that have been announced by the company at the time of target setting. For PSUs, targets are adjusted for all in-year acquisitions. For comparability with actual company results, targets presented herein were adjusted, as applicable, as follows: | | • | Revenue targets were adjusted to include the impact of foreign currency exchange movements and revenue generated by acquisitions, as applicable; | | • | Adjusted operating margin and adjusted diluted EPS targets were adjusted by the impact of acquisitions, as applicable and, in 2021, by the impact of the 2021 class action settlement. |
| • | Adjusted operating margin and adjusted diluted EPS are not measurements of financial performance prepared in accordance with GAAP. See page 48 for information regarding the impact of our NextGen program on adjusted operating margin and adjusted diluted EPS as well as “Forward-looking statements and non-GAAP financial measures” on page 98 for more information. | | • | Payout shown for 2023 ACI applies to corporate executives. A portion of the business unit and integrated practice leaders’ results are impacted by performance of their business unit or integrated practice area; as a result, the payout level for Mr. Gummadi was 15.8% and for Mr. Ayyar was 44.9%. | | | |
2023 Annual cash incentive (ACI)ACI awards were granted by the Compensation Committee on April 5, 2023, cover a performance period of January 1 through December 31, 2023, and were paid on March 15, 2024 (except for Mr. Ayyar, who is based in Singapore, on March 27, 2024). Our 2023 ACI had the same design as the prior year with a large portion of the award tied to our revenue growth target. Information regarding the weighting, targets and performance on our 2023 ACI metrics is shown below. See pages 47 through 49 for further detail regarding how the targets for each metric were set. Prior to determining the company performance against the targets for 2023, the Compensation Committee (1) adjusted the revenue threshold, target and maximum levels to account for currency fluctuations in a manner intended to ensure that they do not impact, positively or negatively, the achievement of targets and (2) where applicable, adjusted both the revenue and adjusted operating margin threshold, target and maximum levels to account for the amount of revenue and operating margin derived from acquisitions completed during 2023 in a manner intended to ensure that acquisitions do not impact, positively or negatively, the achievement of targets. In connection with determining the ACI payout for 2023, the Compensation Committee exercised its judgment to include in the final payout percentage 5% for all recipients taking into consideration the company’s performance across its two strategic objectives collectively, which together are given 10% weighting under the ACI metrics. With respect to the gender diversity objective, the Compensation Committee took into consideration the fact that management continued to make progress on increasing the number of women at the senior manager level and above (moving from 17.2% actual result in 2022 to 17.8% in 2023) even though the company reduced its overall headcount throughout 2023. With regard to the revenue from strategic services objective, the Compensation Committee acknowledged that in the difficult economic environment of 2023, management was appropriately focused on maintaining the overall revenue of the company rather than the percentage of revenue attributed to its strategic services delivery model. 
| * | In connection with determining the ACI payout for 2023, the Compensation Committee exercised its judgment to include in the final payout percentage 5% for all recipients in light of the company’s performance across its two strategic objectives collectively, which together are given 10% weighting under the ACI metrics. See the paragraph immediately preceding the above graphic for more detail. |
Adjusted operating margin excludes costs related to our NextGen program and is not a measurement of financial performance prepared in accordance with GAAP. See page 98 for more information. Cognizant 2024 Proxy statement 52 2021-2023 Performance stock units (PSUs)2021-2023 PSUs were granted by the Compensation Committee on February 23, 2021 and subsequently in 2021 in connection with promotions to executives, had a 3-year performance period of January 1, 2021 through December 31, 2023, and were settled at approximately 91.4% of target on March 15, 2024. Targets, which are set at the beginning of the 3-year performance period as a % increase over prior year results (assuming no acquisitions) included the following: | • | Revenue: Growth measured as increase in revenue adjusted for currency fluctuations and acquisitions; prior year actual revenue for each year of the performance period that is measured separately against a percentage growth target for such year; targets for all three years set upfront in February 2021 as a percentage increase over the prior year; each year is weighted equally | | • | Adjusted diluted EPS: Increase in adjusted diluted EPS over prior year adjusted diluted EPS for each year of the performance period that is measured separately against a percentage increase target for such year; targets for all three years set upfront in February 2021 as a percentage increase over the prior year; each year is weighted equally | | • | Relative TSR: Achievement determined after end of 3-year performance period against a peer group of companies in the S&P 500 Information Technology Index plus Capgemini, Tata Consulting Services, Infosys, Wipro, HCL, CGI, EPAM Systems and Genpact |
Prior to determining the performance by the company against the revenue and adjusted diluted EPS targets for 2020, 2021each year, the Compensation Committee adjusted (1) the revenue threshold, target and 2022,maximum levels to account for currency fluctuations in a manner intended to ensure that they do not impact, positively or negatively, the committee adjusted for 2020,achievement of targets and expects to adjust for 2021 and 2022,(2) the revenue and adjusted diluted EPS targets by the amount of revenue and adjusted diluted EPS derived from acquisitions completed during the respective years in a manner intended to ensure goals arethat acquisitions do not attained through acquisitions.impact, positively or negatively, the achievement of targets. Additionally, in early 2022 the Compensation Committee increased the 2021 adjusted diluted EPS target by the per-share impact of the 2021 class action settlement loss, net of tax, which was excluded from the company’s 2021 adjusted diluted EPS to ensure that the achievement against target reflected the impact of the loss. See “Forward-looking statements and non-GAAP financial measures” on page 98 for more information regarding the class action settlement loss. Annual Compensation Evaluation and Target Direct Compensation
The Compensation Committee utilizes target direct compensation as the principal manner in which it reviews, evaluates and makes decisions with respect to executive compensation. Target direct compensation is the annual compensation that would be delivered to an NEO in a theoretical, steady-state environment where the same annual compensation was granted in multiple years and the company’s performance was at target across all such years. The committee believes this approach is most appropriate for its decision-making, including evaluation against the compensation practices of comparable companies with which we compete for talent, as it is designed to capture the annual compensation an NEO would be expected to earn, assuming company performance at target, based on the decisions of the committee in the year of such decision.
The Compensation Committee reviews the target direct compensation of our NEOs on an annual basis and makes periodic adjustments based on individual performance and contributions, market trends and competitive environment for talent, increases in the cost of living, internal pay equity, the scope, responsibility and business impact of the individual’s position, the individual’s potential for increased responsibility and promotion over the award term, and the value of equity compensation that the individual has previously been awarded. No specific weight is assigned to any of the above criteria relative to the others, but rather the committee uses its judgment in
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Adjusted diluted EPS is not a measurement of financial performance prepared in accordance with GAAP. See page 98 for more information. Cognizant 2024 Proxy statement 53 Performance on outstanding PSUsTable of Contents
Our 2022-2024 and 2023-2025 PSUs are structured similarly to the 2021-2023 PSUs described above, with three year performance periods and similar metrics. The 2021-2023 PSUs and 2022-2024 PSUs also utilize the same peer group for relative TSR. In setting the performance targets for the 2023-2025 PSUs, in order to better align with market practices, the Compensation > CD&A > Primary Compensation Elements  | Base Salary
Stable source of cash income at competitive levels
The base salary component of an NEO’s target direct compensation is included to provide financial stability and certainty to balance against the performance-based compensation elements.
Annual Cash Incentive (ACI)
Motivate and reward achievement of short-term company financial objectives
Prior to the onset of the Covid-19 pandemic, the Compensation Committee designed our 2020 ACI program to stimulate and support a high-performance environment by tying such incentive compensation to the attainment of short-term goals across two metrics aligned with our company’s financial objectives that it believed are valued by our shareholders:
• constant currency revenue growth (60% weighting); and
• adjusted income from operations (40% weighting).
The maximum award each NEO could receive was 200% of target.
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In July 2020, in lightCommittee approved a different peer group consisting of the unanticipated business impactS&P 500 Index. Except for relative TSR, targets are set at the beginning of the Covid-19 pandemic,3-year performance period as a percentage increase over prior year results (so the committee revisedexact target is not known until after the 2020 ACI program to measure Q1 performance (25% weighting) based on the original pre-Covid-19 targets established in March 2020 and Q2 through Q4 performance (75% weighting) based on revised targets for each component, and established a maximum payout of 85% of target to ensure the lowered expectations for the year did not result in an above-target payout and a minimum payout of 50% of target to ensure at least the threshold level of payout in a year of extraordinary business challenges.
The Compensation Committee initially established targets for 2020 of 3.7% constant currency revenue growth and a 3.1% increase in adjusted income from operations as compared to 2019. The committee established these targets to incentivize the company’s management to prioritize continued growth in revenue and adjusted income from operations. There was substantial uncertainty at the time the committee established the targets as to the likelihoodend of the company’s attainment of the targeted levels of performance and payout of the ACI. As revised in July 2020, the targets were for a 4.5% revenue decline on a constant currency basis and a 17.8% decrease in adjusted income from operations as compared to 2019. The achievement of the targets remained uncertain except with respect to the minimum payout of 50% that was established.
The committee determined the 2020 ACI payout based upon actual company results for the 2020 fiscal year.prior year). Prior to determining the performance by the company against the revenue and adjusted diluted EPS targets for 2020,each year, the committeeCompensation Committee adjusted, and expects to adjust for 2024 and 2025, (1) the revenue threshold, target and maximum levels to account for currency fluctuations in a manner intended to ensure that they do not impact, positively or negatively, the achievement of targets and (2) the revenue and adjusted income from operationsdiluted EPS targets by the amount of revenue and income from operationsdiluted EPS derived from acquisitions completed during 2020the respective years in a manner intended to ensure goalsthat acquisitions do not impact, positively or negatively, the achievement of targets. Performance on such awards for which at least a full calendar year of the performance period has been completed are tracking below target as follows:
| | Metric | | Year | | Threshold | | Target | | Maximum | | Achieved | | % of
Achievement
Earned | 2022-2024
PSUs | Revenue
(in billions) | | Year 1 (2022) | | $19.3 | | $19.7 | | $20.1 | | $19.4 | | 61% | | | Year 2 (2023) | | $20.7 | | $21.1 | | $21.5 | | $19.4 | | 0% | | | Year 3 (2024) | | | | | | | | | | | Adjusted
Diluted EPS | | Year 1 (2022) | | $4.44 | | $4.53 | | $4.61 | | $4.40 | | 0% | | | Year 2 (2023) | | $4.75 | | $4.84 | | $4.92 | | $4.55 | | 0% | | | Year 3 (2024) | | | | | | | | | | | | Relative TSR | | 3-year period | | 30th %ile | | 50th %ile | | 80th %ile | | 38.8th %ile as of 12/31/2023 | | | 2023-2025
PSUs | Revenue
(in billions) | | Year 1 (2023) | | $20.0 | | $20.4 | | $20.8 | | $19.4 | | 0% | | | Year 2 (2024) | | | | | | | | | | | | | Year 3 (2025) | | | | | | | | | | | Adjusted
Diluted EPS | | Year 1 (2023) | | $4.51 | | $4.59 | | $4.68 | | $4.55 | | 76% | | | Year 2 (2024) | | | | | | | | | | | | | Year 3 (2025) | | | | | | | | | | | | Relative TSR | | 3-year period | | 30th %ile | | 50th %ile | | 80th %ile | | 81.4th %ile as of 12/31/2023 | | | | Adjusted diluted EPS is not a measurement of financial performance prepared in accordance with GAAP. See page 98 for more information. |
In addition to the PSU awards described above, Brian Humphries, our former CEO, received PSUs in connection with his April 2019 hiring that included performance criteria based on absolute and relative TSR. One-half of such PSUs were based on absolute TSR (with a threshold of 25% return) and one-half were based on relative TSR against the S&P 500 Information Technology Index (with a threshold of the 30th percentile), in each case over a four-year performance period from April 1, 2019 through March 31, 2023. These PSUs were tracking below threshold and would not attainedhave paid out even if they had not been forfeited in connection with the termination of Mr. Humphries’ employment effective as of March 15, 2023. Mr. Kumar received a CEO New Hire award of PSUs when he joined the company in January 2023. The payout is based on absolute TSR (measured by CAGR) of the company’s common stock over the four-year performance period. Based on CAGR performance through acquisitions.the portion of the performance period ending December 31, 2023 of 30.4%, Mr. Kumar’s PSUs are on pace for achievement of the maximum level of performance. combination with market2024 ACI and other data. The committee evaluates2024-2026 PSUs In early 2024, the total mixCompensation Committee considered how the uncertain economic environment across the technology professional services industry presented challenges in setting financial performance goals. To reflect these challenges while continuing to maintain goal rigor and the integrity of cash versus equity-basedthe company’s performance-based compensation short-term versus long-term compensation and performance-based versus fixed compensation with reference to market practices and compensation program objectives. | Target direct compensation excludes additional awardsprograms, the Committee adopted an ACI payout design that may be made from time to timeprovides less variability in payout for retention purposesperformance at or individual achievement (see additional equity awards (RSUs and 2020/21 PSUs (2-year)) granted to Ms. McLoughlin, Mr. Frank and Mr. Friedrich in 2020). It also excludes new hire awards, such as sign-on bonuses or one-time equity grants, upon joiningnear target levels. In addition, the company that are not intendedstrategic initiatives were combined into an overall set of qualitative goals to be recurringevaluated at the end of the performance year. These goals, which include a goal related to GenAI, a desire to improve female representation in mid-level and senior roles, and a skilling goal related to our Synapse Initiative, collectively comprise a total 10% of the ACI opportunity.Similarly, due to multi-year goal-setting challenges in the uncertain economic environment across the industry, the Compensation Committee approved a new design for the 2024-2026 PSUs that increases the emphasis on relative performance against peers (versus absolute performance). The new awards balance relative performance (relative revenue growth, with a 50% weighting, and relative TSR, with a 25% weighting) compared to peers and companies comprising the S&P 500 Index, respectively, with absolute EPS growth, with a 25% weighting. Each of these measures is based on a full three-year performance period. These changes are designed to compensate a new hire for compensation being lost as a resultcontinue to incentivize shareholder return and reward achievement of leaving a prior employer or additional costslong-term company financial objectives and performance of joining the company, or are needed as additional incentive for a new hire to joincompany’s common stock, while maintaining overall pay competitiveness, thereby attracting, retaining and providing stability of the company (see awards granted to Mr. Siegmund and Ms. Schmitt in 2020). Equity accelerations upon retirement are also not included in target direct compensation. See pages 40 to 46 for additional details on target direct compensation and any excluded awards. executive leadership team. |
Cognizant 2024 Proxy statement 54 Table of Contents
Performance-Based Compensation – Performance by Metric
• Strong, consistent revenue growthis a key company objective | • Aspirational but achievable targets and significant weighting; revenue weighting for 2020 ACI increased to 60% as days sales outstanding (DSO) metric, previously weighted 10%, was dropped as a metric in 2020 | • M&A- targets increased by the amount of revenue derived from acquisitions during the applicable performance periods | | COVID-19 | • 2020 ACI target adjusted in mid-2020for unanticipated business impact of the Covid-19 pandemic | • 2020 ACI award payout limited to 85% of targetnotwithstanding the company significantly exceeding the Covid-adjusted targets |
• Increased profitabilityis a key company objective | • Aspirational but achievable targets and significant weightingfor ACI | • Adjusted income from operations utilized for 2019 and 2020 awardsto align with the company’s revised non-GAAP financial metric | • M&A- targets adjusted by the amount of income from operations derived from acquisitions during the applicable performance periods | COVID-19 | • 2020 ACI target adjusted in mid-2020for the unanticipated business impact of the Covid-19 pandemic | • 2020 ACI award payout limited to 85% of target notwithstanding the company significantly exceeding the Covid-adjusted targets |
Presentation Notes
| 1 | Targets for 2017/18 PSUs, 2018/19 PSUs and 2019/20 PSUs were based on combined performance of the company across multiple years. For presentation purposes, the combined target was allocated between the applicable years in the same proportion as the actual results for such years such that the same level of achievement is reflected in both years. | 2 | Target increases in the tables are as initially set by the Compensation Committee (compound annual growth for 2017/18 PSUs, 2018/19 PSUs and 2019/20 PSUs) and assume no acquisitions. Achieved increases are as reported less acquisitions (for comparability to target increases). | 3 | Target and achieved revenue increases for the 2020 ACI, 2019/20 PSUs, 2020/21 PSUs and 2020/22 PSUs are based on constant currency revenue growth. | 4 | Non-GAAP income from operations, adjusted income from operations, non-GAAP diluted earnings per share and adjusted diluted earnings per share are not measurements of financial performance prepared in accordance with GAAP. See “Forward-Looking Statements and Non-GAAP Financial Measures” on page 68 for more information. |
| | | | | | | Key | GAAP or market metric | | Actual company revenue (GAAP) and total shareholder return (TSR) (market metric) | | | |
Table of Contents
Compensation > CD&A > Performance-Based Compensation – Performance by Metric
The graphs below show actual company performance versus the corresponding performance targets for the company’s performance-based compensation elements.
• Increased profitabilityis a key company objective | • Aspirational but achievable targets | • Weighting decreased from 50% to 25% in 2020with the addition of a relative TSR metric | • Adjusted diluted EPS utilized for 2019 and 2020 awardsto align with the company’s revised non-GAAP financial metric | • M&A- targets adjusted by the amount of income from operations derived from acquisitions during the applicable performance periods | COVID-19 | • No adjustmentmade to PSU targets notwithstanding the unanticipated business impact of the Covid-19 pandemic | • Zero attainment for the 2020 performance periodfor both the 2020/21 PSUs (2-year) and the 2020/22 PSUs (3-year) |
• To incentivize shareholder return, absolute TSR and relative TSR were utilized as performance metrics for the PSUs awarded to Mr. Humphries in 2019 upon his joining the company and relative TSR was utilized as a performance metric for all PSU awards in 2020
| | | | | | Non-GAAP | Adjusted | | Actual company non-GAAP income from operations and non-GAAP diluted earnings per share (EPS) | Actual company adjusted income from operations and adjusted diluted earnings per share (EPS) | |
Table of Contents
Performance-Based Compensation – Performance by Award
Presentation Notes | 1 | Target increases in the tables (compound annual growth rate for 2017/18 PSUs, 2018/19 PSUs and 2019/20 PSUs) are as initially set by the Compensation Committee and assume no acquisitions. Achieved increases are as reported less acquisitions (for comparability to target increases). |
Table of Contents
Compensation > CD&A > Performance-Based Compensation – Performance by Award
The timelines and tables below show the performance-based compensation awards in 2020 and those awarded in prior years with performance periods covering or vestings during 2020.
2 | Target and achieved revenue increases for the 2020 ACI, 2020/21 PSUs, 2020/22 PSUs and 2019/20 PSUs are based on constant currency revenue growth. | 3 | Covid-19 adjustments limited to 2020 ACI; no such adjustments made to any of the PSUs. |
Table of Contents
Compensation by NEO
This section includes compensation information for and provides an overview of the compensation decisions made with respect to our NEOs. Three Viewsviews of Compensation
compensation To assist shareholders in understanding the compensation arrangements for our NEOs, we provide the following three views of compensation: Target Direct Compensation – The Compensation Committee utilizes target direct compensation to review, evaluate and make decisions, typically early in the year, with respect to the compensation of our NEOs. This view is intended to capture the annual compensation that would be delivered to an NEO in a theoretical, steady-statesteady environment where the same annual compensation was granted in multiple years and the company’s performance was at target across all such years. The committeeCompensation Committee believes this view is most appropriate for its decision-making, including evaluation against the compensation practices of comparable companies with which we compete for talent, as it is designed to capture the annual compensation an NEO would be expected to earn, assuming company performance at target, based on the decisions of the committeeCompensation Committee in the year of such decision. Target direct compensation excludes additional cash and equity awards that are made for new hires, retention or other purposes that are not intended to be recurring. SEC Compensation – The SEC compensation view summarizes the compensation of an NEO consistent with the compensation calculated in accordance with SEC rules and set out in the “2023 Summary compensation table” on page 70. The SEC compensation view reflects the actual base salary and ACI earned by an NEO in a given year, any cash bonuses, the grant date fair value of all RSUs and PSUs granted in a given year (including equity awards that are made for new hires, retention or other purposes) and all other compensation, including perquisites, required to be reported under SEC rules. SEC compensation includes several items for which the NEOs do not actually receive the amounts during the year, such as equity grants that may not vest for several years (or at all). It also excludes items that may be paid during the year, but that are attributable to prior years. As such, the SEC compensation may differ substantially from the compensation actually realized by our NEOs. Realized Compensation – To supplement the SEC-required disclosure, we provide a realized compensation view that is designed to capture the compensation actually received by an NEO in a given year. We calculate realized compensation by using the reported W-2 income for an NEO (or, in the case of NEOs who are not resident in the U.S., the comparable information as if they had received a W-2) for a given year and substituting the actual ACI paid in such year (which relates to the prior year given such incentives are paid in the first quarter of the following year) with the ACI earned for such year. Realized compensation is not a substitute for the amounts reported as SEC compensation. See “Pay versus performance table” on page 83 for additional information on compensation actually paid to NEOs as compared to SEC compensation. Because the compensation elements of our NEOs may be calculated differently across the three views of compensation, these views can result in very different compensation outlooks for each NEO. In general, base salary tends to be stable across the three views (unless an NEO joins the company late, or departs the company early, in any given year such that their pro-rata actual base salary will be substantially lower than target annual base salary) but in the case of compensation elements that are tied to performance metrics, whether and how well the company achieves the performance targets can lead to wide discrepancies between the Target Direct Compensation view and the other two views of compensation. In addition, the differences in how equity-based compensation is presented across the three views can also lead to large differences across the various views. The table below, which summarizes the manner in which the various compensation elements for a given year are used to build target direct compensation, SEC compensation and realized compensation, denotes the differences in how the various compensation elements are calculated and credited to NEOs between the different views. See Executive Compensation Tables beginning on page 70 for additional information regarding these items. Cognizant 2024 Proxy statement 55 SEC Compensation – The SEC compensation view summarizes the compensation of an NEO consistent with the compensation calculated in accordance with SEC rules and set out in the “2020 Summary Compensation Table” on page 51. The SEC compensation view reflects the actual base salary and ACI earned by an NEO in a given year, any cash bonuses, the grant date fair value of all RSUs and PSUs granted in a given year (including equity awards that are made for new hires, retention or other purposes) and all other compensation, including perquisites, required to be reported under SEC rules. SEC compensation includes several items for which the NEOs do not actually receive the amounts during the year, such as equity grants that may not vest for several years (or at all). It also excludes items that may be paid during the year, but that are attributable to prior years. As such, the SEC compensation may differ substantially from the compensation actually realized by our NEOs.
Realized Compensation – To supplement the SEC-required disclosure, we provide a realized compensation view that is designed to capture the compensation actually received by an NEO in a given year. We calculate realized compensation by using the reported W-2 income for an NEO for a given year and substituting the actual ACI paid in such year (which relates to the prior year given such incentives are paid in the first quarter of the following year) with the ACI earned for such year. Realized compensation is not a substitute for the amounts reported as SEC compensation.
The table to the right summarizes the manner in which the various compensation elements for a given year are included in target direct compensation, SEC compensation and realized compensation.
| | | | | | | | | |
| | | Target Direct
Compensation | | SEC
Compensation | | Realized
Compensation | | | Other | | | | All other compensation as required by SEC rules, including sign-on bonuses upon joining the company and perquisites | | All other reported W-2 income | | | RSUs | | Humphries,
McLoughlin
and Frank:
Grant date fair value of the RSUs granted during the year, excluding additional awards | | Grant date fair value of the RSUs granted during the year | | Actual value as of the vesting date of RSUs that vested during the year | | | | | Theoretical compensation utilized to
review, evaluate and make decisions
regarding NEO compensation | | Compensation calculated as required by
SEC rules, which may differ substantially
from compensation actually realized by
NEOs | | Compensation designed to reflect
compensation actually received by an
NEO in a given year | | Base Salary | | | | Target base salary for the year (generally equal to actual base salary) | | | Siegmund,
Schmitt and
Friedrich: Grant date fair value of the RSUs targeted to vest duringActual base salary for the year (and, for Mr. Humphries and Ms. Schmitt, cash paid in lieu of unused vacation at the time each left the company in March 2023 and May 2023, respectively) | | Actual base salary for the year (and, for Mr. Humphries and Ms. Schmitt, cash paid in lieu of unused vacation at the time each left the company in March 2023 and May 2023, respectively) | | ACI | | | | | PSUsTarget ACI for the year | | Grant date fairActual ACI earned for the year | | Actual ACI earned for the year | | PSUs | | Target value of the PSUs granted during theto vest each year, excluding additional awards | | Grant date fair value of the PSUs granted during the year, calculated with respect to relative TSR as an award with a “market condition” under applicable accounting rules | | Actual value as of the vesting date of PSUs that vested during the year | | | ACIRSUs | | Target ACI forGrant date fair value of the RSUs targeted to vest each year, excluding additional awards | | Actual ACI earned forGrant date fair value of the yearRSUs granted during the year; may include transition grants that initially create compensation reported in excess of target amounts, but are designed to ensure receipt of target amounts annually | | Actual ACI earned forvalue as of the vesting date of RSUs that vested during the year | | | BaseBonus
Salary | | Target base salary for the year (generally equal to actual base salary) | | Actual base salaryKumar only: $750,000 as cash sign-on bonus Dalal only: $150,000 as initial portion of $300,000 cash sign-on bonus Gummadi only: $1,000,000 bonus for service as interim head of North America ($250,000 was paid in 2022 with the yearremaining paid in 2023) | | Actual base salaryKumar only: $750,000 as cash sign-on bonus Dalal only: $150,000 as initial portion of $300,000 cash sign-on bonus Gummadi only: $1,000,000 bonus for service as interim head of North America ($250,000 was paid in 2022 with the yearremaining paid in 2023) | | Other | |
| | All other compensation as required by SEC rules, including perquisites | | | 40 | Cognizant |
Cognizant 2024 Proxy statement 56 Table of Contents
Compensation > CD&A > Compensation by NEO
Ravi Kumar
Current CEO (since January 12, 2023) Brian Humphries
CEO
Age
47
Education
University of Ulster,
Northern Ireland - B.A.
Cognizant Tenure
2 years
|  | | | KEY RESPONSIBILITIES AND CAREER HIGHLIGHTSKey responsibilities and career highlights
Mr. Humphries joined CognizantKumar has served as our CEO on April 1, 2019.since January 12, 2023. In histhis role, as CEO, BrianMr. Kumar sets the company’s strategic direction, promotes the company’s client-first culture and focuses on ensuring the company’s sustainable growth and driving long-term shareholder value. Prior to joining the company, Mr. Kumar served as President of Infosys from 2016 to 2022, where he led the global services organization across all industry segments and served as Chairman of the Board of Infosys BPM Ltd. Previously, he was the Group Head for the Insurance, Healthcare, and Cards and Payments unit, and led the Global Delivery organization where he built the Oracle and CRM practices. Before joining Infosys, Mr. Kumar served in positions of increasing responsibility at PricewaterhouseCoopers, Cambridge Technology Partners, Oracle and Sapient (now Publicis Sapient). | Age
52 | Cognizant Tenure
1 year | | Education
Shivaji University - B.E. Xavier Institute of Management, India - M.B.A. | | | | | |
Committee assessment and target direct compensationMr. Kumar was selected by the Board to serve as the company’s new CEO based on his experience gained from his 20-year career at Infosys where he held various leadership roles, most recently serving as President from 2016 to 2022. In connection with his appointment as CEO, the company provided Mr. Kumar with an offer letter and subsequently entered into an Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement effective January 12, 2023, pursuant to which Mr. Kumar agreed to serve as the company’s CEO. The Compensation Committee reviewed and approved the compensation arrangements set forth in the offer letter and Mr. Kumar’s employment agreement after considering compensation information provided by Pay Governance for CEOs in the company’s peer group and other information on compensation arrangements for new CEOs. The Compensation Committee approved, and Mr. Kumar’s employment agreement provides for (by reference to the offer letter, where applicable), 2023 annual target direct compensation of $14,500,000 comprised of: (i) base salary of $1,000,000, (ii) ACI target of $2,000,000, (iii) PSUs of $6,900,000 and (iv) RSUs of $4,600,000. SEC compensationMr. Kumar’s 2023 SEC compensation was substantially higher than his target direct compensation primarily due to the inclusion of the following one-time awards that he received upon becoming the CEO of the company: (a) his CEO New Hire Award of PSUs with a target value of $3,000,000 (see page 50 for more information); (b) an equity award consisting of RSUs with a grant date value of $5,000,000, which was a buyout award to replace forfeited equity awards from his previous employer, and (c) a cash sign-on bonus of $750,000. These one-time awards are partially offset by the 2023 ACI award payout being 30.3% of target and pro-rated for the partial year of service. Realized compensationMr. Kumar’s realized compensation was significantly lower than his target direct compensation primarily because his 2023 PSU grants, including his CEO New Hire Award, are scheduled to vest, subject to the satisfaction of performance criteria, in future periods and because his 2023 ACI award payout amount was lower than the target amount. These were partially offset by the inclusion of the one-time cash sign-on bonus he received at the time of his appointment as CEO. His 2023 realized compensation consisted principally of his base salary, 2023 ACI award payout at 30.3% of target, and quarterly vestings of RSUs in the aggregate amount of approximately $4,911,000 and cash sign-on bonus of $750,000. 
Cognizant 2024 Proxy statement 57 Brian Humphries
Former CEO (until January 12, 2023) | | Key responsibilities and career highlights Mr. Humphries served as our CEO from April 1, 2019 until January 12, 2023. While serving in his role as CEO, Mr. Humphries set the company’s strategic direction, promoted the company’s client-first culture and focused on ensuring the company’s sustainable growth and driving long-term shareholder value. Prior to joining Cognizant, he was CEO of Vodafone Business where he was responsible for the strategy, solution development, sales, marketing, partnerships and commercial and financial success of Vodafone Business, a division of Vodafone Group, one of the world’s largest telecommunications companies. Vodafone Business accounted for nearly a third of Vodafone Group’s service revenue, with approximately €12 billion in sales globally, during Mr. Humphries’ tenure as CEO. Prior to Vodafone, Mr. Humphries held a variety of executive roles at technology companies Dell Technologies and Hewlett-Packard. | Age
50 | Cognizant Tenure
4 years | Education
University of Ulster, Northern Ireland - B.A. | | | | |
COMMITTEE ASSESSMENT AND TARGET DIRECT COMPENSATION
The Compensation Committee, at its meeting in March 2020, evaluatedEffective January 12, 2023, Mr. Humphries’ performance during 2019 and the compensation information provided by Pay Governance for CEOs inKumar succeeded Mr. Humphries as the company’s peer group. The committeeCEO. Mr. Humphries remained an employee and special advisor to the company until March 15, 2023. His separation was considered his performancean involuntary termination without cause. See “Termination of Brian Humphries as CEO in 2019, the company’s growth and transformation initiatives and strategic priorities, and the compensation information for CEOs in the peer group for 2020 (see “Peer Group Review”related severance payments” on page 3268). Based on these considerations, for further details regarding the committee determined thatseverance received by Mr. Humphries. Due to his transition out of the CEO role and imminent departure at the time the Compensation Committee was determining 2023 target direct compensation for 2020 should be increasedexecutive officers, the Compensation Committee did not set 2023 target direct compensation for Mr. Humphries.
Mr. Humphries’ total 2023 SEC compensation of approximately $4,216,000 was comprised of base salary through the effective date of his termination on March 15, 2023 (approximately $317,000) and approximately $3,899,000 of other compensation, including severance benefits he was entitled to $13,480,000 (31% increase vs. 2019)under his employment agreement (see page 72 for these other items of compensation and page 68 for more information on Mr. Humphries’ severance benefits). He did not receive a 2023 ACI award or any new grants of RSUs or PSUs in 2023. In addition to the items described above, Mr. Humphries’ 2023 realized compensation included RSU vestings from January 1, 2023 through the date of his termination of employment in the aggregate amount of approximately $1,150,000, RSU vestings in the aggregate amount of approximately $2,780,000 pursuant to the severance provisions of his employment agreement (see page 68 for more information on such severance benefits), and approximately $5,717,000 for the March 2023 vesting of his 2020-2022 PSUs. In early December 2022, the Compensation Committee approved a change in the currency for Mr. Humphries’ base salary for 2023 to reflect performancethe payment in his firstSwiss Francs (CHF) rather than British pounds; this change was made in recognition of Mr. Humphries’ primary residence and the requirement, applicable as of January 1, 2023, that Swiss social security payments be made with respect to Mr. Humphries. Salary and portions of the severance amounts discussed above were converted to US$ based on 1 CHF = $1.11 and £1 = $1.24 exchange rates, the 12-month averages for fiscal year as CEO and compensation trends2023. See page 68 for CEOs in the peer group.more information. The specific components of Mr. Humphries’ 2020 target direct compensation were as follows: (i) base salary of £800,000 ($1,027,000) (unchanged vs. 2019), (ii) ACI target of 2x base salary (£1,600,000, or $2,053,000) (unchanged vs. 2019), (iii) PSUs of $6,240,000 (22% decrease vs. 2019) and (iv) RSUs of $4,160,000 (vs. no RSUs included in 2019 target direct compensation). From 2019 to 2020, the primary change was a change in the equity mix from 100% 2019/23 CEO PSUs (New Hire) granted to him in 2019 upon his joining the company (see page 39) to a 60%/40% split of 2020/22 PSUs (3-year) (see page 38) and RSUs granted to him in 2020. The 2020/22 PSUs granted in 2020 had the same metrics, targets and performance period as such PSUs granted to the other NEOs, as compared to the 2019/23 CEO PSUs (New Hire) granted in 2019 that were specific to him.
Cognizant 2024 Proxy statement 58 SEC COMPENSATION
Mr. Humphries’ SEC compensation in 2020 was lower than in 2019 primarily due to his receipt in 2019 of buy-out awards upon joining the company: (i) RSUs of $3,000,000 and (ii) cash sign-on bonus of $4,000,000 (of which he was required to utilize $1,000,000 of the after-tax amount to purchase shares of our common stock in 2019). Such awards were partially offset by the overall increase in equity awards granted to him as part of his target direct compensation in 2020 as compared to 2019 ($10,400,000 vs. $8,000,000) and higher ACI achievement in 2020.
The ACI amounts in SEC compensation are lower than the amounts in target direct compensation due to the ACI achievement being lower than target in both years (42.8% in 2019 and 85% in 2020). The grant date fair value of the PSUs in 2020 required to be included in SEC compensation is slightly higher than the target award value due to the relative TSR component being an award with a “market condition” under applicable accounting rules. This differs from 2019 when the effect of the market condition resulted in a discount relative to the fair value of the 2019 PSU award.
REALIZED COMPENSATION
In 2020, Mr. Humphries’ realized compensation was substantially lower than his target direct compensation as all of the PSU awards made in 2019 and 2020 will vest in future periods. His 2020 realized compensation consisted principally of his base salary, 2020 ACI at 85% of target and four quarterly vestings of RSUs of $1,990,000. In 2019, a substantial portion of his realized compensation came from his receipt of buy-out awards upon joining the company.
Certain numbers shown in the graphs above were converted to US$ based on a £1 = $1.28 exchange rate, the twelve-month average for fiscal year 2020.
|  |
Table of Contents
Jan SiegmundJatin Dalal
Current CFO (since December 4, 2023) | |  | | KEY RESPONSIBILITIES AND CAREER HIGHLIGHTSKey responsibilities and career highlights
Mr. SeigmundDalal leads the company’s worldwide financial planning and analysis, accounting and controllership, tax, treasury and internal audit functions. He also oversees corporate development, investor relations, and enterprise risk management.management, sales operations, pricing, post-acquisition integration and information technology functions. Prior to joining Cognizant in September 2020,December 2023, he wasserved as President and CFO of Wipro, a position he assumed after serving as CFO from 2015 to 2019. Previously, he held various leadership positions at Wipro, including CFO, IT Business from 2011 to 2015. Mr. Dalal joined Wipro in 2002 from the CFO for Automatic Data Processing (ADP), a $14 billion in annual revenue global human capital management technology and services provider. HeGeneral Electric Company, where he began his career at McKinsey & Company. in 1999. | CFOAge
49 | Cognizant Tenure
0 years | | | Education
National Institute of Technology, Surat - B.E. Narsee Monjee Institute of Management Studies, Mumbai - Postgraduate diploma in Business Administration The Wharton School of the University of Pennsylvania - Advanced Management Program | Age | Cognizant Tenure | Public Company Boards | 56 | 1 year | The Western Union | | | Company (WU) | Education | | Technical University Karlsuhe - M.A. | University of California, Santa Barbara - M.A. | Technical University of Dresden, Germany - Doctorate | | | | | | |
Committee assessment and target direct compensation COMMITTEE ASSESSMENT AND TARGET DIRECT COMPENSATION
Mr. SiegmundDalal was selected by the boardBoard to serve as the company’s new CFO based on his extensive financial experience gained from his long career at Wipro, where he held various positions of increasing responsibility since joining the company in 2002, most recently serving as a senior executive in the technology sector.President and CFO from 2019 to 2023. In connection with his appointment as CFO, the company entered intoprovided Mr. Dalal with an offer letter with him on July 7, 2020, and subsequently entered into an executive employmentExecutive Employment and non-disclosure, non-competition,Non-Disclosure, Non-Competition and invention assignment agreement on September 1, 2020,Invention Assignment Agreement effective December 4, 2023, pursuant to which heMr. Dalal agreed to serve as the company’s CFO. The Compensation Committee reviewed and approved the compensation arrangements set forth in the offer letter and Mr. Dalal’s employment agreement after considering compensation information provided by Pay Governance for CFOs in the company’s peer group (see “Peer Group Review” on page 32) and other information on compensation arrangements for new CFOs. The committee approved, and Mr. Siegmund’s employment agreement provided for (by way of reference to the offer letter, as applicable), target direct compensation consisting of the following: (i) base salary of $800,000 (prorated to $267,000 for 2020), (ii) ACI target of 1x base salary ($800,000, prorated to $267,000 for 2020), (iii) 2020/22 PSUs (3-year) of $2,250,000 (prorated to $750,000 for 2020) and (iv) RSUs of $2,250,000 (prorated to $562,000 for 2020). In addition, he was entitled to additional RSUs of $1,500,000 as a sign-on award, which amount is not included in target direct composition.
The Compensation Committee approved, and Mr. Dalal’s employment agreement provides for, 2023 annual target direct compensation of $5,200,000 comprised of: (i) base salary of $750,000, (ii) ACI target of $750,000, (iii) PSUs of $1,850,000 and (iv) RSUs of $1,850,000. SEC compensationMr. Dalal’s 2023 SEC compensation was lower than his target direct compensation primarily because he received only a pro rata portion of his annual base salary based on his employment commencing in December 2023, the difference in value of his PSUs as reported for SEC compensation versus in target direct compensation and a much smaller ACI award payout of only 30.3% of the pro rata portion of his target ACI amount based on his employment start date. These lower amounts were partially offset by the receipt of a transition RSU award of approximately $2,300,000 at the time he began his employment (see page 50 for additional information on transition awards), the inclusion of certain other items of compensation not included in calculating his target direct compensation (see page 72 for more information on the other items of compensation) and the inclusion of the following one-time awards that he received upon becoming the CFO of the company: (a) an equity award consisting of RSUs with a grant date value of $765,000 and (b) payment of $150,000 as the first half of a $300,000 cash-sign on bonus. Realized compensationMr. Dalal’s realized compensation was significantly lower than his target direct compensation primarily because (i) he received only a pro rata portion of his annual base salary based on his employment commencing in December 2023 as well as a much smaller ACI award payout compared to target and (ii) due to the timing of the start of his employment in December 2023, his realized compensation did not include any RSU or PSU vestings. His 2023 realized compensation consisted principally of his base salary of approximately $60,000, pro rata 2023 ACI award payout at 30.3% of target, cash sign-on bonus of $150,000 and certain other items of compensation not included in calculating his target direct compensation of approximately $48,000 (see page 72 for more information on the other items of compensation). 
Cognizant 2024 Proxy statement 59 SEC COMPENSATION
Mr. Siegmund’s SEC compensation was substantially higher than his target direct compensation as it included the full grant date fair value of $3,375,000 in RSUs for his initial grant to achieve the target direct compensation of $2,250,000 in RSUs on an annual grant cycle. His SEC compensation also included the additional $1,500,000 in RSUs provided for by his offer letter as a sign-on award. The grant date fair value of the PSUs required to be included in SEC compensation is slightly higher than the target award value in target direct compensation due to the relative TSR component being an award with a “market condition” under applicable accounting rules. As he joined the company in September 2020, the offer letter provided him a prorated 2020 ACI award payout at target (such amount shown in the 2020 Summary Compensation Table on page 51 as “Bonus” due to the guaranteed level of 2020 payout under the offer letter).
REALIZED COMPENSATION
Mr. Siegmund’s realized compensation was lower than his target direct compensation in 2020 as nearly all of the equity awards made in 2020 will vest in future periods. His realized compensation consisted principally of his prorated base salary, prorated 2020 ACI award payout at target and one quarter’s vesting of RSUs, of which $663,000 was from vesting of his RSU sign-on award.
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Table of Contents
Compensation > CD&A > Compensation by NEO
Jan Siegmund
Former CFO (through December 3, 2023) Karen McLoughlin |  | | KEY RESPONSIBILITIES AND CAREER HIGHLIGHTSKey responsibilities and career highlights
Ms. McLoughlinMr. Siegmund served as our CFO from 2012September 1, 2020 through August 31, 2020. AsDecember 3, 2023. During his tenure as CFO, she oversawMr. Siegmund led the company’s worldwide financial planning and analysis, accounting and controllership, tax, treasury and internal audit functions. Other areas under her purview included ourHe also oversaw corporate development, investor relations, enterprise risk management, procurementsales operations, pricing, post-acquisition integration and real estateinformation technology functions. Prior to joining Cognizant in 2003, she held key financialSeptember 2020, he was the CFO for Automatic Data Processing (ADP), a global human capital management positions with Spheriontechnology and Ryder System. Sheservices provider. He began herhis career with Price Waterhouse (now PricewaterhouseCoopers).at McKinsey & Company. Mr. Siegmund is a member of the board of directors of The Western Union Company.
| Former CFO (through August 31, 2020)Age
59 | Cognizant Tenure
4 years | | | | Age | Cognizant Tenure | Public Company Boards | 56 | 17 years | Best Buy Co., Inc. | | | (BBY) | | Education | |
Wellesley College Technical University Karlsuhe - B.A. | M.A.
Columbia University of California, Santa Barbara- M. B. A. | | | M.A.
Technical University of Dresden, Germany - Doctorate | | | | | | | |
Committee assessment and target direct compensation COMMITTEE ASSESSMENT AND TARGET DIRECT COMPENSATION
The Compensation Committee, at its meeting in March 2020,February 2023, evaluated Ms. McLoughlin’sMr. Siegmund’s prior year performance during 2019 and prior years and the compensationupdated information provided by Pay Governance for CFOs in the company’s peer group. Based on these considerations, the Compensation Committee determined that Mr. Siegmund’s target direct compensation for 2023 should remain consistent with a target annual amount of $6,600,000. The committee considered herspecific components of Mr. Siegmund’s 2023 target direct compensation were as follows: (i) base salary of $850,000, (ii) ACI target of $850,000, (iii) PSUs of $2,450,000 and (iv) RSUs of $2,450,000. In late summer 2023, Mr. Siegmund announced his plans to retire from the company. He subsequently ceased to be CFO, effective December 4, 2023. He remained an employee and special advisor to the company until March 31, 2024. SEC compensationMr. Siegmund’s 2023 SEC compensation was slightly lower than his target direct compensation, primarily due to the 2023 ACI award payout being 30.3% of target, which was partially offset by the higher value of the PSUs as reported for SEC compensation versus in target direct compensation. Realized compensationMr. Siegmund’s realized compensation was lower than his target direct compensation primarily because his PSU grants are largely expected to vest in future periods and because his 2023 ACI award payout amount was lower than the target amount. His 2023 realized compensation consisted principally of his base salary, 2023 ACI award payout at 30.3% of target, PSU vestings in the aggregate amount of $611,000 and quarterly vestings of RSUs in the aggregate amount of approximately $2,617,000. 
Cognizant 2024 Proxy statement 60 Surya Gummadi
EVP and President, Americas | | Key responsibilities and career highlights
Mr. Gummadi has served as our Executive Vice President and President, Americas since January 2023. Mr. Gummadi served as our SVP, Americas (Interim) from July 2022 to January 2023. He served as senior vice president of Cognizant’s Health Sciences business segment from April 2022 to January 2023, Vice President and leader of our Healthcare business from February 2020 to July 2020 and market head for our Health Plans business from October 2017 to February 2020. Prior to that, he served in a variety of roles in his 25-year tenure with Cognizant. | Age
47 | Cognizant Tenure
25 years | Education
Indian Institute of Technology, Bombay - B.M.E. | | | | |
Committee assessment and target direct compensationThe Compensation Committee, at its meeting in February 2023, evaluated Mr. Gummadi’s prior year performance, his new role as CFOEVP and President, Americas, the company’s Americas business performance and compensation information provided by Pay Governance for executives with similar responsibilities in the company’s peer group for 2023. Based on these considerations, the Compensation Committee determined that Mr. Gummadi’s target direct compensation for 2023 should be increased to $3,500,000 (57% increase vs. 2022), in connection with his promotion to serve as the EVP and President, Americas. The specific components of Mr. Gummadi’s 2023 target direct compensation were approved by the Compensation Committee as follows: (i) base salary of $650,000 (a 24% increase vs. 2022), (ii) ACI target of $650,000 (a 26% increase over his non-equity incentive bonus for 2022), (iii) PSUs of $1,100,000 (an 83% increase vs. 2022) and (iv) RSUs of $1,1,00,000 (an 83% increase vs. 2022). His ACI award was based 40% on the overall company ACI metrics and targets like the other NEOs, with the remaining 60% based on metrics and targets specific to the Americas business unit: (a) 35% based on constant currency revenue growth of the Americas business unit and (b) 25% based on Americas business unit profit. SEC compensationMr. Gummadi’s SEC compensation was higher than his target direct compensation primarily due to the inclusion of a transition RSU award of approximately $1,000,000 in connection with his increased compensation (see page 50 for additional information on transition awards), and the payment of the remaining $750,000 of a $1,000,000 aggregate bonus awarded in 2022 related to his interim role, each of which is not included in target direct compensation. These increases in SEC compensation were partially offset by his 2023 ACI award payout being 15.8% of target. Realized compensationMr. Gummadi’s realized compensation was slightly lower than his target direct compensation primarily because his PSU grants are largely expected to vest in future periods and because his 2023 ACI award payout amount was lower than the target amount. His 2023 realized compensation consisted principally of his base salary, 2023 ACI award payout at 15.8% of target (based on the company’s and his business unit’s 2023 performance), PSU vestings in the aggregate amount of $137,000, quarterly vestings of RSUs in the aggregate amount of approximately $1,598,000, and the remaining $750,000 of his bonus paid upon completion of his interim role of SVP, Americas. 
Cognizant 2024 Proxy statement 61 John Kim
EVP, Chief Legal Officer, Chief Administrative Officer and Corporate Secretary (EVP, General Counsel, Chief Corporate Affairs Officer and Secretary during 2023) | | Key responsibilities and career highlights
Mr. Kim has held the title of Executive Vice President, Chief Legal Officer, Chief Administrative Officer and Corporate Secretary since February 2024. This title change was made to better reflect his responsibilities after previously serving as our Executive Vice President, General Counsel, Chief Corporate Affairs Officer and Secretary beginning March 2021. In this role, he leads the company’s legal, company secretary, compliance, corporate security, regulatory, ESG, global real estate, procurement, contract lifecycle risk management and strategic negotiations functions. He joined Cognizant in November 2019 as Senior Vice President and Deputy General Counsel, Global Commercial Contracts. Prior to joining Cognizant, he served as Global Head of Big Deals at Capgemini, U.S. Counsel for WNS Global Services and General Counsel for Travelport, a leading travel technology company, as well as a number of technology service companies. | Age
56 | Cognizant Tenure
4 years | Education
Columbia University – B.A.
Cornell Law School – J.D. | | | | |
Committee assessment and target direct compensationThe Compensation Committee, at its meeting in February 2023, evaluated Mr. Kim’s prior year performance and compensation information provided by Pay Governance for executives with similar responsibilities based on a size and industry appropriate peer group and market data, including compensation information for executives at other companies with similar responsibilities in the company’s peer group for 2023. Based on these considerations, the Compensation Committee determined that Mr. Kim’s target direct compensation for 2023 should be increased to $3,800,000 (16% increase vs. 2022) to reflect additional responsibilities he took on in early 2023 overseeing the company’s procurement, global real estate and contract lifecycle risk management functions. The specific components of Mr. Kim’s 2023 target direct compensation were as follows: (i) base salary of $700,000 (an 8% increase vs. 2022), (ii) ACI target of $700,000 (an 8% increase vs. 2022), (iii) PSUs of $1,200,000 (a 20% increase vs. 2022) and (iv) RSUs of $1,200,000 (a 23% increase vs. 2022). SEC compensationMr. Kim’s 2023 SEC compensation was higher than his target direct compensation due primarily to the inclusion of the full grant date value of a special one-time RSU grant of approximately $500,000 related to his efforts in connection with the early 2023 CEO transition and his receipt of a transition grant of approximately $450,000 in RSUs in connection with his increased compensation (see page 50 for additional information on transition awards); this amount was largely offset by below target payment of the 2023 ACI. Realized compensationIn 2023, Mr. Kim’s realized compensation was significantly lower than his target direct compensation primarily because his increased PSU grants are largely expected to vest in future periods and because his 2023 ACI award payout amount was lower than the target amount. His realized compensation for 2023 consisted principally of his base salary, 2023 ACI award payout at 30.3% of target, PSU vesting of approximately $138,000 and quarterly vesting of RSUs in the aggregate amount of approximately $1,188,000. 
Cognizant 2024 Proxy statement 62 Ganesh Ayyar
EVP and President, Intuitive Operations and Automation and Industry Solutions | | Key responsibilities and career highlights Mr. Ayyar has been our Executive Vice President and President, Intuitive Operations and Automation since July 2022 and assumed additional responsibilities for Industry Solutions in April 2023. In his role, he oversees a global team of associates in providing business process services, automation services and platform services to clients. Previously, he was EVP and President, Digital Operations, from August 2019 to June 2022. Prior to that, he was the CEO of Mphasis (a global IT services company listed in India), from 2009 to 2017. He was recognized as the CEO of the Year in 2016 by CEO Connections for his successful track record of transformation initiatives and market value enhancements. | Age
62 | Cognizant Tenure 5 years | Education
University of Madras, India – BCom
Institute of Chartered Accountants of India - Chartered Accountancy | | | | |
Committee assessment and target direct compensationThe Compensation Committee, at its meeting in February 2023, evaluated Mr. Ayyar’s prior year performance, the company’s growth and transformation initiatives and strategic priorities, and the compensation information provided by Pay Governance for CFOsexecutives with similar responsibilities in the company’s peer group for 2020 (see “Peer Group Review” on page 32).2023. Based on these considerations, the committeeCompensation Committee determined that herMr. Ayyar’s target direct compensation for 20202023 should remain at $5,800,000,be increased to approximately $3,126,000 (8% increase vs. 2022) to reflect the same as in 2019.continued performance of the integrated practice area under his oversight. The specific components of Ms. McLoughlin’s 2020Mr. Ayyar’s 2023 target direct compensation were as follows (all unchanged vs. 2019):follows: (i) base salary of $750,000,S$958,000 (Singapore dollar; approximately US$713,000; an 11% increase vs. 2022 USD salary), (ii) ACI target of 1x base salary ($750,000)S$958,000 (approximately US$713,000; an 11% increase vs. 2022 USD ACI), (iii) 2020/22 PSUs (3-year) of $2,300,000$850,000 (a 6% increase vs. 2022) and (iv) RSUs of $2,000,000.$850,000 (a 6% increase vs. 2022). His ACI award was based 40% on the overall company ACI metrics and targets like the other NEOs, with the remaining 60% based on metrics and targets specific to the Intuitive Operations and Automation business unit: (i) 35% based on constant currency revenue growth of the integrated practice and (ii) 25% based on integrated practice profit. Also in March 2020, the committee granted additional equity awards due to the additional efforts required of Ms. McLoughlin during the ongoing changes in company leadership and transformation initiatives underway, the need to bridge the transition from 2-year to 3-years PSUs that occurred between 2019 and 2020 and the retention concerns presented by the 0% payout for the 2018/19 PSUs and anticipated 0% payout for the 2019/20 PSUs. As such, the committee approved an additional equity award of $2,150,000, calculated as 50% of the combined grant date fair values of 2018/19 PSUs and 2019/20 PSUs previously awarded to her as to which there was expected to be a 0% payout. The additional equity award consisted of $1,075,000 of 2020/21 PSUs (2-year) and $1,075,000 of RSUs, which amounts are not included in target direct composition.
SEC compensationMr. Ayyar’s SEC compensation was lower than his target direct compensation primarily due to his 2023 ACI award payout being 44.9% of target, which was partially offset by his receipt of a transition grant of approximately $100,000 in RSUs in connection with his increased compensation (see page 50 for additional information on transition awards) and the higher value of the PSUs as reported for SEC compensation versus in target direct compensation. Realized compensationMr. Ayyar’s 2023 realized compensation was lower than his target direct compensation primarily because many of his PSU grants are expected to vest in future periods and because his 2023 ACI award payout amount was lower than the target amount. His realized compensation for 2023 consisted principally of his base salary, 2023 ACI award payout at approximately 44.9% of target (based on the company’s and his integrated practice’s 2023 performance), PSU vesting of approximately $642,000 and quarterly vestings of RSUs in the aggregate amount of approximately $908,000. 
Cognizant 2024 Proxy statement 63 Ms. McLoughlin retired from the company on December 31, 2020. In connection with such retirement, she received ACI for 2020 at the achieved level (included in the graphs to the right) and the vesting of certain outstanding equity, which settles according to the original vesting schedule (not included in the graphs to the right but included in the “Calculation of Potential Payments” table on page 59), in accordance with the applicable terms of the company’s retirement, death and disability policy (see page 47).
SEC COMPENSATION
In 2020, Ms. McLoughlin’s SEC compensation was substantially higher than her target direct compensation primarily due to the additional equity awards not included in target direct compensation: (i) 2020/21 PSUs (2-year) of $1,116,000 and (ii) RSUs of $1,075,000.
The ACI amounts in SEC compensation are lower than the amounts in target direct compensation due to the ACI achievement being lower than target in both years (42.8% in 2019 and 85% in 2020). The grant date fair values of the PSUs in 2020 required to be included in SEC compensation are slightly higher than the target award value due to the relative TSR component being an award with a “market condition” under applicable accounting rules.
REALIZED COMPENSATION
Ms. McLoughlin’s realized compensation was lower than her target direct compensation in both 2019 and 2020 due to the actual achievement of ACI versus target and differences in equity vestings versus equity grant date fair values during the years. In 2020, this lower value was partially offset by $309,000 of quarterly vestings from the additional equity awards granted to her. In both years her realized compensation consisted principally of base salary, ACI at the achieved level and vestings of PSUs and RSUs.
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Table of Contents
| Becky Schmitt |  | | KEY RESPONSIBILITIES AND CAREER HIGHLIGHTS
Ms. Schmitt has been our Executive Vice President,
Former Chief People Officer since(until May 5, 2023)
| | Key responsibilities and career highlights
Ms. Schmitt served as our Chief People Officer from February 2020.2020 through May 5, 2023. In this role, she leadsled all aspects of people management and company culture, including attracting world-class, diverse talent and developing a future-ready workforce. Prior to joining Cognizant, she was the Chief People Officer of Sam’s Club, a division of Walmart, from 2018 to 2020 and in various other senior human resources roles at Walmart before that. Prior to joining Walmart in 2016, she spent over 20 years with Accenture in various human resources roles, culminating in her role as HR Managing Director, North America Business from 2014 to 2016. | Chief People OfficerAge
50 | Cognizant Tenure
3 years | | | | Age | Cognizant Tenure | | 47 | 1 year | | | | | | Education | | |
University of Michigan, Ann | | Arbor- – B.A. | | | |
| | | |
Committee assessment and target direct compensation COMMITTEE ASSESSMENT AND TARGET DIRECT COMPENSATION
Ms. Schmitt was selected by the board to serve as the company’s chief people officer based on her extensive human resources experience as a senior executive. In connection with her appointment as chief people officer, the company entered into an offer letter and executive employment and non-disclosure, non-competition, and invention assignment agreement with her on November 25, 2019, pursuant to which she agreed to serve as the company’s chief people officer. The Compensation Committee reviewed and approved the compensation arrangements set forth in the offer letter and employment agreement after considering compensation information provided by Pay Governance for chief people officers in the company’s peer group (see “Peer Group Review” on page 32) and other information on compensation arrangements for new chief people officers.
The committee approved, and Ms. Schmitt’s employment agreement provided for (by way of reference to the offer letter, as applicable), target direct compensation consisting of the following: (i) base salary of $650,000 (prorated to $596,000 for 2020), (ii) ACI target of 1x base salary ($650,000, prorated to $596,000 for 2020), (iii) 2020/22 PSUs (3-year) of $1,250,000 and (iv) RSUs of $1,250,000. In addition, she was entitled to additional RSUs of $2,500,000 as a sign-on award and a cash sign-on bonus of $600,000 paid in two equal installments in 2020. The sign-on award and sign-on bonus were intended to compensate her for a portion of the long-term compensation at Walmart that she forfeited upon joining Cognizant and were not considered part of her target direct compensation.
SEC COMPENSATION
Ms. Schmitt’s SEC compensation was substantially higher than her target direct compensation as it included the full grant date fair value of $3,750,000 in RSUs for her initial grant to achieve the target direct compensation of $1,250,000 in RSUs on an annual grant cycle. Her SEC compensation also included the additional $2,500,000 in RSUs provided for by her offer letter as a sign-on award. It also included $811,000, included in “Other”, comprised of her sign-on bonus ($600,000), relocation expenses ($162,000) and a tax gross-up on the relocation expenses ($49,000).
The ACI amount in SEC compensation is lower than the amount in target direct compensation due to the ACI achievement being 85% of target in 2020. The grant date fair value of the PSUs required to be included in SEC compensation is slightly higher than the target award value due to the relative TSR component being an award with a “market condition” under applicable accounting rules.
REALIZED COMPENSATION
Ms. Schmitt’s realized compensation was lower than her target direct compensation in 2020 as most of the equity awards made in 2020 will vest in future periods. Her realized compensation consisted principally of her prorated base salary, prorated 2020 ACI at 85% of target, three quarterly vestings of RSUs, of which $1,097,000 was from vestings of her RSU sign-on award, and the $811,000 related to her sign-on bonus and relocation expenses included in “Other”.
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Table of Contents
Compensation > CD&A > Compensation by NEO
Malcolm Frank |
 | | KEY RESPONSIBILITIES AND CAREER HIGHLIGHTS
Mr. Frank became our Executive Vice President and President, Digital Business & Technology in January 2021. In this role, Mr. Frank is responsible for overseeing our Digital Business & Technology practice that helps clients build modern enterprises that deliver exceptional customer experiences that are created at the intersection of cloud and digital. Prior to our merging our Digital Business and Digital Systems & Technology practices in January 2021, he was our Executive Vice President and President, Digital Business, from May 2019. Prior to that, Mr. Frank was our Executive Vice President, Chief Strategy Officer and Chief Marketing Officer.
| President, Digital Business & Technology | | | | | Age | Cognizant Tenure | | 55 | 15 years | | | | | Education | | Yale University - B.A. | | Public Company Boards
FactSet Research Systems Inc.
(FDS) | | | | | | |
COMMITTEE ASSESSMENT AND TARGET DIRECT COMPENSATION
The Compensation Committee at its meeting in March 2020,February 2023, evaluated Mr. Frank’sMs. Schmitt’s prior year performance during 2019 and prior years and compensation information provided by Pay Governance for executives with similar responsibilities based on a size and industry-appropriate peer group and market data. The committee considered his performance in 2019, the company’s growth and transformation initiatives and strategic priorities, including in the digital business areas under Mr. Frank’s leadership, and the compensation information for executives at other companies with similar responsibilities, including companies in the company’s peer group for 2020 (see “Peer Group Review ” on page 32).2023. Based on these considerations, the committeeCompensation Committee determined that Mr. Frank’sMs. Schmitt’s target direct compensation for 2020 should remain2023 be set at $4,800,000, the same as in 2019.$4,200,000. The specific components of Mr. Frank’s 2020Ms. Schmitt’s 2023 target direct compensation were as follows (all unchanged vs. 2019):follows: (i) base salary of $650,000,$700,000, (ii) ACI target of 1x base salary ($650,000),$700,000, (iii) 2020/22 PSUs (3-year) of $1,900,000$1,400,000 and (iv) RSUs of $1,600,000. His$1,400,000. Ms. Schmitt voluntarily terminated her employment with the company effective May 5, 2023. SEC CompensationMs. Schmitt’s SEC compensation in 2023 was slightly higher than her target direct compensation primarily due to the inclusion of the full grant date value of a transition RSU award of approximately $2,500,000 (in addition to regular annual awards) to replace expiring off-cycle awards and ensure continued vesting of Ms. Schmitt’s annual targeted RSU amount (see page 50 for additional information on transition awards). This transition award was larger than typical for such awards because it replaced one of the last RSU awards that was granted on a three-year cycle by the company before it transitioned to the more typical practice of granting annual awards. The value of this transition award in SEC compensation was largely offset by (i) Ms. Schmitt’s forfeiture of her ACI award was based 40% onwhen she left the overall company ACI metrics and targets like the other NEOs, with the remaining 60% based on metrics and targets specific to the Digital Business practice: (i) 35% based on constant currency revenue growth of the practice and (ii) 25% based on adjusted income from operationsher receipt of only a pro rata portion of her annual base salary through the practice.date of termination of her employment. Also in March 2020, the committee granted additional equity awards due to the additional efforts required of Mr. Frank during the ongoing changes in company leadership and transformation initiatives underway, the need to bridge the transition from 2-year to 3-years PSUs that occurred between 2019 and 2020 and the retention concerns presented by the 0% payout for the 2018/19 PSUs and anticipated 0% payout for the 2019/20 PSUs. As such, the committee approved an additional equity award of $1,882,000, calculated as 50% of the combined grant date fair values of 2018/19 PSUs and 2019/20 PSUs previously awarded to him as to which there was expected to be a 0% payout. The additional equity award consisted of $941,000 of 2020/21 PSUs (2-year) and $941,000 of RSUs. Also, in recognition of the substantial additional responsibilities taken on by him in assuming leadership of the Digital Business practice area, a strategic priority for the company, the committee provided a further additional equity award in 2020 consisting of $1,000,000 of RSUs. The additional equity awards are not included in target direct compensation.
Realized CompensationMs. Schmitt’s realized compensation in 2023 was substantially lower than her target direct compensation primarily because she only received a pro rata portion of her annual base salary through the date of termination of her employment and forfeited her ACI award payout and unvested stock awards (including the transition award discussed above) at the time she left the company in May 2023. Her 2023 realized compensation consisted principally of her base salary through May 2023, quarterly vesting of RSUs in the aggregate amount of approximately $622,000 and PSU vesting of approximately $1,145,000. 
Cognizant 2024 Proxy statement 64 SEC COMPENSATION
In 2020, Mr. Frank’s SEC compensation was significantly higher than his target direct compensation primarily due to the additional equity awards not included in target direct compensation: (i) 2020/21 PSUs (2-year) of $978,000, (ii) RSUs of $941,000 and (iii) RSUs of $1,000,000 .
The ACI amounts in SEC compensation are lower than the amounts in target direct compensation due to the ACI achievement being lower than target in both years (42.8% in 2019 and 85% in 2020). Mr. Frank’s 2020 ACI achievement was determined in part based on the performance of the Digital Business practice, as described above, but after the mid-2020 Covid-19 adjustment was limited to a maximum 85% achievement as was the case for the other NEOs. The grant date fair values of the PSUs in 2020 required to be included in SEC compensation are slightly higher than the target award value due to the relative TSR component being an award with a “market condition” under applicable accounting rules.
REALIZED COMPENSATION
Mr. Frank’s realized compensation was higher than his target direct compensation in 2020 primarily due to the quarterly vestings of his additional equity awards: (i) RSUs of $271,000 and (ii) RSUs of $288,000. His realized compensation in 2019 was lower than his target direct compensation in 2019 primarily due to the ACI achievement being lower than target (42.8%) and differences in equity vestings versus equity grant date fair values. In both years his realized compensation consisted principally of base salary, ACI at the achieved level and vestings of PSUs and RSUs.
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TableOther elements of Contentscompensation
Matthew W. Friedrich |
 | | KEY RESPONSIBILITIES AND CAREER HIGHLIGHTS
Mr. Friedrich served as our Executive Vice President, General Counsel, Chief Corporate Affairs Officer and Secretary through January 1, 2021. In that role, he was responsible for the company’s legal, compliance, corporate affairs and company secretary functions. Prior to joining Cognizant in May 2017, Mr. Friedrich served as the Chief Corporate Counsel at Chevron and was previously a partner in the law firms of Freshfields Bruckhaus Deringer and Boies Schiller & Flexner. Mr. Friedrich began his legal career in 1995 as a federal prosecutor with the United States Department of Justice, where he remained for nearly 14 years, culminating with his designation as the acting assistant Attorney General of the Criminal Division in 2008.
Broad-based programs | Former General Counsel (through January 1, 2021) | | | | | Age | Cognizant Tenure | | 54 | 4 years | | | | | Education | | University of Virginia - B.A.
University of Texas School
of Law - J.D. | | | | | | | | | |
COMMITTEE ASSESSMENT AND TARGET DIRECT COMPENSATION
The Compensation Committee, at its meeting in March 2020, considered Mr. Friedrich’s performance during 2020 and prior years and compensation information provided by Pay Governance for general counsels in the company’s peer group. The committee considered his performance as general counsel in 2019, the company’s growth and transformation initiatives and strategic priorities, and the compensation information for general counsels in the peer group for 2020 (see “Peer Group Review” on page 32). Based on these considerations, the committee determined that Mr. Friedrich’s target direct compensation for 2020 should be $4,176,000 to reflect performance and general market trends.
The specific components of Mr. Friedrich’s 2020 target direct compensation were as follows: (i) base salary of $650,000, (ii) ACI target of 1x base salary ($650,000), (iii) 2020/22 PSUs (3-year) of $1,175,000 and (iv) RSUs of $1,701,000.
Also in March 2020, the committee granted additional equity awards due to the additional efforts required of Mr. Friedrich during the ongoing changes in company leadership and transformation initiatives underway, the need to bridge the transition from 2-year to 3-years PSUs that occurred between 2019 and 2020 and the retention concerns presented by the 0% payout for the 2018/19 PSUs and anticipated 0% payout for the 2019/20 PSUs. As such, the committee approved an additional equity award of $974,000, calculated as 50% of the combined grant date fair values of 2018/19 PSUs and 2019/20 PSUs previously awarded to him as to which there was expected to be a 0% payout. The additional equity award consisted of $487,000 of 2020/21 PSUs (2-year) and $487,000 of RSUs. Also, in recognition of his contributions to successfully resolving the company’s Foreign Corrupt Practices Act matter in 2019, the committee provided a further additional equity award in 2020 consisting of $1,000,000 of RSUs. The additional equity awards are not included in target direct compensation. In February 2021, in recognition of his contributions during 2020, the committee determined to pay him the 2020 ACI at the achieved level (85% of target) notwithstanding his departure from the company prior to the March 2021 payout date. The unvested portions of the additional equity awards (all portions not included in realized compensation below) were forfeited upon Mr. Friedrich’s departure from the Company in January 2021.
SEC COMPENSATION
In 2020, Mr. Friedrich’s SEC compensation was significantly higher than his target direct compensation primarily due to the additional equity awards not included in target direct compensation: (i) 2020/21 PSUs (2-year) of $506,000, (ii) RSUs of $487,000 and (iii) RSUs of $1,000,000.
The ACI amount in SEC compensation is lower than the amount in target direct compensation due to the ACI achievement being 85% of target. The grant date fair values of the PSUs required to be included in SEC compensation are slightly higher than the target award value due to the relative TSR component being an award with a “market condition” under applicable accounting rules.
REALIZED COMPENSATION
Mr. Friedrich’s realized compensation was higher than his target direct compensation in 2020 primarily due to the quarterly vestings of his additional equity awards: (i) RSUs of $140,000 and (ii) RSUs of $288,000. His realized compensation consisted principally of his base salary, ACI at the achieved level and vestings of PSUs and RSUs.
We have excluded Mr. Friedrich’s compensation for 2019 as he was not an NEO during 2019.
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Table of Contents
Compensation > CD&A > Other Elements of Compensation
Other Elements of Compensation
Broad-Based Programs
Our executive officers are eligible to participate in our broad-based medical, dental, vision, life and accidental death insurance programs.programs, as well as in retirement programs generally available to employees in each applicable country. The availability of these broad-based benefit programs enhances employee morale and loyalty. Our U.S.-based executive officers are additionally eligible to participate in our 401(k) savings plan, 2004 Employee Stock Purchase Plan as(as amended and restated, in 2013 and 2018 (thethe “ESPP”), and the Cognizant Technology Solutions Supplemental Retirement Plan (the “CSRP”) on the same basis as other U.S.-based employees (or executives in the case of the CSRP) generally. Under the 401(k) savings plan, we match employee contributions at the rate of 50% for each dollar contributed during each pay period, up to the first 6% of eligible compensation contributed during each pay period and an additional year-end match at the rate of 50% of the first 2% contributed (subject to employment at the end of the plan year), subject to applicable plan and U.S. Internal Revenue Service (“IRS”) limits. The matching contributions vest immediately. Our U.S.-based executive officers whoafter the first year of employment for those hired 2022 or later (those hired prior to 2022 were subject to immediate vesting). To ensure plan compliance, Highly Compensated Employees (“HCEs”) are subject to lower contribution restrictions under ourlimits to the 401(k) savings plan duethan non-HCEs. Due to statutory limits that apply to highly-compensated employees are eligible to participate inthese rules, HCEs can avail themselves of the CSRP onwithout forgoing the same basis as other U.S.-based employees generally.company match. The CSRP is a nonqualified savings plan in which the employee’s contributions are made on a post-tax basis to an individually owned, portable and flexible retirement plan held with a life insurance company. The CSRP works alongside established qualified retirement plans such as our 401(k) savings plan or can be the basis for a long-term stand-alone retirement savings plan. We provide a fully vested incentive match following the same formula as our 401(k) savings plan. Because the CSRP is not subject to the same IRS non-discrimination rules as our 401(k) savings plan, employees that face limitations on their 401(k) contributions due to these rules can avail themselves of the CSRP without forgoing the company match. Although there is a limit in the amount of employer contributions, there is no limit to the amount an employee may contribute to the CSRP, and it can be used in concert with other retirement strategies that may be available outside of the company. The CSRP allows participants to choose between a tax-deferred variable retirement annuity and a variable (equity investment) life insurance plan. Both the annuity and the life insurance plan offer the ability to exchange the policy for a guaranteed retirement income that cannot be outlived as well as a range of investment options for the executive to choose from.
Our U.K.-based executive officers (including, for 2023 during the period he remained an employee of the company, Mr. Humphries) are eligible to participate in our U.K. group personal pension plan on the same basis as other U.K.-based employees generally. Under this plan, we match employee contributions of up to 10% of eligible salary (depending on the employee’s job grade), subject to applicable statutory annual allowance limits. For any excess pension contributions over the annual allowance limits, whichthat an employee ismay be eligible for under the terms of such employee’s contract of employment, such employee is paidhas the option to elect such excess contribution value as a cash allowance, subject to applicable tax law. The 401(k) savings plan, CSRP, U.K. group personal pension planOur Singapore-based executive officers are eligible to participate in the Central Provident Fund (the “CPF”), which is a statutory benefit program, on the same basis as all other regular Singapore-based employees generally. Under the CPF, we make a matching contribution between 7.5% and other generally available benefit programs allow us to remain competitive for employee talent. We believe that the availability17% of the aforementioned broad-based benefit programs generally enhances employee morale and loyalty.employee’s monthly wages, depending on the age of the employee. The matching contribution percentage applies to (i) the first S$6,000 in monthly wages (beginning in September 2023, this amount was raised to S$6,300) (“ordinary wages”) plus (ii) an additional wage ceiling amount calculated by subtracting the total annual ordinary wages subject to CPF from S$102,000. This contribution immediately vests.
RETIREMENT, DEATH AND DISABILITY POLICY | | | | RETIREMENT, DEATH AND DISABILITY POLICY | | Our executive officers and certain other senior employees are eligible to participate in our retirement, death and disability policy, which was developed by the Compensation Committee in 2020 with reference to the practices of peer group companies and with the advice of Pay Governance.policy. | | | | Eligibility | | Eligibility | All employees at the vice president level and above | | | | Retirement | Voluntary retirement upon: | | | | | | | Retirement | Voluntary retirement upon: • At least 55 yearsof age; and | | • At least 10 yearsof service | | | | | Benefits | PSUs and RSUscontinue to settle on the originally scheduled vesting dates following departure | | | | | (except in the event of (i) death, in which case the vesting and payment of RSUs accelerate and become immediately vested to the time of death, or (ii) disability, in which case RSUs eligible for the policy (as described below) settle on the originally scheduled vesting dates following departure and RSUs ineligible for the policy settle at the time of disability) • Applies only to equity awards madegranted on or after the adoption of the policy and at least 6 months before the individual’s retirement date | | | | | • termination of servicePSU awards are prorated based on the portion of the performance measurement period during which the individual was employed before retirement, death or disability (actual performance continues to be assessed on the full original performance measurement period) | | | | | ACI / annual bonus at the achieved level level for the year during which the departure occurs for departures on or after July 1 of the year (prorated for portion of the year served) or for the prior year (if unpaid at the time of departure) | | | | | Company-paid health benefits for a period of time following retirement or a departure due to disability | | • Executive vice president or above | 18 months | | | | • Senior vice president | 12 months | | | | • Vice president | 6 months | | | | | • Executive vice president or aboveAdditional Conditions | 18 months | | • Senior vice president | 12 months | | • Vice president | 6 months | | | | AdditionalConditions | 3 monthsmonths’ notice before retirement to allow for succession planning, execution of a release and compliance with non-competition and non-solicitation restrictions (subject to administrator discretion and where permitted by law) | | | | | | | |
Cognizant 2024 Proxy statement 65 Table of Contents
Supplemental Retirement Programs
We do not have any nonqualified deferred compensation programs, pension plans or pre-tax supplemental executive retirement plans for our NEOs, except for the CSRP described under “Broad-Based Programs” on page 47.
Perquisites Perquisites
We seek to maintain an egalitarian culture in our facilities and operations. The company’s philosophy is to provide a minimal amountnumber of personal benefits and perquisites to its executives and generally only when such benefits have a strong business purpose. We incur expenses to ensure that our employees, including our executive officers, are accessible to us and our customers at all times and to promote our commitment to provide our employees and executives with the necessary resources and technology to allow them to operate “around the clock” in a “virtual office” environment. However, we do not view these expenses as executive perquisites because they are essential to the efficient performance of executives’ duties and are comparable to the benefits provided to a broad-based group of our employees. We also provide personal security services to certain of our executive officers where we believe the provision of such services is in the interest of the company, and we may reimburse executives for approved travel expenses where an immediate family member accompanies an executive to attend a business function at which such family member is generally expected to attend. In addition, during his tenure as CEO of the company, provideswe provided Mr. Humphries with a corporate apartment in New York City as a result of his frequent travel to our New York office. Company Policies Impactingpolicies impacting compensation
Executive stock ownership guidelines Our stock ownership guidelines are designed to further align the interests of our senior leadership, including our NEOs, with those of our shareholders. Under the guidelines, our CEO and each direct report of the CEO who is at the level of EVP or higher is required over time to hold a number of shares (including a portion of the shares underlying restricted stock units) with a value equal to the applicable multiple of annual base salary. The annual base salary utilized in the calculation is the annual base salary applicable as of the date an individual becomes subject to the stock ownership guidelines. The stock price used to assess compliance is the closing price per share of the company’s common stock on the first trading day of the fiscal year in which compliance is being assessed. Compliance is required within five years of an officer becoming subject to the guidelines, subject to limited exceptions for hardship or other personal circumstances as determined by the Compensation Committee. As of April 8, 2024, none of our currently employed NEOs had yet reached their five-year deadline for compliance with the stock ownership guidelines; however, Mr. Gummadi, Mr. Kim and Mr. Ayyar had sufficient shares to be in compliance with our stock ownership guidelines for 2024. In addition, at the time of their departures from their roles as CEO and CFO, respectively, of the company, each of Mr. Humphries and Mr. Siegmund also held sufficient shares to be in compliance with our stock ownership guidelines. Executive Stock Ownership Guidelines
Hedging, short sale, margin account and pledging prohibitions  | Our stock ownership guidelines are designed to further aligninsider trading policies include the interests of our NEOs with those of our shareholders. Under the guidelines, each NEO is required over time to hold a number of shares with a value, as of March 2017 or, for later identified NEOs, the time an executive becomes an NEO, equal to the applicable multiple of annual base salary. The annual base salary utilized in the calculation is the annual base salary applicable as of March 2017 or, for later identified NEOs, the annual base salary when an officer becomes an NEO. Compliance is required within five years of an officer becoming an NEO, subject to limited exceptions for hardship or other personal circumstances as determined by the Compensation Committee. As of March 31, 2021, all of our NEOs who remained employed with us as of such date were in compliance with our stock ownership guidelines.following prohibitions: |  | |
| Hedging, Short Sale, Margin Account and Pledging ProhibitionsOur insider trading policies include the following prohibitions:
X | No Hedgingor Speculation | | All of the company’s directors, executive officers and other employees are prohibited from purchasing or selling puts, calls and other derivative securities of the company or any other derivative security that provides the equivalent of ownership of any of the company’s securities or an opportunity, directly or indirectly, to profit from the change in value of the company’s securities. | X | | No Short Sales | | All of the company’s directors, executive officers and other employees are prohibited from engaging in short sales of company securities, preventing such persons from profiting from a decline in the trading price of the company’s common stock. | X | | No MarginAccounts | | All of the company’s directors, executive officers and other employees are prohibited from using company securities as collateral in a margin account. | X | | No Pledging | | All of the company’s directors, executive officers and other employees are prohibited from pledging company securities as collateral for a loan, or modifying an existing pledge. |
Clawback policies In 2023, we adopted a Rule 10D-1 compensation recoupment (clawback) policy (the “Rule 10D-1 Policy”) that complies with the final listing standards from Nasdaq implementing Exchange Act Rule 10D-1. This policy mandates recovery of certain erroneously awarded incentive-based compensation from Section 16 officers (as defined under the Exchange Act), including the NEOs, following accounting restatements due to material noncompliance with any financial reporting requirements that impacts the performance period for such incentive-based compensation. The Rule 10D-1 Policy generally extends to incentive based compensation received during the three fiscal years preceding the date on which the company is required to prepare the accounting restatement. The compensation to be recovered is the amount in excess of what would have been paid based on the restated results. Recovery will be required on a “no fault” basis, without regard to whether any misconduct occurred and without regard to whether the covered officer was responsible for the erroneous financial statements. We also amended our existing clawback policy in 2023 to work in tandem with the Rule 10D-1 Policy. The key provisions of our amended clawback policy are set forth below. Cognizant 2024 Proxy statement 66 Table of Contents
Compensation > CD&A > Company Policies Impacting Compensation
Clawback Policy
We maintain a clawback policy, which applies to all NEOs and certain other members of management.
| Covered individuals | | • Current and former Section 16 officers • All executive vice presidents and members of the company’s executive committee • All senior vice presidents | When Clawback Policy May ApplyNo-fault triggering event | | Compensation Subject to Clawback | Company is required to prepare an accounting restatement due to material noncompliance by the company with any financial reporting requirement under thefederal securities laws that | | Misconduct triggering events | | • A restatement is caused directly or indirectly by any current or former employee’s gross negligence, willful fraud or failure to act that affects the performance measures or the payment, award or value of any compensation that is based in whole or in part on the achievement of financial results by the company (“incentive compensation”) | | Incentive compensation actually received during the preceding three years
less
amount that would have been received based on restated financial results
| …and to the extent the restatement is caused by an a covered employee’s willful fraud or intentional manipulation of performance measuresthat affects incentive compensation, for such employee… | | Same as above, but clawback may cover the entire period the employee was subject to the clawback policy | Employee engages in illegal• Illegal or improper conduct that causes significant financial or reputational harm to the company | | Any portion of incentive compensation | Employee has knowledge• Knowledge of and failsfailure to report to the board theBoard certain improper conduct of any other employee or agent of the company who engages• Gross negligence in any of the conduct described above fulfilling supervisory responsibilities | Compensation subject to clawback (no-fault) | | Any portionincentive-based cash compensation or equity compensation granted, vested or settled on the basis of incentive compensationa financial reporting measure | Employee is grossly negligent in fulfilling his or her supervisory responsibilitiesCompensation subject to prevent any employee or agent of the company from engaging in any of the conduct described above clawback(misconduct) | | Any portion of incentiveAll compensation under the no-fault clawback scenario described above plus discretionary bonuses, time-based awards and performance-based awards | Amount of compensation subject to clawback (no-fault) | | Excess incentive compensation that would not have been earned under restated results | Amount of compensation subject to clawback (misconduct) | | Up to all covered compensation |
Equity Grant Practicesgrant practices The Compensation Committee or the boardBoard approves the grant of stock-based equity awards, such as PSUs RSUs and options,RSUs, at its regularly scheduled meetings or by written consent (to be effective on the date of the meeting or receipt of all signed consents, or a later date). In addition, the committeeCompensation Committee has authorized, subject to various limitations, a committee comprised of members of the executive management team to grant stock-based equity awards to certain newly hired and certain existing employees (including in certain cases employees hired through acquisitions), excluding executive officers and certain other senior employees. TheNone of the Board, Compensation Committee, and the board do notor executive management team committee engage in any market timing with regards to the stock-based equity awards made to executive officers or other award recipients. It is the company’s policy that all stock option grants, whether made by the board,Board, the Compensation Committee or the executive committee, have an exercise price per share equal to the fair market value of our common stock based on the closing market price per share on the grant date. Risk Assessmentassessment The Compensation Committee believes that its approach to goal setting and setting of targets with payouts at multiple levels of performance assists in mitigating excessive risk-taking that could harm the company’s value or reward poor judgment by executives. Several features of the company’s compensation program reflect sound risk management practices. Notably, the committeeCompensation Committee believes compensation has been allocated among cash and equity and short and long-term compensation elements in such a way as to not encourage excessive risk-taking, but rather to reward meeting strategic company goals that enhance shareholder value. In addition, the committeeCompensation Committee believes that the mix of equity award instruments used under the company’s long-term incentive program (full value awards as well as the multi-year vesting of the equity awards) also minimize excessive risk-taking that might lead to short-term returns at the expense of long-term value creation. We also set stock ownership guidelines for our NEOsCEO and certain other members of senior leadership to help mitigate potential compensation risk (see page 4866). Additionally, prior to determining the performance by the company against the targets for performance-based compensation (ACI and PSUs), the committeeCompensation Committee adjusts the targets for the impact of acquisitions completed during the performance period which discouragesin order to discourage excessive risk-taking with respect to M&A transactions. In sum, the committeeCompensation Committee believes that the company’s compensation policies do not create risks that are reasonably likely to have a material adverse effect on the company. Tax Considerations – Deductibility of Executive Compensation
U.S. Internal Revenue Code (“IRC”) Section 162(m) imposes a $1 million annual limit on the amount that a public company may deduct for compensation paid to covered employees, which generally includes all current and certain former NEOs (2017 and later), who are employed as of the end of the year. As such, any compensation in excess of the $1 million annual limit that we may pay to a covered employee is not deductible.
Severance benefits Table of Contents
Severance Benefits
We have entered into executive employment and non-disclosure, non-competition and invention assignment agreements (collectively, the “Employment Agreements”) with each of the NEOsMr. Kumar, Mr. Dalal, Mr. Gummadi, Mr. Ayyar and Mr. Kim under which certain payments and benefits would be provided should thesuch NEO’s employment terminate under certain circumstances, including in connection with a change in control (see page 5878). While they were employed with the company, Mr. Humphries, Mr. Siegmund and Ms. Schmitt also had Employment Agreements with the company. We believe that the Employment Agreements achieve two important goals crucial to our long-term financial success, namely, the long-term retention of our NEOs and their commitment to the attainment of our strategic objectives. These agreements will allow our NEOs to continue to focus their attention on our business operations and strategic plans without undue concern over their own financial situations during periods when substantial disruptions and distractions, including a potential change in control, might otherwise prevail. We believe that these severance packages under the Employment Agreements are fair and reasonable in light of market practices for executives of a similar level of experience as our NEOs, the level of dedication and commitment of our NEOs, the contributions our NEOs have made to our growth and financial success and the value we expect to receive from retaining the continued services of our NEOs, including during challenging transition periods following a change in control. SENIOR EXECUTIVE CASH SEVERANCE POLICY The Board has adopted a Senior Executive Cash Severance Policy, which provides that the company will not enter into any new employment agreement or severance or separation arrangement or agreement with any senior executive of the company, or establish any new severance plan or policy covering any senior executive of the company, in each case, that provides for cash severance benefits exceeding 2.99 times the sum of the senior executive’s base salary plus target bonus for the year of termination, without seeking shareholder approval or ratification of such agreement, arrangement, plan or policy. |
Cognizant 2024 Proxy statement 67 NO TAX GROSS-UPS ON SEVERANCE BENEFITS None of the NEOs is entitled to any tax gross-up payments for theany tax liability they incur with respect to such severance benefits or other changeschange in control-related payments. The material terms of the NEOs’ Employment Agreements and post-employment compensation are described in “Potential Payments Upon Terminationpayments upon termination or Changechange in Control”control” starting on page 5878. |
Termination of Brian Humphries as CEO and related severance payments On January 12, 2023, the Board of Directors named Ravi Kumar S as CEO and member of the Board, effective immediately. Mr. Kumar succeeded Brian Humphries. Mr. Humphries’ separation was considered an involuntary termination without cause under his Executive Employment and Non-Disclosure, Non-Competition, and Invention Assignment Agreement dated April 1, 2019 (as amended by a letter agreement dated as of December 9, 2022, relating to the currency in which his 2023 base salary and corresponding ACI payments would be denominated, the “Humphries Employment Agreement”), which was further amended as part of the termination and related transition. The letter agreement provided that, to assist in facilitating the transition of the CEO role, Mr. Humphries would remain an employee of Cognizant Worldwide Limited, a subsidiary of the company, and continue to receive his existing base salary and vesting of outstanding equity awards pursuant to their terms through March 15, 2023, during which time he would serve as a special advisor to the company. In addition, subject to Mr. Humphries’ execution and non-revocation of a release of claims against the company and the Humphries Employment Agreement, subject to his continued employment with the company through March 15, 2023 he received the following: | • | his annual cash incentive for 2022 based on the company’s actual performance, which was paid in March 2023, | | • | continued payment of his salary and benefits through March 15, 2023, | | • | continued vesting of outstanding equity awards in accordance with their terms through March 15, 2023, | | • | payment for his accrued but untaken vacation, and | | • | following March 15, 2023, the severance benefits to which he would have been entitled on the basis of an involuntary termination without Cause (as defined in the Humphries Employment Agreement) under the Humphries Employment Agreement, which included: |
| • | an amount equal to his annual base salary (1,150,000 CHF, or approximately $1.3 million), payable over a one-year period in installments, | | • | a lump-sum cash amount equal to his target annual cash incentive for 2023, (2,300,000 CHF, or approximately $2.6 million), and | | • | accelerated vesting of 47,369 RSUs with a total value of $2,780,812 that were scheduled to vest between March 15, 2023 and March 15, 2024, which were settled as of March 15, 2023, with all remaining unvested equity awards, including his 2019-2023 CEO new hire PSU award, forfeited. |
The payments and benefits received by Mr. Humphries were made to him, among other things, as additional consideration for the post-employment restrictive covenants contained in the Humphries Employment Agreement and, had he violated any such provisions, remaining severance payments could immediately cease and, at any time prior to March 15, 2024, the company could require that the 47,369 shares of common stock he received as a result of accelerated vesting be forfeited and Mr. Humphries be required to pay to the company any profits realized from the sale of such shares. Mr. Humphries was fully responsible for all federal, state, local or foreign taxes due with respect to all payments and awards received under this agreement, including any excise tax. Although the letter agreement was signed before adoption of the senior executive cash severance policy described on page 67, the severance amounts provided to Mr. Humphries complied with the limits of such policy. His severance payments also aligned with the severance provisions of the original, unamended Humphries Employment Agreement for an involuntary termination without cause and with generally applicable company policy. The foregoing severance payments were previously disclosed in the company’s 2023 proxy statement. The disclosure has been retained for this year because of Mr. Humphries’ continued status as an NEO for purposes of this proxy statement. There are no additional or new severance arrangements between the company and Mr. Humphries that have not been previously disclosed. Cognizant 2024 Proxy statement 68 Compensation Committee Reportreport The Compensation Committee has furnished the report set forth below. The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the company specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act. To the Board of Directors of Cognizant Technology Solutions Corporation: The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in the company’s proxy statement for the 20212024 annual meeting of shareholders. The Compensation Committee has recommended to the boardBoard of directorsDirectors that the Compensation Discussion and Analysis be included in such proxy statement for filing with the Securities and Exchange Commission and incorporated by reference into the company’s Annual Report on Form 10-K for the year ended December 31, 2020.2023. By the Compensation Committee of the Board of Directors of Cognizant Technology Solutions Corporation  |  |  |  
ZEIN ABDALLA |  | 
VINITA BALI | JOHN N. FOX, JR. | 
ERIC BRANDERIZ | | 
ARCHANA DESKUS | | 
LEO S.
MACKAY, JR. | MICHAEL PATSALOS-FOX | 
MICHAEL
PATSALOS-FOX | | 
JOSEPH M. VELLI | | | | | | | | | | | | | |
Cognizant 2024 Proxy statement 69 Table of Contents
Compensation > Executive Compensation Tablescompensation tables
Executive Compensation Tables
2023 Summary compensation table 2020 Summary Compensation Table
The following 20202023 Summary Compensation Table provides certain summary information concerning the compensation earned for services rendered in all capacities to us and our subsidiaries for the years ended December 31, 2018, 20192021, 2022 and 20202023 by our CEO, former CEO, CFO, our former CFO, and each of our three other most highly compensated executive officers who were serving as executive officers at the end of the 20202023 fiscal year and one executive officer who would have been among the three most highly compensated executive officers for 2023 had she not left the company prior to the end of 2023 (collectively, the “NEOs”). No executive officers who would have otherwise been includable in such table on the basis of total compensation for the 2020 fiscal year have been excluded by reason of their termination of employment or change in executive status during that year. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | Name and | | | | | | | | | | | Stock | | | Incentive | | | All Other | | | | | | | Principal Position | | Year | | | Salary | | | Bonus | | | Awards | | | Plan Comp. | | | Comp. | | | SEC Total | | | | Brian Humphries | | | 2020 | | | $ | 1,026,681 | | | | — | | | $ | 10,692,541 | | | $ | 1,745,358 | | | $ | 343,360 | | | $ | 13,807,940 | | | | CEO | | | 2019 | | | $ | 769,649 | | | $ | 4,000,000 | | | $ | 10,346,672 | | | $ | 658,819 | | | $ | 182,862 | | | $ | 15,958,002 | | | | Jan Siegmund | | | 2020 | | | $ | 266,667 | | | $ | 266,667 | | | $ | 5,656,360 | | | | — | | | | — | | | $ | 6,189,694 | | | | CFO | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Karen McLoughlin | | | 2020 | | | $ | 750,000 | | | | — | | | $ | 6,599,285 | | | $ | 637,500 | | | $ | 9,062 | | | $ | 7,995,847 | | | | Former CFO | | | 2019 | | | $ | 750,000 | | | | — | | | $ | 4,299,924 | | | $ | 321,000 | | | $ | 9,746 | | | $ | 5,380,670 | | | | | | | 2018 | | | $ | 700,000 | | | | — | | | $ | 4,199,928 | | | $ | 613,900 | | | $ | 9,327 | | | $ | 5,523,155 | | | | Becky Schmitt | | | 2020 | | | $ | 595,845 | | | $ | 600,000 | | | $ | 7,558,558 | | | $ | 506,468 | | | $ | 211,263 | | | $ | 9,472,135 | | | | Chief People Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Malcolm Frank | | | 2020 | | | $ | 650,000 | | | | — | | | $ | 6,507,688 | | | $ | 552,500 | | | $ | 8,000 | | | $ | 7,718,188 | | | | President, Cognizant | | | 2019 | | | $ | 650,000 | | | | — | | | $ | 3,499,919 | | | $ | 278,200 | | | $ | 7,750 | | | $ | 4,435,869 | | | | Digital Business | | | 2018 | | | $ | 535,000 | | | | — | | | $ | 3,667,159 | | | $ | 469,195 | | | $ | 5,750 | | | $ | 4,677,104 | | | | Matthew Friedrich | | | 2020 | | | $ | 650,000 | | | | — | | | $ | 4,972,408 | | | $ | 552,500 | | | $ | 8,000 | | | $ | 6,182,908 | | | | Former General Counsel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal
Position | | Year | | Salary | | Bonus | | Stock
Awards | | Non-Equity
Incentive
Plan Comp. | | All Other
Comp. | | SEC Total | Ravi Kumar Current CEO | | 2023 | | $966,036 | | $750,000 | | $20,252,245 | | $585,224 | | $9,900 | | $22,563,405 | Brian Humphries Former CEO | | 2023 | | $317,000 | | — | | — | | — | | $3,899,416 | | $4,216,416 | | | 2022 | | $1,144,855 | | — | | $14,761,593 | | $1,767,978 | | $269,469 | | $17,943,895 | | | 2021 | | $1,230,262 | | — | | $14,097,855 | | $4,086,930 | | $272,238 | | $19,687,285 | Jatin Dalal Current CFO | | 2023 | | $60,096 | | $150,000 | | $3,077,457 | | $18,203 | | $47,958 | | $3,353,714 | Jan Siegmund Former CFO | | 2023 | | $850,000 | | — | | $5,094,619 | | $257,465 | | $12,950 | | $6,215,034 | | | 2022 | | $850,000 | | — | | $5,322,032 | | $656,320 | | $9,150 | | $6,837,502 | | | 2021 | | $800,000 | | — | | $4,526,144 | | $1,328,800 | | — | | $6,654,944 | Surya Gummadi EVP & President, Americas | | 2023 | | $650,000 | | $750,000 | | $2,787,355 | | $102,960 | | $10,050 | | $4,300,365 | | | 2022 | | $522,417 | | $647,989 | | $3,256,748 | | — | | $7,000 | | $4,434,154 | John Kim EVP, Chief Legal Officer, Chief Administrative Officer and Corporate Secretary | | 2023 | | $700,000 | | — | | $3,220,248 | | $212,030 | | $12,950 | | $4,145,228 | | | 2022 | | $650,000 | | — | | $2,103,059 | | $501,891 | | $9,150 | | $3,264,100 | | | 2021 | | $654,615 | | — | | $2,671,429 | | $1,079,650 | | $8,700 | | $4,414,394 | Ganesh Ayyar EVP and President, Intuitive Operations and Automation and Industry Solutions | | 2023 | | $713,264 | | — | | $1,817,442 | | $320,184 | | $8,459 | | $2,859,349 | | | 2022 | | $641,636 | | — | | $1,947,476 | | $938,041 | | $7,403 | | $3,534,556 | Becky Schmitt Former Chief People Officer | | 2023 | | $260,244 | | — | | $4,161,155 | | — | | $9,556 | | $4,430,955 |
| Year.Under applicable SEC rules, we have excluded compensation for Mr. Siegmund,Gummadi and Mr. Ayyar prior to 2022 and for Mr. Kumar, Mr. Dalal and Ms. Schmitt and Mr. Friedrich for 2019 and 2018, and Mr. Humphries for 2018,years prior to 2023, as they were not NEOs during those years. Mr. Humphries, Mr. Siegmund and Ms. Schmitt were first employed by the company on April 1, 2019, September 1, 2020 and February 3, 2020, respectively. Mr. Friedrich became an NEO in 2020. Salary.Salaries are paid in the local currency of the resident jurisdiction of each NEO. The local currency for all NEOs, other than Mr. Humphries,Kumar, Mr. Dalal, Mr. Siegmund, Mr. Gummadi, Mr. Kim and Ms. Schmitt is US$. For purposes of this column, (a) Mr. Humphries’ salary has been converted to US$ from GBPCHF at an exchange rate of £1approximately 1 CHF = $1.28,$1.11, the twelve-month12-month average exchange rate for fiscal year 2020.2023, and (b) Mr. Ayyar’s salary has been converted to US$ from SGD at an exchange rate of approximately S$1 = $0.74, the 12-month average exchange rate for fiscal year 2023. For Mr. Kim, the salary shown in 2021 includes $4,615 of cash paid in lieu of unused vacation (a one-time benefit provided to employees in 2021 in light of the COVID-19 pandemic). For Mr. Humphries and Ms. Schmitt, the salary shown in 2023 includes $49,566 and $13,462, respectively, of cash paid in lieu of unused vacation at the time they left the company. Mr. Humphries’ payment in lieu of unused vacation was made in accordance with the terms of his employment agreement and Ms. Schmitt’s payment was made in accordance with company policy. Bonus.From time to time, our Compensation Committee determines that a cash bonus is appropriate in light of an NEO’s individual circumstances. Mr. Humphries. Mr. Humphries receivedKumar. The amount shown in this column represents a one-time cash sign-on bonus received upon his joining the company on April 1, 2019 that was designed to compensate him for long-term compensation at Vodafone he forfeited on joining Cognizant and of which $1,000,000 of the after-taxJanuary 12, 2023. Mr. Dalal. The amount he was required to utilize to purchase shares of our common stock during our first open market trading window after April 1, 2019 (see page 41). Mr. Siegmund. As he joined the company on September 1, 2020, Mr. Siegmund’s offer letter provided him a prorated 2020 ACI award payout at targetshown in lieu of such award payout being based on company performance. As such, the amount of such award is included in “Bonus” instead of under “Non-Equity Incentive Plan Compensation”.
Ms. Schmitt. Ms. Schmitt receivedthis column represents a one-time cash sign-on bonus awarded upon herhis joining the company on February 3, 2020 that was designed to compensate her for a portionDecember 4, 2023, with $150,000 paid within 30 days of the long-term compensation at Walmart that she forfeitedstart of his employment and the remaining $150,000 to be paid within 30 days after the six-month anniversary of the start of his employment with the company.
Mr. Gummadi. The amount shown in this column for 2023 represents a cash bonus of $750,000 paid upon joining Cognizant.completion of his interim role of SVP, Americas, which occurred in connection with his promotion to his current position in January 2023. |
Cognizant 2024 Proxy statement 70 Stock Awards.Amounts shown in this column represent the aggregate grant date fair value of PSUs and RSUs determined in accordance with FASB ASC Topic 718 granted in each respective year. These amounts reflect the Company’scompany’s accounting expense as required by SEC rules and do not correspond to the actual value that will be realized by the NEO. The reported dollar amounts do not take into account any estimated forfeitures related to continued service vesting requirements. See pages 34 50to 46 64for information on the terms of the RSUs and PSUs granted during 2020. None of the NEOs, except for Ms. McLoughlin due to retirement, forfeited any stock awards during the 2018, 2019 or 2020 fiscal years.2023. For information regarding assumptions underlying the valuation of stock-based awards, see the notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the applicable fiscal year. | | | | The grant date fair value of stock awards granted in 2023 are set out below. The 2023-2025 PSUs were generally part of the target direct compensation (“TDC”) for all NEOs other than Mr. Humphries and Mr. Dalal. In addition, “transition grants” of RSUs with front-loaded vesting were granted as well to quickly align target compensation levels to an executive’s new role or to supplement expiring grants that were originally made off-cycle so that the executive would continue to receive the full targeted quarterly value of their awards; these transition grants may result in compensation for purposes of this table in excess of annual TDC amounts. See pages 50, 59 and 61 to 64 for information regarding transition grants of RSUs. In connection with their appointment as CEO and CFO, respectively, Mr. Kumar and Mr. Dalal each also received a one-time award of RSUs. Mr. Kumar also received his CEO New Hire Award of PSUs (see page 50) with a grant date fair value of $3,204,081. Mr. Kim received a special award in February 2023 acknowledging his efforts in connection with the early 2023 CEO transition. These additional one-time awards are reflected in this column but are not included in TDC for Mr. Kumar, Mr. Dalal and Mr. Kim. |
| | | Mr. Kumar | | Mr.
Humphries | | Mr. Dalal | | Mr.
Siegmund | | Mr.
Gummadi | | Mr. Kim | | Mr. Ayyar | | Ms.
Schmitt | | 2023-2025 PSUs - annual grant | | $7,448,282 | | — | | — | | $2,644,674 | | $1,187,416 | | $1,295,344 | | $917,534 | | $1,511,201 | | CEO New Hire Award of PSUs | | $3,204,081 | | — | | — | | — | | — | | — | | — | | — | | RSUs | | | | | | | | | | | | | | | | | | Annual grant and transition grants | | $4,599,942 | | — | | $2,312,487 | | $2,449,945 | | $1,599,940 | | $1,424,948 | | $899,908 | | $2,649,954 | Additional equity grants (not included in TDC) | | $4,999,940 | | — | | $764,970 | | — | | — | | $499,956 | | — | | — | | | | | | | | | | | | | | | | | | | The grant date fair value of the portion of the 2023-2025 PSUs relating to relative TSR (see pages 49 to 53) and the grant date fair value of the CEO New Hire Award of PSUs shown above are determined in accordance with FASB ASC Topic 718 as an award with a “market condition,” meaning the value is based on the probable outcome of the performance conditions at the time of grant. The grant date fair values of PSUs granted to our NEOs during 2023, assuming maximum performance (200% for the 2023-2025 annual grant of PSUs and 250% for the CEO New Hire Award of PSUs, in each case based on the closing price on the date of grant), would be as set out below. | PSUs, settlement at
maximum | | Mr. Kumar | | Mr. Humphries | | Mr. Dalal | | Mr. Siegmund | | Mr. Gummadi | | Mr. Kim | | Mr. Ayyar | | Ms. Schmitt | | 2023-2025 PSUs - annual grant | | $13,799,995 | | — | | — | | $4,899,984 | | $2,199,990 | | $2,399,967 | | $1,699,987 | | $2,799,919 | | CEO New Hire Award of PSUs | | $7,499,846 | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Compensation. Amounts shown in this column represent cash incentive awards earned for each respective fiscal year and paid in the first quarter of the following year under our ACI program (see pages 49 to 64). ACI is paid in the local currency of the resident jurisdiction of each NEO. The local currency for Mr. Kumar, Mr. Dalal, Mr. Siegmund, Mr. Gummadi and Mr. Kim is US$. For purposes of this column, Mr. Ayyar’s ACI has been converted to US$from SGD at an exchange rate of approximately S$1 = $0.74, the 12-month average exchange rate for fiscal year 2023. Mr. Humphries’ ACI award payout is included in All Other Compensation under Incentive payment at target (see below). Ms. Schmitt forfeited her 2023 ACI award when she terminated her employment with the company. |
Cognizant 2024 Proxy statement 71 | All Other Compensation. We provide our NEOs with other benefits that we believe are reasonable, competitive and consistent with our overall executive compensation program. The costs of these benefits for 2023 are shown in the table below. |
| | | Mr. Kumar | | Mr.
Humphries | | Mr. Dalal | | Mr.
Siegmund | | Mr.
Gummadi | | Mr. Kim | | Mr. Ayyar | | Ms.
Schmitt | | Corporate apartment(a) | | — | | $58,385 | | — | | — | | — | | — | | — | | — | | Home security services | | — | | $2,355 | | — | | — | | — | | — | | — | | — | | Pension allowance(b) | | — | | $26,053 | | — | | — | | — | | — | | — | | — | | CPF matching contribution | | — | | — | | — | | — | | — | | — | | $8,459 | | — | | 401(k) matching contribution | | $9,900 | | — | | — | | $12,950 | | $10,050 | | $6,300 | | — | | $9,556 | | CSRP matching contribution | | — | | — | | — | | — | | — | | $6,650 | | — | | — | | Monthly severance in lieu of base salary(c) | | — | | $1,066,457 | | — | | — | | — | | — | | — | | — | | KPMG tax preparation and filing fees | | — | | $153,774 | | — | | — | | — | | — | | — | | — | | Incentive payment at target(c) | | — | | $2,559,497 | | — | | — | | — | | — | | — | | — | | Moving expenses | | — | | $32,895 | | — | | — | | — | | — | | — | | — | | Temporary accommodations(d) | | — | | — | | $28,776 | | — | | — | | — | | — | | — | | Airline tickets(d) | | — | | — | | $12,482 | | — | | — | | — | | — | | — | | NY orientation tour(d) | | — | | — | | $900 | | — | | — | | — | | — | | — | | School assistance for child(d) | | — | | — | | $4,500 | | — | | — | | — | | — | | — | | EY India and US tax briefing(d) | | — | | — | | $1,300 | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | |
*The values of pension allowances and KPMG tax preparation and filing fees provided to Mr. Humphries are converted to US$from GBP at an exchange rate of approximately £1 = $1.24, the 12-month average exchange rate for fiscal year 2023. The values of monthly severance in lieu of base salary and incentive payment at target (also a portion of the severance benefits) and home security services provided to Mr. Humphries are converted to US$from CHF at exchange rate of approximately 1 CHF = $1.11, the 12-month average exchange rate for fiscal year 2023, and the value of the CPF matching contribution provided to Mr. Ayyar is converted to US$from SGD at an exchange rate of approximately S$1 = $0.74, the 12-month average exchange rate for fiscal year 2023. (a) The company provided Mr. Humphries with a corporate apartment in New York during the term of his employment with the company (see page 66 for further details). (b) The value of the pension allowance represents the amount of employer contributions under the U.K. group personal pension plan in excess of the statutory annual allowance limit that is paid to Mr. Humphries as a cash allowance, subject to applicable income tax (see page 65). (c) The amount shown reflects separation payments provided to Mr. Humphries, which are described in further detail on page 80. (d) The company provided these services to Mr. Dalal to assist with his relocation to the U.S. from India, which was necessitated by his appointment as the company’s new CFO. |
Table of Contents
The grant date fair value of stock awards granted in 2020 resulted from PSU and RSU awards with the grant date fair values set out below. The 2020/22 PSUs (3-year) were part of the target direct compensation (“TDC”) for all NEOs. The 2020/21 PSUs (2-year) were part of additional equity awards made to certain longer-serving NEOs.
Cognizant 2024 Proxy statement 72 | | | Mr. Humphries | | Mr. Siegmund | | Ms. McLoughlin | | Ms. Schmitt | | Mr. Frank | | Mr. Friedrich | | PSUs | | | | | | | | | | | | | 2020/22 PSUs (3-year)
(included in TDC) | | $6,532,560 | | $ 781,413 | | $ 2,407,841 | | $1,308,577 | | $1,989,049 | | $1,230,026 | 2020/21 PSUs (2-year)
(additional equity awards) | | — | | — | | $ 1,116,496 | | — | | $ 977,495 | | $ 505,618 | | RSUs | | | | | | | | | | | | | | Included in TDC | | $4,159,981 | | $ 4,874,947 | | $ 1,999,963 | | $6,249,981 | | $1,599,961 | | $1,749,960 | | Additional equity awards | | — | | — | | $ 1,074,985 | | — | | $1,941,183 | | $1,486,804 |
The grant date fair values of PSUs granted to our NEOs during 2020, assuming maximum performance (200%), would be as set out below.
| PSUs, settlement at maximum – 200% | Mr. Humphries | Mr. Siegmund | Ms. McLoughlin | Ms. Schmitt | Mr. Frank | Mr. Friedrich | 2020/22 PSUs (3-year)
(included in TDC) | $11,212,494 | $ 1,343,894 | $ 4,132,807 | $ 2,246,002 | $ 3,414,005 | $ 2,111,177 | 2020/21 PSUs (2-year)
(additional equity awards) | — | — | $ 1,922,674 | — | $ 1,683,351 | $ 870,712 |
The grant date fair value of the portion of the 2020/22 PSUs (3-year) and 2020/21 PSUs (2-year) relating to relative TSR (see pages 34 to 38) are determined in accordance with FASB ASC Topic 718 as an award with a “market condition,” meaning that the potential for maximum performance is built into the grant date fair value calculation.
Non-Equity Incentive Plan Compensation. Amounts shown in this column represent cash incentive awards earned for each respective fiscal year and paid in the first quarter of the following year under our ACI program (see pages 34 to 46). ACI is paid in the local currency of the resident jurisdiction of each NEO. The local currency for all NEOs, other than Mr. Humphries, is US$. For purposes of this column, Mr. Humphries’ ACI has been converted to US$ from GBP at an exchange rate of £1 = $1.28, the twelve-month average exchange rate for fiscal year 2020.
All Other Compensation. We provide our NEOs with other benefits that we believe are reasonable, competitive and consistent with our overall executive compensation program. The costs of these benefits for 2020 are shown in the table below.
| | Mr. Humphries | Mr. Siegmund | Ms. McLoughlin | Ms. Schmitt | Mr. Frank | Mr. Friedrich | | Corporate apartment | $ 217,439 | — | — | — | — | — | | Home security services | $ 23,253 | — | $ 512 | — | — | — | | Pension allowance | $ 99,139 | — | — | — | — | — | | U.K. group personal pension plan | | | | | | | | matching contribution | $ 3,529 | — | — | — | — | — | | 401(k) matching contribution | — | — | $3,750 | — | $8,000 | $8,000 | | CSRP matching contribution | — | — | $4,800 | — | — | — | | Relocation expense (estimated) | — | — | — | $161,913,
plus
$49,350
gross-up
for taxes | — | — |
For Mr. Humphries, (i) the value of the pension allowance represents the amount of employer contributions under the U.K. group personal pension plan in excess of the statutory annual allowance limit that are paid to Mr. Humphries as a cash allowance, subject to applicable income tax, and (ii) the value of the U.K. group personal pension plan matching contribution represents the employer contributions to such plan (see page 47). The value of home security services provided to Mr. Humphries is converted to US$ from CHF at exchange rate of 1 CHF = $1.07, the twelve-month average exchange rate for fiscal year 2020, and the values of pension allowance and the employer contributions under the U.K. group personal pension plan are converted to US$ from GBP at an exchange rate of £1 = $1.28, the twelve-month average exchange rate for fiscal year 2020.
Table of Contents
Compensation > Executive Compensation Tables
2020
2023 Grants of Plan-Based Awards Tableplan-based awards table The following table provides certain summary information concerning each grant of an award made to an NEO in the 20202023 fiscal year under a compensation plan. | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts | All Other | | | | | | | Estimated Future Payouts | | Under Equity Incentive | Stock Awards: | Grant Date | | | | | | Under Non-Equity Incentive | | Plan Awards: Number of Shares | Number of | Fair Value | | | | | | Plan Awards | | of Stock or Units | Shares of | of Equity | | | | Name | Grant Date | Threshold | Target | Maximum | | Threshold | Target | Maximum | Stock or Units | Awards | | | | Brian Humphries | 3/5/2020 | $ 1,026,681 | $2,053,363 | $4,106,726 | | | | | | | | | | | 3/5/2020 | | | | | 52,061 | 104,121 | 208,242 | | $6,532,560 | | | | | 3/5/2020 | | | | | | | | 69,414 | $4,159,981 | | | | Jan Siegmund | 9/1/2020 | | | | | 5,600 | 11,199 | 22,398 | | $ 781,413 | | | | | 9/1/2020 | | | | | | | | 72,793 | $4,874,947 | | | | Karen McLoughlin | 3/5/2020 | $ 375,000 | $ 750,000 | $1,500,000 | | | | | | | | | | | 3/5/2020 | | | | | 19,189 | 38,378 | 76,756 | | $2,407,841 | | | | | 3/5/2020 | | | | | 8,969 | 17,937 | 35,874 | | $1,116,496 | | | | | 3/5/2020 | | | | | | | | 51,309 | $3,074,948 | | | | Becky Schmitt | 3/5/2020 | $ 297,922 | $ 595,845 | $1,191,690 | | | | | | | | | | | 3/5/2020 | | | | | 10,429 | 20,857 | 41,714 | | $1,308,577 | | | | | 2/3/2020 | | | | | | | | 99,824 | $6,249,981 | | | | Malcolm Frank | 3/5/2020 | $ 325,000 | $ 650,000 | $1,300,000 | | | | | | | | | | | 3/5/2020 | | | | | 15,852 | 31,703 | 63,406 | | $1,989,049 | | | | | 3/5/2020 | | | | | 7,852 | 15,704 | 31,408 | | $ 977,495 | | | | | 3/5/2020 | | | | | | | | 59,088 | $3,541,144 | | | | Matthew Friedrich | 3/5/2020 | $ 325,000 | $ 650,000 | $1,300,000 | | | | | | | | | | | 3/5/2020 | | | | | 9,803 | 19,605 | 39,210 | | $1,230,026 | | | | | 3/5/2020 | | | | | 4,062 | 8,123 | 16,246 | | $ 505,618 | | | | | 3/5/2020 | | | | | | | | 24,809 | $1,486,804 | | | | | 5/19/2020 | | | | | | | | 33,993 | $1,749,960 | | | | | | | | | | | | | | | |
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards. Represents the range of ACI that can be earned by the NEO if the threshold, target and maximum performance targets are achieved. The ACI is prorated if performance levels are achieved between the threshold and target levels or between the target and maximum levels. Performance below the threshold results in no ACI payout to the NEO. See pages 34 to 38 for information regarding the methodology and performance criteria applied in determining these potential cash incentive amounts. The actual ACI paid to each NEO for his or her 2020 performance is reported as “Non-Equity Incentive Plan Comp.” in the 2020 Summary Compensation Table on page 51. For Mr. Humphries, the ACI amount, including threshold, target and maximum payouts, was set in his resident jurisdiction local currency and such amounts were converted to US$ for purposes of the table above based on the twelve-month average exchange rate for fiscal year 2020 of £1 = $1.28.
Estimated Future Payouts Under Equity Incentive Plan Awards. Represents the range of shares that could vest pursuant to PSU awards. The values set out above for Mr. Humphries, Mr. Siegmund and Ms. Schmitt, and the values set out above in the first of the two rows with values in this column for Ms. McLouglin, Mr. Frank and Mr. Friedrich, are for the 2020/22 PSUs (3-year) awarded to such individuals in 2020 and included in target direct compensation. The values set out above in the second of the two rows with values in this column for Ms. McLouglin, Mr. Frank and Mr. Friedrich are for the 2020/21 PSUs (2-year) granted to such individuals as additional equity awards in 2020 and not included in target direct compensation. See pages 34 to 46 for a description of the terms of the PSUs and the awards to the NEOs.
All Other Stock Awards. Represents RSUs granted in 2020. For Ms. McLoughlin, Mr. Frank and Mr. Friedrich, it includes 17,937, 32,390 and 24,809 RSUs respectively, that were granted on March 5, 2020 as additional equity awards that were not included in target direct compensation. See page 34 and pages 40 to 46 for a description of the terms of the RSUs and the awards to NEOs.
Grant Date Fair Value of Equity Awards. Represents the grant date fair value of the PSUs and RSUs determined in accordance with FASB ASC Topic 718, assuming target achievement for PSUs. For information regarding assumptions underlying the valuation of stock-based awards, see Note 17 to the Consolidated Financial Statements in our 2020 Annual Report.
| | | | |
| Name | | Grant Date | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under
Equity Incentive Plan Awards:
Number of Shares
of Stock or Units | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units | | Grant Date
Fair Value
of Equity
Awards | | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | Ravi Kumar | | 4/5/2023 | | $966,036 | | $1,932,071 | | $3,864,142 | | | | | | | | | | | | | | 1/12/2023 | | | | | | | | 23,041 | | 46,082 | | 115,205 | | | | $3,204,081 | | | | 3/6/2023 | | | | | | | | 55,103 | | 110,206 | | 220,412 | | | | $7,448,282 | | | | 1/12/2023 | | | | | | | | | | | | | | 76,804 | | $4,999,940 | | | | 2/16/2023 | | | | | | | | | | | | | | 69,318 | | $4,599,942 | | Brian Humphries | | — | | — | | — | | — | | — | | — | | — | | — | | — | | | Jatin Dalal | | 12/4/2023 | | $30,048 | | $60,096 | | $120,192 | | | | | | | | | | | | | | 12/4/2023 | | | | | | | | | | | | | | 10,750 | | $764,970 | | | | 12/4/2023 | | | | | | | | | | | | | | 32,497 | | $2,312,487 | | | Jan Siegmund | | 4/5/2023 | | $425,000 | | $850,000 | | $1,700,000 | | | | | | | | | | | | | | 3/6/2023 | | | | | | | | 19,565 | | 39,131 | | 78,262 | | | | $2,644,674 | | | | 2/16/2023 | | | | | | | | | | | | | | 36,919 | | $2,449,945 | | | Surya Gummadi | | 4/5/2023 | | $325,000 | | $650,000 | | $1,300,000 | | | | | | | | | | | | | | 3/6/2023 | | | | | | | | 8,784 | | 17,569 | | 35,138 | | | | $1,187,416 | | | | 2/16/2023 | | | | | | | | | | | | | | 9,041 | | $599,961 | | | | 2/16/2023 | | | | | | | | | | | | | | 15,069 | | $999,979 | | | John Kim | | 4/5/2023 | | $350,000 | | $700,000 | | $1,400,000 | | | | | | | | | | | | | | 3/6/2023 | | | | | | | | 9,583 | | 19,166 | | 38,332 | | | | $1,295,344 | | | | 2/16/2023 | | | | | | | | | | | | | | 14,692 | | $974,961 | | | | 2/16/2023 | | | | | | | | | | | | | | 7,534 | | $499,956 | | | | 2/16/2023 | | | | | | | | | | | | | | 6,781 | | $449,987 | | | Ganesh Ayyar | | 4/5/2023 | | $356,632 | | $713,264 | | $1,426,528 | | | | | | | | | | | | | | 3/6/2023 | | | | | | | | 6,788 | | 13,576 | | 27,152 | | | | $917,534 | | | | 2/16/2023 | | | | | | | | | | | | | | 12,055 | | $799,970 | | | | 2/16/2023 | | | | | | | | | | | | | | 1,506 | | $99,938 | | | Becky Schmitt | | 4/5/2023 | | $123,391 | | $246,782 | | $493,564 | | | | | | | | | | | | | | 3/6/2023 | | | | | | | | 11,180 | | 22,360 | | 44,720 | | | | $1,511,201 | | | | 2/16/2023 | | | | | | | | | | | | | | 2,260 | | $149,974 | | | | 2/16/2023 | | | | | | | | | | | | | | 37,673 | | $2,499,980 | | | | |
Estimated Future Payouts Under Non-EquityIncentive Plan Awards. For all NEOs, represents the range of ACI that can be earned by the NEO if the threshold, target and maximum performance targets are achieved. The ACI is prorated if performance levels are achieved between the threshold and target levels or between the target and maximum levels. Performance below the threshold results in no payout to the NEO. See pages 49 and 52 for information regarding the methodology and performance criteria applied in determining these potential cash incentive amounts. The actual ACI paid to each NEO for his or her 2023 performance is reported as “Non-Equity Incentive Plan Comp.” in the 2023 Summary compensation table on page 70. For Mr. Ayyar, such amounts were converted to US$ for purposes of the table above based on the 12-month average exchange rate for fiscal year 2023 of approximately S$1 = $0.74. Estimated FuturePayouts UnderEquity Incentive PlanAwards. Represents the range of shares that could vest pursuant to PSU awards. The values set out above are for the 2023-2025 PSUs awarded to such individuals in 2023 and included in TDC which are eligible to vest based on revenue growth (measured by revenue adjusted for currency fluctuations and acquisitions), adjusted diluted EPS and relative TSR over the 3-year performance period beginning January 1, 2023 and ending December 31, 2025. See pages 49 to 64 for a description of the terms of the PSUs and the awards to the NEOs. In addition, for Mr. Kumar, includes the value of his CEO New Hire Award of PSUs granted on January 12, 2023 and not included in TDC, which are eligible to vest based on absolute total shareholder return (measured as a CAGR) of the company’s common stock over the four-year performance period beginning January 12, 2023 and ending January 12, 2027. See page 50 for a description of the terms of the CEO New Hire Award of PSUs. Cognizant 2024 Proxy statement 73 All Other Stock Awards. Represents RSUs granted in 2023. The RSUs granted on February 16, 2023 (other than the 15,069 RSUs granted to Mr. Gummadi, the 6,781 RSUs granted to Mr. Kim, the 1,506 RSUs granted to Mr. Ayyar and the 37,673 RSUs granted to Ms. Schmitt) vest in equal 1/12th installments over three years, commencing on May 16, 2023, and will be fully vested on February 16, 2026. For Mr. Kim, the 7,534 RSUs granted on February 16, 2023 represent a special award acknowledging his efforts in connection with the early 2023 CEO transition and are not included in his target direct compensation. The other RSUs granted on February 16, 2023 to Mr. Gummadi, Mr. Kim, Mr. Ayyar and Ms. Schmitt represent transition awards designed to replace expiring off-cycle awards and ensure continued vesting of targeted annual RSU amounts for each executive. They vest in quarterly installments through February 16, 2026, with 1/8th vesting on each of the first four vesting dates, 2/3rds of 1/8th vesting on each of the next four quarters, 1/3rd of 1/8th vesting on each of the next three successive vesting dates and the remainder vesting on the 12th vesting date. See page 50, 59 and pages 61 to 64 for a description of the terms of the RSUs, including transition awards, and the awards to NEOs. For Mr. Kumar, this column also includes 76,804 RSUs granted January 12, 2023, which was a one-time award in connection with his appointment as CEO, vesting in equal 1/4th installments over four successive quarters commencing on April 12, 2023, with full vesting occurring on January 12, 2024. For Mr. Dalal, this column includes (1) 10,750 RSUs granted December 4, 2023, which was a one-time award in connection with his appointment as CFO, vesting in equal 1/4th installments over four successive quarters commencing on March 4, 2024, with full vesting occurring on December 4, 2024 and (2) 32,497 RSUs representing a transition award designed to ensure the vesting of his full RSU target compensation amounts beginning in 2024, vesting in nine successive quarterly installments through March 4, 2026, with 1/5th vesting on the first vesting date, 2/3rds of 1/5th vesting on each of the four successive vesting dates, 1/3rd of 1/5th vesting on each of the next three successive vesting dates and the remainder of such RSUs vesting on the ninth vesting date. See page 50 for a description of our transition awards. Grant Date Fair Value of Equity Awards. Represents the grant date fair value of the PSUs and RSUs determined in accordance with FASB ASC Topic 718, assuming target achievement for PSUs and, for PSUs relating to relative TSR, based on the probable outcome of the performance conditions at the time of grant. For information regarding assumptions underlying the valuation of stock-based awards, see Note 17 to the Consolidated Financial Statements in our 2023 Annual Report. Cognizant 2024 Proxy statement 74 Table of Contents
Outstanding Equity Awardsequity awards at Fiscal Year-End 2020 Tablefiscal year-end 2023The following table provides certain summary information concerning outstanding equity awards held by the NEOs as of December 31, 2020.2023. Our NEOs did not hold any outstanding option awards as of December 31, 2020.2023. | Name | | Grant Date | | Stock Awards | | Number of
Shares or
Units of
Stock That
Have Not
Vested | | Market Value of
Shares or Units of
Stock That Have
Not Vested1 | | 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
Vested1 | | Ravi Kumar | | 1/12/2023 | | 19,2012 | | $1,450,252 | | | | | | | | Stock Awards | | | 2/16/2023 | | 51,9892 | | Equity Incentive | Equity Incentive$3,926,729 | | | | | | Plan Awards; | Plan Awards; Market | | | | | | Number of | or Payout Value of | | | | Number of | Market Value of | Unearned Shares, | Unearned Shares, | | | | Shares or Units of | Shares or Units of | Units or Other | Units or Other | | | | Stock That Have | Stock That Have | Rights That Have | Rights That Have | | | Name | Not Vested | Not Vested1 | Not Vested | Not Vested1 | | | Brian Humphries | 20,3112 | $1,664,486 | | | | | | 1/12/2023 | 52,061 | | | | | 115,2053 | | $8,701,4343 | | 3/6/2023 | | | | | | 55,1036 | | $4,161,9306 | | Brian Humphries | | — | | — | | — | | — | | — | | Jatin Dalal | | 12/4/2023 | | 10,7502 | | $4,266,399811,948 | | | | | | | 12/4/2023 | | | 108,32732,49732 | $ 8,877,398 | | | $2,454,498 | | | | | 104,1215 | $ 8,532,716Jan Siegmund | | | 2/23/2021 | | Jan Siegmund | 20,5322,5732 | | $1,682,597194,339 | | | | | | | 3/1/2022 | 41,996 | 12,0932 | | $3,441,572913,384 | | | | | | | 2/16/2023 | | | 11,19927,69052 | $ 917,758 | | | $2,091,426 | | Karen McLoughlin | 38,4822 | $3,153,600 | | | | | | 2/23/2021 | | | 12,79428,22454 | $1,048,4685 | | | | $2,131,7594 | | 8,9696 | $ 735,0106 | | | Becky Schmitt | 74,8682 | $6,135,433 | | | | | | 3/1/2022 | | | 20,857 | | | 14,2775 | $ 1,709,231 | | $1,078,3425 | | | Malcolm Frank3/6/2023 | 1,005 | | | | | 19,5656 | | $1,477,7446 | | Surya Gummadi | | 2/23/2021 | | 4152 | | $ 82,36031,345 | | | | | | | 5/17/2021 | 1,710 | 192 | | $ 140,1351,435 | | | | | | | 3/1/2022 | 9,254 | 2,9772 | | $ 758,365224,853 | | | | | | | 7/1/2022 | 44,316 | 2,5722 | | $3,631,696194,263 | | | | | | | 11/15/2022 | | | —16,89442 | — | | | | $1,276,004 | | 31,7035 | $2,598,0615 | | | | | | 15,7046 | $1,286,9436 | | | Matthew Friedrich | 1,7282 | $ 141,610 | | | | | | 2/16/2023 | 1,701 | 16,2002 | | $ 139,3971,223,586 | | | | | | | 2/23/2021 | 18,6072 | 2,1944 | | $1,524,844165,7134 | | | | | | | 5/17/2021 | 24,2812 | 2,9104 | | $1,989,828219,7924 | | | | | | | 3/1/2022 | | | —4 | — | | | | | | | 19,605 | 3,4965 | $1,606,6305 | | $264,0535 | | 3/6/2023 | | | | | 8,123 | 8,7846 | | $ 665,680663,4566 | | John Kim | | 3/29/2021 | | 8822 | | $66,617 | | | | | | 3/1/2022 | | 4,0072 | | $302,649 | | | | | | 11/15/2022 | | 1,2502 | | $94,413 | | | | | | 2/16/2023 | | 20,9092 | | $1,579,257 | | | | | | 2/23/2021 | | 1,8804 | | $141,9964 | | | | | | 3/29/2021 | | 9,9544 | | $751,8264 | | | | | | 3/1/2022 | | | | | | 5,8275 | | $440,1135 | | 3/6/2023 | | | | | | 9,5836 | | $723,8046 | | Ganesh Ayyar | | 3/1/2022 | | 5832 | | $44,034 | | | | | | 11/15/2022 | | 5,8352 | | $440,718 | | | | | | 2/16/2023 | | 9,9842 | | $754,092 | | | | | | 2/23/2021 | | 8,7804 | | $663,1534 | | | | | | 3/1/2022 | | | | | | 4,6625 | | $352,1215 | | 3/6/2023 | | | | | | 6,7886 | | $512,6986 | | Becky Schmitt | | — | | — | | — | | — | | — | | | | | | | | |
| 1 | Market value was determined based on the closing price of our common stock of $81.95 on December 31, 2020. | | | | | | | 2 | Amounts shown represent the following with respect to RSUs: | | | | | | | | Mr. Humphries. Awards shown are time-based RSUs that were granted on April 1, 2019 and March 2, 2020, respectively, and vest on specified dates if Mr. Humphries is still employed by the company. A total of 36,678 shares are scheduled to vest in January, March, April, June, July, September, October and December of 2021; a total of 29,909 shares are scheduled to vest in January, March, April, June, September and December of 2022; and 5,785 shares are scheduled to vest in March of 2023. | | | | | | | | Mr. Siegmund. Awards shown are time-based RSUs that were granted on September 1, 2020 and vest on specified dates if Mr. Siegmund is still employed by the company. A total of 32,662 shares are scheduled to vest in March, June, September and December of 2021; a total of 21,462 shares are scheduled to vest in March, June, September and December of 2022; and a total of 8,404 shares are scheduled to vest in March, June and September of 2023. | | | | | | | | Ms. McLoughlin. Awards shown are time-based RSUs that were granted on March 5, 2020 and vested on December 31, 2020 upon her retirement in accordance with the applicable terms of the retirement, death and disability policy. A total of 17,103 shares will be settled in March, June, September and December of 2021; a total of 17,103 shares will be settled in March, June, September and December of 2022; and 4,276 shares will be settled in March of 2023, subject in each case to continued compliance with the applicable terms of the retirement, death and disability policy. | | | | | | | | Ms. Schmitt. Awards shown are time-based RSUs that were granted on February 3, 2020 and vest on specified dates if Ms. Schmitt is still employed by the company. A total of 33,274 shares are scheduled to vest in February, May, August, and November of 2022; a total of 33,275 shares are scheduled to vest in February, May, August, and November of 2022; and 8,319 shares are scheduled to vest in February of 2023. | | | | | | |
Cognizant 2024 Proxy statement 75 Table1 Market value was determined utilizing the closing price of Contentsour common stock of $75.53 on December 29, 2023, and the performance level for each award as indicated in footnotes 3 through 6 below.
Compensation2 Amounts shown represent the following with respect to RSUs:
Mr. Kumar. Awards shown are time-based RSUs that were granted on January 12, 2023 and February 16, 2023, respectively, and vest on specified dates if Mr. Kumar is still employed by the company. A total of 42,307 shares are scheduled to vest in January, February, May, August and November of 2024; a total of 23,106 shares are scheduled to vest in February, May, August and November of 2025; and a total of 5,777 shares are scheduled to vest in February of 2026. Mr. Dalal. Awards shown are time-based RSUs that were granted on December 4, 2023 and vest on specified dates if Mr. Dalal is still employed by the company. A total of 30,249 shares are scheduled to vest in March, June, September and December of 2024; a total of 10,831 shares are scheduled to vest in March, June, September and December of 2025; and a total of 2,167 shares are scheduled to vest in March of 2026. > Executive Compensation Tables Mr. Siegmund.Awards shown are time-based RSUs that were granted on February 23, 2021, March 1, 2022 and February 16, 2023, respectively, and would vest on specified dates if Mr. Siegmund was still employed by the company. As of December 31, 2023, a total of 24,592 shares are scheduled to vest in February, March, May, June, August, September, November and December of 2024; a total of 14,687 shares are scheduled to vest in February, March, May, August and November of 2025; and a total of 3,077 shares are scheduled to vest in February of 2026. Mr. Gummadi. Awards shown are time-based RSUs that were granted on February 23, 2021, May 17, 2021, March 1, 2022, July 1, 2022, November 15, 2022 and February 16, 2023, respectively, and vest on specified dates if Mr. Gummadi is still employed by the company. A total of 21,503 shares are scheduled to vest in each month of 2024; a total of 16,191 shares are scheduled to vest in January, February, March, April, May, July, August and November of 2025; and a total of 1,383 shares are scheduled to vest in February of 2026. Mr. Kim. Awards shown are time-based RSUs that were granted on March 29, 2021, March 1, 2022, November 15, 2022 and February 16, 2023, respectively, and vest on specified dates if Mr. Kim is still employed by the company. A total of 15,079 shares are scheduled to vest in February, March, May, June, August, September, November and December of 2024; a total of 9,833 shares are scheduled to vest in February, March, May, August and November of 2025; and a total of 2,136 shares are scheduled to vest in February of 2026. Mr. Ayyar. Awards shown are time-based RSUs that were granted on March 1, 2022, November 15, 2022 and February 16, 2023, respectively, and vest on specified dates if Mr. Ayyar is still employed by the company. A total of 9,930 shares are scheduled to vest in February, March, May, June, August, September, November and December of 2024; a total of 5,404 shares are scheduled to vest in February, March, May, August and November of 2025; and a total of 1,068 shares are scheduled to vest in February of 2026. 3 2023-2026 CEO PSUs (New Hire). Based on performance through December 31, 2023, the number of units and the payout value shown above assume a payout at maximum. Represents the number of unearned shares not vested equal to the maximum number of shares to be settled under the award for PSUs granted in 2023 with a market condition, as described in FASB ASC Topic 718, and a four-year performance measurement period beginning January 12, 2023. See page 50 for additional information. 4 2021-2023 PSUs. The number of units and the payout values are based on actual payout at approximately 91.4% of target, as certified by the Compensation Committee, and such shares vested on March 15, 2024 (after compliance with the requirement of continued employment through such date). See pages 50 to 53 for additional information on these PSUs. 5 2022-2024 PSUs. Based on performance through December 31, 2023, the number of units and the payout values shown above assumed a payout at threshold. Represents the number of unearned shares not vested equal to the threshold number of shares to be settled under the award for PSUs granted in 2022 with a 3-year performance measurement period (combined performance of the company for 2022, 2023 and 2024). See pages 50 to 54 for additional information. After the Compensation Committee determines, based on the performance for fiscal 2022, 2023 and 2024, the number of shares that may vest, such shares are expected to vest no later than March 15, 2025 (subject to continued employment through such date). 6 2023-2025 PSUs. Based on performance through December 31, 2023, the number of units and the payout values shown above assumed a payout at threshold. Represents the number of unearned shares not vested equal to the threshold number of shares to be settled under the award for PSUs granted in 2023 with a 3-year performance measurement period (combined performance of the company for 2023, 2024 and 2025). See pages 50 to 54 for additional information. After the Compensation Committee determines, based on the performance for fiscal 2023, 2024 and 2025, the number of shares that may vest, such shares are expected to vest no later than March 15, 2026 (subject to continued employment through such date). Cognizant 2024 Proxy statement 76 Mr. Frank. Awards shown are time-based RSUs that were granted on February 26, 2018, June 12, 2018, February 26, 2019 and March 5, 2020, respectively, and vest on specified dates if Mr. Frank is still employed by the company. A total of 29,814 shares are scheduledBack to vest in March, June, September and December of 2021; a total of 21,547 shares are scheduled to vest in March, June, September and December of 2022; and 4,924 shares are scheduled to vest in March of 2023. | | Contents | | | Mr. Friedrich. Awards shown are time-based RSUs that were granted on June 12, 2018, February 26, 2019, March 5, 2020 and May 19, 2020, respectively, and would have vested on specified dates if Mr. Friedrich were still employed by the company. A total of 25,924 shares were scheduled to vest in February, March, May, June, August, September, November and December of 2021; a total of 16,702 shares were scheduled to vest in February, March, May, June, August, September, November and December of 2022; and a total of 3,691 shares were scheduled to vest in February and March of 2023. As Mr. Friedrich left the company in January 2021, all of these unvested awards were forfeited. | | | 3 | 2019/23 CEO PSUs (New Hire). Represents the number of unearned shares not vested equal to the threshold award for PSUs granted in 2019 with a market condition, as described in FASB ASC Topic 718, and a four-year performance measurement period (April 1, 2019 – April 1, 2023). See pages 34 to 41 for additional information. | | | 4 | 2019/20 PSUs. Represents the number of unearned shares not vested equal to the threshold award for PSUs granted in 2019 with a 2019/20 performance measurement period (combined performance of the company for 2019 and 2020). Performance for such awards was below threshold levels as set forth on pages 36 to 39. As such, no shares will vest from these awards. | | | 5 | 2020/22 PSUs (3-year). Represents the number of unearned shares not vested equal to the target award for PSUs granted in 2020 with a 3-year performance measurement period (combined performance of the company for 2020, 2021 and 2022). See pages 34 to 46 for additional information. After the Compensation Committee determines, based on the performance for fiscal 2020, 2021 and 2022, the number of shares that may vest, such shares will vest no later than March 15, 2023 (subject to continued employment through such date). As a result of her retirement on December 31, 2020 under the retirement, death and disability policy, Ms. McLoughlin remains eligible to vest as to 1/3rd of such unearned shares as a result of her retirement under such policy 1/3rd of the way through the 3-year performance period. As Mr. Friedrich left the company in January 2021, he forfeited all of these unearned shares. | | | 6 | 2020/21 PSUs (2-year). Represents the number of unearned shares not vested equal to the target award for PSUs granted in 2020 with a 2-year performance measurement period (combined performance of the company for 2020 and 2021). See pages 34 to 46 for additional information. After the Compensation Committee determines, based on the performance for fiscal 2020 and 2021, the number of shares that may vest, such shares will vest no later than March 15, 2022 (subject to continued employment through such date). As a result of her retirement on December 31, 2020 under the retirement, death and disability policy, Ms. McLoughlin remains eligible to vest as to 1/2 of such unearned shares as a result of her retirement under such policy 1/2 of the way through the 2-year performance period. As Mr. Friedrich left the company in January 2021, he forfeited all of these unearned shares. |
2023 Option exercises and stock vested table 2020 Option Exercises and Stock Vested Table
None of our NEOs held or exercised any options during 2020.2023. The following table provides information about the value realized by the NEOs on stock award vestings during the year ended December 31, 2020.2023. | | | Stock Awards | | | | | Number of Shares | Value Realized | | | | Name | Acquired on Vesting Date | on Vesting | | | | Brian Humphries | 30,894 | $ 1,989,574 | | | | Jan Siegmund | 10,265 | $ 809,703 | | | | Karen McLoughlin | 64,061 | $ 4,203,209 | | | | Becky Schmitt | 24,956 | $ 1,645,441 | | | | Malcolm Frank | 59,928 | $ 3,938,138 | | | | Matthew Friedrich | 50,470 | $ 3,290,866 | | | | | | | |
| Stock Awards. The number of shares shown in the table reflects the gross number of shares each NEO was entitled to receive upon vesting of the underlying PSUs or RSUs. The company reduced the number of shares issued to each NEO by automatically withholding a number of shares with a fair market value as of the vesting date sufficient to satisfy required tax withholdings. Each NEO actually received the following net number of shares (and net value realized on vesting, including any dividend equivalents payable on vesting) following such share withholding: Mr. Humphries, 23,550 ($1,541,280); Mr. Siegmund, 6,359 ($500,199); Ms. McLoughlin, 33,524 ($2,123,795); Ms. Schmitt, 14,356 ($941,644); Mr. Frank, 33,304 ($2,134,055); and Mr. Friedrich, 26,622 ($1,692,911). Value realized on vesting is calculated by multiplying the number of shares acquired on vesting by the fair market value of the shares on the respective vesting dates, including any dividend equivalents payable on vesting.
2020 Nonqualified Deferred Compensation Table
None of the NEOs participated in any nonqualified defined contribution or other nonqualified deferred compensation plan in 2020.
2020 Pension Benefits Table
None of the NEOs participated in any defined benefit pension plan in 2020.
| | | | |
| Name | | Stock Awards | | | | Number of Shares
Acquired on
Vesting Date | | Value Realized on
Vesting | | | Ravi Kumar | | 74,932 | | $4,910,605 | | | Brian Humphries | | 160,187 | | $9,647,319 | | | Jatin Dalal | | — | | — | | | Jan Siegmund | | 48,649 | | $3,227,720 | | | Surya Gummadi | | 26,020 | | $1,735,284 | | | John Kim | | 19,871 | | $1,325,541 | | | Ganesh Ayyar | | 24,129 | | $1,548,625 | | | Becky Schmitt | | 27,857 | | $1,767,536 | | | | | | | | |
Stock Awards. The number of shares shown in the table reflects the gross number of shares each NEO was entitled to receive upon vesting of the underlying PSUs or RSUs. The company reduced the number of shares issued to each NEO by automatically withholding a number of shares with a fair market value as of the vesting date sufficient to satisfy required tax withholdings. Value realized on vesting is calculated by multiplying the number of shares acquired on vesting by the fair market value of the shares on the respective vesting dates, including any dividend equivalents payable on vesting. 2023 Pension benefits and non-qualified deferred compensation None of our NEOs were participants in any plan that provided payments or other benefits at, following, or in connection with retirement in 2023 other than the broad-based defined contribution plans. Further, none of our NEOs participate in any nonqualified deferred compensation plan. Cognizant 2024 Proxy statement 77 Table of Contents
Equity Compensation Plan Information
The following table provides information as of December 31, 2020 with respect to the shares of our common stock that may be issued under our existing equity compensation plans approved by shareholders, which include the 2017 Incentive Award Plan (the “2017 Plan”), the ESPP, and our prior equity compensation plan, the 2009 Incentive Compensation Plan (the “2009 Plan”). The 2017 Plan succeeded the 2009 Plan. Awards granted under the 2009 Plan remain valid, though no additional awards may be granted from such plan. For additional information on our equity compensation plans, see Note 17 to the Consolidated Financial StatementsPotential payments upon termination or change in our 2020 Annual Report.
control | | | | | | | | | | Number of | | Number of Securities | | | | | Securities to be | | Available for Future | | | | | Issued Upon | Weighted-Average | Issuance Under | | | | | Exercise of | Exercise Price | Equity Compensation | | | | | Outstanding | of Outstanding | Plans (excludes | | | | | Options, Warrants | Options, Warrants | securities reflected in | | | | Plan Category | and Rights | and Rights | first column) | | | | Equity compensation plans approved by security holders | 6,124,667 | $ 60.23 | 34,707,546 | | | | Equity compensation plans not approved by security holders | – | N/A | — | | | | Total | 6,124,667 | $60.23 | 34,707,546 | | | | | | | | |
| Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights. The securities listed in this column exclude purchase rights outstanding under the ESPP. Under such plan, employees may purchase whole shares of common stock at a price per share equal to 90% of the lower of the fair market value per share on the first day of the purchase period or the fair market value per share on the last day of the purchase period. As of December 31, 2020, 55,979 shares may be issued pursuant to stock options upon exercise, 1,664,542 shares may be issued pursuant to PSUs upon vesting and 4,404,146 shares may be issued pursuant to RSUs upon vesting. The number of shares that may be issued under the outstanding and unvested PSUs for which the performance measurement period has not ended is based on vesting of the maximum number of award shares (200% of the target number of award shares). The actual number of shares that may vest may range from 0% to 200% of the target number based on the level of achievement of the applicable performance metrics and the continued service vesting requirements. See pages 34 to 39.
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights. As of December 31, 2020, the weighted-average exercise price of outstanding options to purchase common stock was $60.23. No weighting was assigned to PSUs or RSUs as no exercise price is applicable to PSUs or RSUs.
Number of Securities Available for Future Issuance Under Equity Compensation Plans. The securities listed in this column include 28,805,003 shares available for future issuance under the 2017 Plan. Any shares underlying outstanding awards that are forfeited under the 2009 Plan (which are included in the first column of this table) will be available for future issuance under the 2017 Plan. Also includes 5,902,543 shares available for future issuance under the ESPP. As of December 31, 2020, there were no outstanding purchase periods under the ESPP.
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Table of Contents
Compensation > CEO Pay Ratio
CEO Pay Ratio
We are required by SEC rules and regulations to disclose the annual total compensation for our CEO and an estimate of the median annual total compensation for our worldwide employee population excluding our CEO, and the ratio of annual total compensation for our CEO to the annual total compensation for our median employee. As further described below, we have also included supplemental pay ratio information to show the ratios of the annual total compensation of our CEO to the annual total compensation of our median employees in the United States and the United Kingdom and Western Europe, respectively.
The following table provides information, based on our reasonable estimates, about the relationship between the annual total compensation of our CEO and the annual total compensation of our median employees for the year ended December 31, 2020.
| | | | | | | | | | Median | | | | | | | Employee | CEO | Pay Ratio | | | | | Annual Total | Annual Total | (CEO : median | | | | Category | Compensation | Compensation | employee) | | | | CEO Pay to Worldwide Median Employee Pay
(SEC-required pay ratio disclosure) | $ 33,358 | | 414 : 1 | | | | CEO Pay to U.S. Median Employee Pay
(Supplemental pay ratio information) | $ 87,375 | $13,807,940 | 158 : 1 | | | | CEO Pay to U.K. and Western Europe Median Employee Pay
(Supplemental pay ratio information) | $ 72,253 | | 191 : 1 | | | | | | | | |
| Employees Included. The company had approximately 289,500 employees at the end of 2020, with 43,500 in North America, 13,400 in Continental Europe, 6,800 in the United Kingdom and 225,800 in various other locations throughout the rest of the world, including 204,500 in India. In identifying the worldwide median employee, we included all such employees, except for our CEO and approximately 2,500 employees of Bright Wolf, Code Zero, Collaborative Solutions, El Technologies, Levementum, New Signature, 10th Magnitude and Tin Roof, which businesses we acquired during 2020 (the “2020 Acquired Companies”). In identifying the U.S. median employee and the U.K. and Western Europe median employee, we included all employees in the United States and in the United Kingdom and Western Europe, respectively, except for our CEO and employees of the 2020 Acquired Companies. We did not include any independent contractors in either calculation.
Compensation Included. In identifying the median employees, we used the actual salary, bonus and ACI for 2020 (in each case annualized for full-time employees who joined during 2020) and the grant date fair value of PSUs and RSUs awarded during 2020 for each applicable employee as of December 31, 2020. Where there were multiple employees with the resulting median compensation, we calculated each such employee’s annual total compensation in the same manner as the “SEC Total” of compensation shown for our CEO in the “2020 Summary Compensation Table” on page 51. We used such annual total compensation to identify the median of such employees and for disclosure of median employee pay herein (averaged where the median fell between two employees).
Currency Conversion. For employees receiving their compensation in a currency other than US$, including our CEO, we translated such compensation to US$ at twelve-month average exchange rates for 2020.
Cost-of-Living Adjustment. We applied a cost-of-living adjustment to the compensation of each of our employees resident in a jurisdiction other than the jurisdiction in which our CEO is based (the United Kingdom) in order to adjust the compensation of such employees to the jurisdiction in which our CEO is based. In making such cost-of-living adjustments, we used the cost-of-living index for the country in which the employee was based for all employees not based in the United Kingdom. Each such cost-of-living index, including that for India (24.12), the location of the worldwide median employee, the United States (72.47), the location of the U.S. median employee, and the United Kingdom (65.67), the location of the U.K. and Western Europe median employee, was used to adjust the applicable compensation of employees to the cost-of-living index for the United Kingdom (65.67). All cost-of-living indexes used were as published by Numbeo.com for mid-year 2020. Without application of a cost-of-living adjustment, and after otherwise utilizing the same process described above to identify the worldwide median employee, the worldwide median employee would have been a full-time, salaried employee located in India with annual total compensation of $13,460. The ratio of the annual total compensation of our CEO to such median employee’s annual total compensation was 1,026 : 1.
Supplemental U.S. Median Employee and U.K. and Western Europe Median Employee Pay Ratios. The form and amount of our CEO’s annual total compensation is largely influenced by prevailing compensation practices in the United States and in the United Kingdom and Western Europe and the competitive market for senior executive talent. While the market for such talent is global, given that the company is a U.S.-headquartered, publicly-traded company with revenues derived principally from the United States, the United Kingdom and Western Europe, we believe that it is useful to understand the relationship between the annual total compensation of our CEO and the annual total compensation of our median employees in the United States and the United Kingdom and Western Europe, respectively. As noted above, the medians of the annual total compensation of our employees included in these calculations were adjusted to the cost-of-living index for the United Kingdom.
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Table of Contents
Potential Payments Upon Termination or Change in Control
Overview of Potential Paymentspotential payments Employment Agreements We have entered into employment agreements with our NEOs that provide certain benefits uponif such employees beingare terminated without Cause or leavingleave for Good Reason (each, a “Qualifying Termination” — see “What is a ‘Qualifying Termination’?” below for more details). Such benefits are adjusted in the event the Qualifying Termination occurs within the 12 months following a change in control. The employment agreements also provide for certain benefits in the event of the NEO’s death. The table below summarizes the benefits under the employment agreements, as applicable to each of our NEOs who remain executive officersset forth below. Ms. Schmitt had an employment agreement while she served as Chief People Officer of the date of this proxy statement.company, which contained benefit provisions in line with those below. However, when she voluntarily terminated her employment with the company effective May 5, 2023, she ceased to be entitled to such benefits and did not receive any qualifying termination payment. Termination
Event | | Employment
Agreement
Version | | Salary and ACI | | Benefits | | Unvested
RSUs/
Time-Based
Awards | | Unvested PSUs /
Performance-Based Awards | | | | | | | | Unvested PSUs / | | Performance
Measurement Period
Ended; Performance
Objectives Satisfied | | Performance
Measurement
Period Not
Ended | | Qualifying Termination – no Change inControl | | Kumar, Dalal, Siegmund, Gummadi, Kim and Ayyar | | Performance-Based Awards | | | | | | | | Performance | | | | | | | | | Measurement | | | | | | | | Unvested | Period Ended; | Performance | | | | Employment | | | RSUs / | Performance | Measurement | | | Termination | Agreement | | | Time-Based | Objectives | Period Not | | | Event | Version | Salary and ACI | Benefits | Awards | Satisfied | Ended | | | | Humphries, | 1x | 18 months of | | | | | | | Siegmund | …base salary, payable | reimbursement for | | | | | | Qualifying | and Schmitt | over 12 months | COBRA premiums, | Acceleration | Acceleration | | | | Termination – | |
…ACI (100% of target), | as applicable | of awards that | of awards that | | | | no Change in | | payable in a lump sum | | would otherwise | would otherwise | Forfeited18 months of reimbursement for COBRA premiums, as applicable | | | Control | Frank | 22 months | 12 months Acceleration of | awards that would otherwise vest in the next12 months | | Acceleration of awards that would otherwise vest in the next12 months | | Forfeited | | Qualifying Termination – within 12 months of Change in Control | | Kumar, Dalal, Siegmund, Gummadi, Kim and Ayyar | | 2x…base salary, payable | reimbursement for | 12 months | 12 months | | | | | | in installments | COBRA premiums | | | | | | | Humphries, | 2x | 18 months of | | | | | | | Siegmund | …base salary, payable | reimbursement for | | | | | | | and Schmitt | over 24 months | COBRA premiums, | | | Acceleration | | | Qualifying | |
…ACI (100% of target), | as applicable | | | of entire award | | | Termination – | | payable in a lump sum | | Acceleration of | Acceleration of | (based on | | | within 12 months | Frank | 1x | 1218 months of | entire award | entire award | performance | | | of Change inreimbursement for COBRA premiums, as applicable | | …base salary, payable | reimbursement forAcceleration of entire award | | Acceleration of entire award | | Vesting of pro-rata amount (based on portion of performance period elapsed and performance results as of change in | control date) | | ControlDeath | | over 12 months | COBRA premiumsKumar, Dalal, Siegmund, Gummadi, Kim and Ayyar | | | control date) | | | | | …Prorated ACI (100% of target), | | | | | | | | | payable in a lump sum | | None | | | | | Acceleration of entire award | | Acceleration of entire award | | | | | | Vesting of pro-rataamount (based on portion of performance period elapsed and performance results prior to death) |
| WHAT IS A “QUALIFYING TERMINATION”? | | | | What is a “qualifying termination”? Termination without “Cause” “Cause” is defined as: | • | Willful malfeasance or willful misconduct in connection with employment; |
| • | Continuing failure to perform duties requested; |
| • | Failure to observe material policies of the company; |
| • | Commission of any felony or any misdemeanor involving moral turpitude; |
| • | Engaging in any fraudulent act or embezzlement; or |
| • | Any material breach of an employment agreement. |
| Leaving for “Good Reason” “Good Reason” is defined as: | • | A material diminution of authority, duties or responsibilities; |
| • | A material diminution in overall compensation package that is not broadly applied to other executives; |
| • | The company’s failure to obtain from its successor the express assumption of an employment agreement; or |
| • | The company’s change, without the executive officer’s consent, in the principal place of his or her work to a location more than 50 miles from the primary work location, but only if the change is after a change in control (provided, however, that, with respect to Mr. Humphries, a change in his principal place of work to New York or New Jersey would not constitute “Good Reason”). | | | | | control. |
| | | DEATH BENEFITS | | NO EXCESS PARACHUTE PAYMENTS | | | | The employment agreements applicable to Mr. Humphries, Mr. Siegmund and Ms. Schmitt (but not Mr. Frank) also provide the following death benefits:
Cognizant 2024 Proxy statement 78 • 1x ACI (100% of target), prorated for the portion of the year the employee served, payable in a lump sum;
• Acceleration of the entirety of any equity awards that would have vested solely upon continued service with the company; and
• Acceleration of any equity awards that had performance measurement periods ongoing, with the level of achievement determined by the Compensation Committee’s good faith determination of the level of company achievement of the performance objectives for the portion of the performance measurement period that elapsed prior to death.
| | The employment agreements also provide that in the event any payments under the employment agreements would constitute parachute payments under IRC Section 280G, then the payments under the employment agreements will be reduced by the minimum amount necessary so that no amounts paid will be non-deductible to the company or subject to the excise tax imposed under IRC Section 4999. |
TableLimitations on severance
The employment agreements also provide that in the event any payments under the employment agreements would constitute parachute payments under IRC Section 280G, then the payments under the employment agreements will be reduced by the minimum amount necessary so that no amounts paid will be non-deductible to the company or subject to the excise tax imposed under IRC Section 4999. In March 2023, the Board adopted the Senior Executive Cash Severance Policy (the “Policy”). This Policy provides that the company will not enter into any new employment agreement or severance or separation arrangement or agreement with any senior executive of Contents the company, or establish any new severance plan or policy covering any senior executive of the company, in each case, that provides for cash severance benefits exceeding 2.99 times the sum of the senior executive’s base salary plus target bonus for the year of termination, without seeking stockholder approval or ratification of such agreement, arrangement, plan or policy.
Compensation
Benefits under the retirement, death and disability policy As described on > Potential Payments Upon Terminationpage 65, Cognizant has adopted a retirement, death and disability policy. None of our NEOs currently qualifies for retirement benefits under the policy. However, each of the NEOs would be eligible for benefits under the retirement, death and disability policy in the event of their death or Change in Controldisability to the extent that their employment agreement does not already provide for such benefits. Cash severance payments are contingent on the executive officers executing and not revoking a waiver and release of claims against the company and complying with one-year post-termination non-competition and non-solicitation covenants, a six-month post-termination intellectual property covenant and a perpetual confidentiality covenant (subject to administrator discretion and where permitted by law). Upon any termination of employment, each executive officer will also be entitled to any amounts earned, accrued and owed but not yet paid as of the termination date and any benefits accrued and earned in accordance with the terms of any benefits plans or programs, and these amounts are not conditioned upon the release becoming effective. Cognizant 2024 Proxy statement 79 Calculation of Potential Paymentspotential payments The following table shows potential payments to our NEOs under the employment agreements in effect on December 31, 2020 (as opposedand our retirement, death and disability. Except with respect to the date of this proxy statement for the table on page 58) in the event of a Qualifying Termination prior to or within 12 months following a change in control. After the period of 12 months following a change in control, theMs. Schmitt, potential payments upon a Qualifying Termination, absent another change in control, revert to those prior to a change in control as set forth below. Potential payments are calculated assuming a (i) that the applicable triggering event occurred on December 31, 20202023 as the Qualifying Termination date and, (ii) where applicable, using the closing price of our common stock of $81.95$75.53 on December 31, 2020,29, 2023, as reported on Nasdaq.Nasdaq and (iii) COBRA premium rate applicable for 2024 based on 2024 election by each applicable NEO. For Mr. Humphries, the table shows the actual termination payments he became entitled to upon leaving the company in March 2023. Ms. Schmitt voluntarily terminated her employment with the company effective May 5, 2023 and was not entitled to any qualifying termination payment. | | | | | | | | | | | | | | | Awards | | | | | | | Salary and | | Acceleration / | | | | | Name | Trigger | Bonus | Benefits | Extension | Total | | | | Brian Humphries | Qualifying Termination Prior to Change in Control | $3,080,044 | — | $ 3,005,762 | $ 6,085,806 | | | | | Qualifying Termination Following Change in Control | $6,160,089 | — | $ 8,337,593 | $14,497,682 | | | | | Death or Disability | $2,053,363 | — | $ 8,337,593 | $10,390,956 | | | | | Retirement | — | — | — | — | | | | | Termination for Other Reasons | — | — | — | — | | | | Jan Siegmund | Qualifying Termination Prior to Change in Control | $1,600,000 | — | $ 2,676,651 | $ 4,276,651 | | | | | Qualifying Termination Following Change in Control | $3,200,000 | — | $ 5,382,968 | $ 8,582,968 | | | | | Death or Disability | $ 800,000 | — | $ 5,382,968 | $ 6,182,968 | | | | | Retirement | — | — | — | — | | | | | Termination for Other Reasons | — | — | — | — | | | | Karen McLoughlin | Qualifying Termination Prior to Change in Control | — | — | — | — | | | | | Qualifying Termination Following Change in Control | — | — | — | — | | | | | Death or Disability | — | — | — | — | | | | | Retirement | — | $ 19,753 | $ 3,656,691 | $ 3,676,444 | | | | | Termination for Other Reasons | — | — | — | — | | | | Becky Schmitt | Qualifying Termination Prior to Change in Control | $1,300,000 | $ 11,302 | $ 2,726,804 | $ 4,038,106 | | | | | Qualifying Termination Following Change in Control | $2,600,000 | $ 11,302 | $ 6,617,544 | $ 9,228,846 | | | | | Death or Disability | $ 650,000 | — | $ 6,617,544 | $ 7,267,544 | | | | | Retirement | — | — | — | — | | | | | Termination for Other Reasons | — | — | — | — | | | | Malcolm Frank | Qualifying Termination Prior to Change in Control | $1,191,667 | $ 18,330 | $ 2,443,257 | $ 3,653,254 | | | | | Qualifying Termination Following Change in Control | $1,300,000 | $ 18,330 | $ 5,708,309 | $ 7,026,639 | | | | | Death or Disability | — | — | — | — | | | | | Retirement | — | — | — | — | | | | | Termination for Other Reasons | — | — | — | — | | | | Matthew Friedrich | Qualifying Termination Prior to Change in Control | $1,300,000 | — | $ 2,124,472 | $ 3,424,472 | | | | | Qualifying Termination Following Change in Control | $2,600,000 | — | $ 4,436,609 | $ 7,036,609 | | | | | Death or Disability | $ 650,000 | — | $ 4,436,609 | $ 5,086,609 | | | | | Retirement | — | — | — | — | | | | | Termination for Other Reasons | — | — | — | — | | | | | | | | | | |
| | Name | Trigger | Salary and
Bonus | Benefits | Awards
Acceleration/
Extension | Total | | Ravi Kumar | Qualifying Termination Prior to Change in Control | $3,000,000 | $30,547 | $3,195,448 | $6,225,995 | | Qualifying Termination Following Change in Control | $6,000,000 | $30,547 | $18,768,978 | $24,799,525 | | Death or Disability | $2,000,000 | — | $18,768,978 | $20,768,978 | | Retirement | — | — | — | — | | Termination for Other Reasons | — | — | — | — | | Jatin Dalal | Qualifying Termination Prior to Change in Control | $1,500,000 | $10,962 | $2,284,707 | $3,795,669 | | Qualifying Termination Following Change in Control | $3,000,000 | $10,962 | $3,266,446 | $6,277,408 | | Death or Disability | $750,000 | — | $3,266,446 | $4,016,446 | | Retirement | — | — | — | — | | Termination for Other Reasons | — | — | — | — | | Jan Siegmund | Qualifying Termination Prior to Change in Control | $1,700,000 | — | $3,989,192 | $5,689,192 | | Qualifying Termination Following Change in Control | $3,400,000 | — | $7,603,303 | $11,003,303 | | Death or Disability | $850,000 | — | $7,603,303 | $8,453,303 | | Retirement | — | — | — | — | | Termination for Other Reasons | — | — | — | — | | Surya Gummadi | Qualifying Termination Prior to Change in Control | $1,300,000 | $30,547 | $2,009,627 | $3,340,174 | | Qualifying Termination Following Change in Control | $2,600,000 | $30,547 | $4,233,457 | $6,864,004 | | Death or Disability | $650,000 | — | $4,233,457 | $4,883,457 | | Retirement | — | — | — | — | | Termination for Other Reasons | — | — | — | — | | John Kim | Qualifying Termination Prior to Change in Control | $1,400,000 | $30,547 | $2,032,739 | $3,463,286 | | Qualifying Termination Following Change in Control | $2,800,000 | $30,547 | $4,000,144 | $6,830,691 | | Death or Disability | $700,000 | — | $4,000,144 | $4,700,144 | | Retirement | — | — | — | — | | Termination for Other Reasons | — | — | — | — | | Ganesh Ayyar | Qualifying Termination Prior to Change in Control | $1,426,529 | — | $1,413,166 | $2,839,695 | | Qualifying Termination Following Change in Control | $2,853,057 | — | $2,677,916 | $5,530,973 | | Death or Disability | $713,264 | — | $2,677,916 | $3,391,180 | | Retirement | — | — | — | — | | Termination for Other Reasons | — | — | — | — | | Actual severance paid to former executives who departed during 2023 | | | | | Brian Humphries1 | Qualifying Termination Prior to Change in Control | $3,625,9552 | $186,669 | $2,780,812 | $6,593,436 | | |
1 Reflects the actual severance amount paid to Mr. Humphries during 2023 as a result of his involuntary termination without cause in March 2023. See “Termination of Brian Humphries as CEO and related severance payments” on page 68 for information on the actual severance benefits he became entitled to upon his termination. Ms. McLoughlin. Ms. McLoughlin retired on December 31, 2020. In accordance with the applicable terms of the company’s retirement, death and disability policy, she was entitled to retirement benefits upon her departure (see page 47).
Mr. Friedrich. Mr. Friedrich left the company in January 2021 and, as such, does not remain eligible for the benefits listed in this table. This table provides the SEC-required information as of December 31, 2020.
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2 Such payments have been converted to US$ from CHF at an exchange rate of approximately 1 CHF = $1.11, the 12-month average exchange rate for fiscal year 2023. Cognizant 2024 Proxy statement 80 Equity compensation plan information The following table provides information as of December 31, 2023 with respect to the shares of our common stock that may be issued under our existing equity compensation plans approved by shareholders, which include the 2023 Incentive Award Plan (the “2023 Plan”), the ESPP, and our prior equity compensation plans, the 2017 Incentive Award Plan (the “2017 Plan”) and the 2009 Incentive Compensation Plan (the “2009 Plan”). The 2023 Plan succeeded the 2017 Plan, which previously succeeded the 2009 Plan. Awards granted under the 2017 Plan and the 2009 Plan remain valid, though no additional awards may be granted from either the 2017 Plan or the 2009 Plan. For additional information on our equity compensation plans, see Note 17 to the Consolidated Financial Statements in our 2023 Annual Report. | 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 Available
for Future Issuance
Under Equity
Compensation
Plans (excludes
securities reflected
in first column) | | Equity compensation plans approved by security holders | 4,766,082 | $0.00 | 36,615,148 | | Equity compensation plans not approved by security holders | — | N/A | — | | Total | 4,766,082 | $0.00 | 36,615,148 |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights. Excludes purchase rights outstanding under the ESPP. Under such plan, employees may purchase whole shares of stock at a price per share equal to 95% of the fair market value per share on the last day of the purchase period. As of December 31, 2023, 3,272,639 shares of common stock may be issued pursuant to RSUs upon vesting and 1,493,443 shares of common stock may be issued pursuant to PSUs upon vesting. The number of shares of common stock that may be issued under the outstanding and unvested PSUs for which the performance measurement period has not ended is based on vesting of the maximum number of award shares. The actual number of shares of common stock that may vest range from 0% to 200% of the target number (except for Mr. Kumar’s new hire CEO grants, which range from 0% to 250% of the target number) based on the level of achievement of the applicable performance metric(s) and the continued service vesting requirements. Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights. As of December 31, 2023, there were no options to purchase shares outstanding under the 2009 Plan, 2017 Plan or 2023 Plan. No weighting was assigned to PSUs or RSUs as no exercise price is applicable to PSUs or RSUs. Number of Securities Available for Future Issuance Under Equity Compensation Plans. The securities listed in this column include 25,106,403 shares of common stock available for future issuance under the 2023 Plan. Any shares underlying outstanding awards (which shares are included in the first column of this table) that are forfeited after June 6, 2023 under the 2009 Plan or the 2017 Plan are available for future issuance under the 2023 Plan. Also includes 11,508,745 shares available for future issuance under the ESPP. As of December 31, 2023, there were no outstanding purchase periods under the ESPP. Cognizant 2024 Proxy statement 81 CEO pay ratio We are required by SEC rules and regulations to disclose the annual total compensation for our current CEO, an estimate of the median annual total compensation for our worldwide employee population excluding our current CEO, and the ratio of annual total compensation for our current CEO to the annual total compensation for such median employee. As further described below, we have also included supplemental pay ratio information to show the ratios of the annual total compensation of our current CEO to the annual total compensation of our median employees in the United States. The following table provides information, based on our reasonable estimates, about the relationship between the annual total compensation of Mr. Kumar and the annual total compensation of our median employees for the year ended December 31, 2023. Mr. Kumar’s annual total compensation for 2023 is substantially higher than the annual total compensation of our former CEO, Mr. Humphries, for 2022 because of certain one-time equity awards that Mr. Kumar received when he assumed the CEO position in January 2023: (a) PSUs with a target value of $3,000,000, and a payout range from 0% to 250% of the target measured over a four-year performance cycle based on absolute total shareholder return of the company’s common stock (see page 50 for additional information on these PSUs) and (b) an equity award consisting of RSUs with a grant date value of $5,000,000, which was a buyout award to replace forfeited equity awards from his previous employer. Because the PSUs are subject to the performance condition described above, the actual payout may differ significantly from the target value attributed to them, including possibly no payout at all. See page 54 for information on the current performance of these PSUs. | Category | Median
Employee
Annual Total
Compensation | CEO
Annual Total
Compensation | Pay Ratio
(CEO: median
employee) | CEO Pay to Worldwide Median Employee Pay
(SEC-required pay ratio disclosure) | $40,660 | $22,617,945 | 556 : 1 | CEO Pay to U.S. Median Employee Pay
(Supplemental pay ratio information) | $125,791 | 180 : 1 | | | | | |
CEO Compensation. For the year ended December 31, 2023, the total compensation for our current CEO, Mr. Kumar, was $22,563,405 as reported in the “SEC Total” column of the Summary Compensation Table on page 70. Since Mr. Kumar was appointed CEO effective January 12, 2023, we annualized his Salary and Non-Equity Incentive Plan Compensation as disclosed in the Summary Compensation Table, and added the disclosed values of his Bonus, Stock Awards and 401(k) company contribution to arrive at a value of $22,617,945, used for the ratio of annual total compensation for our current CEO to the annual total compensation for our median employee. We annualized Mr. Kumar’s total compensation as follows: | Current CEO pay components | Compensation included in | | Rationale | Summary
compensation
table | Annual total
compensation
for CEO pay ratio | | | Salary | $966,036 | $1,000,000 | | Annualized salary | | Bonus | $750,000 | $750,000 | | Not annualized; one-time cash sign-on bonus | | Stock awards | $20,252,245 | $20,252,245 | | Not annualized; comprised of: • annual grant of 110,206 PSUs with grant date fair value of $7,448,282 and 69,318 RSUs with grant date fair value of $4,599,942 and • one-time grant of 46,082 PSUs with grant date fair value of $3,204,081 and 76,804 RSUs with grant date fair value of $4,999,940 | | Non-equity incentive plan compensation | $585,224 | $605,800 | | Annualized earned ACI | | All other compensation | $9,900 | $9,900 | | Not annualized; maximum allowed 401(k) company contribution for 2023 | | Total | $22,563,405 | $22,617,945 | | |
Employees Included. The company had approximately 347,700 employees as of December 31, 2023, with 254,000 in India, 40,500 in North America, 16,300 in Continental Europe, 8,500 in the United Kingdom and 28,400 in various other locations throughout the rest of the world. In identifying the worldwide median employee, we included all such employees, except for Mr. Kumar and approximately 1,200 employees of OneSource Virtual and Mobica, which businesses we acquired during 2023 (collectively, the “2023 Acquired Companies”). In identifying the U.S. median employee, we included all employees in the United States except for Mr. Kumar and employees of the 2023 Acquired Companies. We did not include any independent contractors in either calculation. Compensation Included. In identifying the median employees, we used the actual salary, bonus and ACI for 2023 (in each case annualized for full-time employees who joined during 2023 and estimated where final bonus amounts had not yet been determined as of the date of this filing (approximately 850 employees’ bonuses)) and the grant date fair value of PSUs and RSUs awarded during 2023 for each applicable employee as of December 31, 2023. Where there were multiple employees with the resulting median compensation, we calculated each such employee’s annual total compensation in the same manner as the “SEC Total” of compensation shown for Mr. Kumar in the “2023 Summary compensation table” on page 70. We used such annual total compensation to identify the median of such employees and for disclosure of median employee pay herein (averaged where the median fell between two employees). Cognizant 2024 Proxy statement 82 Currency Conversion. For employees receiving their compensation in a currency other than US$, we converted such compensation to US$ based on the 12-month average exchange rates for 2023. Cost-of-Living Adjustment. We applied a cost-of-living adjustment to the compensation of each of our employees residing in a jurisdiction other than Mr. Kumar’s principal work location (the United States) in order to adjust the compensation of such employees to the jurisdiction of Mr. Kumar’s’ principal work location. In making such cost-of-living adjustments, we used the cost-of-living index for the country in which the employee was based for all employees not based in the United States. Each such cost-of-living index, including that for India (22.2), the location of the worldwide median employee, was used to adjust the applicable compensation of employees to the cost-of-living index for the United States (72.90). All cost-of-living indexes used were as published by Numbeo.com for full-year 2023. Without application of a cost-of-living adjustment, and after otherwise utilizing the same process described above to identify the worldwide median employee, the worldwide median employee would have been a full-time, salaried employee located in India with annual total compensation of $13,735. The ratio of the annual total compensation of Mr. Kumar to such median employee’s annual total compensation was 1,647 : 1. Supplemental U.S. Median Employee Pay Ratio. The form and amount of Mr. Kumar’s annual total compensation is largely influenced by prevailing compensation practices in the United States and the competitive market for senior executive talent. While the market for such talent is global, given that the company is a U.S.-headquartered, publicly traded company, we believe that it is useful to understand the relationship between the annual total compensation of Mr. Kumar and the annual total compensation of our median employees in the United States. Pay versus performance table The following table provides certain summary information concerning the relationship between executive “compensation actually paid” to our principal executive officer (“PEO”) and other NEOs and certain financial performance of the company. The “compensation actually paid” does not necessarily reflect the value received or realized by our NEOs or how the compensation committee evaluates compensation decisions in light of company performance. Information on the compensation realized by our NEOs can be found on pages 55 to 64. For further information concerning the company’s pay for performance philosophy and how the company aligns executive compensation with the company’s performance, see “Compensation -- Compensation Discussion and Analysis” beginning on page 45. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. Revenue (GAAP) | Year | Summary Compensation
Table Total for PEO | Compensation Actually
Paid to PEO | Average
Summary
Compensation
Table Total
for Non-PEO
NEOs | Average
Compensation
Actually Paid
to Non-PEO
NEOs | Value of Initial
Fixed $100
Investment
Based On: | Net
Income
(GAAP)
($M) | Revenue
(GAAP)
($M) | | Mr. Kumar | Mr.
Humphries | Mr. Kumar | Mr.
Humphries | Total
Share-
holder
Return | Peer
Group
Total
Share-
holder
Return | | 2023 | $22,563,405 | $4,216,416 | $23,063,570 | ($11,121,997) | $4,217,441 | $3,122,360 | $129.19 | $219.37 | $2,126 | $19,353 | | 2022 | — | $17,943,894 | — | ($949,565) | $4,263,584 | $808,056 | $96.15 | $138.98 | $2,290 | $19,428 | | 2021 | — | $19,687,285 | — | $22,375,791 | $5,654,584 | $6,736,685 | $146.87 | $193.55 | $2,137 | $18,507 | | 2020 | — | $13,807,940 | — | $21,897,726 | $7,511,754 | $8,998,439 | $133.96 | $143.88 | $1,392 | $16,652 |
Summary Compensation Table Total for PEO.During 2023, Mr. Kumar and Mr. Humphries each served for a period of time as our CEO and Mr. Humphries was our CEO for 2020, 2021 and 2022. The dollar amounts shown in these two columns represent the “SEC Total” as set forth in the Summary Compensation Table. Compensation Actually Paid to PEO. The dollar amounts shown represent the amount of “compensation actually paid” to Mr. Kumar and Mr. Humphries for 2023, as computed in accordance with Item 402 (v) of Regulation S-K, and do not reflect the total compensation actually realized or received by Mr. Kumar or Mr. Humphries. In accordance with these rules, these amounts reflect “SEC Total” as set forth in the Summary Compensation Table for 2023, adjusted as shown below. Equity values are computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under GAAP. The methodology assumptions used to compute these values does not materially differ from those used at the time of grant. Mr. Kumar’s compensation actually paid includes certain one-time equity awards received when he assumed the CEO position in January 2023: (a) PSUs with a target value of $3,000,000, and a payout range from 0% to 250% of the target measured over a four-year performance cycle based on absolute total shareholder return of the company’s common stock (see page 50 for additional information on these PSUs) and (b) an equity award consisting of RSUs with a grant date value of $5,000,000, which was a buyout award to replace forfeited equity awards from his previous employer. Because the PSUs are subject to the performance condition described above, the actual payout may differ significantly from the target value attributed to them, including possibly no payout at all. See page 54 for information on the current performance of these PSUs. Cognizant 2024 Proxy statement 83 | Compensation actually paid to PEO in 2023 | Mr. Kumar | Mr. Humphries | | Summary Compensation Table Total | $22,563,405 | $4,216,416 | | Less, value of Stock Awards reported in Summary Compensation Table | ($20,252,245) | — | | Plus, year-end fair value of outstanding and unvested equity awards granted in the year | $15,841,805 | — | | Plus, fair value as of vesting date of equity awards granted and vested in the year | $4,910,605 | — | | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years | — | — | | Plus (less), year over year change in fair value of equity awards granted in prior years that vested in the year | — | $133,932 | | Less, prior year-end fair value for any equity awards forfeited in the year | — | ($15,472,345) | | Compensation actually paid to PEO | $23,063,570 | ($11,121,997) |
Average Summary Compensation Table Total for Non-PEO NEOs. The dollar amounts shown represent the average of the amounts reported as “SEC Total” in the Summary Compensation Table for the company’s NEOs as a group (excluding Mr. Kumar and Mr. Humphries) in each applicable year. For 2023, our non-PEO NEOs are Mr. Dalal, Mr. Siegmund, Mr. Gummadi, Mr. Kim, Mr. Ayyar and Ms. Schmitt. For 2022, our non-PEO NEOs were Mr. Siegmund, Mr. Gummadi, Mr. Ayyar, Mr. Kim, Greg Hyttenrauch and Ursula Morgenstern. For 2021, our non-PEO NEOs were Mr. Siegmund, Mr. Hyttenrauch, Mr. Kim and Rajesh Nambiar. For 2020, our non-PEO NEOs were Mr. Siegmund, Karen McLoughlin, Ms. Schmitt, Malcolm Frank and Matthew Friedrich. Average Compensation Actually Paid to Non-PEO NEOs. The dollar amounts shown represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Kumar and Mr. Humphries) for 2023, as computed in accordance with Item 402 (v) of Regulation S-K, and do not reflect the total compensation actually realized or received by such NEOs. In accordance with these rules, these amounts reflect “SEC Total” as set forth in the Summary Compensation Table for 2023, adjusted as shown below. Equity values are computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under GAAP. The methodology assumptions used to compute these values does not materially differ from those used at the time of grant. | Average compensation actually paid to Non-PEO NEOs | 2023 | | Average Summary Compensation Table Total | $4,217,441 | | Less, average value of Stock Awards reported in Summary Compensation Table | ($3,359,713) | | Plus, average year-end fair value of outstanding and unvested equity awards granted in the year | $2,335,383 | | Plus, average fair value as of vesting date of equity awards granted and vested in the year | $322,448 | | Plus (less), average year over year change in fair value of outstanding and unvested equity awards granted in prior years | ($121,768) | | Plus (less), average year over year change in fair value of equity awards granted in prior years that vested in the year | $121,144 | | Less, average prior year-end fair value for any equity awards forfeited in the year | ($392,575) | | Average compensation actually paid to non-PEO NEOs | $3,122,360 |
TableTotal Shareholder Return. Total Shareholder Return (TSR) is calculated by dividing (a) the sum of Contents(i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the company’s share price at the end of each fiscal year shown and the beginning of the measurement period, by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2019.
Peer Group Total Shareholder Return.The peer group used for this column is the S&P 500 Information Technology Sector Index (S51NFT). Cognizant Reported Revenue per US GAAP. We have presented revenue, calculated in accordance with U.S. GAAP, since revenue, as adjusted for currency fluctuations and acquisitions, is the most significant performance metric in the Company’s ACI and annual PSU awards. In the presentation, we have not adjusted the revenue amounts for acquisitions because there are differences in acquisitions required to be adjusted for ACI and each of the annual PSU awards due to the timing of the target-setting process for each of the awards. Additionally, we have not adjusted the presented revenue amounts for impacts of currency as currency adjustments are relative to the applicable base year of measurement. Cognizant 2024 Proxy statement 84 Relationship Between Compensation Actually Paid and Performance The table below reflects the relationship between the PEO and the average Other NEO compensation actually paid and the performance measures shown in the Pay versus performance table annually from 2020 to 2023. For each column below, the amount shown represents the percentage increase or percentage decrease in such item annually from 2020 to 2023; amounts for the relevant years used in such calculations are shown in the Pay versus performance table on page 83. | Period | Compensation
Actually Paid
to Mr. Kumar | Compensation
Actually Paid
to Mr.
Humphries | Average
Compensation
Actually Paid
to Other
NEOs | Company
TSR | Peer Group
TSR | Net Income | Revenue | | 2022 to 2023 | — | (1,071.3%) | 286.4% | 34.4% | 57.8% | (7.2%) | (0.4%) | | 2021 to 2022 | — | (104.2%) | (88.0%) | (34.5%) | (28.2%) | 7.2% | 5.0% | | 2020 to 2021 | — | 2.2% | (25.1%) | 9.6% | 34.5% | 53.5% | 11.1% |
The change in Compensation Actually Paid from 2021 to 2022 (a reduction of 104.2% for Mr. Humphries and an average reduction of 88.0% for the other NEOs) is largely due to the impact of the significant reduction in the company’s stock price from $88.72 as of December 31, 2021 to $57.19 as of December 31, 2022 on the value of each NEO’s unvested equity awards. This reduction is reflected in the negative 34.5% company TSR over such period. In contrast, from December 31, 2022 to December 31, 2023, the company’s stock price increased from $57.19 to $75.53, as reflected in the company TSR of 34.4%. However, during such period the company’s revenue and net income suffered from macroeconomic challenges, resulting in relatively low ACI payouts. This reduced payout was offset by increases in the value of each NEO’s equity holdings, resulting in an average 286.4% increase in compensation actually paid to the non-PEO NEOs. In addition, the 1,071.3% decrease in Mr. Humphries’ compensation actually paid from 2022 to 2023 includes the impact of the forfeiture of approximately $15.5 million of equity grants in connection with the termination of his employment. As described in more detail in the section “Compensation – Compensation discussion and analysis,” the company’s executive compensation program reflects a variable pay-for-performance philosophy. While the company utilizes several performance measures to align executive compensation with company performance, all of those company measures are not presented in the Pay versus performance table. Moreover, the company generally seeks to incentivize long-term performance, and therefore does not specifically align the company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the company is providing the foregoing descriptions of the relationships between information presented in the Pay versus performance table. Financial Performance Measures As required, we disclose below the most important measures used by the company to link compensation actually paid to our NEOs for 2023 to company performance. For further information regarding these performance metrics and their function in our executive compensation program, please see “Compensation -- Compensation discussion and analysis”. These measures are unranked. | | | • | Revenue, which is utilized in our ACI and PSUs as Revenue adjusted for Currency Fluctuations and Acquisitions (as described on pages 49 to 53) | | • | Adjusted Operating Margin(as described on pages 49 and 52 | | • | Adjusted Diluted Earnings per Share (as described on pages 50, 52 and 53) | | • | Relative Total Shareholder Return (as described on pages 50, 51 and 53) |
Cognizant 2024 Proxy statement 85 Back to ContentsRatification of Appointment of Independent Registered Public Accounting Firm | |
Adoption of the company’s Amended and Restated Certificate of Incorporation
Proposal 3: Adoption of the company’s Amended and Restated Certificate of IncorporationThe Board unanimously recommends a vote FOR the adoption of the company’s Amended and Restated Certificate of Incorporation. What are you voting on? After careful consideration, our Board is asking shareholders to adopt the proposed amendment and restatement of our Restated Certificate of Incorporation (the “Certificate”), in the form attached as Appendix A to this proxy statement (the “Proposed Restated Certificate”). The Proposed Restated Certificate would amend the Certificate to: The board unanimously recommends a vote FOR| • | limit the ratificationliability of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021.WHAT ARE YOU VOTING ON?
Our Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm to audit our consolidated financial statements and our internal control over financial reporting for 2021. We are asking our shareholders to ratify this appointment of PwC. Although ratification is not required by our by-laws or otherwise, the board values the opinions of our shareholders and believes that shareholder ratification of the Audit Committee’s selection is a good corporate governance practice. If the selection is not ratified, the committee will take this fact into consideration in determining whether it is appropriate to select another independent auditor for 2021 or future years. Even if the selection is ratified, the committee may select a different independent auditor at any time during the year if it determines that this would be in the best interestscertain officers of the company as permitted by Delaware law, as described below (the “Exculpation Amendment”);
| | • | remove or revise obsolete provisions relating to the classification of our Board that are inapplicable because the declassification of our Board was completed in 2016, and its shareholders.include other technical and administrative updates; and | | • | restate the Certificate to reflect the foregoing amendments. |
Appendix A shows the proposed changes to the Certificate, with deletions indicated by strikeouts and additions indicated by underlining. The Board approved the Proposed Restated Certificate, and recommended its adoption by the company’s shareholders, on February 28, 2024. If adopted by the company’s shareholders, the Proposed Restated Certificate would become effective upon the filing of that document with the Secretary of State of the State of Delaware. We intend to make the filing promptly after the Annual Meeting. Purpose and effect of the Exculpation Amendment Pursuant to and consistent with Section 102(b)(7) of the Delaware General Corporation Law (“GCL”), Article X of the Certificate already eliminates the monetary liability of directors for breaches of the duty of care, to the extent permitted by the GCL. Effective August 1, 2022, Section 102(b)(7) of the GCL was amended to permit Delaware corporations to include in their certificates of incorporation limitations of monetary liability for certain officers. The officers who would be exculpated are: (i) the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer; (ii) individuals who are or were identified in the company’s public filings as its most highly compensated officers; and (iii) individuals who, by written agreement with the company, consented to be identified as officers for purposes of accepting service of process (together, “covered officers”). Consistent with Section 102(b)(7) of the GCL, the Exculpation Amendment would permit limiting the liability of covered officers for breaches of the fiduciary duty of care for direct claims. Like the provision limiting the liability of directors, the Exculpation Amendment does not permit the elimination of liability of covered officers for: | • | any breach of the duty of loyalty to the company or its shareholders; | | • | any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; or | | • | any transaction from which the officer derived an improper personal benefit. |
In addition, consistent with Section 102(b)(7) of the GCL, the Exculpation Amendment would not permit the limitation of liability of such officers of the company in any derivative action. The Exculpation Amendment also simplifies the existing exculpation provision related to directors of the company set forth in Article X by referring to the GCL, instead of specifying each instance wherein exculpation for directors is currently not permissible under the GCL. However, these changes pursuant to the Exculpation Amendment do not have the effect of altering the scope of the current exculpation protections available to our directors. The Board believes that it is important to extend exculpation protection to officers, to the fullest extent permitted by the GCL, in order to better position the company to attract and retain qualified and experienced officers. In the absence of such protection, such individuals might be deterred from serving as officers due to exposure to personal liability and the risk of incurring substantial expense in defending lawsuits, regardless of merit. In addition, the Board believes extending exculpation protection to officers could prevent costly and protracted litigation that distracts our officers from important operational and strategic matters. Aligning the protections available to our officers with those available to our directors to the extent such protections are available under the GCL would empower officers to exercise their business judgment in furtherance of shareholder interests without the potential for distraction posed by the risk of personal liability. Taking into account the narrow class and type of claims for which officers would be exculpated in accordance with the GCL, and the benefits the Board believes would accrue to the company and its shareholders—enhancing our ability to attract and retain talented officers and potentially reducing future litigation costs associated with frivolous lawsuits—the Board determined that the Exculpation Amendment is in the best interests of the company and its shareholders.
Cognizant 2024 Proxy statement 86 Removal of obsolete provisions and other technical and administrative updatesThe Certificate currently includes certain references to requirements in force prior to the completion of the declassification of our Board. Because the declassification of our Board was completed in 2016, these references no longer apply. If the Proposed Restated Certificate is adopted by our shareholders and becomes effective, the obsolete references to such requirements will be removed. The Proposed Restated Certificate would also make other administrative and conforming amendments to the Certificate, including the update of the company’s registered office and the company’s registered agent in Article II, the expanded use of capitalized defined terms and certain typographical corrections. All of the foregoing amendments, including amendments to remove obsolete language and make other technical and administrative changes, are shown in the marked copy of the Proposed Restated Certificate attached as Appendix A to this proxy statement. Legal effectiveness of the Proposed Restated CertificateThe Proposed Restated Certificate is set forth in Appendix A to this proxy statement. Approval of the Proposed Restated Certificate requires the affirmative vote of a majority of shares outstanding as of the record date and is not conditioned on the approval of any other proposal contained in this proxy statement. Abstentions and broker non-votes will have the same effect as a vote against this proposal. If our shareholders approve this proposal, we will file the Proposed Restated Certificate with the Secretary of State of the State of Delaware, upon which filing the company’s officers will receive the protections from liability afforded by the Exculpation Amendment, the obsolete provisions relating to the previous classification of our Board will be removed and the other technical and administrative updates discussed above will be incorporated. If our shareholders do not approve this proposal, we will not file the Proposed Restated Certificate with the Secretary of State of the State of Delaware, our covered officers will not be entitled to exculpation under the GCL, the obsolete provisions relating to the previous classification of our Board will not be removed and the other technical and administrative updates discussed above will not be incorporated into the Certificate. The Board reserves the right to abandon the Proposed Restated Certificate at any time before it becomes effective, even if it is approved by the shareholders. For the reasons discussed above, the Board believes that approving the Proposed Restated Certificate is in the best interests of the company and its shareholders at this time. Cognizant 2024 Proxy statement 87 Audit Mattersmatters  
Proposal 4: Ratification of appointment of independent registered public accounting firmThe Board unanimously recommends a vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024. Independent AuditorWhat are you voting on?
Our Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm to audit our Consolidated Financial Statements and our internal control over financial reporting for 2024. We are asking our shareholders to ratify this appointment of PwC. Although ratification is not required by our by-laws or otherwise, the Board values the opinions of our shareholders and believes that shareholder ratification of the Audit Committee’s selection is a good corporate governance practice. If the selection is not ratified, the Audit Committee will take this fact into consideration in determining whether it is appropriate to select another independent auditor for 2024 or future years. Even if the selection is ratified, the Audit Committee may select a different independent auditor at any time during the year if it determines that this would be in the best interests of the company and its shareholders. Independent auditor Review and Engagementengagement The Audit Committee is directly responsible for the appointment, compensation (including negotiation and approval of the audit fees), retention and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting. The committeeAudit Committee and its chairChair are directly involved in the selection of the lead audit partner at the start of each rotation. To ensure continuing audit independence: The Audit Committee periodically considers whether there should be a change of the accounting firm that is retained, and considers the advisability and potential impact of selecting a different accounting firm;
Neither the accounting firm nor any of its members is permitted to have any direct or indirect financial interest in or any connection with us in any capacity other than as our auditors, providing audit and non-audit related services; and
In accordance with SEC rules and PwC policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide services to our company. For lead audit partners and quality review partners, the maximum number of consecutive years of service in that capacity is five years.
| • | the audit committee periodically considers whether there should be a change of the accounting firm that is retained, and considers the advisability and potential impact of selecting a different accounting firm; | | • | the accounting firm, any covered person in the firm and any of their immediate family members are not permitted to have any direct or material indirect financial interest in or any connection with us in any capacity other than as our auditors, providing audit and permissible non-audit related services; and | | • | In accordance with SEC rules and PwC policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide services to our company. For lead audit partners and quality review partners, the maximum number of consecutive years of service in that capacity is five years. |
The members of the Audit Committee and the boardBoard believe that the continued retention of PwC to serve as the company’s independent registered public accounting firm is in the best interests of the company and its shareholders. Annual Meeting Attendancemeeting attendance We expect PwC representatives to attend the annual meeting. They will have an opportunity to make a statement if they wish and are expected to be available to respond to appropriate questions from shareholders. Pre-Approval Policy
Pre-approval policy and Proceduresprocedures The Audit Committee has adopted a policy that generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by the committeeAudit Committee or the engagement is entered into pursuant to one of the pre-approval procedures described below. From time to time, the committeeAudit Committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided. The committeeAudit Committee has also delegated to its chairChair the authority to approve any audit or non-audit services to be provided to us by our independent registered public accounting firm. Any such approval of services pursuant to this delegated authority is reported on at the next committeeAudit Committee meeting. During 20192022 and 2020,2023, the committeeAudit Committee approved all services provided to us by PwC that are subject to the pre-approval procedures in accordance with our pre-approval policy.
Cognizant 2024 Proxy statement 88 Table of Contents
Audit Matters > Auditor Feesfees
Auditor Fees
The following table summarizes the fees of PwC, our independent registered public accounting firm, for each of the last two fiscal years. | | | | | | | | Fee Category | 2019 | 2020 | | | | Audit Fees | $ 5,990,300 | $ 6,147,400 | | | | Audit-Related Fees | 1,325,600 | 5,775,300 | | | | Tax Fees | 1,240,300 | 641,600 | | | | All Other Fees | 596,300 | 79,200 | | | | Total | $ 9,152,500 | $ 12,643,500 | | | | | | | |
| | Fee Category | 2022 | | 2023 | | | | Audit Fees | $6,127,100 | | $6,622,600 | | | | Audit-Related Fees | 6,053,500 | | 3,689,800 | | | | Tax Fees | 1,153,400 | | 921,800 | | | | All Other Fees | 321,600 | | 41,800 | | | | Total | $13,655,600 | | $11,276,000 | |
| | Audit Fees. Audit fees consist of fees for the audit of our consolidated financial statementsConsolidated Financial Statements (including internal controls over financial reporting), the review of our interim quarterly financial statements, and other professional services provided in connection with statutory and regulatory filings or engagements. Audit-Related Fees.Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and are not reported under “Audit Fees”, including independent assessments for service organization control reports and acquisition financial due diligence services. The increase in audit-related fees from 2019 to 2020 was principally due to increased financial due diligence services related to business combinations, with a higher number of service organization control reports also contributing to the increase. Tax Fees.Tax fees comprise fees for a variety of permissible services relating to tax compliance, tax planning and tax advice. These services include assistance in complying with local transfer pricing requirements, assistance with local tax audits and assessments, withholding tax and indirect tax matters, preparation and filing of local tax returns, and technical advice relating to local and international tax matters. The decrease in tax fees from 2019 to 2020 was principally related to decreased local tax advisory services. All Other Fees.All other fees consist of fees not reported under the categories above and primarily include immigration services, assessment of non-financial metrics and documentation, non-financial due diligence services related to acquisitions and accounting research software. The decrease from 2019 to 2020 is attributable to a reduction in fees for non-financial due diligence services related to acquisitions.software and ESG reporting. | | | | | |
Audit Committee Reportreport The Audit Committee has furnished the report set forth below.
To the Board of Directors of Cognizant Technology Solutions Corporation:
The Audit Committee of the board acts under a written charter, which is available in the “Corporate Governance” section of the “About Cognizant” page of the company’s website located at www.cognizant.com. The members of the committee are independent directors, as defined in its charter and the rules of The Nasdaq Stock Market LLC. The committee held 15 meetings during 2020. Management is responsible for establishing and maintaining adequate internal control over financial reporting. The company’s independent registered public accounting firm (“auditor”) is responsible for performing an independent integrated audit of the company’s annual financial statements and management’s assessment of the effectiveness of the company’s internal control over financial reporting. The committee is responsible for providing independent, objective oversight of these processes.
The Audit Committee has reviewed the company’s audited financial statements for the fiscal year ended December 31, 2020 and has discussed these financial statements with management and the company’s auditor. The committee has also received from, and discussed with, the company’s auditor various communications that such auditor is required to provide to the committee, including the matters required to be discussed by, as may be modified or supplemented by, the PCAOB and the SEC. The company’s auditor also provided the committee with written disclosures and the letter from the auditor required by the applicable requirements of the PCAOB regarding the auditor’s communications with the committee concerning independence. In addition, the committee discussed with the auditor its independence from the company. The committee also considered whether the auditor’s provision of certain other non-audit related services to the company is compatible with maintaining such firm’s independence.
Based on its discussions with management and the auditor, and its review of the representations and information provided by management and the auditor, the committee recommended to the board that the audited financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
| | | | The Audit Committee has furnished the report set forth below. To the Board of Directors of Cognizant Technology Solutions Corporation: The Audit Committee of the Board acts under a written charter, which is available in the “Corporate Governance” section of the “About Cognizant” page of the company’s website located at www.cognizant.com. The members of the Audit Committee are independent directors, as defined in its charter and the rules of The Nasdaq Stock Market LLC. The Audit Committee held 11 meetings during 2023. Management is responsible for establishing and maintaining adequate internal control over financial reporting. The company’s independent registered public accounting firm (“auditor”) is responsible for performing an independent integrated audit of the company’s annual financial statements and management’s assessment of the effectiveness of the company’s internal control over financial reporting. The Audit Committee is responsible for providing independent, objective oversight of these processes. The Audit Committee has reviewed the company’s audited financial statements for the fiscal year ended December 31, 2023 and has discussed these financial statements with management and the company’s auditor. The Audit Committee has also received from, and discussed with, the company’s auditor various communications that such auditor is required to provide to the Audit Committee, including the matters required to be discussed by, as may be modified or supplemented by, the PCAOB and the SEC. The company’s auditor also provided the Audit Committee with written disclosures and the letter from the auditor required by the applicable requirements of the PCAOB regarding the auditor’s communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with the auditor its independence from the company. The Audit Committee also considered whether the auditor’s provision of certain other non-audit related services to the company is compatible with maintaining such firm’s independence. Based on its discussions with management and the auditor, and its review of the representations and information provided by management and the auditor, the Audit Committee recommended to the Board that the audited financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. By the Audit Committee of the Board of Directors of Cognizant Technology Solutions Corporation  |  |  |  |  |  | MAUREEN | ARCHANA | JOHN DINEEN | LEO S. MACKAY, | JOSEPH M. VELLI | SANDRA S. | BREAKIRON- | DESKUS | | JR. | | WIJNBERG | EVANS | | | | | |
|  |  |  |  |  |  |  | | | ERIC BRANDERIZ | ARCHANA
DESKUS | JOHN
DINEEN | LEO S.
MACKAY, JR. | STEPHEN J.
ROHLEDER | JOSEPH M. VELLI | SANDRA S.
WIJNBERG | |
Cognizant 2024 Proxy statement 89 Table of Contents
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PROPOSAL 4
Shareholder Action by Written Consent
 The board unanimously recommends a vote AGAINST this proposal for the reasons discussed in the board’s Statement of Opposition below.
WHAT ARE YOU VOTING ON?
The shareholder proposal will be voted on at the annual meeting only if properly presented by or on behalf of the shareholder proponent.
Shareholder Proposalsproposal 
Proposal 5: Fair treatment of shareholder nomineesProposal 5: The Board unanimously recommends a vote AGAINST this proposal for the reasons discussed in the Board’s statement of opposition below. What are you voting on? The shareholder proposal will be voted on at the annual meeting only if properly presented by or on behalf of the shareholder proponent. Shareholder Proposalproposal for the 2021 Annual Meeting2024 annual meetingThe company has been advised that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278,James McRitchie, 9295 Yorkship Court, Elk Grove, CA 95758, beneficial owner of 100 shares or more of the company’s common stock, intends to submit the proposal set forth below at the annual meeting. 
Proposal 45 – Adopt a MainstreamFair Treatment of Shareholder Right – Written ConsentNominees Resolved Shareholders request the Board of Directors adopt and disclose a policy stating how it will exercise its discretion to treat shareholders’ nominees for board membership equitably and avoid encumbering such nominations with unnecessary administrative or evidentiary requirements. Supporting Statement In the view of the proponent, the Board should consider exercising its discretion under the proposed policy toward ensuring that our boardpaperwork requirements governing the nomination and election of directors takeshould generally treat shareholder and Board nominees equitably; requirements regarding endorsements and solicitations should not unnecessarily encumber the necessary stepsnomination process. Consideration should also be given under the policy 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 initiaterepealing any appropriate topic for written consent.
Thisadvance notice bylaw provisions imposing additional requirements inconsistent with this proposal, topic won 95%-support at Dover Corporation and 88%-support at AT&T. Written consent allows shareholders to vote on important matters,unless legally required, such as electing new directors that can arise between annual meetings.
A shareholder right to act by written consent still affords Cognizant Technology Solutions management strong deference for any lingering status quo management mentality 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 CTSH annual meeting to equal a majority from the CTSH shares outstanding.
And Mr. Zein Abdalla, Chair of the CTSH Governance Committee, seemed to be totally unaware as late as 2020 that written consent can be structured so that all shareholders get notice.
The right for shareholders to act by written consent is gaining acceptance as a more important right than the right to call a special meeting. The directors at Intel apparently thought they could divert shareholder attention away from written consent by making it less difficult for shareholders to call a special meeting. However Intel shareholders responded with greater support for written consent in 2019 compared to 2018.
The year 2020 marked the near extinction of in-person shareholder meetings. The new style of tightly controlled online shareholder meetings makes the shareholder right to act by written consent all the more important because almost everything is optional with online shareholder meetings. For instance management reporting on the state of the company is optional. Also management answers to shareholder questions are optional even if management misleadingly asks for questions.
The Goodyear shareholder meeting was spoiled by a trigger-happy management mute button that was used to quash constructive shareholder criticism. AT&T would not even allow shareholders to speak.
Please see:
Goodyear’s virtual meeting creates issues with shareholder
https://www.crainscleveland.com/manufacturing/goodyears-virtual-meeting-creates-issues-shareholder
Please see:
AT&T investors denied a dial-in as annual meeting goes online
https://whbl.com/2020/04/17/att-investors-denied-a-dial-in-as-annual-meeting-goes-online/1007928/
And the CTSH brand of a shareholder right to call a special meeting is deceptive because all shares owned for less than one unbroken year are 100% disqualified.
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 a shareholder engagement wasteland.those requiring:
Please vote yes:
Adopt a Mainstream Shareholder Right -
Written Consent - Proposal 4• |  | | • | Nominees submit questionnaires regarding background and qualifications (other than as required in the Company’s certificate of incorporation or bylaws); | | • | Nominees submit to interviews with the Board or any committee thereof; | | • | Shareholders or nominees provide information that is already required to be publicly disclosed under applicable law or regulation; and | | • | Excessive or inappropriate levels of disclosure regarding nominees’ eligibility to serve on the Board, the nominees’ background, or experience. |
The legitimacy of Board power to oversee the executives of Cognizant Technology Solutions (Company) rests on the power of shareholders to elect directors:(1) [T]he unadorned right to cast a ballot in a contest for [corporate] office . . . is meaningless without the right to participate in selecting the contestants... To allow for voting while maintaining a closed candidate selection process thus renders the former an empty exercise.”(2) Burdening shareholder nominees can entrench incumbent directors and management. Laws and regulations overseen and enforced by the U.S. Securities and Exchange Commission, a neutral third party, ensure shareholders have pertinent information on nominating shareholders and nominees before executing proxies,(3) Advance notice bylaws can create hurdles for shareholders exercising their rights and can be used to conduct “fishing expeditions” to which board nominees are not subject. | 1 | https://ssrn.com/abstract=4565395 | | 2 | https://casetext.com/case/durkin-v-national-bank-of-olyphant | | 3 | https://www.ecfr.gov/current/title-17/chapter-11/part-240/subpart-A/subject-group-ECFR8c9733e13b955d6/section-240.14a-101 |
The Board’s Statement of OppositionCognizant 2024 Proxy statement 90
Substantially identical proposals have been rejected by the company’s shareholders at six of the last eight annual meetings, with 83% of shareholders voting against the proposal at the 2020 annual meeting. The board continues to believe that this proposal is not in the best interests of all shareholders, and that the proponent wastes shareholder time and company resources in continuing to submit substantially the same proposal year after year notwithstanding its having been repeatedly rejected by shareholders.
These practices delegitimize corporate activity because directors work on behalf of shareholders, who should be able to replace their own fiduciaries. Company interference in this process is especially dangerous because financial theory recommends that most shareholders diversify their portfolios. Such diversified investors have an interest in ensuring our Company does not profit from practices that threaten social and environmental systems upon which diversified portfolios depend.(4) Company directors influenced by executives, in contrast, may prioritize Company profitability over systems that are of critical importance to shareholders.(5) Accordingly, giving Company directors a gatekeeper role through a burdensome unequal nomination process threatens the interests of shareholders to nominate candidates free of management influence. Fair Treatment of Shareholder Nominees - Vote FOR Proposal 5 The Board’s statement of opposition | • | Our Board values shareholder input, and Cognizant has a strong track record of being proactive and engaged with our shareholders | | • | Our existing corporate governance policies and practices are already designed to promote the equitable treatment of shareholders’ director nominees | | • | Our procedures for director nominations by shareholders are consistent with industry standards and are designed to clearly and transparently elicit limited information that benefits all shareholders | | • | Director nominees selected by Cognizant undergo a rigorous vetting process, while shareholder nominees need only comply with the requirements set forth in our by-laws | | • | The effect of the proposal is vague, and the proposal mischaracterizes Cognizant’s existing corporate governance practices |
All shareholders are entitled to make informed decisions in director elections. Consistent with this principle, our advance notice and “proxy access” by-laws, which govern the information shareholders and/or their nominees are required to submit in connection with a director nomination, are designed to provide Cognizant and all of our shareholders with timely and relevant data regarding potential directors. Our Board believes that these requirements, which are designed to facilitate our compliance with the SEC’s disclosure rules and to prevent outside nominees from concealing key aspects of their agendas or interests from their fellow shareholders, are appropriately tailored and reasonable given the vital role that each director plays as a steward of your investment in Cognizant. Our Board values shareholder input, and Cognizant has a strong track record of being proactive and engaged with our shareholders. We participate in an ongoing dialogue with our shareholders throughout the year on a wide range of governance matters, including Board effectiveness and composition and best practices with respect to director skills and tenure. Reflecting the Board’s attention to these concerns, average tenure on our Board is only five years and the Board added four new directors in 2023 (although Ms. Domenici subsequently resigned from the Board in early 2024 in order to pursue an outside opportunity, at which time the size of the Board was decreased to 12). In addition, our declassified board structure and majority vote standard for uncontested director elections, and the absence of supermajority voting provisions in our Certificate of Incorporation and by-laws, serve as additional mechanisms to promote continued Board accountability. We believe that our shareholders recognized our efforts in this area when a similar proposal, from the same proponent, was rejected by approximately 80% of shareholders who voted at our 2023 annual meeting. Our existing corporate governance policies, by-laws and Delaware law already require and promote the equitable treatment of shareholder nominees. Our Corporate Governance Guidelines, as currently in effect, clearly state that the Governance and Sustainability Committee uses the same criteria for evaluating director candidates regardless of the source of referral. Similarly, our by-laws establish an equitable and transparent process for shareholder director nominees, generally consisting of requirements that have been repeatedly upheld by Delaware courts as valid and not inequitable. Further, Delaware law imposes upon our Board fiduciary duties to our shareholders to act on an informed basis in shareholders’ best interest, including in the context of assessing and recommending to shareholders whether to support or oppose any director candidate nominated by a shareholder. Our current director recruitment procedures are more rigorous than the process for shareholder nominations of director candidates. When the Board identifies emerging needs or seeks to fill an open seat, it conducts a broad and rigorous review of potential candidates. These reviews often last several months, or longer, and generally include the completion of detailed questionnaires, meetings with select members of the Board and professionally conducted background checks. In addition, our Corporate Governance Guidelines require the Governance and Sustainability Committee to annually review each incumbent director’s continuation on the Board, considering a variety of factors such as the mix of capabilities on the Board, the need to ensure appropriate refreshment and change on the Board and the diversity of the Board in terms of backgrounds, expertise, capabilities and leadership, among others. In contrast, shareholder nominees will be included on the ballot for an annual general meeting so long as the nomination complies with our by-laws’ informational and procedural requirements, and the Board generally cannot require the submission of additional information other than, as stated in the by-laws, when reasonably necessary for the limited purpose of determining the nominee’s eligibility for service as a director (in accordance with applicable law and our publicly available criteria for nomination as a director). Such informational requirements are standard market practice and are designed to provide greater transparency for both the Board and our shareholders when considering director nominees, and Delaware case law prohibits applying them inequitably or in any manner that unduly restricts shareholders’ rights. While we would welcome it if a shareholder-nominated candidate would be willing to go through the same extensive vetting process that the Board applies to its own director candidates, we do not believe that adding these requirements to our by-laws would be practical. The proposal is vague, contradictory and misleading, and there can be no assurance as to its ultimate effect. The proposal requests a policy standard that relies on vague and subjective terms such as “unnecessary,” “excessive” and “inappropriate.” For example, the proposal cites a | 4 | https://theshareholdercommons.com/wp-content/uploads/2022/09/Climate-Change-Case-Study-F1NAL.pdf | | 5 | https://ssrn.com/abstract=4056602 |
Cognizant 2024 Proxy statement 91 Tablerequirement to disclose information that is required to be disclosed under applicable law as an example of Contents
Shareholder Proposals > Shareholder Proposalsa “possible inequitable or burdensome requirement,” without explaining how it is inequitable or burdensome to require advance disclosure of information that a shareholder will be required to disclose by law. Nor does the proposal give any guidance as to how, or by whom, an informational or procedural requirement would be judged under the policy requested under the proposal. Thus, while the Board believes that our by-laws already establish an equitable and Nomineesappropriate process for shareholder nominations, the 2022 Annual Meeting
The company’s current practicepolicy requested by the proposal is vague and subjective. Further, the proposal is purportedly concerned with reducing barriers to entry for shareholder nominees, but either ignores or is unaware of the Board’s high standards and intensive due diligence with respect to Board-selected nominees. Finally, we believe the proposal is misleading in several respects, including its implication that beneficial owners of our common stock may not nominate director candidates, which is inconsistent with the procedures for such nominations set forth in our by-laws. Similarly, the proposal notes several inapplicable examples of what may be considered “inequitable practices,” but as discussed above, Cognizant’s by-laws do not include such practices with respect to shareholder action by written consent is consistent with market practice. An overwhelming majoritynominations and leave the Board no discretion to unilaterally impose such requirements on shareholder nominees.
For all of S&P 500 companies, 69%, either do not permit shareholdersthese reasons, the Board urges you to act by written consent or require that any shareholder action by written consent be unanimous (which is effectively the same as not permitting action by written consent for a large public company). As such, most other large public companies in fact do not permit the kind of shareholder action by written consent requested by the proponent and the board believes that the company’s current practice is consistent with market practice.vote “No” on this proposal. The company’s existing corporate governance practices already ensure shareholder democracyCognizant 2024 Proxy statement 92
Shareholder proposals and board accountability. Implementation of this proposal is unnecessary given the company’s other governance practices, including our by-law provisions that (i) permit shareholders owning 10% of our common stock for one year to call special meetings and (ii) permit shareholder proxy access, meaning a group of shareholders who have owned at least 3% of the company’s stock for at least 3 years may submit up to 2 director nominees or 25% of the board, whichever is greater, for inclusion in our proxy statement.Written consent can result in an unfair, secret and unsound process. Action by written consent as set forth in this proposal would allow a limited group of shareholders to act on potentially significant matters, without a meeting, without prior notice to all shareholders, and without an opportunity for fair and open discussion among shareholders. Given this, the board believes that such action by written consent would be an unfair, secretive and unsound process. By contrast, at meetings of shareholders, all shareholders have the opportunity to express views on proposed actions, participate in deliberations and vote, and such meetings occur at a time and date announced publicly in advance of the meeting. As such, the board believes that the company’s existing right of shareholders holding 10% of our common stock for one year to call a special meeting represents a much better process, while action by written consent is not in the best interest of shareholders.
Shareholder Proposals and Nominees for the 2022 Annual Meeting2025 annual meeting
| | | | Rule 14a-8 Shareholder
Proposals | | Director Nominees Via Proxy Access | | Other Proposals or Director Nominees | | | | | Rule 14a-8 ShareholderDescription | | | | | | Proposals | Director Nominees Via Proxy Access | Other Proposals or Director Nominees | | | Description | SEC rules permit shareholders to submit proposals for inclusion in our proxy statement if the shareholder and the proposal meet the requirements specified in Rule 14a-8 under the Exchange Act (“Rule 14a-8”). | | Our by-laws permit a group of shareholders who have owned a significant amount of the company’s common stock (at least 3%) for a significant amount of time (at least three years) to submit director nominees (up to 25% of the boardBoard and in any event not less than two directors) for inclusion in our proxy statement if the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws. | | Our by-laws require that any shareholderproposal, including a director nomination, that is not submitted for inclusion in next year’s proxy statement (either under Rule 14a-8 or our proxy access by-laws), but is instead sought to be presented directly at such meeting, must be received by our secretaryCorporate Secretary in writing not earlier than the close of businesson the 120thday and not later than the closeof business on the 90thday prior to theanniversary of the preceding year’s annual meeting. In addition, shareholders who intend to solicit proxies in support of director nominees other than the company’s nominees must comply with the requirements of SEC Rule 14a-19. | | | | When | | Any shareholderproposals submitted in accordance with Rule 14a-8 must be received at our principal executiveoffices no later thanthe close of businesson December 22,2021. | Notice of director nominees under theseby-law provisions must be received noearlier than November 22, 2021 andno later than the close of business on , 2024. | | Notice of director nominees under these by-law provisions must be received December 22, 2021no earlier than , 2024 and no later than the close of business on , 2024. In the event that thedate of the 20222024 annual meeting is more than 30 days before or more than 70 days after June 1, 2022,4, 2025, then our secretaryCorporate Secretary must receive such written notice not earlier than the close of business on the150th 150th day prior to the 20222025 annual meetingand not later than the close of business onthe later of the 120th 120th day prior to the 20222025 annual meeting or the 10th 10th day followingthe day on which public announcement of the date of such meeting is first made by the company. | | Shareholder proposals or directornominations submitted under these by-lawprovisions must be received no earlier thanthe close of business on February 1, 20224, 2025 and no later than the close of business onMarch 3, 20226, 2025. In the event that the date ofthe 20222025 annual meeting is more than 30 days before or more than 70 days after June 1, 2022,4, 2025, then our secretaryCorporate Secretary must receive any such proposal not earlier than the close ofbusiness on the 120th 120th day prior to the 20222025 annual meeting and not later than the close ofbusiness of the later of the 90th 90th day prior to the2022 2025 annual meeting or the 10th 10th day followingthe day on which public announcement of the date of such meeting is first made by the company.The information required by SEC Rule 14a-19 must be provided no later than April 5, 2025. In the event that the date of the 2025 annual meeting is more than 30 calendar days from the previous year, then the Rule 14a-19 notice must be provided by the later of 60 calendar days prior to the date of the annual meeting or the 10th calendar day following the date on which public announcement of the date of such meeting is first made by the company. | | | | Where | Proposal or notice should be sent to our secretary. See “Helpful Resources” on page 73What. | | | What | Proposals must conform to and include the information required by Rule 14a-8. | | Notice or proposal must include the information required by our by-laws, a copy of which is available on our website or upon request to our secretary.Corporate Secretary. See “Helpful Resources”resources” on page 73103. | | Notice must include the information required by our by-laws, a copy of which is available on our website or upon request to our Corporate Secretary. See “Helpful resources” on page 103. In addition, notice under Rule 14a-19 must include the information required by Rule 14a-19. | | | | Please NoteWhere | | Proposal or notice should be sent to our Corporate Secretary. See “Helpful resources” on page 103. | | | Please
Note | | SEC rules permit management to vote proxies in its discretion in certain cases if the shareholder does not comply with the above deadlines and, in certain other cases, notwithstanding the shareholder’s compliance with these deadlines. The company reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with the requirements set forth above or other applicable requirements. We intend to file a proxy statement and WHITE proxy card with the SEC in connection with our solicitation of proxies for our 2025 annual meeting. Shareholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed with the SEC without charge from the SEC’s website at: www.sec.gov. | | | | | | | | |
Cognizant 2024 Proxy statement 93 Table of Contents
Additional Informationinformation Proxy Statementstatement and Proxy Solicitationproxy solicitation About This Proxy Statementthis proxy statement and the Annual Meetingannual meeting This proxy statement is furnished in connection with the solicitation by the boardBoard of proxies to be voted at our annual meeting to be held on Tuesday, June 1, 2021,4, 2024, at 9:30 am Eastern Time, via live webcast, and at any continuation, postponement or adjournment thereof. Holders of record of shares of our Class A common stock (“common stock”) as of April 5, 2021,8, 2024, the record date, will be entitled to notice of and to vote at the annual meeting and any continuation, postponement or adjournment thereof. As of the record date, there were 528,532,227497,198,884 shares of common stock issued and outstanding and entitled to vote at the annual meeting. Each share of common stock is entitled to one vote on any matter presented to shareholders at the meeting. At the annual meeting, our shareholders will be asked to vote on the management proposals and shareholder proposalproposals set forth on pages 4 7and to 510. The boardBoard recommends that you vote your shares as indicated on pages 4 7and to 510. If you return a properly completed proxy card, or vote your shares by telephone or over the Internet, your shares of common stock will be voted on your behalf as you direct. If not otherwise specified, the shares of common stock represented by the proxies will be voted in accordance with the board’sBoard’s recommendations set forth on pages 4 7and to 510. We know of no other business that will be presented at the annual meeting. If any other matter properly comes before the shareholders for a vote at the annual meeting, however, the proxy holders named on the company’s proxy card will vote your shares in accordance with their best judgment. Notice of Internet Availabilityinternet availability of Proxy Materialsproxy materials As permitted by SEC rules, Cognizant is making this proxy statement and its 20202023 Annual Report available to certain of its shareholders electronically via the Internet. On or about April 21, 2021,, 2024, we mailed to these shareholders a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) containing instructions on how to access this proxy statement and our 20202023 Annual Report and vote online. If you received an Internet Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you specifically request them. Instead, the Internet Notice instructs you on how to access and review all of the important information contained in this proxy statement and 20202023 Annual Report. The Internet Notice also instructs you on how you may submit your proxy over the Internet. If you received an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained on the Internet Notice. Printed Copiescopies of Our Proxy Materialsour proxy materials and Householdinghouseholding Some of our shareholders received printed copies of our proxy statement, 20202023 Annual Report and proxy card. If you received printed copies of our proxy materials, then instructions regarding how you can vote are contained on the proxy card included in the materials. The SEC’s rules permit us to deliver a single set of proxy materials to one address shared by two or more of our shareholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one set of proxy materials to multiple shareholders who share an address, unless we received contrary instructions from the impacted shareholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the proxy materials, as requested, to any shareholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the proxy materials, contact Broadridge Financial Solutions, Inc. (“Broadridge”) at 866-540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. If you are currently a shareholder sharing an address with another shareholder and wish to receive only one copy of future proxy materials for your household, please contact Broadridge at the above phone number or address. Solicitation of Proxiesproxies The accompanying proxy is solicited by and on behalf of the board,Board, whose meeting notice is included with this proxy statement, and the entire cost of such solicitation will be borne by us. In addition to the use of mail, proxies may be solicited by personal interview, telephone, e-mail, text and facsimile by our directors, officers and other employees who will not be specially compensated for these services. We have engaged Morrow Sodali Corporate LLC to assist us with the solicitation of proxies. We expect to pay Morrow Sodali LLC a fee of $18,000 plus reimbursement for out-of-pocket expenses for its services. We will also request that brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial owners of shares held by such brokers, nominees, custodians and other fiduciaries. We will reimburse such persons for their reasonable expenses in connection therewith. Table of Contents
Additional Information > Annual Meeting Q&A
Communications to the Board from Shareholdersshareholders Under procedures approved by a majority of our independent directors, our chair, general counselChair, Chief Legal Officer and secretaryCorporate Secretary are primarily responsible for monitoring communications from shareholders and, if they relate to important substantive matters and include suggestions or comments that our chair, general counselChair, Chief Legal Officer and secretaryCorporate Secretary consider to be important for the directors to know, providing copies or summaries to the other directors. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications. The boardBoard will give appropriate attention to written communications that are submitted by shareholders, and will respond if and as appropriate. Shareholders who wish to send communications on any topic to the boardBoard should address such communications to the boardBoard or our general counselChief Legal Officer and secretary.Corporate Secretary. See “Helpful Resources”resources” on page 73103. Cognizant 2024 Proxy statement 94 Annual Meetingmeeting Q&A Questions and Answers Aboutanswers about the 2021 Annual Meeting2023 annual meeting Who is entitled to vote at the annual meeting?The record date for the annual meeting is April 5, 2021.8, 2024. You are entitled to vote at the annual meeting only if you were a shareholder of record at the close of business on that date, or if you hold a valid proxy for the annual meeting. The only class of stock entitled to be voted at the annual meeting is our common stock. Each outstanding share of common stock is entitled to one vote for all matters before the annual meeting. At the close of business on the record date, there were 528,532,227497,198,884 shares of common stock issued and outstanding and entitled to vote at the annual meeting. What is the difference between being a “record holder” and holding shares in “street name”?A record holder holds shares in his or her name. Shares held in “street name” means shares that are held in the name of a bank or broker on a person’s behalf. Am I entitled to vote if my shares are held in “street name”?Yes. If your shares are held by a bank or a brokerage firm, you are considered the “beneficial owner” of those shares held in “street name”. If your shares are held in street name, these proxy materials are being provided to you by your bank or brokerage firm, along with a voting instruction card if such bank or brokerage firm received printed copies of our proxy materials. As the beneficial owner, you have the right to direct your bank or brokerage firm how to vote your shares, and the bank or brokerage firm is required to vote your shares in accordance with your instructions. If your shares are held in street name, and you wish to vote your shares at the annual meeting, you may join the annual meeting live webcast following the instructions provided under “How do I join the annual meeting live webcast?” below. How many shares must be present to hold the annual meeting?A quorum must be present at the annual meeting for any business to be conducted. The presence at the annual meeting, via live webcast or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum. Who can attend the annual meeting live webcast?You may attend the annual meeting only if you are a Cognizant shareholder who is entitled to vote at the annual meeting, or if you hold a valid proxy for the annual meeting. How do I join the annual meeting live webcast?The annual meeting will be a virtual meeting of shareholders conducted via a live webcast that provides shareholders the same rights and opportunities to participate as they would have at an in-person meeting. We believe that a virtual meeting will provide expanded shareholder access and participation and improved communications. You will be able to vote your shares electronically at the virtual meeting. To attend and submit your questions during the virtual meeting, please visit www.virtualshareholdermeeting.com/CTSH2021.CTSH2024. To participate and vote during the annual meeting, you will need the 16-digit control number included on your Internet Notice or on your proxy card. Beneficial shareholders who do not have a control number may gain access to and vote at the meeting by logging in to their broker, brokerage firm, bank or other nominee’s website and selecting the shareholder communications mailbox to access the meeting; instructions should also be provided on the voting instruction card provided by your broker, bank, or other nominee. If you lose your 16-digit control number, you may join the annual meeting as a “Guest”, but you will not be able to vote, ask questions or access the list of shareholders as of the record date. If you encounter any difficulties accessing the virtual meeting during check-in or the meeting, please call the technical support number that will be posted on the virtual shareholder meeting log-in page. What if a quorum is not present at the annual meeting?If a quorum is not present at the scheduled time of the annual meeting, the chairChair of the meeting is authorized by our by-laws to adjourn the meeting without the vote of shareholders. Table of Contents
Will there be a question and answer session during the annual meeting?As part of the annual meeting, we will hold a live question and answer session, during which we intend to answer appropriate questions submitted during the meeting that are pertinent to the company and the meeting matters. If there are matters of individual concern to a shareholder and not of general concern to all shareholders, or if a question posed was not otherwise answered, we provide an opportunity for shareholders to contact us separately after the meeting through our investor relations website (see page 73103). Only shareholders that have accessed the annual meeting as a shareholder (rather than a “Guest”) by following the procedures outlined in “How do I join the annual meeting live webcast?” on page 6595 will be permitted to submit questions during the annual meeting. Each shareholder is limited to no more than two questions. Questions should be succinct and only cover a single topic. We will not address questions that are, among other things: | • | not pertinent to the business of the company or to the business of the annual meeting; | | • | related to material non-public information of the company, including the status or results of our business since our last Quarterly Report on Form 10-Q; |
Cognizant 2024 Proxy statement 95 | • | related to any pending, threatened or ongoing litigation; | | • | related to personal grievances; | | • | derogatory references to individuals or that are otherwise in bad taste; | | • | substantially repetitious of questions already made by another shareholder; | | • | in excess of the two question limit; | | • | in furtherance of the shareholder’s personal or business interests; or | | • | out of order or not otherwise suitable for the conduct of the annual meeting as determined by the chairChair of the meeting or secretaryCorporate Secretary in their reasonable judgment. |
Additional information regarding the question and answer session will be available in the “Rules of Conduct” available on the annual meeting webpage for shareholders that have accessed the annual meeting as a shareholder (rather than a “Guest”) by following the procedures outlined above in “How do I join the annual meeting live webcast?” on page 6595. What does it mean if I receive more than one Internet Notice or more than one set of proxy materials?It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each Internet Notice or set of proxy materials, please submit your proxy by phone, via the Internet, or, if you received printed copies of the proxy materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope. How do I vote by proxy?We recommend that shareholders vote by proxy even if they plan to attend and vote during the annual meeting. Each shareholder may appoint only one proxy holder or representative to attend the meeting on his or her behalf. If you are a shareholder of record, there are three ways to vote by proxy: | • | Use the Internet.You can vote over the Internet at www.proxyvote.com by following the instructions on the Internet Notice or proxy card; | | • | Call. You can vote by telephone by calling +1-800-690-6903 and following the instructions on the proxy card; or | | • | Mail Your Proxy Card.You can vote by mail by signing, dating and mailing the proxy card, which you may have received by mail. |
Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on May 31, 2021.June 3, 2024. The above phone number will work internationally but is only toll-free for callers within the U.S. and Canada. If your shares are held in street name through a bank or broker, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares to be voted. Telephone and Internet voting also will be offered to shareholders owning shares through certain banks and brokers. Can I revoke my proxy or change my vote after I submit my proxy?Yes. If you are a registered shareholder, you may revoke your proxy and change your vote by: | • | submitting a duly executed proxy bearing a later date; | | • | granting a subsequent proxy through the Internet or telephone; | | • | giving written notice of revocation to the secretaryCorporate Secretary of Cognizant prior to the annual meeting; or | | • | attending and voting during the annual meeting live webcast. |
Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance at the annual meeting itself will not revoke your proxy unless you give written notice of revocation to the secretaryCorporate Secretary before your proxy is voted or you vote at the annual meeting. If your shares are held in street name, you may change or revoke your voting instructions by following the specific directions provided to you by your bank or broker. Table of Contents
Additional Information > Cognizant’s Annual Report on Form 10-K
Where do I direct requests for materials mentioned in this proxy statement and how do I contact Cognizant’s secretary?Corporate Secretary? Please direct requests for materials mentioned in this proxy statement or other inquiries to our secretary.Secretary. See “Helpful Resources”resources” on page 73103 for how to contact our secretary.Corporate Secretary. Whom should I contact if I have questions or need assistance voting?Please contact Morrow Sodali LLC, our proxy solicitor assisting us in connection with the annual meeting. Shareholders in the United States may call toll free at 1-800-607-0088.+1-800-607-0088. Banks and brokers and shareholders located outside of the United States may call collect at 1-203-658-9400.+1-203-658-9400. Who will count the votes?Representatives of Broadridge Financial Solutions, Inc.,will tabulate the votes cast at our annual meeting, and American Election Services, LLC will act as the independent inspector of election, will tabulate and certify the votes.election. What if I do not specify how my shares are to be voted?If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the board.Board. The board’sBoard’s recommendations for each proposal are set forth on pages 47 and to5 10, as well as with the Cognizant 2024 Proxy statement 96 description of each proposal in this proxy statement. The persons named as proxies are further authorized to vote in their discretion (1) for the election of any person to the Board if any nominee named in this proxy statement becomes unable to serve or for good cause will not serve, (2) on any matter that the Board did not know would be presented at the annual meeting by a reasonable time before the proxy solicitation was made, and (3) on such other business (other than the proposals contained in this proxy statement) as may properly come before the meeting or any continuation, postponement or adjournment thereof. How many votes are required for the approval of the proposals to be voted upon and how will abstentions and broker non-votes be treated?
| | | | Effect of Abstentions | Proposal | | Votes required | | and Broker Non-Votes | Proposal 1: Election of directors | | Votes cast “for” exceed
votes cast “against”. | | No effect. | Proposal 2: Advisory (non-binding) vote on executive compensation (Say-on-Pay) | | Majority of votes cast. | | No effect. | Proposal 3: Ratification of appointment of independent registered publicaccounting firm | | Majority of votes cast. | | Abstentions will have no effect; no broker non-votes expected. | Proposal 4: Shareholder proposal regarding written consent | | Majority of votes cast. | | No effect. |
What is an abstention and how will abstentions be treated?An “abstention” represents a shareholder’s affirmative choice to decline to vote on a proposal. Abstentions are counted as present and entitled to vote for purposes of determining a quorum. Abstentions will have no effect on any of the proposals before the annual meeting, other than Proposal 4, Adoption of the company’s Amended and Restated Certificate of Incorporation, where abstentions will have the same effect as a vote against the proposal. Will my shares be voted if I do not provide my proxy? If you hold your shares directly in your own name, they will not be voted if you do not provide a proxy or attend the annual meeting. WhatYour shares may be voted under certain circumstances if they are held by a bank or brokerage firm in “street name.” Brokers may have the authority to vote shares not voted by customers on certain “routine” matters. Under the New York Stock Exchange (“NYSE”) rules, your bank or brokerage firm is prohibited from voting your shares on non-routine items (referred to as a “broker non-vote”) if you have not given your bank or brokerage firm voting instructions on that matter. Note that whether a proposal is considered routine or non-routine is subject to NYSE rules and final determination by the stock exchange. Even with respect to routine matters, some banks and brokerage firms are choosing not to exercise discretionary voting authority. As a result, we urge you to direct your bank or brokerage firm how to vote your shares on all proposals to ensure that your vote is counted.
In the case of broker non-votes, and do they count for determiningin cases where you abstain from voting on a quorum? Generally, broker non-votes occurmatter when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal becausepresent at the broker (i) has not received voting instructions from the beneficial ownerannual meeting and (ii) lacks discretionary voting powerentitled to vote, those shares. Ashares will still be counted for purposes of determining of a quorum. In tabulating the voting results for any particular proposal, shares that constitute broker isnon-votes are not considered entitled to vote shares heldon that proposal, but are considered “outstanding” for a beneficial owner on routine matters, such aspurposes of Proposal 3 herein.
How many votes are required for the ratificationapproval of the appointment of PwC as our independent registered public accounting firm, without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, we expect that a broker will not be entitled to vote shares held for a beneficial owner on all of the other proposals to be voted on at the annual meeting. Brokerupon and how will abstentions and broker non-votes count for purposes of determining whether a quorum is present.be treated? | Proposal | | The Board’s
recommendation | | Votes required | | Effect of abstentions
and broker non-votes | | | Proposal 1: Election of 12 directors | | FOR each director nominee | | Votes cast “for” exceed votes cast “against”. | | No effect. | | | Proposal 2: Advisory (non-binding) vote on executive compensation
(Say-on-Pay) | | FOR | | Majority of votes cast. | | No effect. | | | Proposal 3: Adoption of the company’s Amended and Restated Certificate of Incorporation | | FOR | | Majority of shares outstanding as of the record date and entitled to vote thereon. | | Equivalent to a vote against. | | | Proposal 4: Ratification of appointment of independent registered public accounting firm | | FOR | | Majority of votes cast. | | Abstentions will have no effect; no broker non-votes expected. | | | Proposal 5: Shareholder proposal, if properly presented at the meeting | | AGAINST | | Majority of votes cast. | | No effect. | | | | | | | | | | |
Where can I find the voting results of the annual meeting of shareholders?We plan to announce preliminary voting results at the annual meeting and we will report the final results in a Current Report on Form 8-K, which we intend to file with the SEC shortly after the annual meeting. Cognizant’s Annual Report on Form 10-KA copy of Cognizant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“2020 Annual Report”),2023, including financial statements and schedules thereto but not including exhibits, as filed with the SEC, will be sent to any shareholder of record on April 5, 2021,8, 2024, without charge, upon written request addressed to our secretary.Corporate Secretary. See “Helpful Resources”resources” on page 73103. A reasonable fee will be charged for copies of exhibits. You may also access this proxy statement and our 20202023 Annual Report at www.proxyvote.com and at www.cognizant.com. Cognizant 2024 Proxy statement 97 Table of Contents
Forward-Looking StatementsForward-looking statements and Non-GAAP Financial Measuresnon-GAAP financial measures
Forward-looking statements Forward-Looking Statements
This proxy statement and the letter to shareholders included with this proxy statement include statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to our expectations regarding our company vision and strategy (including efforts to accelerate growth and sustain commercial momentum, become an employer of choice and simplify our operations to improve efficiencies), our Sustainability and diversity and inclusion commitments, the growth of our business, including our deployment of AI-based technologies in client offerings and our own internal operations and the development of our large deals capabilities, and our anticipated financial performance. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ materially from those expressed or implied include general economic and geopolitical conditions globally, the competitive and rapidly changing nature of the markets we compete in, the competitive marketplace for talent and its impact on employee recruitment and retention, legal, reputational and financial risks resulting from cyberattacks, the effectiveness of business continuity plans during the COVID-19 pandemic, the impact of the COVID-19 pandemic,future pandemics, epidemics or other outbreaks of disease, changes in the regulatory environment, including with respect to immigration and taxes, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Cognizant undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities law. Non-GAAP Financial Measuresfinancial measures Portions of our disclosure include non-GAAP financial measures. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of our non-GAAP financial measures to the corresponding GAAP measures set forth below, should be carefully evaluated. In 2018, we announced a plan to modify our non-GAAP financial measures. Our historical non-GAAP financial measures non-GAAP operating margin, non-GAAP income from operationsAdjusted Operating Margin and non-GAAP diluted earnings per share (EPS), excluded stock-based compensation expense, acquisition-relatedAdjusted Income From Operations exclude unusual items, such as the Class Action Settlement Loss in 2021 and NextGen charges and unusual items.in 2023. Our non-GAAP dilutedfinancial measure Adjusted Diluted EPS additionally excluded net non-operating foreign currency exchange gains or lossesexcludes unusual items, such as the Class Actions Settlement Loss in 2021, the effect of recognition in the third quarter of 2022 of an income tax benefit related to a specific uncertain tax position that was previously unrecognized in our prior-year consolidated financial statements and the tax impacts of all applicable adjustments. Our new non-GAAP financial measures, adjusted operating margin, adjusted income from operationsNextGen charges in 2023, and adjusted diluted EPS, exclude unusual items. Additionally, adjusted diluted EPS excludes net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. The income tax impact of each item excluded from Adjusted Diluted EPS is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Additionally, we introduced two new non-GAAP financial measures, free cash flow and constant currency revenue growth. Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment. Constant currency revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates measured against the comparative period’s reported revenues. Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment.
We believe providing investors with an operating view consistent with how we manage the company provides enhanced transparency into our operating results. For our internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for our executive officers and for making comparisons of our operating results to those of our competitors. Therefore, it is our belief that the use of non-GAAP financial measures excluding certain costs provides a meaningful supplemental measure for investors to evaluate our financial performance. We believe that the presentation of our non-GAAP financial measures along with reconciliations to the most comparable GAAP measure, as applicable, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations. A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring such as our net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from our non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures. Cognizant 2024 Proxy statement 98 Table of Contents
Additional Information > Forward-Looking Statements and Non-GAAP Financial Measures
Reconciliation to GAAP Financial Measuresfinancial measures The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the years indicatedindicated. | | (Dollars in millions, except per share data) | | 2018 | | % of
Revenues | | | 2019 | | | % of
Revenues | | | 2020 | | | % of
Revenues | | | | | GAAP income from operations and operating margin | | $ | 2,801 | | | | 17.4 | % | | $ | 2,453 | | | | 14.6 | % | | $ | 2,114 | | | | 12.7 | % | | | | Realignment charges1 | | | 19 | | | | 0.1 | | | | 169 | | | | 1.0 | | | | 42 | | | | 0.3 | | | | | 2020 Fit for Growth Plan restructuring charges2 | | | — | | | | — | | | | 48 | | | | 0.3 | | | | 173 | | | | 1.0 | | | | | COVID-19 charges3 | | | — | | | | — | | | | — | | | | — | | | | 65 | | | | 0.4 | | | | | Incremental accrual related to the India Defined Contribution Obligation 4 | | | — | | | | — | | | | 117 | | | | 0.7 | | | | — | | | | — | | | | | Initial funding of Cognizant U. S. Foundation5 | | | 100 | | | | 0.6 | | | | — | | | | — | | | | — | | | | — | | | | | Adjusted income from operations and adjusted operating margin | | $ | 2,920 | | | | 18.1 | % | | $ | 2,787 | | | | 16.6 | % | | $ | 2,394 | | | | 14.4 | % | | | | Stock-based compensation expense 6 | | | 267 | | | | 1.6 | | | | — | 14 | | | — | 14 | | | — | 14 | | | — | 14 | | | | Acquisition-related charges7 | | | 158 | | | | 1.0 | | | | — | 14 | | | — | 14 | | | — | 14 | | | — | 14 | | | | Non-GAAP income from operations and non-GAAP operating margin | | $ | 3,345 | | | | 20.7 | % | | | — | 14 | | | — | 14 | | | — | 14 | | | — | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP diluted EPS | | $ | 3.60 | | | | | | | $ | 3.29 | | | | | | | $ | 2.57 | | | | | | | | | Effect of realignment charges, 2020 Fit for Growth Plan restructuring charges, COVID-19 charges, incremental accrual related to the India Defined Contribution Obligation and initial funding of Cognizant U. S. Foundation, as applicable, pre-tax | | | 0.20 | | | | | | | | 0.60 | | | | | | | | 0.52 | | | | | | | | | Effect of non-operating foreign currency exchange losses (gains), pre-tax 8 | | | 0.26 | | | | | | | | 0.11 | | | | | | | | 0.22 | | | | | | | | | Tax effect of above adjustments9 | | | (0.03 | ) | | | | | | | (0.15 | ) | | | | | | | (0.15 | ) | | | | | | | | Tax on Accumulated Indian Earnings10 | | | — | | | | | | | | — | | | | | | | | 0.26 | | | | | | | | | Effect of the equity method investment impairment11 | | | — | | | | | | | | 0.10 | | | | | | | | — | | | | | | | | | Effect of the India Tax Law12 | | | — | | | | | | | | 0.04 | | | | | | | | — | | | | | | | | | Effect of net incremental income tax expense related to the Tax Reform Act13 | | | (0.01 | ) | | | | | | | — | | | | | | | | — | | | | | | | | | Adjusted diluted EPS | | $ | 4.02 | | | | | | | $ | 3.99 | | | | | | | $ | 3.42 | | | | | | | | | Effect of stock-based compensation expense and acquisition-related charges, pre-tax | | | 0.73 | | | | | | | | 0.75 | | | | | | | | — | 14 | | | | | | | | Tax effect of stock-based compensation expense and acquisition-related charges9 | | | (0.18 | ) | | | | | | | (0.16 | ) | | | | | | | — | 14 | | | | | | | | Non-GAAP diluted EPS | | $ | 4.57 | | | | | | | $ | 4.58 | | | | | | | | — | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net cash provided by operating activities | | $ | 2,592 | | | | | | | $ | 2,499 | | | | | | | $ | 3,299 | | | | | | | | | Purchases of property and equipment | | | (377 | ) | | | | | | | (392 | ) | | | | | | | (398 | ) | | | | | | | | Free cash flow | | $ | 2,215 | | | | | | | $ | 2,107 | | | | | | | $ | 2,901 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions, except per share data) | 2021 | | % of
Revenues | | 2022 | % of
Revenues | | 2023 | % of
Revenues | | GAAP income from operations and operating margin | $2,826 | | 15.3% | | $2,968 | 15.3% | | $2,689 | 13.9% | | NextGen charges1 | — | | — | | — | — | | 229 | 1.2 | | Class Action Settlement Loss2 | 20 | | 0.1 | | — | — | | — | — | Adjusted income from operations and adjusted operating margin | $2,846 | | 15.4% | | $2,968 | 15.3% | | $2,918 | 15.1% | | | | | | | | | | | | | GAAP diluted EPS | $4.05 | | | | $4.41 | | | $4.21 | | | Effect of the above adjustments, pre-tax | 0.04 | | | | — | | | 0.45 | | | Effect of non-operating foreign currency exchange losses (gains), pre-tax3 | 0.03 | | | | (0.01) | | | — | | | Tax effect of above adjustments4 | — | | | | 0.07 | | | (0.11) | | | Effect of recognition of income tax benefit related to an uncertain tax position5 | — | | | | (0.07) | | | — | | | Adjusted diluted EPS | $4.12 | | | | $4.40 | | | $4.55 | | | | | | | | | | | | | | Net cash provided by operating activities | $2,495 | | | | $2,568 | | | $2,330 | | | Purchases of property and equipment | (279) | | | | (332) | | | (317) | | | Free cash flow | $2,216 | | | | $2,236 | | | $2,013 | | | | | | | | | | | | |
1 | As During 2023, as part of our realignmentthe NextGen program, we incurred costs associated with our 2019 CEO transition and the departure of our former president, employee separation, costs, employee retention costsfacility exit and professional fees, as applicable.other costs. See Note 4 to the Consolidated Financial Statementsour consolidated financial statements in our 20202023 Annual Report. | 2 | As part of our 2020 Fit for Growth plan, we incurred certain employee separation, employee retention and facility exit costs and other charges, as applicable. See Note 4 to the Consolidated Financial Statements in our 2020 Annual Report. | 3 | In 2020, we incurred costs in response to the COVID-19 pandemic, including a one-time bonus to our employees at the designation of associate and below in India and the Philippines and certain costs to enable our employees to work remotely and provide medical staff and additional cleaning services for our facilities. Most of the costs related to the pandemic are reported in “Cost of revenues” in our Consolidated Statements of Operations in our 2020 Annual Report. | 4 | In 2019, During 2021, we recorded an accrual of $117 million related to certain statutory defined contribution obligations of employees and employers in India (the “India Defined Contribution Obligation”) as further described in Note 15 to the Consolidated Financial Statements in our 2020 Annual Report. | 5 | In 2018, we provided $100 million of initial funding to Cognizant U.S. Foundation. This cost is reporteda Class Action Settlement Loss in “Selling, general and administrative expenses” in our Consolidated Statements of Operationsconsolidated financial statements. See Note 15 to our consolidated financial statements in our 20202021 Annual Report. |
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6 | Stock-based compensation expense reported in: |
| | | For the years ended | | | | December 31, | | (in millions) | | 2018 | | | 2019 | | | 2020 | | | Cost of revenues | | $ | 62 | | | | —14 | | | | —14 | | | Selling, general and administrative expenses | | | 205 | | | | —14 | | | | —14 | |
7 | Acquisition-related charges include amortization of purchased intangible assets included in the depreciation and amortization expense line on our Consolidated Statements of Operations in our 2020 Annual Report, external deal costs, acquisition-related retention bonuses, integration costs, changes in the fair value of contingent consideration liabilities, charges for impairment of acquired intangible assets and other acquisition-related costs, as applicable. | 8 | 3 Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in “Foreign currency exchange gains (losses), net” in our Consolidated Statementsconsolidated statements of Operationsoperations in our 20202023 Annual Report. | 9 | 4 Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income:income. The effective tax rate related to non-operating foreign currency exchange gains and losses varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions. As such, the income tax effect of non-operating foreign currency exchange gains and losses shown in the below table may not appear proportionate to the net pre-tax foreign currency exchange gains and losses reported in our consolidated statements of operations in our 2023 Annual Report. |
| | | For the years ended | | | | December 31, | | (in millions) | | 2018 | | | 2019 | | | 2020 | | | Non-GAAP income tax benefit (expense) related to: | | | | | | | | | | | | | | Realignment charges | | $ | 5 | | | $ | 43 | | | $ | 11 | | | 2020 Fit for Growth Plan restructuring charges | | | — | | | | 13 | | | | 45 | | | COVID-19 charges | | | — | | | | — | | | | 17 | | | Foreign currency exchange gains and losses | | | (12 | ) | | | (1 | ) | | | 6 | | | Incremental accrual related to the India Defined Contribution Obligation | | | — | | | | 31 | | | | — | | | Initial funding of Cognizant U.S. Foundation | | | 28 | | | | — | | | | — | | | Stock-based compensation expense | | | 66 | | | | 32 | | | | —14 | | | Acquisition-related charges | | | 38 | | | | 55 | | | | —14 | |
| (in millions) | For the years ended December 31, | | 2021 | 2022 | 2023 | | Non-GAAP income tax benefit (expense) related to: | | | | | NextGen charges | $— | $— | $59 | | Class Action Settlement Loss | 6 | — | — | | Foreign currency exchange gains and losses | (5) | (39) | (6) | | | | | |
10 | In 2020,5 During the three months ended September 30, 2022, we reversed our indefinite reinvestment assertion on Indian earnings accumulated in prior years and recorded $140 million in income tax expense. See Note 11 to the Consolidated Financial Statements in our 2020 Annual Report. | 11 | In 2019, we recordedrecognized an impairment charge of $57 million on one of our equity investments as further described in Note 5 to the Consolidated Financial Statements in our 2020 Annual Report. | 12 | In 2019, the Government of India enacted a new tax regime (“India Tax Law”) effective retroactively to April, 2019 that enables domestic companies to elect to be taxed at a lower income tax rate of 25.17%, as compared to the current income tax rate of 34.94%. Once a company elects into the lower income tax rate, a company may not benefit from any tax holidays associated with Special Economic Zones and certain other tax incentives, including Minimum Alternative Tax credit carryforwards, and may not reverse its election. As a result of the enactment of the India Tax Law, we recorded a one-time net income tax expense of $21 million due to the revaluation to the lower income tax rate of our India net deferred income tax assets that we expected to reverse after we elected into the new tax regime. | 13 | In 2018, we finalized our calculation of the one-time tax expense related to the enactment of the Tax Cuts and Jobs Act (“Tax Reform Act”) and recognized a $5 million income tax benefit which reducedof $36 million related to a specific uncertain tax position that was previously unrecognized in our provision for income taxes. | 14 | Reconciliations, andprior-year consolidated financial statements in our annual reports. The recognition of the associated inputsbenefit in the third quarter of 2022 was based on management’s reassessment regarding whether this unrecognized tax benefit met the more-likely-than-not threshold in light of the lapse in the statute of limitations as to a portion of such reconcilliations, to 2019 and 2020 non-GAAP income from operations, 2019 and 2020 non-GAAP operating margin and 2020 non-GAAP diluted EPS are not presented as the 2019 and 2020 numbers are not presented in this proxy statement or otherwise disclosed publicly.benefit. |
Cognizant 2024 Proxy statement 99 Appendix A
TableAmended and Restated Certificate of ContentsIncorporation of Cognizant Technology Solutions Corporation
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Cognizant Technology Solutions Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY AS FOLLOWS: 2021 Proxy Statement1. | 71The name of the Corporation is Cognizant Technology Solutions Corporation. | | 2. | The name under which the Corporation was originally incorporated is Anemone Investments, Inc.; and the date of filing the original certificate of incorporation of the Corporation with the Secretary of State of the State of Delaware is April 6, 1988. | | 3. | This Amended and Restated Certificate of Incorporation, which both restates and amends the provisions of the Original Certificate, was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. | | 4. | The text of the Original Certificate is hereby amended and restated in its entirety to read as follows: |
ARTICLE IThe name of the Corporation is Cognizant Technology Solutions Corporation (hereinafter, the “Corporation”). ARTICLE IIThe registered office of the Corporation within the State of Delaware is located at Corporation Trust Center, 1209 Orange Street251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at that address is The Corporation Trust CompanyCorporation Service Company. ARTICLE IIIThe nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware (the “GCL”). ARTICLE IVA. The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 1,015,000,000 shares, consisting of (i) 1,000,000,000 shares of Class A Common Stock, $0.01 par value per share (“Common Stock”) and (ii) 15,000,000 shares of Preferred Stock, $0.10 par value per share (“Preferred Stock”). B. The number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the votes entitled to be cast by the holders of the Common Stock of the Corporation, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the GCL or any corresponding provision hereinafter enacted. C. The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation. | (1) | COMMON STOCK | | (a) | General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors upon any issuance of the Preferred Stock of any series. | | (b) | Voting. The holders of the Common Stock shall have voting rights at all meetings of stockholders, each such holder being entitled to one vote for each share thereof held by such holder; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (which, as used herein, shall mean the certificate of incorporation of the Corporation, as amended from time to time, including the terms of any certificate of designation of any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation. There shall be no cumulative voting. | | (c) | Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and when determined by the Board of Directors and subject to any preferential dividend or other rights of any then outstanding Preferred Stock. | | (d) | Liquidation. Upon the dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential or other rights of any then outstanding Preferred Stock. For the purposes of this paragraph (C)(1)(d), the voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the assets of the Corporation or a consolidation or merger of the Corporation with one or more other corporations (whether or not the Corporation is the corporation surviving such consolidation or merger) shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary. |
Cognizant 2024 Proxy statement 100 TableThe number of Contents
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authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the GCL or any corresponding provision hereinafter enacted. 72(2) | CognizantPREFERRED STOCK. |
Subject to the limitations and in the manner provided by law, shares of the Preferred Stock may be issued from time to time in series, and the Board of Directors of the Corporation or a duly- authorized committee of the Board of Directors of the Corporation, in accordance with the laws of the State of Delaware, is hereby authorized to determine or alter the relative rights, powers (including voting powers), preferences, privileges and restrictions granted to or imposed upon Preferred Stock or any wholly unissued series of shares of Preferred Stock, and to increase or decrease (but not below the number of shares of any series of Preferred Stock then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall upon the taking of any action required by applicable law resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series. ARTICLE VThe business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Restated Certificate of Incorporation or the bylawsby-laws of the Corporation,(the “By-Laws”),the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation. Election of directors need not be by written ballot unless the bylawsBy-Laws so provide.
ARTICLE VIThe books and records of the Corporation may be kept (subject to any mandatory requirement of law) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or by the bylaws of the CorporationBy-Laws.
ARTICLE VIIThe Board of Directors shall be authorized to make, amend, alter, change, add to or repeal the ByLaws of the corporationBy-Laws in any manner not inconsistent with the laws of the State of Delaware. The stockholders may make additional ByLawsBy-Laws and may amend, alter, change, add to or repeal any ByLaws of the corporationBy-Laws whether adopted by them or otherwise.
ARTICLE VIII| (1) | The Board of Directors shall consist of not less than three directors, the exact number of directors to be determined from time to time by resolution adopted by the affirmative vote of a majority of the Board of Directors. The directors, other than directors elected separately as a class by the holders of any one or more series of Preferred Stock, shall be and are divided into classes, with the terms of the classes elected at the annual meetings of stockholders held in 2011, 2012 and 2013, respectively, expiring at the third annual meeting of stockholders held after the election of such class of directors; provided that such division shall terminate at the third annual meeting of stockholders held after the 2013 annual meeting of stockholders. Notwithstanding the preceding sentence, but subjectSubject to the rights of the holders of any one or more series of Preferred Stock to elect directors separately as a class, each director elected by the stockholders after the 2013 annual meeting of stockholders shall serve for a term expiring at the first annual meeting of stockholders held after such director’s election, subject, however, to prior death, resignation, retirement, disqualification or removal from office. | | (2) | Any newly created directorship on the Board of Directors that results from an increase in the number of directors or any vacancy occurring in the Board of Directors shall be filled only by a majority vote of the directors then in office, although less than a quorum, or by a sole remaining director. Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expires or, following the termination of the division of directors into three classes, directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders held after their election as directors. | | (3) | Subject to the rights of the holders of any one or more series of Preferred Stock to elect additional directors under specific circumstances, (i) all directors shall be removable either with or without cause and (ii) the removal of any director, whether with or without cause, shall require the affirmative vote of the holders of at least a majority in voting power of all outstanding shares of the corporation entitled to vote generally in the election of directors, voting as a single class. | | (4) | Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect any director at an annual or special meeting of stockholders, the election, term of office, removal, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation (including any certificate of designations relating to any series of preferred stockPreferred Stock) applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article VIII unless expressly provided by such terms. |
Cognizant 2024 Proxy statement 101 ARTICLE IX
TableSubject to the rights of Contentsthe holders of any series of Preferred Stock, any action required or permitted to be taken by stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing by such holders. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of stockholders of the corporationCorporation may be called only by (i) the Chief Executive Officer of the Corporation, (ii) the Board of Directors pursuant to a resolution approved by the Board of Directors or (iii) by the Secretary in accordance with Section 2 of the Corporation’s Amended and RestatedBy-laws, and special meetings may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice sent by the Secretary relating to such meeting.
ARTICLE XA director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director’s duty of loyalty to the Corporation and its stockholders; (b) for acts or omissions not in good faith or which involve intentional misconduct or knowing violations of law; (c) under Section 174 of the GCL; or (d) for any transaction from which the director derived an improper personal benefit or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the GCL as the same exists or may hereafter be amended. If the GCL hereafter is amended to further eliminate or limit the liability of directors or officers, then the liability of a director or officer of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended GCL. Any repeal or modification of the foregoing provisions of this Article X shall not adversely affect any right or protection of any director, officer, employee or agent of the Corporation existing at the time of such repeal or modification. ARTICLE XIThe Corporation reserves the right to amend or repeal any provision contained in this RestatedCertificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon a stockholder herein are granted subject to this reservation. Cognizant 2024 Proxy statement 102 Helpful Resourcesresources Links | Board of Directors | | WeblinksCognizant Board | https://www.cognizant.com/us/en/about-cognizant/corporate-governance/board-of-directors | | Board Committee Charters | | Board of DirectorsAudit Committee | | Cognizant Board | https://www.cognizant.com/about-cognizant/board-of-directorsen_us/about/documents/audit-committee-charter.pdf | BoardCompensation and Human Capital Committee Charters | | Audit Committee | https://www.cognizant.com/about-cognizant-resources/audit-committee-charter. pdfen_us/about/documents/compensation-and-human-capital-committee-charter.pdf | | Finance and Strategy Committee | https://www.cognizant.com/about-cognizant-resources/en_us/about/documents/finance-and-strategy-committee-charter.pdf | Management Development and | https://www.cognizant.com/about-cognizant-resources/management-development-and- | Compensation Committee | compensation-committee-charter. pdf | | Governance and Sustainability Committee | https://www.cognizant.com/Resources/governance-and-sustainability-committee-charter. pdfen_us/about/documents/governance-and-sustainability-committee-charter.pdf | | Financial Reporting | Financial Reporting | | 20202023 Annual Report | https://investors.cognizant.com/home/default.aspx#annual-report | | Cognizant | Cognizant | | | Corporate Website | https://www.cognizant.com/ | | Leadership Team | https://www.cognizant.com/us/en/about-cognizant/corporate-governance/leadership-team | | Investor Relations | https://investors.cognizant.com | | Diversity & Inclusion | https://www.cognizant.com/about-cognizant/diversity-and-inclusion | | Public Policy | https://www.cognizant.com/about-cognizant/public-policy | | Sustainability | https://www.cognizant.com/us/en/about-cognizant/sustainabilityesg/environmental-stewardship | | Governance Documents | Governance DocumentsBy-laws | | By-laws | https://www.cognizant.com/about-cognizant-resources/by-laws. pdfen_us/about/documents/by-laws.pdf | | Certificate of Incorporation | https://www.cognizant.com/about-cognizant-resources/certificate-of-incorporation. pdfen_us/about/documents/certificate-of-incorporation.pdf | | Code of Ethics | https://www.cognizant.com/codeofethics.pdfen_us/about/documents/code-of-ethics.pdf | | Corporate Governance Guidelines | https://www.cognizant.com/about-cognizant-resources/corporate-governance-guidelines. pdfen_us/about/documents/corporate-governance-guidelines.pdf |
Weblinksare provided for convenience only and the content on the referenced websites does not constitute a part of, and is not incorporated by reference into, this proxy statement. ContactsCompany Contacts Board or Chief Legal Officer and Corporate Secretary
corporategovernance@cognizant.com General Counsel
generalcounsel@cognizant.com
Chief Compliance Officer
chiefcomplianceofficer@cognizant.com
…or...or mail or fax to our principal executive offices,
attention to the applicable contact
Our Principal Executive Offices Cognizant Technology Solutions
300 Frank W. Burr Blvd.
Suite 36, 6thFloor
Teaneck, New Jersey 07666
Fax: 201-801-0243+1-201-801-0243 |
| To Request Copies of the Internet Notice or Proxy Materials Broadridge Financial Solutions, Inc.
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Phone: 866-540-7095+1-866-540-7095 For Questions or Assistance Voting Morrow Sodali LLC
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Shareholders in the United States
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Cognizant 2024 Proxy statement 103 Table of Contents
 
Table of Contents
 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
300 FRANK W. BURR BLVD.
SUITE 36, 6TH FLOOR
TEANECK, NJ 07666
 | | SCAN TO
VIEW MATERIALS & VOTE | |  |
VOTE BY INTERNET
Before The Meeting- Go to www.proxyvote.com or scan the QR Barcode above with your smartphone or tablet Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 31, 2021.June 3, 2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/CTSH2021CTSH2024 You may attend the meeting via the Internet and vote during the meeting when the polls are open. We recommend, however, that you vote before the meeting even if you plan to participate in the meeting, since you can change your vote during the meeting by voting when the polls are open. Have the information that is printed in the box marked by the arrow ➔XXXX XXXX XXXX XXXX available and follow the instructions. VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 31, 2021.June 3, 2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | | V44485-P05302 | | D48183-P54101 | | KEEP THIS PORTION FOR YOUR RECORDS | | | | | DETACH AND RETURN THIS PORTION ONLY | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION | Company Proposals | | | | | | | | | | | The board of directors recommends you vote FOR each of the nominees: | | 1. | | Election of directors to serve until the 2022 annual meeting of shareholders. | | | Nominees | | For | | Against | | Abstain | | | 1a. | | Zein Abdalla | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | 1. | 1b.Election of 12 directors to serve until the 2025 annual meeting of shareholders. | | Vinita Bali | | ☐ | | ☐ | | ☐ | | | | For | Against | | | | | | Abstain | | | | 1c. | | Maureen Breakiron-Evans | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1d. | | Archana Deskus | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1e. | | John M. Dineen | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1f. | | Brian Humphries | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1g. | | Leo S. Mackay, Jr. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1h. | | Michael Patsalos-Fox | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1i. | | Joseph M. Velli | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | 1j. | | Sandra S. Wijnberg | | ☐ | | ☐ | | ☐ | |
| | | | | | | Nominees | | | | | | | | | | | | | 1a. | Zein Abdalla | ☐ | ☐ | ☐ | | | | | | | | | 1b. | Vinita Bali | ☐ | ☐ | ☐ | | | | | | | | | 1c. | Eric Branderiz | ☐ | ☐ | ☐ | | | | | | | | | 1d. | Archana Deskus | ☐ | ☐ | ☐ | | | | | | | | | 1e. | John M. Dineen | ☐ | ☐ | ☐ | | | | | | | | | 1f. | Ravi Kumar S | ☐ | ☐ | ☐ | | | | | | | | | 1g. | Leo S. Mackay, Jr. | ☐ | ☐ | ☐ | | | | | | | | | 1h. | Michael Patsalos-Fox | ☐ | ☐ | ☐ | | | | | | | | | 1i. | Stephen J. Rohleder | ☐ | ☐ | ☐ | | | | | | | | | 1j. | Abraham Schot | ☐ | ☐ | ☐ | | | | | | | | | 1k. | Joseph M. Velli | ☐ | ☐ | ☐ | | | | | | | | | | 1l. | Sandra S. Wijnberg | ☐ | ☐ | ☐ | |
| | | | | | | | | | The board of directors recommends you vote FOR proposals 2, 3 and 4. | For | Against | Abstain | | 2. | Approve, on an advisory (non-binding) basis, the compensation of the company’s named executive officers (say-on-pay). | ☐ | ☐ | ☐ | | | | | | | 3. | Adopt the company’s Amended and Restated Certificate of Incorporation to limit the liability of certain officers as permitted by Delaware law, remove obsolete provisions and make other technical and administrative updates. | ☐ | ☐ | ☐ | | | | | | | 4. | Ratify the appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the year ending December 31, 2024. | ☐ | ☐ | ☐ | | | Shareholder Proposal | | | | | | | | | | | The board of directors recommends you vote FOR proposals 2 and 3.AGAINST proposal 5. | For | ForAgainst | | AgainstAbstain | | Abstain | | 5. | Shareholder proposal regarding fair treatment of shareholder nominees, requesting that the board of directors adopt and disclose a policy relating to treating shareholders’ board nominees equitably and without certain unnecessary requirements. | ☐ | ☐ | | | ☐ | 2. | | Approve, on an advisory (non-binding) basis, the compensation of the company's named executive officers. | | ☐ | | ☐ | | ☐ | | | | | | | | | | 3. | | Ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year ending December 31, 2021. | | ☐ | | ☐ | | ☐ | | | | | | | | | | The board of directors recommends you vote AGAINST proposal 4.Note: | | For | | Against | | Abstain | | | | | | | | 4. | | Shareholder proposal requesting that the board of directors take action as necessary to permit shareholder action by written consent. | | ☐ | | ☐ | | ☐ | | | | | | | | | | Note: To transact such other business as may properly come before the meeting or any continuation, postponement or adjournment thereof.
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| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | Date | | Signature (Joint Owners) | Date | |
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
D48184-P54101V44486-P05302 |
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CLASS A COMMON STOCK
JUNE 1, 20214, 2024
Please date, sign and mail your proxy card in the envelope provided as soon as possible. The undersigned shareholder(s) of Cognizant Technology Solutions Corporation hereby appoint(s) Jan Siegmund,Jatin Dalal, Chief Financial Officer of the company, John Kim, Executive Vice President, General Counsel, Chief Corporate AffairsLegal Officer, Chief Administrative Officer and Corporate Secretary of the company, Robert Telesmanic, Senior Vice President, Controller and Chief Accounting Officer of the company, and Harry Demas, Vice President, Deputy General Counsel andCarrie Ryan, Assistant Secretary of the company, as proxies, with full power of substitution, to vote all shares of the company'scompany’s Class A Common Stock which the undersigned shareholder(s) is/are entitled to vote at the company's 2021company’s 2024 annual meeting of shareholders or any postponement, continuation or adjournment thereof. This proxy, when properly executed and returned, will be voted in the manner directed herein by the undersigned shareholder. If this proxy is executed but no direction is made, this proxy will be voted FOR each of the nominees listed in accordance with the board of directors' recommendations.Proposal 1, FOR Proposals 2, 3 and 4 and AGAINST Proposal 5. The proxies are further authorized to vote in their discretion (1) for the election of any person to the board of directors if any nominee named herein becomes unable to serve or for good cause will not serve, (2) on any matter that the board of directors did not know would be presented at the annual meeting by a reasonable time before the proxy solicitation was made, and (3) on such other business as may properly come before the meeting or any continuation, postponement or adjournment thereof.
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