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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Number of Shares Held | Number of Shares Subject to Options Exercisable within 60 Days | Total Shares Beneficially Owned | ||||||||||||||||||||||||||||||
Name of Beneficial Owner | Number | % | ||||||||||||||||||||||||||||||
Principal Stockholders | ||||||||||||||||||||||||||||||||
Nantahala Capital Management, LLC (1) | 2,980,767 | — | 2,980,767 | 8.7 | % | |||||||||||||||||||||||||||
Royce & Associates (2) | 2,397,476 | — | 2,397,476 | 7.0 | % | |||||||||||||||||||||||||||
SevenSaoi Capital Partners, LLC (3) | 2,069,761 | — | 2,069,761 | 6.1 | % | |||||||||||||||||||||||||||
Heartland Advisors, Inc. (4) | 1,804,102 | — | 1,804,102 | 5.3 | % | |||||||||||||||||||||||||||
Directors and Named Executive Officers | ||||||||||||||||||||||||||||||||
Marc Brown (8) | 50,555 | — | 50,555 | * | ||||||||||||||||||||||||||||
Teresa Carroll | 61,260 | — | 61,260 | * | ||||||||||||||||||||||||||||
Andrew Clark (5)(8) | 1,222,044 | 550,422 | 1,772,466 | 5.1 | % | |||||||||||||||||||||||||||
Michael Cole (6) | 25,856 | — | 25,856 | * | ||||||||||||||||||||||||||||
Ryan Craig (7) | 35,300 | 27,804 | 63,104 | * | ||||||||||||||||||||||||||||
Randy Hendricks | — | — | — | * | ||||||||||||||||||||||||||||
Matthew Hillman | 5,810 | — | 5,810 | * | ||||||||||||||||||||||||||||
Michael Horn | 70,710 | — | 70,710 | * | ||||||||||||||||||||||||||||
Ron Huberman | — | — | — | * | ||||||||||||||||||||||||||||
John Kiely | 63,010 | — | 63,010 | * | ||||||||||||||||||||||||||||
Kirsten Marriner | 61,260 | — | 61,260 | * | ||||||||||||||||||||||||||||
Matt Mitchell | 26,772 | 3,719 | 30,491 | * | ||||||||||||||||||||||||||||
Victor Nichols (7) | 71,801 | 28,034 | 99,835 | * | ||||||||||||||||||||||||||||
George Pernsteiner | 71,709 | — | 71,709 | * | ||||||||||||||||||||||||||||
Kevin Royal | 138,591 | — | 138,591 | * | ||||||||||||||||||||||||||||
John Semel | 39,206 | — | 39,206 | * | ||||||||||||||||||||||||||||
Christopher Spohn (8) | 102,101 | — | 102,101 | * | ||||||||||||||||||||||||||||
Diane Thompson (8) | 152,067 | — | 152,067 | * | ||||||||||||||||||||||||||||
John Wilson | — | — | — | * | ||||||||||||||||||||||||||||
All Directors and Executive Officers as a Group (16 Persons) | 830,524 | 126,368 | 956,892 | 2.8 | % |
Number of Shares Held | Number of Shares Subject to Options Exercisable within 60 Days | Total Shares Beneficially Owned | ||||||||||
Name of Beneficial Owner | Number | % | ||||||||||
Principal Stockholders | ||||||||||||
Nantahala Capital Management, LLC (1) | 2,653,087 | — | 2,653,087 | 8.7 | % | |||||||
Schroder Investment Management, LTD (2) | 2,408,853 | — | 2,408,853 | 7.9 | % | |||||||
Heartland Advisors, Inc. (3) | 2,277,450 | — | 2,277,450 | 7.5 | % | |||||||
SevenSaoi Capital Partners, LLC (4) | 2,069,761 | — | 2,069,761 | 6.8 | % | |||||||
Dimensional Fund Advisors, LP (5) | 2,045,918 | — | 2,045,918 | 6.7 | % | |||||||
Prescott Group Capital Management, LLC (6) | 1,975,018 | — | 1,975,018 | 6.5 | % | |||||||
Renaissance Technologies, LLC (7) | 1,869,258 | — | 1,869,258 | 6.2 | % | |||||||
Directors and Executive Officers | ||||||||||||
Teresa S. Carroll | 3,063 | — | 3,063 | * | ||||||||
Andrew S. Clark (8) | 896,485 | 906,414 | 1,802,899 | 5.8 | % | |||||||
Michael P. Cole | — | — | — | * | ||||||||
Ryan D. Craig | 28,889 | 41,214 | 70,103 | * | ||||||||
L. Dale Crandall | 43,176 | 41,214 | 84,390 | * | ||||||||
Gregory K. Finkelstein (9) | 5,396 | — | 5,396 | * | ||||||||
Michael B. Horn | 16,976 | — | 16,976 | * | ||||||||
Kirsten M. Marriner | 3,063 | — | 3,063 | * | ||||||||
Victor K. Nichols | 22,791 | 28,034 | 50,825 | * | ||||||||
George P. Pernsteiner | 16,976 | — | 16,976 | * | ||||||||
Kevin S. Royal | 38,609 | — | 38,609 | * | ||||||||
All Directors and Executive Officers as a Group (20 Persons) | 1,254,300 | 1,408,097 | 2,662,397 | 8.4 | % |
PROPOSAL 1 |
Carroll | Cole | Horn | Huberman | Kiely | Marriner | Pernsteiner | Wilson | ||||||||||||||||||||||
SKILLS AND EXPERIENCE | |||||||||||||||||||||||||||||
Public Company Executive Leadership Directors who have held leadership positions with an understanding of the considerations that are unique to a public company | * | * | * | * | * | ||||||||||||||||||||||||
Strategic Planning and Transformation Directors with experience setting long-term corporate vision and direction, desirable products and customer segments, and evaluating competitive positioning | * | * | * | * | * | * | * | ||||||||||||||||||||||
Finance and Accounting Directors with experience in evaluating financial statements, capital structure and financial strategy | * | * | * | * | |||||||||||||||||||||||||
Industry Experience Directors with experience in the industry and markets served by the Company and offer valuable perspective for operations | * | * | * | * | |||||||||||||||||||||||||
Risk Management Directors with experience in overseeing the challenges and potential disruptors facing the Company | * | * | * | * | * | * | * | * | |||||||||||||||||||||
Human Capital Management Directors with experience in succession planning, attracting, developing, motivating and retaining high-performing talent | * | * | * | * | |||||||||||||||||||||||||
Government / Policy / Regulatory Directors with experience with public policy, governmental affairs, and highly-regulated industries | * | * | * | * | * | * | * | * | |||||||||||||||||||||
Corporate Governance Directors with experience in assuring transparency, accountability and board effectiveness | * | * | * | * | * | * | * | * |
BOARD DIVERSITY MATRIX | |||||||||||||||||
Total Number of Directors | 9 | ||||||||||||||||
Part I: Gender Identity | Female | Male | Non-Binary | Did not disclose | |||||||||||||
Directors | 2 | 6 | 0 | 1 | |||||||||||||
Part II: Demographic Background | |||||||||||||||||
African American or Black | 0 | 1 | 0 | 0 | |||||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | |||||||||||||
Asian | 0 | 0 | 0 | 0 | |||||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | |||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | |||||||||||||
White | 2 | 5 | 0 | 0 | |||||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | |||||||||||||
LGBTQ+ | 1 | ||||||||||||||||
Did Not Disclose Demographics | 1 |
CORPORATE GOVERNANCE |
Director | Audit Committee | Compensation Committee | M&A Oversight Committee | Nominating and Governance Committee | ||||||||||||||||||||||||
Teresa | Member | — | — | — | ||||||||||||||||||||||||
Michael | — | Member | Member | — | ||||||||||||||||||||||||
Randy Hendricks | — | |||||||||||||||||||||||||||
— | Chair | — | ||||||||||||||||||||||||||
Michael Horn | — | — | — | Chair | ||||||||||||||||||||||||
Member | — | |||||||||||||||||||||||||||
— | — | |||||||||||||||||||||||||||
John | — | — | Member | |||||||||||||||||||||||||
Kirsten Marriner | — | Chair | — | — | ||||||||||||||||||||||||
— | Member | — | ||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||
— | — | Member |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | ||||||||||||||||||||||||||||||||
Teresa Carroll | 60,000 | 69,743 | 129,743 | ||||||||||||||||||||||||||||||||
Michael Cole | 90,000 | 69,743 | 159,743 | ||||||||||||||||||||||||||||||||
Ryan Craig | 95,000 | 69,743 | 164,743 | ||||||||||||||||||||||||||||||||
Michael Horn | 55,000 | 69,743 | 124,743 | ||||||||||||||||||||||||||||||||
Ron Huberman | 45,000 | 76,590 | 121,590 | ||||||||||||||||||||||||||||||||
John Kiely | 90,500 | 69,743 | 160,243 | ||||||||||||||||||||||||||||||||
Kirsten Marriner | 65,000 | 69,743 | 134,743 | ||||||||||||||||||||||||||||||||
Victor Nichols | 102,500 | 69,743 | 172,243 | ||||||||||||||||||||||||||||||||
George Pernsteiner | 126,875 | 140,704 | 267,579 | ||||||||||||||||||||||||||||||||
John Wilson | 41,250 | 76,590 | 117,840 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | ||||||||
Teresa S. Carroll | 60,000 | 85,000 | 145,000 | ||||||||
Michael P. Cole (2) | — | — | — | ||||||||
Ryan D. Craig | 95,000 | 85,000 | 180,000 | ||||||||
L. Dale Crandall (3) | 107,500 | 85,000 | 192,500 | ||||||||
Robert Hartman | 27,083 | 85,000 | 112,083 | ||||||||
Michael B. Horn | 55,000 | 85,000 | 140,000 | ||||||||
John J. Kiely | 32,500 | 85,000 | 117,500 | ||||||||
Kirsten M. Marriner | 57,500 | 85,000 | 142,500 | ||||||||
Victor K. Nichols | 102,500 | 85,000 | 187,500 | ||||||||
George P. Pernsteiner | 132,500 | 85,000 | 217,500 |
Director | Total Number of Options Outstanding or Unreleased RSUs | Number of Vested Exercisable Options | ||||
Teresa S. Carroll | 22,897 | — | ||||
Michael P. Cole | — | — | ||||
Ryan D. Craig | 54,924 | 41,214 | ||||
L. Dale Crandall (1) | 54,924 | 41,214 | ||||
Robert Hartman | — | — | ||||
Michael B. Horn | 18,434 | — | ||||
John J. Kiely | 35,420 | — | ||||
Kirsten M. Marriner | 22,897 | — | ||||
Victor K. Nichols | 41,744 | 28,034 | ||||
George P. Pernsteiner | 18,434 | — |
Director | Number of Unreleased RSUs | Number of Vested Exercisable Options | |||||||||||||||
Teresa Carroll | 19,472 | — | |||||||||||||||
Michael Cole | 30,577 | — | |||||||||||||||
Ryan Craig | 16,410 | 32,714 | |||||||||||||||
Michael Horn | 16,410 | — | |||||||||||||||
Ron Huberman | 31,370 | — | |||||||||||||||
John Kiely | 34,120 | — | |||||||||||||||
Kirsten Marriner | 19,472 | — | |||||||||||||||
Victor Nichols | 16,410 | 28,034 | |||||||||||||||
George Pernsteiner | 36,860 | — | |||||||||||||||
John Wilson | 31,370 | — |
Position | Annual Cash Retainer ($) | Annual Equity Award ($) | ||||||||||||||||||||||||
Continuing Director | 50,000 | 85,000 | (3) | |||||||||||||||||||||||
Board of Directors Chair | 50,000 | (1) | — | |||||||||||||||||||||||
Audit Committee Chair | 15,000 | (2) | — | |||||||||||||||||||||||
Compensation Committee Chair | 10,000 | (2) | — | |||||||||||||||||||||||
Nominating and Governance Committee Chair | 5,000 | (2) | — | |||||||||||||||||||||||
CEO Search Committee Chair | 3,000 | (2) | — | |||||||||||||||||||||||
Audit Committee Member | 10,000 | — | ||||||||||||||||||||||||
Compensation Committee Member | 7,500 | — | ||||||||||||||||||||||||
Nominating and Governance Committee Member | 5,000 | — | ||||||||||||||||||||||||
CEO Search Committee Member | 7,500 | — | ||||||||||||||||||||||||
M&A Oversight Committee Member | 25,000 | — |
Position | Annual Cash Retainer ($) | Annual Equity Award ($) | ||||||
Continuing Director | 50,000 | 85,000 | (3) | |||||
Board of Directors Chair | 50,000 | (1) | — | |||||
Audit Committee Chair | 15,000 | (2) | — | |||||
Compensation Committee Chair | 10,000 | (2) | — | |||||
Nominating and Governance Committee Chair | 5,000 | (2) | — | |||||
Audit Committee Member | 10,000 | — | ||||||
Compensation Committee Member | 7,500 | — | ||||||
Nominating and Governance Committee Member | 5,000 | — | ||||||
M&A Oversight Committee Member | 25,000 | — |
EXECUTIVE OFFICERS |
Name | Age | Position | ||||||||||||
Kevin S. Royal | Executive Vice President/Chief Financial Officer | |||||||||||||
Steven R. Burkholder | Vice President, Chief Accounting Officer and Corporate Controller | |||||||||||||
Vickie L. Schray | Executive Vice President and Chief External Affairs Officer | |||||||||||||
John W. Semel | Executive Vice President/Chief Strategy Officer | |||||||||||||
Executive Vice | ||||||||||||||
COMPENSATION DISCUSSION AND ANALYSIS |
Randy Hendricks | This Compensation Discussion and Analysis is composed of these sections: | |||||||
Chief Executive Officer (“CEO”) | ||||||||
1. | Executive Summary | |||||||
George Pernsteiner | 2. | Compensation Program Highlights | ||||||
Chairman of the Board and Office of the CEO | 3. | Compensation Framework | ||||||
4. | Plan Design and Award Decisions | |||||||
Christopher Spohn | 5. | Compensation Risk Management, Policies & Practices | ||||||
Executive Vice President, Operations and Office of the CEO | ||||||||
Andrew Clark | Detailed compensation tables that quantify and further explain our NEOs’ compensation follow this Compensation Discussion and Analysis. | |||||||
Former President and Chief Executive Officer (“Former CEO”) | ||||||||
Kevin Royal | ||||||||
Executive Vice President, Chief Financial Officer (“CFO”) | ||||||||
John Semel | ||||||||
Executive Vice President, Chief Strategy Officer | ||||||||
Diane Thompson | ||||||||
Former Executive Vice President, General Counsel | ||||||||
Marc Brown | ||||||||
Former Chief Human Resource Officer (“Former CHRO”) | ||||||||
Matthew Hillman | ||||||||
SVP, University Partnerships | ||||||||
Matt Mitchell | ||||||||
SVP, Secretary and General Counsel |
EXECUTIVE SUMMARY |
COMPENSATION PROGRAM HIGHLIGHTS |
Compensation Program Highlights | |||||
Incentive Plans | Our incentive plans are split between short-term incentives (“STI”) and long-term incentives (“LTI”) to balance short-term and long-term value creation. | ||||
Equity Awards | We offer our executive officers a combination of performance stock units (“PSUs”) and time-based restricted stock units (“RSUs”) to align our executives’ interests with those of shareholders and reward the attainment of specific performance objectives. | ||||
Vesting Periods | All performance-based equity vests on the third anniversary of the grant date. This vesting period was selected to align with the achievement of specific performance-based metrics. Our time-based equity awards vest annually in one-third increments over three years. | ||||
Performance Measures | For executive officers, at least 60% of their LTI awards are performance-based and tied to performance metrics that support our strategic objectives that we believe will drive shareholder value over the long-term. | ||||
Stock Ownership Guidelines | We require our CEO, Executive Vice Presidents and Senior Vice Presidents to maintain minimum stock ownership levels (6x, 3x and 2x of base salary, respectively). These requirements reinforce our belief in the importance of aligning our executives’ interests with the interests of our shareholders. | ||||
Market-based Compensation | We regularly perform market-based compensation analysis to ensure that our executive officers’ total compensation packages remain competitive. | ||||
Peer Group | We leverage a peer group that reflects the size, scope, and complexity of our transforming business to stay informed of market trends and understand how our compensation programs and practices compare to similar companies. | ||||
Recoupment Policy | We have adopted a recoupment policy (clawback policy) that covers all performance-based compensation. |
COMPENSATION FRAMEWORK |
WHAT WE DO | WHAT WE DON’T DO | ||||
ü Adhere to a disciplined pay-for-performance philosophy that informs our compensation design and target pay levels ü Maintain an independent Compensation Committee that has oversight of executive pay design ü Utilize an independent compensation consultant who is hired by and reports directly to the Compensation Committee ü Require minimum levels of stock ownership for our executives and directors ü Maintain a formal clawback policy applicable to all performance-based compensation that covers both financial restatements and certain detrimental conduct ü Deploy a multi-year vesting approach on equity ü Conduct an annual compensation risk assessment ü Utilize a rigorous target-setting process for our incentive plan metrics ü Impose limits on maximum incentive payouts | û No guaranteed salary increases û No credit for unvested performance shares or vested stock options when determining compliance with stock ownership guidelines û No hedging or pledging of Zovio stock û No repricing underwater stock options û No excessive perquisites for senior leaders; all perquisites require specific business rationale û No perquisite-related tax gross-ups for executive officers (except for company-wide benefits such as relocation) û No special retirement plans exclusively for executive officers û No excise tax gross-ups related to change of control |
Pay Element | Purpose | Performance Period | Performance Metric | ||||||||
Base Salary | Market competitive fixed compensation reflecting executive’s scope of responsibility | Annual | — | ||||||||
Short-Term Cash Incentive | Cash-based incentive compensation to reward achievement of Zovio’s short-term financial and operational objectives | One-Year Period | ◦Revenue ◦Net Income ◦EBITDA ◦Operational Goals | ||||||||
Restricted Stock Units | Facilitates stock ownership, executive retention, and shareholder alignment | Three-Year Period with Annual Vesting | ◦Value of RSUs is tied to our stock price | ||||||||
Performance Stock Units | Reward long-term profitability, long-term performance, and alignment with shareholders | Three-Year Performance Period | ◦EBITDA ◦rTSR (relative total shareholder return) |
2021 CEO Pay Opportunity (1)(2) | 2021 NEOs Pay Opportunity (1)(2)(3) |
CEO | Other NEOs (Average) | ||||||||||||||||
Target | ___________________ | 100% | Target | ___________________ | 100% |
2021 Pay Opportunity Comparison to Total Realized Compensation | ||||||||||||||
Named Executive Officer | 2021 Pay Opportunity | 2021 Total Realized Compensation | % of Pay Opportunity Realized | |||||||||||
Randy Hendricks | $3,699,741 | $331,731 | ò | 9% | ||||||||||
Christopher Spohn | $1,878,590 | $883,236 | ò | 47% | ||||||||||
Kevin Royal | $1,003,126 | $585,721 | ò | 58% | ||||||||||
John Semel | $1,097,663 | $595,230 | ò | 54% | ||||||||||
Matthew Hillman | $706,163 | $352,640 | ò | 50% | ||||||||||
Matt Mitchell | $612,283 | $345,506 | ò | 56% |
Base Salary | + | Target Bonus Opportunity | + | Grant date fair value of equity awards |
Base Salary | + | Actual Bonus Earned | + | Value realized from shares vested during the year |
Independent Compensation Consultant / Market Data | Shareholder Say-on- Pay | Peer Group | Management | ||||||||
–Evaluates comparative market data against peer group and survey data –Advises the Compensation Committee on compensation plan design, targets and pay mix –Provides the Compensation Committee with research on trends and best practices | –Engage with shareholders to understand their viewpoints and focus –Results of the advisory Say-on-Pay vote | –Our peer group is reviewed annually and comprised of companies that are of similar revenue, market capitalization, and complexity where we may recruit talent –Provides a reference point to inform executive compensation decisions | –CEO provides input regarding the various roles and responsibilities of his direct reports and their overall performance –CEO provides recommendations to the Compensation Committee for the compensation of his direct reports and the rationale for those decisions |
Industry | Strategic Focus | Talent | Size / Growth | Customers | ||||||||||
Operates in a similar education or technology sector | Similar interests in education or technology | Compete for executive talent and experience | Similar revenue and market capitalization | Similar types of customers and/or product offerings |
Benefitfocus, Inc. | K12 Inc. | Synacor, Inc. | ||||||
Ebix, Inc. | Perdoceo Education Corporation | Syncronoss Technologies, Inc. | ||||||
GreenSky, Inc. | QAD Inc. | Telenav, Inc. | ||||||
Houghton Mifflin Harcourt Comp | RealNetworks, Inc. | 2U, Inc. | ||||||
i3 Verticals, Inc. | Rimini Street, Inc. | Universal Technical Institute, Inc. |
ALJ Regional Holdings, Inc. | Kaspien Holdings Inc. | RealNetworks, Inc. | ||||||
Aspen Group, Inc. | Limelight Networks, Inc. | Rimini Street, Inc. | ||||||
Benefitfocus, Inc. | Lincoln Educational Services Corp. | Stride, Inc. | ||||||
Ebix, Inc. | Net Element, Inc. | Synchronoss Technologies, Inc. | ||||||
GreenSky, Inc. | Perdoceo Education Corporation | 2U, Inc. | ||||||
Houghton Mifflin Harcourt Comp | QAD Inc. | Universal Technical Institute, Inc. | ||||||
i3 Verticals, Inc. |
PLAN DESIGN AND AWARD DECISIONS |
Named Executive Officer | Position | 2020 Base Salary | 2021 Base Salary | % Change 2021 vs. 2020 | ||||||||||
Randy Hendricks | CEO | N/A | $550,000 | N/A | ||||||||||
George Pernsteiner | Chairman of the Board and Office of the CEO | N/A | N/A | N/A | ||||||||||
Christopher Spohn | EVP, Operations and Office of the CEO | $525,000 | $525,000 | —% | ||||||||||
Andrew Clark | Former President and CEO | $777,000 | $777,000 | —% | ||||||||||
Kevin Royal | EVP, Chief Financial Officer | $395,000 | $395,000 | —% | ||||||||||
John Semel | EVP, Chief Strategy Officer | $500,000 | $500,000 | —% | ||||||||||
Diane Thompson | Former EVP, General Counsel | $422,300 | $422,300 | —% | ||||||||||
Marc Brown | Former Chief Human Resource Officer | $312,000 | $325,000 | 4% | ||||||||||
Matthew Hillman | SVP, University Partnerships | $350,000 | $350,000 | —% | ||||||||||
Matt Mitchell | SVP, Secretary and General Counsel | $288,000 | $300,000 | 4% |
For this purpose, Non-GAAP Net Income is defined as net income plus other income (expense), including interest, income tax benefit, depreciation, and amortization plus certain other expenses as more fully described below. | ||
For the Revenue metric, a payout is earned between the target and maximum based on the attainment of performance goals. Similarly, reduced payouts are earned between the minimum threshold and target based on the achievement of performance goals. | ||
For Non-GAAP Net Income metric, a payout is earned for every dollar in positive net income growth above threshold. | ||
A threshold of positive EBITDA performance exists in order for the plan to fund any of the two metrics. In addition, Operational Goals in Student Net Promoter Score ("NPS"), Employee Engagement, New University Clients, and Client Satisfaction were included, requiring 2 of the 4 metrics to be met in order to fund the plan. |
Annual STI Payout Percentage | ||||||||||||||
Named Executive Officers | Below Threshold | Threshold | Target | Maximum | ||||||||||
0% | 50% | 100% | 200% |
Base Salary for Year | x | Target Annual STI Percentage | x | Performance Attainment (0% - 200%) | = | Annual STI Payout |
Performance Targets (in millions) | Weighting | Threshold (50%) | Target (100%) | Maximum (200%) | Performance Attainment | Total Payout1 | ||||||||||||||
Revenue | 10% | $247.5 | $275.0 | $302.5 | $263.0 | 8.0% | ||||||||||||||
Non-GAAP Net Income | 90% | $(6.7) | $(5.6) | $(4.4) | $(15.7) | 0.0% | ||||||||||||||
EBITDA | Gateopener | n/a | $(9.7) | n/a | ||||||||||||||||
Operational Metrics | Gateopener | n/a | Met 3 of 4 | n/a | ||||||||||||||||
Total | 0.0% |
Named Executive Officer | 2021 Base Pay | 2021 STI Target | Payout | Actual Payout | ||||||||||
Randy Hendricks | $550,000 | 115% | —% | $— | ||||||||||
George Pernsteiner | N/A | N/A | $— | |||||||||||
Christopher Spohn | $525,000 | 115% | $— | |||||||||||
Andrew Clark | $777,000 | 100% | $— | |||||||||||
Kevin Royal | $395,000 | 55% | $— | |||||||||||
John Semel 1 | $500,000 | 75% | $187,500 | |||||||||||
Diane Thompson | $422,300 | 50% | $— | |||||||||||
Marc Brown | $325,000 | 55% | $— | |||||||||||
Matthew Hillman | $350,000 | 65% | $— | |||||||||||
Matt Mitchell | $300,000 | 50% | $— |
The RSUs vest annually over three years and align the executive officers’ interests with shareholders by emphasizing long-term value creation and retaining top talent through our transition to an education technology services provider. | ||
At the end of the three years, the PSUs vest, based on EBITDA performance vs. a three-year cumulative goal. The number of shares vesting at the end of the performance can further be modified based upon the attainment of a rTSR (relative total shareholder return) performance against the Russell 200 index.. | ||
Given the volatility in our stock price during 2021, the Compensation Committee determined to use a premium stock price when converting target LTI values into a number of RSUs and PSUs granted. The premium value applied to the annual grant for executives and was 220% of the FMV of the stock on grant date. |
Named Executive Officer | PSUs 60% | RSUs 40% | Total 2021 LTI Award | Total 2020 LTI Award | % Change 2021 vs. 2020 | ||||||||||||
Randy Hendricks | $1,518,000 | $838,241 | $2,356,241 | $— | N/A | ||||||||||||
George Pernsteiner | $— | $185,000 | $185,000 | $85,000 | 118% | ||||||||||||
Christopher Spohn | $866,250 | $627,500 | $1,493,750 | $1,643,750 | (9)% | ||||||||||||
Kevin Royal | $474,000 | $316,000 | $790,000 | $790,000 | —% | ||||||||||||
John Semel | $270,000 | $180,000 | $450,000 | $450,000 | —% | ||||||||||||
Diane Thompson | $225,508 | $200,339 | $425,847 | $375,847 | 13% | ||||||||||||
Marc Brown | $210,600 | $140,400 | $351,000 | $336,960 | 4% | ||||||||||||
Matthew Hillman | $156,000 | $104,000 | $260,000 | $65,000 | 300% | ||||||||||||
Matt Mitchell | $144,000 | $96,000 | $240,000 | $167,272 | 43% | ||||||||||||
COMPENSATION RISK MANAGEMENT, POLICIES, AND PRACTICES |
Misconduct | Financial Restatements Outside of Misconduct | |||||||
WHO | ◦NEOs and other executive officers | ◦NEOs and other executive officers | ||||||
WHEN | ◦Intentional misconduct, gross negligence or failure to report intentional misconduct or gross negligence ◦Contributing factor in having to restate our financial statements ◦Fraud, bribery or any other illegal act | ◦Restatement of any of our financial statements (excluding changes due to account principles) ◦Restated financial results would have resulted in a lesser amount of paid performance-based compensation | ||||||
WHAT | ◦Company may seek to recover incentive compensation ◦Cancel outstanding equity awards ◦Reimbursement of realized equity gains ◦Possible adjustment of future compensation ◦Disciplinary actions, up to and including termination |
Chief Executive Officer | 6x Annual Base Salary | ||||||||||||||||||||||||||||||||||||||||
Executive Vice Presidents | 3x Annual Base Salary | ||||||||||||||||||||||||||||||||||||||||
Senior Vice Presidents | 2x Annual Base Salary | ||||||||||||||||||||||||||||||||||||||||
Non-Employee Directors | 3x Annual Cash Retainer | ||||||||||||||||||||||||||||||||||||||||
COMPENSATION COMMITTEE REPORT |
SUMMARY COMPENSATION TABLE |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Changes in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5)(6) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||
Randy Hendricks | 2021 | 31,731 | 300,000 | 2,517,241 | — | — | — | 1,957 | 2,850,929 | ||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
George Pernsteiner | 2021 | 392,829 | 100,000 | 140,705 | — | — | — | — | 633,534 | ||||||||||||||||||||||||||||||||||||||||||||
Chairman of the Board | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Office of the CEO | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher Spohn | 2021 | 657,892 | — | 750,140 | — | — | — | 59,698 | 1,467,730 | ||||||||||||||||||||||||||||||||||||||||||||
EVP of Operations | 2020 | 347,308 | — | 900,508 | — | 342,279 | — | 51,624 | 1,641,719 | ||||||||||||||||||||||||||||||||||||||||||||
Office of the CEO | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Andrew Clark | 2021 | 203,116 | — | — | — | — | — | 3,182,622 | 3,385,738 | ||||||||||||||||||||||||||||||||||||||||||||
Former President and CEO (7) | 2020 | 806,490 | — | 1,222,762 | — | 655,056 | — | 91,456 | 2,775,764 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 776,620 | — | 2,486,860 | — | — | — | 1,064,969 | 4,328,449 | |||||||||||||||||||||||||||||||||||||||||||||
Kevin Royal | 2021 | 395,000 | — | 391,176 | — | — | — | 64,688 | 850,864 | ||||||||||||||||||||||||||||||||||||||||||||
EVP, Chief Financial Officer | 2020 | 410,192 | — | 382,699 | — | 183,244 | — | 69,027 | 1,045,162 | ||||||||||||||||||||||||||||||||||||||||||||
2019 | 395,000 | — | 778,361 | — | — | — | 79,208 | 1,252,569 | |||||||||||||||||||||||||||||||||||||||||||||
John Semel | 2021 | 500,000 | — | 222,663 | — | 187,500 | — | 72,688 | 982,851 | ||||||||||||||||||||||||||||||||||||||||||||
EVP, Chief Strategy Officer | 2020 | 503,846 | — | 218,000 | — | 316,301 | — | 75,853 | 1,114,000 | ||||||||||||||||||||||||||||||||||||||||||||
Diane Thompson | 2021 | 526,683 | — | 221,419 | — | — | — | 72,881 | 820,983 | ||||||||||||||||||||||||||||||||||||||||||||
Former General Counsel | 2020 | 438,542 | — | 182,074 | — | 178,099 | — | 125,287 | 924,002 | ||||||||||||||||||||||||||||||||||||||||||||
Office of the CEO | 2019 | 422,300 | — | 370,347 | — | — | — | 110,712 | 903,359 | ||||||||||||||||||||||||||||||||||||||||||||
Marc Brown | 2021 | 160,000 | — | 173,665 | — | — | — | 431,796 | 765,461 | ||||||||||||||||||||||||||||||||||||||||||||
Former Chief HR Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Hillman | 2021 | 350,000 | — | 128,663 | — | — | — | 69,578 | 548,241 | ||||||||||||||||||||||||||||||||||||||||||||
SVP, University Partnerships | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Matt Mitchell | 2021 | 294,200 | — | 162,282 | — | — | — | 28,603 | 485,085 | ||||||||||||||||||||||||||||||||||||||||||||
General Counsel and Secretary |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Changes in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5)(6) | Total ($) | ||||||||||||||||
Andrew S. Clark | 2019 | 776,620 | — | 2,486,860 | — | — | — | 1,064,969 | 4,328,449 | ||||||||||||||||
Founder, President and CEO | 2018 | 769,660 | — | 2,398,251 | — | 1,484,092 | — | 68,009 | 4,720,012 | ||||||||||||||||
Kevin S. Royal | 2019 | 395,000 | — | 778,361 | — | — | — | 79,208 | 1,252,569 | ||||||||||||||||
EVP, Chief Financial Officer | 2018 | 265,865 | — | 751,138 | — | 416,575 | — | 245,663 | 1,679,241 | ||||||||||||||||
Gregory J. Finkelstein (7) | 2019 | 413,462 | — | 1,203,579 | — | — | — | 71,186 | 1,688,227 | ||||||||||||||||
EVP, Chief Operating Officer |
Name | Year | Qualified Retirement Plan Employer Match ($) | Employer Deferred Compensation Plan Contributions ($) | Health, Life and Disability Insurance Premiums and Medical Reimbursements ($) | Legal Reimbursement, Housing or Vacation Pay Out ($) | All Other Compensation Total ($) | |||||||||||
Andrew S. Clark | 2019 | 8,400 | — | 59,564 | 997,005 | 1,064,969 | |||||||||||
2018 | 12,250 | — | 55,759 | — | 68,009 | ||||||||||||
Kevin S. Royal | 2019 | — | — | 59,564 | 19,644 | 79,208 | |||||||||||
2018 | — | — | 55,759 | — | 55,759 | ||||||||||||
Gregory J. Finkelstein (7) | 2019 | 8,435 | — | 61,372 | 1,379 | 71,186 |
ALL OTHER COMPENSATION DETAIL |
Name | Year | Qualified Retirement Plan Employer Match ($) | Employer Deferred Compensation Plan Contributions ($) | Health, Life and Disability Insurance Premiums and Medical Reimbursements ($) | Severance, Legal Reimbursement, Housing or Vacation Pay Out ($) | All Other Compensation Total ($) | ||||||||||||||||||||||||||||||||
Randy Hendricks | 2021 | 635 | — | 1,307 | 15 | 1,957 | ||||||||||||||||||||||||||||||||
George Pernsteiner | 2021 | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Christopher Spohn | 2021 | — | — | 44,456 | 15,242 | 59,698 | ||||||||||||||||||||||||||||||||
2020 | — | — | 28,800 | 22,824 | 51,624 | |||||||||||||||||||||||||||||||||
Andrew Clark | 2021 | 4,182 | — | 65,932 | 3,112,508 | 3,182,622 | ||||||||||||||||||||||||||||||||
2020 | 8,550 | — | 66,497 | 16,409 | 91,456 | |||||||||||||||||||||||||||||||||
2019 | 8,400 | — | 59,564 | 997,005 | 1,064,969 | |||||||||||||||||||||||||||||||||
Kevin Royal | 2021 | — | — | 64,488 | 200 | 64,688 | ||||||||||||||||||||||||||||||||
2020 | — | — | 66,497 | 2,530 | 69,027 | |||||||||||||||||||||||||||||||||
2019 | — | — | 59,564 | 19,644 | 79,208 | |||||||||||||||||||||||||||||||||
John Semel | 2021 | 8,000 | — | 64,488 | 200 | 72,688 | ||||||||||||||||||||||||||||||||
2020 | 7,923 | — | 66,497 | 1,433 | 75,853 | |||||||||||||||||||||||||||||||||
Diane Thompson | 2021 | 8,700 | — | 40,447 | 23,734 | 72,881 | ||||||||||||||||||||||||||||||||
2020 | 8,550 | — | 41,605 | 75,132 | 125,287 | |||||||||||||||||||||||||||||||||
2019 | 8,769 | — | 37,471 | 64,472 | 110,712 | |||||||||||||||||||||||||||||||||
Marc Brown | 2021 | 4,433 | — | 64,712 | 362,651 | 431,796 | ||||||||||||||||||||||||||||||||
Matthew Hillman | 2021 | 4,890 | — | 64,488 | 200 | 69,578 | ||||||||||||||||||||||||||||||||
Matt Mitchell | 2021 | 8,700 | — | 19,703 | 200 | 28,603 | ||||||||||||||||||||||||||||||||
GRANTS OF PLAN-BASED AWARDS |
Name | Grant Date | Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards (3)($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hendricks | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
12/6/21 | 12/1/21 | — | — | — | — | — | — | 574,138 | 838,241 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/6/21 | 12/1/21 | — | — | — | 690,000 | 1,150,000 | 2,300,000 | — | 1,518,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pernsteiner | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
3/29/21 | 3/15/21 | — | — | — | — | — | — | 16,410 | 69,743 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
4/7/21 | 4/7/21 | — | — | — | — | — | — | 20,450 | 70,962 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Spohn | — | — | 301,875 | 603,750 | 1,207,500 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
4/7/21 | 4/7/21 | — | — | — | — | — | — | 10,220 | 35,463 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 111,490 | 262,002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 115,500 | 192,500 | 385,000 | — | 481,250 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Clark | — | — | 388,310 | 776,620 | 1,553,240 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Royal | — | — | 108,625 | 217,250 | 434,500 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 61,000 | 143,350 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 63,198 | 105,330 | 210,660 | — | 263,325 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Semel | — | — | 187,500 | 375,000 | 750,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 34,750 | 81,663 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 36,000 | 60,000 | 120,000 | — | 150,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Thompson | — | — | 105,575 | 211,150 | 422,300 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
4/7/21 | 4/7/21 | — | — | — | — | — | — | 10,220 | 35,463 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 29,020 | 68,197 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 30,066 | 50,110 | 100,220 | — | 125,275 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Brown | — | — | 85,800 | 171,600 | 343,200 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 27,100 | 63,685 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 28,080 | 46,800 | 93,600 | — | 117,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Hillman | — | — | 113,750 | 227,500 | 455,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 20,080 | 47,188 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 20,802 | 34,670 | 69,340 | — | 86,675 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mitchell | — | — | 57,680 | 115,360 | 230,720 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | — | — | — | 12,920 | 30,362 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
8/31/21 | 8/25/21 | — | — | — | — | — | — | 12,330 | 31,811 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5/31/21 | 5/27/31 | — | — | — | 13,380 | 22,300 | 44,600 | — | 55,750 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
8/31/21 | 8/25/21 | — | — | — | 11,094 | 18,490 | 36,980 | — | 50,663 |
OUTSTANDING EQUITY AWARDS |
Outstanding Equity Awards at Fiscal Year End | ||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Unit Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
Name | Securities underlying unexercised options (#) exercisable | Securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of stock units that have not vested (#) | Market value of all stock units that have not vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares that have not vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares that have not vested (1) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Hendricks | — | — | — | — | 574,138 | 729,155 | (2) | — | — | |||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 1,150,000 | 1,460,500 | (3) | ||||||||||||||||||||||||||||||||||||||||||
Mr Pernsteiner | — | — | — | — | 16,410 | 20,841 | (4) | — | — | |||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 20,450 | 25,972 | (5) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Mr. Spohn | — | — | — | — | 82,417 | 104,670 | (6) | — | — | |||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 85,553 | 108,652 | (7) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 111,490 | 141,592 | (8) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 192,500 | 244,475 | (9) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 192,500 | 244,475 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Clark | 122,750 | — | 24.75 | 3/30/22 | (11)(12) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
125,900 | — | 10.23 | 3/29/23 | (11)(13) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
114,230 | — | 14.50 | 3/29/24 | (11)(14) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
105,952 | — | 9.43 | 3/29/25 | (11)(15) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
100,270 | — | 10.59 | 3/29/26 | (11)(16) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
104,070 | — | 10.44 | 3/29/27 | (11)(17) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 150,870 | 191,605 | (20) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Royal | — | — | — | — | 10,020 | 12,725 | (21) | — | — | |||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 31,854 | 40,455 | (19) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 46,813 | 59,453 | (7) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 61,000 | 77,470 | (8) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 47,220 | 59,969 | (20) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 105,330 | 133,769 | (9) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 105,330 | 133,769 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Semel | — | — | — | — | 18,144 | 23,043 | (19) | — | — | |||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 26,666 | 33,866 | (7) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 34,750 | 44,133 | (8) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 26,900 | 34,163 | (20) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 60,000 | 76,200 | (9) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 60,000 | 76,200 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Ms. Thompson | 38,870 | — | 24.75 | 44,650 | (11)(12) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
31,470 | — | 10.23 | 45,014 | (11)(13) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
26,110 | — | 14.50 | 45,380 | (11)(14) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
25,198 | — | 9.43 | 45,745 | (11)(15) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
23,830 | — | 10.59 | 46,110 | (11)(16) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
24,730 | — | 10.44 | 46,475 | (11)(17) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 6,772 | 8,600 | (18) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 15,154 | 19,246 | (19) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 22,273 | 28,287 | (7) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 29,020 | 36,855 | (8) | — | — |
Outstanding Equity Awards at Fiscal Year End | |||||||||||||||||||||
Option Awards | Stock Unit Awards | ||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of stock units that have not vested (#) | Market value of stock units that have not vested ($)(1) | |||||||||||||||
Andrew S. Clark | 125,100 | — | 15.81 | 8/5/2020 | (2)(3) | — | — | ||||||||||||||
134,160 | — | 17.10 | 3/31/2021 | (2)(4) | — | — | |||||||||||||||
122,750 | — | 24.75 | 3/30/2022 | (2)(5) | — | — | |||||||||||||||
125,900 | — | 10.23 | 3/29/2023 | (2)(6) | — | — | |||||||||||||||
114,230 | — | 14.50 | 3/29/2024 | (2)(7) | — | — | |||||||||||||||
105,952 | — | 9.43 | 3/29/2025 | (2)(8) | — | — | |||||||||||||||
91,246 | 9,024 | 10.59 | 3/29/2026 | (2)(9) | — | — | |||||||||||||||
69,727 | 34,343 | 10.44 | 3/29/2027 | (2)(10) | — | — | |||||||||||||||
— | — | — | — | 11,915 | (11) | 24,545 | |||||||||||||||
— | — | — | — | 24,220 | (12) | 49,893 | |||||||||||||||
— | — | — | — | 94,395 | (13) | 194,454 | |||||||||||||||
— | — | — | — | 80,980 | (14) | 166,819 | |||||||||||||||
— | — | — | — | 68,340 | (15) | 140,780 | |||||||||||||||
— | — | — | — | 203,550 | (17) | 419,313 | |||||||||||||||
— | — | — | — | 150,870 | (18) | 310,792 | |||||||||||||||
Kevin S. Royal | — | — | — | — | 30,060 | (16) | 61,924 | ||||||||||||||
— | — | — | — | 24,820 | (14) | 51,129 | |||||||||||||||
— | — | — | — | 20,940 | (15) | 43,136 | |||||||||||||||
— | — | — | — | 63,710 | (17) | 131,243 | |||||||||||||||
— | — | — | — | 47,220 | (18) | 97,273 | |||||||||||||||
Gregory J. Finkelstein | — | — | — | — | 21,397 | (19) | 44,078 | ||||||||||||||
— | — | — | — | 79,760 | (17) | 164,306 | |||||||||||||||
— | — | — | — | 59,120 | (18) | 121,787 |
Mr. Hillman | — | — | — | — | 3,853 | 4,893 | (22) | — | — | |||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 20,080 | 25,502 | (8) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 8,670 | 11,011 | (23) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 34,670 | 44,031 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Mitchell | 3,719 | — | 9.43 | 3/29/25 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 2,287 | 2,904 | (18) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 6,744 | 8,565 | (19) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 9,913 | 12,590 | (7) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 12,920 | 16,408 | (8) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 12,330 | 15,659 | (24) | — | — | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 10,000 | 12,700 | (20) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 22,300 | 28,321 | (9) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 22,300 | 28,321 | (10) | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 18,490 | 23,482 | (25) |
OPTION EXERCISES AND STOCK VESTED |
Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(2) | ||||||||||||||||||||||
Randy Hendricks | — | — | — | — | ||||||||||||||||||||||
George Pernsteiner | — | — | 21,252 | 86,376 | ||||||||||||||||||||||
Christopher Spohn | — | — | 80,470 | 225,344 | ||||||||||||||||||||||
Andrew Clark | — | — | 326,389 | 1,357,297 | ||||||||||||||||||||||
Kevin Royal | — | — | 49,355 | 190,721 | ||||||||||||||||||||||
John Semel | — | — | 22,407 | 95,230 | ||||||||||||||||||||||
Diane Thompson | — | — | 38,584 | 143,440 | ||||||||||||||||||||||
Marc Brown | — | — | 23,324 | 99,127 | ||||||||||||||||||||||
Matthew Hillman | — | — | 1,927 | 2,640 | ||||||||||||||||||||||
Matt Mitchell | — | — | 12,072 | 51,306 |
EMPLOYMENT AGREEMENTS |
Name | Position | Effective Date of Agreement | Initial Term of Agreement (1) | Base Salary ($)(2) | Annual Target Bonus, as Percentage of Salary (3) | Potential Payments upon Termination or Change of Control | ||||||||||||||||||||||||||||||||||||||
Christopher Spohn | Executive Vice President of Operations | April 30, 2020 | 2 years | 525,000 | 115 | % | (4) | |||||||||||||||||||||||||||||||||||||
Andrew Clark | Former President and Chief Executive Officer | March 9, 2015 | 3 years | 725,000 | 100 | % | (4) |
Name | Position | Date of Agreement | Initial Term of Agreement (1) | Base Salary ($)(2) | Annual Target Bonus, as Percentage of Salary (3) | Potential Payments upon Termination or Change of Control | Other | |||||||||
Andrew S. Clark | Founder, President and Chief Executive Officer | March 9, 2015 | 3 years | 725,000 | 100 | % | (4) | (5) | ||||||||
Gregory J. Finkelstein | Former Executive Vice President, Chief Operating Officer | December 31, 2018 | 3 years | 430,000 | 70 | % | (4) |
(2) This column shows the initial annual base salary set forth in the related employment agreement, which salary may be periodically reviewed and increased by the Board in its discretion, or decreased with such executive’s written consent. (3) The employment agreement for Mr. Clark provided that he would have been eligible for an annual discretionary incentive bonus based on the attainment of certain performance criteria. The employment agreement provided for a target bonus amount as a percentage of annual salary, which target percentage is reflected in this column. The actual bonus paid may have been more or less than the target amount, as determined by the Board or the Compensation Committee. Upon his separation from the Company, Mr. Clark was eligible to receive his annual cash bonus for the prior fiscal year to the extent such bonus had not yet been paid. In addition, upon his separation from the Company, Mr. Clark was eligible to be paid a pro-rata portion of his annual cash bonus for the fiscal year of termination based on the percentage of time he was employed in fiscal year 2021. (4) For information regarding severance and other payments that Messrs. Spohn and Clark would have received, under their employment agreement in the event of a termination of employment and/or a change of control, see “Potential |
POTENTIAL PAYMENTS UPON TERMINATION AND CHANGE OF CONTROL |
Name | Change of Control (1) | Termination of Employee Without Cause, or Resignation by Employee for Good Reason (2)(3) | Termination of Employee without Cause, or Resignation by Employee for Good Reason, within 24 Months of Change of Control (1)(2)(3) | Termination of Employee for Death | Termination of Employee for Disability (4) | ||||||||||||||||||||
Andrew S. Clark | |||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 3,106,480 | (7) | $ | 3,106,480 | (10) | $ | 388,310 | (13) | $ | 388,310 | (13) | |||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 776,620 | (7) | $ | 776,620 | (10) | $ | — | (13) | $ | — | (13) | |||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 84,000 | (7) | $ | 84,000 | (10) | $ | 21,000 | (13) | $ | 21,000 | (13) | |||||||||||
Acceleration of Vesting of Stock Options | $ | — | $ | — | (7) | $ | — | (10) | $ | — | (13) | $ | — | (13) | |||||||||||
Acceleration of Vesting of Stock Awards | $ | 879,082 | (5)(6) | $ | 385,957 | (7) | $ | 1,306,596 | (10) | $ | 385,957 | (13) | $ | 385,957 | (13) | ||||||||||
Total | $ | 879,082 | $ | 4,353,057 | $ | 5,273,696 | $ | 795,267 | $ | 795,267 | |||||||||||||||
Kevin Royal | |||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 395,000 | (8) | $ | 395,000 | (11) | $ | — | $ | — | |||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 217,250 | (8) | $ | 217,250 | (11) | $ | — | $ | — | |||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 21,000 | (8) | $ | 21,000 | (11) | $ | — | $ | — | |||||||||||||
Acceleration of Vesting of Stock Options | $ | — | $ | — | (8) | $ | — | (11) | $ | — | $ | — | |||||||||||||
Acceleration of Vesting of Stock Awards | $ | 140,410 | (6) | $ | 105,740 | (8) | $ | 287,432 | (11) | $ | — | $ | — | ||||||||||||
Total | $ | 140,410 | $ | 738,990 | $ | 920,682 | $ | — | $ | — | |||||||||||||||
Gregory J. Finkelstein | |||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 1,096,500 | (9) | $ | 1,096,500 | (12) | $ | 215,000 | (14) | $ | 215,000 | (14) | |||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 301,000 | (9) | $ | 301,000 | (12) | $ | — | (14) | $ | — | (14) | |||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 63,000 | (9) | $ | 63,000 | (12) | $ | 21,000 | (14) | $ | 21,000 | (14) | |||||||||||
Acceleration of Vesting of Stock Options | $ | — | $ | — | (9) | $ | — | (12) | $ | — | (14) | $ | — | (14) | |||||||||||
Acceleration of Vesting of Stock Awards | $ | 121,787 | (6) | $ | 85,154 | (9) | $ | 208,383 | (12) | $ | 85,154 | (14) | $ | 85,154 | (14) | ||||||||||
Total | $ | 121,787 | $ | 1,545,654 | $ | 1,668,883 | $ | 321,154 | $ | 321,154 |
Name | Change of Control (1) | Termination of Employee Without Cause, or Resignation by Employee for Good Reason (2)(3) | Termination of Employee without Cause, or Resignation by Employee for Good Reason, within 24 Months of Change of Control (1)(2)(3) | Termination of Employee for Death | Termination of Employee for Disability (4) | ||||||||||||||||||||||||||||||||||||||||||
Randy Hendricks | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 550,000 | (6) | $ | 550,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 632,500 | (6) | $ | 632,500 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 84,000 | (6) | $ | 84,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Awards | $ | — | $ | 243,053 | (6) | $ | 2,189,655 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 1,509,553 | $ | 3,456,155 | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
Christopher Spohn | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 1,693,125 | (7) | $ | 1,693,125 | (9) | $ | 262,500 | (10) | $ | 262,500 | (10) | |||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 603,750 | (7) | $ | 603,750 | (9) | $ | — | (10) | $ | — | (10) | |||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 63,000 | (7) | $ | 63,000 | (9) | $ | 21,000 | (10) | $ | 21,000 | (10) | |||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Awards | $ | — | (5) | $ | 136,416 | (7) | $ | 843,864 | (9) | $ | 136,416 | (10) | $ | 136,416 | (10) | ||||||||||||||||||||||||||||||||
Total | $ | — | $ | 2,496,291 | $ | 3,203,739 | $ | 419,916 | $ | 419,916 | |||||||||||||||||||||||||||||||||||||
Andrew Clark | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 3,106,480 | (11) | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 102,834 | (11) | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Options | $ | — | $ | 471,744 | (11) | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 3,681,058 | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
Kevin Royal | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 395,000 | (6) | $ | 395,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 217,250 | (6) | $ | 217,250 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 21,000 | (6) | $ | 21,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Awards | $ | — | (5) | $ | 88,504 | (6) | $ | 517,610 | (8) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 721,754 | $ | 1,150,860 | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
John Semel | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 500,000 | (6) | $ | 500,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 375,000 | (6) | $ | 375,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 21,000 | (6) | $ | 21,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Awards | $ | — | (5) | $ | 43,166 | (6) | $ | 287,604 | (8) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 939,166 | $ | 1,183,604 | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
Matthew Hillman | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 350,000 | (6) | $ | 350,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 227,500 | (6) | $ | 227,500 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 21,000 | (6) | $ | 21,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Awards | $ | — | (5) | $ | 10,949 | (6) | $ | 85,437 | (8) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 609,449 | $ | 683,937 | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
Marc Brown | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 325,000 | (12) | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 51,243 | (12) | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 376,243 | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
Matt Mitchell | |||||||||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment | $ | — | $ | 144,000 | (6) | $ | 144,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Compensation | $ | — | $ | 57,600 | (6) | $ | 57,600 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Continuation of Health Insurance Benefits | $ | — | $ | 21,000 | (6) | $ | 21,000 | (8) | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
Acceleration of Vesting of Stock Awards | $ | — | (5) | $ | 24,172 | (6) | $ | 148,951 | (8) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 246,772 | $ | 371,551 | $ | — | $ | — |
(3) For Mr. Spohn, “Good Reason” generally means any of the following events: (a) a material diminution in his annual base salary; (b) a material diminution in his authorities, duties, responsibilities or reporting structure; or (c) our material breach of his employment agreement. For Mr. Royal, “Good Reason” generally means any of the following events: (a) a material diminution in their annual base salary; (b) a material diminution in his authorities, duties, responsibilities or reporting structure; (c) notification of a material change in his geographic work location; or (d) our material breach of his Severance Agreement. (4) For Mr. Spohn, “Disability” generally means he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. (5) The Compensation Committee has discretion as to whether to approve the acceleration of the RSUs and PSUs that would accelerate based on a Change of Control. (6) If the NEO’s employment is terminated by us without Cause or by employee for Good Reason (and other than for death or Disability), then the NEO will receive, pursuant to the Amended and Restated Executive Severance Plan and the Severance Agreement executed by the NEO thereunder, (i) cash payments equal in the aggregate to one times his annual base salary, payable in equal bi-weekly installments over the 12-month period following termination date; (ii) medical, dental and life insurance premiums for up to 12 months following termination, provided that such benefit will terminate immediately if he is offered comparable coverage in connection with new employment, paid by the company at the same cost as if the NEO continued as an active employee of the company; and (iii) a lump sum cash payment equal to the pro-rata portion of his annual cash bonus for the fiscal year of termination based on the percentage of time he was employed in such fiscal year, payable at the same time the company pays annual cash bonuses to other members of senior management. (7) If Mr. Spohn’s employment is terminated by us without Cause or by Mr. Spohn for Good Reason (and other than for death or Disability), then Mr. Spohn will receive, pursuant to his employment agreement, (i) continued payment of base salary for a period of 18 months; (ii) if his termination occurs following the end of our fiscal year but before the date annual bonuses are paid for that year, payment of his |
Non-Qualified Deferred Compensation (1) | ||||||||||||||||||||||||||||||||
Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||||||||||||||
Diane Thompson | 32,947 | — | 90,872 | — | 691,227 | |||||||||||||||||||||||||||
Marc Brown | 14,700 | — | 44,591 | 430,670 | — |
CEO PAY RATIO |
CEO | Median Employee | |||||||||||||||||||
Total | $ | 2,850,929 | $ | 70,489 | ||||||||||||||||
PROPOSAL 2 |
2021 | 2020 | ||||||||||
Audit Fees (1) | $ | 1,315,818 | $ | 2,257,624 | |||||||
Audit‑Related Fees (2) | — | 265,745 | |||||||||
Tax Fees (3) | 19,626 | 157,236 | |||||||||
All Other Fees (4) | 3,790 | 3,790 | |||||||||
Total | $ | 1,339,234 | $ | 2,684,395 |
2019 | 2018 | ||||||
Audit Fees (1) | $ | 2,602,535 | $ | 2,821,536 | |||
Audit‑Related Fees (2) | — | 80,200 | |||||
Tax Fees (3) | 401,335 | 380,524 | |||||
All Other Fees (4) | 3,790 | 3,790 | |||||
Total | $ | 3,007,660 | $ | 3,286,050 |
REPORT OF THE AUDIT COMMITTEE TO THE BOARD OF DIRECTORS |
Dated: | Audit Committee: | ||||
Teresa S. Carroll Ryan D. Craig Victor K. Nichols |
EQUITY COMPENSATION PLAN INFORMATION |
Plan Category | Number of securities to be issued upon exercise of outstanding options and rights (a) | Weighted-average exercise price of outstanding options and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||||||||||||||||
Equity compensation plans approved by security holders (1) (2) (3) | 4,379,123 | (4) | $ | 7.67 | (5) | 6,921,689 | ||||||||||||||||||||
Equity compensation plans not approved by security holders | 1,724,138 | — | — | |||||||||||||||||||||||
Total | 6,103,261 | $ | 7.67 | 6,921,689 |
Plan Category | Number of securities to be issued upon exercise of outstanding options and rights (a) | Weighted-average exercise price of outstanding options and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
Equity compensation plans approved by security holders (1) (2) | 5,381,373 | (3) | $ | 8.88 | (4) | 6,452,654 | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 5,381,373 | $ | 8.88 | 6,452,654 |
By order of the Board of Directors, | |||||
/s/ | |||||