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MEETINGS OF THE BOARD OF DIRECTORS
The board of directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations. The board of
directors'directors’ primary responsibility is to oversee the management of Genpact and, in so doing, serve the best interests of the Company. Subject to the recommendations of the compensation committee and the nominating and governance committee, respectively, the board of directors selects, evaluates and provides for the succession of executive officers, and the board of directors nominates for election at annual general shareholder meetings individuals to serve as directors of Genpact and elects individuals to fill any vacancies on the board of directors to the extent not filled by shareholders in general meetings. The board of directors reviews and approves corporate objectives and strategies, and evaluates significant policies and proposed major commitments
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of corporate resources. Management keeps the directors informed of Company activity through presentations at board of directors and committee meetings.
The board of directors met, in person or telephonically,
14ten times in
2020.2022. During
2020, each2022, all of our directors attended
75% or moreat least 84%, and an average of 89%, of the total number of meetings of the board of directors and the committees of which such director was a member during the period of time he or she served on such committee. Our Corporate Governance Guidelines set forth our policy that directors are expected to attend annual general meetings of shareholders. All of our directors
standing for re-election at the 2021 annual meeting who were serving on our board of directors at the time of the 2020 annual meeting attended the
20202022 annual meeting.
COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors has standing audit, compensation and nominating and governance committees. Each committee has a charter that has been approved by the board of directors. Each committee must review the appropriateness of its charter and perform a self-evaluation at least annually. Mr. Tyagarajan is the only director who is an employee of Genpact, and he does not participate in any meeting, or portions of any meeting, at which his compensation or performance is evaluated. All members of all committees are non-employee directors and the board of directors has determined that all of the members of our three standing committees are independent as defined under the rules of the NYSE, and, in the case of all members of the audit committee, the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934, as
amended.amended (the “Exchange Act”).
The table below sets forth the committees of our board, the composition of each committee and the number of meetings of each committee during
2020. | | BOARD COMMITTEES |
Board Member | | Audit | | Compensation | | Nominating and
Governance |
Ajay Agrawal | | | | | | Member |
Stacey Cartwright | | Member | | | | |
Laura Conigliaro | | Member | | | | Member |
Carol Lindstrom | | | | Member | | Chair |
James Madden(1) | | | | Member | | Member |
CeCelia Morken | | Member | | Member | | |
Mark Nunnelly | | | | Chair | | |
Brian Stevens | | Member | | | | |
Mark Verdi(2) | | Chair | | | | |
Number of meetings in 2020 | | 9 | | 7 | | 5 |
| | Ajay Agrawal | | | | | | | | | Member | |
| | Stacey Cartwright | | | Member | | | | | | | |
| | Laura Conigliaro | | | Member | | | | | | Chair | |
| | Tamara Franklin | | | Member | | | | | | Member | |
| | Carol Lindstrom | | | | | | Chair | | | Member | |
| | James Madden(1) | | | | | | Member | | | Member | |
| | CeCelia Morken | | | Member | | | Member | | | | |
| | Brian Stevens | | | Member | | | | | | | |
| | Mark Verdi(2) | | | Chair | | | | | | | |
| | Number of meetings in 2022 | | | 9 | | | 6 | | | 3 | |
(1)
| (1)
| Mr. Madden currently serves as ChairmanChair of the board of directors. |
(2)
| (2)
| Audit committee financial expert as defined by SEC rules. |
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The tables below set forth the primary responsibilities of each committee of our board. The lists of responsibilities set forth below are not exhaustive. A complete list of each
committee'scommittee’s responsibilities can be found in the charter for each committee, available on our website,
www.genpact.com.
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Audit Committee
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MEMBERS(1)
Mark Verdi (Chair)(2)
Tamara Franklin
Brian Stevens | PRIMARY RESPONSIBILITIES
| | • Appointing, approving the compensation of, and assessing the independence of our registered independent public accounting firm.
• the performance of any registered public accounting firm employed by us to provide audit services, including such firm'sfirm’s qualifications and independence;
• the quality and integrity of our accounting and reporting practices and controls, including our financial • the performance of our internal audit function; and
• our compliance with legal and regulatory requirements.
• Preparing an audit committee report as required by the SEC to be included in our annual proxy statement.
• Approving, in advance, any audit and any permissible non-audit services to be provided by our independent external audit firm.
• Reviewing and discussing with management our major financial, data privacy and cybersecurity and other significant risk exposures and the steps management has taken to monitor and control such exposures.
• Reviewing the Company’s policies and procedures for reviewing and approving related party transactions and recommending changes in such policies and procedures to our board of directors, and reviewing and approving related party transactions.
• Overseeing our compliance program andadherence to our Code of Conduct and investigating any matters that arise relating to the integrity of management.
• Establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.
• Investigating any matter brought to its attention within the scope of its duties and retaining counsel for this purpose where appropriate.
• Reporting regularly to our full board of directors with respect to the foregoing. | |
(1)
| (1)
| The board has determined that each member of the audit committee meets the financial literacy and independence requirements of the SEC and the NYSE applicable to audit committee members. |
(2)
| (2)
| The board has determined that Mr. Verdi has been determined to beis an "audit“audit committee financial expert,"” as such term is defined in Item 407(d)(5) of Regulation S-K, and to havehas accounting or related financial management expertise as required by the NYSE listing standards. |
(3)
| The audit committee was established in accordance with section 3(a)(58)(A) of the Exchange Act. |
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Compensation Committee
MEMBERS(1)
Mark Nunnelly (Chair)
| CeCelia Morken | PRIMARY RESPONSIBILITIES
| | • Reviewing our compensation practices and policies, including equity plans.
• Overseeing the risks associated with the Company’s compensation policies and practices, and reviewing whether such policies and practices are reasonably likely to have a material adverse effect on the Company.
• Conducting an annual review and evaluation of our CEO; reviewing and approving compensation for our CEO and senior executives.executive officers.
• Reviewing and consulting with our CEO concerning selection of executive officers, performance of individual senior executivesexecutive officers and related matters.
• Overseeing the succession plans for our CEO and senior management.executive officers.
• Reviewing and approving compensation for our directors, including the ChairmanChair of the Board.
• Reviewing and discussing the management disclosures in our "Compensation“Compensation Discussion and Analysis"Analysis” and recommending to the board whether such disclosures shall be included in the appropriate regulatory filing.
• Overseeing our equity plans, incentive compensation plans and any such plans that the board may from time to time adopt and exercising all the powers, duties and responsibilities of the board of directors with respect to such plans.
• Preparing a compensation committee report for inclusion in our proxy statement.
• Reporting regularly to our full board of directors with respect to the foregoing. | |
(1)
| (1)
| The board has determined that each member of the compensation committee meets the independence requirements of the SEC and NYSE applicable to compensation committee members. |
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Nominating and Governance Committee
MEMBERS(1)
| Laura Conigliaro (Chair)
Ajay Agrawal
Tamara Franklin
Carol Lindstrom (Chair)Ajay Agrawal
Laura Conigliaro
James Madden | PRIMARY RESPONSIBILITIES
| | • Making recommendations as to the size, composition, structure, operations, performance and effectiveness of our board of directors.
• Establishing criteria and qualifications for membership on our board of directors and its committees.
• Assessing and recommending to our board of directors strong and capable candidates with diverse experience and perspectives who are qualified to serve on our board of directors and its committees.
• Developing and recommending to our board of directors a set of corporate governance principles, including independence standards.
• Conducting an annual evaluation of our board of directors and our board committees.
• Overseeing environmental, social and governance (“ESG”) programs, activities and practices of the Company.
• Otherwise taking a leadership role in shaping our corporate governance.
• Reporting regularly to our full board of directors with respect to the foregoing. | |
(1)
| (1)
| The board has determined that each member of the nominating and governance committee meets the independence requirements of the SEC and NYSE applicable to nominating and governance committee members. |
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BOARD LEADERSHIP STRUCTURE
The positions of
ChairmanChair of the board of directors and CEO have historically been separated at Genpact. Keeping these positions separate allows our CEO to focus on our day-to-day business, while allowing the
ChairmanChair of the board of directors to lead the board in its exercise of business judgment to promote the long-term interests of our shareholders by providing strategic direction and overseeing management. The board of directors believes that keeping these positions separate is the appropriate leadership structure for us at this time.
ANNUAL BOARD, COMMITTEE AND INDIVIDUAL DIRECTOR EVALUATION PROCESS
As set forth in its charter, the nominating and governance committee oversees the board, committee and individual director evaluation process. Annually, the nominating and governance committee determines the appropriate form of evaluation and considers the design of the process to ensure it is both meaningful and effective.
From time to time, the board of directors engages an independent third party with experience in board evaluations and organizational effectiveness to lead the board evaluation. The last time the board engaged a third party to lead the board evaluation process was in 2019. In
2020,2022, the board led its own self-evaluation process, which included written evaluations of the board as a whole
each committee and individual directors and was led by the Chair of the nominating and governance committee. The process also included one-on-one interviews between the Chair of the nominating and governance committee and each other member of the board. The evaluation process engaged our directors on a wide range of topics, including board and committee structure, board dynamics and operations, and board, committee and individual director effectiveness and performance. Following the conclusion of the evaluation process, the board reviewed and discussed the evaluation
results and, in response, established certain agenda items for the board and its committees to act upon in 2021.results.
The results of the
20202022 evaluation process support the board’s belief that the board and its committees are operating effectively.
Our management is responsible for risk management on a day-to-day basis, and our board
and its committees overseeoversees the risk management activities of
management.management, which include our enterprise risk management program and the risks highlighted through our annual risk assessment process. The
board’s risk oversight responsibilities are fulfilled both by the board directly, as well as by its committees, each of which assists the Board in overseeing a part of the Company’s overall risk management agenda. As more fully described below, the audit committee assists the board in fulfilling its oversight responsibilities with respect to risk management in the areas of
data privacy, financial reporting, cybersecurity, internal controls and compliance with legal and regulatory requirements, and, in accordance with NYSE requirements, discusses policies with respect to risk assessment and risk management. The compensation committee assists the board in fulfilling its oversight responsibilities
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with respect to the management of risks arising from our compensation policies and programs and succession planning for our executive officers. The nominating and governance committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors, the Company’s ESG activities and corporate governance. For additional information on risks that affect our business, please see our most recent Annual Report on Form 10-K and other filings we make with the SEC.
OVERSIGHT OF ESG STRATEGY AND CYBERSECURITY AND DATA PRIVACY RISKS
As part of our board’s strategic and risk oversight, the board oversees our ESG strategies, including our sustainability priorities and human capital management practices and related risks. Throughout the year, the board receives periodic reports from management and the board’s committees on our ESG initiatives, overall sustainability strategy and the ESG reporting frameworks we use to track our progress. In 2022, our board delegated ESG oversight responsibility to the nominating and governance committee. Accordingly, the nominating and governance committee now oversees our overall ESG performance, disclosure, strategies, goals and objectives and monitors ESG risks and opportunities on behalf of the board. The board will also continue to monitor and receive periodic reports from the nominating and governance committee and management on these and other ESG matters, including with respect to human capital matters such as pay equity, inclusion and diversity, company culture and related risks.
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As part of the board’s role in overseeing the Company’s enterprise risk management program, the board and the audit committee devote substantial time to monitoring cybersecurity and data privacy related risks. Our audit committee charter sets out the committee’s role in overseeing information technology risk exposures, including cybersecurity, data privacy and data security, and the audit committee receives quarterly reports on cybersecurity and data privacy matters and related risk exposures from management, including our Global Operating Officer, Chief Legal Officer and Chief Information Security Officer. The audit committee regularly updates the board on such matters and the board also periodically receives reports from management directly.
COMMUNICATING WITH THE INDEPENDENT DIRECTORS
The board of directors will give appropriate attention to written communications that are submitted by shareholders and other interested parties, and will respond if and as appropriate. The nominating and governance committee, with the assistance of the
Company'sCompany’s Chief Legal Officer, is primarily responsible for monitoring communications from shareholders and other interested parties and for providing copies or summaries to the other directors as its members consider appropriate. Our non-executive
Chairman,Chair, Mr. Madden, serves as the presiding director at all executive sessions of our non-management directors.
Communications will be forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the nominating and governance committee considers to be important for the directors to know. In general, communications relating to corporate governance and corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which the Company may receive repetitive or duplicative communications.
Shareholders and interested parties who wish to send communications on any topic to the board of directors should address such communications to:
521 Fifth Avenue,
of the Americas, 4th14th Floor
New York, New York
1003610175
Attention: Corporate Secretary
Our board of directors has adopted a code of conduct applicable to our directors, officers and employees in accordance with applicable rules and regulations of the SEC and the NYSE. The code is posted on our website at
www.genpact.com under the heading “Investors—Corporate
Governance.Governance—Highlights.” We will also provide a copy of the code to shareholders upon request. We disclose any material amendments to our code of conduct, as well as any waivers for executive officers or directors, on our website.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our board of directors has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which Genpact Limited is a participant, the amount involved exceeds $120,000, and one of our officers, directors, director nominees or 5% shareholders (or their immediate family members), each of whom we refer to as a
"related“related person,
"” has a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a "related“related person transaction,"” the related person must report the proposed related person transaction to our General Counsel. The policy calls for the proposed related person transaction to be reviewed prior to entry into the transaction and, if deemed appropriate, approved by the board'sboard’s audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval isour General Counsel becomes aware of a related person transaction that has not practicable,been reviewed by the audit committee, willthen the audit committee must review the transaction and, in its discretion, may ratify the related person transaction. The policy also permits the chair of the audit committee to review and, if deemed appropriate, approve proposed related person transactions that arise between committee meetings, subject to ratification by the audit committee at its next meeting.it. Any related person transactions that are ongoing in nature will be reviewed annually.
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| Corporate Governance | |
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A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the audit committee after full disclosure of the related
person'sperson’s interest in the transaction. The audit committee will review and consider such information regarding the related person transaction as it deems appropriate under the circumstances.
The audit committee may approve or ratify the transaction only if the audit committee determines that, under all of the circumstances, the transaction is in,
or is not inconsistent with, the
Company's best interests.interests of the Company and its shareholders. The audit committee may impose any conditions on the related person transaction that it deems appropriate.
In addition to the transactions that are excluded by applicable SEC rules, the board has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:
interests arising solely from the related personsperson’s position as an executive officer of another entity (whether or not the person is also a director of such entity) that is a participant in the transaction, where (a) the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, (b) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction, (c) the amount involved in the transaction equals less than the greater of $1 million dollars or 2% of the annual gross revenues of the other entity that is a party to the transaction, and (d) the amount involved in the transaction equals less than 2% of our annual gross revenues; and
a transaction that is specifically contemplated by provisions of our charter or bye-laws.
We did not have any related person transactions with any of our executive officers or directors in 2020.2022.
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10 |2021 Proxy Statement
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Security Ownership of Certain Beneficial Owners and Management | | | |
Security Ownership of Certain Beneficial Owners and Management The following table contains information regarding the beneficial ownership of our common shares as of March 12, 202110, 2023 by:
each shareholder we know to own beneficially more than 5% of our outstanding common shares;
each executive officer named in the 20202022 Summary Compensation Table; and
all of our director nominees and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Common shares subject to options that are currently exercisable or are exercisable within 60 days of March
12, 202110, 2023 are deemed to be outstanding and beneficially owned by the person holding such options. Such shares, however, are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person. Percentage of beneficial ownership is based on
187,149,112183,669,129 common shares of Genpact Limited outstanding on March
12, 2021. | | | | | | |
Name of Beneficial Owner(1) | | Number of Shares Beneficially Owned(2) | | Percentage of
Outstanding
Shares |
Known 5% Beneficial Owners |
FMR, LLC(3) | | 26,672,247 | | | 14.25 | % |
Wellington Management Group, LLP(4) | | 25,665,661 | | | 13.71 | % |
The Vanguard Group(5) | | 16,516,951 | | | 8.83 | % |
Brown Advisory Incorporated(6) | | 13,855,970 | | | 7.40 | % |
Nalanda India Equity Fund Limited(7) | | 13,143,983 | | | 7.02 | % |
| | | | |
Directors and Named Executive Officers |
N.V. Tyagarajan(8) | | 3,223,882 | | | 1.72 | % |
Edward J. Fitzpatrick(9) | | 322,409 | | | * |
Balkrishan Kalra(10) | | 292,390 | | | * |
Darren Saumur(11) | | 64,096 | | | * |
Kathryn Stein(12) | | 46,643 | | | * |
Ajay Agrawal(13) | | 11,212 | | | * |
Stacey Cartwright(14) | | 5,112 | | | * |
Laura Conigliaro(15) | | 49,230 | | | * |
Tamara Franklin | | — | | | * |
Carol Lindstrom(16) | | 18,079 | | | * |
James Madden(17) | | 20,604 | | | * |
CeCelia Morken(18) | | 27,774 | | | * |
Mark Nunnelly(19) | | 40,019 | | | * |
Brian Stevens(20) | | 5,112 | | | * |
Mark Verdi(21) | | 40,019 | | | * |
All Director Nominees and Executive Officers as a group (18 persons) | | 4,468,605 | | | 2.39 | % |
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| Security Ownership of Certain Beneficial Owners and Management | | | |
| | FMR, LLC(3) | | | 18,683,945 | | | 10.17% | |
| | The Vanguard Group(4) | | | 16,741,780 | | | 9.12% | |
| | BlackRock, Inc.(5) | | | 15,507,019 | | | 8.44% | |
| | Wellington Management Group, LLP(6) | | | 14,000,573 | | | 7.62% | |
| | Nalanda India Equity Fund Limited(7) | | | 13,143,983 | | | 7.16% | |
| | Directors and Named Executive Officers
| |
| | N.V. Tyagarajan(8) | | | 3,252,560 | | | 1.77% | |
| | Michael Weiner(9) | | | 13,801 | | | * | |
| | Balkrishan Kalra(10) | | | 550,855 | | | * | |
| | Darren Saumur(11) | | | 108,985 | | | * | |
| | Kathryn Stein(12) | | | 172,911 | | | * | |
| | Ajay Agrawal(13) | | | 22,524 | | | * | |
| | Stacey Cartwright(14) | | | 15,662 | | | * | |
| | Laura Conigliaro(15) | | | 57,768 | | | * | |
| | Tamara Franklin(16) | | | 8,538 | | | * | |
| | Carol Lindstrom(17) | | | 15,197 | | | * | |
| | James Madden(18) | | | 34,582 | | | * | |
| | CeCelia Morken(19) | | | 36,312 | | | * | |
| | Brian Stevens(20) | | | 13,650 | | | * | |
| | Mark Verdi(21) | | | 48,557 | | | * | |
| | All Director Nominees and Executive Officers as a group (16 persons) | | | 4,808,131 | | | 2.62% | |
*
| Number of shares represents less than 1% of outstanding common shares. |
(1)
| (1)
| Unless noted otherwise, the business address of each beneficial owner is c/o Genpact Limited, Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda. |
(2)
| (2)
| Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and/or investment power with respect to the shares shown as beneficially owned. |
(3)
| (3)
| Based solely on a Schedule 13G/A filed with the SEC on February 8, 2021.10, 2023. The business address of FMR, LLC is 245 Summer Street, Boston, MA 02210 02210. |
(4)
| (4)
| Based solely on a Schedule 13G/A filed with the SEC on February 3, 2021.9, 2023. The business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
(5)
| Based solely on a Schedule 13G/A filed with the SEC on February 23, 2023. The business address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
(6)
| Based solely on a Schedule 13G/A filed with the SEC on February 6, 2023. The business address of Wellington Management Group, LLP is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210. |
(7)
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| 2021 Proxy Statement |11
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| (5)
| Based solely on a Schedule 13G/A filed with the SEC on February 10, 2021. The business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
|
| (6)
| Based solely on a Schedule 13G/A filed with the SEC on February 8, 2021. This amount includes 13,659,469 common shares beneficially owned by Brown Advisory, LLC, 188,993 common shares beneficially owned by Brown Investment Advisory and Trust Company and 7,508 common shares beneficially owned by Brown Advisory Limited. The business address of Brown Advisory Incorporated is 901 South Bond Street, Ste. 400, Baltimore, MD 21231.
|
| (7)
| Based solely on a Schedule 13G filed with the SEC on February 11, 2021. The business address of Nalanda India Equity Fund Limited is Lot 203A, 2nd Floor, Moka Business Center, Montagne Ory Road, Bon Air, Moka, Mauritius. |
(8)
| (8)
| This amount includes options to purchase 2,850,1782,733,106 shares that are exercisable within 60 days, 363,704519,454 shares held directly by Mr. Tyagarajan, and 10,000 shares held in trust for the benefit of Mr. Tyagarajan'sTyagarajan’s family members. |
(9)
| (9)
This amount includes 13,801 shares held directly by Mr. Weiner. |
(10)
| This amount includes options to purchase 250,000448,410 shares that are exercisable within 60 days and 72,409102,445 shares held directly by Mr. Fitzpatrick. Kalra. |
(11)
| (10)
| This amount includes options to purchase 207,28053,990 shares that are exercisable within 60 days and 85,11054,995 shares held directly by Mr. Kalra. Saumur. |
(12)
| (11)
| This amount includes options to purchase 35,000143,040 shares that are exercisable within 60 days and 29,096 shares held directly by Mr. Saumur. |
| (12)
| This amount includes options to purchase 25,000 shares that are exercisable within 60 days and 21,64329,871 shares held directly by Ms. Stein.
|
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| Security Ownership of Certain Beneficial Owners and Management | | | |
(13)
| (13)
| This amount includes 6,10017,695 shares held directly by Mr. Agrawal and 5,1124,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(14)
| (14)
| This amount includes 5,11210,833 shares held directly by Ms. Cartwright and 4,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(15)
| (15)
| This amount includes 44,11852,939 shares held directly by Ms. Conigliaro and 5,1124,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(16)
| (16)
| This amount includes 12,9673,709 shares held directly by Ms. LindstromFranklin and 5,1124,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(17)
| (17)
| This amount includes 11,98710,368 shares held directly by Mr. MaddenMs. Lindstrom and 8,6174,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(18)
| (18)
| This amount includes 22,66226,856 shares held directly by Ms. MorkenMr. Madden and 5,1127,726 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(19)
| (19)
| This amount includes 34,90731,483 shares held directly by Mr. NunnellyMs. Morken and 5,1124,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(20)
| (20)
| This amount includes 5,1128,821 shares held directly by Mr. Stevens and 4,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
(21)
| (21)
| This amount includes 34,90743,728 shares held directly by Mr. Verdi and 5,1124,829 vested restricted share units, the shares underlying which will be issued on December 31, 2021. 2023. |
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| Director Nominees | |
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| | BOARD RECOMMENDATION:
The board of directors believes that approval of the election of all nominees set forth herein is in the Company’s best interests and the best interests of our shareholders and therefore recommends a vote FOR all of these nominees.
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ELECTION OF DIRECTORS
Our board of directors currently consists of
eleven members, including Tamara Franklin, who was appointed to serve on our board effective March 29, 2021.ten members. The nominating and governance committee of the board of directors has recommended to the board of directors, and the board of directors has nominated, the
eleventen persons whose biographies appear below for election as directors with terms expiring at the
20222024 annual meeting. Unless a contrary direction is indicated, it is intended that proxies received will be voted for the election as directors of the
eleventen nominees, each to serve for a one-year term until their successors are elected or the incumbent resigns. Each of the nominees has consented to being named in this
Proxy Statementproxy statement and to serve as a director if elected. In the event any nominee for director declines or is unable to serve, there will be a vacancy created on the board of directors, which the board of directors may fill on the recommendation of the nominating and governance committee.
Set forth below is certain biographical information as of the date of this proxy statement about each nominee for election to our board of directors, including information each nominee has given us about his or her age, his or her principal occupation and business experience for the past five years, and the names of other publicly held companies of which he or she has served as a director in the past five years. The information presented reflects the specific experience, qualifications, attributes and skills that led the board to conclude that each of these individuals is well-suited to serve on our board. Information about the number of common shares beneficially owned by each current director appears above under the heading “Security Ownership of Certain Beneficial Owners and Management.”
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DIRECTOR PROFILES
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N.V. “Tiger” Tyagarajan | | James Madden, Chair
|
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| | Director Since: 2005
Age: 59
INDEPENDENT
Committees: Nominating and Governance, Compensation
|
• President and Chief Executive Officer, Genpact (2011 to present)
• Chief Operating Officer, Genpact (2009-2011)
• Executive Vice President, Sales, Marketing, and Business Development, Genpact (2005-2009)
QUALIFICATIONS FOR BOARD SERVICE
• Extensive knowledge of our industry and business and service as our Chief Executive Officer. | |
| | James Madden, Chair
Director Since: 2005
Age: 61
INDEPENDENT
Committees: Nominating and
Governance, Compensation | | | • Co-founder and Co-CEO, Carrick Capital Partners, LLC (2012 to present)
• Founder, Managing Partner, Madden Capital Partners (2005-2012)
• Partner, Accretive LLC (2007-2011)
• Special Advisor, General Atlantic LLC (2005-2007)
• Chairman Chair and CEO, Exult, Inc. (1998-2005)
PAST PUBLIC COMPANY BOARDS
• ServiceSource International, Inc.
QUALIFICATIONS FOR BOARD SERVICE
• Extensive knowledge of our industry and experience serving on the boards of other public companies. | |
| | |
| 2021 Proxy Statement |13
|
| | | | | | |
| | | | | | |
Ajay Agrawal
| | Stacey Cartwright
|
| |
Committees: Nominating and
Governance | | 
| | Director Since: 2019
Age: 57
INDEPENDENT
Committees: Audit
|
• Professor of Strategic Management, Rotman School of Management, University of Toronto (2003 to present)
• Founder and Academic Director, Creative Destruction Lab, Rotman School of Management (2012 to present)
• Founder, Brainmaven Corp. (October 2018 to present)
• Assistant Professor, Queens University (prior to 2003)
QUALIFICATIONS FOR BOARD SERVICE
• Extensive knowledge of and expertise in new technologies, including artificial intelligence, relevant to our strategic business plan. |
|
17 2023 Proxy Statement | | | |
TABLE OF CONTENTS
| | Stacey Cartwright
Director Since: 2019
Age: 59
INDEPENDENT
Committees: Audit | | | • Chief Executive Officer, Harvey Nichols Group Ltd (2014-2018)
• EVP and Chief Financial Officer, Burberry Group plc (2004-2013)
• Chief Financial Officer, Egg plc (1999-2003)
• Granada plc (various positions) (1988-1999)
• Pricewaterhouse UK (various positions) (1985-1988)
CURRENT PUBLIC COMPANY BOARDS
PAST PUBLIC COMPANY BOARDS
QUALIFICATIONS FOR BOARD SERVICE
• Experience leading and transforming, and serving as a director on the boards of, other public companies. | |
| | | | | | | |
Laura Conigliaro | | Tamara Franklin
|
| |
Committees: Audit, Nominating and Governance (Chair) | | 
| | Director Since: 2021*
Age: 54
INDEPENDENT
|
• Partner, Co-director, America'sAmerica’s Equity Research Unit; Technology equity research business unit leader; Analyst, hardware systems sector, Goldman Sachs (1996-2011)
• Analyst, Prudential Securities (1979-1996)
PAST PUBLIC COMPANY BOARDS ●
QUALIFICATIONS FOR BOARD SERVICE
• Extensive knowledge of the financial services and technology industries and service on other public company boards. |
|
| | Tamara Franklin
Director Since: 2021
Age: 56
INDEPENDENT
Committees: Audit, Nominating and Governance | | | • Chief Digital, Data & Analytics Officer, Marsh LLC (2020 to present)2023)
• Chief Digital Officer/Vice President, Media & Entertainment, North America, IBM (2017-2020)
• Executive Vice President, Digital, Scripps Networks Interactive (2009-2016)
QUALIFICATIONS FOR BOARD SERVICE
• Extensive experience at large companies driving digital transformation initiatives across technology, data and analytics.* Ms. Franklin has been appointed to the Board effective March 29, 2021.
| |
18 2023 Proxy Statement | | | |
TABLE OF CONTENTS
| Director Nominees | |
14 |2021 Proxy Statement
|
| |
| | | | | | | |
| | | | | | |
Carol Lindstrom
| | CeCelia Morken
|
| |
Committees: Compensation
(Chair), Nominating
and Governance (Chair) | | 
| | Director Since: 2016
Age: 63
INDEPENDENT
Committees: Audit, Compensation
|
• Vice Chairman, Deloitte LLP; President, Deloitte Foundation; Director, Deloitte & Touche LLP Board (1995-2016)
• Partner, Andersen Consulting
CURRENT PUBLIC COMPANY BOARDS
• ASGN Incorporated
PAST PUBLIC COMPANY BOARDS
QUALIFICATIONS FOR BOARD SERVICE
• Extensive experience in the fields of technology and consulting and service on other public company boards. |
|
| | CeCelia Morken
Director Since: 2016
Age: 65
INDEPENDENT
Committees: Audit,
Compensation | | | • President, Headspace Health and Former Chief Executive Officer, Headspace Inc. (January 2021 to present)•December 2021); President and Chief Operating OfficerCOO, Headspace Inc. (April 2020 to December 2020)
• Executive Vice President and General Manager, Strategic Partner Group, Intuit Inc. (2013 to 2020)•; General Manager, Intuit Financial Services Division, Intuit Inc. (2002-2013)
• Senior Vice President, WebTone Technologies (1999-2002)
• Senior Vice President, retail lending, Fortis Investments (1998-1999)
• Senior Vice President; various positions, John H. Hartland Co. (1983-1998)
CURRENT PUBLIC COMPANY BOARDS
• Alteryx, Inc.
• Wells Fargo & Company
QUALIFICATIONS FOR BOARD SERVICE
• Experience in finance and accounting, sales and marketing, new digital technologies and employee health, welfare and engagement. | |
| | | | | | | |
Mark Nunnelly
| | Brian Stevens |
| |
Committees: Compensation (Chair)Audit | | 
| | Director Since: 2020
Age: 57
INDEPENDENT
Committees: Audit
|
• Chairman, AVALT Holdings (2018 to present)• Secretary, Executive Office of Technology Services and Security, Commonwealth of Massachusetts (2017 to 2018)
• Commissioner of Revenue, Commonwealth of Massachusetts (2015-2017)
• Managing Director, Bain Capital (1989-2014)
PAST PUBLIC COMPANY BOARDS
• Bloomin' Brands, Inc.
• Dunkin' Brands Group, Inc.
QUALIFICATIONS FOR BOARD SERVICE
• Extensive knowledge of the financial services industry and experience in finance and serving on the boards of other public companies.
|
| PROFESSIONAL EXPERIENCE
• Executive Chairman, Neural Magic (2019 to present)
• Vice President and Chief Technology Officer, Google Cloud (2014-2019)
• Chief Technology Officer and Executive Vice President of Worldwide Engineering, Red Hat, Inc. (2001-2014)
CURRENT PUBLIC COMPANY BOARDS
QUALIFICATIONS FOR BOARD SERVICE
• Experience as a chief technology officer and expertise in software engineering, cloud, open source, virtualization and machine learning. learning, and service on other public company boards.
| |
19 2023 Proxy Statement | | | |
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| Director Nominees | |
| 2021 Proxy Statement |15
| |
| | | | | | | |
| | | | | | |
Mark Verdi
| | |
| |
Committees: Audit (Chair) | | | | |
• Partner, AVALT Holdings (2015 to present)
• President, C&S Wholesale Grocers, Inc. (2014-2015)
• Managing Director, Bain Capital (2004-2014)
• Head of financial services business transformation outsourcing group, IBM Global Services (prior to 2004)
PAST PUBLIC COMPANY BOARDS
• Burlington Stores, Inc.
QUALIFICATIONS FOR BOARD SERVICE
• Extensive experience in our industry and in finance and accounting, and experience serving on the boards of other public companies. |
| |
There are no family relationships among any of the directors and executive officers of Genpact. No arrangements or understandings exist between any director or any person nominated for election as a director and any other person pursuant to which such person is to be selected as a director or nominee for election as a director.
20 2023 Proxy Statement | | | |
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| Director Compensation |
PROPOSAL 1 – ELECTION OF DIRECTORS
| | |
BOARD RECOMMENDATION: The board of directors believes that approval of the election of all nominees listed above is in the Company's best interests and the best interests of our shareholders and therefore recommends a vote FOR all of these nominees.Director Compensation | |
16 |2021 Proxy Statement
|
|
The compensation committee, which is comprised solely of independent directors, reviews and approves the compensation arrangements for our directors.
The committee reviews director compensation every other year.
In connection with its
20192021 review of director compensation, the compensation committee considered the results of an independent analysis on director compensation prepared by FW Cook, an independent, external compensation consulting firm. As part of this analysis, FW Cook reviewed non-employee director compensation trends and data from companies comprising the same executive compensation peer group used by the compensation committee in connection with its review of CEO compensation in
2018.2021. After considering the information contained in the FW Cook report, the compensation committee
recommended and the board approved the following changes to our director compensation program effective January 1,
20202022 to align director compensation levels
withinwith the
projected market median range:
Increased the base annual cash retainer for non-employee directors from $62,500 to $70,000;
Increased the committee chair retainers for the audit, compensation and nominating and governance committees by $5,000 annually;
EliminatedIncreased the sign-onvalue of the annual restricted share unit (“RSU”) grant with a value of $180,000, a one-time award previously granted to new non-employee directors upon joiningfrom $175,000 to $200,000.
The compensation committee believes that leaving the board;annual base cash retainer unchanged and
Increased allocating the valuetotal amount of the base director compensation increase to the annual RSU grant to non-employeeis appropriate because it more closely aligns our directors from $120,000 to $175,000.
with our shareholders’ interests by rewarding directors for long-term shareholder value creation, and it also mirrors the emphasis in our executive compensation program on weighting equity more heavily than cash in setting total compensation targets. All other features of our director compensation program were left unchanged. The components of our 2020 non-employee director compensation are set forth below.
ELEMENTS OF
20202022 DIRECTOR COMPENSATION
Under our director compensation program, our non-employee directors received an annual retainer with a total value of
$245,000,$270,000, divided between cash and equity — in the form of an RSU grant — as depicted below.
(1)
| (1)
| Under our director compensation program, on the date of the 2022 annual general meeting of shareholders, our non-employee directors received a grant of RSUs with a value of $175,000$200,000 based on the closing price of the Company'sCompany’s common shares on the date of grant. Such RSUs vested on December 31, 2022 and the underlying shares will be issued at the end of 2023. |
21 2023 Proxy Statement | | | |
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| Director Compensation | | | |
In addition to an annual cash retainer and RSU grant, our non-employee directors receive the additional compensation below, as applicable. All cash retainers are paid in quarterly installments based on each director’s service on the board or a committee during such quarter.
| | Board Chair Retainer (annual) | | | $65,000 | |
| | Board Chair RSU Grant (annual)(1) | | | $120,000 in value of RSUs | |
| | Committee Chair Retainer (annual) | | | $47,500 for the Audit Committee Chair
$32,500 for the Compensation Committee Chair
$32,500 for the Nominating and Governance Committee Chair | |
| | Committee Membership Retainer (annual) | | | $22,500 for the Audit Committee
$17,500 for the Compensation Committee
$17,500 for the Nominating and Governance Committee | |
(1)
| For his service as Chair of the board of directors, in addition to the annual grant of RSUs to all non-employee directors, Mr. Madden received, on the date of the 2022 annual general meeting of shareholders, a grant of RSUs with a value of $120,000 based on the closing price of the Company’s common shares on the date of grant. Such RSUs vest on the last day of the calendar year of grant and the underlying vested shares are issued at the end of the subsequent year. |
| |
| 2021 Proxy Statement |17
|
In addition to an annual cash retainer and RSU grant, our non-employee directors receive the additional compensation below, as applicable. All cash retainers are paid in quarterly installments based on each director's service on the board or a committee during such quarter.
| |
Chairman Retainer (annual)(1)
| $65,000
|
Chairman RSU Grant (annual)(1)(2)
| $120,000 in value of RSUs
|
Committee Chair Retainer (annual)
| $42,500 for the Audit Committee Chair
$27,500 for the Compensation Committee Chair
$27,500 for the Nominating and Governance Committee Chair
|
Committee Membership Retainer (annual)
| $22,500 for the Audit Committee
$17,500 for the Compensation Committee
$17,500 for the Nominating and Governance Committee
|
| (1)
| In connection with the transition from Mr. Robert Scott to Mr. Madden as the Chairman of our board of directors in May 2020, the compensation committee reduced the annual Chairman cash retainer from $100,000 to $65,000 and the annual Chairman RSU grant from $150,000 to $120,000.
|
| (2)
| For his service as Chairman of the board of directors, in addition to the annual grant of RSUs to all non-employee directors, Mr. Madden received, on the date of the 2020 annual general meeting of shareholders, a grant of RSUs with a value of $120,000 based on the closing price of the Company's common shares on the date of grant. Such RSUs vest on the last day of the calendar year of grant and the underlying vested shares are issued at the end of the subsequent year.
|
Governance Features
Our non-employee director compensation program is subject to the following governance features:
| • | Limit on Director Compensation. The total annual limit on aggregate maximum compensation per non-employee director is $750,000. |
| • | Trading Windows. Our directors can only transact in our securities during approved trading windows after satisfying mandatory trade pre-clearance requirements. |
| • | Hedging/Pledging Prohibition. Our insider trading policy prohibits our directors from hedging or pledging our securities. |
| • | Share Ownership Requirement. Our non-employee directors are required to own a number of our common shares with a minimum value of three times their annual cash retainers. Each non-employee director has a five-year phase in period to meet the ownership requirements, measured from the later of the adoption of the Company’s share ownership guidelines in 2019 or the date of such director’s appointment to the board. After the initial phase-in period, each non-employee director is required to retain 100% of the shares issued upon the vesting of restricted share unit awards (net of any shares withheld or sold to cover withholding and other applicable taxes) until the multiple of annual cash retainer is reached. As of December 31, 2022, all of our non-employee directors were in compliance with the ownership requirement applicable to them. |
| • | Other Compensation. Our non-employee directors do not receive any non-equity incentive plan compensation, participate in any pension plans or receive non-qualified deferred compensation. We provide our directors with directors and officers liability insurance as part of our corporate insurance policies. We also reimburse our directors for reasonable travel and related expenses incurred in connection with their participation in board and committee meetings and other Company activities such as site visits or Company-sponsored events in which they participate as directors. |
Limit on Director Compensation. The total annual limit on aggregate maximum compensation per non-employee director is $750,000.
22 2023 Proxy Statement | | | |
Trading Windows. Our directors can only transact in our securities during approved trading windows after satisfying mandatory trade pre-clearance requirements.
Hedging/Pledging Prohibition. Our insider trading policy prohibits our directors from hedging or pledging our securities.
Share Ownership Requirement. Our non-employee directors are required to own a number of our common shares with a minimum value of three times their annual cash retainers.
Other Compensation. Our non-employee directors do not receive any non-equity incentive plan compensation, participate in any pension plans or receive non-qualified deferred compensation. We provide our directors with directors and officers liability insurance as part of our corporate insurance policies. We also reimburse our directors for reasonable travel and related expenses incurred in connection with their participation in board and committee meetings and other Company activities such as site visits or Company-sponsored events in which they participate as directors.
TABLE OF CONTENTS
| Director Compensation | |
18 |2021 Proxy Statement
|
| |
The following table sets forth the compensation of our non-employee directors for the fiscal year ended December 31,
2020. | | | | | | | | | | | | | | | |
Director | | Fees Earned or
Paid in Cash | | Stock Awards(1) | | All Other
Compensation | | Total |
A. AGRAWAL | | $ | 87,500 | | | $ | 174,984 | | | — | | | $ | 262,484 | |
S. CARTWRIGHT | | $ | 92,500 | | | $ | 174,984 | | | — | | | $ | 267,484 | |
L. CONIGLIARO | | $ | 103,269 | | | $ | 174,984 | | | — | | | $ | 278,253 | |
C. LINDSTROM | | $ | 104,423 | | | $ | 174,984 | | | — | | | $ | 279,407 | |
J. MADDEN | | $ | 148,846 | | | $ | 294,960 | | | — | | | $ | 443,806 | |
C. MORKEN | | $ | 103,269 | | | $ | 174,984 | | | — | | | $ | 278,253 | |
M. NUNNELLY | | $ | 97,500 | | | $ | 174,984 | | | — | | | $ | 272,484 | |
R. SCOTT | | $ | 87,500 | | | $ | — | | | $27,692(2) | | $ | 115,192 | |
B. STEVENS | | $ | 54,327 | | | $ | 174,984 | | | — | | | $ | 229,311 | |
M. VERDI | | $ | 112,500 | | | $ | 174,984 | | | — | | | $ | 287,484 | |
| | A. AGRAWAL | | | $ 87,500 | | | $199,969 | | | — | | | $287,469 | |
| | S. CARTWRIGHT | | | $ 92,500 | | | $199,969 | | | — | | | $292,469 | |
| | L. CONIGLIARO(2) | | | $119,231 | | | $199,969 | | | — | | | $319,200 | |
| | T. FRANKLIN(3) | | | $103,269 | | | $199,969 | | | — | | | $303,238 | |
| | C. LINDSTROM | | | $120,000 | | | $199,969 | | | — | | | $319,969 | |
| | J. MADDEN | | | $170,000 | | | $319,934 | | | — | | | $489,934 | |
| | C. MORKEN | | | $110,000 | | | $199,969 | | | — | | | $309,969 | |
| | M. NUNNELLY(4) | | | $ 39,423 | | | — | | | — | | | $39,423 | |
| | B. STEVENS | | | $ 92,500 | | | $199,969 | | | — | | | $292,469 | |
| | M. VERDI | | | $117,500 | | | $199,969 | | | — | | | $317,469 | |
(1)
| (1)
| The amounts shown under this column reflect the dollar amount of the aggregate grant date fair value of equity-based compensation awards granted during the year, calculated in accordance with Financial Accounting Standards Board Codification Topic 718, Compensation-Stock Compensation, pursuant to our 2017 Omnibus Incentive Compensation Plan. Assumptions used in the calculation of these amounts are included in Note 18, "Stock-based“Stock-based compensation,"” to our audited consolidated financial statements for the fiscal year ended December 31, 20202022 included in our Annual Report on Form 10-K. In accordance with the rules promulgated by the SEC, the amounts shown exclude the effect of estimated forfeitures. |
(2)
| (2)
The amount shown includes the pro-rated cash fees paid to Ms. Conigliaro for the number of weeks she served as Chair of the nominating and governance committee in 2022. |
(3)
| While he stillThe amount shown includes the pro-rated cash fees paid to Ms. Franklin for the number of weeks she served as a member of the nominating and governance committee in 2022.
|
(4)
| Mr. Nunnelly’s service on the board Mr. Scott received $72,000 annually, paid quarterly, for secretarial and office support services.ended on May 19, 2022. The amount shown reflects the prorated amount of this additional paymentpro-rated cash fees paid to him for the number of weeks that Mr. Scott served onhe was a member of the board in 2020.2022. |
The following table sets forth, with respect to each non-employee director, (i) the grant date of the RSU award granted during the
20202022 fiscal year, (ii) the aggregate number of the
Company'sCompany’s common shares subject to each such award, and (iii) the grant-date fair value of each such award, calculated in accordance with ASC Topic 718.
| | | | | | |
Director | | Grant Date of
RSUs | | Number of Common Shares Subject to RSUs Granted(1) | | Grant Date
Fair Value |
A. AGRAWAL | | May 20, 2020 | | 5,112 | | $174,984 |
S. CARTWRIGHT | | May 20, 2020 | | 5,112 | | $174,984 |
L. CONIGLIARO | | May 20, 2020 | | 5,112 | | $174,984 |
C. LINDSTROM | | May 20, 2020 | | 5,112 | | $174,984 |
J. MADDEN | | May 20, 2020 | | 8,617 | | $294,960 |
C. MORKEN | | May 20, 2020 | | 5,112 | | $174,984 |
M. NUNNELLY | | May 20, 2020 | | 5,112 | | $174,984 |
B. STEVENS | | May 20, 2020 | | 5,112 | | $174,984 |
M. VERDI | | May 20, 2020 | | 5,112 | | $174,984 |
| | A. AGRAWAL | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | S. CARTWRIGHT | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | L. CONIGLIARO | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | T. FRANKLIN | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | C. LINDSTROM | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | J. MADDEN | | | May 19, 2022 | | | 7,726 | | | $319,934 | |
| | C. MORKEN | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | B. STEVENS | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
| | M. VERDI | | | May 19, 2022 | | | 4,829 | | | $199,969 | |
(1)
| (1)
| Except as otherwise indicated, theThe RSUs shown in this table vested in full on December 31, 2020,2022, and shares underlying such RSUs are issuable on December 31, 2021.
2023. |
23 2023 Proxy Statement | | | |
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| Director Compensation | |
| 2021 Proxy Statement |19
| |
The table below sets forth the aggregate number of common shares subject to unvested RSU awards held by each of our non-employee directors as of December 31,
2020.2022. There were no common shares subject to outstanding options held by our non-employee directors as of December 31,
2020.2022.
Director | | | Number of Common Shares
Subject to all Unvested Stock
Awards/Units(1) | |
| A. AGRAWAL | 5,548
| | 2,774 | |
| S. CARTWRIGHT | 4,455
| | 2,228 | |
| L. CONIGLIARO | | | — | |
C. LINDSTROM
| T. FRANKLIN | | | — | |
J. MADDEN
| C. LINDSTROM | | | — | |
C. MORKEN
| J. MADDEN | | | — | |
M. NUNNELLY
| C. MORKEN | | | — | |
| B. STEVENS | | | — | |
| M. VERDI | | | — | |
(1)
| The shares shown in this table are outstanding under sign-on RSU awards that were granted under our director compensation program in effect until December 31, 2019 and vest over a four-year period from the date of the director’s commencement of service. Effective January 1, 2020, we no longer grant sign-on RSUs to our new directors. |
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20 |2021 Proxy Statement
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|
|
Executive Officer Compensation | | | |
EXECUTIVE OFFICER COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
The compensation committee of the board of directors oversees our executive officer compensation program. In this role, the compensation committee reviews and approves all compensation decisions relating to our named executive officers. This Compensation Discussion and Analysis section discusses the compensation policies and programs for our Chief Executive Officer (referred to as our CEO), our Chief Financial Officer (referred to as our CFO) and our three
next most highly paid executive officers as determined under the rules of the SEC. Such individuals are referred to as our named executive officers.
Our named executive officers (also referred to as
"NEOs"“NEOs”) for
20202022 are:
| | |
N.V. "Tiger"“Tiger” Tyagarajan | | | President, Chief Executive Officer and Director | |
Edward J. Fitzpatrick
| Michael Weiner | | | Senior Vice President, Chief Financial Officer | |
| Balkrishan Kalra | | | Senior Vice President, Banking, Capital Markets, Consumer Goods, Retail, Life Sciences and Healthcare | |
| Darren SaumurSaumur* | | | Senior Vice President, Global Operating Officer | |
| Kathryn Stein | | | Senior Vice President, Chief Strategy Officer and Global Business Leader, Enterprise Services and Analytics | |
2020
*
| Mr. Saumur resigned from his position as Senior Vice President, Global Operating Officer of the Company, effective as of February 20, 2023. |
2022 Key Financial Highlights
In
2020,2022, we
faced a number of logistical and macroeconomic challenges related to the COVID-19 pandemic, including the need to quickly transition tens of thousands of employees across the globe to a virtual, work-from-home operating environment and extended economic uncertainty that resulted in delayed client decision-making as well as delays or cancellations of new projects or orders. All of these factors had an adverse impact on our bookings, revenues and operating income for the year. However, against this backdrop, our agility and culture of embracing change allowed us to rapidly adapt to meet client needs and pivot to new ways of working. We also focused on employee engagement and well-being during 2020, promoting employee training and re-skilling through our learning platform called Genome and providing internal opportunities through TalentMatch, our employee redeployment platform launched in 2020.Our financial results for the year, although lower than initially expected, reflect strong performance, including a 5% increase in total net revenues compared to 2019, in spite of the many challenges presented by the COVID-19 pandemic. We continued to followinvest for long-term growth following a strategy focused on delivering differentiated, domain-led solutions in a focused set of geographies, industry verticals and service lines. During the year we made acquisitions in twoWe sharpened our focus areas – experience-led transformation and data and analytics –on a portfolio of strategic clients and continued to invest in our existing digital capabilitiesemerging service lines. We also continued to invest in the learning and domain expertise,development of our employees to provide them with the critical skills needed for the future and to build their careers.
Select 2022 financial results are set out below.
(1)
Revenue growth on a constant currency basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period’s
foreign currency exchange rates adjusted for hedging gains/losses in such period.
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| Executive Officer Compensation | | | |
(2)
Adjusted income from operations margin is a non-GAAP financial measure used by our management for reporting, budgeting and decision-making purposes. Adjusted income from operations margin excludes certain recurring costs, namely stock-based compensation and amortization of acquired intangibles and, since April 2016, impairment of acquired intangibles. See Exhibit 1 to this Proxy Statement for a reconciliation of adjusted income from operations margin to the most directly comparable GAAP financial measure.
(3)
This is the peer group we use for purposes of Item 201(e) of Regulation S-K, consisting of the six companies that we believe are our closest reporting issuer competitors: Accenture plc, Cognizant Technology Solutions Corp., ExlService Holdings, Inc., Infosys Technologies Limited, Wipro Technologies Limited, and WNS (Holdings) Limited. The returns of the component entities of our peer group index are weighted according to the market capitalization of each company as of the end of each period for which a return is presented. The returns assume that $100 was invested on December 31, 2021 and that all dividends were reinvested.
Throughout 2022 there was significant economic and geopolitical uncertainty in
an effort to acceleratemany markets around the
business outcomesworld, including the markets in which we
can driveand our clients operate. Despite these challenges, our 2022 financial results reflect solid performance across all of our industry segments, highlighting the relevance of our Data-Tech-AI and Digital Operations services for our clients.
Our 2020 financial results include:
| |
Total net revenues increased 5%
2020 revenues were $3.71 billion, up 5% from $3.52 billion in 2019.
| Revenues from Global Clients increased 7%
2020 revenues from Global Clients (our clients other than the General Electric Company, or GE) were $3.3 billion, up 7% from 2019.
|
New bookings(1) performance
New bookings in 2020 were approximately $3.1 billion, down 20% from $3.9 billion in 2019.
| Diluted earnings per share increased 1%; adjusted diluted earnings per share(2)increased 3%
Diluted earnings per share were $1.57, up 1% from 2019, and adjusted diluted earnings per share were $2.12, up 3% from 2019.
|
| |
| 2021 Proxy Statement |21
|
| |
Income from operations increased 2%; adjusted income from operations(2) increased 5%
Income from operations in 2020 was $439 million, up 2% from 2019, and adjusted income from operations was $589 million, up 5% from 2019.
| Income from operations margin was 11.8%; adjusted income from operations margin(2) was 15.9%
Income from operations margin in 2020 was 11.8%, down 3% from 2019, and adjusted income from operations was 15.9%, in line with 2019.
|
Cash generated from operations was $584 million
Our cash generated from operations for the year ended December 31, 2020 was $584 million, up 36% from $428 million in 2019.
| $211 million returned to shareholders
In 2020, we returned a total of $211 million to shareholders. $137 million was in the form of share repurchases under our $1.75 billion share repurchase program and $74 million was in the form of quarterly cash dividends.
|
| (1)
| New bookings is an operating or other statistical measure and represents the total contract value of new client contracts and certain changes to existing client contracts to the extent such contracts represent incremental future revenue. Regular renewals of contracts with no change in scope, which we consider business as usual, are not counted as new bookings. For a more detailed description of new bookings, see "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations—New Bookings" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
|
| (2)
| Adjusted income from operations/margin and adjusted diluted earnings per share are non-GAAP financial measures used by our management for reporting, budgeting and decision-making purposes. Adjusted income from operations/margin exclude certain recurring costs, namely stock-based compensation and amortization of acquired intangibles and, since April 2016, impairment of acquired intangibles. See Exhibit 1 to this Proxy Statement for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.
|
Due to the impacts of the COVID-19 pandemic on the global business and economic environment, Overall, while our financial results for 2020 resulted in below-target performance against several of the financial metrics in our 20202022 performance-based compensation plans was strong and significantly lowerwe achieved above-target performance under our 2022 performance share awards, bonus payouts to our executives in 2020 compared to 2019. The compensation committee initially setnamed executive officers were lower than target, reflecting the targets for our 2020 performance-based compensation plans in the first quarter of 2020 before the onsetstrength of the COVID-19 pandemic, at which time the potential impact of the pandemic was not in consideration. In June 2020, the compensation committee reevaluated our compensation plans for the year and in light of the impactplan design, leading to date and the further expected impact of the pandemic on our financial results for the year, the compensation committee amended our 2020 performance compensation plans to lower the threshold performance levels under each plana lower-than-target Company Multiplier, as well as the financial metrics in our named executive officers’ bonus scorecards. Loweringrigor of the threshold goals enabled potential achievement of at least a minimum level of vesting under the plans and provided an incentive for our management to continue to drive maximum performance under the circumstances. The target and outstanding performance levels for the financial metrics under each plan were not adjusted. Additionally, certain qualitative goals in our named executive officers’ bonus scorecards were added or revised to account for specific challenges presented by the COVID-19 pandemic as discussed below under “Compensation Components—Annual Cash Bonus—Bonus Scorecards.” Additionally, in recognition of the need to focus our management team on employee engagement and well-being given extended lockdowns and stay-at-home orders, in June 2020 the compensation committee approved the establishment of an additional bonus pool linked to an internal employee engagement metric, which had a maximum value of approximately 10% of the target bonus pool under our annual cash bonus plan. See “Compensation Components—Annual Cash Bonus—Bonus Pool” below for further information regarding this additional bonus pool.
If the threshold levels for the financial metrics under our 2020 performance-based compensation plans had not been adjusted mid-year, there would have been no payout under our annual cash bonus plan and a less than 17% vesting percentage under our long-term performance share awards for 2020. Based on our actual results for 2020 and after taking into account the revised threshold levels, our 2020 performance-based compensation plans were funded below target (88%) for our annual cash bonus plan and significantly below target (68%) for our performance share awards.
2022 individual scorecards.
We believe that our pay-for-performance program, which incentivizes higher-than-target growth in revenues,
adjusted operating income,
transformation services revenuesnet bookings and
netrenewal bookings while requiring a threshold level of
adjusted operating income margin, combined with the strength and resilience of our business model as well as a continued focus on our
strategy based on a set of industry verticals and service lines,strategic goals, contributed to our operational and financial achievements in
2020.
2022. | |
22 |2021 Proxy Statement
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Compensation Objectives
The primary objectives of our compensation program for our executives, including our named executive officers, are to attract, motivate and retain highly talented individuals who are committed to our core values of courage, curiosity, incisiveness and integrity. Our compensation program is designed to incentivize and reward the achievement of our annual, long-term and strategic goals, such as growing revenues, improving operating margins and deepening client relationships. It is also designed to align the interests of our executives, including our named executive officers, with those of our shareholders by rewarding performance that exceeds our
target goals, with the ultimate objective of increasing shareholder value.
Our compensation committee is responsible for overseeing the goals and objectives of our executive compensation plans and programs. The compensation committee bases our executive compensation programs on the same objectives that guide us in administering the compensation programs for all of our employees globally:
Compensation is based on the individual’s level of job responsibility.
Compensation reflects the value of the job in the marketplace.
Compensation programs are designed to incentivize and reward performance, both on an individual and Company.
Company basis.Our compensation committee considers risk when developing our compensation program and believes that the design of our current compensation program does not encourage excessive or inappropriate risk taking. Our base salaries provide competitive fixed compensation. Under our annual cash bonus program, the target bonuses for our named executive officers range from 100% to
160%158% of their base salaries, and bonuses are payable based on attainment of multiple financial and non-financial short-term performance goals. We believe this structure, which is based on a number of different performance measures together with a meaningful cap on the potential payout, deters executives from focusing exclusively on the specific financial metrics that might encourage excessive short-term risk taking.
Our named executive officers are also granted performance share awards tied to the attainment of a number ofmultiple performance goals over the fiscal year and continued service over a three-year period. We believe that the three-year service vesting requirement under these awards encourages the recipients to focus on sustaining the Company'sCompany’s long-term performance. Our named executive officers also periodically receive option grants, which vest over a five-year period.period, and we grant restricted share units from time to time as sign-on grants. The value of our options and restricted share unit awards is tied to sustained long-term appreciation of our share price, which we believe mitigates excessive short-term risk taking. For 2023, in part in response to shareholder feedback we have received on our compensation practices, our compensation committee has approved changes to our long-term incentive compensation program. See the section titled “2022 Shareholder Feedback and Responsiveness” below for more information about these changes.
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✘
WHAT WE
DON’T DO
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Executive Compensation Practices
We strive to maintain sound governance standards and compensation practices by continually monitoring the evolution of
"best“best practices.
"” As in prior years, we incorporated many best practices into our
20202022 compensation programs, including the following:
| | ✔ | |
WHAT WE DO
|
✓Align our executive pay with performance
| |
| | ✓ ✔
| | | Include a "clawback"“clawback” provision in our performance share awards | |
✓
| ✔ | | | Make payouts under our executive bonus plan only if threshold Company performance is met | |
| | ✓ ✔
| | | Set challenging performance objectives for our performance share awards and annual bonus | |
✓
| ✔ | | | Maintain a meaningful equity ownership policy for the CEO (6x base salary) and other NEOs (1x base salary) | |
| | ✓ ✔
| | | Regularly review the relationship between CEO compensation and Company performance | |
✓
| ✔ | | | Include caps on individual payouts in short- and long-term incentive plans | |
| | ✓ ✔
| | | Maintain an independent compensation committee | |
✓
| ✔ | | | Hold an annual "say-on-pay"“say-on-pay” advisory vote | |
| | ✓ ✔
| | | Prohibit hedging and pledging of Company common shares | |
✓
| ✔ | | | Retain an independent compensation consultant | |
| | ✓ ✔
| | | Place a substantial majority of executive pay at risk | |
✓
| ✔ | | | Regularly evaluate our share utilization and the dilutive impact of equity awards | |
| | ✓ ✔
| | | Mitigate the potentially dilutive effect of equity awards through our share repurchase program |
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WHAT WE DON'T DO
| ✔ | | | Include restrictive covenants in equity award agreements, with a “clawback” of equity in certain circumstances | |
⨯
| ✔ | | | Maintain a three-year cliff service vesting schedule for annual performance share awards
| |
| | ✘ | | | Offer contracts with multi-year guaranteed salary or bonus increases | |
| | ⨯✘
| | | Provide guaranteed retirement benefits or contribute to non-qualified deferred compensation plans | |
⨯
| ✘ | | | Provide tax gross-ups (except with respect to the reimbursement of relocation expenses) | |
| | ⨯ ✘
| | | Provide excessive perquisites | |
⨯
| ✘ | | | Grant equity awards with "single-trigger"“single-trigger” change of control provisions | |
| | ⨯ ✘
| | | Pay dividends or dividend equivalents on unvested equity awards | |
⨯
| ✘ | | | Reprice or exchange underwater options without shareholder approval | |
| | ⨯ ✘
| | | Maintain special retirement plans exclusively for executive officers | |
⨯
| ✘ | | | Time the release of material non-public information to affect the value of executive compensation | |
| | ⨯ ✘
| | | Allow short sales or purchases of equity derivatives of our common shares by officers or directors | |
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Pay for Performance Philosophy
The core objective of our executive officer compensation program is to align pay and performance. We believe that as an
employee'semployee’s level of responsibility increases, so should the proportion of total compensation opportunity that is structured in the form of long-term incentive opportunities. The compensation of our named executive officers for
20202022 reflects both our
20202022 performance and our commitment to providing executive compensation opportunities that are linked to Company performance, including progress on long-term strategic goals and shareholder value
creation, as well as the extraordinary impact of the COVID-19 pandemic.creation.
The material components of our compensation are (i) a fixed base salary and (ii) variable, performance-based compensation comprised of (A) short-term incentive compensation under our performance-based annual cash bonus program and (B) long-term incentive compensation in the form of equity awards, which
are generallyhave historically been granted as performance share awards on an annual basis along with periodic option awards. Our incentive plans are predominantly based on diverse
strategic financial metrics that
are aligned with our strategy to drive revenue and profitability goals and focus on long-term
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24 |2021 Proxy Statement
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strategic priorities. Payouts to our executives vary significantly year to year based on performance against challenging targets.
The charts below reflect the target pay mix between fixed and variable compensation components based on target compensation for our NEOs during fiscal year
2020,2022, which reflects our pay-for-performance philosophy. In
2020,2022, approximately
92%91% of our
CEO'sCEO’s total
2020 target annualized compensation of
$8,950,000$9,374,000 was performance-based and approximately
77%81% (on average) of the total
2020 target compensation of our other named executive officers was performance-based. In the charts below, performance-based compensation includes short-term incentives in the form of our annual cash bonus plan and long-term incentives in the form of both performance share and option awards. For our CEO, target compensation includes the annualized grant-date value of the option award granted to him in 2018.
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We welcome and value the views and insights of our shareholders. We have ongoing communications with our shareholders in the normal course of business and
takeevaluate all shareholder
feedback seriously.feedback. Leading up to and following our
20202022 annual meeting,
at which 96% of the shares voted on our say-on-pay proposal were voted in favor of our 2021 executive compensation practices, we conducted extensive shareholder outreach to better understand our
shareholders'shareholders’ perspectives on our compensation practices and to solicit their feedback. In the second quarter of
2020,2022, we contacted shareholders owning
approximatelymore than 70% of our outstanding shares, including
14 of our top
1519 shareholders, and we had discussions with shareholders representing approximately
10% of our total shares then outstanding. In the fourth quarter of 2020, we again contacted shareholders owning approximately 70% of our outstanding shares, including 13 of our top 15 shareholders, and we had discussions with shareholders representing approximately 8%15% of our total shares then outstanding. The remaining shareholders from whom we solicited feedback in
20202022 either declined to meet or did not respond to our inquiries.
The meetings with these shareholders were typically attended by our Chief Financial Officer, our Chief Legal Officer and our Head of Investor Relations. This effort supplemented the ongoing communications and meetings we hold with our investors throughout the year and focused on the Company'sCompany’s compensation practices and philosophy, and the alignment of our compensation program with our strategic direction and our environmental, social and governance (“ESG”)ESG practices and philosophy.
In addition, in June 2022, we hosted our Investor and Analyst Day in New York City at which our investors had an opportunity to hear directly from our CEO and other members of our leadership team about our overall strategy, including our perspectives on our market, drivers of our growth and profitability and our capital allocation and financial plans.
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2020
| Executive Officer Compensation | | | |
2022 Shareholder Feedback and Responsiveness
Based on the feedback we received from our shareholders, in
20202022 our compensation committee evaluated several potential changes to our compensation practices. The table below highlights
the | |
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certain compensation practices that were evaluated and the compensation committee'scommittee’s responses to the shareholder feedback, including actions that were taken as a result, where applicable.
COMPENSATION
PRACTICES | | | OUR RESPONSE/ACTIONS WE TOOK | |
Proxy statement disclosure – lack
| Use of disclosure of performance goalstime-based options in long-term incentive compensation | In 2019, certain
| | Historically, our compensation committee has granted options to our NEOs, as it did for our NEOs other than Messrs. Tyagarajan and Weiner in 2022. Several of our shareholders expressed a desire for the Company to disclose the performance goals used insuggested that we consider eliminating time-based option grants, particularly multi-year option grants, from our annual bonus plan. We responded to that feedback by including new disclosure in our proxy statement for our 2020 annual meeting of shareholders about our annual bonus plan, namely the bonus scorecard components for each NEO and the percentage split between financial and non-financial metrics for each NEO’s bonus scorecard. See the section below titled “Annual Cash Bonus—Bonus Scorecards” for this disclosure for 2020. We do not disclose certain other performance goals in the annual bonus and long-term incentive plans because we believe that this information is competitively sensitive. Certain of our shareholders expressed satisfaction with this new disclosure, while others requested that we continue to evaluate whether more information could be disclosed without revealing competitively sensitive information. Ourcompensation. While the compensation committee carefullybelieves that multi-year option grants have focused our NEOs on share price appreciation, aligned their interests with shareholders and had greater retention value than other equity vehicles, the compensation committee considered thisthe feedback received from shareholders and determined that the current levelgoing forward, including for 2023, we will provide annual grants of disclosure is appropriate considering the need not to disclose competitively sensitive information.RSUs in lieu of periodic grants of options. | |
| Inclusion of ESG metricsTSR or relative TSR metric in performance compensation program | | | Several of our shareholders suggested that we consider including ESG metricsa TSR or relative TSR metric in our performance-based compensation. In 2020, we incorporatedFollowing discussions with shareholders and with input from FW Cook, an employee engagement metric intoindependent compensation consulting firm, our bonus plan by establishing an additional bonus poolcompensation committee evaluated several design alternatives for our management team which was funded based onperformance share awards that incorporated a minimum level of overall positive employee feedback as measured by our AI-enabled employee engagement tool, “Amber.” SeeTSR or relative TSR performance metric and decided to include a relative TSR component in the section below titled “Annual Cash Bonus” for more detail.2023 performance share awards. | |
| One-year performance period for performance share awards | The
| | Several of our shareholders suggested that we consider increasing the length of the performance period for our performance share awards. While the compensation committee believes there are a number of benefits to a one-year performance period combined with a three-year service period, and that these benefits significantly outweigh any disadvantages. In particular, the compensation committee’s ability to reset performance objectives and tailor goals year over year in response to near-term changes in Company strategy or performance, including where the goals are achieved early in thecommittee determined that it will utilize a three-year performance period makes a one-yearfor performance period more powerful as a tool for incentivizing consistent, exceptional performance. share awards beginning with the 2023 performance share awards. | |
Our compensation committee is responsible for reviewing the performance and potential of each of our
senior executives,executive officers, including our named executive officers, approving the compensation level of each of our
senior executives,executive officers, establishing criteria for granting equity awards to our
senior executivesexecutive officers and other employees, and approving such grants.
The compensation committee typically reviews each component of compensation every 12 months with the goal of allocating compensation between cash and non-cash compensation and between short- and long-term compensation, and combining the compensation elements for each executive in a manner we believe best fulfills the objectives of our compensation program.
The compensation committee has not adopted a policy for the allocation of compensation between cash and non-cash components or between short-term and long-term components, nor has the compensation committee adopted a pre-established ratio between the
CEO'sCEO’s compensation and that of the other named executive officers. Rather, the compensation committee, which includes experienced directors who have served as members of the boards and compensation committees of other public companies, works closely with our CEO, discussing with him the
Company'sCompany’s overall performance, the
CEO'sCEO’s own performance and his evaluation of and compensation recommendations for the other named executive officers. See the section titled
"2020“2022 Target Pay Mix and Pay
Positioning"Positioning” below for further details.
The compensation committee then utilizes its judgment and experience in making all compensation determinations. The compensation
committee'scommittee’s determination of compensation levels is based upon what
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26 |2021 Proxy Statement
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the members of the committee deem appropriate, considering information such as the factors listed above, as well as input from our CEO, shareholder feedback, publicly available information on compensation practices in our industry, and information and advice provided by independent compensation consultants.
Base salaries and target annual bonuses
for 2022 were reviewed
in early 2020at the end of 2021 and adjustments were approved by the compensation committee for certain of our named executive officers.
TargetBase salary and target bonus increases approved
early in 2020at the end of 2021 were made effective January 1,
2020. However, as a result of the onset of the COVID-19 pandemic, we decided to postpone the implementation of base salary increases Company-wide until we had a clearer picture of the likely impact of the pandemic on our business and 2020 financial results. Therefore, 2020 base salary increases for certain of our named executive officers that were approved in early 2020 were not made effective until September 1, 2020, eight months after their initially approved effective date. Regular base salary increases for our eligible employees generally were deferred for six months as a result of the pandemic. There were no changes to our CEO's base salary and target bonus in 2020. 2022.
The performance goals for our 20202022 annual bonus plan and the 20202022 performance share awards were also approved by the compensation committee in early 20202022 based on expected financial performance for the full year 20202022 and reflected the Company's Company’s
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| Executive Officer Compensation | | | |
strategic and operational short- and long-term priorities. The compensation committee determined at that time that the targets under our
20202022 incentive compensation plans were challenging to achieve but attainable without taking excessive risk, and the targets were consistent with the financial outlook we disclosed at the beginning of
2020. As discussed under “2020 Key Financial Highlights” above, in June 2020, in light of the adverse impact to date and the expected further adverse impact of the COVID-19 pandemic on our 2020 revenues, bookings and operating income, the compensation committee approved amendments to both the 2020 annual bonus plan and 2020 performance share awards to reduce the threshold performance levels for each financial metric and qualifying targets under each plan. The thresholds and certain goals in our named executive officers’ bonus scorecards were also revised in June 2020 given the unprecedented challenges faced by the Company and the need to focus our executives on the right goals, including employee well-being, to ensure our successful navigation through the COVID-19 pandemic, as discussed under “Compensation Components—Annual Cash Bonus—Target Bonuses” below.2022.
Role of CEO in Compensation Decisions
In late 2021, the CEO provided the compensation committee recommendations on adjustments to the base salaries and target bonuses of the other named executive officers for 2022 as well as grants of long-term incentive awards. After the end of the
20202022 fiscal year, the compensation committee and the CEO discussed our business performance, his performance and his evaluation of the level of achievement of the individual objectives set forth in the
2022 bonus scorecards of the other named executive
officers and certain other members of senior management. The CEO also provided recommendations on adjustments to the base salaries and target bonuses of the other named executive officers as well as grants of long-term incentive awards.officers. The compensation committee took into consideration the
CEO'sCEO’s recommendations but made the final decisions on compensation as it deemed appropriate. The compensation committee, without the CEO present, determined the
CEO's 2020CEO’s 2022 compensation.
Role of Consultants and Advisors in Compensation Decisions
The compensation committee has the authority to retain and terminate an independent third-party compensation consultant and to obtain independent advice and assistance from internal and external legal, accounting and other advisors.
ManagementThe compensation committee has periodically engaged an independent compensation consultant that meets with the
compensation committee and advises
the compensation committee with respect toon compensation trends and best practices, plan design, and the competitiveness of CEO
compensation awards.compensation.
With respect to the CEO, the compensation committee
generally reviews a market study of CEO compensation at least
once every
threetwo years.
The last study was conducted inIn early
2018 using 2017 proxy data2022, the compensation committee reviewed a report prepared by FW Cook, an independent
external compensation consulting firm,
in connection with itssetting forth FW Cook’s evaluation and recommendations
concerning our CEO's 2018 compensation (the “2018 Report”), and the compensation committee has reviewed a market study of CEO compensation in 2021 to be used for 2021 | |
| 2021 Proxy Statement |27
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compensation. With respect to theregarding CEO compensation for 2020, the compensation committee used benchmarking information from the 2018 Report, adjusted by management to account for the passage of time since the date the report was prepared.2022 using 2021 proxy data (the “2022 Report”). The peer group used by FW Cook in the 20182022 Report was based on the peer group used by Institutional Shareholder Services or ISS,(“ISS”) in its 20172021 proxy analysis and benchmark policy voting recommendation report.report for the Company. As of December 31, 2017,2021, our revenues ranked nearat the median45th percentile and our market capitalization ranked betweennear the 25th percentile and median of the peer group companies used in the ISS report. In addition, as of December 31, 2017, our one-year TSR was near the 75th percentile and our three-year TSR was between the median and 75th percentile of that peer group.
Peer Group Companies for the CEO | |
| Akamai Technologies, Inc. | DST Systems, Inc.
| MoneyGram International, Inc.
|
Autodesk, Inc.
| Euronet Worldwide, Inc. | Paychex, Inc.
| | Synopsys | |
Blackhawk Network
| Alliance Data Systems Corporation | | | FleetCor Technologies, Inc. | | | TTEC Holdings, Inc. | Fiserv, Inc.
| Sykes Enterprises, Incorporated
|
| Booz Allen Hamilton | | | Gartner, Inc. | | | Unisys Corporation | |
| | Broadridge Financial Solutions, Inc. | FleetCor Technologies, Inc.
| The Western Union Company
|
Cimpress N.V.
| Gartner, Inc.
| Total System Services, Inc.
|
Citrix Systems, Inc.
| Global Payments Inc.
| Worldpay, Inc.
|
Convergys Corporation
| Jack Henry & Associates, Inc. | | | The Western Union Company | |
CoreLogic, Inc.
| CACI International Inc | | | MAXIMUS, Inc. | | | | |
| | Citrix Systems, Inc. | | | Paychex, Inc. | | | | |
| | Conduent Inc. | | | Sykes Enterprises, Incorporated | | | | |
With respect to
In connection with establishing the 2022 compensation for our named executive officers other than
ourthe CEO,
for 2020 compensation the compensation committee reviewed, for reference, materials prepared by Aon Hewitt,
a compensation consulting firm, for management in late
20192021 showing peer group compensation levels and practices for the peer group set forth below.
We do not believe many companies compete directly with us across our select industry verticals and service offerings. In developing a peer group for our named executive officers other than the CEO, Aon Hewitt included companies with whom we compete for business and/or talent and companies in the broader technology industry and for which sufficient disclosure was available in publicly available proxy statements at the time of the review. In cases where the peer company data on comparable management positions was inadequate or insufficient, Aon Hewitt also provided target compensation data from its published surveys for positions comparable to those of our executive officers (in terms of scope of responsibility).
In late 2019,
At the end of 2021, the compensation committee used the market data included in those materials to establish each element of the 20202022 compensation for our named executive officers other than the CEO. In comparing our named executive officer compensation with that of the peer and survey group used by Aon Hewitt, the compensation committee accounted for differences in revenue size and market capitalization between us and the companies in those groups by comparing the compensation of our named executive
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| Executive Officer Compensation | | | |
officers with the compensation paid by the peer and survey group companies to individuals with a similar scope of responsibility but not necessarily the same title. In addition, the compensation committee reviewed data presented by management for additional peers as appropriate by position. While the compensation committee relies on the peer and survey group analysis to provide market data and relevant trend information, it does not consider the analysis as a substitute for its collective business judgment.
Peer Group Companies for Named Executive Officers other than the CEO* | |
| Accenture plc | Citrix Systems, Inc.
| HCL Technologies Ltd.
|
Akamai Technologies, Inc.
| Cognizant Technology Solutions Corporation | | | PricewaterhouseCoopers | |
| | Akamai Technologies, Inc. | | | ExlService Holdings, Inc. | | | Red Hat, Inc. | |
| | Autodesk, Inc | | | Gartner, Inc. | | | Tata Consultancy Services Limited | |
| | Capgemini S.A. | | | HCL Technologies Ltd. | | | | |
| | Citrix Systems, Inc. | | | International Business Machines Corporation |
Automatic Data Processing, Inc.
| ExlService Holdings, Inc.
| Tata Consultancy Services Limited
|
Autodesk, Inc
| Fidelity National Information Services, Inc.
| |
Capgemini S.A.
| Gartner, Inc.
| |
∗
| ∗
| Different subsets of the peer group were used for different named executive officers depending on the officer’s position and geographic location. Differences in revenue size and market capitalization between us and companies in the peer group were accounted for by comparing roles with a similar scope of responsibility. |
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28 |2021 Proxy Statement
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20202022 Target Pay Mix and Pay Positioning
The compensation committee annually reviews the total direct compensation and pay mix for the CEO and each other
named executive officer. In determining total compensation opportunities and the pay mix for our executives, the compensation committee considers many factors, including (i) our pay for performance compensation philosophy; (ii) competitive market data to provide a frame of reference for how our peer group companies set compensation opportunities; (iii) the nature and scope of the
executive'sexecutive’s role at the Company; (iv) the
individual'sindividual’s performance, contributions to the Company and impact to shareholder value; and (v) the retention value of the compensation.
While we do not have any pre-established allocation of the target pay mix, the compensation
committee'scommittee’s overall intent is to emphasize the variable, performance-based components of pay and, accordingly, we allocate a significant percentage of targeted total compensation in the form of long-term incentives and our annual performance-based bonus plan,
payouts under both of which fluctuate with Company performance. Our long-term incentives
arefor 2022 were in the form of performance share awards and options, which the compensation committee believes also incentivize long-term Company performance since the value of the options is directly tied to the value of the underlying shares.
Our
CEO'sCEO’s compensation is aligned with our performance and our
shareholders'shareholders’ interests. As indicated in the chart on page
25, 92%28, 91% of our
CEO'sCEO’s target annualized total direct compensation for
20202022 was based on achievement of annual financial goals and share price performance and thus strongly linked to Company results. Only
8%9% of our
CEO's 2020CEO’s 2022 target compensation was in the form of fixed pay. Against a backdrop of consistent
high performance over his tenure, and based on the peer benchmarking information included in the
20182022 FW Cook report on CEO compensation
(as adjusted– which showed that for 2021 our CEO’s base salary was close to
account for the
passage25th percentile and his target bonus was in the range of
time sincemedian compared to the
report was prepared),peer group – the compensation committee made the following decisions regarding the
CEO'sCEO’s target annualized compensation for
2020:2022:The committee reviewed but made no changes to hisHis base salary of $750,000, unchanged since 2018.
His annual target bonus opportunity remained at $1,200,000, unchanged since 2014.
He was granted a performance share award covering shares having a value of $3.5$3.75 million (compared to $4 million(the same as the target value of his performance share award in 2019)2021). Together with the annualized target value of the option granted to him in 2018, the annualized target value of his long-term incentive awards for 20202022 was $7$7.25 million, (compared to $7.5 million in 2019).
unchanged from 2021.Accordingly, our CEO'sCEO’s total target annualized direct compensation for 20202022 was set at $8,950,000, a decrease$9,374,000, an increase of approximately 5%less than 1% compared to $9,450,000$9,350,000 for 2019.2021. This total target annualized direct compensation positions Mr. Tyagarajan’s 2022 compensation between the median and the 75th percentile relative to the peer group (based on the 2021 proxy data included in the 2022 Report), reflecting Mr. Tyagarajan’s exceptional performance as well as his long and successful tenure as our CEO.
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The
| Executive Officer Compensation | | | |
In addition, in targeting our CEO’s total direct compensation competitively compared to the peer group, the compensation committee
designed thisconsidered that our CEO’s pay mix
to reflectreflects a stronger performance orientation (with
92%91% performance-based) compared to the total direct compensation for CEOs in the
20182021 peer group.
The make-up of our CEO's long-term incentives also does not include any time-based restricted share units. We believe the structure of his long-term incentive compensation,
which includes the 2018 multi-year option grant and annual performance share awards, focuses our CEO on managing the business for the long term and reinforces the link between his earning opportunity and the long-term growth of the Company and total shareholder return.
Other NEO Compensation Mix
For our other named executive officers, we continued to
follow the philosophy of maintainingmaintain a compensation structure with a significant portion of total compensation at risk based on Company and share price performance. As indicated on the chart on page
25,28, approximately
77%81% (on average) of the
20202022 total target direct compensation for our other named executive officers was performance-based.
In
2020,2022, in accordance with our overall compensation philosophy, we targeted our
other named executive
officers'officers’ base salaries between the 25
th percentile and median and
targettotal annual cash compensation (base plus target bonus)
betweenin the
range of median
and 75th percentile compared to the peer and survey groups used by the compensation committee in setting
2020 compensation, although the2022 compensation. The annual cash compensation targets
were higher for certain named executive
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officers were higher than that range based on their role and position. The compensation committee believes that, similar to our CEO, the total target direct compensation for our other NEOs is appropriate because the total pay package (with 77%81% at risk on average) has a stronger performance orientation compared to the total direct compensation for comparable positions in the peer and survey groups. For instance, 50% of the total target cash compensation ofSimilar to our CEO, our other NEOs is comprised of target bonus, which is at risk and subject to the achievement of challenging performance conditions that are reset each year. Similarly, the make-up of our other named executive officers' 2020NEOs’ 2022 long-term incentives consist of periodic grants of options, which does not includerequire appreciation in our share price over time for our NEOs to realize any time-based restrictedvalue, and annual performance share units, is also more heavily weighted to performance compared to the peer and survey groups. awards.
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| Executive Officer Compensation | | | |
Each year, our compensation committee considers the outcome of our annual shareholder advisory vote on executive compensation when making decisions relating to the compensation of our named executive officers and our executive compensation programs and policies. At our 20202022 annual meeting of shareholders, approximately 84%96% of the votes cast were in favor of the compensation of our named executive officers, a significant increaseofficers.
Following the results of our 2022 say-on-pay vote and based on
feedback received from our shareholders, the levelcompensation
committee considered several potential changes to our
compensation practices. For 2023, the compensation committee
has approved changes to the design of supportour long-term incentive
compensation plan. For more information about shareholder
feedback we received in 2022 and how we have responded to
that feedback, see the section titled “Shareholder Engagement”
above. The compensation committee will continue to take into
account future shareholder advisory votes on the 2019 vote when approximately 70% of the votes cast were in favor of this proposal.executive
| |
Following the results of our 2020 say-on-pay vote and based on feedback received from our shareholders, the compensation committee considered several potential changes to our compensation practices and elected to make certain changes to our practices and proxy disclosure. For more information about shareholder feedback and responsiveness in 2020, see the section titled “Shareholder Engagement” above. The compensation committee will continue to take into account future shareholder advisory votes on executive compensation and other relevant market developments affecting executive officer compensation in order to determine whether any subsequent changes to our programs and policies are warranted to reflect shareholder concerns or to address market developments.
| 2020 Say-on-Pay Vote Result
|
compensation and other relevant market developments affecting
executive officer compensation to determine whether any subsequent changes to our programs and policies are
warranted.
Frequency of
"Say-on-pay"“Say-on-pay” Shareholder Advisory Vote
Based on the results of the
"say-on-frequency"“say-on-frequency” vote held at our 2017 annual meeting, at which approximately 96% of the votes submitted by our shareholders were in favor of holding an annual shareholder advisory
"say-on-pay"“say-on-pay” vote, our board of directors has decided that shareholder advisory
"say-on-pay"“say-on-pay” votes will occur annually.
We are holding a “say-on-frequency” vote this year at our 2023 annual meeting, and our board recommends that shareholders vote to hold a shareholder advisory “say-on-pay” vote every year. See “Proposal 3—Non-binding Vote on the Frequency of Non-binding Shareholder Votes on Executive Compensation.” | |
30 |2021 Proxy Statement
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Compensation Components
We regularly evaluate how to best compensate our executive officers, based upon market data and the extensive experience of our compensation committee with performance and retention practices. For fiscal 2020,2022, our executive compensation program had three primary components, in addition to certain benefits and perquisites:
Short-term, performance-based incentive compensation, or our annual cash bonus program; and
Long-term, performance- and time-based equity compensation in the form of performance share awards and options.
Base salary is provided to ensure that we are able to attract and retain high-quality executives. It is intended to provide a fixed level of overall compensation that does not vary annually based on performance or changes in shareholder value. Base salary reflects the experience, knowledge, skills and performance records our
executives, including our named executive officers bring to their positions and the general market conditions in the country in which
the executivesthey are located. In addition, we have entered into employment agreements with our
CEO, CFO and Mr. Saumur,NEOs, each of which specifies a minimum base
salary as described insalary. For a description of our NEOs’ employment agreements, see the
footnotessection below titled “—Narrative Disclosure to
the tableSummary Compensation Table and Grants of Plan-Based Awards Table—Employment Agreements with Named Executive Officers” below.
Our compensation committee reviews the base salaries of our executives every 12 months. The compensation committee determines changes in base salaries based on various factors, including the importance of the executive'sexecutive’s role in our overall business, the performance and potential of the executive, general Company performance, and the market practices in the country where
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| Executive Officer Compensation | | | |
the named executive officer is
located.located, and the executive’s current base salary relative to benchmarking data for the peer group companies. In connection with such review, our CEO provides compensation recommendations for
the executives who directly report to him, including our named executive officers, and the compensation committee considers the
CEO'sCEO’s recommendations in setting their base salaries.
The following table sets forth, for each of our named executive officers, such
officer's 2019officer’s 2021 and
20202022 base salary.
The base salaries shown are as of December 31 of each year. Due to the COVID-19 pandemic, 2020Base salary
increases, where applicable, that were approved in early 2020 were deferred for most of the year andchanges became effective on
SeptemberJanuary 1
2020. | | | | | | | | |
Executive | | 2019 Base
Salary | | 2020 Base
Salary |
N.V. TYAGARAJAN(1)(6) | | $ | 750,000 | | | $ | 750,000 | |
EDWARD J. FITZPATRICK(2) | | $ | 620,000 | | | $ | 620,000 | |
BALKRISHAN KALRA(3) | | $ | 525,000 | | | $ | 650,000 | |
DARREN SAUMUR(4)(6) | | $ | — | | | $ | 500,000 | |
KATHRYN STEIN(5) | | $ | — | | | $ | 500,000 | |
| | N.V. TYAGARAJAN(1)(6) | | | $800,000 | | | $824,000 | |
| | MICHAEL WEINER(2) | | | $600,000 | | | $600,000 | |
| | BALKRISHAN KALRA(3) | | | $680,000 | | | $700,000 | |
| | DARREN SAUMUR(4)(6) | | | $515,000 | | | $575,000 | |
| | KATHRYN STEIN(5) | | | $550,000 | | | $600,000 | |
(1)
| (1)
| We entered into an employment agreement with Mr. Tyagarajan on June 15, 2011 when he became our president and chief executive officer. The agreement provides for an annual base salary of not less than $600,000, which was increased by 5% to $630,000 in September 2012 and increased by 19% to $750,000, effective June 1, 2018. The 2018 increase represented anFor 2022, the compensation committee approved a 3% increase in Mr. Tyagarajan'sTyagarajan’s base salary, of between 3%from $800,000 to $824,000. See the section above titled “2022 Target Pay Mix and 4% on an annualized basis since becoming our Chief Executive Officer. His base salary was reviewed but not adjusted in 2019 or 2020.Pay Positioning—CEO Compensation Mix.” Mr. Tyagarajan'sTyagarajan’s base salary reflects the importance of his role as our Chief Executive Officer in addition to his personal performance. For a description of the employment agreement with Mr. Tyagarajan, see "—Narrative Disclosure to Summary Compensation Table and Grant of Plan-Based Awards Table-Employment Agreements with Named Executive Officers."
|
(2)
| (2)
| On June 26, 2014, we entered into an employment agreement with Mr. Fitzpatrick when he became our chief financial officer. The employment agreement specifies that Mr. Fitzpatrick will receive an annualWeiner's base salary for 2021 was established in August 2021 upon his commencement of $600,000 per year, which will be reviewed periodically and may be increased atemployment with the discretion of the compensation committee.Company. There was no change in Mr. Fitzpatrick'sWeiner’s base salary was increased by approximately 3%from 2021 to $620,000 effective January 1, 2019.2022. Mr. Fitzpatrick'sWeiner’s base salary reflects the importance of his role as our Chief Financial OfficerOfficer.
|
(3)
| For 2022, the compensation committee approved an approximately 3% increase in addition to his personal performance. For a description of his employment agreement, see "-Narrative Disclosure to Summary Compensation Table and Grant of Plan-Based Awards Table-Employment Agreements with Named Executive Officers." |
| (3)
| Mr. Kalra'sKalra’s base salary, was increased by approximately 24% effective September 1, 2020.from $680,000 to $700,000. Mr. Kalra'sKalra’s base salary reflects the importance of his role as the business leader for our banking and capital markets and consumer goods, retail, life sciences and healthcare verticals, which cover a substantial portion of our overall business, in addition to his personal performance. |
(4)
| |
| 2021 Proxy Statement |31
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| (4)
| On February 26, 2018, we entered intoFor 2022, the compensation committee approved an employment agreement withapproximately 12% increase in Mr. Saumur when he became our global operating officer. The employment agreement specifies that Mr. Saumur will receive an annualSaumur’s base salary, of $500,000 per year, which is subjectfrom $515,000 to our review and may be changed at our discretion.$575,000. Mr. Saumur was not a named executive officer prior to 2020. Mr. Saumur'sSaumur’s base salary reflects the importance of his role as our global operating officer in addition to his personal performance.
|
(5)
| (5)
| For 2022, the compensation committee approved an approximately 9% increase in Ms. Stein was not a named executive officer priorStein’s base salary, from $550,000 to 2020.$600,000. Ms. Stein'sStein’s base salary reflects the importance of her role as our chief strategy officer and global leader of our enterprise services businessand analytics businesses in addition to her personal performance. |
(6)
| (6)
| All of our named executive officers’ base salaries are denominated in U.S. dollars. The base salaries for Mr. Tyagarajan (following his relocation to the United Kingdom in November 2020) and Mr. Saumur are converted to and paid in U.K. pounds sterling and Canadian dollars, respectively. |
Annual cash bonuses are designed to reward our executives, including our named executive officers, for Company performance and our
executives'executives’ individual performance during the most recent year. We believe that the immediacy of these cash bonuses, in contrast to our equity grants, which vest over a period of time, provides a significant incentive to our executives to achieve their respective individual objectives, our Company objectives and our overall long-term and strategic goals, such as client satisfaction, growing revenues
and bookings, including client renewals, improving operating margins, managing employee attrition levels and making disciplined investments. Our cash bonuses are an important motivating factor for our executives, in addition to being a significant factor in attracting and retaining our executives.
Annual bonuses under our cash bonus plan are directly linked to Company, business unit and individual performance. Annual bonuses to our executives are payable only if threshold performance is attained.
In order to receive As in prior years, for 2022 the compensation committee established a bonus payment,pool which is funded based on the executive must remain in employment throughlevel of attainment of Company performance metrics (subject to a threshold level of performance). The compensation committee also established target bonuses for each NEO, with the payment dateactual bonus payable based on attainment of individual, Company and business unit goals and adjusted based on the funding of the bonus which is generally in March of the year following the year of performance.pool.
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Under our annual cash bonus plan, each of our named executive officers is eligible for a target bonus specified as a percentage of his
or her base salary. For
2020, the2022, Mr. Tyagarajan’s target bonus
for Mr. Tyagarajan was
160%approximately 158% of his base salary and
the target bonus for our other named executive
officers wasofficers’ target bonuses were 100% of
their base
salary. For Messrs. Tyagarajan, Fitzpatrick and Saumur, who have employment agreements that specify bonus opportunities, thesalaries. The compensation committee took into consideration the requirements under
theireach of our named executive officer’s employment agreements in setting their bonus targets. See “—Narrative Disclosure to Summary Compensation Table and
GrantGrants of Plan-Based Awards Table—Employment Agreements with Named Executive Officers.”
At the beginning of 2020,2022, the compensation committee established a target bonus pool for 20202022 equal to the aggregate target bonuses for all of the senior vice presidents in the Company, including all of the named executive officers other than the CEO. The bonus pool was to be funded only ifbased on the Company achieved 2020Company’s 2022 adjusted income from operations (“AOI”) margin above a threshold amount. If, revenue and employee engagement score performance, weighted 45%, 45% and 10%, respectively. The bonus pool funding was subject to an additional condition that if the Company achieved the minimum level ofCompany's AOI margin required to fundfor 2022 was lower than a specified amount, the Compensation Committee could reduce the bonus pool funding, including to zero, to allow the determinationCompany to achieve a specified AOI margin for 2022.
For 2022, the employee engagement metric was the Company’s employee engagement score for 2022, which is calculated by multiplying the Company’s overall employee response rate on its “Amber” platform, an AI-based tool that collects employee feedback and assesses employee sentiment, by the percentage of
potential payouts would be basedthe Company’s Amber responses that were positive for 2022. For the purposes of the 2022 bonus plan, a positive response is defined as either a four or five rating on
an equal weightinga scale of
AOIfive in response to a question in Amber that asks each employee to rate their employee experience over the course of their tenure with the Company. This change to the employee engagement metric for 2022 reflects our observation that higher rates of attrition are observed among employees who do not engage with the Amber platform and
revenue.that therefore the employee response rate is as important as the positive response score in assessing employee engagement and improving employee retention.
The potential bonus pool ranged from 0% to 200% of target (with performance between the established levels determined on a straight-line basis), depending on the levelslevel of achievement of the AOI, revenue and revenueemployee engagement score goals and whether the threshold for both metricseach metric was met. Under the 20202022 plan, if the Company failed to achieve the threshold level ofCompany’s AOI margin for 2022 was below a certain level, then regardless of the level of achievement of the AOI, revenue or AOI,employee engagement score goals, the compensation committee retained the discretion to reduce the bonus pool would be reduced by any amount the amount necessarycommittee determined (including to zero) to ensure thatincrease the Company achieved the threshold level ofCompany’s AOI margin before any bonuses were paid.up to a specified amount. As a result, the full bonus pool was at risk inrisk.
If the
event of a failure to achieveCompany achieved the threshold level of
AOI margin, includingat least one of the
possibility that no bonuses would be payable under the plan.If the Company achieved either the threshold level of AOI or revenue, but not both,three metrics, then the bonus pool would be funded based solely on the level of attainment of the metric that wasmetric(s) achieved at the threshold level. The aggregate level and the rangeof attainment of the bonus poolgoals (based on the weighting of each goal) is referred to as the “Company Multiplier.”
The table below sets out the threshold and outstanding performance levels as a percentage of the target which we refer to as theperformance level for each metric under our 2022 bonus plan:
| | AOI (45%) | | | 95% | | | 100% | | | 110% | |
| | Revenue (45%) | | | 98% | | | 100% | | | 105% | |
| | Employee engagement score (10%) | | | 90% | | | 100% | | | 110% | |
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"Company Multiplier," would be from 25% to 100% (with performance between established levels determined on a straight-line basis) as illustrated below:
| | |
AOI or Revenue Performance Level
| | Company Multiplier
(as a percentage of total target bonuses)
|
Threshold
| | 25%
|
Target
| | 50%
|
Outstanding
| | 100%
|
If the Company achieved
at least the threshold levels of
botheach of the AOI,
revenue and
revenue,employee engagement score goals, the potential range of the Company Multiplier
(based on the level of attainment of each goal and the weighting of that goal) would be as follows:
AOI and RevenueBonus Pool
Performance Level
| | | Company Multiplier
(as a percentage of total target
bonuses) | |
Threshold
| Threshold | | | 50% | |
Target
| Target | | | 100% | |
Outstanding
| Outstanding | | | 200% | |
In June 2020, as a result of,
For 2022, we achieved higher-than-target performance on the revenue and
in response to,employee engagement score goals and lower-than-target but higher-than-threshold performance on the
COVID-19 pandemic and its adverse impact and expected further adverse impactAOI goal. Given the lower-than-target performance on
our 2020 financial performance,the AOI goal, the compensation committee
(i) reducedexercised its discretion to reduce the
threshold (but not target or outstanding) performance levels of AOI and revenue under the 2020 bonus plan, (ii) reduced the qualifying level of AOI margin under the 2020 bonus plan, (iii) revised certain qualitative goals and the threshold (but not target or outstanding) levels of the financial goals in our named executive officers’ bonus scorecards and (iv) established an additional bonus pool for 2020 to incentivize our management team to focus on employee engagement and well-being given the new challenges facing employees due to extended lockdowns and stay-at-home orders implemented in response to the COVID-19 pandemic.The target amount for the additional 2020 bonus pool was set at approximately 10% of the 2020 bonus plan (calculated as the approximate sum of 10% of the target bonuses of all of the participants in the 2020 bonus plan) and was funded based on the Company’s overall positive response rate for the fourth quarter of 2020 in our proprietary AI-based employee engagement platform called “Amber.” This platform collects employee feedback and assesses employee sentiment. For the purposes of the additional 2020 bonus pool, a positive response is defined as either a four or five rating on a scale of five in response to a question asking each employee to rate how they feel about their tenure as an employee of the Company. For the additional bonus pool to fund at the threshold level, at least 60% of all employee responses to this question during the fourth quarter of 2020 had to be positive responses. If the positive response rate was between 60 and 75%, then the pool would be funded based on straight-line interpolation between the threshold and target levels, and at an overall positive response rate of 75% or greater, the pool would be fully funded at 100% of target as illustrated below:
| | |
Performance Level
| Positive Response Rate | Funding Level
(as a percentage of total additional bonus pool) |
Threshold | 60% | 50% |
Target | 75% or greater | 100% |
The overall positive response rate for the fourth quarter of 2020 in our employee engagement platform was 85%, higher than the target level of 75%. Accordingly, the additional bonus pool established in June 2020 was fully funded.
Additionally, our 2020 AOI for purposes of calculating the Company Multiplier was $589 million, which was higher than the threshold but lower than the $630 million target for AOIpayout under the bonus plan, and our revenue was also higher than the threshold but lower than the target level,pool, resulting in a Company Multiplier of approximately 77%93%. Although the Company Multiplier did not directly apply to the additional 2020 bonus pool linked to employee engagement, including the impact of the additional
| |
| 2021 Proxy Statement |33
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bonus pool with the annual bonus plan resulted in a combined Company Multiplier for the 2020 bonus plan of 88% and therefore the bonus pool (including the additional bonus pool) was funded at approximately 88% of the target pool.
See "Executive“Executive Officer Compensation—Compensation Discussion and Analysis—20202022 Key Financial Highlights"Highlights” for information regarding how our calculation of AOI differs from United States Generally Accepted Accounting Principles ("GAAP"(“GAAP”) net income, attributable to Genpact Limited shareholders as well as Exhibit 1 to this Proxy Statement for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.
In an effort to further link our executive officer compensation to measurable Company and individual performance, the actual bonus payable to each of our named executive officers is determined based on attainment of pre-established individual, Company and business unit performance targets for each officer subject to the maximum bonus potential based on the level of AOI,
revenue and
transformation services revenue.employee engagement scores. We utilize a scorecard methodology that incorporates multiple financial and non-financial strategic performance indicators for each officer, with the financial performance metrics accounting for at least
55%60% of the result. The table below shows the weighting of financial and non-financial metrics in each named executive
officer's 2020officer’s 2022 scorecard:
| | N.V. TYAGARAJAN | | | 60% | | | 40% | |
| | MICHAEL WEINER | | | 60% | | | 40% | |
| | BALKRISHAN KALRA | | | 70% | | | 30% | |
| | DARREN SAUMUR | | | 65% | | | 35% | |
| | KATHRYN STEIN | | | 60% | | | 40% | |
| | | | |
Executive | | Financial | | Non-financial |
N.V. TYAGARAJAN | | 60% | | 40% |
EDWARD J. FITZPATRICK | | 55% | | 45% |
BALKRISHAN KALRA | | 70% | | 30% |
DARREN SAUMUR | | 65% | | 35% |
KATHRYN STEIN | | 60% | | 40% |
The potential bonus payout based on the scorecard result ranges from 0% to 150% of target.
The compensation committee establishes the scorecard for the CEO, and the CEO establishes the scorecards for the other executive officers. At the time of establishing the individual scorecards, the goals in the scorecards were determined to be challenging. We believe that encouraging our named executive officers, as well as other employees with management responsibility, to focus on a variety of performance objectives that are important for creating shareholder value reduces incentives to take excessive risk with respect to any single objective.
36 2023 Proxy Statement | | | |
