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A: | As of the record date for the annual meeting, Michael S. Dell and a separate property trust for the benefit of Mr. Dell’s wife (referred to as the MD stockholders) beneficially owned, in aggregate, approximately 49% of the outstanding shares of our common stock, representing approximately 66% of the total voting power of the outstanding shares of all outstanding classes
Q:How will the voting power of shares held by our principal stockholders affect approval of the proposals being voted on at the annual meeting? A: Our principal stockholders have the ability to ensure approval of all of the proposals to be voted on at the annual meeting, except the election of the Group IV director nominee in accordance with Proposal 1. Only holders of our outstanding Class C common stock will be entitled to vote for the election of the Group IV nominee. As indicated above, each share of Class A common stock is entitled to ten votes, each share of Class B common stock is entitled to ten votes and each share of Class C common is entitled to one vote. As of the record date for the annual meeting, Michael S. Dell and the other MD stockholders (as defined in Annex A to this proxy statement) beneficially owned, in aggregate, approximately 51.0% of the outstanding shares of our common stock, including approximately 99.8% of the outstanding Class A common stock, representing approximately 74.8% of the total voting power of the outstanding shares of all outstanding series of common stock. As of the record date for the annual meeting, certain investment funds affiliated with Silver Lake Partners (referred to as the SLP stockholders) beneficially owned, in aggregate, approximately 18% of the outstanding shares of our common stock, including all of the Class B common stock, representing approximately 24% of the total voting power of the outstanding shares of all outstanding classes of common stock. As indicated above, each share of Class A common stock is entitled to ten votes per share and each share of Class B common stock is entitled to ten votes per share. |
By reason of their ownership of Class A common stock representing a majority of the total voting power represented by all of the outstanding shares of thesuch Class A common stock, the Class B common stock, the Class C common stock and the Class V common stock, the MD stockholders generally have the ability to approve any matter submitted to the vote of all of the outstanding shares of our common stock, voting together as a single class. As a result, the MD stockholders have the ability:
•to elect all of the directors nominated for election as Group I directors who have an aggregate of 3 ofat the 13 total votes on the Board of Directors;annual meeting; and
•to determine the outcome of Proposals 2 and 3.
In addition:
by reason of their ownership of a majorityAs of the Classrecord date for the annual meeting, certain investment funds affiliated with Silver Lake and the other SLP stockholders (as defined in Annex A to this proxy statement) beneficially owned, in aggregate, approximately 13.3% of the outstanding shares of our common stock, the MD stockholders have the ability to elect the Group II director, who has an aggregate of 7 of the 13 total votes on the Board of Directors; and
by reason of their ownership ofincluding all of the Class B common stock, representing approximately 19.8% of the total voting power of the outstanding shares of all outstanding series of common stock.
Under their respective stockholders agreements with Dell Technologies described in this proxy statement, each of the MD stockholders and the SLP stockholders are obligated to vote in favor of each Group I director nominated by the MD stockholders or the SLP stockholders.
Q:What happens if additional matters are presented at the annual meeting?
A: If you grant a proxy to the Company, the Company’s proxy holders will have the abilitydiscretion to elect allvote your shares on any additional matters properly presented for a vote at the annual meeting. As of the Group III directors, who have an aggregatedate of 3this proxy statement, other than the proposals described in this proxy statement, the Company has not received valid notice of any other business to be acted upon at the annual meeting.
Q:Who will count the votes?
A: Broadridge Financial Solutions, Inc. will count the votes for the annual meeting. A representative or agent of Broadridge Financial Solutions, Inc. will certify the votes as the inspector of election.
Q:Where can I find the voting results of the 13 totalannual meeting?
A: Dell Technologies will report the voting results by filing a current report on Form 8-K with the SEC within four business days after the date of the annual meeting. If the final voting results are not known when Dell Technologies files its report, it will amend the initial report to disclose the final voting results within four business days after those results become known.
Q:Who will bear the cost of soliciting votes for the annual meeting?
A: Dell Technologies will bear all costs of this proxy solicitation. Proxies may be solicited by mail, in person, by telephone, by facsimile, by electronic means or by advertisements by directors, executive officers and other
employees of Dell Technologies or its subsidiaries, without additional compensation. Dell Technologies will reimburse banks, brokerage firms and other nominees for their reasonable expenses to forward proxy materials to beneficial owners.
Q:Are copies of the proxy materials for the annual meeting and Dell Technologies’ annual report on Form 10-K available electronically?
A: Yes. Copies of the Boardproxy materials for the annual meeting and Dell Technologies’ annual report on Form 10-K for Fiscal 2021 are available without exhibits on our website at http://investors.delltechnologies.com under the News & Events – Upcoming Events section. Copies of Directors.the proxy materials and our annual report on Form 10-K for Fiscal 2021 are available with exhibits on our website at http://investors.delltechnologies.com under the Financials – SEC Filings section and at the website maintained by the SEC at www.sec.gov.
Q:How may I propose matters for inclusion in Dell Technologies’ proxy materials for the 2022 annual meeting of stockholders or for consideration at the 2022 annual meeting of stockholders, and what are the deadlines?
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Q: | What happens if additional matters are presented at the annual meeting? |
A: For information on how to propose matters for inclusion in Dell Technologies’ proxy materials for the 2022 annual meeting of stockholders or for consideration at the 2022 annual meeting of stockholders without inclusion in our proxy materials, and for the specification of the applicable deadlines, see “Additional Information – Stockholder Proposals for Next Year’s Annual Meeting.”
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A: | If you grant a proxy to the Company, the Company’s proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the annual meeting. Other than matters and proposals described in this proxy statement, as of the date of this proxy statement, the Company has not received valid notice of any other business to be acted upon at the annual meeting. |
Q:What is “householding” and how does it affect me?
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Q: | Who will count the votes? |
A: For information on “householding” of proxy materials and how it may affect you, including how to obtain a separate set of voting materials, see “Additional Information – Stockholders Sharing the Same Last Name and Address.”
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A: | Broadridge Financial Solutions, Inc., or a representative or agent of Broadridge Financial Solutions, Inc., will tabulate and certify the votes as the inspector of election for the annual meeting. |
Q:What is the address of Dell Technologies’ principal executive offices?
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Q: | Where can I find the voting results of the annual meeting? |
A: The mailing address of Dell Technologies’ principal executive offices is One Dell Way, Round Rock, Texas 78682.
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A: | Dell Technologies will report the voting results by filing a current report on Form 8-K with the SEC within four business days following the date of the annual meeting. If the final voting results are not known when Dell Technologies files its report, it will amend the initial report to disclose the final voting results within four business days after those results become known. |
Q:Who can help answer my other questions or help me if I need other assistance?
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Q: | Who will bear the cost of soliciting votes for the annual meeting? |
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A: | Dell Technologies will bear all costs of this proxy solicitation. Proxies may be solicited by mail, in person, by telephone, by facsimile, by electronic means or by advertisements by directors, executive officers and other employees of Dell Technologies or its subsidiaries, without additional compensation. Dell Technologies will reimburse banks, brokerage firms and other nominees for their reasonable expenses to forward proxy materials to beneficial owners. |
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Q: | Are copies of the proxy materials for the annual meeting and Dell Technologies’ Annual Report on Form 10-K available electronically? |
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A: | Yes. Copies of the proxy materials for the annual meeting and Dell Technologies’ Annual Report on Form 10-K for Fiscal 2018 are available without exhibits at http://investors.delltechnologies.com under the News & Events – Events & Presentations section, and with exhibits at the website maintained by the SECA: If you have questions about the annual meeting, require assistance in submitting your proxy or voting your shares, or need additional copies of the proxy statement or the proxy card, please contact Investor Relations at investor_relations@dell.com.www.sec.gov.
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Q: | How may I propose matters for inclusion in Dell Technologies’ proxy materials for the 2019 Annual Meeting of Stockholders or for consideration at the 2019 Annual Meeting of Stockholders, and what are the deadlines? |
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A: | For information on how to propose matters for inclusion in Dell Technologies’ proxy materials for the 2019 Annual Meeting of Stockholders or for consideration at the 2019 Annual Meeting of Stockholders without inclusion in our proxy materials, and for the specification of the applicable deadlines, see “Additional Information – Stockholder Proposals for Next Year’s Annual Meeting.” |
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Q: | What is “householding” and how does it affect me? |
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A: | For information on “householding” of proxy materials and how it may affect you, including how to obtain a separate set of voting materials, see “Additional Information – Stockholders Sharing the Same Last Name and Address.” |
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Q: | What is the address of Dell Technologies’ principal executive offices? |
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A: | The mailing address of Dell Technologies’ principal executive offices is One Dell Way, Round Rock, Texas 78682. |
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Q: | Who can help answer my other questions or help me if I need other assistance? |
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A: | If you have questions about the annual meeting, require assistance in submitting your proxy or voting your shares, or need additional copies of the proxy statement or the proxy card, please contact Investor Relations at investor_relations@dell.com. |
If your bank, brokerage firm or other nominee holds your shares, you also should contact your nominee for additional information.
PROPOSAL 1 -– ELECTION OF DIRECTORS
TheOur stockholders are being asked to vote for the election of Michael S. Dell, David W. Dorman, Egon Durban, William D. Green, Ellen J. Kullman, Michael S. Dell, Egon DurbanSimon Patterson and Simon PattersonLynn M. Vojvodich to the Board of Directors.Directors as Group I directors, and for the election of Ellen J. Kullman to the Board of Directors as the Group IV director. Each of the nomineesdirector nominee is currently serving as a member of our Board of Directors.
Each of the six Group I director nominees was elected to the Board of Directors at the 2020 annual meeting of stockholders and is currently serving as a Group I director. The Group IV director nominee was also elected to the Board of Directors at the 2020 annual meeting of stockholders and is currently serving as a Group IV director.
Class C Vote for Group IV Director
Holders of the Class C common stock, voting separately as a series, will elect the Group IV director. We added this voting provision to our certificate of incorporation in connection with the transaction, which we refer to as the Class V transaction, that we completed on December 28, 2018. In the Class V transaction, we paid $14 billion of cash and issued 149,387,617 shares of our Class C common stock, which was newly listed on the NYSE, in exchange for all outstanding shares of our Class V common stock. In connection with that transaction, we agreed to implement certain enhancements to our corporate governance that include the right of our Class C stockholders to vote for a director independently from the holders of our other outstanding series of common stock.
On the recommendation of the Nominating and Governance Committee, the Board of Directors has unanimously nominated Ellen J. Kullman for election as the Group IV director because of the perspective she brings to corporate governance from her extensive experience as a senior executive, including as a chief executive officer, and her board and committee service as an independent director of Dell Technologies and other major public companies.
Director Groups
OurThe Board of Directors is currently composed of seven members, six members. of whom are Group I directors and one of whom is a Group IV director under the terms of our organizational documents.
Under the Dell Technologiesour certificate of incorporation, and the Dell Technologies’ Sponsor Stockholders Agreement (as defined in Annex A), our Board of Directors consists of three groups called the Group I directors, the Group II directors and the Group III directors. There are currently three Group I directors, one Group II director and two Group III directors, consisting of the following directors:
David W. Dorman, William D. Green and Ellen J. Kullman are the Group I directors.
Michael S. Dell is the sole Group II director.
Egon Durban and Simon Patterson are the Group III directors.
The rights of Dell Technologies’ stockholders to elect the directors constituting each group, the terms of the members of each group, and the voting power of the members of each group are described below.
Stockholder Rights to Elect Directors - Dell Technologies’ stockholders are entitled to elect, remove and fill vacancies in respect of members of the Board of Directors as follows:
Group I Directors. The holders of Dell Technologies common stock (other than the holders of any Class D common stock that may be issued in the future), voting together as a single class, are entitled to elect, vote to remove or fill any vacancy in respect of any Group I director.
The total number of Group I directors may be increased (to no more than seven) or decreased (to no fewer than three) by action of the Board of Directors that includes the affirmative vote of (1) a majority of the members of the Board then in office, (2) a majority of the Group II directors and (3) a majority of the Group III directors. Any newly created directorship on the Board with respect to the Group I directors that results from an increase in the number of Group I directors may be filledno fewer than three or more than 20 directors and will be determined in accordance with our bylaws. The bylaws provide that the number of directors will be fixed by the affirmative vote of a majority of the membersresolution of the Board then in office, so long as a quorum is present, and any other vacancy occurring on the Board with respect to the Group I directors may be filled by the affirmative vote of a majority of the members of the Board then in office, even if less than a quorum, or by a sole remaining director. The holders of a majority of the Dell Technologies common stock (other than the Class D common stock), voting together as a single class, are entitled to remove any Group I director with or without cause at any time. In the event that the Board consists of a number of directors entitled to an aggregate amount of votes that isno fewer than seven votes,three directors or more than 21 directors, provided that the number of Group I directors will automaticallymay be increased to such number as is necessary to ensure that the voting power of the Board is equal to an aggregate of seven votes (assuming, for each such calculation, full attendance by each director).
Group II Directors. Until a Designation Rights Trigger Event (as defined in Annex A) has occurred with respect to the Class A common stock, the holders of Class A common stock (and no other class of common stock) have the right, voting separatelyfewer than three directors or more than 20 directors and there shall be one director acting as a class, to elect up to three Group II directors, and, voting separately as a class, are solely entitled to elect, vote to remove without cause or fill any vacancy in respect of any Group IIIV director.
Upon the occurrence of a Designation Rights Trigger Event with respect to the Class A common stock, the rights of the Class A common stock described above will immediately terminate and no right to elect Group II directors will thereafter attach to the Class A common stock. The total number of Group II directors may
be increased (to no more than three) by action of the Group II directors or by vote of the holders of Class A common stock, voting separately as a class, or decreased (to no less than one) by vote of the holders of Class A common stock, voting separately as a class. In the case of any vacancy or newly created directorship occurring with respect to the Group II directors, such vacancy or newly created directorship may be filled only by the vote of the holders of the outstanding Class A common stock, voting separately as a class. The holders of Class A common stock, voting separately as a class, are entitled to remove any Group II director with or without cause at any time.
Group III Directors. Until a Designation Rights Trigger Event (as defined in Annex A) has occurred with respect to the Class B common stock, the holders of Class B common stock (and no other class of common stock) have the right, voting separately as a class, to elect the Group III directors, and, voting separately as a class, are solely entitled to elect, vote to remove without cause or fill any vacancy in respect of any Group III director.
Upon the occurrence of a Designation Rights Trigger Event with respect to the Class B common stock, the rights of the Class B common stock described above will immediately terminate and no right to elect Group III directors will thereafter attach to the Class B common stock. The total number of Group III directors may be increased (to no more than three) by action of the Group III directors or by vote of the holders of Class B common stock, voting separately as a class, or decreased (to no less than one) by vote of the holders of Class B common stock, voting separately as a class. In the case of any vacancy or newly created directorship occurring with respect to the Group III directors, such vacancy or newly created directorship may be filled only by the vote of the holders of the outstanding Class B common stock, voting separately as a class. The holders of Class B common stock, voting separately as a class, are entitled to remove any Group III director with or without cause at any time.
Under the Sponsor Stockholders Agreement, the MD stockholders and the SLP stockholders have agreed to vote their shares in favor of the Group I director nominees they jointly designate.
Terms of Directors
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Elections of the members of the Board of Directors will beare held annually at the annual meeting of Dell Technologies stockholders and eachstockholders. Each director will beis elected for a term commencing on the date of thatsuch director’s election and ending on the earliest of (1) the date on which the director’s successor is elected and qualified, (2) solelyqualified.
Under the certificate of incorporation, each Group I director is elected annually by the holders of all series of our outstanding common stock, voting together as a single class. The Group IV director is elected annually by the holders of Class C common stock, voting separately as a series.
Stockholder Arrangements
Certain stockholders have rights to nominate directors and obligations to vote for director nominees under the stockholders agreements described below entered into in connection with the Class V transaction referred to above.
Stockholder Rights to Nominate Directors – Effective as of December 25, 2018, Dell Technologies and certain of its wholly-owned subsidiaries entered into a stockholders agreement, referred to as the MD Stockholders Agreement, with the MD stockholders (as defined in Annex A to this proxy statement), and into a stockholders agreement, referred to as the SLP Stockholders Agreement, with the SLP stockholders (as defined in Annex A to this proxy statement) and other named stockholders. We refer to the MD Stockholders Agreement and the SLP Stockholders Agreement as the Sponsor Stockholders Agreements.
Under the Sponsor Stockholders Agreements, each of the MD stockholders and the SLP stockholders have the right to nominate a number of individuals for election as directors which is equal to (1) in the case where the MD stockholders and the SLP stockholders beneficially own more than 70% of the Group IItotal voting power for the regular election of directors, the occurrencepercentage of a Designation Rights Trigger Event with respect to(x) the Class A common stock, and (3) solelytotal voting power for the regular election of directors beneficially owned by the MD stockholders or by the SLP stockholders, as the case may be, multiplied by (y) the number of directors then on the Board of Directors (and any vacancy thereon) who are not members of the Audit Committee, or (2) in the case where the MD stockholders and the SLP stockholders beneficially own 70% or less of the Group IIItotal voting power for the regular election of directors, the occurrencepercentage of a Designation Rights Trigger Event with respect(x) the total voting power for the regular election of directors beneficially owned by the MD stockholders or by the SLP stockholders, as the case may be, multiplied by (y) the number of directors then on the Board of Directors (and any vacancy thereon), in each case rounded up to the Class Bnearest whole number. Further, so long as the MD stockholders or the SLP stockholders each beneficially own at least 5% of all outstanding shares of the common stock.
Voting Powerstock entitled to vote generally in the election of directors, each of the MD stockholders or the SLP stockholders, as applicable, are entitled to nominate at least one individual for election to the Board of Directors - Under as a Group I director. Of the Group I director nominees proposed for election at this annual meeting, Mr. Dell, Technologies certificateMr. Patterson and Ms. Vojvodich have been designated for nomination by the MD stockholders and Mr. Durban has been designated for nomination by the SLP stockholders.
The SLP Stockholders Agreement provides that, so long as the MD stockholders and the MSD Partners stockholders (as defined in Annex A to this proxy statement) beneficially own, in the aggregate, common stock representing a majority of incorporation andthe total voting power of the outstanding common stock, the SLP stockholders will use their reasonable best efforts to expand the size of the Board of Directors to up to 21 directors at the request of the MD stockholders. In addition, under the Sponsor Stockholders Agreement,Agreements, if any person nominated by the MD stockholders or the SLP stockholders ceases to serve on the Board as a Group I director for any reason (except as a result of a reduction in the applicable stockholders’ right to nominate Group I directors constituting each groupunder the relevant Sponsor Stockholders Agreement), the stockholders who nominated such Group I director are currently entitled to nominate a replacement so long as the following numberstockholders are entitled to nominate at least one Group I director to the Board at such time.
Under the MD Stockholders Agreement, for so long as the MD stockholders are entitled to nominate at least one Group I director, the MD stockholders may have at least one of votes whiletheir nominees then serving on the Board of Directors:Directors serve on each committee of the Board (except the Audit Committee), to the extent permitted by applicable law and stock exchange rules and subject to certain exceptions. Under the SLP Stockholders Agreement, the SLP stockholders have the same right as the MD stockholders to representation on Board committees for so long as they are entitled to nominate at least one Group I director.
EachStockholder Obligations to Vote for Director Nominees – For so long as either the MD stockholders or the SLP stockholders have the right to nominate a Group I director or Group I directors under the applicable Sponsor Stockholders Agreement, each of Dell Technologies, the MD stockholders and the SLP stockholders are obligated to nominate such Group I director or Group I directors for election as part of the slate of directors that is entitledincluded in Dell Technologies’ proxy statement and to cast oneprovide the highest level of support for the election of such nominees as any of the foregoing provides to any other individual standing for election as a director. Each of the MD stockholders and the SLP stockholders also are obligated to vote in favor of each Group I director nominated by the
Each Group II director is entitled to castMD stockholders or the number of votes (or a fraction thereof) which is equal to the quotient obtained by dividing (1) the Aggregate Group II Director Votes (as definedSLP stockholders in Annex A), which currently equals seven, by (2) the number of Group II directors then in office
Each Group III director is entitled to cast the number of votes (or a fraction thereof) which is equal to the quotient obtained by dividing (1) the Aggregate Group III Director Votes (as defined in Annex A), which currently equals three, by (2) the number of Group III directors then in office
In accordance with the Dell Technologies certificate of incorporation,MD Stockholders Agreement or the SLP Stockholders Agreement, as applicable, unless the sole Group II director, Mr. Dell is entitledSLP stockholders elect to cast a majorityterminate such arrangements under the SLP Stockholders Agreement. Further, under the Sponsor Stockholders Agreements, none of the votes of the whole Board of Directors and therefore is able to approve any matter submitted to a vote of the Board, other than those matters that also require the approval of either the Capital Stock CommitteeMD stockholders or the Audit Committee, and other than matters for whichSLP stockholders may nominate or support any person who is not nominated by the approval of other groups is specified in the Dell Technologies certificate of incorporationMD stockholders or the SLP stockholders or the then-incumbent directors of Dell Technologies bylaws.Technologies.
The following table summarizes certain features relating to the election, number and voting power of members of the Board of Directors:
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| | | Stockholders Entitled to Vote in Election of Each Director Group | | | | | | |
| Director Group | | Class of Common Stock | | % of Total Votes for Each Group Entitled to be Cast by Class | | Number of Directors Constituting Director Group | | Total Number of Votes Entitled to be Cast by Director Group | | % of Board Votes Entitled to be Cast by Director Group |
| Group I | | Class A | | 72% | | Three (Messrs. Dorman and Green and Mrs. Kullman) | | Three (one per Group I director) | | 23% |
| Group I | | Class B | | 24% | | | | |
| Group I | | Class C | | * | | | | |
| Group I | | Class V | | 4% | | | | | |
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| Group II | | Class A | | 100% | | One (Mr. Dell) | | Seven (regardless of the number of Group II directors) | | 54% |
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| Group III | | Class B | | 100% | | Two (Messrs. Durban and Patterson) | | Three (regardless of the number of Group III directors) | | 23% |
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Director Nominees
The Board of Directors has nominated the six individualsmembers currently serving as Group I directors for election as Group I directors at the annual meeting, and one member currently serving as a Group IV director for election as the Group IV director at the annual meeting. Each nominee has consented to serve as a nominee, to serve as a director if elected, and to be named as a nominee in this proxy statement.statement and to serve as a director if elected. If any nominee is unavailable for election or unable to serve upon election, the Company’s proxy holders will vote the shares of common stock for which they have received validly executed proxies for any substitute nominee proposeddesignated by the Board of Directors, (unlessunless the Board chooses to reduce the number of authorized directors in accordance with, and subject to the terms of, our bylaws, or to leave unfilled the Dell Technologies certificate of incorporation).resulting vacancy on the Board.
Biographical and qualification information about each of the nominees is included under “– Director Qualifications and Information.” The Board’s recommendation of its director nominees is based on the terms of the Dell Technologies certificate of incorporation and the Sponsor Stockholders AgreementAgreements and on the Board’s carefully considered judgment that the qualifications and experience of the nominees, particularly in areas relevant to Dell Technologies’ strategy and operations, make them suitable candidates to serve on the Board.
The Board of Directors unanimously recommends a vote “FOR” each of the Board’s nominees for director.
Director Qualifications and Information
Director Qualifications -– The Board of Directors believes that individuals who serve on the Board should have demonstrated notable or significant achievements in business, education or public service; should possess the requisite intelligence, education, experience and judgment to make a significant contribution to the Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and should have the highest standards of ethics and integrity, a strong sense of professionalism and intense dedication to serving the interests of Dell Technologies’ stockholders. A primary responsibility of the Nominating and Governance Committee is to assess the skills and experiences of director candidates to propose for nomination those individuals that the committee believes will exercise effective oversight of Dell Technologies’ strategic initiatives. The following are qualifications, experience and skills for Board members whichthat are important to Dell Technologies’ businesscurrent and its future:future business:
•Leadership Experience -– Dell Technologies seeks directors who demonstrate extraordinary leadership qualities. Strong leaders bring vision, strategic agility, diverse and global perspectives and broad business insight to the Company. They demonstrate practical management experience, skills for managing change, and deep knowledge of industries, geographies and risk management strategies relevant to the Company. They have experience in identifying and developing Dell Technologies’ current and future leaders. The relevant leadership experience Dell Technologies seeks includes a past or current leadership role in a major public company or recognized privately held entity; a past or current leadership role at a prominent educational institution or senior faculty position in an area of study important or relevant to the Company; a past elected or appointed senior government position; or a past or current senior managerial or advisory position with a highly visible nonprofitnon-profit organization.
•Finance Experience -– Dell Technologies believes that all directors should possess an understanding of finance and related corporate reporting processes. Dell Technologies also seeks to ensure the Board includes directors who qualify as an “audit committee financial expert,” as defined in the SEC’s rules, for potential service on the Audit Committee.
•Industry Experience -– Dell Technologies seeks directors who have relevant industry experience. Dell Technologies values experience in areas in which Dell Technologies places strategic importance, including new or expanding businesses, customer segments or geographies, organic and inorganic growth strategies, and existing and new technologies; deep understanding or unique understanding ofa special perspective concerning Dell Technologies’ business environments; and experience with, exposure to, or reputation among a broad subset of Dell Technologies’ customer base.
•International Experience -– Dell Technologies seeks directors who have experience attained through key leadership or management roles in a global business or responsibility for non-U.S. operations.
•Diversity of Background - Although the Board of Directors has not established any formal diversity policy to be used to identify director nominees, it recognizes that a– A current strength of the Board stems from the diversity of perspectives and understanding that arises from discussions involving individuals of varied backgrounds and experience. WhenWhile the Board of Directors has not established any formal diversity policy to be used to identify director nominees, when assessing a candidate’s background and experience, the Board of Directors takes into consideration a broad range of relevant factors, including a candidate’s gender, age, race and ethnic and geographic backgrounds.ethnicity.
Director Matrix -– The Board of Directors evaluates, selects evaluates and nominates qualified candidates for election or appointment to the Board. The matrix below shows how the director nominees contribute the various skills, experiences and perspectives the Board of Directors considers important.
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| Name | Chief
Executive
Officer
Experience | Leadership | Public
Company
Board
Experience | Financial
Literacy | Audit
Committee
Financial
Expert | InternationalTechnology
Industry
Experience | | |
Name | | Technology
Industry
| | Chief
Executive
Officer
Experience
| | Public
Company
Board
Experience
| | Financial
Literacy
| | Audit
Committee
Financial
Expert
| | Global Mindset,
Emerging
Markets,
Operational
Experience
| | GenderDiverse |
| Michael S. Dell | X | X | X | | X | | X | | X | | | | X | | |
| David W. Dorman | X | X | X | X | X | X | | X | | X | | X | | |
| Egon Durban | | X | X | | | X | | X | | | | X | | |
| William D. Green | X | X | X | X | X | X | | X | | X | | X | | |
| Ellen J. Kullman | X | X | X | X | X | X | | X | | X | | X | | X |
| Simon Patterson | | X | X | | | X | X | |
Lynn M.Vojvodich | | X | X | | | X | X | X |
Set forth below is biographical information, as of May 1, 2018,2021, about the persons whom the Board of Directors has nominated for election at the annual meeting and the qualifications, experience and skills the Board considered in determining that each person should serve as a director:
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Michael S. Dell
Group III Director Age: 5356 Director since October 2013 Board committees: lExecutive Nominating and Governance (Chair) | | Mr. Dell serves as Chairman of the Board and Chief Executive Officer of Dell Technologies. Mr. Dell served as Chief Executive Officer of Dell Inc., a wholly-owned subsidiary of Dell Technologies, from 1984 until July 2004 and resumed that role in January 2007. In 1998, Mr. Dell formed MSD Capital, L.P. for the purpose of managing his and his family’s investments, and, in 1999, he and his wife established the Michael & Susan Dell Foundation to provide philanthropic support to a variety of global causes. He is an honorary member of the Foundation Board of the World Economic Forum and is an executive committee member of the International Business Council. HeMr. Dell serves as a member of the Technology CEO Council and is a member of the U.S. Business Council and the Business Roundtable. He also serves on the advisory board of Tsinghua University’s School of Economics and Management in Beijing, China, on the governing board of the Indian School of Business in Hyderabad, India, and isas a board member of Catalyst, Inc., a non-profit organization that promotes inclusive workplaces for women. In June 2014, Mr. Dell was named the United Nations Foundation’s first Global Advocate for Entrepreneurship. Mr. Dell is also Chairman of the Board of Directors of VMware, Inc., a cloud infrastructure and digital workspace technology company, and Non-Executive Chairman of SecureWorks Corp., a global provider of intelligence-driven information security solutions,solutions. VMware, Inc. and a director of Pivotal Software, Inc., which provides a leading cloud‑native platform. VMware, Inc., SecureWorks Corp. and Pivotal Software, Inc. are public majority-owned subsidiaries of Dell Technologies. See “– Settlement of SEC Proceeding with Mr. Dell” below for information about legal proceedings to which Mr. Dell has beenwas a party. board member of Pivotal Software, Inc., formerly a public majority-owned subsidiary of Dell Technologies that provides a leading cloud native platform, from September 2016 until it merged with VMware, Inc. in December 2019.
The Board selected Mr. Dell to serve as a director because of his leadership experience as founder of Dell Inc. and Chairman and Chief Executive Officer of Dell Technologies and his deep technology industry experience.
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David W. Dorman
Group I Director Age: 6467 Director since September 2016 Board committees: lCapital Stock (Chair) Audit lAudit Nominating and Governance | | Mr. Dorman has been a Founding Partner of Centerview Capital Technology, or Centerview, a private investment firm, since July 2013. Before his association with Centerview, Mr. Dorman served as a Senior Advisor and Managing Director to Warburg Pincus LLC, a global private equity firm, from October 2006 through April 2008, and in a number of positions with AT&T Corp., or AT&T, a global telecommunications company, from 2000 to 2006. Mr. Dorman joined AT&T as President in December 2000 and was named Chairman and Chief Executive Officer in November 2002, a position he held until November 2005, and served as President and a director of AT&T from November 2005 to January 2006. Before his appointment as President of AT&T, Mr. Dorman served as Chief Executive Officer of Concert Communications Services, a global venture created by AT&T and British Telecommunications plc, from 1999 to 2000, as Chief Executive Officer of PointCast Inc., a web-based media company, from 1997 to 1999 and as Chief Executive Officer and Chairman of Pacific Bell Telephone Company from 1994 to 1997. Mr. Dorman has served as Non-Executive Chairman of the Board of CVS Health Corporation, (formerly known as CVS Caremark Corporation), a pharmacy healthcare provider, since May 2011, and as a director of CVS Health Corporation since March 2006.2006, and as Chairman of the Board of Infoworks.io, an enterprise software company, since July 2018. He also serves as a director of PayPal Holdings, Inc., an onlinea digital payments system operator. Mr. Dorman became a board member of Motorola Solutions, Inc., a global provider of communication infrastructure, devices, accessories, software and services, in July 2006, served as Non-Executive Chairman of the Board of that company from May 2008 to May 2011, and served as its Lead Director until his retirement from his board position in May 2015. He served as a director of SecureWorks Corp., a public majority-owned subsidiary of Dell Technologies and global provider of intelligence-driven information security solutions, from April 2016 to JulySeptember 2016, and a director of eBay Inc., an e-commerce company, from May 2014 until July 2015, when he joined the board of directors of PayPal Holdings, Inc. upon its separation from eBay Inc. Mr. Dorman was a board member of Yum! Brands, Inc., a fast foodfast-food restaurant company, from January 2005 until May 2017. Mr. Dorman is also currentlywas a member of the board of trusteesdirectors of Expanse, Inc. (formerly Qadium) until December 10, 2020 following its merger with Palo Alto Networks. He served on the Georgia Tech Foundation. Foundation board of trustees for 12 years.
The Board selected Mr. Dorman to serve as a director because of his expertise in management, finance and strategic planning gained through his experience as a principal and founder of Centerview and as Chief Executive Officer of AT&T, and because of his extensive public company board and committee experience. |
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Egon Durban
Group IIII Director Age: 4447 Director since October 2013 Board committees: lExecutive Nominating and Governance | | Mr. Durban has been a member of the boardBoard of directorsDirectors of Dell Technologies since the closing of Dell Inc.’s going-private transaction in October 2013. Mr. Durban is a Managing Partner and Managing DirectorCo-CEO of Silver Lake Partners, or Silver Lake, a global private equitytechnology investment firm. Mr. Durban joined Silver Lake in 1999 as a founding principal and is based in the firm’s Menlo Park office. He has previously worked in the firm’s New York office, as well as the London office, which he launched and managed from 2005 to 2010. Mr. Durban serves on the boards of directors of Motorola Solutions, Inc., a global provider of communication infrastructure, devices, accessories, software and services, Qualtrics International Inc., a leader in customer experience management platform software, Twitter, Inc., a social networking service, Unity Software Inc., a company that provides a real-time development platform, Endeavor Group Holdings, Inc., an entertainment, sports and content company, where he is Chairman of the board of directors, and VMware, Inc., a cloud infrastructure and digital workspace technology company, SecureWorks Corp.,company. VMware, Inc. is a global provider of intelligence‑driven information security solutions, and Pivotal Software, Inc., which provides a leading cloud‑native platform. VMware, Inc., SecureWorks Corp. and Pivotal Software, Inc. are public majority-owned subsidiariesmajority owned subsidiary of Dell Technologies. Previously, Mr. Durban served on the boards of directors of Intelsat S.A., a provider of integrated satellite solutions, from 2011 to 2016, and of NXP Semiconductors N.V.SecureWorks Corp., a public majority-owned subsidiary of Dell Technologies and a global provider of secure connectivityintelligence driven information security solutions, from 20062015 to 2013.May 2020 and Pivotal Software, Inc., formerly a public majority-owned subsidiary of Dell Technologies that provides a leading cloud native platform, from September 2016 until it merged with VMware, Inc. in December 2019. Mr. Durban currently serves on the board of directors of Tipping Point, a poverty-fighting organization that identifiesBusiness Council and funds leading non-profit programs in the Bay Area to assist individuals and families in need.Business Roundtable. Before joining Silver Lake, Mr. Durban worked in Morgan Stanley’sthe investment banking division. division of Morgan Stanley, a global diversified financial services firm.
The Board selected Mr. Durban to serve as a director because of his strong experience in technology and finance, and his extensive knowledge of and years of experience in global strategic leadership and management of multiple companies.
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William D. Green
Group I Director Age: 6467 Director since September 2016 Board committees: lAudit l Capital Stock (Chair)
| | Mr. Green served as a director of EMC Corporation, or EMC, from July 2013 to August 2016, before EMC was acquired by Dell Technologies, and as EMC’s independent Lead Director from February 2015 to August 2016. He served on the leadership and compensation committee, the audit committee, and the mergers and acquisitions committee of the EMC board of directors. Mr. Green served as Chairman of the Board of Accenture plc, a global management consulting, technology services and outsourcing company, from August 2006 until his retirement in February 2013, and as Chief Executive Officer of that company from September 2004 through December 2010. He was elected as a partner of Accenture plc in 1986. Mr. Green ispreviously served as Co-Chief Executive Officer and Co-Chairman of GTY Technology Holdings Inc., a special purpose acquisition company.public sector software-as-a-service (SaaS) company, from September 2016 until February 2019. Mr. Green serves as a director of GTY Technology Holdings Inc., where he has been Chairman of the board of directors since March 2020 and also serves on the board’s audit committee. Mr. Green is also a member of the boards of directors of S&P Global Inc. (formerly known as McGraw Hill Financial, Inc.), a company that provides financial ratings, benchmarks, analytics and data, where he serves on the board’s compensation and leadership development committee, executive committee and nominating and corporate governance committee, of Pivotal Software, Inc., a public majority‑owned subsidiary of Dell Technologies that provides a leading cloud‑native platform, where he serves on the board’s audit committee and compensation committee, and of Inovalon Holdings, Inc., a company that provides data analytics, intervention and reporting platforms to the healthcare industry, where he serves on the board’s compensation committee, nominating and corporate governance committee and security and compliance committee. Mr. Green was a board member of Pivotal Software, Inc., formerly a public majority-owned subsidiary of Dell Technologies that provides a leading cloud native platform, from August 2015 until it merged with VMware, Inc. in December 2019.
The Board selected Mr. Green to serve as a director because of his leadership and operating experience as the former Chairman and CEO of Accenture plc, deep understanding of the information technology industry and broad international business expertise.
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Ellen J. Kullman
Group IIV Director Age: 6265 Director since September 2016 Board committees: lAudit (Chair) l Capital Stock
| | Mrs. Kullman has served as President and Chief Executive Officer of Carbon, Inc., a 3D printing company, since November 2019, and as a member of its board of directors since 2016. Mrs. Kullman previously served as Chief Executive Officer of E. I. du Pont de Nemours and Company, or DuPont, a provider of basic materials and innovative products and services for diverse industries, from January 2009 to October 2015 and as Chair of DuPont from December 2009 to October 2015. She served as President of DuPont from October 2008 to December 2008. From June 2006 through September 2008, she served as Executive Vice President of DuPont. Before her service in that position, Mrs. Kullman was Group Vice President-DuPont Safety & Protection. She has served as Chair of the US-China Business Council, a member of the US-India CEO Forum and on the executive committee of the Business Council. She is a member of the National Academy of Engineering and co-chaired their Committee on Changing the Conversation: From Research to Action. Mrs. Kullman also serves as a director of United Technologies Corporation, a provider of high-technology products and services to the building systems and aerospace industries, Amgen Inc., a developer and manufacturer of human therapeutics, and The Goldman Sachs Group, Inc., a global investment banking, securities and investment management firm. Mrs. Kullman was a director of United Technologies Corporation, a provider of high-technology products and services to the building systems and aerospace industries, from 2011 until April 2020. She is a member of the board of trustees of Northwestern University and serves on the board of overseers atadvisors of Tufts University School of Engineering.
The Board selected Mrs. Kullman to serve as a director because of her leadership and operating experience as the former Chair and CEO of DuPont, her extensive experience with technology and product development, and her experience implementing business strategy around the world.
The Board also considered Mrs. Kullman’s gender in the context of the Board’s policy objective emphasizing diversity of background. |
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Simon Patterson
Group IIII Director Age: 4548 Director since October 2013 No Board committees
| | Mr. Patterson has been a member of the boardBoard of directorsDirectors of Dell Technologies since the closing of Dell Inc.’s going-private transaction in October 2013. Mr. Patterson is a Managing Director of Silver Lake, Partners, a global private equitytechnology investment firm, which he joined in 2005. Mr. Patterson previously worked at Global Freight Exchange Limited, a logistics software company acquired by Descartes Systems Group, the Financial Times and McKinsey & Company, a global management consulting firm. Mr. Patterson serves on the board of directors of Tesco plc, a multinational grocery and general merchandise retailer. He also serves on the boards of trustees of the Natural History Museum in London and The Royal Foundation of The Duke and Duchess of Cambridge and Prince Harry.Cambridge. Previously, he served on the boards of directors of Intelsat S.A., a provider of integrated satellite solutions, and N Brown Group plc, a digital fashion retailer.
The Board selected Mr. Patterson to serve as a director because of his extensive knowledge of and years of experience in finance, technology and global operations.
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Settlement of SEC Proceeding with Mr. Dell - On October 13, 2010, a federal district court approved settlements by Dell Inc. and Mr. Dell with the SEC resolving an SEC investigation into Dell Inc.’s disclosures and alleged omissions before fiscal year 2008 regarding certain aspects of its commercial relationship with Intel Corporation and into separate accounting and financial reporting matters. Dell Inc. and Mr. Dell entered into the settlements without admitting or denying the allegations in the SEC’s complaint, as is consistent with common SEC practice. The SEC’s allegations with respect to Mr. Dell and his settlement were limited to the alleged failure to provide adequate disclosures with respect to Dell Inc.’s commercial relationship with Intel Corporation before fiscal year 2008. Mr. Dell’s settlement did not involve any of the separate accounting fraud charges settled by Dell Inc. and others. Moreover, Mr. Dell’s settlement was limited to claims in which only negligence, and not fraudulent intent, is required to establish liability, as well as secondary liability claims for other non-fraud charges. Under his settlement, Mr. Dell consented to a permanent injunction against future violations of these negligence-based provisions and other non-fraud based provisions related to periodic reporting. Specifically, Mr. Dell consented to be enjoined from violating Sections 17(a)(2) and (3) of the Securities Act of 1933 and Rule 13a-14 under the Exchange Act, and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 under the Exchange Act. In addition, Mr. Dell agreed to pay a civil monetary penalty of $4 million, which has been paid in full. The settlement did not include any restrictions on Mr. Dell’s continued service as an officer or director of Dell | | | | | | | | |
Lynn M. Vojvodich Group I Director Age: 53 Director since April 2019 No Board committees | | Ms. Vojvodich is an advisor to start-up and growth-stage technology companies. She served as Executive Vice President and Chief Marketing Officer of Salesforce.com, Inc., or Salesforce, the world’s fourth largest enterprise software company and a global leader in customer relationship management, from September 2013 to February 2017. Before serving at Salesforce, she was a partner at the venture capital firm Andreessen Horowitz, where she helped portfolio companies accelerate their go-to-market strategies and Global 1000 companies advance their digital agendas. Ms. Vojvodich previously held marketing leadership roles at global enterprise software companies, including Microsoft Corporation, BEA Systems, Inc. (before its acquisition by Oracle Corporation) and Terracotta Inc. (before its acquisition by Software AG). Ms. Vojvodich began her career as a mechanical engineer working on the design and construction of Gulfstream jets and offshore oil structures, and later worked with Bain & Company, an international consulting firm. Ms. Vojvodich currently serves on the boards of directors of Booking Holdings Inc., a global provider of online travel and related services, and Ford Motor Company.
The Board selected Ms. Vojvodich to serve as a director because of her leadership and operating experience in multiple roles, deep understanding of the software industry and broad international business expertise. The Board also considered Ms. Vojvodich’s gender in the context of the Board’s policy objective emphasizing diversity of background.
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Corporate Governance
Corporate Governance Enhancements – Since Dell Technologies’ return to the public markets through the Class V transaction in December 2018, the Board of Directors has continued seeking to enhance the Company’s corporate governance as informed by stockholder feedback. In connection with this effort, the Board has established a Nominating and Governance Committee, approved the constitution of a majority independent Board, provided for the Group IV director’s annual election solely by the holders of the Class C common stock, and dissolved its Executive Committee. The Board continues to evaluate Dell Technologies’ corporate governance policies and practices to ensure they are consistent with the Company’s focus on long-term value creation for stockholders.
Stockholder Engagement – Dell Technologies has established a robust stockholder engagement program which has been enhanced over the past two years. The Company’s engagement team contacted holders representing more than 60% of our Class C common stock and engaged with holders representing almost 50% of the Class C common stock regarding both the 2019 and 2020 annual meetings. Topics discussed with our stockholders included recent performance, long-term strategy, corporate governance, Board composition, executive compensation, the COVID-19 response, human capital management, corporate responsibility, and diversity and inclusion.
Corporate Responsibility – At Dell Technologies, we are a diverse team with unique perspectives and are united in our purpose, vision, strategy, and culture. We are unwavering in our commitment to equality, trust and advocacy for one another and are motivated by the power of technology to drive human progress. Through our people, our reach, the depth and breadth of our technology capabilities and our aggressive social impact and sustainability initiatives, we strive to create a positive and lasting impact.
We take our opportunity and responsibility seriously, making effective governance and transparency an essential part of our Environmental, Social, Governance, or ESG, strategy. Our Board of Directors oversees the establishment and maintenance of our governance, compliance and risk oversight processes and procedures to promote the conduct of our business with the highest standards of responsibility, ethics and integrity. In Fiscal 2021, we instituted a governance framework that includes the formation of management committees tasked with overseeing our ESG strategy and progress as well as reporting to the Board of Directors on ESG matters. In order to ensure an integrated perspective and approach to ESG, these management committees are composed of members from various teams across the Company, including representatives from the following functions: sustainability, diversity and inclusion, human resources, giving and social innovation, ethics and privacy, supply chain, corporate
affairs, government affairs, audit, legal, risk management, investor relations, accounting, and security. Together, these governance bodies develop, manage and measure our ESG strategy and performance.
We are committed to transparency in our effort to drive human progress, and we regularly evaluate the quality and effectiveness of our social impact reporting based on feedback from our stockholders and other stakeholders as well as conduct a review of other external reporting frameworks. We publish detailed, three-year performance trends on key metrics in various reports, including our annual Progress Made Real and Diversity and Inclusion reports, on the Social Impact page of our website. This reporting promotes accountability and allows our stakeholders to follow our progress in achieving our goals. We complement this information with an online index to the Global Reporting Initiative’s Standards.
In November 2019, Dell Technologies launched its Social Impact Plan for 2030, or 2030 Plan, establishing our ESG goals, including several ambitious, quantifiable “moonshots,” with a focus on four critical areas: advancing sustainability, cultivating inclusion, transforming lives around the world and an enduring commitment to upholding ethics and privacy.
•Advancing Sustainability – We work closely with our customers, suppliers and communities to protect and enrich our planet. It is a core part of our business, and we embed sustainability and ethical practices in all we do, to be accountable for our actions while driving improvements wherever possible. Most recently, we announced our new goals for net zero greenhouse gas emissions by the year 2050.
•Cultivating Inclusion – We strive to create a workplace where everyone, from any background, can be their best and do their best work. We champion inclusion within our company and work to close the diversity gap to meet future talent needs. Diversity and inclusion is a business imperative enabling us to attract, develop, retain and advance top talent that is reflective of the customers and communities we serve. In Fiscal 2021, we championed inclusive policies that support a diverse workforce, women, members of the LGBTQ+ community, people with different abilities and other underrepresented groups. Our initiatives include our Autism Hiring Program through which we provide career readiness training and possible career opportunities for neurodivergent job seekers. Additionally, we instituted a talent acquisition policy aimed at ensuring that at least one candidate from an underrepresented ethnicity or gender is included in external candidate interview slates, including at the executive officer level, and actively engaged with our stockholders on raising public awareness of such initiatives.
•Transforming Lives – There are limitless possibilities when we apply our people, scale, technology and partnerships to solve complex societal challenges. We leverage the power of technology to enable a future that is capable of fully realizing human potential. For example, to address the digital divide that was exacerbated by the COVID-19 pandemic, we have partnered with state and local governments as well as public and private-sector companies to enable learning and working from home by providing connectivity, devices, digital literacy and community support.
•Upholding Ethics and Privacy – Ethics and privacy play a critical role in establishing a strong foundation for ESG leadership. In this time of rapid innovation, big data, an evolving regulatory environment and increasing expectations from our customers, team members and communities, we are committed to continuing to lead in ethics and privacy. Our constant push for higher ethics and privacy standards will be a guidepost for our ESG work. In Fiscal 2021, we launched our privacy trust center for registered Dell My Account users to be able to easily manage their data. This self-service center allows users to access and delete their data and deactivate and re-activate their My Account when they no longer want to access their data.
For more information on our commitment to corporate ESG and our reporting on material indicators from across our business, and for more information on our 2030 Plan and our progress, please consult our annual report on Form 10-K for Fiscal 2021 as well as the various reports, including our annual Progress Made Real and Diversity and Inclusion reports, on the Social Impact page of our website.
Corporate Governance Principles -– The Board of Directors is committed to the achievement ofachieving business success and the enhancement ofincreasing long-term stockholder value with the highest standards of integrity and ethics. In that regard, the Board of Directors has adopted the Dell Technologies Corporate Governance Principles to provide an effective corporate governance framework for the Company. The Corporate Governance Principles reflect a set of core values that provide the foundation for our governance and management systems and our interactions with others. A copy of those principles can be found on our website at http://investors.delltechnologies.com under the Corporate Governance & Leadership – Governance Documents section.
Controlled Company Status - The– Dell Technologies’ Class VC common stock is listed on the NYSE.NYSE under the ticker symbol “DELL.” As a result, Dell Technologies is subject to governance requirements under the NYSE rules.
Dell Technologies is a “controlled company” under the rules of the NYSE.NYSE corporate governance standards. As a result, it qualifies for exemptions from, and has electedis entitled to elect not to comply with, certain corporate governance requirements under NYSE rules, including the requirements that Dell Technologies have a board that is composed of a majority of “independent directors,” as defined under NYSE rules, and a compensation committee and a nominatingnominating/corporate governance committee that are each composed entirely of independent directors. Even though Dell Technologies is a controlled company, it is required to comply with the rules of the SEC and the NYSE relating to the membership, qualifications and operations of the Audit Committee, as discussed below.
Notwithstanding its eligibility for the exemption from these requirements, Dell Technologies currently has a majority of independent directors serving on the Board of Directors. Dell Technologies has elected not to maintain a compensation committee or a nominating/corporate governance committee that is composed entirely of independent directors.
The NYSE rules of the NYSE define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Dell Technologies is a controlled company on the basis of Mr. Dell beneficially ownsDell’s beneficial ownership of shares of our Class A common stock and Class C common stock representing more than 50% of the voting power of our shares of common stock eligible to vote in the election of our directors. If Dell Technologies ceases to be a controlled company and the Class VC common stock continues to be listed on the NYSE, Dell Technologies will be required to comply with theNYSE’s director independence requirements of the NYSE relating to the board of directors, a compensation committee and a nominatingnominating/corporate governance committee by the date its status changes or within specified transition periodsperiods.
We are not required to maintain compliance with the director independence requirements of the NYSE rules applicable to certain provisions.
a listed company that is not a controlled company, including the requirement to have a board that is composed of a majority of independent directors. We may choose to change our Board composition in the future to manage this aspect of our corporate governance in accordance with the controlled company exemption.
Director Independence -– The Board of Directors has affirmatively determined that Messrs. Dorman and Green, and Mrs. Kullman and Ms. Vojvodich, constituting threefour of our sixseven directors, are independent under the NYSE rules and the standards for independent directors established in our Corporate Governance Principles, which incorporate the director independence requirements of the NYSE rules. The NYSE rules provide that, in order to determine that a director is independent, the Board of Directors must determine that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). In
accordance with the NYSE rules, when assessing the materiality of a director’s relationship (if any) with the Company, the Board of Directors considers materiality both from the standpoint of the director and from the standpoint of persons or organizations with which the director has an affiliation.
Board Leadership -– The Dell Technologies bylaws provide that the Chairman of the Board will preside at all meetings of the Board of Directors at which he is present. The Chief Executive Officer has management responsibility for the business and affairs of the Company. Both the Chairman and Chief Executive Officer positions are currently held by Mr. Dell.
The Board of Directors has determined that its current structure, with combined Chairman and Chief Executive Officer roles and, as discussed further below, the exercise of key Board oversight responsibilities by theour independent directors, serving on the Audit and Capital Stock Committees, as discussed below, is in the best interests of Dell Technologies and our stockholders. The Board of Directors believes that
combining the Chairman and Chief Executive Officer positions is currently the most effective leadership structure for the Company given Mr. Dell’s in-depth knowledge of Dell Technologies’ business and industry, his ability to formulate and implement strategic initiatives, and his extensive contact with and knowledge of customers. As Chief Executive Officer, Mr. Dell is intimately involved in the day-to-day operations of the Company and is thustherefore in a position to elevate the most critical business issues for consideration by the Board’s independent directors. Additionally, Mr. Dell is best positioned to oversee the execution of strategy across each of the Company’s businesses to optimize long-term stockholder value creation for Dell Technologies’ stockholders.
Our Corporate Governance Principles contain several features which the Company believes will help to ensure that the Board of Directors maintains effective and independent oversight of management, including the following:
•Executive sessions of the independent directors are held at any time requested by a majority of the independent directors and, in any event, are held at least twice during each fiscal year in connection with regularly scheduled Board meetings. The agenda for each executive session focuses principally on whether management is performing its responsibilities in a manner consistent with the Board’s direction.
All members of the Audit Committee and the Capital Stock Committee are independent directors. The chairs of these committees have authority to conduct executive sessions of each committee without management and non-independent directors present.
•At each executive session of the independent directors, those directors elect an independent director as presiding director to chair the next executive session.
•All members of the Audit Committee are independent directors. The chair of the Audit Committee has and exercises authority to conduct executive sessions of the Audit Committee without management and non-independent directors present.
Board Committees -– The Board of Directors has established threemaintains two standing committees, which consist of the Audit Committee the Capital Stock Committee and the ExecutiveNominating and Governance Committee. These committees assist the Board of Directors in discharging its oversight responsibilities. The Board of Directors has adopted a written charter for each of the standing committees. These charters form an integral part of Dell Technologies’our Corporate Governance Principles. A current copy of each charter can be found on Dell Technologies’ website at http://investors.delltechnologies.com under the Corporate Governance & Leadership – Governance Documents section.
Under the Sponsor Stockholders Agreements, as described above under “– Stockholder Arrangements – Stockholder Rights to Nominate Directors,” for so long as the MD stockholders or the SLP stockholders are entitled to nominate at least one Group I director, such stockholders may have at least one of their nominees then serving on the Board of Directors serve on each committee of the Board other than the Audit Committee, to the extent permitted by applicable law and stock exchange rules and subject to specified exceptions. Mr. Dell serves as a member of the Nominating and Governance Committee as the MD stockholders’ nominee, and Mr. Durban serves as a member of that committee as the SLP stockholders’ nominee.
The following table shows, as of April 26, 2021, the current members of the Board of Directors and the committees and director groups toon which each director belongsserves and indicates the directors determined by the Board of Directors to be independent under the NYSE rules and our Corporate Governance Principles.
Each committee member shown in the table served on the applicable committee for all of Fiscal 2021. |
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| | Audit
Committee | Audit
Nominating and Governance Committee | | Capital Stock
Committee
| | Executive
Committee
| | Director
Group
| | Independent |
| Michael S. Dell | | | | | | Chair | | II | | |
| David W. Dorman | ü | ü | | Chair | | | | I | | ü |
| Egon Durban | | | | | | ü | | III | | |
| William D. Green | Chair | ü | | ü | | | | I | | ü |
| Ellen J. Kullman | | Chair | | ü | | | | I | | ü |
| Simon Patterson | | | |
| Lynn M. Vojvodich | | | | | III | | ü |
As discussed above under “– Controlled Company Status,” Dell has elected under the controlled company exemptions from certain corporate governance requirements under NYSE rules not to constitute the Nominating and Governance Committee solely with members who qualify as independent directors under such rules.
In September 2020, the Board of Directors dissolved its Executive Committee, which had been composed of Mr. Dell as the designee of the MD stockholders and Mr. Durban as the designee of the SLP stockholders. The Executive Committee had been delegated the Board’s power and authority, among other matters and subject to specified limits, to review and approve, with respect to Dell Technologies and its subsidiaries, acquisitions and dispositions, the annual budget and business plan, the incurrence of indebtedness, entry into material commercial agreements, joint ventures and strategic alliances, and the commencement and settlement of material litigation. Following the dissolution of the Executive Committee, such matters are subject to the oversight of the full Board. In addition, through April 1, 2019, the Executive Committee had acted as the compensation committee of the Board of Directors. The Nominating and Governance Committee currently acts as the compensation committee of the Board.
Descriptions of the primary responsibilities of each committee are set forth below.
Audit Committee
The Audit Committee has three members and is composed entirely of members of the Board of Directors who satisfy the standards of independence established for independent directors under the NYSE rules and the additional independence standards applicable to audit committee members established pursuant to Rule 10A-3 under the Exchange Act, as determined by the Board of Directors. Under the Sponsor Stockholders Agreement,NYSE rules, the membership of the Audit Committee is required to consist solely of no fewer than three directors thatwho are qualified as independent directors as described above. The Board of Directors has determined that each member of the Audit Committee meets the “financial literacy” requirement for Audit Committee members under the NYSE rules and that each member is an “audit committee financial expert” within the meaning of SEC rules.
The Audit Committee’s primary responsibilities include, among other matters:
•appointing, retaining, compensating and overseeing a qualified firm to serve as the independent registered public accounting firm to audit Dell Technologies’ financial statements;
•assessing the independence and performance of the independent registered public accounting firm;
•reviewing and discussing the scope and results of the audit and Dell Technologies’ interim and year-end operating results with the independent registered public accounting firm and management;
•establishing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
•reviewing Dell Technologies’ policies on risk assessment and risk management;
•reviewing and, if appropriate, approving or ratifying transactions with related persons;
•obtaining and reviewing a report by the independent registered public accounting firm, at least annually, that describes the accounting firm’s internal quality control procedures, any material issues raised by those procedures or other review or inspection, and any steps taken to deal with those issues; and
•pre-approving all audit and all permissible non-audit services, other thande minimis non-audit services in accordance with SEC rules, to be performed by the independent registered public accounting firm.
In conjunction with the mandatory rotation of the audit firm’s lead engagement partner or partner responsible for reviewing the audit, the Audit Committee and its chair are directly involved in the selection of the independent registered public accounting firm’s new lead engagement partner.
Capital StockNominating and Governance Committee
The Nominating and Governance Committee’s primary responsibilities include, among other matters:
Under the Dell Technologies bylaws, the Capital Stock Committee must consist of a majority of directors determined by•identifying and evaluating potential candidates to be considered for appointment or election to the Board of Directors to satisfy the independence requirements under NYSE rules for audit committee service. The Capital Stock Committee currently consists solely of directors who satisfy these independence requirements.Directors;
The Capital Stock Committee has been granted powers, authority and responsibilities by the Board of Directors in connection with the adoption of general policies governing the relationship between business groups or otherwise, including with respect to, among other matters: (1) the business and financial relationships between the DHI Group (as defined in Annex A) or any business or subsidiary allocated to the DHI Group, on the one hand, and the Class V Group (as defined in Annex A) or any business or subsidiary allocated to the Class V Group, on the other hand; and (2) any matters arising in connection with the foregoing relationships. The grant of such powers, authority and
responsibilities has been made pursuant to the Dell Technologies bylaws and the Tracking Stock Policy governing the Class V common stock.
Without the approval of the Capital Stock Committee, the Board of Directors may not approve:
any investment made by or attributed to the Class V Group, including any investment of any dividends received on the common stock of VMware, Inc. attributed to the Class V Group, other than (1) investments made by VMware, Inc. or (2) any reallocation related to the Retained Interest Dividend Amount (as defined in Annex A) or Retained Interest Redemption Amount (as defined in Annex A);
any allocation of any acquired assets, businesses or liabilities to the Class V Group;
any allocation or reallocation of any assets, businesses or liabilities from one group to the other (other than a pledge of any assets of one group to secure obligations of the other, or any foreclosure on the assets subject to such a pledge); or
any resolution, or the submission to the Dell Technologies stockholders of any resolution, setting forth an amendment to the Dell Technologies certificate of incorporation to increase the number of authorized shares of Class V common stock or any series thereof at any time when the common stock of VMware, Inc. is publicly traded and VMware, Inc. is required to file reports under Sections 13 and 15(d) of the Exchange Act.
Any determination by the Board of Directors to amend, modify or rescind such general policies may become effective only with the approval of the Capital Stock Committee.
For so long as any shares of Class V common stock remain outstanding, the provisions of the Dell Technologies bylaws creating the Capital Stock Committee may not be amended or repealed (1) by the Dell Technologies stockholders unless such action has received the affirmative vote of the holders of record (other than shares held by Dell Technologies’ affiliates), as of the record date for the meeting at which such vote is taken, of (a) Class V common stock representing a majority of the aggregate voting power (other than shares held by the Dell Technologies’ affiliates) of Class V common stock present, in person or by proxy, at such meeting and entitled to vote thereon, voting together as a separate class, and (b) common stock representing a majority of the aggregate voting power of the Dell Technologies common stock present, in person or by proxy, at such meeting and entitled to vote thereon or (2) by any action of the Board of Directors.
A copy of the Tracking Stock Policy governing the Class V common stock is available on our website at http://investors.delltechnologies.com under the Tracking Stock Information section.
Executive Committee
Under the Sponsor Stockholders Agreement, the Executive Committee must consist solely of Group II directors and Group III directors and, until a Designation Rights Trigger Event has occurred with respect to the Class A common stock or the Class B common stock, as applicable, must include at least one Group II director and at least one Group III director. The voting power of the Group II directors and the Group III directors on the Executive Committee is proportionate to their respective voting power on the Board of Directors, as described above. The Executive Committee is responsible for, among other matters:
providing our executive officers with advice and input regarding the operations and management of our business; and
considering and •making recommendations to the Board of Directors regarding Dell Technologies’ business strategy.
The Executive Committee has been delegated the powerselection and authority of the Board of Directors over the following matters to the fullest extent permitted under Delaware law:
review and approval of acquisitions and dispositions by Dell Technologies and its subsidiaries, excluding dispositions of shares of Class V common stock or VMware, Inc. common stock;
review and approval of the annual budget and business plan of Dell Technologies and its subsidiaries;
the incurrence of indebtedness by Dell Technologies and its subsidiaries, to the extent that the incurrence requires approval of the Board of Directors;
the entering into of material commercial agreements, joint ventures and strategic alliances by Dell Technologies and its subsidiaries, to the extent the action requires approval by the Board of Directors;nominees to be submitted for election by a stockholder vote;
acting•monitoring and reviewing any issues regarding the independence of our non-employee directors or involving potential conflicts of interest affecting any such directors;
•reviewing the Board committee structure and composition and making recommendations annually to the Board of Directors regarding the appointment of directors to serve as members of each committee;
•reviewing our Corporate Governance Principles at least annually and recommending any changes to such principles to the Board of Directors; and
•periodically reviewing and approving changes to our Code of Conduct and other policies with respect to legal compliance, conflicts of interest and ethical conduct.
In addition, the Nominating and Governance Committee acts as the compensation committee of the Board, of Directors, including (1) reviewing and in which capacity it has the following responsibilities, among others:
•approving the compensation policy for Dell Technologies’ senior executivesour executive officers and non-employee directors, and such other managers as may be directed by the Board;
•approving (or making recommendationsthe forms of compensation to the full Board of Directorsbe provided to approve) casheach executive officer and equity compensation for Dell Technologies’ senior executives and directors, (2) the appointment and removal of senior executives of Dell Technologies and its subsidiaries, (3) reviewing and non-employee director;
•approving recommendations regarding aggregate salary and bonus budgets andwith respect to compensation guidelines for all other employeesemployees;
•evaluating the need for, and (4) provisions of, employment contracts or severance arrangements for our executive officers;
•reviewing our incentive compensation arrangements to determine whether they encourage excessive risk-taking, and evaluating compensation policies and practices that could mitigate any such risk;
•acting as administrator of Dell Technologies’ equityour equity-based and cashother compensation plans;
•reviewing and discussing with our management the adoptionCompensation Discussion and Analysis disclosure required to be included in the proxy statement for the annual meeting of employee benefitstockholders or annual report on Form 10-K to be filed with the SEC and, based on such review and discussion, determining whether to recommend to the Board that the Compensation Discussion and Analysis disclosure be included in such filing; and
•preparing the Compensation Committee Report required by SEC rules to be included in the proxy statement for the annual meeting of stockholders or annual report on Form 10-K.
The Nominating and Governance Committee has the authority to delegate any of its responsibilities under its charter, along with the authority to take action in relation to such responsibilities, to subcommittees consisting of one or more members of the committee, as the committee may deem appropriate.
In addition, the Nominating and Governance Committee may delegate to one or more of our executive officers the authority to make grants of equity-based compensation to eligible individuals who are not directors or executive officers and to administer our equity-based compensation plans, byin each case subject to compliance with applicable law, NYSE rules and the terms of any applicable compensation plan. The Nominating and Governance Committee may revoke any delegation of authority at any time. Any executive officer to whom the Nominating and Governance Committee may delegate authority to make grants of equity-based compensation is required to report regularly to the committee with respect to any grants made. The Nominating and Governance Committee has delegated to our Chief Human Resources Officer the authority to offer awards under the Dell Technologies and its subsidiaries,Inc. 2013 Stock Incentive Plan to the extent that the action requires approval of the Board of Directors;eligible employees who are not directors or executive officers.
the redemption or repurchase by Dell Technologies of DHI Group common stock (as defined in Annex A);
the commencement and settlement by Dell Technologies and its subsidiaries of material litigation, to the extent that the action requires approval of the Board of Directors; and
any other matters that may be delegated by the Board of Directors to the Executive Committee.
For a discussion of the process by which the ExecutiveNominating and Governance Committee evaluatesevaluated and determinesdetermined executive officer compensation for Fiscal 2021, including the role of executive officers in determining or recommending the amount or form of executive compensation, see “Compensation Discussion and Analysis – ExecutiveAnalysis.”
Use of Compensation Consultant – ProcessDuring Fiscal 2021, our management retained the services of Mercer (US) Inc., or Mercer, an external compensation consultant. Mercer provided advice to management on the design of compensation programs for Evaluatingour directors, executive officers and Determining Executive Officer Compensation.”other employees for the fiscal year ending January 28, 2022, or Fiscal 2022, including equity-based compensation programs. The total fees paid to Mercer for these services were $0.26 million.
During Fiscal 2021, our management also retained other business units of Mercer and affiliates of Mercer to provide additional services to the Company, including human resources services, services relating to employee benefit plans and insurance services. The total fees paid to Mercer and its affiliates with respect to services provided during Fiscal 2021 (excluding services provided as compensation consultant as discussed above) were $19.7 million.
The Company has determined that the work of Mercer and its affiliates on matters other than executive compensation did not raise any conflict of interest with Mercer’s services as compensation consultant, taking into account, among other factors, Mercer’s policies and procedures relating to the prevention of conflicts of interest and the use of separate teams for compensation consulting services and other services provided by Mercer and its affiliates.
Compensation Committee Interlocks and Insider Participation -– The ExecutiveNominating and Governance Committee, which is composed of Messrs. Dell, Dorman and Durban, actsfunctions as the compensation committee of the Board.committee. Mr. Dell is our Chief Executive Officer. NoneDuring Fiscal 2021, none of Dell Technologies’ executive officers served on the board of directors or compensation committee (or other committee serving an equivalent function) of any other entity that has or had one or more executive officers who served as a member of Dell Technologies’ Board of Directors or the Executive Committee during Fiscal 2018.Nominating and Governance Committee. For information concerning transactions among each of Messrs. Dell and Durban and their associated related persons, on the one hand, and Dell Technologies and its subsidiaries, on the other hand, see “Additional Information – Certain Relationships and Related Transactions.”
Board Risk Oversight -– The Board of Directors oversees and maintains Dell Technologies’ governance and compliance processes and procedures to promote the conduct of Dell Technologies’ business in accordance with applicable laws and regulations and with the highest standards of responsibility, ethics and integrity. As part of its oversight responsibility, the Board is responsible for the oversight of risks facing the Company and seeks to provideprovides guidance with respect to the management and mitigation of those risks. An analysis of strategic and operational risks is presented to the Board in reports submitted by the Chief Executive Officer, the Chief Financial Officer and the General Counsel, as well as by other members of Dell Technologies’ senior management who regularly appear before the Board to provide detailed overviews of the businesses they oversee. Directors have complete and open
access to all Dell Technologies employees and are free to communicate, and do communicate, directly with management.
The Board of Directors delegates oversight of the following specific areas of risk to its committees:
•The Audit Committee is responsibleCommittee:
◦maintains responsibility for the oversight of risk policies and processes relating to Dell Technologies’ financial statements and financial reporting processes. The Audit Committee processes;
◦reviews and discusses with management, the independent registered public accounting firm and the Vice President of Corporate Audit significant risks and exposures to Dell Technologies and the steps management has taken or plans to take to minimize or manage these risks. The Audit Committee also is responsiblerisks with management, the independent registered public accounting firm and the Senior Vice President of Corporate Audit;
◦maintains responsibility for discussing the policies and guidelines governingthat govern compliance risk assessment and management andmanagement;
◦maintains responsibility for reviewing and assessing, along with management, Dell Technologies’ major information technology risk exposures (including cybersecurity risk exposures) and risk monitoring and mitigation measures. The Audit Committee measures; and
◦meets in executive session with each of the Chief Financial Officer, the Chief Accounting Officer, the Senior Vice President of Corporate Audit, the Senior Vice President for Ethics and Compliance and Dell Technologies’ independent registered public accounting firm at each regular meeting of the Audit Committee.
•The Executive Committee, which acts as the Board’s compensation committee, Nominating and Governance Committee:
◦monitors the risks associated with succession planning and development as well as compensation plans and arrangementsarrangements; and in this role,
◦evaluates the effect Dell Technologies’that our compensation arrangements may have on risk decisions.
Each of the committee chairs reports to the full Board of Directors at its regular meetings concerning the activities of the committee, the significant issues it has discussed and the actions taken by the committee.
AlthoughWhile the Board of Directors is responsible for risk oversight, management is responsible for risk management. Dell Technologies seeks to maintain an effective internal control environment and has processes to identify and manage risk, including anrisk. An Executive Risk Steering Committee, which is a committee composed of members of management. This committeemanagement, exercises oversight ofwith respect to the various risk assessment and monitoring and controls processes across the Company, which includeCompany. The Committee’s oversight includes an annual risk assessment process that supports the annual internal audit plan. Dell Technologies also maintains and enforces a Code of Conduct, a Code of Ethics for Senior Financial Officers, an Accounting Code of Conduct, an ethics and compliance program, a comprehensive internal audit process and approved quality standards.
Meetings and Attendance -– In Fiscal 2018,2021, the full Board of Directors met fourfive times, and the Audit Committee met eight times and the Nominating and Governance Committee met four times. The Capital Stock Committee and the Executive Committee did not meet duringin Fiscal 2018,2021 before its dissolution by the Board of Directors in September 2020, acting instead acting by unanimous written consent.
In Fiscal 2018,2021, each member of the Board of Directors attended at least 75% of the total number of meetings of the Board and each Board committee held during the period in which such member served as a director of Dell Technologies or as a member of such committee.
Dell Technologies does not have a policy on director attendance at annual meetings of stockholders. Each memberFive of the seven members of the Board of Directors attended last year’s annual meeting held on June 26, 2017.29, 2020.
Communications with Directors -– Any interested person (whether or not a Dell Technologies stockholder) may send communications to the Board of Directors as a whole, the independent directors as a group, any Board
committee, or any individual member of the Board. Any person who wishes to send this type ofsuch a communication may obtain the appropriate contact information at http://investors.delltechnologies.com under the Corporate Governance & Leadership – Contact the Board section.
In addition, any person who has a concern about the Dell Technologies’ conduct, accounting, financial reporting, internal controls or auditing matters may communicate that concern directly to the independent directors or to the Audit Committee (through the committee chair). These communications may be made on a confidential and anonymous basis, and may be e-mailed, submitted in writing or reported by phone to the Company’s Global Ethics and Compliance office. Any person who wishes to send this type of communication may obtain the appropriate contact information at http://investors.delltechnologies.com under the Corporate Governance & Leadership section. All of these
concerns will be forwarded to the appropriate directors for their review and will be simultaneously reviewed and addressed by the Global Ethics and Compliance office in the same manner in which such concerns are addressed by the Company’s management.
The status of all outstanding concerns addressed to the independent directors or the Audit Committee will be reported to the full Board of Directors on a quarterly basis. The independent directors or the Audit Committee may undertake special action, including the retention of outside advisors or counsel, with respect to any concern addressed to them. Our Code of Conduct prohibits any employee from retaliating or taking any adverse actionretaliation against any other employeeperson who reports suspected misconduct or other person for raisingassists with an investigation or audit in good faith, or helping to resolve, an integrity concern.faith.
Director Compensation
Our Board of Directors has adopted a compensation program for our independent directors that we believe will enable us to attract and retain qualified directors, provide them with compensation at a level that is consistent with our compensation objectives and encourage their ownership of our common stock to further the alignment of their interests with the interests of our stockholders. OurFor Fiscal 2021, our compensation program for independent directors includesincluded the following elements:
•an annual cash retainer with a value of $75,000, all or a portion of which the director may elect to receive in the form of deferred stock units;$100,000;
•an annual equity retainer with a value of $225,000 payable (a) 25% in options to purchase sharesthe form of Class C common stock, (b) 25% in options to purchase shares of Class V common stock, (c) 25% in restricted stock units that settle in shares of Class C common stockstock; and (d) 25% in restricted stock units that settle in shares of Class V common stock, all or a portion of which restricted stock units the director may elect to receive in the form of deferred stock units;
•an additional annual cash retainer with a value of $25,000 for service as chair of the Audit Committee or Capital Stock Committee,Committee.
Directors may elect to receive all or a portion of whicheach of the director may elect to receiveannual cash retainer and the cash retainer for service as Audit Committee chair, as applicable, in the form of cash, deferred stock units; and
an initial equity retainer with a value of $1,000,000 upon the director’s initial election or appointment to the Board, payable 50% in options to purchase shares of Class C common stock and 50% in options to purchase shares of Class V common stock.
Upon any election by an independent director to receive the annual cash retainer or annual committee chair retainer in the form of deferred stock units, the deferred stock units issued in accordance with the election will be allocated equally between units that settle in shares of Class C common stock and units that settle inor vested shares of Class VC common stock.
We believe that granting to each independent directorstock, or a combination of the initial equity retainer described above will, among other objectives, provide those directors with an equity interest in the Company that will enhance the alignment of their interests with those of our stockholders.
foregoing.
An independent director elected to the Board of Directors, other than through election at an annual meeting of stockholders, will be awarded a pro-rated portion of each applicable annual retainer.retainer for the director’s initial year of service on the Board of Directors.
All of the equity-based awards are granted under the Dell Technologies Inc. 2013 Stock Incentive Plan (as amended and restated as of July 9, 2019), which we refer to as the Stock Incentive Plan. Each equity-based award will vestvests in full on the first anniversary of the grant date,last annual meeting of stockholders, except that (1) the initial equity retainer awards willformerly granted to directors on their initial election or appointment vest annually in equal installments over four years from the grant date and (2) deferred stock units will settle in shares of Class C common stock or Class V common stock, as applicable, on the earlier of the termination of the applicable director’s Board service for any reason or a change in control of Dell Technologies. The vesting of unvested equity-based awards will be accelerated upon the director’s death or disability, the termination of the director’s service without cause andor a change in control of Dell Technologies. The shares of Class C commonCertain restricted stock
received in the settlement of the restricted units, deferred stock units and stock options exercisable for Class C common stock, as well as shares of Class C common stock received in the settlement of such awards, are subject to the applicable terms and conditions of a management stockholders agreement.
We reimburse our directors for their reasonable expenses incurred in attending meetings of our Board of Directors or committees.
We also provide our independent directors with liability insurance coverage for their activities as directors. The Dell TechnologiesOur certificate of incorporation and bylaws provide that our directors are entitled to indemnification and advancement of expenses from us to the fullest extent permitted by Delaware law. We have entered into indemnification agreements with each of our directors to afford them contractual assurances regarding the scope of their indemnification and to provide procedures for the determination of a director’s right to receive indemnification and to receive reimbursement of expenses as incurred in connection with any related legal proceedings.
The following table sets forth the compensation granted or paid to our independent directors for Fiscal 2018.
2021.
Fiscal 20182021 Director Compensation
| | | Name | | Fees earned or paid in cash (1) ($) | | Stock awards (2) ($) | | Option awards (3) ($) | | Total ($) | Name | Fees earned
or paid in cash (1)
($) | Stock
awards (2)
($) | Option
awards (3)
($) | Total
($) |
| David W. Dorman | | 100,000 | | 112,500 | | 112,500 | | 325,000 | David W. Dorman | 100,000 | 224,960 | — | 324,960 |
| William D. Green | | 75,000 | | 112,500 | | 112,500 | | 300,000 | William D. Green | 125,000 | 224,960 | — | 349,960 |
| Ellen J. Kullman | | 100,000 | | 112,500 | | 112,500 | | 325,000 | Ellen J. Kullman | 100,000 | 224,894 | — | 324,894 |
Lynn M. Vojvodich | | Lynn M. Vojvodich | 100,000 | 224,960 | — | 324,960 |
_____________
| |
(1) | Each of Mr. Dorman and Mrs. Kullman elected to receive 75% of the annual cash retainer and committee chair retainer to which such director was entitled in the form of deferred stock units, which were allocated equally between units that settle in Class C common stock and units that settle in Class V common stock. Each of Mr. Dorman and Mrs. Kullman received (a) 1,146 deferred stock units that settle in shares of Class C common stock, determined by dividing the applicable portion of the aggregate retainer amounts by the fair market value of a share of Class C common stock as of September 28, 2017, based upon the good faith determination by the Board of Directors of such fair market value most immediately preceding such date, and (b) 486 deferred stock units that settle in shares of Class V common stock deferred stock units, determined by dividing the applicable portion of the aggregate retainer amounts by the closing price of a share of Class V common stock as reported on the NYSE on September 28, 2017. |
| |
(2) | Stock awards were made in the form of restricted stock units that settle in Class C common stock or Class V common stock, subject to each director’s right to elect to receive a specified portion in deferred stock units. For the annual equity retainer, Mrs. Kullman elected to receive in the form of deferred stock units 75% of both the awards of restricted stock units that settle in Class C common stock and the awards of restricted stock units that settle in Class V common stock. Each of Messrs. Dorman and Green and Mrs. Kullman was awarded a total of 1,720 restricted stock units that settle in Class C common stock and a total of 729 restricted stock units that settle in Class V common stock. The aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of the restricted stock units that settle in Class C common stock and the restricted stock units that settle in Class V common stock received by each director were $56,250 and $56,250, respectively. The assumptions used by us in calculating these amounts are incorporated herein by reference to Note 19 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended February 2, 2018, filed with the SEC on March 29, 2018, which we refer to as our 2018 Form 10-K. As of February 2, 2018, (a) Mr. Dorman held an aggregate of 2,449 outstanding restricted stock units and 3,770 outstanding deferred stock units; (b) Mr. Green held an aggregate of 2,449 outstanding restricted stock units; and (c) Mrs. Kullman held an aggregate of 613 outstanding restricted stock units and 8,012 outstanding deferred stock units. |
| |
(3) | Consists of annual option awards that are allocated between options to purchase Class C common stock and options to purchase Class V common stock. Each of Messrs. Dorman and Green and Mrs. Kullman received 4,986 options to purchase Class C common stock and 3,227 options to purchase Class V common stock. The aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of the options to purchase Class C common stock and the options to purchase Class V common stock received by each director were $56,664 and $57,626, respectively. The assumptions used by us in calculating these amounts are incorporated herein by reference to Note 19 to our consolidated financial statements in our 2018 Form 10-K. As of February 2, 2018, each of Messrs. Dorman and Green and Mrs. Kullman held an aggregate of 93,047 outstanding option awards. |
(1) Each of Mr. Green and Ms. Vojvodich elected to receive 100% of the annual cash retainer in the form of vested shares of Class C common stock and Mr. Green elected to receive 100% of the cash committee chair retainer to which such director was entitled in the form of vested shares of Class C common stock. Each of Mr. Dorman and Mrs. Kullman elected to receive 25% and 75% of the annual cash retainer in the form of vested shares of Class C common stock and deferred stock units that settle in shares of Class C common stock, respectively. For service in Fiscal 2021, Mr. Green received an aggregate of 1,901 vested shares of Class C common stock, Ms. Vojvodich received an aggregate of 1,521 vested shares of Class C common stock and each of Mr. Dorman and Mrs. Kullman received an aggregate of 380 vested shares of Class C common stock and 1,141 deferred stock units that settle in shares of Class C common stock, in each case determined by dividing the applicable portion of the aggregate retainer amounts by the closing price of the Class C common stock as reported on the NYSE on September 25, 2020.
(2) Stock awards were made in the form of restricted stock units that settle in shares of Class C common stock, subject to each director’s right to elect to receive a specified portion in deferred stock units that settle in shares of Class C common stock. For the annual equity retainer, Mrs. Kullman elected to receive 75% of the award of restricted stock units in the form of deferred stock units. For service in Fiscal 2021, (a) each of Messrs. Dorman and Green and Ms. Vojvodich was awarded an aggregate of 3,423 restricted stock units that settle in shares of Class C common stock and (b) Mrs. Kullman was awarded an aggregate of 855 restricted stock units that settle in shares of Class C common stock and 2,567 deferred stock units that settle in shares of Class C common stock (together with the deferred stock units set forth in note 1, Mrs. Kullman received a total of 3,708 deferred stock units for Fiscal 2021). The aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of the (i) restricted stock units awarded to each of Messrs. Dorman and Green and Ms. Vojvodich was $224,960 and to Mrs. Kullman was $56,191 and (ii) deferred stock units awarded to Mrs. Kullman was $168,703, in each case determined by dividing the aggregate retainer amount, or applicable portion of the aggregate retainer amount, by the closing price of the Class C common stock as reported on the NYSE on September 25, 2020. As of January 29, 2021, (A) each of Messrs. Dorman and Green and Ms. Vojvodich held an aggregate of 3,423 outstanding restricted stock units and Mrs. Kullman held an aggregate of 855 outstanding restricted stock units and (B) Mr. Dorman held an aggregate of 8,256 outstanding deferred stock units and Mrs. Kullman held an aggregate of 19,609 outstanding deferred stock units.
(3) As of January 29, 2021, each of Messrs. Dorman and Green and Mrs. Kullman held an aggregate of 138,584 outstanding options and Ms. Vojvodich held an aggregate of 42,783 outstanding options.
PROPOSAL 2 -– RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors is asking the stockholders to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP, or PwC, as Dell Technologies’ independent registered public accounting firm for the fiscal year ending February 1, 2019, or Fiscal 2019.
2022.
PwC is a registered independent public accounting firm and has served as Dell Inc.’sthe independent registered public accounting firmauditors of the Company or its predecessor since 1986 and Dell Technologies’ independent registered public accounting firm since the closing of Dell Inc.’s going-private transaction in October 2013.1986. Although current law, rules and regulations, as well as the Audit Committee’s charter, require Dell Technologies’ independent registered public accounting firm to be engaged, retained and supervised by the Audit Committee, the Board of Directors considers the selection of an independent registered public accounting firm to be an important matter of stockholder concern and considers a proposal for stockholders to ratify this selection to be an opportunity for stockholders to provide direct feedback to the BoardDell Technologies on an important issue of corporate governance. If the stockholders do not ratify the selection of PwC, the Audit Committee will take the vote into consideration in determining whether to retain PwC and whether to engage the firm in future years, but may continue to retain PwC. If the appointment is ratified by stockholders, the Audit Committee in its discretion nevertheless may change the appointment at any time during the current fiscal year if it determines that a change would be in the best interests of the Company and its stockholders.
Representatives of PwC are expected to be present at the annual meeting and available to respond to appropriate questions, and will have an opportunity to make a statement if they desire to do so.
The Board of Directors unanimously recommends a vote “FOR” the ratification of PwC as Dell Technologies’ independent registered public accounting firm for Fiscal 2019.
2022.
In addition to retaining PwC to conduct an independent audit of the consolidated financial statements, Dell Technologies engages PwC from time to time to perform other permissible non-audit services. The following table sets forth all fees incurred in connection with professional services rendered to Dell Technologies by PwC during Fiscal 20182021 and the fiscal year ended February 3, 2017,January 30, 2020, or Fiscal 2017.
2020.
Independent Registered Public Accounting Firm Fees (in millions)
| | | Fee Type | | Fiscal 2018 | | Fiscal 2017 | Fee Type | Fiscal 2021 | Fiscal 2020 |
| Audit Fees(a) | | $ | 28.6 |
| | $ | 29.0 |
| Audit Fees(a) | $26.0 | $26.8 |
| Audit-Related Fees(b) | | 3.1 |
| | 8.2 |
| Audit-Related Fees(b) | 1.5 | 7.6 |
| Tax Fees(c) | | 1.7 |
| | 3.7 |
| Tax Fees(c) | 0.8 | 0.9 |
| All Other Fees(d) | | 0.1 |
| | 0.1 |
| All Other Fees(d) | 0.4 | 0.4 |
| Total | | $ | 33.5 |
| | $ | 41.0 |
| Total | $28.7 | $35.7 |
___________
| |
(a) | (a) This category includes fees incurred for professional services rendered in connection with the audit of the annual financial statements, for the review of the quarterly financial statements, for comfort letters and consents, for the statutory audits of international subsidiaries, and for other procedures. |
| |
(b) | This category includes fees incurred for professional services rendered in connection with assurance and other activities reasonably related to the audit or review of Dell Technologies’ financial statements, including the audits of Dell Technologies’ employee benefit plans, contract compliance reviews, phased audit procedures of pre-adoption accounting documentation and accounting research. Audit-related fees in Fiscal 2017 of approximately $4.9 million included services related to carve-out audits for our discontinued operations. |
| |
(c) | This category includes fees incurred for domestic and international income tax compliance and tax audit assistance, and for corporate-wide tax planning services. |
| |
(d) | This category consists of fees for all products and services other than the services reported in notes (a) through (c) above, and includes fees primarily incurred for training presentations recognized for Association of Chartered Certified Accountants and Chartered Institute of Management Accountants qualifications. |
(b) This category includes fees incurred for professional services rendered in connection with assurance and other activities reasonably related to the audit or review of Dell Technologies’ financial statements, including the audits of Dell Technologies’ employee benefit plans, contract compliance reviews, phased audit procedures of pre-adoption accounting documentation, carve-out audit work, and accounting research.
(c) This category includes fees incurred for domestic and international income tax compliance and tax audit assistance, and for corporate-wide tax planning services.
(d) This category consists of fees for all products and services other than the services reported in notes (a) through (c) above, and includes fees primarily incurred for training presentations recognized for qualifications conferred by the Association of Chartered Certified Accountants and the Chartered Institute of Management Accountants,
assessment of contract compliance by third-party vendors, and benchmarking services related to research and development activities.
The Audit Committee has determined that the provision of the non-audit services described in notes (c) and (d) to the table above was compatible with maintaining the independence of PwC.
PwC’s independence.
The Audit Committee pre-approved PwC’s performance by PwC of the foregoing services that were required to be pre-approved under SEC rules. The Audit Committee has adopted a policy requiring pre-approval by the committee of all services (audit and non-audit) to be provided by Dell Technologies’ independent registered public accounting firm other than in accordance with a limited de minimis exception as provided for under SEC rules. In accordance with that policy, the Audit Committee has given its pre-approval for the provision of audit services by PwC for Fiscal 2019,2022, including PwC’s audit fees, and has also given its pre-approval for up to one year in advance for the provision by PwC of particular categories or types of audit-related, tax and other permitted non-audit services. In circumstances in which the services proposed to be provided by PwC are not covered by one of those pre-approvals, the Audit Committee may delegate authority to the chair or other designated members of the Audit Committee to pre-approve those services. Any pre-approvals granted under this delegated authority would thenmust be communicated to the full Audit Committee.
PROPOSAL 3 -– ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
In this Proposal 3, in accordance with Section 14A of the Exchange Act and the SEC’s rules thereunder, the Board of Directors is asking stockholders to approve, on a non-binding, advisory basis, the compensation of Dell Technologies’ named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosures beginning on page 34.
37.
The Board of Directors unanimously recommends a vote “FOR” approval of Dell Technologies’ compensation of its named executive officers as disclosed in this proxy statement.
As described below in the sections of this proxy statement under “Compensation Discussion and Analysis” and “Compensation of Executive Officers,” the ExecutiveNominating and Governance Committee, which actsacted as the Board’s compensation committee for purposes of executive compensation determinations for Fiscal 2021, has structured Dell Technologies’ executive compensation program to emphasize long-term, performance-dependent pay to motivate and reward long-term value creation for Dell Technologies’ stockholders. Dell Technologies’ executive compensation program has a number of features designed to ensure adherence to the Company’s pay-for-performance philosophy.
The Board of Directors urgesencourages stockholders to read the Compensation Discussion and Analysis below, which describes in detail how Dell Technologies’ executive compensation practices operate and are designed to achieve Dell Technologies’ core executive compensation objectives. The Board also urgesencourages stockholders to review the Fiscal 20182021 Summary Compensation Table and other compensation tables and the narrative disclosures accompanying the tables appearing under “Compensation of Executive Officers,” which provide detailed information about the compensation of our named executive officers. The ExecutiveNominating and Governance Committee and the Board of Directors believe that the compensation practices described in the Compensation Discussion and Analysis are effective in achieving Dell Technologies’ core executive compensation objectives and that the compensation of its named executive officers as disclosed in this proxy statement reflects and supports the appropriateness of Dell Technologies’ executive compensation philosophy and practices. This vote is not intended to address any specific item of compensation, but rather the overall compensation paid to our executive officers and the philosophy, policies and practices described in this proxy statement.
In accordance with Section 14A of the Exchange Act and the SEC’s rules thereunder, Dell Technologies is asking stockholders to approve this proposal by approving the following non-binding resolution:
RESOLVED, that the compensation paid to Dell Technologies’ named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.
A vote on this resolution, commonly referred to as a Say-on-Pay resolution, is not binding on the ExecutiveNominating and Governance Committee or the Board of Directors or Dell Technologies.Directors. Although the vote is advisory in nature and non-binding, the Nominating and Governance Committee and the Board of Directors and the Executive Committee value the views of the Company’s stockholders and will take the voting resultsoutcome of the advisory vote into account when considering future executive compensation questions.matters.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information about our equity compensation plans as of the end of Fiscal 2021.
| | | | | | | | | | | | | | |
| Plan Category | Number of securities to
be issued upon exercise
of outstanding options, warrants and rights (1) | Weighted-average exercise price of outstanding options, warrants and rights (2) | Number of securities remaining available for future issuance under equity compensation
plans (excluding securities reflected in first column) (3) |
| Equity compensation plans approved by security holders | 38,172,237 | $ | 15.87 | 31,650,562 |
| Equity compensation plans not approved by security holders | 4,367 | $ | 13.98 | —(4) |
| Total: | 38,176,604 | $ | 15.87 | 31,650,562 |
__________
(1) The number of securities to be issued upon exercise of outstanding options, warrants and rights set forth in this column represents, as of the end of Fiscal 2021, (a) with respect to equity compensation plans approved by security holders, the aggregate number of shares of Class C common stock that were issuable upon the exercise or settlement of outstanding time-based and performance-based options and time-based and performance-based restricted stock units, or RSUs, granted under the Stock Incentive Plan, and (b) with respect to equity compensation plans not approved by security holders, the number of shares of Class C common stock that were issuable upon the exercise of outstanding time-based options granted under the Dell Inc. Amended and Restated 2002 Long-Term Incentive Plan. The number of securities to be issued under equity compensation plans approved by security holders reported in this column consists of the aggregate number of securities that may be issued in connection with 2,265,591 time-based options to purchase Class C common stock, 3,369,103 performance-based options to purchase Class C common stock, 27,793,789 time-based RSUs that may be settled in Class C common stock, 4,715,889 performance-based RSUs that may be settled in Class C common stock and 27,865 time-based deferred stock units that may be settled in Class C common stock. The number of securities to be issued under the equity compensation plan not approved by security holders reported in this column consists of the aggregate number of securities that may be issued in connection with 4,367 time-based options to purchase Class C common stock.
(2) Weighted-average exercise prices do not reflect shares issuable in connection with the settlement of RSUs or deferred stock units, as RSUs and deferred stock units have no exercise price.
(3) The number of securities remaining available for future issuance reported in this column with respect to equity compensation plans approved by security holders represents the aggregate number of shares of Class C common stock that were available for issuance in connection with grants of options, time-based and performance-based restricted stock, service-based and performance-based RSUs and deferred stock units, and other types of equity awards authorized under the Stock Incentive Plan. The maximum number of shares of Class C common stock issuable under the Stock Incentive Plan (subject to adjustment under the terms of the plan) is 110,500,000, which may be issued in the form of any such award.
(4) As of the end of Fiscal 2021, no shares remained available for future awards under the Dell Inc. Amended and Restated 2002 Long-Term Incentive Plan.
COMPENSATION COMMITTEE REPORT
The ExecutiveNominating and Governance Committee of the Board of Directors of Dell Technologies Inc., acting as the compensation committee of the Board of Directors for the fiscal year ended January 29, 2021, has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management.S-K. Based on such review and discussion, the ExecutiveNominating and Governance Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into Dell Technologies Inc.’s Annual Reportannual report on Form 10-K for the fiscal year ended February 2, 2018.
| | | | | | | | | | | | | | |
| | NOMINATING AND GOVERNANCE COMMITTEE |
| | | | |
| | | EXECUTIVE COMMITTEE |
| | | | |
| | | Michael S. Dell, Chair David W. Dorman Egon Durban |
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis is intended to provide our stockholders with an understanding of Dell Technologies’ compensation philosophy, its core principles, and the compensation in effect during Fiscal 20182021 for the executive officers identified in the Fiscal 2018 Summary Compensation Table under “Compensation of Executive Officers.” We refer to those executive officers as theour named executive officers.
Dell Technologies’ compensation programs are designed to attract, reward and retain high-quality talent and to provide appropriate incentives for achieving Dell Technologies’ financial goals and strategic objectives. Dell Technologies’ compensation programs are focused on both Company and individual performance to create a culture of meritocracy that rewards our named executive officers and other executive officers for their work in achieving performance objectives and aligns their interests with the interests of our stockholders. We emphasize performance-based variable pay programs to drive Company and individual performance and promote this alignment.
Named Executive Officers
The named executive officers are as follows:
|
| | | | |
| Name | | Title |
| Michael S. Dell | | Chairman and Chief Executive Officer |
| Thomas W. Sweet | | Chief Financial Officer |
| Jeffrey W. Clarke | | Chief Operating Officer and Vice Chairman Products and Operations |
David I. Goulden*Richard J. Rothberg | | Former President, Infrastructure Solutions GroupGeneral Counsel |
Rory P. ReadWilliam F. Scannell | | Chief Operating ExecutivePresident, Global Sales and Chief Integration Officer, DellCustomer Operations |
_____________
| |
* | Mr. Goulden terminated employment with the Company effective February 2, 2018. |
On September 7, 2016,
Highlights of Fiscal 2021 Performance
During Fiscal 2021, Dell Technologies completed its acquisitionplayed a central role in helping our customers keep our society, our economy, and our lives moving forward. We delivered strong financial results in Fiscal 2021 despite the challenging environment by mergerleveraging the depth and breadth of EMC Corporation,our portfolio and executing with discipline, speed and precision.
Our full-year financial results for Fiscal 2021 included the following highlights:
•net revenue of $94.2 billion and non-GAAP net revenue of $94.4 billion, each up 2% over the prior year;
•operating income of $5.1 billion and non-GAAP operating income of $10.8 billion, up 96% and 6%, respectively, over the prior year;
•net income of $3.5 billion, down 37% from the prior year, and non-GAAP net income of $6.8 billion, up 11% over the prior year;
•cash flow from operations of $11.4 billion, up 23% over the prior year; and
•repayment of approximately $5.5 billion of core debt, which we refer todefine as the EMC merger. total principal amount of our debt, less DFS-related debt, our margin loan facility and other debt, and public subsidiary debt.
A reconciliation of the foregoing non-GAAP financial measures to the most comparable financial measures calculated in accordance with accounting principles generally accepted in the United States, or GAAP, is set forth in Annex B to this proxy statement.
Executive Summary: Response to COVID-19
In connectionMarch 2020, the World Health Organization declared the outbreak of the COVID-19 a pandemic. Following this declaration, Dell Technologies took precautionary measures to manage expenses and preserve liquidity that included the actions below.
•Mr. Dell voluntarily agreed, as of April 7, 2020, to forgo his base salary, except as necessary to fund, on an after-tax basis, his contributions to continue to participate in our health and welfare benefits plans, effective with the acquisitionstart of EMC Corporation,our second fiscal quarter on May 2, 2020 through the end of Fiscal 2021. Mr. Dell’s voluntary waiver resulted in a 73% reduction in actual salary received relative to the annual base salary rate as specified in Mr. Dell’s employment agreement.
•Effective June 1, 2020, the Company suspended the Dell Inc. 401(k) Plan employer matching contribution for U.S. employees, including our named executive officers, as a precautionary measure to preserve financial flexibility in light of COVID-19. On January 1, 2021, the Dell Inc. 401(k) Plan employer matching contribution was reinstated, with no change to the matching contribution policy or EMC,participant eligibility requirements.
•For Fiscal 2021, we implemented cost-saving measures that included global hiring limitations and reductions in consulting and contractor costs.
•For Fiscal 2021, the resulting consolidationperformance measures and target goals applicable under the Dell Inc. Incentive Bonus Plan, or IBP, and our long-term incentive plan were not adjusted as a result of COVID-19.
•On March 15, 2020, to protect the two companies’ management teams, Mr. Goulden became an executive officerhealth and safety of our team members, we implemented a global work from home policy and made all in-person events virtual. In addition, Dell Technologies in Fiscal 2017.has adopted a conservative, phased approach to returning to the office, evaluating governmental restrictions and public health metrics, and incorporating appropriate safety measures.
Executive Compensation Philosophy and Core Objectives
The ExecutiveNominating and Governance Committee of the Board of Directors acts as the compensation committee of the Board and is composed of Mr. Dell, as Chair of the Committee,committee, Egon Durban and Mr. Durban. In that capacity, the Executive Committee is responsible for reviewing, approvingDavid Dorman. References in this Compensation Discussion and administering compensation programs for executive officers that ensure a suitable link between pay and performance, while appropriately balancing risk. It seeks to increase stockholder value by rewarding performance and ensuring that Dell Technologies can attract and retain the best executive talent through adherenceAnalysis to the following“Committee” refer to the Nominating and Governance Committee.
Our core compensation objectives:objectives that reinforce our strong pay-for-performance philosophy include:
•aligning the interests of our named executive officers and other executive officers with those of Dell Technologies’ stockholders by emphasizing long-term, performance-dependent compensation;
providing appropriate cash incentives for achieving Dell Technologies’ financial goals and strategic objectives;
•creating a culture of meritocracy by linking pay to individual and Company performance;
•providing appropriate cash or equity incentives for achieving Dell Technologies’ financial goals and strategic objectives; and
•providing compensation opportunities that are competitive with companies with which Dell Technologies competes for executive talent.
Executive Compensation Overview
Elements of Total Compensation Package -– The primary components of Dell Technologies’ compensation program for named executive officers consist of base salary, annual incentive bonuses, long-term equity incentives that are time-based and cash incentives,performance-based, and limited benefits and limited perquisites. Dell Technologies does not target a fixed mix of pay for executive officers, but instead evaluates each executive officer individually, and may consider such factors, among others, as individual level of responsibility, market practices and internal equity considerations.
Because executive officers are in a position to directly influence Dell Technologies’ performance, a significant portion of their compensation is delivered in the form of short-term and long-term incentives for which payment or vesting are tied to individual or corporate performance to assist in motivating executives in regard to the achievement of Dell Technologies’ strategic and financial objectives. In addition, the value ultimately realized from equity awards is a function of the value of our common stock.
Compensation Consultants -– The Executive Committee did not engage any compensation consultant to advise on executive officer compensation matters for Fiscal 2018.2021. The Committee has relied on the general knowledge and experience of its members, as well as peer group data, analysis and recommendations presented by management and developed in consultation with Mercer, the external compensation consultant engaged by management. For information about management’s use of a compensation consultant, see “Proposal 1 – Election of Directors – Corporate Governance – Use of Compensation Consultant.”
Process for Evaluating and Determining Executive Officer Compensation -– Dell Technologies conducts a subjectivethorough evaluation of the performance of each named executive officer and each other executive officer annually based on a number of subjective and objective factors and then makes a recommendation to the Executive Committee regarding such officer’s compensation for the current year. The Executive Committee, afterAfter input from management, including the Chief Executive Officer and the Chief Operating Officer and Vice Chairman, and the human resources department, the Committee determines the individual cash compensation elements and associated amounts for each executive officer other than Mr. Dell. When making individual compensation decisions for an executive officer, the Executive Committee may takeconsiders a variety of factors, into account, including:
•the annual performance of Dell Technologies and the executive officer’s business unit, if applicable;
•the executive officer’s performance, experience and ability to contribute to Dell Technologies’ long-term strategic goals;
•the executive officer’s historical compensation;
•internal pay equity; and
•retention considerations.
AsFor Fiscal 2021, the Committee also considered executive officers’ efforts to advance the Company’s financial goals and strategic objectives in the face of challenges related to COVID-19. The performance measures and target goals applicable under the IBP and long-term incentive plan were not adjusted as a controlled company, Dell Technologies is not subject to requirements under NYSE rules that executive compensation decisions be made by a committeeresult of the Board of Directors consisting solely of independent directors. However, directors nominated by Dell Technologies’ major stockholders - the MD stockholders and the SLP stockholders - currently serve on the Executive Committee to help ensure that compensation decisions are aligned with stockholder interests.COVID-19.
Matters regarding Mr. Dell’s compensation are subject to review and approval by the Board of Directors, rather than the Executive Committee. Equity compensation for each named executive officer is subject to review and approval by the Board of Directors.
Compensation Risk Oversight - Dell Technologies’ management– The Committee has undertaken a review of the Company’s material compensation processes, policies and programs for all employees across the following categories: compensation mix; short-term and long-term incentive plan design; performance measures; performance slope; clawback and recoupment policies; ownership requirements and severance or change in control policies under the executive compensation programs; and oversight. Based on its review, the Committee has determined that those processes, policies and programs aredo not reasonably likelyencourage unnecessary or excessive risk, manipulation of financial measures to have a material adverse effectimpact personal financial rewards, or behavior that focuses on short-term results at the Company.expense of long-term value creation.
Consideration of Annual Say-On-Pay Results -– At our annual meeting of stockholders in 2017, we2020, the Fiscal 2020 compensation for our named executive officers received approximately 99% support forin our “say-on-pay”Say-on-Pay vote. No significant changes have been madeDespite this strong level of support, the Committee continues to the structure ofdiscuss our executive compensation programs in lightprogram with stockholders and reviews the program for potential areas of our 2017 “say-on-pay” results.enhancement.
Individual Compensation Components
Base Salary
We use base salary to attract and retain talented executive officers needed to manage the business. SalariesBase salaries for each named executive officer (other than Mr. Dell) are determined annually by the Executive Committee. The base salaries determined by the Executive Committeeof our executive officers vary based on each executive officer’s level of responsibility, performance, experience, retention concerns,considerations, historical compensation and internal equity considerations.
For Fiscal 2018, Mr. Dell received aDell’s base salary is established at an annual rate of $950,000 in accordance with his employment agreement. Under thehis employment agreement, Mr. Dell’s base salary is subject to annual review by the Board of Directors and subject to increase, but not decrease. For additional information concerning Mr. Dell’s employment agreement, see “– Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Employment Agreement with Michael S. Dell.”
In light of the disruption and uncertainty created by COVID-19, Mr. Dell voluntarily agreed, as of April 7, 2020, to forgo his base salary, except as necessary to fund, on an after-tax basis, his contributions to continue to participate in our health and welfare benefits plans, effective with the start of our second fiscal quarter on May 2, 2020. Mr. Dell’s base salary was reinstated at the start of Fiscal 2022. While this reduction did not modify other rights under Mr. Dell’s employment agreement or other compensation, it affected incentive arrangements applicable to Mr. Dell that are determined by reference to his base salary, including his annual bonus target amount.
The table below summarizes the annual base salary rate of each of the named executive officers for Fiscal 2018.2021. Base salaries remained unchanged for all our NEOs that were NEOs in Fiscal 2020, except for Mr. Dell, whose actual Fiscal 2021 base salary was lower than in Fiscal 2020. As a result of payroll processes, the actual base salaries paid for the fiscal year may vary from those shown below.
|
| | | | |
| Name | | Fiscal 20182021 Salary
($)
|
| Michael S. Dell | | 950,000950,000(1) |
| Thomas W. Sweet | | 725,000750,000 |
| Jeffrey W. Clarke | | 851,160881,160 |
David I. GouldenRichard J. Rothberg | | 850,000627,500 |
Rory P. ReadWilliam F. Scannell | | 600,000750,000 |
________
Cash(1)Mr. Dell’s annual base salary rate remained unchanged from Fiscal 2020, at $950,000. However, in light of the COVID-19 pandemic, Mr. Dell voluntarily agreed to forgo receipt of his base salary for a portion of Fiscal 2021, as described above. Mr. Dell’s actual base salary for Fiscal 2021 was $255,769.
Annual Bonus Plans
In Fiscal 2018,2021, all of Dell Technologies’ executive officers participated in the Dell Inc. Incentive Bonus Plan, or IBP, a program that forms a part of the Dell Inc. Annual Bonus Plan.IBP.
Dell Technologies Incentive Bonus Plan
The IBP is designed to align executive officer pay with Dell Technologies’ short-term financial and strategic results, while also serving to attract, retain and motivate executive officers. For each element described below, determinations are made by the Executive Committee for the named executive officers other than Mr. Dell.
IBP Formula
The ExecutiveCommittee may consider the potential payout produced by the formula and such other factors as it deems appropriate, including macroeconomic conditions and significant corporate transactions, to ensure that the actual bonus payout appropriately takes into account those factors.
IBP Target Incentive Opportunity
The Committee establishes a target incentive opportunity annually for each executive officer expressed as a percentage of eligible earnings for that fiscal year. Under his employment agreement, Mr. Dell is eligible for an annual bonus with a target opportunity equal to 200% of his base salary. For Fiscal 2018,2021, target annual incentives, other than for Mr. Dell, were based on job grade, and for our named executive officers were as follows:
|
| | | | |
| Name | | Target Annual Incentive Opportunity
as % of Eligible Earnings
|
| Michael S. Dell | | 200%(1) |
| Thomas W. Sweet | | 100% |
| Jeffrey W. Clarke | 100% |
| Richard J. Rothberg | 100% |
David I. Goulden | | 100% |
Rory P. Read | William F. Scannell | 100% |
________
IBP Formula
To arrive at(1) Mr. Dell’s target bonus opportunity was calculated as 200% of his actual base salary received, taking into account his voluntary agreement to forgo receipt of his base salary for a portion of Fiscal 2018 IBP payout amount for the executive officers, the target annual incentive opportunity for each executive officer was multiplied by a formula based on corporate performance and individual performance. In determining the amount2021 in light of the actual bonus payout, the Executive Committee may consider the potential payout produced by the formula and any other factors it deems appropriate.COVID-19 pandemic, as described above.
IBP Corporate Performance Modifier
The Executive Committee selectsestablishes corporate performance measures and target goals annually. For Fiscal 2018,2021, the selecteddesignated corporate performance measures and target goals were designed to drive profitable growth and achieve strategic objectives. The Committee chose to keep the same performance measures used for the Fiscal 2020 plan, consisting of non-GAAP revenue and non-GAAP operating income, as the two performance measures for the Fiscal 2021 plan. These measures were selected for the incentive program as key elements of our long-term financial framework. The targets for the IBP were intended to be “stretch” goals that could not be easily achieved.
The Executive Committee retains subjective discretion to adjust IBP measures as it determines appropriate. For theThe Fiscal 20182021 IBP the corporate performance goals as adjusted to account for certain business transformation and macroeconomic factors, were as follows:
|
| | | | | | | | | | | | | | | | |
| | | Threshold | | Plan (Target) | | 200% Modifier (1) | | Actual |
| Non-GAAP revenue (millions) (2) | | $ | 52,553 |
| | $ | 65,692 |
| | $ | 91,969 |
| | $ | 69,649 |
|
| Non-GAAP operating income (millions) (3) | | $ | 4,023 |
| | $ | 5,028 |
| | $ | 7,040 |
| | $ | 4,512 |
|
| IBP modifier | | 50% | | 100% | | 200% | | 94% |
| | | | | | | | | | | | | | |
| Performance Measures | Weighting | Threshold | Plan
(Target) | Above
Plan (1) |
| Non-GAAP revenue (billions) (2) | 50% | $72.2B | $80.2B | $104.3B |
| Non-GAAP operating income (billions) (3) | 50% | $5.2B | $5.8B | $7.6B |
| IBP modifier | — | 75% | 100% | 175% |
________
| |
(1) | For Fiscal 2018, there was no cap on the IBP modifier. The modifier would increase on a linear basis for performance above target. |
| |
(2) | For purposes of the IBP, non-GAAP revenue is generally calculated by adjusting Dell Technologies’ net revenue as computed in accordance with accounting principles generally accepted in the United States, or GAAP, to exclude the impact of purchase accounting. |
| |
(3) | For purposes of the IBP, non-GAAP operating income is generally calculated by adjusting Dell Technologies’ operating income as computed on a GAAP basis to exclude the impact of purchase accounting, amortization of intangibles, transaction-related expenses and other corporate expenses. |
(1) For Fiscal 2018,2021, there was no cap on the IBP corporate performance modifier. The modifier would increase on a linear basis for performance above target.
(2) For purposes of the IBP, non-GAAP revenue generally is calculated by adjusting Dell Technologies’ net revenue as computed on a GAAP basis to exclude the impact of purchase accounting. Non-GAAP revenue for this purpose does not equal externally reported non-GAAP revenue for Dell Technologies as the IBP measure excludes the results of certain subsidiaries.
(3) For purposes of the IBP, non-GAAP operating income generally is calculated by adjusting Dell Technologies’ operating income as computed on a GAAP basis to exclude the impact of purchase accounting, amortization of intangibles, transaction-related expenses, stock-based compensation expense and other corporate expenses. Non-GAAP operating income for this purpose does not equal externally reported non-GAAP operating income for Dell Technologies as the IBP measure excludes the results of certain subsidiaries.
Dell Technologies achieved strong financial results for Fiscal 2021. Dell Technologies achieved the target non-GAAP revenue growth for Fiscal 2021 and exceeded the target corporate non-GAAP revenue goal but underperformed relative to the non-GAAP operating income goal resultingfor Fiscal 2021 IBP, driving profitability. For Fiscal 2021, after excluding the results of subsidiaries VMware, Inc., SecureWorks Corp., RSA Security LLC, Virtustream and Boomi, Inc. in calculating the IBP corporate performance modifier, Dell Technologies achieved non-GAAP revenue of $80.9 billion and non-GAAP operating income of $7.1 billion. Consistent with our philosophy of rewarding performance that achieves and exceeds Dell Technologies’ annual financial goals, our Fiscal 2021 performance resulted in a final corporate bonusperformance modifier of 94%130% of target.
IBP Individual Performance Modifier
In view of the executive officers’ potential to influence corporate performance, the Executive Committee (or, in regard to Mr. Dell, the Board of Directors) may taketakes into account personal performance in determining executive officers’ bonus amounts, assigning each executive officer an individual modifier from zero0% to 150% generally following the end of each fiscal year.
In determining individual bonusperformance modifiers, the Committee may consider such factors as achievingachievement of financial targets for the business, cost management, strategic and transformational objectives relating to the executive officer’s business unit or function, and ethics and compliance. The Committee also may consider additional factors based on environmental, social and governance, or ESG, efforts as relevant to their business unit or function, and progress made in achieving the Company’s publicly-announced 2030 social impact goals, which include advancing sustainability and cultivating a diverse and inclusive workforce. The Committee does not place specific weightings on any such objective, but assigns each individual executive officer a subjectivean individual performance modifier based on a holistic and subjective assessment of the officer’s performance.
IBP Payouts for Fiscal 2021
Following the end of Fiscal 2018,2021, the Board of Directors approved Mr. Dell’s bonus amount and the Executive Committee approved the bonus amounts of the other named executive officers. The individual and corporate performance modifiers for the named executive officers are shown below along with the corresponding bonus payment amounts:
| | | Name | | Individual Modifier (%) | | Corporate Modifier (%) | | Bonus Payment ($) | Name | Target
IBP
($) | Corporate
Modifier
(%) | Individual
Modifier
(%) | Bonus
Payment
($) |
| Michael S. Dell | | 100 | | 94 | | 1,786,000 | Michael S. Dell | 511,538(1) | 130 | 100 | 665,000 |
| Thomas W. Sweet | | 115 | | 94 | | 783,725 | Thomas W. Sweet | 750,000 | 130 | 1,267,500 |
| Jeffrey W. Clarke | | 125 | | 94 | | 995,029 | Jeffrey W. Clarke | 881,160 | 130 | 1,489,160 |
| David I. Goulden (1) | | — | | — | | 425,000 | |
| Rory P. Read | | 100 | | 94 | | 564,000 | |
| Richard J. Rothberg | | Richard J. Rothberg | 627,500 | 130 | 1,060,475 |
| William F. Scannell | | William F. Scannell | 750,000 | 130 | 110 | 1,072,500 |
________
| |
(1) | Mr. Goulden received(1) Fiscal 2021 Target IBP was adjusted to reflect Mr. Dell’s voluntary agreement to forgo his base salary for a portion of Fiscal 2021 in light of COVID-19, as described above. This resulted in a bonus payment that was 73% lower than the first installment of his Fiscal 2018 bonus payment in September 2017. |
Special Incentive Bonus Plan
The Dell Inc. Special Incentive Bonus Plan, or SIB, is an annual discretionary bonus plan designed to reward and motivate executives who, for the fiscal year, are the most critical to driving Dell Technologies’ business unit goals and delivering key, business-critical objectives. The Executive Committee determines the maximum SIB opportunity amount for each executive officer selected to participate. For Fiscal 2018, each named executive officer other than Mr. Dell was eligiblewould have been awarded if the annual base salary rate as specified in his employment agreement had been used to participate in the SIB program.determine Mr. Dell’s target IBP.
Each named executive officer’s discretionary SIB payment for Fiscal 2018 was determined by the Executive Committee based on a holistic and subjective assessment of the named executive officer’s contributions to Dell Technologies’ performance, as well as contributions during Fiscal 2018 to achievement of major strategic initiatives. The target amount and payment for Fiscal 2018 under the SIB for each participating named executive officer are shown below:
|
| | | | | |
| Name | | Special Incentive Bonus Target ($) | | Special Incentive Bonus Payment ($) |
| Thomas W. Sweet | | 2,000,000 | | 2,000,000 |
|
| Jeffrey W. Clarke | | 3,000,000 | | 3,000,000 |
|
| David I. Goulden | | 3,000,000 | | — |
|
| Rory P. Read | | 2,000,000 | | 2,000,000 |
|
Equity Incentives
We believe that equityOverview
Equity incentive opportunities are the most significant individual component of total target executive officer compensation. The provision of equity incentive programopportunities is consistent with our compensation philosophy and reflects our core compensation objectives by aligning compensation with stockholders’ interests, creating a culture of meritocracy, and enhancing our ability to attract and retain executive talent.
In Fiscal 2021, executive officers received a combination of time-based and performance-based RSUs. The allocation between time-based RSUs and performance-based RSUs for Fiscal 2021 remained consistent with the allocation for Fiscal 2020, with our named executive officers receiving 70% of their long-term incentive awards in the form of performance-based RSUs and 30% in the form of time-based RSUs.
Messrs. Clarke, Rothberg and Scannell received additional grants of time-based RSUs in August 2020 in recognition of their efforts to advance the Company’s financial goals and strategic objectives in the face of challenges related to COVID-19, to ensure competitive compensation opportunities, and to secure their continued service in key leadership roles for the Company. To ensure continued service, these additional grants provide for a back-weighted, three-year vesting schedule under which 20% of the award becomes eligible to vest in year 1, 30% of the award becomes eligible to vest in year 2, and 50% of the award becomes eligible to vest in the last year.
The Fiscal 2021 awards had the same vesting provisions as those granted in Fiscal 2020. Time-based RSUs vest ratably over a three-year period. Performance-based RSUs are subject to cliff vesting three years after the grant date, based on achievement measured against a combination of (1) annual financial performance measures for each year during the three year-period (collectively weighted 50%) and (2) rTSR, which we define as the cumulative total shareholder return measured against a peer group of companies belonging to the Standard & Poor’s Information Technology Index over a three-year performance period (also weighted 50%). Performance-based RSUs will have a maximum vesting opportunity of up to 200% of the target number of shares. There is no guaranteed level of performance, so if performance is below threshold across each of the performance measures, the entire amount of performance-based RSUs could be forfeited. We believe our use of three one-year performance periods for financial performance measures in combination with one three-year rTSR measure effectively aligns our executives with the Company’s short-term and long-term financial goals and adjusts for potentially volatile factors outside the Company’s control.
Fiscal 2021 Performance-Based RSUs
For Fiscal 2021, the financial performance measures, consisting of non-GAAP revenue and non-GAAP operating income, were equally weighted at 25% each. Based on the achievement of Fiscal 2021 financial performance goals relative to target, the modifier applicable to the first tranche for Fiscal 2021 performance-based RSU awards will be 168% and a corresponding number of RSUs will be eligible to vest on March 15, 2023, subject to continued service.
Fiscal 2020 Performance-Based RSUs
For Fiscal 2020, performance-based RSUs, non-GAAP revenue was weighted at 15% and non-GAAP operating income was weighted at 35%. Based on the achievement of Fiscal 2020 financial performance goals relative to target, the modifier applicable to the first tranche of Fiscal 2020 performance-based RSU awards will be 135% and a corresponding number of RSUs will be eligible to vest on March 15, 2022, subject to continued service. For Fiscal 2021, the financial performance measures, consisting of non-GAAP revenue and non-GAAP operating income, were equally weighted at 25% each. Based on the achievement of Fiscal 2021 financial performance goals relative to target, the modifier applicable to the second tranche for Fiscal 2021 performance-based RSU awards will be 168% and a corresponding number of RSUs will be eligible to vest on March 15, 2022, subject to continued service. No changes were made to financial performance measures, financial performance goals, or outstanding performance-based RSUs due to the impact of COVID-19.
Historical Management Equity Program
Before Fiscal 2020, our executive officers other than Mr. Dell participate is referred to asparticipated in the Management Equity Program, or MEP. MEP awards motivate executive officers to make decisions in support of long-term corporate financial interests and aligns the interests of the executive officers with the interests of Dell Technologies’ stockholders by providing a return if Dell Technologies’ stock price appreciates. MEP awards also serve to attract and retain qualified employees.
Awards pursuant to the MEP under the Dell Technologies Inc. 2013 Stock Incentive Plan arewere made in the form of either stock option awards or full-value (restrictedawards in the form of restricted stock or restricted stock unit) awards,units, and typically consistconsisted of a combination of time-based vesting awards and performance-based vesting awards. The Executive Committee’s allocation of MEP awards between time-based and performance-based awards for each executive officer may vary,varied, but generally at least halfone-half of an executive officer’s MEP award each year iswas in the form of a performance-based award.
Stock Options
As of the end of Fiscal 2021, Mr. Scannell held an unvested MEP stock option awards consist of two types ofperformance-based full-value award. The first type ofThis award is a time-based stock option to purchase shares of our Class C common stock. Our time-based option awards generally vest ratably over five years. Certain time-based options under the MEP granted to Mr. Goulden, who was an executive officer of EMC before the EMC merger, vested based on a schedule corresponding to that of certain EMC equity awards that were converted to cash awards in connection with the EMC merger.
The second type of award, which we refer to as a performance-based award, is a stock option to purchase Class C common stock that becomes exercisable only if a prescribed level of return is achieved on the initial Dell Technologies equity investment of Mr. Dell and the SLP stockholders in connection with the 2013 going-private transaction in which Dell Technologies acquired Dell Inc., or the going-private transaction. We refer to this return as return on equity.
Return on equity for performance-based MEP option awards is measured on specified measurement dates or upon the occurrence of specified events related to Dell Technologies, and the number of performance-based MEP option shares eligible to test for vesting varies depending upon the measurement date or event. The Executive Committee believes the vesting design of performance-based MEP awards further aligns the interests of executive officers with the interests of Dell Technologies’ stockholders by compensating executive officers only if a minimum level of return on equity is achieved. Stock option awards are granted with an exercise pricevest based on the fair market value of Dell Technologies’ common stock on the date of grant as determined by the Board of Directors.
The relationship between return on equity and the percentage of eligible performance-based MEP option awards which generally may vest based on such return is set forth on the following table:
MEP PERFORMANCE OPTIONS
__________
| |
(1) | Return on equity for performance-based MEP option awards granted following the going-private transaction are based on an initial value of $13.75 per share. |
MEP stock options awards were first granted in fiscal year 2014 following the closing of the going-private transaction. MEP option award sizes were intended to be sufficient to address long-term incentive compensation for an executive officer for a period of approximately five years from the grant date. No MEP stock option awards were granted to our named executive officers for Fiscal 2018.
After the going-private transaction, Mr. Dell was granted an option award to purchase shares of our Series A common stock, which were converted on a one-for-one basis into shares of our Class A common stock in connection with the EMC merger. This award vests ratably over five years from the grant date. Mr. Dell does not currently participate in any other long-term incentive compensation programs.
For more information about outstanding option awards, see “Compensation of Executive Officers – Outstanding Equity Awards at End of Fiscal 2018” and “– Stock Incentive Plan.”
Full-Value Stock Awards
In connection with the EMC merger and in order to retain EMC executive talent, Dell Technologies granted equity incentive awards in the form of full-value awards consisting of restricted stock or restricted stock units during Fiscal 2017. As with our stock option awards, these full-value MEP awards consist of two types of award. The first is a time-based award to purchase shares of our Class C common stock, which vests ratably over three years. The second is a performance-based award that vests only if a prescribed level of return is achieved on the Dell Technologies equity investment of Mr. Dell and the SLP stockholders (as defined in Annex A to this proxy statement) in connection with theour acquisition of EMC merger,Corporation in September 2016, which we also refer to as return on equity.
equity, and is determined based on an initial value of $27.50 per share of Class C common stock, subject to adjustment for certain events. Return on equity for performance-based MEP full-value awards is measured on specified measurement dates or upon the occurrence of specified events related to Dell Technologies, and the number of performance-based MEP full-value shares eligible to test for vesting varies depending upon the measurement date or event. As with our performance-based MEP stock options, the ExecutiveThe Committee believes thethis vesting design of these awards aligns the interests of the executive officersofficer with the interests of Dell Technologies’ stockholders by compensating the executive officersofficer only if a minimum level of return on equity is achieved.
The relationship betweenperformance-based MEP full-value award must achieve a threshold return on equity of at least 2x in order for 25% of the award to vest and 3.5x in order for 100% of the percentage of eligible performance-based MEP full-value awards which generally mayaward to vest, with ratable vesting based on such return is set forth onachievement between the following table:two threshold measures.
MEP PERFORMANCE SHARES
__________
| |
(1) | Return on equity for full-value awards granted in connection with the EMC merger is determined based on an initial value of $27.50 per share. |
For more information about ourthe outstanding full-value awards,MEP award, see “Compensation of Executive Officers – Outstanding Equity Awards at End of Fiscal 2018” and “– Stock Incentive Plan.2021.”
Long-Term Cash Incentives
To attract or retain executive officers, Dell Technologies may use long-term incentive cash awards in addition to equity-based incentives.
Other Compensation Components
Benefits and Perquisites
Dell Technologies provides executive officers limited benefits and perquisites.perquisites to its executive officers. While the limitedsuch benefits and perquisites are not a significant part of Dell Technologies’ executive officer compensation on a quantitativedollar value basis, the Executive Committee (or, with respect to Mr. Dell, the Board of Directors) believes that these elements of compensation are important to delivering a competitive package to attract and retain qualified executive officers. Benefits and perquisites include those described below.
•Annual Physical -– Dell Technologies pays for a comprehensive annual physical for each executive officer and the executive officer’s spouse or domestic partner and reimburses the executive officer’s related travel and lodging costs, each subject to an annual maximum payment of $5,000 per person.
•Technical Support -– Dell Technologies provides executive officers with computer technical support and, in some cases, certain home network equipment. The incremental cost to Dell Technologies of providing these services is limited to the cost of hardware provided and is not material.
•Security -– Dell Technologies provides executive officers with security services, including alarm installation and monitoring and, in some cases, certain home security upgrades in accordance with the recommendations of an independent security study. Mr. Dell reimburses the Company for costs related to his family’s personal security protection.protection provided to Mr. Dell and his family.
•Financial Counseling and Tax Preparation Services -– Under the terms of his employment agreement, Mr. Dell is entitled to reimbursement for financial counseling services (including tax preparation) up to $12,500 annually. Other executive officers are eligible forentitled to reimbursement of up to $10,000$15,000 annually for financial counseling services (including tax preparation) beginning January 1, 2018..
•Travel Expenses -– Dell Technologies pays for reasonable travel expenses for the executive officer’s spouse or domestic partner to attend Dell Technologies-sponsored events if the travel is at the request of Dell Technologies.
•Other -– The executive officers participate in Dell Technologies’ other benefit plans on the same terms as other employees. These plans include medical, dental and life insurance benefits, and the Dell Inc. 401(k) retirement savings plan.Plan. For additional information, see “Compensation of Executive Officers– Other Benefit Plans.”
Mr. Goulden continued to be eligible during Fiscal 2018 for certain perquisites offered by EMC to its executive officers before EMC’s acquisition by Dell Technologies. These perquisites included limited tax and financial planning services, executive physicals, temporary housing allowances and limited personal use of company-owned aircraft. Additional information regarding these perquisites is included in the Fiscal 2018 Summary Compensation Table.
For more information onabout Dell Technologies’ arrangements with Mr. Dell with respect to security, travel and certain other benefits, see “Additional Information – Certain Relationships and Related Transactions– Transactions with Michael S. Dell and Other Related Persons.”
Other Compensation Matters
Stock Ownership Guidelines; Prohibited TransactionsGuidelines
The Board of Directors doeshas not currently applyadopted stock ownership guidelinesrequirements for our directors or executive officers of Dell Technologies.officers. The Board of Directors and the Executive Committee believe that at this time the design of Dell Technologies’ equity compensation strategy for executive officers links the interests of executive officers closely with those of other Dell Technologies stockholders. Additionally, Mr. Dell’s ownership in the company already reflects his full alignment with the long-term performance of Dell Technologies.
Policy on Hedging Transactions and Pledging of Securities
Dell Technologies maintains a securities trading policy that applies to our directors and employees, including executive officers and other officers, and prohibits certain activities relating to Company stock, includingspecified securities, as described below. The policy also generally applies to family members who reside with any director or employee, any other person who lives in the director or employee’s household, and any other family members whose transactions in securities are directed by, or subject to the influence or control of, the director or employee, as well as entities, such as a corporation, partnership or trust, controlled by the director or employee.
The activities prohibited by the policy include (1) hedging and monetization transactions that would permit any such person to continue to own the securities without the full risks and rewards of ownership, (2) transactions in put options, call options or other derivative securities on an exchange or in any other organized market and (3) the holding of Company stockthe securities in a margin account or other pledging of Company stockthe securities as collateral for a loan. The policy prohibits hedging and monetization transactions without regard to the means by which they are accomplished, whether through the use of financial instruments such as prepaid variable forwards, equity swaps, collars or exchange funds or otherwise, including short sales, option positions and pledges arising from certain types of hedging transactions.
Employment Agreements; Severance and Change-in-Control Arrangements
Employment Agreement with Michael S. Dell
On October 29, 2013, Dell Technologies and Dell Inc. entered into an employment agreement with Mr. Dell, pursuant to which Mr. Dell serves as Chief Executive Officer and ChairmanThe foregoing provisions of the Board of Directors of Dell Technologies. Mr. Dell may resign for any or no reason or the Board of Directors may terminate him for “cause” (as defined below) at any time. In addition, following a changesecurities trading policy apply to transactions in control of Dell Technologies (as defined below) or a qualified initial public offering (as defined in the agreement), the Board of Directors may terminate Mr. Dell for any or no reason.
Under the employment agreement, Mr. Dell receives an annual base salary of $950,000 and is eligible for an annual bonus with a target opportunity equal to 200% of his base salary. Mr. Dell’s base salary is subject to annual review by the Board of Directors and subject to increase, but not decrease. Dell Technologies reimburses Mr. Dell for financial counseling and tax preparation up to $12,500 per year, an annual physical (for himself and his spouse)
up to $5,000 per person and all travel and business expenses reasonably incurred by Mr. Dell. Dell Technologies also provides Mr. Dell with business-related security protection.
Pursuant to the agreement, Mr. Dell received a stock option to purchase 10,909,091 shares of the Class A common stock of Dell Technologies (formerly Series A common stock) with a per share exercise price equal to $13.75. Subject to Mr. Dell’s continued employment, the option vests ratably over a five-year period, with accelerated vesting upon a change in control. Dell Technologies believes that providing for “single trigger” acceleration of vesting of Mr. Dell’s option award was appropriate because a change in control of Dell Technologies would be likely to materially alter his role with the Company. Mr. Dell’s employment agreement does not provide for other severance benefits. The unvested portion of the foregoing option will be forfeited upon the latest to occur of (1) a resignation of employment by Mr. Dell, (2) a termination of his employmentsecurities, including equity securities, issued by Dell Technologies for causeor specified subsidiaries, including VMware, Inc. and (3) Mr. Dell ceasingSecureWorks Corp., that are held by any person covered by the policy. Equity securities subject to servethe policy include awards granted under equity compensation plans, as a memberwell as derivative securities that are not issued by the foregoing entities, such as exchange-traded put or call options or swaps relating to those entities’ securities.
The administrator of the board of directors of Dell Technologiespolicy has the discretion, on a case-by-case basis and in appropriate circumstances, to waive or Dell Inc.
Mr. Dell is subject to a covenant of indefinite duration not to disclose confidential informationmodify the restrictions and an obligation to assign to Dell Technologies and Dell Inc. any intellectual property created by Mr. Dell during his employment.
Under the employment agreement, “cause” is generally defined as any of the following events:
the conviction of Mr. Dell for a felony resulting in his incarceration; or
the legal incapacity of Mr. Dell to serve as (1) a director of Dell Technologies or certain subsidiaries of Dell Technologies or (2) the chief executive officer of Dell Technologies or certain subsidiaries of Dell Technologies.
Under the employment agreement, a “change in control” is generally defined as any of the following events:
a sale or disposition of all or substantially all of the assets of Dell Technologies and its subsidiaries, taken as a whole, to any person, entity or group;
any person, entity or group (other than Mr. Dell, the SLP stockholders or certain related parties) becomes the beneficial owner of capital stock representing more than 50% of the total voting power of Dell Technologies’ outstanding capital stock, other than pursuant to a merger or consolidation of Dell Technologies with or into any other entity that does not constitute a “change in control” under the following change-in-control event; or
any merger or consolidation of Dell Technologies with or into any other entity unless the holders of Dell Technologies’ outstanding voting securities immediately before the closing directly or indirectly beneficially own capital stock representing a majority of the total voting power of the resulting entity in substantially the same proportions as their ownership in Dell Technologies immediately before such transaction.
Severance and Change-in-Control Arrangements with Other Named Executive Officers
Mr. Clarke and Mr. Sweet each have entered into a severance agreement with Dell Technologies, pursuant to which, if the executive’s employment is terminated without “cause,” or if the executive resigns for “good reason” (each as defined below), the executive will receive a severance payment in effect in the year of termination. The severance payment for Mr. Clarke and Mr. Sweet will be equal to 300% of the executive’s then-current annual base salary. Two-thirds of this severance amount will be payable following termination of employment and the remainder will be payableprohibitions on the one-year anniversaryhedging and other transactions described above.
employment and also provides that each executive will not use or disclose certain confidential information of Dell Technologies as set forth in the agreement at any time during or after the executive’s employment.
Except as indicated below, if Mr. Clarke or Mr. Sweet is terminated without cause, or resigns for good reason, during the period beginning three months before and ending 18 months after a change in control of Dell Technologies (as defined below), which we refer to as the “change-in-control period,” the outstanding, unvested portion of such named executive officer’s time-based vesting MEP awards will vest upon his termination of employment or, if later, upon the occurrence of the change in control. If Mr. Clarke or Mr. Sweet is terminated without cause or resigns for good reason during the change-in-control period or such named executive officer dies or becomes disabled at any time, the outstanding, unvested portion of his performance-based vesting MEP award will not be forfeited, but will remain outstanding (subject to expiration in accordance with its terms) and eligible to vest based on Dell Technologies’ achievement of return on equity, as described above. If a termination without cause or a resignation for good reason occurs during the three-month period before a change in control, such performance-based vesting MEP award will remain outstanding for the three-month period to determine whether the change in control occurs. If no change in control occurs on or before the expiration of that period, the performance-based vesting MEP award will be forfeited. Dell Technologies believes that providing for “double trigger” acceleration will help to prevent the loss of key personnel in the event of a change in control and is consistent with the practices of many companies with which it competes for executive talent. The foregoing “double trigger” protections do not apply with respect to Mr. Dell’s stock option granted pursuant to his employment agreement described above. These protections also do not apply with respect to certain outstanding MEP stock options granted to Mr. Sweet before he became an executive officer.
Dell Technologies believes that the severance benefits it provides to the foregoing named executive officers are appropriate in light of the severance protections available to similarly-situated executive officers at companies that compete with Dell Technologies for executive talent. Dell Technologies believes the severance benefits help to attract and retain key executives who may be presented with alternative employment opportunities that might appear to be more attractive absent these protections.
Under the severance agreements, “cause” is generally defined as any of the following events:
a violation of confidentiality obligations;
acts resulting in being charged with a criminal offense that constitutes a felony or involves moral turpitude or dishonesty;
conduct that constitutes gross neglect, insubordination, willful misconduct or breach of Dell Technologies’ code of conduct or the executive’s fiduciary duty; or
a determination that the executive violated laws relating to the workplace environment.
Under the severance agreements for Mr. Clarke and Mr. Sweet, “good reason” is generally defined as any of the following events, if in each case not timely cured:
a material reduction in base salary;
a material adverse change in title or reduction in authority, duties or responsibilities; or
a change in the executive’s principal place of work of more than 25 miles.
Under the severance agreements, “change in control” has the meaning set forth in the Dell Technologies Inc. 2013 Stock Incentive Plan, which generally defines the term to include any of the following events:
a sale or disposition of all or substantially all of the assets of the DHI Group (as defined in the Dell Technologies certificate of incorporation) to any person other than to Mr. Dell, Silver Lake Partners or certain related parties;
any person or group (other than Mr. Dell, Silver Lake Partners or certain related parties) becomes the beneficial owner of voting stock representing more than 50% of the total voting power of Dell Technologies’ outstanding voting stock, other than pursuant to a merger or consolidation of Dell Technologies with or into any other entity that does not constitute a “change in control” under the immediately following change-in-control event;
any merger or consolidation of Dell Technologies with or into any other entity unless the holders of Dell Technologies’ outstanding voting securities immediately before the closing directly or indirectly beneficially own voting stock representing a majority of the total voting power of the resulting entity; or
before an initial public offering of Dell Technologies’ common stock, Mr. Dell, Silver Lake Partners or certain related parties do not have the ability to cause the election of a majority of the members of the Board of Directors and any person or group (other than Mr. Dell, Silver Lake Partners or certain related parties) beneficially owns outstanding voting stock representing a greater percentage of voting power with respect to the general election of members of the Board of Directors than the shares of outstanding voting stock beneficially owned by Mr. Dell, Silver Lake Partners and certain related parties.
For more information about potential payments to Mr. Dell under his employment agreement and to our other named executive officers under their severance agreements, see “Compensation of Executive Officers – Potential Payments Upon Termination of Employment or Change in Control.”Contents
Recoupment Policy for Performance-Based Compensation
If Dell Technologies restates its reported financial results, the Board of Directors will review the bonus and other cash or equity awards made to the executive officers, including the named executive officers, based on financial results during the period subject to the restatement and, to the extent practicable under applicable law, Dell Technologies will seek to recover or cancel any of these awards that were awarded as a result of achieving performance targets that would not have been met under the restated financial results.
Employment Agreements; Severance and Change-in-Control Arrangements
Employment Agreement with Michael S. Dell
Mr. Dell’s employment is subject to an employment agreement with Dell Technologies and Dell Inc. pursuant to which Mr. Dell serves as Chief Executive Officer and as Chairman of the Board of Directors of Dell Technologies. Under the employment agreement, Mr. Dell may resign for any or no reason or the Board of Directors may terminate him at any time for “cause” (as defined below). In addition, following a change in control of Dell Technologies (as defined below) or a qualified initial public offering (as defined in the agreement), the Board of Directors may terminate Mr. Dell for any or no reason. Notwithstanding the termination provisions of the employment agreement, the Dell Technologies certificate of incorporation provides that, without the approval of the holders of a majority of the Class A common stock, voting separately as a series, and subject to specified conditions, Mr. Dell may not be removed as the Chief Executive Officer, and the Chief Executive Officer will serve as the Chairman of the Board. As described elsewhere in this proxy statement, Mr. Dell and the other MD stockholders beneficially owned, in aggregate, approximately 99.8% of the Class A common stock outstanding as of the record date for the annual meeting.
Under the employment agreement, Mr. Dell is entitled to an annual base salary of $950,000 and is eligible for an annual bonus with a target opportunity equal to 200% of his base salary. Mr. Dell’s base salary is subject to annual review by the Board of Directors and subject to increase, but not decrease. In light of COVID-19, Mr. Dell voluntarily agreed to forgo his base salary for a portion of Fiscal 2021, as described above. Further, as discussed under “–Individual Compensation Components – Other Factors Affecting Compensation Components – Benefits and Perquisites,” Dell Technologies reimburses Mr. Dell for financial counseling and tax preparation up to $12,500 per year, an annual physical (for himself and his spouse) up to $5,000 per person and all travel and business expenses reasonably incurred by Mr. Dell. Dell Technologies also provides Mr. Dell and his family with business-related security protection.
PriorAs a result of his substantial stock ownership, Mr. Dell believes that he is appropriately incentivized and that his interests are appropriately aligned with stockholders’ interests. Mr. Dell did not receive any stock-based compensation from the Company in Fiscal 2021.
Mr. Dell is subject to December 22, 2017, whena covenant of indefinite duration not to disclose confidential information and an obligation to assign to Dell Technologies and Dell Inc. any intellectual property created by Mr. Dell during his employment.
Under the Tax Cutsemployment agreement, “cause” is generally defined as any of the following events:
•the conviction of Mr. Dell for a felony resulting in his incarceration; or
•the legal incapacity of Mr. Dell to serve as (1) a director of Dell Technologies or certain subsidiaries of Dell Technologies or (2) the chief executive officer of Dell Technologies or certain subsidiaries of Dell Technologies.
Under the employment agreement, a “change in control” is generally defined as any of the following events:
•a sale or disposition of all or substantially all of the assets of Dell Technologies and Jobsits subsidiaries, taken as a whole, to any person, entity or group;
•any person, entity or group (other than Mr. Dell, the SLP stockholders or certain related parties) becomes the beneficial owner of capital stock representing 50% or more of the total voting power of Dell Technologies’ outstanding capital stock, other than pursuant to a merger or consolidation of Dell Technologies with or into any other entity that does not constitute a “change in control” under the following change-in-control event; or
•any merger or consolidation of Dell Technologies with or into any other entity unless the holders of Dell Technologies’ outstanding voting securities immediately before the closing directly or indirectly beneficially own capital stock representing a majority of the total voting power of the resulting entity in substantially the same proportions as their ownership in Dell Technologies immediately before such a transaction.
Severance and Change-in-Control Arrangements with Other Named Executive Officers
Each of the other named executive officers, consisting of Messrs. Sweet, Clarke, Rothberg and Scannell, has entered into a severance agreement with Dell Technologies pursuant to which, if the executive’s employment is terminated without “cause,” or if the executive resigns for “good reason” (each as defined below), the executive will receive a severance payment equal to 300% of the executive’s then-current annual base salary. Two-thirds of this severance amount will be payable following termination of employment and the remainder will be payable on the one-year anniversary of such termination. Each of the severance agreements obligates the executive to comply with certain non-competition and non-solicitation obligations for a period of 12 months following termination of employment and also provides that each executive may not use or disclose certain confidential information of Dell Technologies as set forth in the agreement at any time during or after the executive’s employment.
The treatment of outstanding unvested equity awards held by such named executive officers upon a termination of employment varies depending on the dates on which the awards were granted.
As of the end of Fiscal 2021, Mr. Scannell held an unvested performance-based equity award granted under the Management Equity Program between the closing of the EMC merger in September 2016 and the end of Fiscal 2019. If Mr. Scannell is terminated without cause or resigns for good reason during the change-in-control period or he dies or becomes disabled at any time, the outstanding, unvested portion of his performance-based MEP award will not be forfeited, but will remain outstanding (subject to expiration in accordance with its terms) and eligible to vest based on Dell Technologies’ achievement of the return on equity target, as described above under “– Individual Compensation Components – Equity Incentives – Historical Management Equity Program.” If a termination without cause or a resignation for good reason occurs during the three-month period before a change in control, the performance-based vesting MEP award will remain outstanding for the three-month period to determine whether the change in control occurs. If no change in control occurs on or before the expiration of that period, the performance-based vesting MEP award will be forfeited.
Equity awards granted under our Fiscal 2020 and Fiscal 2021 equity compensation programs will be forfeited upon termination of employment, except in the case of termination due to death or disability. The awards provide no exception to this treatment in the case of a termination of employment following a change in control of Dell Technologies. In the case of termination due to death or disability, the outstanding, unvested portion of such named executive officer’s time-based vesting awards and the portion of such named executive officer’s performance-based awards for which performance has been determined will vest and the portion of such named executive officer’s performance-based awards for which performance has not been determined will vest at the target level.
Dell Technologies believes that the severance benefits it provides to the foregoing named executive officers are appropriate in light of the severance protections available to similarly-situated executive officers at companies that
compete with Dell Technologies for executive talent. Dell Technologies believes the severance benefits help it to attract and retain key executives who may be presented with alternative employment opportunities that might appear to be more attractive absent these protections.
Under the severance agreements, “cause” generally is defined as any of the following events:
•a violation of confidentiality obligations;
•acts resulting in being charged with a criminal offense that constitutes a felony or involves moral turpitude or dishonesty;
•conduct that constitutes gross neglect, insubordination, willful misconduct or breach of Dell Technologies’ code of conduct or the executive’s fiduciary duty; or
•a determination that the executive violated laws relating to the workplace environment.
Under the severance agreements, “good reason” generally is defined as any of the following events, if in each case not timely cured:
•a material reduction in base salary;
•a material adverse change in title or reduction in authority, duties or responsibilities; or
•a change in the executive’s principal place of work of more than 25 miles.
Under the severance agreements, “change in control” has the meaning set forth in the Stock Incentive Plan, which generally defines the term to include any of the following events:
• the sale or disposition, in one or a series of related transactions, to any person or group (as such term is used for purposes of Section 14(d)(2) of the Exchange Act), other than to the Sponsor Stockholders or any of their respective affiliates or to any person or group in which any of the foregoing is a member, of all or substantially all of the consolidated assets of Dell Technologies;
• any person or group (as such term is used for purposes of Section 14(d)(2) of the Exchange Act), other than the Sponsor Stockholders or any of their respective affiliates or any person or group in which any of the foregoing is a member, is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the outstanding shares of Dell Technologies common stock, other than as a result of any merger or consolidation that does not constitute a change in control pursuant to the event immediately set forth below;
• any merger or consolidation of Dell Technologies with or into any other person, unless the holders of the Dell Technologies common stock immediately prior to such merger or consolidation beneficially own (within the meaning of Rule 13d-3 under the Exchange Act) a majority of the outstanding shares of the common stock (or equivalent voting securities) of the surviving or successor entity (or the parent entity thereof); or
• prior to an initial public offering of the Class C common stock that is registered under the Securities Act of 2017, or Tax Reform, was signed into law, Section 162(m)1933, the Sponsor Stockholders and their respective affiliates cease to have the ability to cause the election of that number of members of the Internal Revenue Code generally disallowedBoard who would collectively have the right to vote a tax deductionmajority of the aggregate number of votes represented by all of the members of the Board, and any person or group (as such term is used for purposes of Section 14(d)(2) of the Exchange Act), other than the Sponsor Stockholders and their respective affiliates or any person or group in which any of the foregoing is a member, beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act) outstanding voting stock representing a greater percentage of voting power with respect to publicly held companies for compensation paidthe general election of members of
the Board than the shares of outstanding voting stock which the Sponsor Stockholders and their respective affiliates collectively beneficially own (within the meaning of Rule 13d-3 under the Exchange Act).
For purposes of this provision of the Stock Incentive Plan, the term Sponsor Stockholders refers collectively to certainthe MD stockholders (as defined in Annex A to this proxy statement) and the SLP stockholders (as defined in Annex A to this proxy statement).
For more information about potential payments to Mr. Dell under his employment agreement and to our other named executive officers under their severance agreements, see “Compensation of Executive Officers – Potential Payments Upon Termination of Employment or Change in excessControl.”
COMPENSATION OF EXECUTIVE OFFICERS
Fiscal 20182021 Summary Compensation Table
The following table summarizes the total compensation paid for the fiscal years indicated by Dell Technologies to the following persons, each of whom was serving as an executive officer of Dell Technologies as of February 2, 2018,January 29, 2021, which was the last day of Fiscal 2018:2021:
•Michael S. Dell, who served as our principal executive officer
•Thomas W. Sweet, who served as our principal financial officer
•Jeffrey W. Clarke, David I. Goulden (who terminated his employment with the Company effective February 2, 2018)Richard J. Rothberg and Rory P. Read,William F. Scannell, who are our three other most highly compensated employeesexecutive officers
We refer to these executive officers as our named executive officers.
| | Name and principal position | | Fiscal Year | | Salary ($) | | Bonus ($) | | Stock awards ($)(1) | | Option awards ($)(1) | | Non-equity incentive plan compensation (2) ($) | | All other compensation ($) | | Total ($) |
Name and principal position |
Fiscal Year | Salary
($) | Bonus
($) | Stock
awards
($)(1) | Non-equity
incentive
plan
compensation
($)(2) | All other
compensation
($) | Total
($) |
Michael S. Dell Chairman and Chief Executive Officer | | 2018 | | 950,000 | | — |
| | — |
| | — |
| | 1,786,000 |
| | 19,901 |
| | 2,755,901 |
| Michael S. Dell Chairman and Chief Executive Officer | 2021 | 255,769(3) | — | 665,000 | 9,646 | 930,415 |
| | 2017 | | 950,000 | | — |
| | — |
| | — |
| | 2,375,000 |
| | 22,276 |
| | 3,347,276 |
| 2020 | 950,000 | — | 2,394,000 | 15,058 | 3,359,058 |
| | 2016 | | 950,000 | | 1,425,000 |
| | — |
| | — |
| | — |
| | 17,918 |
| | 2,392,918 |
| 2019 | 950,000 | — | 2,660,000 | 13,801 | 3,623,801 |
Thomas W. Sweet Chief Financial Officer | | 2018 | | 725,000 | | 2,000,000(3) |
| | — |
| | — |
| | 783,725 |
| | 61,034 |
| | 3,569,759 |
| Thomas W. Sweet Chief Financial Officer | 2021 | 750,000 | — | 5,241,221(4) | 1,267,500 | 44,472 | 7,303,193 |
| | 2017 | | 686,539 | | 2,170,832 |
| | — |
| | — |
| | 1,029,808 |
| | 42,892 |
| | 3,930,071 |
| 2020 | 732,692 | — | 5,354,646 | 1,153,990 | 45,705 | 7,287,033 |
| | 2016 | | 650,000 | | 2,707,082 |
| | — |
| | — |
| | — |
| | 35,053 |
| | 3,392,135 |
| 2019 | 725,000 | 2,250,000 | — | 1,218,000 | 35,918 | 4,228,918 |
Jeffrey W. Clarke Vice Chairman, Products and Operations | | 2018 | | 846,833 | | 3,000,000(3) |
| | — |
| | — |
| | 995,029 |
| | 35,007 |
| | 4,876,869 |
| |
| | 2017 | | 826,160 | | 3,000,000 |
| | — |
| | — |
| | 1,239,240 |
| | 36,402 |
| | 5,101,802 |
| |
| | 2016 | | 826,160 | | 2,957,658 |
| | — |
| | — |
| | — |
| | 25,146 |
| | 3,808,964 |
| |
David I. Goulden Former President, Infrastructure Solutions Group | | 2018 | | 850,000 | | 2,666,667(4) |
| | — |
| | — |
| | 425,000 |
| | 4,487,152 |
| | 8,428,819 |
| |
| | 2017 | | 359,615 | | 545,052 |
| | 21,412,367(5) |
| | 2,490,348 |
| | — |
| | 58,466 |
| | 24,865,848 |
| |
Rory P. Read Chief Operating Executive and Chief Integration Officer, Dell | | 2018 | | 600,000 | | 5,000,000(6) |
| | — |
| | — |
| | 564,000 |
| | 24,076 |
| | 6,188,076 |
| |
| | 2017 | | 600,000 | | 5,000,000 |
| | — |
| | — |
| | 837,692 |
| | 28,802 |
| | 6,466,494 |
| |
| | 2016 | | 496,154 | | 2,954,633 |
| | — |
| | 7,077,937 |
| | — |
| | 15,770 |
| | 10,544,494 |
| |
Jeffrey W. Clarke Chief Operating Officer and Vice Chairman | | Jeffrey W. Clarke Chief Operating Officer and Vice Chairman | 2021 | 881,160 | — | 12,637,502(4)(5) | 1,489,160 | 49,847 | 15,057,669 |
| 2020 | 860,391 | — | 7,072,202 | 1,355,115 | 46,391 | 9,334,099 |
| 2019 | 851,160 | 4,000,000 | — | 1,549,111 | 45,798 | 6,446,068 |
Richard J. Rothberg General Counsel | | Richard J. Rothberg General Counsel | 2021 | 627,500 | — | 6,834,929(4)(5) | 1,060,475 | 39,383 | 8,562,287 |
William F. Scannell President, Global Sales and Customer Operations | | William F. Scannell President, Global Sales and Customer Operations | 2021 | 750,000 | — | 10,241,206(4)(5) | 1,072,500 | 39,720 | 12,103,426 |
| 2020 | 732,692 | 4,666,667 | 13,640,018 | 877,033 | 27,239 | 19,943,649 |
| 2019 | 725,000 | 4,666,667 | — | 1,065,750 | 41,001 | 6,498,418 |
__________
| |
(1) | The assumptions used by us to calculate these amounts are incorporated herein by reference to Note 19 to our consolidated financial statements in our 2018(1) The assumptions used by us to calculate this amount are incorporated herein by reference to Note 16 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended January 29, 2021, filed with the SEC on March 26, 2021, which we refer to as our 2021 Form 10-K. |
| |
(2) | Amounts represent payments under the IBP. |
| |
(3) | Amount represents award under the SIB for Fiscal 2018. |
| |
(4) | Amount represents vesting of award under the long-term cash incentive award granted to Mr. Goulden on September 14, 2016. |
| |
(5) | Includes both time-based and performance-based awards of shares under the MEP. |
| |
(6) | Amount represents award of $2,000,000 under the SIB for Fiscal 2018 and award of $3,000,000 under the long-term cash incentive award granted to Mr. Read on May 15, 2015. |
(2) Amounts represent payments under the IBP.
(3) Amount reflects Mr. Dell’s voluntary agreement to forgo receipt of his base salary for a portion of Fiscal 2021 in light of the COVID-19 pandemic and represents Mr. Dell’s eligible earnings as a result of such agreement for purpose of calculating Mr. Dell’s target incentive opportunity under the IBP, as described above under “Compensation Discussion and Analysis – Individual Compensation Components – IBP Target Incentive Opportunity.”
(4) Stock awards shown include awards granted in March 2020 consisting of (a) time-based RSUs, (b) performance-based RSUs based on rTSR for the three-year period including Fiscal 2021 through Fiscal 2023, or Fiscal 2021-2023, and (c) performance-based RSUs based on Fiscal 2021 non-GAAP revenue and non-GAAP operating income for Dell Technologies. Also includes awards granted in March 2019 consisting of
performance-based RSUs based on Fiscal 2021 non-GAAP revenue and non-GAAP operating income for Dell Technologies.
(5) The awards shown include retention time-based RSUs granted in August 2020 to Messrs. Clarke, Rothberg and Scannell.
All Other Compensation Table
The following table summarizes the information included in the All Other Compensation column for Fiscal 20182021 in the Fiscal 20182021 Summary Compensation Table.
| | | Name | | Retirement plans matching contribution(1) ($) | | Benefit plans ($) | | Annual physical ($) | | Security ($) | | Imputed income(2) ($) | | Other ($) | | Severance pay ($) | | Total ($) | Name | Air
travel(1)
($) | Retirement
plans
matching
contribution
($) | Benefit
plans
($) | Annual
physical
($) | Security
($) | Imputed
income(2)
($) | Other
($) | Total
($) |
| Michael S. Dell | | 14,231 | | 2,603 | | 3,067 |
| | — |
| | — |
| | — |
| | — |
| | 19,901 |
| Michael S. Dell | — | 2,740 | 6,906 | — | 9,646 |
| Thomas W. Sweet | | 14,058 | | 3,771 | | 3,005 |
| | 1,347 |
| | 33,153(2) |
| | 5,700(3) |
| | — |
| | 61,034 |
| Thomas W. Sweet | — | 7,125 | 11,484 | 4,022 | 391 | 1,972 | 19,478(3) | 44,472 |
| Jeffrey W. Clarke | | 13,596 | | 2,606 | | 6,662 |
| | 2,623 |
| | — |
| | 9,520(3) |
| | — |
| | 35,007 |
| Jeffrey W. Clarke | 1,551 | 7,125 | 7,482 | 4,318 | 4,652 | 275 | 24,444(4) | 49,847 |
| David I. Goulden | | 9,173 | | 6,988 | | 4,512 |
| | — |
| | 46,664(2) |
| | 33,093(4) |
| | 4,386,721(5) |
| | 4,487,152 |
| |
| Rory P. Read | | 13,500 | | 3,076 | | — |
| | — |
| | — |
| | 7,500(3) |
| | — |
| | 24,076 |
| |
| Richard J. Rothberg | | Richard J. Rothberg | — | 7,608 | 6,223 | — | 5,144 | — | 20,408(5) | 39,383 |
| William F. Scannell | | William F. Scannell | — | 7,125 | 7,482 | 4,413 | 200 | — | 20,500(6) | 39,720 |
__________
| |
(1) | Messrs. Dell, Sweet, Clarke and Read participate in the Dell Inc. 401(k) plan. Mr. Goulden participated in the 401(k) plan sponsored by EMC through December 31, 2017, at which time he commenced participation in the Dell Inc. 401(k) plan. Mr. Goulden’s matching contribution included a supplemental matching contribution of $3,000 for Fiscal 2017. For more information about these retirement plans and Dell Technologies’ matching contributions, see “– Other Benefit Plans – 401(k) Retirement Plans.” |
| |
(2) | Represents the incremental cost of spousal travel andexecutive and spousal attendance at various Dell Technologies-sponsored events.(1) Represents the value of personal use of Dell-owned aircraft. Such use is valued based on the aggregate incremental cost to Dell determined on a per flight basis and includes the cost of fuel used, the hourly cost of aircraft maintenance, landing fees, trip-related hangar and parking costs, and crew-related costs. The incremental cost does not include “deadhead” flights (a return flight on which no passenger was on board). There were no associated deadhead flights for Fiscal 2021. (2) Represents the incremental cost of personal travel or travel by spouses and attendance by the executive officers and spouses at Dell Technologies-sponsored events, as applicable. For additional information, see “Compensation Discussion and Analysis – Individual Compensation Components – Other Compensation Components – Benefits and Perquisites.” (3) Represents tax and financial planning expenses of $15,000, contribution by Dell Technologies to match the executive officer’s charitable contribution of $4,320, and earnings under the activity perquisites and healthy rewards programs of $158. (4) Represents tax and financial planning expenses of $15,000, contribution by Dell Technologies to match the executive officer’s charitable contribution of $9,040, and earnings under the activity perquisites and healthy rewards programs of $404. (5) Represents tax and financial planning expenses of $10,000, contribution by Dell Technologies to match the executive officer’s charitable contribution of $10,000, fitness program reimbursements of $300 and earnings under the healthy rewards programs of $108. (6) Represents tax and financial planning expenses of $15,000 and contribution by Dell Technologies to match the executive officer’s charitable contribution of $5,500.
|
| |
(3) | Represents contribution by Dell Technologies to match the executive officer’s charitable contribution. |
| |
(4) | Represents personal air travel costs of $19,843, tax and financial planning expenses of $12,000 and contribution by Dell Technologies to match the executive officer’s charitable contribution of $1,250. |
| |
(5) | Represents a lump sum severance payment of $1,700,000, the acceleration of vesting of long-term incentive cash award of $2,666,667, and continuation of benefits coverage valued at $20,054 in connection with his termination of employment with the Company effective February 2, 2018. |
Grants of Plan-Based Awards in Fiscal 20182021
The following table sets forth certain information about grants of plan-based awards that Dell Technologies made to the named executive officers during Fiscal 2018.2021. For more information about the plans under which these awards were granted, see “Compensation Discussion and Analysis – Individual Compensation Components – CashAnnual Bonus Plans” “– Special – Incentive Bonus Plan” and “– Equity Incentives.”
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Type of
award (1) | Grant
date | Award
date (2) | Estimated future payouts
under non-equity incentive plan awards (3) | Estimated future payouts under equity incentive
plan awards (4) | All other stock awards: Number of shares of stock or units
(#) | Grant date fair value of stock and option awards
($) |
Threshold
($) | Target
($) | Maximum
($) | Threshold
(#) | Target
(#) | Maximum
(#) |
| Michael S. Dell | IBP | — | — | — | 511,538 | — | — | — | — | — | — |
| Thomas W. Sweet | IBP | — | — | — | 750,000 | — | — | — | — | — | — |
| PSU-rTSR(5) | 3/15/2020 | 3/15/2020 | — | — | — | 29,207 | 58,414 | 116,828 | — | 2,337,144 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2020 | — | — | — | 9,738 | 19,476 | 38,952 | — | 700,162 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2019 | — | — | — | 5,618 | 11,235 | 22,470 | — | 403,898 |
| RSU | 3/15/2020 | — | — | — | — | — | — | — | 50,070(7) | 1,800,017 |
| Jeffrey W. Clarke | IBP | — | — | — | 881,160 | — | — | — | — | — | — |
| PSU-rTSR(5) | 3/15/2020 | 3/15/2020 | — | — | — | 42,894 | 85,787 | 171,574 | — | 3,432,338 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2020 | — | — | — | 14,301 | 28,602 | 57,204 | — | 1,028,242 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2019 | — | — | — | 7,419 | 14,838 | 29,676 | — | 533,426 |
| RSU | 3/15/2020 | — | — | — | — | — | — | — | 73,533(7) | 2,643,511 |
| RSU | 8/20/2020 | — | — | — | — | — | — | — | 83,808(8) | 4,999,985 |
| Richard J. Rothberg | IBP | — | — | — | 627,500 | — | — | — | — | — | — |
| PSU-rTSR(5) | 3/15/2020 | 3/15/2020 | — | — | — | 21,382 | 42,764 | 85,528 | — | 1,710,988 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2020 | — | — | — | 7,129 | 14,258 | 28,516 | — | 512,575 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2019 | — | — | — | 4,085 | 8,169 | 16,338 | — | 293,676 |
| RSU | 3/15/2020 | — | — | — | — | — | — | — | 36,655(7) | 1,317,747 |
| RSU | 8/20/2020 | — | — | — | — | — | — | — | 50,284(8) | 2,999,943 |
| William F. Scannell | IBP | — | — | — | 750,000 | — | — | — | — | — | — |
| PSU-rTSR(5) | 3/15/2020 | 3/15/2020 | — | — | — | 29,207 | 58,414 | 116,828 | — | 2,337,144 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2020 | — | — | — | 9,738 | 19,476 | 38,952 | — | 700,162 |
| PSU-FIN(6) | 3/15/2020 | 3/15/2019 | — | — | — | 5,618 | 11,235 | 22,470 | — | 403,898 |
| RSU | 3/15/2020 | — | — | — | — | — | — | — | 50,070(7) | 1,800,017 |
| RSU | 8/20/2020 | — | — | — | — | — | — | — | 83,808(8) | 4,999,985 |
__________
(1) Of the awards shown in the table:
• “IBP” refers to the Dell Inc. Incentive Bonus Plan.
• “PSU–rTSR” refers to Fiscal 2021 performance-based stock units eligible to vest based on achievement measured against the rTSR performance goal for Fiscal 2021-2023.
• “PSU–FIN” refers to Fiscal 2021 performance-based stock units eligible to vest based on achievement measured against financial performance goals for Fiscal 2021. See note 6 below.
• “RSU” refers to time-based restricted stock units.
(2) This column reflects the date on which the Nominating and Governance Committee approved all material terms of each grant of performance-based stock units, except performance targets for subsequent fiscal years, which were approved at the later date reflected in the “Grant date” column. For financial reporting purposes, awards are measured at fair value on the grant date as defined by FASB ASC Topic 718.
|
| | | | | | | | |
Name | | Estimated future payouts under non-equity incentive plan awards (1) |
Threshold
($)
| | Target
($)
| | Maximum
($)
|
Michael S. Dell | | — |
| | 1,900,000 | | — |
|
Thomas W. Sweet | | — |
| | 725,000 | | — |
|
Jeffrey W. Clarke | | — |
| | 846,833 | | — |
|
David I. Goulden | | — |
| | 850,000 | | — |
|
Rory P. Read | | — |
| | 600,000 | | — |
|
(3) Each named executive officer participated in the IBP. Awards under this plan were funded at 130% based on the corporate modifier. An individual modifier was applied for Messrs. Sweet, Clarke, Rothberg and Scannell.________
| |
(1) | Each named executive officer participated in the IBP. Awards under this plan were funded at 94% based on the corporate modifier. An individual modifier was applied for Messrs. Sweet, Clarke and Read. Mr. Goulden received a payment equal to 50% of his target in September 2017 and did not receive any other payments under the plan for the fiscal year. |
(4) The amounts shown in the Threshold, Target and Maximum columns reflect the minimum, target and maximum number, respectively, of Fiscal 2021 performance-based stock units that are eligible to vest subject to the achievement of Fiscal 2021-2023 performance goals. The threshold number of shares is 50% of the target number of shares and the maximum number of shares is 200% of the target number of shares. If any of these units become eligible to vest, they will vest in Fiscal 2023. For more information about these performance-based stock units, see “Compensation Discussion and Analysis – Individual Compensation Components – Equity Incentives – Fiscal 2021 Performance-Based RSUs.”
(5) The amounts shown represent the shares subject to restricted stock unit awards that may be eligible to vest based on rTSR for Fiscal 2021-2023. The weighted-average grant date fair value is $40.01 and is determined utilizing a Monte Carlo valuation model.
(6) The amounts shown represent the shares subject to restricted stock unit awards that may be eligible to vest upon achievement of the financial performance goals based on non-GAAP revenue and non-GAAP operating income for Fiscal 2021 only. The grant date fair value is based on the closing price of the Class C common stock of $35.95 as reported on the NYSE on March 15, 2020, which reflects only the foregoing Fiscal 2021 financial performance goals. Achievement with respect to these restricted stock units was fixed at 168% of the target number of shares covered by the awards based on performance for Fiscal 2021. The Fiscal 2022 financial performance goals were approved in March 2021 and will be presented in the proxy statement for the 2022 annual meeting of stockholders. The Fiscal 2023 financial performance goals for the March 2020 award will be approved in Fiscal 2023 and will be presented in the proxy statement for the 2023 annual meeting of stockholders.
(7) One-third of these restricted stock units vested on March 15, 2021 and the remaining two-thirds will vest in equal installments on March 15, 2022 and March 15, 2023.
(8) Of these restricted stock units, 20% will vest on August 20, 2021, 30% will vest on August 20, 2022 and 50% will vest on August 20, 2023.
Outstanding Equity Awards at End of Fiscal 20182021
The following table sets forth certain information about outstanding option and stock awards held as of the end of Fiscal 20182021 by the named executive officers.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Option awards | Stock awards |
Number of
securities
underlying
unexercised
options
(#)
exercisable | Number of
securities
underlying
unexercised
options
(#)
unexercisable | Equity
incentive
plan awards:
number of
securities
underlying
unexercised
unearned
options
(#) | Option
exercise
price
($) | Option
expiration
date | Number
of shares
or units of stock that
have
not vested
(#) | Market
value of
shares or
units of
stock held that have
not vested
($) | Equity
incentive
plan awards:
number
of unearned
shares,
units or
other rights
that have
not vested
(#) | Equity
incentive
plan
awards:
market or
payout
value of
unearned
shares,
units or
other
rights that
have not
vested
($) |
| Michael S. Dell | — | — | — | — | — | — | — | — | — |
Thomas W. Sweet | 381,818 | — | — | 13.75(1) | 2/6/2024 | 136,089(2) | 9,919,527 | 142,290(3) | 10,371,518 |
| 500,000 | — | — | 13.75(1) | 2/6/2024 | — | — | — | — |
| Jeffrey W. Clarke | 113,946 | — | — | 13.75(1) | 11/25/2023 | 275,787(4) | 20,102,114 | 202,325(5) | 14,747,469 |
| Richard J. Rothberg | 346,374 | — | — | 13.75(1) | 11/25/2023 | 149,647(6) | 10,907,770 | 103,947(7) | 7,576,697 |
| 8,571 | — | — | 13.75(1) | 11/25/2023 | — | — | — | — |
| William F. Scannell | — | — | — | — | — | 387,787(8) | 28,265,794 | 343,562(9) | 25,042,234 |
__________
(1) In approving this option award, the Board of Directors determined that the fair market value as of the grant date of each share of Class C common stock underlying the option award was equal to the merger consideration of $13.75 per share of Dell Inc. common stock paid to Dell Inc. public stockholders in the going-private transaction.
(2) Mr. Sweet was granted a performance-based RSU award based on a target number of 19,476 shares on March 15, 2020. Of this award, 168% of the target (32,719 shares) became eligible to vest based on the achievement of Fiscal 2021 financial performance goals and will vest on March 15, 2023, subject to continued service. Mr. Sweet was also granted 50,070 time-based RSUs on March 15, 2020. One-third of the shares subject to those RSUs vested on March 15, 2021 and the remaining two-thirds will vest in equal installments on March 15, 2022 and March 15, 2023. In addition, Mr. Sweet was granted two separate performance-based RSU awards, each based on a target number of 11,235 shares, on March 15, 2019. One award was based on Fiscal 2021 financial performance goals and 168% of the target (18,874 shares) became eligible to vest based on the achievement of those goals. The second award was based on Fiscal 2020 financial performance goals and 135% of the target (15,167 shares) became eligible to vest based on the achievement of those goals. Both awards will vest on March 15, 2022, subject to continued service. Mr. Sweet was also granted 28,889 time-based RSUs on March 15, 2019. One-third of the shares subject to those RSUs vested on March 15, 2020 and March 15, 2021 and the remaining shares will vest on March 15, 2022.
(3) Mr. Sweet was granted a performance-based RSU award on March 15, 2020 with a target number of 58,414 shares based on the achievement of rTSR performance for Fiscal 2021-2023, which will vest on March 15, 2023, subject to such performance and continued service. In addition, Mr. Sweet was granted a performance-based RSU award on March 15, 2020 with a target number of 38,938 shares, with one-half based on the achievement of Fiscal 2022 financial performance goals and one-half based on the achievement of Fiscal 2023 financial performance goals. These shares will vest on March 15, 2023, subject to such performance and continued service. Mr. Sweet was also granted a performance-based RSU award on March 15, 2019 with a target number of 33,704 shares based on the achievement of rTSR performance for Fiscal 2020-2022, which will vest on March 15, 2022, subject to such performance and continued service. In addition, Mr. Sweet was granted a performance-based RSU award on March 15, 2019 with a target number of 11,234 shares based on the
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of securities underlying unexercised options (#) exercisable | | Number of securities underlying unexercised options (#) unexercisable | | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | | Option exercise price ($) | | Option expiration date | | Number of shares or units of stock that have not vested (#) | | Market value of shares or units of stock held that have not vested ($) | | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) |
| Michael S. Dell | | 8,727,272(1) | | | 2,181,819(1) |
| | — |
| | 13.75(2) | | 11/25/2023 | | — |
| | — |
| | — |
| | — |
|
Thomas W. Sweet | | 104,000(3) | | | 48,000(3) |
| | — |
| | 13.75(2) | | 11/25/2023 | | — |
| | — |
| | — |
| | — |
|
| | 498,543(4) | | | 340,366(4) |
| | — |
| | 13.75(2) | | 2/6/2024 | | — |
| | — |
| | — |
| | — |
|
| | — | | | — |
| | 290,909(5) |
| | 13.75(2) | | 11/25/2023 | | — |
| | — |
| | — |
| | — |
|
| | — | | | — |
| | 800,000(5) |
| | 13.75(2) | | 2/6/2024 | | — |
| | — |
| | — |
| | — |
|
Jeffrey W. Clarke | | 1,371,108(6) | | | 342,778(6) |
| | — |
| | 13.75(2) | | 11/25/2023 | | — |
| | — |
| | — |
| | — |
|
| | — | | | — |
| | 2,467,996(5) |
| | 13.75(2) | | 11/25/2023 | | — |
| | — |
| | — |
| | — |
|
David I. Goulden | | 44,668(7) | | | — |
| | — |
| | 27.50(8) | | 9/14/2019(9) | | 290,909(10) |
| | 9,649,452 |
| | 654,545(11) |
| | 21,711,258 |
|
| | 150,755(7) | | | — |
| | — |
| | 27.50(8) | | 9/14/2019(9) | | — |
| | — |
| | — |
| | — |
|
| | 50,251(7) | | | — |
| | — |
| | 27.50(8) | | 9/14/2019(9) | | — |
| | — |
| | — |
| | — |
|
| Rory P. Read | | 93,040(12) | | | 139,560(12) |
| | — |
| | 26.67(13) | | 5/29/2025 | | — |
| | — |
| | — |
| | — |
|
| | — | | | — |
| | 348,900(5) |
| | 26.67(13) | | 5/29/2025 | | — |
| | — |
| | — |
| | — |
|
___________
| |
(1) | Represents option award exercisable for Class A common stock that vests and becomes exercisable with respect to 20% of the shares subject to the option on each of the first, second, third, fourth and fifth anniversaries of the vesting commencement date of October 29, 2013. |
| |
(2) | In approving this option award, the Board of Directors determined that the fair market value as of the grant date of each share of Class C common stock or (for Mr. Dell) Class A common stock underlying the option award was equal to the merger consideration of $13.75 per share of Dell Inc. common stock paid to Dell Inc. public stockholders in the going-private transaction. |
| |
(3) | Represents option award exercisable for Class C common stock that vests and becomes exercisable with respect to 20% of the shares subject to the option on each of the first, second, third, fourth and fifth anniversaries of the grant date of November 25, 2013. |
| |
(4) | Represents option award exercisable for Class C common stock that vests and becomes exercisable with respect to 20% of the shares subject to the option on each of the first, second, third, fourth and fifth anniversaries of the grant date of February 6, 2014. |
| |
(5) | Represents option award exercisable for Class C common stock that vests and becomes exercisable based upon the level of return achieved on the initial equity investment in Dell Technologies measured on specified measurement dates or upon the occurrence of specified events related to Dell Technologies. |
| |
(6) | Represents option award exercisable for Class C common stock that vests and becomes exercisable with respect to 20% of the shares subject to the option on each of the first, second, third, fourth and fifth anniversaries of the vesting commencement date of November 25, 2013. |
| |
(7) | This option award was a voluntary rollover option award in which Mr. Goulden elected to receive for a specified portion of his EMC restricted stock units, which would have been accelerated in the EMC merger, (a) a fixed cash award and (b) a new grant of unvested options to purchase Class C common stock. |
| |
(8) | In approving this option award, the Board of Directors determined that the fair market value as of the grant date of each share of Class C common stock underlying the option award was equal to $27.50 per share following the EMC merger. |
| |
(9) | The option expiration date was accelerated to November 2, 2018 due to Mr. Goulden’s termination of employment on February 2, 2018. |
| |
(10) | Represents restricted stock award for our Class C common stock that vests in three equal annual installments on the first, second and third anniversaries of the grant date of September 14, 2016. Following the end of Fiscal 2018, pursuant to Mr. Goulden’s termination of employment on February 2, 2018, 72,728 shares under this award vested on February 5, 2018 and the remainder were cancelled. |
| |
(11) | Represents restricted stock award for our Class C common stock that vests based upon the level of return achieved on the initial equity investment in Dell Technologies measured on specified measurement dates or upon the occurrence of specified events related to Dell Technologies. One-half of these shares were cancelled pursuant to Mr. Goulden’s termination of employment on February 2, 2018. The remaining 50% are eligible to vest based upon the performance achievement. |
| |
(12) | Represents option award exercisable for Class C common stock that vests and becomes exercisable with respect to 20% of the shares subject to the option on each of the first, second, third, fourth and fifth anniversaries of the vesting commencement date of May 29, 2015. |
| |
(13) | Exercise price is fixed based upon the good faith determination by the Board of Directors of the fair market value of a share of Class C common stock most immediately preceding the grant date. |
(4) Mr. Clarke was granted 83,808 time-based RSUs on August 20, 2020. Of the shares subject to this award, 20% will vest on August 20, 2021, 30% will vest on August 20, 2022 and 50% will vest on August 20, 2023. Mr. Clarke was also granted a performance-based RSU award based on a target number of 28,602 shares on March 15, 2020. Of this award, 168% of the target (48,051 shares) became eligible to vest based on the achievement of Fiscal 2021 financial performance goals and will vest on March 15, 2023, subject to continued service. In addition, Mr. Clarke was granted 73,533 time-based RSUs on March 15, 2020. One-third of the shares subject to those RSUs vested on March 15, 2021 and the remaining two-thirds will vest in equal installments on March 15, 2022 and March 15, 2023. Mr. Clarke was also granted two separate performance-based RSU awards, each based on a target number of 14,838 shares, on March 15, 2019. The vesting of one award was based on Fiscal 2021 financial performance goals and 168% of the target (24,927 shares) became eligible to vest based on the achievement of those goals. The vesting of the second award was based on Fiscal 2020 financial performance goals and 135% of the target (20,032 shares) became eligible to vest based on the achievement of those goals. Both awards will vest on March 15, 2022, subject to continued service. In addition, Mr. Clarke was granted 38,155 time-based RSUs on March 15, 2019. One-third of the shares subject to those RSUs vested on March 15, 2020 and March 15, 2021 and the remaining shares will vest on March 15, 2022.
(5) Mr. Clarke was granted a performance-based RSU award on March 15, 2020 with a target number of 85,787 shares based on the achievement of rTSR performance for Fiscal 2021-2023, which will vest on March 15, 2023, subject to such performance and continued service. In addition, Mr. Clarke was granted a performance-based RSU award on March 15, 2020 with a target number of 57,185 shares, with one-half based on the achievement of Fiscal 2022 financial performance goals and one-half based on the achievement of Fiscal 2023 financial performance goals. These shares will vest on March 15, 2023, subject to such performance and continued service. Mr. Clarke was also granted a performance-based RSU award on March 15, 2019 with a target number of 44,515 shares based on the achievement of rTSR performance for Fiscal 2020-2022, which will vest on March 15, 2022, subject to such performance and continued service. In addition, Mr. Clarke was granted a performance-based RSU award on March 15, 2019 with a target number of 14,838 shares based on the achievement of Fiscal 2022 financial performance goals, which will vest on March 15, 2022, subject to such performance and continued service.
(6) Mr. Rothberg was granted 50,284 time-based RSUs on August 20, 2020. Of the shares subject to those RSUs, 20% will vest on August 20, 2021, 30% will vest on August 20, 2022 and 50% will vest on August 20, 2023. Mr. Rothberg was also granted a performance-based RSU award based on a target number of 14,258 shares on March 15, 2020. Of this award, 168% of the target (23,953 shares) became eligible to vest based on the achievement of Fiscal 2021 financial performance goals and will vest on March 15, 2023, subject to continued service. In addition, Mr. Rothberg was granted 36,655 time-based RSUs on March 15, 2020. One-third of the shares subject to those RSUs vested on March 15, 2021 and the remaining two-thirds will vest in equal installments on March 15, 2022 and March 15, 2023. Mr. Rothberg was also granted two separate performance-based RSU awards, each based on a target number of 8,169 shares, on March 15, 2019. The vesting of one award was based on Fiscal 2021 financial performance goals and 168% of the target (13,723 shares) became eligible to vest based on the achievement of those goals. The vesting of the second award was based on Fiscal 2020 financial performance goals and 135% of the target (11,029 shares) became eligible to vest based on the achievement of those goals. Both awards will vest on March 15, 2022, subject to continued service. In addition, Mr. Rothberg was granted 21,006 time-based RSUs on March 15, 2019. One-third of the shares subject to those RSUs vested on March 15, 2020 and March 15, 2021 and the remaining shares will vest on March 15, 2022.
(7) Mr. Rothberg was granted a performance-based RSU award on March 15, 2020 with a target number of 42,764 shares based on the achievement of rTSR performance for Fiscal 2021-2023, which will vest on March 15, 2023, subject to such performance and continued service. In addition, Mr. Rothberg was granted a performance-based RSU award on March 15, 2020 with a target number of 28,506 shares, with one-half based on the achievement of Fiscal 2022 financial performance goals and one-half based on the achievement of Fiscal 2023 financial performance goals. These shares will vest on March 15, 2023, subject to such performance and continued service. Mr. Rothberg was also granted a performance-based RSU award on March 15, 2019 with a target number of 24,508 shares based on the achievement of rTSR performance for Fiscal 2020-2022, which will vest on March 15, 2022, subject to such performance and continued service. In addition, Mr. Rothberg was granted a performance-based RSU award on March 15, 2019 with a target number of 8,169 shares based on the
achievement of Fiscal 2022 financial performance goals, which will vest on March 15, 2022 subject to such performance and continued service.
(8) Mr. Scannell was granted 83,808 time-based RSUs on August 20, 2020. Of the shares subject to those RSUs, 20% will vest on August 20, 2021, 30% will vest on August 20, 2022 and 50% will vest on August 20, 2023. Mr. Scannell was also granted a performance-based RSU award based on a target number of 19,476 shares on March 15, 2020. Of this award, 168% of the target (32,719 shares) became eligible to vest based on the achievement of Fiscal 2021 financial performance goals and will vest on March 15, 2023, subject to continued service. In addition, Mr. Scannell was granted 50,070 time-based RSUs on March 15, 2020. One-third of the shares subject to those RSUs vested on March 15, 2021 and the remaining two-thirds will vest in equal installments on March 15, 2022 and March 15, 2023. Mr. Scannell was also granted 167,890 time-based RSUs on December 13, 2019 that vest in equal annual installments on December 9, 2021 and December 9, 2022. In addition, Mr. Scannell was granted two separate performance-based RSU awards, each based on a target number of 11,235 shares, on March 15, 2019. One award was based on Fiscal 2021 financial performance goals and 168% of the target (18,874 shares) became eligible to vest based on the achievement of those goals. The second award was based on Fiscal 2020 financial performance goals and 135% of the target (15,167 shares) became eligible to vest based on the achievement of those goals. Both awards will vest on March 15, 2022, subject to continued service. Mr. Scannell was also granted 28,889 time-based RSUs on March 15, 2019. One-third of the shares subject to those RSUs vested on March 15, 2020 and March 15, 2021 and the remaining shares will vest on March 15, 2022.
(9) Mr. Scannell was granted a performance-based RSU award on March 15, 2020 with a target number of 58,414 shares based on the achievement of rTSR performance for Fiscal 2021-2023, which will vest on March 15, 2023, subject to such performance and continued service. In addition, Mr. Scannell was granted a performance-based RSU award on March 15, 2020 with a target number of 38,938 shares, with one-half based on the achievement of Fiscal 2022 financial performance goals and one-half based on the achievement of Fiscal 2023 financial performance goals. These shares will vest on March 15, 2023, subject to such performance and continued service. Mr. Scannell was also granted a performance-based RSU award on March 15, 2019 with a target number of 33,704 shares based on the achievement of rTSR performance for Fiscal 2020-2022, which will vest on March 15, 2022, subject to such performance and continued service. In addition, Mr. Scannell was granted a performance-based RSU award on March 15, 2019 with a target number of 11,234 shares based on the achievement of Fiscal 2022 financial performance, which will vest on March 15, 2022, subject to such performance and continued service. As discussed under “Compensation Discussion and Analysis – Individual Compensation Components – Equity Incentives – Historical Management Equity Program,” Mr. Scannell was also granted a performance-based stock award for 327,273 shares under the MEP on September 14, 2016 that is subject to vesting based on the level of return achieved on the initial equity investment in Dell Technologies calculated on specified measurement dates or upon the occurrence of specified events related to Dell Technologies. Of the shares subject to this award, 38.5% (126,001 shares) vested on September 7, 2020 based on achievement of specified goals and the remaining 201,272 shares remain unvested at fiscal-year end.
Option Exercises and Stock Vested
The following table sets forth certain information about option exercises and vesting of restricted stock or restricted stock units during Fiscal 20182021 for each of the named executive officers on an aggregate basis.
| | | | | | | | | | | | | | |
| Name | Option awards | Stock awards |
Number of shares acquired on exercise
(#) | Value realized
on exercise
($)(1) | Number of shares acquired on vesting
(#) | Value realized
on vesting
($)(2) |
| Michael S. Dell | — | — | — | — |
| Thomas W. Sweet | 600,000 | 30,408,937 | 9,630 | 346,199 |
| Jeffrey W. Clarke | 2,813,372 | 146,355,832 | 12,719 | 457,248 |
| Richard J. Rothberg | 493,785 | 24,596,768 | 7,003 | 251,758 |
| William F. Scannell | — | — | 135,631 | 8,492,163 |
|
| | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of shares acquired on exercise (#) | | Value realized on exercise ($)(1) | | Number of shares acquired on vesting (#) | | Value realized on vesting ($)(1) |
| Michael S. Dell | | — |
| | — |
| | — |
| | — |
|
| Thomas W. Sweet | | 40,000 |
| | 673,200 |
| | — |
| | — |
|
| Jeffrey W. Clarke | | — |
| | — |
| | — |
| | — |
|
| David I. Goulden | | — |
| | — |
| | 218,183 |
| | 7,168,766 |
|
| Rory P. Read | | — |
| | — |
| | — |
| | — |
|
________
| |
(1) | Calculated based upon the good faith determination by the Board of Directors of the fair market value of a share of Class C common stock most immediately preceding such exercise or vesting date. |
(1) Represents the difference between the exercise price and the price of our Class C common stock, as reported on the NYSE, at the time of exercise for each option.
(2) Represents the closing price of our Class C common stock as reported on the NYSE on the immediately preceding trading date, multiplied by the number of shares of stock vesting on the applicable vesting date.
Stock Incentive Plan
Dell Technologies Inc. 2013 Stock Incentive Plan
The purpose of the Dell Technologies Inc. 2013 Stock Incentive Plan referred(as amended and restated as of July 9, 2019), which we refer to as the 2013Stock Incentive Plan, is to aid Dell Technologies in recruiting and retaining employees, directors and other service providers of outstanding ability and to motivate these persons to exert their best efforts on behalf of the Company by providing incentives through the granting of stock-based awards with respect to shares of Class C common stock or Class V common stock, which we refer to as shares. Cash incentive awards also may be granted underand the 2013 Plan.granting of cash-denominated awards.
A totalThe maximum number of 75,000,000 shares of Class C common stock andissuable under the Stock Incentive Plan is 110,500,000, subject to adjustment under the terms of the plan. As of January 29, 2021, a total of 500,00031,650,562 shares of Class V common stock may be issuedremained available for issuance for future awards under the 2013 Plan, each subject to adjustment based on a change in the Company’s capitalization and other significant corporate events.plan.
Employees, consultants, non-employee directors, and other service providers of the Company and its affiliates approved by the Executive Committee are eligible to receive stock awards under the 2013Stock Incentive Plan, subject to certain limits provided by law with respect to the granting of incentive stock options. The ExecutiveNominating and Governance Committee has the full authority to determine who will be granted awards under the 2013Stock Incentive Plan.
The 2013Stock Incentive Plan provides for the grant of any of the following types of stock awards (or any combination thereof): options to purchase shares (incentive or nonqualified); stock appreciation rights to acquire shares; or other stock-based awards providing for the delivery of shares. Other stock-based awards the Company may grant include restricted stock, restricted stock units, deferred stock units and dividend equivalent rights.
Shares of Class C common stock acquired pursuant to awards granted under the 2013Stock Incentive Plan are subject to transfer and repurchase rightsrestrictions set forth in the 2013Stock Incentive Plan, and for the named executive officers and certain other senior members of Dell Technologies, liquidity and put restrictionssale (put) provisions set forth in a management stockholders agreement with Dell Technologies.
If Dell Technologies undergoes a change in control, as defined in the 2013Stock Incentive Plan, the ExecutiveNominating and Governance Committee, at its discretion, may accelerate the vesting or cause any restrictions to lapse with respect to outstanding awards, may cancel such awards for fair value, or may provide for the issuance of substitute awards.
Subject to certain limitations specified in the 2013Stock Incentive Plan, the Board of Directors may amend or terminate the 2013Stock Incentive Plan. Unless earlier terminated, the 2013Stock Incentive Plan will terminate ten years following its effective date, or
October 29, 2023, but any awards outstanding under the 2013Stock Incentive Plan as of the termination date will remain outstanding in accordance with their terms.
Other Benefit Plans
401(k) Retirement Plans
During Fiscal 2018, our named executive officers participated in two 401(k) retirement savings plans.
Before January 1, 2018, eligible employees of EMC and certain of its subsidiaries, including Mr. Goulden, participated in the 401(k) plan sponsored by EMC. The EMC plan provided for a matching contribution of up to 6% of the participant’s eligible compensation, with a maximum matching contribution of $6,000 per year. The matching contribution vests pro rata over the participant’s first three years of service.
Before January 1, 2018, the named executive officers other than Mr. Goulden were eligible to participate in the Dell Inc. 401(k) plan, which provided for matching contributions of up to 5% of the participant’s eligible compensation, and a participant vested immediately in the matching contributions. Beginning January 1, 2018,2021, all named executive officers were eligible to participate in the Dell Inc. 401(k) planPlan and receive matching contributions of up to 6% of the participant’s eligible compensation, withup to a maximum amount for the Dell Inc. 401(k) Plan year. Due to the suspension of the matching contribution of $7,500 per year.
described below, the matching contribution limit for the Dell Inc. 401(k) Plan year 2020 was $7,125. Participants in each planthe Dell Inc. 401(k) Plan may invest their contributions and the matching contributions in a variety of investment choices.
Effective June 1, 2020, the Company suspended the Dell Inc. 401(k) Plan employer matching contribution for U.S. employees, including our named executive officers, as a precautionary measure to preserve financial flexibility in light of COVID-19. On January 1, 2021, the Dell Inc. 401(k) Plan employer matching contributions were reinstated, with no change to the matching contribution policy or participant eligibility requirements.
Deferred Compensation Plans
Dell Technologies maintains a nonqualified deferred compensation plansplan pursuant to which designated managerial or highly compensated employees, including the named executive officers, may elect to defer the receipt of a portion of the base salaries and/or cash bonuses that they otherwise would otherwise have received when earned.
Before January 1, 2018, Mr. Goulden was eligible to participate in the nonqualified deferred compensation plan maintained by EMC following the closing of the EMC merger. Messrs. Dell, Sweet and Read were eligible to participate in a deferred compensation plan established by Dell Technologies. Neither EMC nor Dell Technologies makesdoes not make any matching or other contributions under either of the plans.plan. The plans areplan is intended to give participants the ability to defer receipt of certain income to a later date, which may be an attractive tax planning feature and the availability of which assists in the attraction and retention of executive talent. Participants’ account balances reflect gains and losses in the plan’s investment funds.
The following table shows the executive contributions, earnings and account balances in the deferred compensation plans for the named executive officers for Fiscal 2018.2021.
Fiscal 20182021 Nonqualified Deferred Compensation Plan Table
| | | Name | | Executive contributions in last FY ($) | | Registrant contributions in last FY ($) | | Aggregate earnings in last FY ($) | | Aggregate withdrawals/ distributions ($) | | Aggregate balance at last FYE ($) | Name | Executive
contributions
in last FY
($) | Registrant
contributions
in last FY
($) | Aggregate
earnings
in last FY(1)
($) | Aggregate
withdrawals/
distributions
($) | Aggregate
balance
at last FYE
($) |
| Michael S. Dell | | — |
| | — |
| | — |
| | — |
| | — |
| Michael S. Dell | — | — |
| Thomas W. Sweet | | — |
| | — |
| | — |
| | — |
| | — |
| Thomas W. Sweet | — | — |
| Jeffrey W. Clarke | | — |
| | — |
| | — |
| | — |
| | — |
| Jeffrey W. Clarke | — | — |
| David I. Goulden | | 291,016(1) |
| | — |
| | 417,393 |
| | — |
| | 2,439,955(2) |
| |
| Rory P. Read | | — |
| | — |
| | — |
| | — |
| | — |
| |
| Richard J. Rothberg | | Richard J. Rothberg | 276,783 | — | 282,680 | — | 1,159,165 |
| William F. Scannell | | William F. Scannell | — | 52 | — | 27,733 |
__________
| |
(1) | $127,500 of this amount is reported in the Fiscal 2018 Summary Compensation Table for Mr. Goulden under the Non-Equity Incentive Plan Compensation column. |
| |
(2) | $163,516 of this amount was previously reported in the Fiscal 2017 Summary Compensation Table of our definitive proxy statement filed with the SEC on May 16, 2017. |
(1) The aggregate earnings have been reduced to reflect the deduction of an annual administrative fee of $37.
Potential Payments Upon Termination of Employment or Change in Control
The following table sets forth the amount of compensation that would become payable to each named executive officer other than Mr. Goulden under existing plans and arrangements if one of the events described in the table had occurred on February 2, 2018, givenJanuary 29, 2021, based on the named executive officer’s compensation as of such date and, if applicable, based on the amount of outstanding stock-based awards held by the named executive officer as of such date and the fair market value as of such date of the Class C common stock or (for Mr. Dell) the Class A common stock, as determined by the Board of Directors on that date.stock. These benefits are in addition to benefits available before the occurrence of any termination of employment or change in control of Dell Technologies, including then-exercisable stock options, and benefits available generally to salaried employees, such as distributions under the Dell Inc. 401(k) plans.Plan. In addition, in connection with any actual termination of employment or change-in-control transaction, the CompanyDell Technologies may determine to enter into an agreement or to establish an arrangement providing additional benefits or amounts, or altering the terms of benefits described below, as the Board of Directors determines appropriate.
The actual amounts that would be paid upon a named executive officer’s termination of employment or in connection with a change in control can be determined only at the time of any such event. Because of the number of factors that affect the nature and amount of any benefits, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event, the named executive officer’s current position and salary, the amount of stock-based awards held by the named executive officer and the fair market value of the Class C common stock or (for Mr. Dell) the Class A common stock, as determined by the Board of Directors.stock.
For information about the events that constitute a “change in control” under Mr. Dell’s employment agreement, see “Compensation Discussion and Analysis – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Employment Agreement with Michael S. Dell.” For information about the events that constitute a “change in control” or a qualifying termination of employment under the severance agreements with the other named executive officers, see “Compensation Discussion and Analysis – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Severance and Change-in-Control Arrangements with Other Named Executive Officers.”
| | | | | | | | | | | | | | | | | |
| Name | Severance
payment(1)
($) | Acceleration
benefit upon
death or
disability(2)
($) | Acceleration
upon
change in
control
($) | Acceleration
upon change in
control and
qualifying
termination(3)
($) | Acceleration
upon
qualifying
termination(4)
($) |
| Michael S. Dell | — | — | — | — | — |
| Thomas W. Sweet | 2,250,000 | 20,291,045 | — | — | — |
| Jeffrey W. Clarke | 2,643,480 | 34,849,584 | — | — | — |
| Richard J. Rothberg | 1,882,500 | 18,484,467 | — | — | — |
| William F. Scannell | 2,250,000 | 38,637,313 | — | — | — |
|
| | | | | | | | | | | | | | |
| Name | | Severance payment(1) ($) | | Acceleration benefit upon death or disability(2) ($) | | Acceleration upon change in control(3) ($) | | Acceleration upon change in control and qualifying termination(4) ($) | | Acceleration upon qualifying termination(5) ($) |
| Michael S. Dell | | — |
| | — |
| | 42,370,925 |
| | 42,370,925 | | — |
|
| Thomas W. Sweet | | 2,175,000 |
| | 6,609,908 |
| | — |
| | 6,609,908 | | 3,304,915 |
|
| Jeffrey W. Clarke | | 2,553,480 |
| | 6,656,749 |
| | — |
| | 6,656,749 | | 3,328,374 |
|
| Rory P. Read | | 3,200,000 |
| | 9,000,000 |
| | — |
| | 3,000,000 | | 3,000,000 |
|
______________
| |
(1) | (1) Represents estimated lump sum severance payments payable by Dell Technologies. |
| |
(2) | Represents the in-the-money value of unvested stock options to purchase Class C common stock that are subject to vesting acceleration in the event of death or permanent disability, assuming a share value of $33.17, based upon the good faith determination by the Board of Directors of the fair market value of a share of Class C common stock most immediately preceding the payment event. |
| |
(3) | Represents the in-the-money value of Mr. Dell’s unvested stock option to purchase Class A common stock that is subject to vesting acceleration in the event of a change in control, assuming a share value of $33.17, based upon the good faith determination by the Board of Directors of the fair market value of a share of Class A common stock most immediately preceding the payment event. For more information, see “Compensation Discussion and Analysis – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Employment Agreement with Michael S. Dell.” |
| |
(4) | Represents the in-the-money value of unvested stock options or the value of restricted shares of Class C common stock held by the named executive officer that are subject to vesting acceleration in the event of a qualifying termination during a change-in-control period, assuming a share value of $33.17, based upon the good faith determination by the Board of Directors of the fair market value of a share of Class C common stock most immediately preceding the payment event. For more information, see “Compensation Discussion and Analysis – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Severance and Change-in-Control Arrangements with Other Named Executive Officers.” |
| |
(5) | Represents the in-the-money value of unvested stock options that are subject to vesting acceleration in the event of a qualifying termination outside of a change-in-control period, assuming a share value of $33.17, based upon the good faith determination by the Board of Directors of the fair market value of a share of Class C common stock most immediately preceding the payment event. In the event of a qualifying termination outside of a change-in-control period, a portion of the named executive officer’s unvested MEP performance-based awards would remain outstanding and eligible to vest in accordance with their terms. |
Mr. Goulden terminated employment with Dell Technologies effective February 2, 2018. As a result of his termination of employment, Mr. Goulden received a lump sum severance paymentpayments payable by Dell Technologies.
(2) Represents the value of $1,700,000,unvested restricted shares that are subject to vesting acceleration in the event of vestingdeath or permanent disability, based on the closing price of $2,666,667$72.89 of the sign-on cash award he received in connection with the commencement of his employment with Dell Technologies, acceleration of vesting of 72,728 restricted stock units for Class C common stock equalon January 29, 2021 as reported on the NYSE. The unvested MEP performance-based award for Mr. Scannell would remain outstanding and eligible to $2,412,388 (assuming a share value of $33.17 based upon the good faith determination by the Board of Directorsvest in accordance with its terms. For information about this award, see “Compensation Discussion and Analysis – Individual Compensation Components – Equity Incentives – Historical Management Equity Program.”
(3) The unvested MEP performance-based award for Mr. Scannell would remain outstanding and eligible to vest in accordance with its terms.
(4) A portion of the fair market value of a share of Class C common stock most immediately preceding the payment event), and $20,054 of continued benefit coverage. Mr. Goulden will receive an additional severance payment of $850,000 on the one-year anniversary of his separation date. Outstanding awards for 327,273 restricted stock units for Class C common stock remain subject to vesting under Mr. Goulden’sunvested MEP performance-based award.award for Mr. Scannell would remain outstanding and eligible to vest in accordance with its terms.
Pay Ratio Disclosure
In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee, excluding our CEO. For Fiscal 2018,2021, as determined under Item 402 of the SEC’s Regulation S-K, the annual total compensation for our CEO was $2,755,901,$930,416, the annual total compensation for our median employee was $83,139,$67,496, and the ratio of our CEO’s annual total compensation to our median employee’s annual total compensation for fiscal year 2018Fiscal 2021 was 3314 to 1. The ratio for Fiscal 2021 was lower than the ratio calculated in prior fiscal years as a result of Mr. Dell’s voluntary waiver of a portion of his Fiscal 2021 base salary, as described above. under “Compensation Discussion and Analysis – Individual Compensation Components – Base Salary.” Mr. Dell’s waiver resulted in a 73% reduction in actual salary received relative to his annual base salary rate. This reduction affected incentive arrangements applicable to Mr. Dell that are determined by reference to his base salary.
We believe the ratio presented above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. In identifying our median employee, we calculated annual total target cash compensation of each employee as of November 14, 201713, 2020 for the 12-month period that ended on February 2, 2018.January 29, 2021. Total target cash compensation for this purpose consisted of base salary and target annual bonus and commission incentive and was calculated using internal human resources records.
Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilizeuse different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information about our equity compensation plans as of the end of Fiscal 2018.
|
| | | | | | | | | |
Plan Category | | | | Number of securities to
be issued upon exercise
of outstanding options, warrants and rights (1)
| | Weighted-average exercise price of outstanding options, warrants and rights (2) | | Number of securities remaining available for future issuance under equity compensation
plans (excluding securities reflected in first column) (3)
|
Equity compensation plans approved by security holders | | Class A:
Class C:
Class V:
| | —
36,833,063
134,695
| | $—
15.16
50.51
| | —
29,875,492
362,688
|
| | | |
Equity compensation plans not approved by security holders | | Class A:
Class C:
| | 10,909,091
184,661
| | $13.75
15.75
| | —(4)
—(5)
|
| | | |
Total: | | Class A:
Class C:
Class V:
| | 10,909,091
37,017,724
134,695
| | $13.75
15.16
50.51
| | —
29,875,492
362,688
|
__________
| |
(1) | The number of securities to be issued upon exercise of outstanding options, warrants and rights set forth in this column represents, as of the end of Fiscal 2018, (a) with respect to equity compensation plans approved by security holders, the aggregate number of shares of Class C common stock and Class V common stock, as applicable, that were issuable upon the exercise or settlement of outstanding time-based and performance-based options and time-based and performance-based restricted stock units, or RSUs, granted under the 2013 Plan and (b) with respect to equity compensation plans not approved by security holders, the number of shares of Class A common stock and Class C common stock that were issuable upon the exercise of outstanding time-based options granted under the Stock Option Agreement, dated as of November 25, 2013, between Michael S. Dell and the Company, and the Dell Inc. Amended and Restated 2002 Long-Term Incentive Plan, respectively. The number of securities to be issued under equity compensation plans approved by security holders reported in this column consists of the aggregate number of securities that may be issued in connection with 12,504,641 time-based options to purchase Class C common stock, 18,659,848 performance-based options to purchase Class C common stock, 129,114 time-based options to purchase Class V common stock, 1,888,031 time-based RSUs that may be settled in Class C common stock, 3,780,543 performance-based RSUs that may be settled in Class C common stock and 5,581 time-based RSUs that may be settled in Class V common stock. The number of securities to be issued under equity compensation plans not approved by security holders reported in this column consists of the aggregate number of securities that may be issued in connection with 10,909,091 time-based options to purchase Class A common stock and 184,661 time-based options to purchase Class C common stock. |
| |
(2) | Weighted-average exercise prices do not reflect shares issuable in connection with the settlement of RSUs, as RSUs have no exercise price. |
| |
(3) | The number of securities remaining available for future issuance reported in this column with respect to equity compensation plans approved by security holders represents the aggregate number of shares of Class C common stock and Class V common stock that were available for issuance in connection with grants of options, time-based and performance-based restricted stock, service-based and performance-based RSUs and deferred stock units under the 2013 Plan. The maximum number of shares of Class C common stock and Class V common stock issuable under the 2013 Plan (subject to adjustment for stock dividends and splits and other specified events) is 75,000,000 and 500,000, respectively, which may be issued in the form of any such award. |
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(4) | As of the end of Fiscal 2018, no shares remained available for future awards under the Stock Option Agreement, dated as of November 25, 2013, between Michael S. Dell and the Company. |
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(5) | As of the end of Fiscal 2018, no shares remained available for future awards under the Dell Inc. Amended and Restated 2002 Long-Term Incentive Plan. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents as of April 26, 2018,2021, except as otherwise indicated below, certain information based on our records and filings with the SEC regarding the beneficial ownership of our common stock by:
•each director and director nominee;
•each executive officer named in the Fiscal 20182021 Summary Compensation Table under “Compensation of Executive Officers”;
•all of our directors and executive officers as a group; and
•each person known by us to own beneficially more than 5% of the outstanding shares of any class of our common stock.
The Dell TechnologiesWe are authorized under our certificate currently authorizes usof incorporation to issue shares of the following classes of common stock:stock that were outstanding as of April 26, 2021:
•600,000,000 shares of Class A common stock, of which 409,538,423384,416,886 shares were issued and outstanding as of April 26, 2018;2021;
•200,000,000 shares of Class B common stock, of which 136,986,858101,685,217 shares were issued and outstanding as of April 26, 2018;2021; and
•7,900,000,000 shares of Class C common stock, of which 22,103,215277,577,182 shares were issued and outstanding as of April 26, 2018;2021.
100,000,000 shares of Class D common stock, of which no shares were issued and outstanding as of April 26, 2018; and
343,025,308 shares of Class V common stock, of which 199,354,950 shares were issued and outstanding as of April 26, 2018.
The Class VC common stock is registered under the Exchange Act and listed on the NYSE. No other class of our common stock is registered under the Exchange Act or listed on any securities exchange.
The calculation of beneficial ownership is made in accordance with SEC rules. According toUnder such rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. Under these rules, beneficialBeneficial ownership as of any date includes any shares as to which a person has the right to acquire voting or investment power as of such date or within 60 days thereafter through the exercise of any stock option or other right or the vesting of any RSU, without regard to whether such right expires before the end of such 60-day period or continues thereafter. Under the Dell Technologiesour certificate at any time and from time to time,of incorporation, any holder of Class A common stock or Class B common stock has the right at any time to convert all or any of the shares of such Class A common stock or Class B common stock as applicable, held by such holder into shares of Class C common stock on a one-to-one basis. The numbers of shares beneficially owned and applicable percentage ownership amounts set forth in the following table under the heading “Class C Common Stock” do not reflect conversion of any shares of Class A common stock or Class B common stock into shares of Class C common stock. If two or more persons share voting power or investment power with respect to specific securities, all of such persons may be deemed to be beneficial owners of such securities.
The percentage of beneficial ownership as to any person as of April 26, 20182021 (except as otherwise indicated below) is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power as of or within 60 days
after April 26, 2018,2021, by the sum of the number of shares outstanding as of April 26, 20182021 plus the number of shares as to which such person has the right to acquire voting or investment power as of or within 60 days after April 26, 2018.2021. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, Dell Technologies believes that the beneficial owners of the common stock listed below, based on information furnished by suchthe beneficial owners in SEC filings or otherwise, have sole voting and investment power with respect to the shares shown.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name of Beneficial Owner | | | | | | | | | | Percentage Ownership of All Outstanding Dell Technologies Common Stock |
| | Class A Common Stock | | Class B Common Stock | | Class C Common Stock | | Class V Common Stock | |
| | Number | | Percent (1) | | Number | | Percent (1) | | Number | | Percent (1) | | Number | | Percent (1) | |
| Executive Officers and Directors: | | | | | | | | | | | | | | | | | | |
| Michael S. Dell (2) | | 348,677,582 |
| | 83% |
| | — |
| | — |
| | 526,921 |
| | 2% |
| | — |
| | — |
| | 45% |
|
| Thomas W. Sweet (3) | | 14,653 |
| | * |
| | — |
| | — |
| | 872,724 |
| | 4% |
| | — |
| | — |
| | * |
|
| Jeffrey W. Clarke (4) | | — |
| | — |
| | — |
| | — |
| | 1,371,108 |
| | 6% |
| | — |
| | — |
| | * |
|
| David W. Dorman (5) | | — |
| | — |
| | — |
| | — |
| | 18,018 |
| | * |
| | 15,116 |
| | * |
| | * |
|
| Egon Durban | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| David I. Goulden (6) | | — |
| | — |
| | — |
| | — |
| | 690,365 |
| | 3% |
| | 16,055 |
| | * |
| | * |
|
| William D. Green (7) | | — |
| | — |
| | — |
| | — |
| | 16,655 |
| | * |
| | 17,354 |
| | * |
| | * |
|
| Ellen J. Kullman (8) | | — |
| | — |
| | — |
| | — |
| | 18,018 |
| | * |
| | 15,116 |
| | * |
| | * |
|
| Simon Patterson | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Rory P. Read (9) | | — |
| | — |
| | — |
| | — |
| | 139,560 |
| | 1% |
| | — |
| | — |
| | * |
|
| All directors and executive officers as a group (17 persons) (10) | | 348,712,583 |
| | 83% |
| | — |
| | — |
| | 8,046,469 |
| | 29 | % | | 89,894 |
| | * |
| | 46% |
|
| Other Stockholders: | | | | | | | | | | | | | | | | | | |
| SLD Trust (11) | | 32,890,896 |
| | 8% |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4% |
|
| MSD Partners Stockholders (12) | | 33,449,504 |
| | 8% |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4% |
|
| SLP Stockholders (13) | | — |
| | — |
| | 136,986,858 |
| | 100% |
| | — |
| | — |
| | — |
| | — |
| | 18% |
|
| Temasek Entity (14) | | — |
| | — |
| | — |
| | — |
| | 18,181,818 |
| | 82% |
| | — |
| | — |
| | 2% |
|
| Dodge & Cox (15) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 14,279,005 |
| | 7% |
| | 2% |
|
| The Vanguard Group (16) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,612,001 |
| | 9% |
| | 2% |
|
| BlackRock, Inc. (17) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 13,276,332 |
| | 7% |
| | 2% |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Name of Beneficial Owner | Class A
Common Stock | Class B
Common Stock | Class C
Common Stock | Percentage Ownership
of All Outstanding
Dell Technologies
Common Stock |
| Number | Percent
(1) | Number | Percent
(1) | Number | Percent
(1) |
| Executive Officers and Directors: | | | | | | | |
| Michael S. Dell (2) | 350,834,081 | 91.3% | — | — | 5,951,255 | 2.1% | 46.7% |
| Thomas W. Sweet (3) | — | — | — | — | 703,621 | * | * |
| Jeffrey W. Clarke (4) | — | — | — | — | 238,898 | * | * |
| David W. Dorman (5) | — | — | — | — | 157,306 | * | * |
| Egon Durban | — | — | — | — | — | — | — |
| William D. Green (6) | — | — | — | — | 157,155 | * | * |
| Ellen J. Kullman (7) | — | — | — | — | 157,673 | * | * |
| Simon Patterson | — | — | — | — | — | — | — |
| Richard J. Rothberg | — | — | — | — | 72,492 | * | * |
| William F. Scannell | — | — | — | — | 227,593 | * | * |
| Lynn M. Vojvodich (8) | — | — | — | — | 28,042 | * | * |
| All directors and executive officers as a group (14 persons) (9) | 350,834,081 | 91.3% | — | — | 8,400,092 | 3.0% | 47.0% |
| Other Stockholders: | | | | | | | |
| SLD Trust (10) | 32,890,896 | 8.5% | — | — | — | — | 4.3% |
| SLP Stockholders (11) | — | — | 101,685,217 | 100% | — | — | 13.3% |
| Dodge & Cox (12) | — | — | — | — | 37,307,662 | 13.4% | 4.9% |
| Elliott Investment Management, L.P. (13) | — | — | — | — | 24,832,943 | 8.9% | 3.3% |
| BlackRock, Inc. (14) | — | — | — | — | 15,575,594 | 5.6% | 2.0% |
| The Vanguard Group (15) | — | — | — | — | 15,036,372 | 5.4% | 2.0% |
_________
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(1) | Represents the percentage of Class A common stock, Class B common stock, Class C common stock or Class V common stock beneficially owned by each stockholder included in the table based on the number of shares of each such class outstanding as of April 26, 2018, as described in the introduction to this table. |
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(2) | The shares of Class A common stock shown as beneficially owned by Mr. Dell include 8,727,272 shares of Class A common stock that Mr. Dell either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. Such shares do not include 32,890,896 shares of Class A common stock owned by the Susan Lieberman Dell Separate Property Trust, or SLD Trust. Mr. Dell may be deemed to beneficially own the shares held by the SLD Trust. |
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(3) | The shares of Class C common stock shown as beneficially owned by Mr. Sweet include 772,724 shares of Class C common stock that Mr. Sweet either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. |
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(4) | The shares of Class C common stock shown as beneficially owned by Mr. Clarke include 1,371,108 shares of Class C common stock that Mr. Clarke either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. |
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(5) | The shares of Class C common stock shown as beneficially owned by Mr. Dorman include 14,610 shares of Class C common stock that Mr. Dorman either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018 and 1,363 shares of Class C common stock issuable pursuant to deferred stock units. The shares of Class V common stock shown as beneficially owned by Mr. Dorman include 13,178 shares of Class V common stock that Mr. Dorman either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018 and 775 shares of Class V common stock issuable pursuant to deferred stock units. |
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(6) | The shares of Class C common stock shown as beneficially owned by Mr. Goulden include 245,674 shares of Class C common stock that Mr. Goulden either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. |
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(7) | The shares of Class C common stock shown as beneficially owned by Mr. Green include 14,610 shares of Class C common stock that Mr. Green either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. The shares of Class V common stock shown as beneficially owned by Mr. Green include 13,178 shares of Class V common stock that Mr. Green either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. |
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(8) | The shares of Class C common stock shown as beneficially owned by Mrs. Kullman include 14,610 shares of Class C common stock that Mrs. Kullman either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018 and 2,897 shares of Class C common stock issuable pursuant to deferred stock units. The shares of Class V common stock shown as beneficially owned by Mrs. Kullman include 13,178 shares of Class V common stock that Mrs. Kullman either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018 and 1,647 shares of Class V common stock issuable pursuant to deferred stock units. |
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(9) | The shares of Class C common stock shown as beneficially owned by Mr. Read include 139,560 shares of Class C common stock that Mr. Read either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2018. |
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(10) | The shares shown as beneficially owned by all directors and executive officers as a group include 8,727,272 shares of Class A common stock, 5,429,544 shares of Class C common stock and 41,956 shares of Class V common stock that members of the group either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days of April 26, 2018, and 4,260 shares of Class C common stock and 2,422 shares of Class V common stock issuable to members of the group pursuant to deferred stock units. |
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(11) | The address of the SLD Trust is c/o Dell Technologies Inc., One Dell Way, Round Rock, Texas 78682. |
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(12) | The MSD Partners Stockholders consist of certain investment funds affiliated with MSD Partners, L.P., an investment firm formed by principals of MSD Capital, L.P., the investment firm that manages the capital of Mr. Dell and his family. The shares of Class A common stock shown as beneficially owned by the MSD Partners Stockholders consist of 31,856,436 shares of Class A common stock owned of record by MSDC Denali Investors, L.P. and 1,593,068 shares of Class A common stock owned of record by MSDC Denali EIV, LLC. The address of each of the MSD Partners Stockholders is 645 Fifth Avenue, 21st Floor, New York, New York 10022. |
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(13) | The shares of Class B common stock shown as beneficially owned by the SLP Stockholders consist of 59,317,156 shares of Class B common stock owned of record by Silver Lake Partners III, L.P., 1,693,974 shares of Class B common stock owned of record by Silver Lake Technology Investors III, L.P., 40,084,313 shares of Class B common stock owned of record by Silver Lake Partners IV, L.P., 589,774 shares of Class B common stock owned of record by Silver Lake Technology Investors IV, L.P. and 35,301,641 shares of Class B common stock owned of record by SLP Denali Co-Invest, L.P. The general partner of each of Silver Lake Partners III, L.P. and Silver Lake Technology Investors III, L.P. is Silver Lake Technology Associates III, L.P., and the general partner of Silver Lake Technology Associates III, L.P. is SLTA III (GP), L.L.C., referred to as SLTA III. The general partner of SLP Denali Co-Invest, L.P. is SLP Denali Co-Invest GP, L.L.C., and the managing member of SLP Denali Co-Invest GP, L.L.C. is Silver Lake Technology Associates III, L.P. The general partner of each of Silver Lake Partners IV, L.P. and Silver Lake Technology Investors IV, L.P. is Silver Lake Technology Associates IV, L.P., and the general partner of Silver Lake Technology Associates IV, L.P. is SLTA IV (GP), L.L.C., referred to as SLTA IV. The managing member of SLTA III and SLTA IV is Silver Lake Group, L.L.C. As such, Silver Lake Group, L.L.C. may be deemed to have beneficial ownership of the securities held by the SLP Stockholders. The managing members of Silver Lake Group, L.L.C. are Michael Bingle, Egon Durban, Kenneth Hao and Gregory Mondre. The address for each of the SLP Stockholders and entities named above is 2775 Sand Hill Road, Suite 100, Menlo Park, California 94025. |
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(14) | All 18,181,818 shares of Class C common stock are owned of record by Venezio Investments Pte. Ltd., an affiliate of Temasek Holdings (Private) Limited. The address of Venezio Investments Pte. Ltd. is 60B Orchard Road, #06-18 Tower 2, Singapore. |
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(15) | The information concerning Dodge & Cox is based on a Schedule 13G/A filed with the SEC on February 13, 2018. Dodge & Cox reports that, as of December 31, 2017, it had sole voting power over 13,545,920 shares of Class V common stock and sole dispositive power over 14,279,005 shares of Class V common stock. The address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, California 94104. |
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(16) | The information concerning The Vanguard Group is based on a Schedule 13G/A filed with the SEC on February 9, 2018. The Vanguard Group reports that, as of December 31, 2017, it had sole voting power over 160,536 shares of Class V common stock, shared voting power over 54,644 shares of Class V common stock, sole dispositive power over 17,402,568 shares of Class V common stock and shared dispositive power over 209,433 shares of Class V common stock. The Vanguard Group reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 98,496 shares of Class V common stock as a result of its serving as investment manager of collective trust accounts and that Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the |
beneficial owner(1) Represents the percentage of 171,370Class A common stock, Class B common stock or Class C common stock beneficially owned by each stockholder included in the table based on the number of shares of each such class outstanding as of April 26, 2021 and without giving effect to the conversion of any shares of Class VA common stock or Class B common stock into shares of Class C common stock, as described in the introduction to this table.
(2) The shares of Class A common stock shown as beneficially owned by Mr. Dell do not include 32,890,896 shares of Class A common stock beneficially owned by Susan Lieberman Dell Separate Property Trust (the “SLD Trust”) and Susan L. Dell, of which Mr. Dell may be deemed the beneficial owner. Mr. Dell’s address is c/o Dell Technologies Inc., One Dell Way, Round Rock, Texas 78682.
(3) The shares of Class C common stock shown as beneficially owned by Mr. Sweet include 681,818 shares of Class C common stock that Mr. Sweet either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2021.
(4) The shares of Class C common stock shown as beneficially owned by Mr. Clarke include 200,000 shares of Class C common stock held by family trusts of which Mr. Clarke and his spouse serve as co-managing trustees, as to which Mr. Clarke has shared voting power and shared dispositive power.
(5) The shares of Class C common stock shown as beneficially owned by Mr. Dorman include 138,584 shares of Class C common stock that Mr. Dorman either may acquire upon the exercise of vested stock options or will
be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2021 and 7,115 shares of Class C common stock issuable pursuant to deferred stock units.
(6) The shares of Class C common stock shown as beneficially owned by Mr. Green include 138,584 shares of Class C common stock that Mr. Green either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2021.
(7) The shares of Class C common stock shown as beneficially owned by Mrs. Kullman include 138,584 shares of Class C common stock that Mrs. Kullman either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2021 and 15,901 shares of Class C common stock issuable pursuant to deferred stock units.
(8) The shares of Class C common stock shown as beneficially owned by Ms. Vojvodich include 24,313 shares of Class C common stock that Ms. Vojvodich either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 26, 2021.
(9) The shares shown as beneficially owned by all directors and executive officers as a resultgroup include 1,296,476 shares of its servingClass C common stock that members of the group either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days of April 26, 2021 and 23,016 shares of Class C common stock issuable to members of the group pursuant to deferred stock units.
(10) The information concerning the SLD Trust is based on a Schedule 13G/A filed with the SEC on February 13, 2020 by the SLD Trust, Susan L. Dell, Hexagon Trust Company (the “Trustee”) and Marc R. Lisker (collectively, the “SLD Filing Persons”). The SLD Filing Persons report that, as of December 31, 2019, the SLD Trust is the record holder of the 32,890,896 shares of Class A common stock shown as beneficially owned, and that each of the SLD Trust, Ms. Dell, the Trustee and Mr. Lisker had shared voting power and shared dispositive power over 32,890,896 shares of Class A common stock. The SLD Filing Persons further report that Ms. Dell is the beneficiary of the Trust, the Trustee is the trustee of the Trust and each of Ms. Dell and the Trustee may be deemed to beneficially own the securities beneficially owned by the SLD Trust. The SLD Filing Persons also report that Mr. Lisker is the President of, and may be deemed to beneficially own the securities beneficially owned by, the Trustee. The address of each of the SLD Filing Persons is c/o Hexagon Trust Company, One Liberty Lane East, Hampton, New Hampshire 03842.
(11) The information concerning the SLP stockholders is based on Amendment No. 2 to Schedule 13D filed with the SEC on January 2, 2020, reporting that the SLP stockholders may be deemed to be the beneficial owners, in the aggregate, of 101,685,217 shares of Class B common stock. The shares of Class B common stock shown as beneficially owned by the SLP stockholders consist of 39,047,589 shares of Class B common stock owned of record by SL SPV-2, L.P., 40,084,313 shares of Class B common stock owned of record by Silver Lake Partners IV, L.P., 589,774 shares of Class B common stock owned of record by Silver Lake Technology Investors IV, L.P., 21,697,586 shares of Class B common stock owned of record by Silver Lake Partners V DE (AIV), L.P. and 265,955 shares of Class B common stock owned of record by Silver Lake Technology Investors V, L.P. The general partner of SL SPV-2, L.P. is SLTA SPV-2, L.P. and the general partner of SLTA SPV-2, L.P. is SLTA SPV-2 (GP), L.L.C. (“SLTA SPV GP”). The SLP stockholders report that the general partner of each of Silver Lake Partners IV, L.P. and Silver Lake Technology Investors IV, L.P. is Silver Lake Technology Associates IV, L.P., and the general partner of Silver Lake Technology Associates IV, L.P. is SLTA IV (GP), L.L.C. (“SLTA IV”). The SLP stockholders further report that the general partner of each of Silver Lake Partners V DE (AIV), L.P. and Silver Lake Technology Investors V, L.P. is Silver Lake Technology Associates V, L.P., and the general partner of Silver Lake Technology Associates V, L.P. is SLTA V (GP), L.L.C. (“SLTA V”). The SLP stockholders also report that the managing member of each of SLTA SPV GP, SLTA IV and SLTA V is Silver Lake Group, L.L.C. and that Silver Lake Group, L.L.C. may be deemed to have beneficial ownership of the securities held by the SLP stockholders. The SLP stockholders have advised that the managing members of Silver Lake are Egon Durban, Kenneth Hao, Gregory Mondre and Joseph Osnoss. The address of each of the SLP stockholders and entities named above is 2775 Sand Hill Road, Suite 100, Menlo Park, California 94025.
(12) The information concerning Dodge & Cox is based on a Schedule 13G/A filed with the SEC on February 11, 2021. Dodge & Cox reports that, as of December 31, 2020, of the shares of Class C common stock shown as beneficially owned, it had sole voting power over 35,512,226 shares and sole dispositive power over 37,307,662 shares and that Dodge & Cox Stock Fund, an investment company registered under the Investment
Company Act of 1940, had an interest in 21,887,280 shares. The address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, California 94104.
(13) The information concerning Elliott Investment Management L.P. (“EIM”) is based on a Schedule 13G/A filed with the SEC on February 16, 2021. EIM reports that, as of December 31, 2020, of the shares of Class C common stock shown as beneficially owned, it had sole voting power and sole dispositive power over 24,832,943 of the shares. EIM further reports that it is the investment manager of Australian investment offerings.each of Elliott Associates, L.P. and Elliott International, L.P. (“Elliott International” and together with Elliott Associates, the “Elliott Funds”) with respect to the shares of Class C common stock held by the Elliott Funds and/or their respective subsidiaries. EIM further reports that the general partner of EIM is Elliott Investment Management GP LLC (“EIM GP”) and that Paul E. Singer is the sole managing member of EIM GP. The address of each of EIM, EIM GP and Mr. Singer is Phillips Point, East Tower, 777 South Flagler Drive, Suite 1000, West Palm Beach, Florida 33401.
(14) The information concerning BlackRock, Inc. is based on a Schedule 13G filed with the SEC on February 2, 2021. BlackRock, Inc. reports that, as of December 31, 2020, of the shares of Class C common stock shown as beneficially owned, it had sole voting power over 13,621,707 shares and sole dispositive power over 15,575,594 shares. BlackRock, Inc. reports that it is the parent holding company of subsidiaries identified in the Schedule 13G/A that hold shares of the Class C common stock reported in the Schedule 13G/A. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
(15) The information concerning The Vanguard Group is based on a Schedule 13G/A filed with the SEC on February 10, 2021. The Vanguard Group reports that, as of December 31, 2020, of the shares of Class C common stock shown as beneficially owned, it had shared voting power over 239,794 shares, sole dispositive power over 14,460,818 shares and shared dispositive power over 575,554. The Vanguard Group reports that it is the parent holding company of subsidiaries identified in the Schedule 13G/A that hold shares of the Class C common stock reported in the Schedule 13G/A. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
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(17) | The information concerning BlackRock, Inc. is based on a Schedule 13G filed with the SEC on February 8, 2018. BlackRock reports that, as of December 31, 2017, it had sole voting power over 11,668,967 shares of Class V common stock, shared voting power over 3,743 shares of Class V common stock, sole dispositive power over 13,264,814 shares of Class V common stock and shared dispositive power over 11,518 shares of Class V common stock. The address of BlackRock is 55 East 52nd Street, New York, New York 10055. |
REPORT OF THE AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in its oversight of the financial reporting process of Dell Technologies Inc. (the “Company”). The Audit Committee’s responsibilities are more fully described in its charter, which is accessible on the Company’s website.
Management has the primary responsibility for the preparation and integrity of the Company’s financial statements, accounting and financial reporting principles and internal controls and procedures. The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion thereon.
The Audit Committee reports that it has:
•reviewed and discussed with the Company’s management the audited consolidated financial statements for the fiscal year ended February 2, 2018;January 29, 2021;
•discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, Communications with Audit Committees, as adopted byapplicable requirements of the Public Company Accounting Oversight Board;Board and the SEC;
•received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence from the Company; and
•based on the review and discussions referred to herein, recommended to the Board of Directors, and the Board of Directors has approved, that the audited consolidated financial statements be included in the Company’s Annual Reportannual report on Form 10-K for the fiscal year ended February 2, 2018,January 29, 2021, for filing with the Securities and Exchange Commission.
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| | | AUDIT COMMITTEE |
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| | | AUDIT COMMITTEE |
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| | | Ellen J. Kullman,William D. Green, Chair
David W. Dorman William D. GreenEllen J. Kullman
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ADDITIONAL INFORMATION
Director Nomination Process
Director Qualifications -– The Board of Directors has adopted guidelines for qualifications of director candidates, which are described above under “Proposal 1 – Election of Directors – Director Qualifications and Information.” In addition, all candidates must possess the aptitude or experience to understand fully the legal responsibilities of a director and the governance processes of a public company, as well as the personal qualities to be able to make a substantial active contribution to Board deliberations. Further, each candidate must be willing to commit sufficient time to discharge the duties of Board membership and should have sufficient years available for service to make a significant contribution to Dell Technologies over time.
Selection and Nomination Process -– Whenever a vacancy occurs on the Board of Directors with respect to a Group I director, either because of a newly created director position or a serving director’s death, resignation, removal or retirement, the Board will select a person to fill the vacancy.vacancy, including, to the extent applicable, in accordance with the terms of the Sponsor Stockholders Agreements, as described under “Proposal 1 – Election of Directors – Stockholder Arrangements – Stockholder Rights to Nominate Directors.” The new director will serve as a Group I director until the annual meeting of stockholders at which the director’s term expires and until the director’s successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification or removal. Vacancies in the Board of Directors with respect to Group II directors or Group III directors under the Dell Technologies certificate of incorporation will be filled by vote of the applicable class of stockholders, as described under “Proposal 1 – Election of Directors – Director Groups.”
The Board of Directors may use any methods it deems appropriate to identify candidates for Board membership, including recommendations from current Board members and recommendations from stockholders. The Board also may engage outside search firms to identify suitable candidates.
The Board of Directors may engage in any investigation and evaluation processes it deems appropriate, including, in addition to a review of a candidate’s background, characteristics, qualities and qualifications, personal interviews with the candidate.
Stockholder Recommendations to the Board of Directors -– Dell Technologies stockholders may recommend individuals to the Board of Directors for consideration as director candidates by submitting candidates’ names and appropriate background and biographical information to the Board of Directors, c/o Board Liaison, Dell Technologies Inc., One Dell Way, Round Rock, Texas 78682. If the appropriate information is provided in a timely manner, the Board generally will consider these candidates in substantially the same manner as it considers other Board candidates. Dell Technologies stockholders also may nominate director candidates by following the advance notice provisions of the Dell Technologies bylaws, as described below under “– Stockholder Proposals for Next Year’s Annual Meeting – ProposalProposals for Consideration at Next Year’s Annual Meeting – Bylaw Provisions.”
Stockholder Nominations -– Stockholders who wish to nominate an individual for election as a director, rather than recommending a candidate for nomination by the Board of Directors, must follow the procedures described in the Dell Technologies bylaws. Those procedures are described below under “– Stockholder Proposals for Next Year’s Annual Meeting – ProposalProposals for Consideration at Next Year’s Annual Meeting – Bylaw Provisions.”
Re-Election of Existing Directors -– In considering whether to recommend directors who are eligible to stand for re-election, the Board of Directors may consider a variety of factors, including a director’s past contributions to the Board and ability to continue to contribute productively, attendance at Board and committee meetings and compliance with Dell Technologies’our Corporate Governance Principles (including satisfying the expectations for individual directors), as well as whether the director continues to possess the attributes, capabilities and qualifications considered necessary or desirable for Board service, the results of the annual Board self-evaluation, the independence of the director and the nature and extent of the director’s activities on behalf of companies other than Dell Technologies. No candidate will be nominated for election to the Board if the candidate’s service for the new term would begin after his or herthe candidate’s 72nd birthday.
Stockholder Proposals for Next Year’s Annual Meeting
Stockholder proposals will be eligible for consideration for inclusion in the proxy statement and form of proxy for the 20192022 annual meeting of stockholders in accordance with Rule 14a-8 under the Exchange Act, or Rule 14a-8.
Further, in accordance with the Dell Technologies bylaws, nominations of persons for election to the Board or other stockholder proposals will be eligible for consideration at the 20192022 annual meeting without inclusion in the proxy materials.
Inclusion in Next Year’s Proxy Statement -– A stockholder who wishes to present a proposal (other than a nomination of persons for election to the Board) for inclusion in next year’s proxy statement in accordance with Rule 14a-8 must deliver the proposal to Dell Technologies’ principal executive offices no later than the close of business on January 15, 2019.19, 2022. Submissions must be addressed to Dell Technologies Inc., One Dell Way, Round Rock, Texas 78682, Attn: Corporate Secretary. The submission by a stockholder of a proposal for inclusion in the proxy statement is subject to regulation by the SEC under Rule 14a-8.
ProposalProposals for Consideration at Next Year’s Annual Meeting–
•Bylaw Provisions – - In accordance with the Dell Technologies bylaws, a stockholder who desires to present a nomination of persons for election to the Board or other proposal for consideration at next year’s annual meeting, but not for inclusion in next year’s proxy statement, must deliver the proposal no earlier than February 25, 201922, 2022 and no later than the close of business on March 27, 201924, 2022 unless we publicly announce a different submission deadline in accordance with our bylaws.
The submission must contain the information specified in the our bylaws, including a description of the proposal and a brief statement of the reasons for the proposal, the name and address of the stockholder (as they appear in Dell Technologies’ stock transfer records), the number of Dell Technologies shares beneficially owned by the stockholder, and a description of any material direct or indirect financial or other interest that the stockholder (or any affiliate or associate) may have in the proposal. For information about these requirements, see the Dell Technologiesyou should refer to our bylaws, which we have filed with the SEC. Proposals must be addressed to Dell Technologies Inc., One Dell Way, Round Rock, Texas 78682, Attn: Corporate Secretary.
The provisions of our bylaws concerning notice of proposals by stockholders are not intended to affect any rights of stockholders to seek inclusion of proposals in our proxy statement under Rule 14a-8.
•Voting by Company’s Proxy Holders on Proposals Presented at Meeting – - For any proposal a stockholder does not submit for inclusion in next year’s proxy statement, but instead seeks to present directly at next year’s annual meeting in accordance with the advance notice provisions of our bylaws described above, the Company’s proxy holders may vote their proxies in their discretion, notwithstanding the stockholder’s compliance with such advance notice provisions, if the Company advises the stockholders in next year’s proxy statement about the nature of the matter and how the Company’s proxy holders intend to vote on such matter, except where the stockholder solicits proxies in the manner contemplated by, and complies with, specified provisions of the SEC’s proxy rules.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, specified officers and persons who beneficially own more than 10% of a registered class of Dell Technologies common stock, which currently is the Class V common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of such class of common stock and other equity securities of Dell Technologies. The reporting persons are required by SEC rules to furnish Dell Technologies with copies of all Section 16(a) reports they file. Based solely on a review of Section 16(a) reports furnished to Dell Technologies for Fiscal 2018, or written representations that no other reports were required, we believe that our Section 16(a) reporting persons complied with all applicable filing requirements for Fiscal 2018.
Certain Relationships and Related Transactions
Review, Approval or Ratification of Transactions with Related Persons
The Audit Committee, in accordance with its charter and with a written policy adopted by the Board of Directors as of September 7, 2016, is charged with the responsibility to review and approve or ratify any transactions with related persons. Under our policy, a related person transaction is any transaction, arrangement or relationship (1) in an amount exceeding $120,000 in which Dell Technologies or any of its subsidiaries is a participant and in which a related person has a direct or indirect material interest within the meaning of Item 404 of the SEC’s Regulation S-K and (2) that would be required to be disclosed by Dell Technologies in its SEC filings under Item 404. For purposes of the policy, a related person is a director (including a director nominee) or executive officer of
Dell Technologies, a person known by us to be the beneficial owner of more than 5% of any class of our voting securities at the time of the occurrence or existence of the transaction, or an immediate family member (as defined in Item 404) of any of the foregoing persons.
In determining whether to approve a related person transaction, the Audit Committee is required to consider, among other factors, the following factors to the extent relevant to the transaction:
•whether the terms are fair to Dell Technologies or its subsidiary and on the same basis that would apply if the transaction did not involve a related person;
•whether there are business reasons for Dell Technologies or its subsidiary to enter into the transaction;
•whether a transaction in which a director has a direct or indirect material interest would impair the independence of a non-employee director under NYSE and SEC standards or, to the director’s status as an “outside director” under Section 162(m) of the Internal Revenue Code orextent applicable, the director’s status as a “non-employee director” pursuant to Rule 16b-3 under the Exchange Act; and
•whether the transaction would present an improper conflict of interest for any director or executive officer.
Related persons referred to in the following description of certain relationships and transactions include Michael S. Dell, the MD stockholders (as defined in Annex A), the MSD Partners stockholders (as defined in Annex A), the SLP stockholders (as defined in Annex A), BlackRock, Inc. and Dodge & Coxfollowing persons based on the basis of their beneficial ownership of more than 5% of a class of our outstanding common stock.stock during Fiscal 2021, or their affiliates or other related entities: Michael S. Dell; the MD stockholders (as defined in Annex A to this proxy statement); the SLP stockholders (as defined in Annex A to this proxy statement); Dodge & Cox; affiliates of GIC Private Limited, or the GIC Entities; BlackRock, Inc.; and The Vanguard Group. See “Security Ownership of Certain Beneficial Owners and Management” for information about the beneficial ownership of our outstanding common stock as of April 26, 2018 by each of these persons.2021 (except as otherwise indicated). Mr. Dell also serves as the Chairman and Chief Executive Officer of Dell Technologies. As of December 31, 2020, the GIC Entities reported that they had ceased to beneficially own more than 5% of a class of our outstanding common stock.
Unless the context indicates otherwise, reference in this section to “we,” “us,” “our,” the “Company” and “Dell Technologies” means Dell Technologies Inc. and its consolidated subsidiaries.
The agreements and arrangements described below under “– Certain Stockholder Agreements and Arrangements” were entered into before or as of September 7, 2016, which was the date on which our Class V common stock was listed on the NYSE, the Audit Committee composed solely of independent directors was constituted, and the written policy summarized above became effective.
Transactions with Michael S. Dell and Other Related Persons
Under a long-standing Dell Technologies policy, Mr. Dell is required to fly privately when traveling. Mr. Dell owns a private aircraft through a wholly-owned limited liability company. For Mr. Dell’s business flights, Dell Technologies leases the plane from the limited liability company and engages a third-party flight services company to act as its agent in operating the aircraft, providing flight personnel and performing other services. Dell Technologies pays the flight services company a fee attributable to Mr. Dell’s business travel on the aircraft and also pays monthly rent to the limited liability company that owns the aircraft. During Fiscal 2018,2021, Dell Technologies paid approximately $2.7$0.84 million for Mr. Dell’s business travel through these arrangements. Mr. Dell directly pays all of the costs of operating the aircraft for all personal flights.
Mr. Dell reimburses Dell Technologies for costs related to his or his family’s personal security protection. Reimbursements for this purpose in Fiscal 20182021 totaled approximately $1.4$1.6 million.
Mr. Dell also holds a non-controlling equity interest in, and appoints a representative to serve on the board of directors of, a landscaping services company. During Fiscal 2018, Dell Technologies’ third-party facilities maintenance vendor subcontracted its landscaping obligations to the landscaping services company. The landscaping services company was paid approximately $662,052 in Fiscal 2018 for landscaping services to Dell Technologies. Future annual payments under this arrangement are expected to be a minimum of $575,000.
Entities affiliated with MSD Capital, L.P., the investment firm that exclusively manages the capital of Mr. Dell and his family, including portfolio companies of the MSD Partners stockholders, as well asCapital, L.P. or its affiliates, the Michael & Susan Dell Foundation and other entities affiliated with Mr. Dell purchase services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. These entities paid Dell Technologiestransactions totaled approximately $2.1$2.0 million for services and products in Fiscal 2018.
2021.
Entities affiliated with Silver Lake, Partners, including portfolio companies of the SLP stockholders or their affiliates, purchase services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. These entities paid Dell Technologiestransactions totaled approximately $54.8$17.3 million for services and products in Fiscal 2018.
2021. In addition, Dell Technologies paid these entities approximately $4.3 million for the purchase ofpurchases products and services from these entities in the ordinary course of business and reimburses certain expenses under the SLP Stockholders Agreement, as described below. These transactions totaled approximately $68.5 million in Fiscal 2018.2021.
BlackRock, Inc. purchases services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. BlackRock, Inc. paid Dell Technologies approximately $2.3 million for services and products in Fiscal 2018.
Dodge & Cox purchases services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. Dodge & Cox paid Dell TechnologiesThese transactions totaled approximately $2.0$4.2 million for services and products in Fiscal 2018.2021.
CertainThe GIC Entities purchase services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $4.8 million for services and products in Fiscal 2021.
BlackRock, Inc. and certain of its affiliates purchase services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $17.5 million for services and products in Fiscal 2021.
The Vanguard Group purchases services or products from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $25.2 million for services and products in Fiscal 2021.
Relationships and Transactions Under Stockholder Agreements and Arrangements
As previously reported, Dell Technologies is a party to variousIn connection with the Company’s Class V transaction, which was completed on December 28, 2018, the Company entered into new stockholders agreements and amended and restated some existing stockholders agreements and other arrangements with Mr. Dell, the MD stockholders, the MSD PartnersSLP stockholders, Venezio Investments Pte. Ltd., an affiliate of Temasek Holdings (Private) Limited, referred to as Temasek, and the Company’s executive officers, among others. For more information about the Class V transaction, see “Proposal 1 – Election of Directors – Class C Vote for Group IV Director.”
MD Stockholders Agreement; SLP Stockholders Agreement –Effective as of December 25, 2018, Dell Technologies entered into the MD Stockholders Agreement and the SLP Stockholders Agreement described under “Proposal 1 – Election of Directors – Stockholder Arrangements.” The MD stockholders are parties to the SLP Stockholders Agreement solely with respect to the specified provisions relating to the tag-along rights described below, certain representations, and our executive officers entered into before orprovisions relating to certain tax matters. The Sponsor Stockholders Agreements contain provisions relating to rights, obligations and agreements of the parties as the owners of September 7, 2016 that, among other matters:
require Dell Technologies common stock, including provisions relating to obtain the approvalcomposition of the Board of Directors and its committees and provisions relating to transfers of Dell Technologies securities.
Under the Sponsor Stockholders Agreements, as described under “Proposal 1 – Election of Directors – Stockholder Arrangements,” each of the MD stockholders and the SLP stockholders before Dell Technologieshave specified rights to nominate directors and to have their nominees serve on Board committees and have specified obligations to vote for director nominees.
The SLP Stockholders Agreement permits the SLP stockholders to terminate certain governance-related provisions of the agreement, including the director nomination and support obligations, in their sole discretion at any time at which they beneficially own less than 5% of the issued and outstanding shares of Class C common stock (after giving effect to the conversion of all shares of common stock owned by the SLP stockholders into Class C common stock). The MD Stockholders Agreement permits the MD stockholders to terminate the agreement if the SLP Stockholders Agreement is terminated. The MD Stockholders Agreement also provides that any termination, amendment or waiver of certain of Dell Technologies’ subsidiaries may take specified actions;rights under the agreement will require the consent of each Group I director.
Under the Sponsor Stockholders Agreements, the MD stockholders and the SLP stockholders are subject to provisions that, with specific exceptions, restrict the sale or other transfer of “DTI securities,” which consist of
outstanding shares of the Class A common stock, Class B common stock, Class C common stock and (if and when issued) Class D common stock, any equity or debt securities of Dell Technologies exercisable or exchangeable for, or convertible into, our common stock, or any option, warrant or other right to acquire any of our common stock or such equity or debt securities.
Under the SLP Stockholders Agreement, if the MD stockholders propose to (1) transfer all or a portion of their DTI securities equal to 10% or more of the then-outstanding common stock to any person (other than their permitted transferees) or (2) enter into a sale or business combination transaction with any person not affiliated with the MD stockholders or Dell Technologies involving the transfer of a majority of the fully-diluted common stock or of the aggregate voting power of the common stock or substantially all of the assets of Dell Technologies and its subsidiaries (subject to specified qualifications and exceptions), the SLP stockholders may exercise tag-along rights to sell their DTI securities on the same terms, conditions and price as the MD stockholders, subject to certain limitations. The tag-along rights were specified to expire on the earlier to occur of (a) 18 months after the completion of the Class V transaction and (b) such date as the MD stockholders no longer beneficially own common stock representing a majority of the common stock beneficially owned by them immediately following the closing of Dell Inc.’s going-private transaction on October 29, 2013. As result, no such rights remained in effect for any period after June 28, 2020.
The Sponsor Stockholders Agreements provide for a renunciation of corporate opportunities presented to any director or officer of Dell Technologies or any of its subsidiaries who is also a director, officer, employee, managing director or other affiliate of (1) MSD Partners L.P. or its affiliates or other MSD Partners stockholders (as defined in Annex A to this proxy statement) (other than Michael Dell for so long as he is an executive officer of Dell Technologies or any specified subsidiary), under the MD Stockholders Agreement, or (2) Silver Lake Management Company III, L.L.C., Silver Lake Management Company IV, L.L.C. and their respective affiliated management companies and investment vehicles, or the SLP stockholders, under the SLP Stockholders Agreement. Further, Dell Technologies has agreed, subject to certain exceptions, to indemnify the MD stockholders and specified affiliated persons under the MD Stockholders Agreement and the SLP stockholders and specified affiliated persons under the SLP Stockholders Agreement from certain losses arising out of the indemnified persons’ investment in, or actual, alleged or deemed control of or ability to influence, Dell Technologies.
Under the MD Stockholders Agreement, Dell Inc. is obligated to pay directly or reimburse the ongoing reasonable out-of-pocket costs and expenses incurred by the MD stockholders in connection with their investment in the Company, including fees, expenses and reasonable out-of-pocket disbursements of independent accountants, outside legal counsel, consultants and other independent professionals and organizations and other services retained by the MD stockholders or any of their affiliates. In Fiscal 2021, Dell Inc. paid directly or reimbursed a total of $0.7 million of costs and expenses incurred by the MD stockholders or their affiliates pursuant to the MD Stockholders Agreement.
Under the SLP Stockholders Agreement, Dell Inc. is obligated to pay directly or reimburse (1) the ongoing reasonable out-of-pocket costs and expenses incurred by the SLP stockholders in connection with their investment in the Company, including fees, expenses and reasonable out-of-pocket disbursements of independent accountants, outside legal counsel, consultants and other independent professionals and organizations and other services retained by the SLP stockholders or any of their affiliates, (2) the reasonable out-of-pocket costs and expenses of the SLP stockholders or their affiliates for their “value creation” personnel and/or employees, to the extent that the Company has requested such personnel and/or employees to provide such services to the Company, and (3) the costs and expenses for such “value creation” personnel and/or employees.
Amended Registration Rights Agreement –Before the Class V transaction, Dell Technologies was a party to an Amended and Restated Registration Rights Agreement, dated as of September 7, 2016, with the MD stockholders, the MSD Partners stockholders (as defined in Annex A to this proxy statement), the SLP stockholders, Temasek and the management stockholders party thereto, referred to as the Registration Rights Agreement. The Registration Rights Agreement provided that the stockholder parties thereto, their affiliates and certain of their transferees had the right, under certain circumstances and subject to certain restrictions, to require Dell Technologies to register for resale the shares of the Class C common stock (including shares of Class C common stock issuable upon any
conversion of the Class A common stock, the Class B common stock and the Class D common stock) to be sold by them. The Registration Rights Agreement required that, if requested by the managing underwriter or underwriters in an underwritten offering, each of Dell Technologies and each stockholder party thereto would agree, and Dell Technologies would cause its executive officers to agree, during the period beginning seven days before the effective date of Dell Technologies’ registration statement filed in connection with an IPO (as defined in the agreement), and ending 180 days thereafter, not to offer, sell, pledge, transfer, loan, grant any option to purchase or short sell, or otherwise dispose of, any securities of Dell Technologies or securities convertible or exchangeable into such securities.
Effective as of December 25, 2018, Dell Technologies entered into a Second Amended and Restated Registration Rights Agreement with the MD stockholders, the MSD Partners stockholders, the SLP stockholders, Temasek and the management stockholders parties thereto, referred to as the Amended Registration Rights Agreement, which amended and restated the Registration Rights Agreement. Under the Amended Registration Rights Agreement, the completion of the Class V transaction is treated as an IPO for which a lock-up of securities is requested or required. As a result, the parties thereto were subject to the transfer restrictions described in the preceding paragraph for 180 days following the completion of the Class V transaction, subject to the exceptions set forth in the Amended Registration Rights Agreement. Dell Technologies and the parties to the Amended Registration Rights Agreement have entered into amendments to the Amended Registration Rights Agreement to extend the deadline, most recently to June 30, 2021, by which Dell Technologies is required, under certain circumstances and subject to certain restrictions, to register for resale the shares of the Class C common stock (including shares of Class C common stock issuable upon any conversion of the Class A common stock, the Class B common stock and the Class D common stock) held by specified stockholder parties. Under the Amended Registration Rights Agreement, as amended in December 2020, the deadline may be extended for additional periods of up to three months each upon the written consent of the Company and the SLP stockholders.
Amended Management Stockholders Agreement –Effective as of December 25, 2018, Dell Technologies entered into a Second Amended and Restated Management Stockholders Agreement, referred to as the Amended Management Stockholders Agreement, with the MD stockholders, the SLP stockholders and the management stockholders parties thereto, which amended and restated the Amended and Restated Management Stockholders Agreement, dated as of September 7, 2016, by and among the Company, the MD stockholders, the MSD Partners stockholders, the SLP stockholders and the management stockholders, referred to as the Management Stockholders Agreement.
Under the Amended Management Stockholders Agreement, the transfer restrictions applicable to the management stockholders under the Management Stockholders Agreement were amended to enable such parties, following the 180-day period after the completion of the Class V transaction, to sell shares of common stock, subject to certain volume limitations. Such transfer restrictions, along with the specified sale (put) rights, were specified to terminate after 18 months following the end of the lock-up period or earlier upon consummation of any underwritten registered offering of shares of Class C common stock (subject to any applicable underwriter lock-up). As result, no such limitations remained in effect for any period after June 28, 2020. Equity awards granted after the completion of the Class V transaction were not subject to such transfer restrictions, but rather to the terms of such awards.
Amended Class C Stockholders Agreement –Effective as of December 25, 2018, Dell Technologies entered into an Amended and Restated Class C Stockholders Agreement with the MD stockholders, the SLP stockholders and Temasek, referred to as the Amended Class C Stockholders Agreement, which amended and restated the Class C Stockholders Agreement, dated as of September 7, 2016, among the Company, the MD stockholders, the MSD Partners stockholders, the SLP stockholders and Temasek, referred to as the Class C Stockholders Agreement.
Under the Amended Class C Stockholders Agreement, the Existing Class C Stockholders’ tag-along rights with respect to a transfer of DTI securities by the MD stockholders were specified to survive for up to 18 months following the completion of the Class V transaction, solely in respect of a transfer of DTI securities by the MD stockholders equal to 10% or more of the then-outstanding common stock. As result, no such rights remained in effect for any period after June 28, 2020. Further, the Existing Class C Stockholders were subject to provisions restricting the transfer of DTI securities held by them, subject to certain exceptions, for 180 days following the
completion of the Class V transaction. Although the Class C Stockholders Agreement would not have prohibited Temasek from making transfers of Class C common stock in accordance with the terms and conditions of the agreement after October 29, 2018, subject to the MD stockholders’ right of first offer before the end of the lock-up period, the Amended Class C Stockholders Agreement prohibited Temasek from making transfers of Class C common stock during the full 180-day lock-up period following the completion of the Class V transaction and eliminated the MD stockholders’ right of first offer. During such 180-day period, any waiver of such transfer restrictions would have required the consent of Dell Technologies, with the approval of the Special Committee of the Board of Directors formed to evaluate the Class V transaction and other potential alternatives solely on behalf of, and solely in the interests of, the holders of Class V common stock, which we refer to as the Special Committee.
Amended Class A Stockholders Agreement –Effective as of December 25, 2018, Dell Technologies entered into a Second Amended and Restated Class A Stockholders Agreement, referred to as the Amended Class A Stockholders Agreement, with the MD stockholders, the SLP stockholders and certain other stockholdersholders of Dell Technologies;
obligateClass A common stock, referred to as the New Class A Stockholders, representing less than 1% of the outstanding common stock, which amended and restated the First Amended and Restated Class A Stockholders Agreement, dated as of September 7, 2016, among Dell Technologies, the MD stockholders, the MSD Partners stockholders, the SLP stockholders and the New Class A Stockholders, referred to purchase or offeras the Class A Stockholders Agreement. The Class A Stockholders Agreement provided for certain transfer restrictions and other rights and obligations of the New Class A Stockholders with respect to purchase sharesthe DTI securities held by them.
The Amended Class A Stockholders Agreement terminated the tag-along and drag-along provisions of the Class C common stock ownedA Stockholders Agreement and terminated substantive restrictions on transfers of DTI securities by its employees, including its executive officers, in specified circumstances; and
require Dell Technologies in specified circumstances to register with the SEC for public resale sharesNew Class A Stockholders under that agreement following the 180-day period after the completion of the Class C common stock held by certainV transaction. During such 180-day period, any waiver of such transfer restrictions would have required the consent of Dell Technologies, stockholders.
In Fiscal 2018, Dell Technologies purchased $2.7 million of Class C common stock from its executive officers, and additional amounts from other employees, pursuant towith the contractual obligations set forth above. Except for the foregoing purchases, in Fiscal 2018, Dell Technologies did not engage in any transaction under anyapproval of the agreements or arrangements in an amount exceeding $120,000.Special Committee.
Code of Ethics for Senior Financial Officers
Dell Technologies maintains a Code of Ethics for Senior Financial Officers that is applicable to our Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer and is available on our website at http://investors.delltechnologies.com under the Corporate Governance & Leadership – Governance Documents section. The Code of Ethics for Senior Financial Officers, which satisfies the requirements of a “code of ethics” under SEC rules, addresses matters specific to those senior financial positions in the Company, including responsibility for the disclosures made in our filings with the SEC, reporting obligations with respect to certain matters and a general obligation to promote honest and ethical conduct within the Company. The Chief Executive Officer, the Chief Financial Officer and the Chief Accounting Officer are also required to comply with our Code of Conduct.Conduct referred to below. We will post any waivers of, or amendments to, the Code of Ethics for Senior Financial Officers on our website at http://investors.delltechnologies.com under the Corporate Governance & Leadership – Governance Documents section in the circumstances and within the time period required under SEC rules.
In addition, Dell Technologies maintains a Code of Conduct that is applicable to all of our employees and officers worldwide and to our Board of Directors. A copy of the Code of Conduct is available on our website at http://investors.delltechnologies.com under the Corporate Governance & Leadership – Governance Documents section.
Stockholders Sharing the Same Last Name and Address
Only one copy of the proxy statement and Annual Reportannual report on Form 10-K for Fiscal 20182021 or Notice of Internet Availability of Proxy for this annual meeting is being sent to stockholders who share the same last name and address, unless they have notified Dell Technologies that they want to continue receiving multiple packages. This practice, known as “householding,” is intended to eliminate duplicate mailings, conserve natural resources and help reduce printing and mailing costs.
If you received a householded“householded” mailing this year and would like to receive a separate copy of the proxy materials, Dell Technologies will deliver a copy promptly upon your request submitted to Dell Technologies in one of the following ways:
•E-mail Dell Technologies’ Investor Relations department at investor_relations@dell.com
•Send your request by mail to Dell Technologies Inc., Investor Relations, One Dell Way, Round Rock, Texas 78682
•Call Dell Technologies’ Investor Relations department at (512) 728-7800
You also may download a copy of any of these materials on our website at http://investors.delltechnologies.com under the News & Events – Upcoming Events & Presentations section.
To opt out of householding for future distributions of proxy materials, you may notify Dell Technologies using the contacts for the Investor Relations department described above.
If you received multiple copies of the proxy materials and would prefer to receive a single copy in the future, you may notify Dell Technologies of your preference using the contacts for the Investor Relations department provided above.
Householding for bank and brokerage accounts is limited to accounts within the same bank or brokerage firm. For example, if you and your spouse share the same last name and address, and you and your spouse each have two accounts containing Dell Technologies stock at two different brokerage firms, your household will receive two copies of the annual meeting materials, one from each brokerage firm. If you are a beneficial owner, you may request information about householding from your bank, brokerage firm or other nominee.
Availability of Annual Report on Form 10-K
This proxy statement is accompanied by our Annual Reportannual report on Form 10-K for Fiscal 2018,2021, which is our annual report to stockholders for the fiscal year. The Form 10-K report is available without exhibitson our website at http://investors.delltechnologies.com under the News & EventsFinancials – Events & PresentationsSEC Filings section and with exhibits at the website maintained by the SEC at www.sec.gov. You may obtain free of charge a printed version of the Form 10-K report, without exhibits, upon request submitted to Dell Technologies in one of the following ways:
•E-mail Dell Technologies’ Investor Relations department at investor_relations@dell.com
•Send your request by mail to Dell Technologies Inc., Investor Relations, One Dell Way, Round Rock, Texas 78682
•Call Dell Technologies’ Investor Relations department at (512) 728-7800
Other Matters
To the extent that this proxy statement is incorporated by reference into any other filing by Dell Technologies under the Exchange Act or the Securities Act of 1933, or the Exchange Act, the sections of this proxy statement entitled “Compensation Committee Report” and “Report of the Audit Committee,” to the extent permitted by the rules of the SEC, will not be deemed incorporated in such a filing, unless specifically provided otherwise in the filing. In addition, such sections will not be deemed to be soliciting material.material for purposes of the solicitation of proxies in connection with the annual meeting.
Except as stated otherwise, allAll website addresses contained in this proxy statement are intended to be inactive, textual references only. The information on, or accessible through, any website (including the Dell Technologies website) identified in this proxy statement is not a part of, and is not incorporated by reference into, this proxy statement.
Annex A
SELECTED DEFINITIONS
Selected Definitions
A reference in this proxy statement to:
“•Class V Group” or“DHI Group” means (1) the assets and liabilities of Dell Technologies that are intended to be tracked by the authorized Class V common stock, which initially consists solely of Dell Technologies’ economic interest in the VMware business as of the completion of the acquisition by merger of EMC Corporation by Dell Technologies, which are referred to as the “Class V Group,” and (2) the remaining assets and liabilities of Dell Technologies that are intended to be tracked by the DHI Group common stock (including a retained interest in the Class V Group, or “inter-group interest”), which are referred to as the “DHI Group.”
“Dell Technologies Bylaws” means the Amended and Restated Bylaws of Dell Technologies.
“Dell Technologies Certificate” means the FourthFifth Amended and Restated Certificate of Incorporation of Dell Technologies.
“•DHI Group common stock” means collectively the classes of Dell Technologies common stock, each with a par value $0.01 per share, designated as Class A common stock, Class B common stock, Class C common stock and Class D common stock.
“MD stockholders” means Michael S. Dell and the Susan Lieberman Dell Separate Property Trust and any person to whomwhich either of them would be permitted to transfer any equity securities of Dell Technologies under the Dell Technologies Certificate.
•“MSD Partners stockholders” means MSDC Denali Investors, L.P., a Delaware limited partnership, and MSDC Denali EIV, LLC, a Delaware limited liability company, and any person to whomwhich either of them would be permitted to transfer any equity securities of Dell Technologies under the Dell Technologies Certificate.
“•Number of Retained Interest Shares” means the proportionate undivided interest, if any, that the DHI Group may be deemed to hold in the assets, liabilities and businesses of the Class V Group in accordance with the Dell Technologies Certificate.
“Publicly Traded” means with respect to shares of capital stock or other securities, such shares or other securities traded on a U.S. securities exchange.
“Retained Interest Dividend Amount” means, if the DHI Group has an inter-group interest in the Class V Group on the record date for any dividend on the Class V common stock, then concurrently with the payment of any dividend on the outstanding shares of Class V common stock:
if such dividend consists of cash, U.S. Publicly Traded securities (other than shares of Class V common stock) or other assets, Dell Technologies will attribute to the DHI Group, referred to as a Retained Interest Dividend, an aggregate amount of cash, securities or other assets, or a combination thereof, at the election of the Dell Technologies Board of Directors (the “Retained Interest Dividend Amount”), with a fair value equal to the amount (rounded, if necessary, to the nearest whole number) obtained by multiplying the Number of Retained Interest Shares as of the record date for such dividend by the fair value of such dividend payable with respect to each outstanding share of Class V common stock, as determined in good faith by the Dell Technologies Board of Directors; or
if such dividend consists of shares of Class V common stock (including dividends of securities convertible or exchangeable or exercisable for shares of Class V common stock), the Number of Retained Interest Shares will be increased by a number equal to the amount (rounded, if necessary, to
the nearest whole number) obtained by multiplying the Number of Retained Interest Shares as of the record date for such dividend by the number of shares (including any fraction of a share) of Class V common stock issuable for each outstanding share of Class V common stock in such dividend.
“Retained Interest Redemption Amount” means an aggregate amount to be attributed to the DHI Group in the event of certain redemptions of a portion of the outstanding shares of Class V common stock in connection with a Class V Group Disposition (as defined in the Dell Technologies Certificate), consisting of cash, securities (other than securities of Dell Technologies) or other assets, or any combination thereof, subject to adjustment as described in the Dell Technologies Certificate, with an aggregate fair value equal to the difference between (x) the Class V Group Net Proceeds and (y) the portion of the Class V Group Allocable Net Proceeds (each as defined in the Dell Technologies Certificate) applied to such redemption as determined in accordance with the Dell Technologies Certificate.
“SLP stockholders” means Silver Lake Partners III, L.P., a Delaware limited partnership, Silver Lake Technology Investors III, L.P., a Delaware limited partnership, Silver Lake Partners IV, L.P., a Delaware limited partnership, Silver Lake Technology Investors IV, L.P., a Delaware limited partnership, and SLP Denali Co-Invest, L.P., a Delaware limited partnership, and any person to whomwhich any of them would be permitted to transfer any equity securities of Dell Technologies under the Dell Technologies Certificate.
For purposesAnnex B
Reconciliation of the Dell Technologies Certificate and the Dell Technologies Bylaws, the following terms have the meanings set forth below:Non-GAAP Financial Measures
(in billions)
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| Fiscal Year Ended
January 29, 2021 |
| Net revenue | $ | 94.2 |
| Non-GAAP adjustments: | | |
| Impact of purchase accounting (a) | | 0.2 |
| Non-GAAP net revenue | $ | 94.4 |
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| Operating income | $ | 5.1 |
| Non-GAAP adjustments: | | |
| Amortization of intangibles | | 3.4 |
| Impact of purchase accounting (a) | | 0.2 |
| Transaction-related expenses (b) | | 0.3 |
| Stock-based compensation expense | | 1.6 |
| Other corporate expenses (c) | | 0.2 |
| Non-GAAP operating income | $ | 10.8 |
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| Net income | $ | 3.5 |
| Non-GAAP adjustments: | | |
| Amortization of intangibles | | 3.4 |
| Impact of purchase accounting (a) | | 0.2 |
| Transaction-related expenses (b) | | (0.2) | |
| Stock-based compensation expense | | 1.6 |
| Other corporate expenses (c) | | 0.1 |
| Fair value adjustments on equity investments | | (0.6) | |
| Aggregate adjustment for income taxes | | (1.2) | |
| Non-GAAP net income | $ | 6.8 |
“Aggregate Group II Director Votes” means, as__________
(a) Impact of the date of measurement:
seven votes for all matters subjectpurchase accounting includes non-cash purchase accounting adjustments that are primarily related to the voteEMC merger transaction.
(b) Transaction-related expenses consist of the Dell Technologies Boardacquisition, integration, and divestiture related costs.
(c) Other corporate expenses consist of Directors (whether by a meeting or by written consent) for so longseverance, facility action, and other costs as the MD stockholders beneficially own an aggregate of more than 35% of the issued and outstanding DHI Group common stock, or, so longwell as the foregoing is not applicable:
three votes for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the MD stockholders beneficially own an aggregate number of shares of DHI Group common stock equal to more than 66 2/3% of the Reference Number;
two votes for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the MD stockholders beneficially own an aggregate number of shares of DHI Group common stock equal to more than 33 1/3% but less than or equal to 66 2/3% of the Reference Number;
one vote for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the MD stockholders beneficially own an aggregate number of shares of DHI Group common stock equal to 10% or more but less than or equal to 33 1/3% of the Reference Number; and
zero votes for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the MD stockholders beneficially own an aggregate number of shares of DHI Group common stock less than 10% of the Reference Number;
except that subject to the immediately succeeding sentence, at any time that the MD stockholders beneficially own a number of shares of DHI Group common stock equal to or greater than 1.5 times the number of shares of DHI Group common stock beneficially owned by the SLP stockholders, the Aggregate Group II Director Votes will equal seven votes. Notwithstanding anything in this definition of “Aggregate
Group II Director Votes” to the contrary, on and after a Disabling Event and if at the commencement of such Disabling Event the SLP stockholders beneficially own an aggregate number of shares of DHI Group common stock equal to at least 50% of the Reference Number, then the aggregate number of votes that the Group II directors will be entitled to will be the lesser of (A) the number of votes that the Group II directors would be entitled to without regard to this sentence and (B) that number of votes that then constitutes the Aggregate Group III Director Votes, except that if the Disabling Event is a Disability of Michael S. Dell, then this sentence will cease to apply, and the number of votes of the Group II directors and the Group III directors will be calculated without regard to this sentence, upon the cessation of such Disabling Event, and except that following and during the continuancederecognition of a Disabling Event, if the MD stockholders beneficially own at least a majoritypreviously accrued litigation loss.
“ContentsAggregate Group III Director Votes” means, as of the date of measurement:
three votes for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the SLP stockholders beneficially own a number of shares of DHI Group common stock (other than Class D common stock) equal to more than 66 2/3% of the Reference Number;
two votes for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the SLP stockholders beneficially own a number of shares of DHI Group common stock (other than Class D common stock) representing more than 33 1/3% but less than or equal to 66 2/3% of the Reference Number;
one vote for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the SLP stockholders beneficially own a number of shares of DHI Group common stock (other than Class D common stock) representing 10% or more but less than or equal to 33 1/3% of the Reference Number; and
zero votes for all matters subject to the vote of the Dell Technologies Board of Directors (whether by a meeting or by written consent) for so long as the SLP stockholders beneficially own a number of shares of DHI Group common stock (other than Class D common stock) representing less than 10% of the Reference Number.
“Designation Rights Trigger Event” means the earliest to occur of the following: (1) the consummation of an initial underwritten public offering of DHI Group common stock that is registered under the Securities Act of 1933; (2) with respect to the Class A common stock, the Aggregate Group II Director Votes equaling zero; and (3) with respect to the Class B common stock, the Aggregate Group III Director Votes equaling zero.
“Disability” means any physical or mental disability or infirmity that prevents the performance of Michael S. Dell’s duties as a director or Chief Executive Officer of Dell Technologies or any Domestic Specified Subsidiary (as defined in the Dell Technologies Certificate) (if, in the case of a Domestic Specified Subsidiary, Michael S. Dell is at the time of such disability or infirmity serving as a director or the Chief Executive Officer of such Domestic Specified Subsidiary) for a period of 180 consecutive days.
“Disabling Event” means either the death, or the continuation of any Disability, of Michael S. Dell.
“Reference Number” means 98,181,818 shares of DHI Group common stock (as adjusted for any stock split, stock dividend, reverse stock split or similar event occurring after the EMC merger).
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| May 2021 |
Dear stockholders, customers, partners and friends, As I write this year’s letter, we are still battling the COVID-19 virus in communities and countries around the world. The rapid development of vaccines has given us a light at the end of the tunnel, but there is still a long way to go. Through it all, I’ve been grateful for the role Dell Technologies has played in serving our customers and in helping to keep our society and our economy running. In Fiscal Year 2021, we faced challenges like never before and I’m pleased to report that our Dell Technologies team executed and delivered results for all of you like never before. Our strategy for long-term value creation remains the right one, as you can see from our results: • Record revenue of $94.2 billion • Record cash flow from operations of $11.4 billion • Paid down $5.5 billion in core debt • Ended the year with $15.8 billion total cash and investments
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Through the year, we prioritized the health and safety of our team members and their families. I’m proud of how our Dell team members adapted and kept their focus, deepening our customer and partner relationships as digital transformation accelerated. In the midst of adapting to new ways of living, learning and working, we delivered new innovations in hybrid cloud, edge infrastructure, storage, servers, PCs and services. Our midrange storage business returned to growth, and PowerStore became the fastest growing new architecture we have released. With the launch of APEX, we’re offering the ease and scale of cloud delivered as-a-Service. We are integrating and innovating our own leading capabilities with VMware and across our ecosystem to develop the highly automated, intelligent infrastructure for the Data Era. All of this was made possible because of the company culture we have built over 37 years, the big goals we set for ourselves, and our determination to strive for them every day. This was never more important than in this past year. We listened to our team members to understand their concerns and how we can do better. We took concrete steps to be part of the solutions that will drive our society forward. It is through our scale and technology – backed by our incredible talent - that we drive business growth, create long-term value for all our stakeholders and drive a positive impact in the world.
When it comes to leading in environmental, social, and governance (ESG), we marry who we are with what we do. We take this opportunity and responsibility seriously, making effective governance and transparency an essential part of our ESG strategy.
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Our Social Impact Plan for 2030 serves as an important tool to drive measurable change and ensure we win the right way with key performance indicators in four areas: • Advancing sustainability – we recently announced a new commitment to achieve net zero greenhouse gas (GHG) emissions across scopes 1, 2 and 3 by 2050. • Cultivating inclusion – last year we promoted underrepresented minorities and women at a higher rate than current representation, accelerating our pipeline for leadership. Additionally, we instituted a talent acquisition policy aimed at ensuring that at least one candidate from an underrepresented ethnicity or gender is included in external candidate interview slates, including at the executive officer level. • Transforming lives – with the Government of India’s Ministry of Health and Family Welfare and Tata Trusts, we continue to grow Digital LifeCare – a technology platform for screening and managing noncommunicable diseases and ultimately serving as digital rails to support all future primary health care programs. To date, 100 million people have enrolled. • Upholding ethics and privacy – we launched our privacy trust center for registered Dell My Account users to be able to easily manage their data. This self-service center allows users to access and delete their data and deactivate and re-activate their My Account when they no longer want to access their data.
Looking ahead, we will continue our focus on delivering long-term value, including through the recently announced spin-off of our equity ownership of VMware. As part of this transaction, Dell Technologies and VMware will retain a strong commercial agreement that is unique and differentiated, preserving our relationship while allowing strategic flexibility for both companies. Our joint momentum in road maps and innovation and in sales and support are full steam ahead. We believe deeply in the better-together power of these two great companies as the foundation for the digital future. With this announcement, we will be even stronger. By simplifying our ownership and capital structures, we will unlock shareholder value and unlock new opportunities to serve our customers by innovating and investing in our companies and across our ecosystems.
It is my honor to spend a great deal of my time with our customers, and everyone is eager to put the pandemic behind us. However, we have also seen the possibilities of a more digital, equitable and sustainable future, and we are not going backwards. We used to go to school, to work, to entertainment, to shop. Now everything comes to us, wherever we are. The economy and our society move on data highways. New infrastructure investments are needed to support all this activity, and Dell Technologies stands ready to capture our share of the opportunities ahead. We were there for our customers when they needed us during times of crisis. Now they are turning to us as their strategic partner to build on last year’s investments and accelerate their digital future. This creates huge opportunity for our customers, team members, communities and shareholders.
I am incredibly excited for our data-fueled future and for the amazing role Dell Technologies will play.
Michael S. Dell
Chairman of the Board and Chief Executive Officer
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| | SUBMIT YOUR PROXY BY INTERNET Go to www.proxyvote.com
Use the Internet to submit your proxy and for electronic delivery of information up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on Sunday,Monday, June 24, 2018.21, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to submit your proxy. Alternatively, you may submit your proxy by scanning the QR code provided on page 1 of the proxy statement with your mobile device (you will need your 16-digit control number).
SUBMIT YOUR PROXY BY PHONE - 1-800-690-6903 Use any touch-tone telephone to submit your proxy up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on SundayMonday, June 24, 2018.21, 2021. Have your proxy card in hand when you call and then follow the instructions.
SUBMIT YOUR PROXY BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
ATTEND THE MEETING AND VOTE BY INTERNET Go to www.virtualshareholdermeeting.com/DVMT2018DELL2021
You may attend the Meeting on Monday,Tuesday, June 25, 201822, 2021, at 1:10:00 p.ma.m. Central Time via the Internet at www.virtualshareholdermeeting.com/DVMT2018DELL2021 and vote at the Meeting using the 16-digit control number provided. |
DELL TECHNOLOGIES INC. ONE DELL WAY ROUND ROCK, TX 78682
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x |
| | E46301-P09152D48572-Z79805 | KEEP THIS PORTION FOR YOUR RECORDS |
| | | DETACH AND RETURN THIS PORTION ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
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| DELL TECHNOLOGIES INC. | For
All
| Withhold
All
| For All
Except
| To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the
number(s) of the nominee(s) on the line below.
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| The Board of Directors recommends that you vote FOR each of the Group I and Group II nominees listed under Proposal 1: | ¨ | ¨ | ¨ | | | | |
| 1. Election of Group I Directors | | | | | | | |
| Nominees: | | | | | | | | |
| 01) Michael S. Dell 02) David W. Dorman 02)03) Egon Durban
| 04) William D. Green 03) Ellen J. Kullman05) Simon Patterson
06) Lynn M. Vojvodich | | | | | | | | |
| Election of Group II Director | | | | | | | | |
| Nominee: | | | | | | | | |
| 04) Michael S. Dell | | | | | | | | |
| The Board of Directors recommends that you vote FOR Proposals 2 and 3: | | For | Against | Abstain |
| 2. Ratification of the appointment of PricewaterhouseCoopers LLP as Dell Technologies Inc.'s independent registered public accounting firm for fiscal year ending February 1, 2019January 28, 2022 | ¨ | ¨ | ¨ |
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| 3. Approval, on an advisory basis, of the compensation of Dell Technologies Inc.'s named executive officers as disclosed in the proxy statement | ¨ | ¨ | ¨ |
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| NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof. | | | |
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| For address changes and/or comments, please check this box and write them on the back where indicated. | ¨ | | | | | |
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| NOTE: Please sign as name appears hereon. Joint owners must each sign. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, or in any other representative capacity, please give full title as such. | | | | | |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting of Stockholders, Proxy Statement, Proxy Card and Annual Report on Form 10-K
are available at www.proxyvote.com.
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| | | | E46302-P09152D48573-Z79805 |
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CLASS A COMMON STOCK PROXY
Dell Technologies Inc.
Annual Meeting of Stockholders
June 25, 2018, 1:22, 2021, 10:00 p.m.a.m. Central Time
To be held at www.virtualshareholdermeeting.com/DVMT2018
DELL2021 |
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| THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF DELL TECHNOLOGIES INC.
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The undersigned hereby appoints Richard J. Rothberg, Robert Potts and Janet M. Bawcom,James Williamson, and each of them, with power to act without the other and with power of substitution and resubstitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the reverse side of this form, all the shares of Dell Technologies Inc. Class A Common Stock which the undersigned is entitled to vote and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held on June 25, 201822, 2021 and any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. |
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THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL GROUP I AND GROUP II NOMINEES UNDER PROPOSAL 1, FOR PROPOSALPROPOSALS 2 AND FOR PROPOSAL 3 AND IN THE DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. |
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| Address Changes/Comments: | | | |
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| (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) |
| (Continued and to be marked, dated and signed, on the reverse side) |
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| | SUBMIT YOUR PROXY BY INTERNET Go to www.proxyvote.com
Use the Internet to submit your proxy and for electronic delivery of information up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on Sunday,Monday, June 24, 2018.21, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to submit your proxy. Alternatively, you may submit your proxy by scanning the QR code provided on page 1 of the proxy statement with your mobile device (you will need your 16-digit control number).
SUBMIT YOUR PROXY BY PHONE - 1-800-690-6903 Use any touch-tone telephone to submit your proxy up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on SundayMonday, June 24, 2018.21, 2021. Have your proxy card in hand when you call and then follow the instructions.
SUBMIT YOUR PROXY BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
ATTEND THE MEETING AND VOTE BY INTERNET Go to www.virtualshareholdermeeting.com/DVMT2018DELL2021
You may attend the Meeting on Monday,Tuesday, June 2522, 20182021, at 1:10:00 p.ma.m. Central Time via the Internet at www.virtualshareholdermeeting.com/DVMT2018DELL2021 and vote at the Meeting using the 16-digit control number provided. |
DELL TECHNOLOGIES INC. ONE DELL WAY ROUND ROCK, TX 78682
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x |
| | E46303-P09152D48574-Z79805 | KEEP THIS PORTION FOR YOUR RECORDS |
| | | DETACH AND RETURN THIS PORTION ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
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| DELL TECHNOLOGIES INC. | For
All
| Withhold
All
| For All
Except
| To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the
number(s) of the nominee(s) on the line below.
| | | |
| The Board of Directors recommends that you vote FOR each of the Group I and Group III nominees listed under Proposal 1: | ¨ | ¨ | ¨ | | | | |
| 1. Election of Group I Directors | | | | | | | |
| Nominees: | | | | | | | | |
| 01) Michael S. Dell 02) David W. Dorman 02)03) Egon Durban
| 04) William D. Green 03) Ellen J. Kullman
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| Election of Group III Directors | | | | | | | | |
| Nominees: | | | | | | | | |
| 04) Egon Durban
05) Simon Patterson 06) Lynn M. Vojvodich | | | | | | | | |
| The Board of Directors recommends that you vote FOR Proposals 2 and 3: | | For | Against | Abstain |
| 2. Ratification of the appointment of PricewaterhouseCoopers LLP as Dell Technologies Inc.'s independent registered public accounting firm for fiscal year ending February 1, 2019January 28, 2022 | ¨ | ¨ | ¨ |
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| 3. Approval, on an advisory basis, of the compensation of Dell Technologies Inc.'s named executive officers as disclosed in the proxy statement | ¨ | ¨ | ¨ |
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| NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof. | | | |
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| For address changes and/or comments, please check this box and write them on the back where indicated. | ¨ | | | | | |
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| NOTE: Please sign as name appears hereon. Joint owners must each sign. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, or in any other representative capacity, please give full title as such. | | | | | |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting of Stockholders, Proxy Statement, Proxy Card and Annual Report on Form 10-K
are available at www.proxyvote.com.
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| | | | E46304-P09152D48575-Z79805 |
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CLASS B COMMON STOCK PROXY
Dell Technologies Inc.
Annual Meeting of Stockholders
June 25, 2018, 1:22, 2021, 10:00 p.m.a.m. Central Time
To be held at www.virtualshareholdermeeting.com/DVMT2018
DELL2021 |
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| THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF DELL TECHNOLOGIES INC.
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The undersigned hereby appoints Richard J. Rothberg, Robert Potts and Janet M. Bawcom,James Williamson, and each of them, with power to act without the other and with power of substitution and resubstitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the reverse side of this form, all the shares of Dell Technologies Inc. Class B Common Stock which the undersigned is entitled to vote and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held on June 25, 201822, 2021 and any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. |
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THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL GROUP I AND GROUP III NOMINEES UNDER PROPOSAL 1, FOR PROPOSALPROPOSALS 2 AND FOR PROPOSAL 3 AND IN THE DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. |
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| Address Changes/Comments: | | | |
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| | | | |
| (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) |
| (Continued and to be marked, dated and signed, on the reverse side) |
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| | | | | | | |
| | SUBMIT YOUR PROXY BY INTERNET Go to www.proxyvote.com
Use the Internet to submit your proxy and for electronic delivery of information up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on Sunday,Monday, June 24, 2018.21, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to submit your proxy. Alternatively, you may submit your proxy by scanning the QR code provided on page 1 of the proxy statement with your mobile device (you will need your 16-digit control number).
SUBMIT YOUR PROXY BY PHONE - 1-800-690-6903 Use any touch-tone telephone to submit your proxy up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on SundayMonday, June 24, 2018.21, 2021. Have your proxy card in hand when you call and then follow the instructions.
SUBMIT YOUR PROXY BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
ATTEND THE MEETING AND VOTE BY INTERNET Go to www.virtualshareholdermeeting.com/DVMT2018DELL2021
You may attend the Meeting on Monday,Tuesday, June 2522, 20182021, at 1:10:00 p.ma.m. Central Time via the Internet at www.virtualshareholdermeeting.com/DVMT2018DELL2021 and vote at the Meeting using the 16-digit control number provided. |
DELL TECHNOLOGIES INC. ONE DELL WAY ROUND ROCK, TX 78682
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x |
| | E46305-P09152D48576-P55689 | KEEP THIS PORTION FOR YOUR RECORDS |
| | | DETACH AND RETURN THIS PORTION ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
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| DELL TECHNOLOGIES INC. | For
All
| Withhold
All
| For All
Except
| To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the
number(s) of the nominee(s) on the line below.
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| The Board of Directors recommends that you vote FOR each of the Group I nominees and the Group IV nominee listed under Proposal 1: | ¨ | ¨ | ¨ | | | | |
| 1. Election of Group I Directors | | | | | | | |
| Nominees: | | | | | | | | |
| 01) Michael S. Dell 02) David W. Dorman 02)03) Egon Durban
| 04) William D. Green 03)05) Simon Patterson
06) Lynn M. Vojvodich | | | | | | | | |
| Election of Group IV Director | | | | | | | | |
| Nominee: | | | | | | | | |
| 07) Ellen J. Kullman | | | | | | | | | |
| The Board of Directors recommends that you vote FOR Proposals 2 and 3: | | For | Against | Abstain |
| 2. Ratification of the appointment of PricewaterhouseCoopers LLP as Dell Technologies Inc.'s independent registered public accounting firm for fiscal year ending February 1, 2019January 28, 2022 | ¨ | ¨ | ¨ |
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| 3. Approval, on an advisory basis, of the compensation of Dell Technologies Inc.'s named executive officers as disclosed in the proxy statement | ¨ | ¨ | ¨ |
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| NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof. | | | |
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| For address changes and/or comments, please check this box and write them on the back where indicated. | ¨ | | | | | |
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| NOTE: Please sign as name appears hereon. Joint owners must each sign. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, or in any other representative capacity, please give full title as such. | | | | | |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting of Stockholders, Proxy Statement, Proxy Card and Annual Report on Form 10-K
are available at www.proxyvote.com.
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| | | | E46306-P09152D48577-P55689 |
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CLASS C COMMON STOCK PROXY
Dell Technologies Inc.
Annual Meeting of Stockholders
June 25, 2018, 1:22, 2021, 10:00 p.m.a.m. Central Time
To be held at www.virtualshareholdermeeting.com/DVMT2018
DELL2021 |
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| THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF DELL TECHNOLOGIES INC.
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The undersigned hereby appoints Richard J. Rothberg, Robert Potts and Janet M. Bawcom,James Williamson, and each of them, with power to act without the other and with power of substitution and resubstitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the reverse side of this form, all the shares of Dell Technologies Inc. Class C Common Stock which the undersigned is entitled to vote and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held on June 25, 201822, 2021 and any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. |
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THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL GROUP I NOMINEES AND THE GROUP IV NOMINEE UNDER PROPOSAL 1, FOR PROPOSALPROPOSALS 2 AND FOR PROPOSAL 3 AND IN THE DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. |
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| Address Changes/Comments: | | | |
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| (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) |
| (Continued and to be marked, dated and signed, on the reverse side) |
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| | SUBMIT YOUR PROXY BY INTERNET
Go to www.proxyvote.com
Use the Internet to submit your proxy and for electronic delivery of information up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on Sunday, June 24, 2018. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to submit your proxy. Alternatively, you may submit your proxy by scanning the QR code provided on page 1 of the proxy statement with your mobile device (you will need your 16-digit control number).
SUBMIT YOUR PROXY BY PHONE - 1-800-690-6903
Use any touch-tone telephone to submit your proxy up until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on Sunday, June 24, 2018. Have your proxy card in hand when you call and then follow the instructions.
SUBMIT YOUR PROXY BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
ATTEND THE MEETING AND VOTE BY INTERNET
Go to www.virtualshareholdermeeting.com/DVMT2018
You may attend the Meeting on Monday, June 25, 2018, at 1:00 p.m. Central Time via the Internet at www.virtualshareholdermeeting.com/DVMT2018 and vote at the Meeting using the 16-digit control number provided.
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DELL TECHNOLOGIES INC.
ONE DELL WAY
ROUND ROCK, TX 78682
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
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| | E46307-P09152 | KEEP THIS PORTION FOR YOUR RECORDS
|
| | | DETACH AND RETURN THIS PORTION ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
|
| | | | | | | | | | |
DELL TECHNOLOGIES INC. | For
All
| Withhold
All
| For All
Except
| To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the
number(s) of the nominee(s) on the line below.
| | | |
| The Board of Directors recommends that you vote FOR each of the Group I nominees listed under Proposal 1: | ¨ | ¨ | ¨ | | | | |
| 1. Election of Group I Directors | | | | | | | |
| Nominees: | | | | | | | | |
| 01) David W. Dorman
02) William D. Green
03) Ellen J. Kullman
| | | | | | | | |
| The Board of Directors recommends that you vote FOR Proposals 2 and 3: | | For | Against | Abstain |
| 2. Ratification of the appointment of PricewaterhouseCoopers LLP as Dell Technologies Inc.'s independent registered public accounting firm for fiscal year ending February 1, 2019 | ¨ | ¨ | ¨ |
| | | | | | | | | | |
| 3. Approval, on an advisory basis, of the compensation of Dell Technologies Inc.'s named executive officers as disclosed in the proxy statement | ¨ | ¨ | ¨ |
| | | | | | | | | | |
| NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof.
| | | |
| | | | | | | | | | |
| For address changes and/or comments, please check this box and write them on the back where indicated. | ¨ | | | | | |
| | | | | | | | | | |
| NOTE: Please sign as name appears hereon. Joint owners must each sign. When signing as attorney, executor, administrator, trustee, guardian or corporate officer, or in any other representative capacity, please give full title as such.
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting of Stockholders, Proxy Statement, Proxy Card and Annual Report on Form 10-K
are available at www.proxyvote.com.
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CLASS V COMMON STOCK PROXY
Dell Technologies Inc.
Annual Meeting of Stockholders
June 25, 2018, 1:00 p.m. Central Time
To be held at www.virtualshareholdermeeting.com/DVMT2018
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF DELL TECHNOLOGIES INC.
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The undersigned hereby appoints Richard J. Rothberg and Janet M. Bawcom, and each of them, with power to act without the other and with power of substitution and resubstitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the reverse side of this form, all the shares of Dell Technologies Inc. Class V Common Stock which the undersigned is entitled to vote and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held on June 25, 2018 and any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. |
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THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL GROUP I NOMINEES UNDER PROPOSAL 1, FOR PROPOSAL 2 AND FOR PROPOSAL 3 AND IN THE DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
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| Address Changes/Comments: | | | |
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) |
(Continued and to be marked, dated and signed, on the reverse side) |
