Annual Incentive Awards
Annual incentive awards are generally paid out based on the achievement of one-year performance goals. ISG reserves the discretion to pay out all or a portion of these in the form of equity awards that require further service as a vesting provision. As in prior years, the Compensation Committee based its award of 20212023 bonuses for each Named Executive Officer on its assessment of ISG’s performance and the executive’s individual performance. In determining annual incentive payments for the Named Executive Officers for fiscal 2021,2023, the Compensation Committee took into account ISG’s results relative to expectations, budgets and prior year performance and its assessment of each Named Executive Officer’s contribution in achieving those results. The Compensation Committee believes that this structure, which allows the Committee to make subjective assessments of performance and payouts, is appropriate based on the rapid development of ISG as a comparatively young company operating in a dynamic international business environment and growing both organically and through acquisitions.
In 2021,2023, ISG reported revenue of $278$291.1 million, net income of $6.2 million, operating income of $25$14.6 million, adjusted EBITDA of $37.7 million, GAAP EPSnet income per diluted share of $0.30$0.12 and adjusted EPSnet income per diluted share of $0.44, all record highs.$0.40. Based on the Company’s 20212023 performance and individual performance, the Compensation Committee approved annual incentive award payouts, payable in cash, as follows: (i) for Mr. Connors, paid $2,000,000 with $1,000,000 paid in cash on December 31, 2021, $800,000 paid in cash on or before March 15, 2022 and a grant of restricted stock units on or before March 15, 20222024 with a value on the grant date equal to $200,000; and$1,000,000; (ii) for Mr. Lavieri, paid $750,000 with $375,000 paid in cash on December 31, 2021, $225,000 paid in cash on or before March 15, 2022 and a grant of restricted stock units on or before March 15, 20222024 with a value on the grant date equal to $150,0000$450,000; and (iii) for Mr. Kucinski, a grant of restricted stock units on or before March 15, 2024 with a value on the grant date equal to $60,000.
The Compensation Committee made all payouts of annual incentives in restricted stock units (“RSUs”) in 2023, with a one-year vesting period. In doing so, the Committee sought to provide an additional incentive to the Named Executive Officers to increase returns to stockholders.
Long-Term Equity Incentive Awards
The Compensation Committee has the authority to grant stock options, restricted stock units and other equity awards under the Plan to executive officers, including the Named Executive Officers, and other key employees. The purpose of the Plan is to provide equity as a component of executive compensation to assure competitiveness of total compensation, to motivate executive officers and key employees to focus on long-term Company performance, to align executive compensation with stockholder interests and to retain the services of the executives during the vesting period because, in most instances, the awards will be forfeited if the recipient voluntarily leaves the employ of the Company before the award vests.such awards vest.
The Compensation Committee believes that the executives’ long-term compensation should be directly linked to the Company’s strategic progress and creation of stockholder value. Accordingly, total stockholder return is a key performance metric for our Named Executive Officers. At its discretion, the Compensation Committee periodically has made awards intended to create a meaningful stock incentive in light of the executive’s current position with the Company, personal performance, potential impact and contributions to the growth of the enterprise, marketplace practice and the terms of any individual employment agreements. An additional key consideration in making these awards also is to promote retention of the grantee and long-term service to the Company. Similarly, the Compensation Committee uses long-term equity awards granted to new executives as a means to induce such persons to join the Company.
On June 1, 20212023, the Company granted 118,64498,814 restricted stock units to Mr. Connors, and 63,55970,405 restricted stock units to Mr. Lavieri.Lavieri and 18,528 restricted stock units to Mr. Kucinski. These restricted stock units will vest in equal annual installments on each of the first four anniversaries of the grant date. Additionally, on June 1, 2021,2023, the Company granted 101,695a target of 177,866 performance-based restricted stock units to Mr. Connors. The payout level of Mr. Connors award will be 200% of the target number of restricted stock units upon achievement of the maximum performance goal. This award will be earned at the target level if ISG’s stock price, measured over a ten-trading-day period ending on the third anniversary of the grant date, is $5.25,$7.00, 150% of the target level if the measured market price is $8.50 and will be earned at the maximum level (200% of the target level) if the measured market price equals or exceeds $7.50$9.00 at the end of the performance period, with straight-line interpolation between 100% and 200% of target if the measured marketthese stock price is between $6.00 and $7.50.values. Any earned restricted stock units will then be fully vested and settled in shares of ISG common stock. Any unearned restricted stock units will be forfeited. If Mr. Connors were to achieve the maximum performance goal, an additional $109,000,000$189,120,000 of market value would have been