UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrantx ☒
Filed by a Party other than the Registrant¨ ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
FIRST ADVANTAGE CORPORATION☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to §240.14a-12
First Advantage Corporation
(Name of Registrant as Specified inIn Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ No fee required
☐ Fee paid previously with preliminary materials
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
April 25, 2024
Dear Stockholders:Stockholder:
I am very pleased to invite you to attend the 2009 annual meeting of stockholders ofPlease join us for First Advantage Corporation, a Delaware corporation,Corporation’s Annual Meeting of Stockholders to be held on Friday, June 7, 2024, at 2:00 p.m., Eastern Time. The Annual Meeting will be held in the Eagle Auditorium of our offices, located at 12395 First American Way, Poway, California 92064, on April 28, 2009 at 9:00 a.m. Pacific Time.
For the first time in our company’s history, we are pleased to take advantage of the Securitiesa virtual meeting format only and Exchange Commission rule allowing companies to furnish proxy materials to their stockholders over the Internet. We believe that this e-proxy process expedites stockholders’ receipt of proxy materials, while also lowering the costs and reducing the environmental impact of our annual meeting. On March 18, 2009, we mailed to our stockholders a Notice containing instructions on how to access our 2009 proxy statement and annual report online.
We hope that you arewill be conducted via live audio webcast. You will be able to attend the annual meeting. It is important that youAnnual Meeting online, vote your shares whether or not you are able to attend in person. We urge you to read the proxy statementelectronically and to votesubmit your shares by proxy by filling in the appropriate boxes on the proxy card and returning it promptly or by voting over the Internet or by telephone by following the instructions found on the proxy card(s). If you attend the meeting and prefer to vote in person, you may do so even if you have already voted your shares by proxy. You may also revoke a proxy at any time before it is exercised.
Directions to the First Advantage Corporation 2009 Annual Meeting are available on the “Investor Relations” page of our website at www.fadv.com.
Thank you for your cooperation and your support and interest in First Advantage Corporation.
FIRST ADVANTAGE CORPORATION
12395 First American Way
Poway, California 92064
NOTICE OF ANNUAL MEETING
To be Held on April 28, 2009
The 2009 annual meeting of stockholders of First Advantage Corporation, a Delaware corporation, will be held in the Eagle Auditorium of our offices, located at 12395 First American Way, Poway, California 92064, on April 28, 2009 at 9:00 a.m. Pacific Time, and at any adjournments thereof, for the following purposes:
Our board of directors has fixed the close of business on March 10, 2009 as the Record Date for determining the holders of our Class A and Class B common stock entitled to notice of the meeting, as well as for determining the holders of our Class A and Class B common stock entitled to vote at the meeting.
All stockholders are invited to attend the annual meeting in person. All stockholders also are respectfully urged to vote their shares by proxy as promptly as possible by executing and returning the enclosed proxy card or by voting over the internet or by telephone by following the instructions found on the proxy card(s). Stockholders who vote their shares by proxy may nevertheless attend the annual meeting, revoke their proxy, and vote their shares in person. Please read the proxy statement and proxy card for information on the annual meeting and instructions for voting your shares by proxy. Directions to the First Advantage Corporation 2009 Annual Meeting are available on the “Investor Relations” page of our website atwww.fadv.com.
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Important Notice Regarding the Availability of Proxy Materials forquestions during the Annual Meeting to be held April 28, 2009
Thevia a live audio webcast by visiting www.proxydocs.com/FA and entering the control number shown on your Notice of Internet Availability of Proxy Materials, includes a toll-free telephone number, an e-mail address and a website where stockholders can request a paperproxy card, or e-mail copy of the instructions that accompanied your proxy statement, our annual report on Form 10-K for the year ended December 31, 2008 and a form of proxy relating to the annual meeting as well as information on how to access the form of proxy. If you want to receive a paper copy or an e-mail with links to the electronic materials, you must request one by contacting Bret T. Jardine, Corporate Secretary, at 100 Carillon Parkway, St. Petersburg, Florida 33716. There is no charge to you for requesting a copy.
FIRST ADVANTAGE CORPORATION
12395 First American Way
Poway, California 92064
PROXY STATEMENT
for
Annual Meeting of Stockholders
April 28, 2009
The board of directors of First Advantage Corporation is soliciting proxies for use at the annual meeting of stockholders to be held in the Eagle Auditorium of our offices, located at 12395 First American Way, Poway, California 92064, on April 28, 2009 at 9:00 a.m., Pacific Time, and at any adjournments thereof.
As permitted by the rules of the Securities and Exchange Commission rules,(the “SEC”), we are making thisfurnishing our proxy statement and our annual report on Form 10-K availablematerials to our shareholders electronically viastockholders primarily over the Internet. On March 18, 2009, we mailedWe believe this process expedites receipt, reduces costs and conserves natural resources. We sent a Notice of Internet Availability of Proxy Materials on or about April 25, 2024 to our stockholders a Notice containingof record at the close of business on April 9, 2024. The notice contains instructions on how to access this proxy statementour Proxy Statement and our annual report2023 Annual Report and vote online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, please follow the instructions for requesting such materials included in the notice.
We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy. The Board of Directors recommends that you vote “FOR” each of the nominees listed in the Proxy Statement, “FOR” the ratification of Deloitte & Touche LLP, and “FOR” the approval, an advisory (non-binding) basis, the compensation of our named executive officers.
Whether or not you plan to attend the meeting, your vote is important to us. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and promptly returning a proxy card, or you may vote via the Internet at the Annual Meeting. We encourage you to vote by Internet, by telephone, or by proxy card in advance even if you plan to attend the Annual Meeting. By doing so, you will ensure that your shares are represented and voted at the Annual Meeting.
Thank you for your continued support of First Advantage Corporation.
Sincerely, |
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Scott Staples |
Chief Executive Officer |
FIRST ADVANTAGE CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME | 2:00 p.m., Eastern Time, onFriday, June 7, 2024 |
VIRTUAL LOCATION | You can attend the Annual Meeting online, vote your shares electronically and submit your questions during the Annual Meeting by visiting www.proxydocs.com/FAand entering the control number shown on your Notice of Internet Availability of Proxy Materials, proxy card, or the instructions that accompanied your proxy materials to join the Annual Meeting. |
ITEMS OF BUSINESS | 1. To elect the three Class II director nominees listed in the Proxy Statement. |
2. To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024. | |
3. To approve, on an advisory (non-binding) basis, the compensation of our named executive officers. | |
4. To consider such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof. | |
RECORD DATE | You may vote at the Annual Meeting if you were a stockholder of record at the close of business on April 9, 2024. |
VOTING BY PROXY | To ensure your shares are voted, you may vote your shares over the Internet, by telephone or by completing, signing, and returning a proxy card. Voting procedures are described on the following page and on the proxy card. |
By Order of the Board of Directors, |
Bret T. Jardine |
Executive Vice President, General Counsel & Corporate Secretary |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on June 7, 2024: This Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) are available free of charge at https://investors.fadv.com/financials-filings/sec-filings and at www.proxydocs.com/FA. A list of stockholders of record at the close of business on April 9, 2024 will be open for examination by any stockholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting at our principal executive offices at 1 Concourse Parkway NE, Suite 200, Atlanta, Georgia 30328, and electronically during the Annual Meeting by registering at www.proxydocs.com/FA.
PROXY VOTING METHODS
If, at the close of business on April 9, 2024, you were a stockholder of record, you may vote your shares by proxy at the Annual Meeting. If you were a stockholder of record, you may vote your shares in advance over the Internet, by telephone, or by mail. You may also revoke your proxies at the times and in the manner described in the General Information section of this Proxy Statement. For shares held through a broker, bank, or other nominee, you may submit voting instructions to your broker, bank or other nominee. Please refer to information from your broker, bank, or other nominee on how to submit voting instructions.
If you are a stockholder of record, your Internet, telephone, or mail vote must be received by 2:00 p.m., Eastern Time, on June 7, 2024 to be counted. If you hold shares through a broker, bank, or other nominee, please refer to information from your bank, broker, or nominee for voting instructions.
To vote by proxy if you are a stockholder of record:
BY INTERNET
BY TELEPHONE
BY MAIL
YOUR VOTE IS IMPORTANT TO US.
THANK YOU FOR VOTING.
Table of Contents
Cautionary Notice Regarding Forward-Looking Statements and Website Reference
This Proxy Statement contains “forward-looking statements” that reflect our current views with respect to, among other things, our operations and financial performance and include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words, or similar terms and phrases. These forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. For additional information on factors that could cause our actual results to differ materially from expected results, please see “Risk Factors” in our 2023 Form 10-K, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. The forward-looking statements included in this Proxy Statement speak only as of the date of this Proxy Statement, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.
Web links throughout this document are provided for convenience only, and the content on the referenced websites does not constitute a part of this Proxy Statement.
FIRST ADVANTAGE CORPORATION
1 Concourse Parkway NE, Suite 200, Atlanta, GA 30328
Telephone: (888) 314-9761
PROXY STATEMENT
Annual Meeting of Stockholders
June 7, 2024
GENERAL INFORMATION
Why am I being provided with these materials?
We are providing this Proxy Statement to you in connection with the solicitation by the Board of Directors (the “Board” or “Board of Directors”) of First Advantage Corporation of proxies to be voted at our Annual Meeting of Stockholders to be held on June 7, 2024 (the “Annual Meeting”) and at any postponements or adjournments of the Annual Meeting. We either (1) mailed you a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) notifying each stockholder entitled to vote at the Annual Meeting how to vote and how to electronically access a copy of this Proxy Statement and our Annual Report for the fiscal year ended December 31, 2023 (referred to as the “Proxy Materials”) or (2) mailed you a paper copy of the Proxy Materials and a proxy card in paper format. If you have not received, but would like to receive, a paper copy of the Proxy Materials and a proxy card in paper format, you should follow the instructions for requesting such materials contained in the Notice.Notice of Internet Availability. Except where the context requires otherwise, references to “First Advantage,” “the Company,” “we,” “us,” and “our” refer to First Advantage Corporation.
Frequently Asked Questions About TheWhat am I voting on?
There are three proposals scheduled to be voted on at the Annual Meeting:
Who is entitled to vote?
Stockholders as of the close of business on April 9, 2024 (the “Record Date”) may vote at the Annual Meeting
You are the record owner of shares if those shares are registeredRecord Date, including shares:
You are the beneficial owner of shares if you hold those shares in “street name” through a stockbroker, bank, trustee or other nominee, including shares held on your behalf in the First Advantage Corporation 401(k) Savings Plan. If you are a beneficial owner, these proxy materials are being sent to you through your stockbroker or other nominee togetheran account with a voting instruction card. In order to vote, you must complete the voting instruction card provided by your stockbroker or other nominee to direct the record holder how to vote your shares or obtain a valid proxy from the stockbroker or other nominee who is the record owner of your shares giving you authority to vote your shares in person at the meeting. Directions to the First Advantage Corporation 2009 Annual Meeting are available on the “Investor Relations” page of our website at www.fadv.com.
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You can come to the annual meeting and vote in person; or
You can vote your shares by proxy.
If you wish to vote at the annual meeting, and you are a beneficial owner of your shares, you must have a legal proxy in your favor executed by the stockbroker or other nominee who is the record owner.
If you are the record owner of your shares, you may vote your shares by proxy using any of the following methods:
completing, signing, dating and returning the proxy card in the postage-paid envelope provided;
calling the toll-free telephone number listed on the proxy card; or
using the Internet site listed on the proxy card.
The telephone and Internet voting procedures set forth on the proxy card are designed to authenticate stockholders’ identities, to allow stockholders to provide their voting instructions, and to confirm that their instructions have been properly recorded. If you vote by telephone or over the Internet, you should not return your proxy card.
If you are a beneficial owner, you will receive voting instructions (including, if your broker, bank, or other nominee elects to do so, instructions on(shares held in “street name”). Street name holders generally cannot vote their shares directly and instead must instruct the brokerage firm, bank, or nominee how to vote yourtheir shares.
First Advantage Corporation | 2024 Proxy Statement | 1 |
What constitutes a quorum?
The presence in person or by proxy of stockholders holding a majority in voting power of the issued and outstanding shares by telephone or over the Internet) from the record holder, and you must follow those instructions in orderof common stock entitled to have your shares votedvote at the Annual Meeting constitutes a quorum for the Annual Meeting. Abstentions and “broker non-votes” are counted as present for purposes of determining a quorum.
DependingWhat if a quorum is not present at the Annual Meeting?
If a quorum is not present at the scheduled time of the Annual Meeting, the person presiding over the Annual Meeting may adjourn the Annual Meeting until a quorum is present or represented.
How many votes are required to approve each proposal?
Under our Amended and Restated Bylaws (the “Bylaws”), directors are elected by a plurality vote, which means that the director nominees with the greatest number of votes cast, even if less than a majority, will be elected (Proposal No. 1). There is no cumulative voting.
Under our Bylaws, the proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024 (Proposal No. 2) requires the vote of the holders of a majority of the voting power of the shares of common stock present in person or represented by proxy and entitled to vote on how you hold yoursuch proposal. It is important to note that the proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024 (Proposal No. 2) is non-binding and advisory. While the ratification of Deloitte & Touche LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise, if our stockholders fail to ratify the selection, we will consider it notice to the Board and the Audit Committee to consider the selection of a different firm.
With respect to the Say on Pay Proposal (Proposal No. 3), the approval on an advisory (non-binding) basis, of the compensation of our named executive officers requires the vote of the holders of a majority of the voting power of the shares of common stock present in person or represented by proxy and entitled to vote on such proposal. It is important to note that the Say on Pay proposal is non-binding and advisory. While the approval of the compensation of our named executive officers is not required by our Bylaws or otherwise, if our stockholders fail to approve the proposal, we will consider the vote when making future decisions regarding executive compensation.
What is a “broker non-vote”?
A broker non-vote occurs when shares held through a broker are not voted with respect to a proposal because (1) the broker has not received voting instructions from the stockholder who beneficially owns the shares and (2) the broker lacks the authority to vote the shares at its discretion. Proposals No. 1 and No. 2 are considered non-routine matters, and a broker will lack the authority to vote uninstructed shares at their discretion on these proposals. Proposal No. 2 is considered a discretionary matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on this proposal.
How are votes counted?
With respect to the election of directors (Proposal No. 1), you may receive more than onevote “FOR” or “WITHHOLD” with respect to each nominee. Votes that are “WITHHELD” will have the same effect as an abstention and will not count as a vote “FOR” or “AGAINST” a director because directors are elected by plurality voting. Broker non-votes will have no effect on the outcome of Proposal No. 1.
With respect to the ratification of our independent registered public accounting firm (Proposal No. 2), you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will be counted as a vote “AGAINST” such proposal and there are no broker non-votes with respect to Proposal No. 2 because brokers are permitted to exercise discretion to vote uninstructed shares on this proposal.
First Advantage Corporation | 2024 Proxy Statement | 2 |
With respect to the Say on Pay Proposal (Proposal No. 3), you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will be counted as a vote “AGAINST” the Say on Pay Proposal and broker non-votes will have no effect on the outcome of the Say on Pay Proposal.
If you sign and submit your proxy card.
Your vote is important. Whether you vote by mail, telephone or over the Internet,card without providing voting instructions, your shares will be voted in accordance with the recommendation of the Board with respect to the Proposals.
How does the Board recommend that I vote?
Our Board recommends that you vote your instructions. shares:
Who will count the vote?
Representatives of Mediant Communications, Inc. (“Mediant”) will tabulate the votes and act as inspectors of election.
How do I vote my shares without attending the Annual Meeting?
If you sign, dateare a stockholder of record, you may vote by authorizing a proxy to vote on your behalf at the Annual Meeting. Specifically, you may authorize a proxy:
Internet and telephone voting facilities will close at 2:00 p.m., Eastern Time, on June 7, 2024, for the voting of shares held by stockholders of record as of the Record Date. Proxy cards with respect to shares held of record must be received no later than 2:00 p.m., Eastern Time, June 7, 2024.
If you hold your shares in street name, you may submit voting instructions to your broker, bank, or other nominee. In most instances, you will be able to do this over the Internet, by telephone, or by mail. Please refer to information from your bank, broker, or other nominee on how to submit voting instructions.
How do I attend and vote my shares at the Virtual Annual Meeting?
This year’s Annual Meeting will be a completely virtual meeting of stockholders. You may attend the Annual Meeting via the Internet. Any stockholder can register and attend the Annual Meeting live online at www.proxydocs.com/FA and enter the control number shown on your Notice of Internet Availability of Proxy Materials, proxy card, or the instructions that accompanied your proxy materials. If you wantvirtually attend the Annual Meeting you can vote your shares electronically, and
First Advantage Corporation | 2024 Proxy Statement | 3 |
submit your questions during the Annual Meeting. A summary of the information you need to attend the Annual Meeting and vote via the Internet is provided below:
Will I be able to participate in the online Annual Meeting on the same basis I would be able to participate in a live annual meeting?
The Annual Meeting will be held in a virtual meeting format only and will be conducted via live audio webcast. The online meeting format for the Annual Meeting will enable full and equal participation by all our stockholders from any place in the world at little to no cost.
We designed the format of the online Annual Meeting to ensure that our stockholders who attend our Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance stockholder access, participation, and communication through online tools. We plan to take the following steps to provide for such an experience:
How do I vote online during the Annual Meeting?
If you are a stockholder of record, you may vote your shares by attending the 2024 Annual Meeting of Stockholders online and following the on-screen voting instructions.
If you hold your shares in street name, you may need to follow additional instructions provided by your bank, broker, or nominee in order to vote your shares and submit questions during the Annual Meeting. After obtaining a valid legal proxy holdersfrom your bank, broker, or nominee, you must submit proof via email of your legal proxy reflecting the number of shares you hold along with your name and address to Mediant at dsmsupport@mediantonline.com.
Requests must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on June 6, 2024. A confirmation of email with additional instructions on how to vote at the Annual Meeting will votebe issued after a valid legal proxy has been received.
What if during the check-in time or during the meeting I have technical difficulties or trouble accessing the virtual meeting website?
If you encounter any technical difficulties with the virtual meeting website on the meeting day, please call the technical support number that will be posted in the instructional email you will receive after completion of your registration and on
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the day of the Annual Meeting. Technical support will be available starting at 1:00 p.m., Eastern Time, on Friday, June 7, 2024 and until the meeting has finished.
What does it mean if I receive more than one Notice of Internet Availability or proxy card on or about the same time?
It generally means you hold shares registered in more than one account. To ensure that all your shares in accordance with the recommendationsare voted, please vote once for each Notice of the Board of Directors.
You may send in anotherInternet Availability or proxy card withyou receive.
May I change my vote or revoke my proxy?
Yes. Whether you have voted by Internet, telephone, or mail, if you are a stockholder of record, you may change your vote and revoke your proxy by:
You may notify Bret Jardine,•
If you hold shares in writing before the annual meeting that you have revokedstreet name, please refer to information from your proxy;bank, broker, or other nominee on how to revoke or submit new voting instructions.
You may vote in personCould other matters be decided at the annual meeting
Shares represented by proxies that withhold authority to vote for a nominee for election as a director or that reflect abstentions or “broker non-votes” (i.e., shares represented at the meeting held by brokers or nominees and to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) will be treated as shares that are present for purposes of determining the presence of a quorum. Abstentions and broker non-votes will not otherwise affect the voting.Annual Meeting?
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PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION OF DIRECTORS
Our charter documents require our entire board of directors to be elected annually. Our board has designated the persons listed below as candidates for election. Each is currently serving as a director. Unless otherwise specified in the proxy card, the proxies solicited by the board will be voted “FOR” the election of these candidates. In case any of these candidates becomes unavailable to stand for election to the board, an event that is not anticipated, the proxy holders will have full discretion and authority to vote or refrain from voting for any substitute nominee in accordance with their judgment.
The terms of directors elected at the annual meeting expire at the 2010 annual meeting or as soon thereafter as their successors are duly elected and qualified. The board has no reason to believe that any of the nominees will be unable or unwilling to serve as a director if elected.
Directors are elected by a plurality vote of shares present at the meeting, meaning that the nominee with the most affirmative votes for a particular seat is elected for that seat. If you do not vote for a particular nominee, or if you withhold authority to vote for a particular nominee on your proxy card, your vote will not count either “for” or “against” the nominee.
Ten directors will be standing for election at the annual meeting. None of the nominees has a family relationship with the other nominees, any existing director or any executive officer of our company. Pursuant to the stockholders agreement dated as of December 13, 2002 among First American, FirstMark Capital, L.L.C. (formerly known as Pequot Private Equity Fund II, L.P.) and us, First American and each of its affiliates have agreed to vote its shares for one nominee designated by FirstMark. However, FirstMark has not designated a nominee to the board of directors.
The board recommends a vote “FOR” the election of each nominee listed below.
Parker S. Kennedy.Chairman and Director since 2003, Mr. Kennedy, 61, has been the Chairman and Chief Executive Officer of our parent company, The First American Corporation, since 2003. He was President of The First American Corporation from 1993 until 2004. Prior to that time, he served as executive vice president from 1986 to 1993 and was appointed to its board of directors in 1987. Mr. Kennedy has been employed by The First American Corporation’s primary subsidiary, First American Title Insurance Company, since 1977. He was appointed Vice President of that company in 1979, joined its board of directors in 1981, appointed Executive Vice President in 1983, and became President in 1989. Mr. Kennedy graduated from the University of Southern California with a Bachelor’s degree in economics, and received his law degree from Hastings College of the Law, San Francisco.
Anand Nallathambi.Director since 2007, Mr. Nallathambi, 47, was appointed to serve as Chief Executive Officer of First Advantage in March 2007 and President of First Advantage in September 2005 following First Advantage’s acquisition of the Credit Information Group from The First American Corporation. He serves as a member of the First Advantage acquisition committee. Prior to joining First Advantage, Mr. Nallathambi served as President of The First American Corporation’s Credit Information Group and as President of First American Appraisal Services from 1996 to 1998. He also serves as a member of the board of the Consumer Data Industry Association, an international trade association. Mr. Nallathambi holds a Bachelor degree in Economics from Loyola University in Madras, India, and an MBA from California Lutheran University.
J. David Chatham.Director since 2003, Mr. Chatham, 58, also serves on the First Advantage Corporation’s audit committee and has been a director of The First American Corporation since 1989, and chairs its audit committee and is a member of the executive committee. Since 1989, Mr. Chatham has also been a member of the board of directors of First American Title Insurance Company, First American’s wholly-owned title insurance underwriter. He is President and Chief Executive Officer of Chatham Holdings, LLC, a real estate development company. Mr. Chatham graduated from the University of Georgia with a Bachelor of Business Administration degree, majoring in real estate and urban development, and completed the management of family-held corporation program at the Wharton School of Business at the University of Pennsylvania.
Barry Connelly.Director since 2003, Mr. Connelly, 68, also serves on the First Advantage Corporation’s audit, nominating and corporate governance committees. Mr. Connelly is a credit information consultant to foreign governments and financial services organizations around the world. He is a director on the board of Collection House LTD, a company listed on the Australian Exchange; a director on the board of Microbilt Corp., a privately-held credit services company; and also serves on the joint venture board of directors of Huaxia/Dun & Bradstreet China. In 2002, he retired from the Consumer Data Industry Association after 33 years of service, including eight years as President. Mr. Connelly graduated from the University of Missouri with a Bachelor of Journalism degree.
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Jill Kanin-Lovers.Director since 2006, Ms. Kanin-Lovers, 57, serves as the chair of the First Advantage Corporation’s compensation committee and is part of its nominating and corporate governance committee. She is a member of the board of directors for BearingPoint, a global management and technology consulting firm, where she chairs the compensation committee and serves on the nominating and governing committees; Dot Foods, one of the nation’s largest food redistributors, where she chairs the compensation committee and serves on the nominating committee; and Heidrick & Struggles, a leading global search firm, where she chairs the compensation committee and serves on the audit committee. Currently, Ms. Kanin-Lovers teaches “Corporate Governance and Business Ethics” for the Rutgers University Mini-MBA program and “Executive Compensation” for the Rutgers University Global Executive HR Master’s program. Previously, she was Senior Vice President of Human Resources and Workplace Management at Avon Products, Inc., held a series of senior corporate human resources executive positions at American Express and IBM, and began her career in management consulting with Towers Perrin as Vice President and Manager responsible for global compensation practice. Ms. Kanin-Lovers holds a Bachelor degree from State University of New York, a Masters degree from the University of Pennsylvania and an MBA from the Wharton School of Business at the University of Pennsylvania.
Frank V. McMahon.Director since April 2006, Mr. McMahon, 49, in addition to serving on the board of directors of First Advantage Corporation, serves as the chair of its acquisition committee and serves on its compensation committee. He also serves as the Vice Chairman of The First American Corporation and is Chief Executive Officer of The First American Corporation’s Information Solutions Group. Previously, he was a Managing Director of the Investment Banking Division of Lehman Brothers, Inc. and was responsible for managing their western region financial institutions group, as well as their U.S. asset management sector from 1999 to 2006. Prior, Mr. McMahon was a Managing Director at Merrill Lynch. Mr. McMahon received a Bachelor degree in Economics from Villanova University and his MBA from Duke University.
Donald Nickelson.Director since 2003, Mr. Nickelson, 76, in addition to serving on the board of directors of First Advantage Corporation, chairs its nominating and corporate governance committee and is a member of its compensation committee and acquisition committee. Currently, he serves as Vice Chairman and Director of Harbour Group Industries Inc., a leveraged buy-out firm; as a director of Adolor Corporation, where he is a member of the compensation committee and audit committee; on the advisory board of Celtic Pharmaceutical Holdings, L.P.; as Chairman of the advisory board of Celtic Therapeutics; and as Chairman of Cross Match Industries. Previously, Mr. Nickelson served as President of PaineWebber Group, an investment banking and brokerage firm, and as Lead Trustee of the Mainstay Mutual Funds Group. He has also served on numerous boards, including: as Chairman of the Pacific Stock Exchange; Omniquip International, Inc.; Greenfield Industries; Vie Financial Group; and Flair Corporation.Inc.; as director of the Chicago Board Options Exchange; W.P. Carey & Co., LLC; Royalty Pharma AG; Allied Healthcare Products; DT Industries; Selectide Corporation; and Sugen, Inc.
Donald Robert.Director since 2003, Mr. Robert, age 49, in addition to serving on the board of directors of First Advantage Corporation, is a member of its compensation committee. He serves as Chief Executive Officer and director of Experian Plc., an information technology business listed on the London Stock Exchange. Prior to his current appointment, Mr. Robert was Chief Operating Officer and President of Experian’s Information Solutions business unit before becoming Chief Executive Officer of Experian North America. Previously, he was a Group Executive of The First American Corporation with responsibility for its Consumer Information and Services Group; President of Credco, Inc., the nation’s largest specialized credit reporting company and now part of First Advantage Corporation. Mr. Robert holds a Bachelor degree in Business Administration from Oregon State University.
D. Van Skilling.Director since 2005, Mr. Skilling, 75, in addition to serving on the board of directors of First Advantage Corporation, serves as a member of its audit committee. Mr. Skilling is the President of Skilling Enterprises. He also currently serves as a member of the board of directors for several companies, including: The First American Corporation, where he is lead director and sits on the audit, nominating, corporate governance, and executive committees; Onvia, where he is a director, chairs the compensation committee, and serves on the nominating and governance committees; and American Business Bank, where he is a member of the compensation committee. He retired from his post as Chairman and Chief Executive Officer of Experian Information Solutions, Inc. (formerly TRW Information Systems & Services), following a 26-year career with them. Mr. Skilling earned an MBA in International Business from Pepperdine University and a Bachelor degree in both Chemistry and Zoology from Colorado College.
David Walker.Director since 2003, Mr. Walker, 55, in addition to serving on the board of directors of First Advantage Corporation, is the chair of its audit committee and serves on the acquisition committee. Mr. Walker, a Certified Public Account and a Certified Fraud Examiner, is currently the Director of the Programs of Accountancy and Social
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Responsibility and Corporate Reporting in the College of Business at the University of South Florida, St. Petersburg, and is a consultant on corporate governance matters. Mr. Walker is also a member of the boards of directors of Chicos FAS, Inc., CommVault Systems, Inc. and Technology Research Corporation, Inc., where he chairs its compensation committee. Previously, he served as a partner with Arthur Andersen LLP. Mr. Walker earned a Bachelor degree from DePauw University in Economics and Mathematics, and an MBA from the University Of Chicago Graduate School Of Business.
INFORMATION ABOUT OUR BOARD OF DIRECTORS
Composition of Board and Committees
Our board of directors oversees our business affairs and monitors the performance of management. Management is responsible for the day-to-day operations of our company. As of the date of this Proxy Statement, we do not know of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted a proxy, statement,the named proxies will have the discretion to vote on those matters for you.
Who will pay for the cost of this proxy solicitation?
We will pay the cost of soliciting proxies. Proxies may be solicited on our board has tenbehalf by our directors, and the following committees: audit, nominating and corporate governance, compensation and acquisition. The membership during the last fiscal year and the function of eachofficers, or employees of the committees are described below. EachCompany (for no additional compensation) in person or by telephone, e-mail, or facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses.
First Advantage Corporation | 2024 Proxy Statement | 5 |
PROPOSAL NO. 1—ELECTION OF DIRECTORS
Our amended and restated certificate of the committees, except the nominating and corporate governance committee, is required to be comprised of three or more members of the board.
We held five board meetings in 2008. Each director attended at least 75% of all board meetings and applicable committee meetings. We strongly encourage ourincorporation provides for a classified board of directors to attend our annual meetingdivided into three classes. Scott Staples and Susan R. Bell constitute a class with a term that expires at the Annual Meeting of stockholders,Stockholders in 2025 (the “Class I Directors”); James L. Clark, Bridgett R. Price, and any member who misses three consecutive annual meetingsBianca Stoica constitute a class with a term that expires at the Annual Meeting of Stockholders in 2026 (the “Class II Directors”); and Joseph Osnoss, John Rudella, and Judith Sim constitute a class with a term that expires at the Annual Meeting of Stockholders in 2024 (the “Class III Directors”).
Upon the recommendation of the Nominating and Corporate Governance Committee, the full Board has considered and nominated the following slate of Class III nominees for a three-year term expiring at the Annual Meeting of Stockholders in 2027: Joseph Osnoss, John Rudella, and Judith Sim. Action will be removed. taken at the Annual Meeting for the election of these three Class III director nominees.
Unless otherwise instructed, the persons named in the form of proxy card (the “proxyholders”) attached to this Proxy Statement intend to vote the proxies held by them for the election of Joseph Osnoss, John Rudella, and Judith Sim. All of the nominees have indicated that they will be willing and able to serve as directors. If any nominee becomes unwilling or unable to serve as a director, the Board may propose another person in place of that nominee, and the individuals designated as your proxies will vote to appoint that proposed person. Alternatively, the Board may decide to reduce the number of directors constituting the full Board.
Nominees for Election to the Board of Directors in 2024
The following table lists membershipinformation describes the offices held, ages (as of our boardthe date of directorsthis Proxy Statement), other business directorships and board committees:the class and term of each director nominee, as well as the experiences, qualifications, attributes, or skills that caused the Board to determine that the director-nominee should serve as a director.
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Class III– Directors Whose Term Expires in 2024
Name | Age | Principal Occupation and Other Information | ||||||||||||
| 46 | Joseph Osnoss has served as a director since January 2020. Mr. Osnoss is a Managing Partner of | ||||||||||||
| 53 | John Rudella has served as our director since January 2020. Mr. Rudella is a Director of Silver Lake, which he joined in 2014. Prior to joining Silver Lake, Mr. Rudella served as a U.S. Navy SEAL where he held a variety of leadership positions, worked in technology development, and made multiple deployments to Africa and the Middle East. Mr. Rudella holds a B.S. in Aeronautical Engineering from the U.S. Naval Academy and a M.S. from the Industrial College of the Armed Forces. In addition to First Advantage, Mr. Rudella currently serves on the board of Entrata, EverCommerce, and the Station Foundation. He previously served on the board of Ancestry.com. Mr. Rudella was selected to serve as a director because of his experience in private equity investing and knowledge and understanding of business and corporate strategy. | ||||||||||||
| 55 | Judith Sim has served as our director since June 2021. Ms. Sim previously held various customer-related and marketing positions at Oracle Corporation from 1991 to April 2020, including as its Chief Marketing Officer from 2005 to April 2020. She has significant leadership and executive experience from her position as head of marketing programs at Oracle, including experience in field marketing, corporate communications, global customer programs, advertising, campaigns, events, and corporate branding. Ms. Sim has been a member of the board of directors at Fortinet Inc, since 2015, serving as the chair of the Human Resources Committee and a member of the Corporate Governance and ESG Committees. She was also a member of the board of directors of the San Francisco Chamber of Commerce from 2015 to 2020. Ms. Sim received a B.S. in dietetics from the University of California at Davis. Ms. Sim was selected to serve as a director because of her significant go-to-market experience and her experience as a public company director. |
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.
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Continuing Members of the Board of Directors
The following information describes the offices held, ages (as of the date of this Proxy Statement), other business directorships and the class and term of each director whose term continues beyond the Annual Meeting and who is not subject to election this year.
Class I – Directors Whose Term Expires in 2025
Name | Age | Principal Occupation and Other Information | ||||||||||
| 58 | Scott Staples has served as our Chief Executive Officer since April 2017. Prior to joining First Advantage, Mr. Staples co-founded Mindtree Ltd., a digital transformation and IT Services company, and served as President Americas & Global Head of Business Groups for 17 years. Mr. Staples spent the first 10 years of his career in various roles at Cambridge Technology Partners, Gemini Consulting and Prudential. Mr. Staples holds a B.A. from the University of Delaware and an M.B.A. from Fairleigh Dickinson University, Madison, New Jersey. Mr. Staples was selected to serve as a director because of his deep knowledge of our business and his significant executive management and leadership experience. | ||||||||||
| 61 | Susan R. Bell has served as our director since June 2021. Ms. Bell currently serves as a member of the boards of directors of Rollins, Inc., RPC, Inc., and Marine Products Corporation and serves on the audit committees of those corporations. She also serves as chair of the Audit Committee of Rollins, Inc. In 2020, Ms. Bell retired from Ernst & Young LLP (“EY”) after a 36-year career in public accounting, serving in key leadership roles, including Global Financial Accounting Advisory Services Power & Utilities sector leader, Office Managing Partner of EY Atlanta, GA, and Southeast Region Risk Advisory practice leader. Simultaneous with those respective roles, Ms. Bell served as external audit partner or independent quality review partner on external audits. Prior to leading EY’s Southeast Region Risk Advisory practice, Ms. Bell served as an audit and business advisory partner at EY and as an audit partner for Arthur Andersen. Ms. Bell graduated summa cum laude from Mississippi State University with a Bachelor of Professional Accountancy and is a Certified Public Accountant in Georgia and Tennessee. Ms. Bell was selected to serve as a director because of her experience in accounting and auditing and her experience with audit committees and boards. |
First Advantage Corporation | 2024 Proxy Statement | 8 |
Class II – Directors Whose Term Expires in 2026
Name | Age | Principal Occupation and Other Information | ||||||||||
| 62 | James L. Clark has served as our director since June 2021. Since 2012, Mr. Clark is the President and Chief Executive Officer of the Boys & Girls Clubs of America. Mr. Clark began his career at the Milwaukee Journal Sentinel in 1979, where he served in senior leadership roles in distribution, marketing and customer service operations and advanced to Senior Vice President. He departed the media company after 24 years to become President and CEO of the Boys & Girls Clubs of Greater Milwaukee in 2004, for which he had served as a board member. Mr. Clark previously served as a director of Boxlight Corporation and on the governance committee. Mr. Clark holds a Business Administration degree from the University of Wisconsin-Milwaukee. Mr. Clark was selected to serve as a director because of his experience as a public company director. | ||||||||||
| 66 | Bridgett R. Price has served as our director since June 2022. In 2023, Dr. Price retired from Marriott International after a long career as a human resources leader, including the Global Human Resources Officer for Consumer, Development, and Operations disciplines. From 2009 to 2016, she was based in London as the Chief Human Resources Officer for Europe for Marriott. Dr. Price has held a variety of human resources executive positions in Fortune 500 hospitality and consumer products companies. Dr. Price also served as a Major in the United States Air Force. Dr. Price earned her Ph.D. in Educational Leadership and Policy Studies from Arizona State University and Master of Science in Education and Counseling Psychology from the University of Southern California. Dr. Price was selected to serve as a director because of her experience in human capital management and knowledge and understanding of business and corporate strategy. | ||||||||||
| 30 | Bianca Stoica has served as our director since January 2020. Ms. Stoica is a Director of Silver Lake, which she joined in 2015. She graduated summa cum laude from The Wharton School of the University of Pennsylvania, where she received a B.S. in Economics with concentrations in Finance and Accounting and a minor in Mathematics. Ms. Stoica was selected to serve as a director because of her experience in private equity investing and knowledge and understanding of business and corporate strategy. |
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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
X =Our Board of Directors directs and oversees the management of our business and affairs and has three standing committees: the Audit Committee, Member; X* =the Compensation Committee, Chairand the Nominating and Corporate Governance Committee. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues.
Director Independence Mattersand Independence Determinations
Our boardCorporate Governance Guidelines define an “independent” director in accordance with Rule 5605(a)(2) of the Nasdaq Stock Market (“Nasdaq”). Under Nasdaq rules, a “independent director” means a person other than an “Executive Officer” or employee of the Company or any other individual having a relationship which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Ownership of a significant amount of our stock, by itself, does not constitute a material relationship.
In addition, audit and compensation committee members are subject to the additional independence requirements of applicable SEC rules and Nasdaq listing standards. Our Corporate Governance Guidelines require our Board of Directors to review the independence of all directors at least annually.
In the event a director has a relationship with the Company that is relevant to his or her independence and is not addressed by the objective tests set forth in the Nasdaq independence definition, our Board of Directors will determine, considering all relevant facts and circumstances, whether such relationship is material.
Our Board of Directors has affirmatively determined that each of our directors and director nominees, other than Scott Staples, is independent withinin accordance with Nasdaq rules. In making its independence determinations, our Board of Directors considered and reviewed all information known to it (including information identified through directors’ questionnaires).
Director Nomination Process
Our Board seeks to ensure that it is composed of members whose particular experience, qualifications, attributes, and skills, when taken together, will allow the meaningBoard to satisfy its oversight responsibilities effectively. As specified in our Corporate Governance Guidelines, in identifying candidates for membership on the Board, the Nominating and Corporate Governance Committee may take into account (1) minimum individual qualifications, including strength of character, mature judgment, familiarity with the Company’s business and industry, independence of thought and an ability to work collegially with the other members of the Board, and (2) all other factors it considers appropriate, which may include age, diversity of background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations such as antitrust issues, corporate governance background, various and relevant career experience, relevant technical skills, relevant business or government acumen, financial and accounting background, technology background, compliance background, executive compensation background, and the size, composition, and combined expertise of the existing Board. As the application of these factors involves the exercise of judgment, the Nominating and Corporate Governance Committee does not have a standard set of fixed qualifications that is applicable NASDAQ Stock Marketto all director candidates, although the Nominating and SecuritiesCorporate Governance Committee does at a minimum assess each candidate’s strength of character, mature judgment, industry knowledge, or business experience and Exchange Commission rules, excepthis or her ability to satisfy independence standards. In addition, while the Board considers diversity of viewpoints, backgrounds, and experiences, the Board does not have a formal diversity policy. In identifying prospective director candidates, the Nominating and Corporate Governance Committee may seek referrals from other members of the Board, management, stockholders, and other sources, including third party recommendations.The Nominating and Corporate Governance Committee also may, but need not, retain a search firm in order to assist it in identifying candidates to serve as directors of the Company. The Nominating and Corporate Governance Committee utilizes the same criteria for Mr. Kennedy, who is chairmanevaluating candidates regardless of the source of the referral.
First Advantage Corporation | 2024 Proxy Statement | 10 |
Board Diversity Matrix (As of April 25, 2024) | ||||
Board Size: | ||||
Total Number of Directors | 8 | |||
| Female | Male | Non-Binary | Did Not Disclose Gender |
Gender: | ||||
Directors | 4 | 4 | -- | -- |
Number of Directors Who Identify in Any of the Categories Below: | ||||
African American or Black | 1 | -- | -- | -- |
Alaskan Native or Native American | -- | -- | -- | -- |
Asian (other than South Asian) | 1 | -- | -- | -- |
South Asian | -- | -- | -- | -- |
Hispanic or Latinx | -- | -- | -- | -- |
Native Hawaiian or Pacific Islander | -- | -- | -- | -- |
White | 2 | 4 | -- | -- |
Two or More Races or Ethnicities | -- | -- | -- | -- |
LGBTQ+ | -- | |||
Persons with Disabilities | -- |
In connection with its annual recommendation of a slate of nominees, the Nominating and chief executive officerCorporate Governance Committee also may assess the contributions of those directors recommended for re-election in the context of the Board evaluation process and other perceived needs of the Board.
When considering whether the nominees have the experience, qualifications, attributes, and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our parent company, First American, Mr. Nallathambi, who isbusiness and structure, the Board focused primarily on the nominees’ contributions to our chief executive officersuccess in recent years and president, and Mr. McMahon, who is the vice chairman and chief executive officer of First American. In considering director independence, the board studied the shares of First Advantage common stock beneficially owned byon information discussed in each of the directors asnominee’s biographical information set forth under “Security Ownershipabove. We believe that our director nominees provide an appropriate mix of Certain Beneficial Ownersexperience and Management,” althoughskills relevant to the board generally believes that stock ownership tends to further align a director’s interests with those of First Advantage’s other stockholders. In addition, as part of this review, the board considered the fact that Mr. Robert is the chief executive officer of Experian Group, a subsidiary which owns approximately 6.3%size and nature of our Class A common stock,business. In particular, with respect to Messrs. Osnoss and determined that this relationship does not interfereRudella, our Board of Directors considered their experience in private equity investing and knowledge and understanding of business and corporate strategy, and with respect to Ms. Sim, our Board of Directors considered her experience as a public company director.
This process resulted in the exercise of Mr. Robert’s independence from First Advantage and its management.
We are a “controlled company” within the meaningBoard’s nomination of the NASDAQ Marketplace Rules because First American controls more than 50%incumbent Class III directors named in this Proxy Statement and proposed for election by you at the upcoming Annual Meeting.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. Any recommendation submitted to the Corporate Secretary of our voting power. Asthe Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include all information relating to such we rely on NASDAQ Marketplace Rule 4350(c)(5), which allows controlled companiesperson that is required to be exempt from rules requiring (a) the compensation and nominating committeesdisclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to be composed solely of independent directors; (b) the compensationSection 14(a) of the executive officers to be determined by a majority of the independent directors or by a compensation committee composed solely of independent directors; and (c) director nominees to be selected or recommended for the board’s selection either by a majority of the independent directors or by a nominating committee composed solely of independent directors.
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Our independent directors meet in executive session immediately following each regularly scheduled meeting of the board of directors. In addition, our independent directors may meet as they determine appropriate from time to time.
Audit Committee. Our board established the audit committee for the primary purposes of overseeing the financial reporting processes of our company and audits of our financial statements. Our board of directors has made an affirmative determination that each member of the audit committee (a) is an “independent director” as that term is defined by NASDAQ Marketplace RulesExchange Act, and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the Company’s Proxy Statement as a nominee of the stockholder and to serving as a director if elected. Stockholders wishing to propose a candidate for consideration may do so by submitting the proposed candidate’s full name and address, résumé, and biographical information to the attention of the Corporate Secretary of the Company, 1 Concourse Parkway NE, Suite 200, Atlanta, Georgia 30328. All recommendations for nomination received by the Corporate Secretary that satisfy our Bylaw requirements relating to director nominations will be presented to the Nominating and Corporate Governance Committee
First Advantage Corporation | 2024 Proxy Statement | 11 |
for its consideration. Stockholders also must satisfy the notification, timeliness, consent, and information requirements set forth in our Bylaws. These requirements are also described under “Stockholder Proposals for the 2024 Annual Meeting.”
Additionally, in connection with the initial public offering (the “IPO”) of our common stock in June 2021, we entered into a stockholders’ agreement with SLP Fastball Aggregator, L.P., Workday, Inc., and management stockholders. Pursuant to the stockholders’ agreement, so long as SLP Fastball Aggregator, L.P. and its affiliates collectively own at least 5% of all outstanding shares of our stock entitled to vote generally in the election of directors, the Silver Lake Transferee Group (as defined therein) have the right, but not the obligation, to nominate to the Board a number of individuals equal to the percentage of the issued and outstanding common stock owned by the Silver Lake Transferee Group multiplied by the total number of directors of the Board (rounded up to the nearest whole number). We have three directors on our Board who are current employees of Silver Lake Group, L.L.C. (together with its affiliated entities, successors, and assignees, “Silver Lake”), and who were recommended by Silver Lake as director nominees pursuant to the stockholders agreement: Ms. Stoica is a Class II director and Messrs. Osnoss and Rudella are Class III directors. See “Transactions Related to Directors, Equity Holders, and Executive Officers” for a discussion of the stockholders’ agreement.
Controlled Company Exemption
We qualify as a “controlled company” under the Securities Exchange Actcorporate governance rules of 1934,the Nasdaq Listing Rules because Silver Lake controls a majority of the voting power of our outstanding common stock. Therefore, we are not required to have a majority of our Board of Directors be independent, nor are we required to have a compensation committee or an independent nominating function. However, we are not currently relying on the exemptions from these corporate governance requirements.
Executive Sessions
Executive sessions, which are meetings of the non-management members of the Board, are regularly scheduled throughout the year. In addition, at least once a year, the independent directors will meet in a private session that excludes management and any non-independent directors. Mr. Osnoss presides at the executive sessions.
Leadership Structure
Mr. Osnoss has served as amended,our Chairperson since 2020. As provided in our Corporate Governance Guidelines, the Board does not have a policy on whether or not the roles of Chairperson and Chief Executive Officer should be separate. Accordingly, the Board of Directors believes that it should be free to make a choice from time to time regarding a leadership structure that is in the best interests of the Company and its stockholders. At this time, the Board believes that the Mr. Osnoss is best situated to serve as Chairperson, while Mr. Staples serves as our Chief Executive Officer and that the Company’s current separated roles of Chairperson and Chief Executive Officer is appropriate. Mr. Osnoss has extensive experience in private equity investing, domestic and international experience, and service on the boards of directors of other companies.
Communications with the Board
As described in our Corporate Governance Guidelines, stockholders and other interested parties who wish to communicate with the chairperson of any of the Audit, Compensation, or Nominating and Corporate Governance Committees, or to the non-management or independent directors as a group, may do so by addressing such communications or concerns to the General Counsel of the Company, 1 Concourse Parkway NE, Suite 200, Atlanta, Georgia 30328, who will forward such communication to the appropriate party. Such communications may be done confidentially or anonymously.
First Advantage Corporation | 2024 Proxy Statement | 12 |
Board Committees and Meetings
The following table summarizes the current membership of each of the Board’s Committees.
Name | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee |
Joseph Osnoss |
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Susan R. Bell |
|
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James L. Clark |
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Bridgett R. Price |
|
| |
John Rudella |
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Judith Sim |
|
| |
Bianca Stoica |
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= Chairman of the Board = Chairperson = Member |
All directors are expected to make their best effort to attend all meetings of the Board, meetings of the committees of which we refer tothey are members and the Annual Meeting of Stockholders. During the year ended December 31, 2023, the Board held five meetings, the Audit Committee held four meetings, the Compensation Committee held four meetings, and the Nominating and Corporate Governance Committee held four meetings. During fiscal 2023, all of our directors attended at least 75% of the meetings of the Board and committees during the time in which he or she served as a member of the Board or such committee and five out of eight director nominees and directors at the time attended our 2023 Annual Meeting.
Audit Committee
Our Audit Committee consists of Ms. Bell, who serves as the “Exchange Act”,Chair, Dr. Price, and (b) satisfies NASDAQ Marketplace Rules relatingMs. Sim. Ms. Bell, Dr. Price, and Ms. Sim have been determined to financial literacybe “independent,” consistent with our Audit Committee charter, Corporate Governance Guidelines, SEC rules and experience. Our boardNasdaq listing standards applicable to boards of directors in general and audit committees in particular. Our Board of Directors has further determined that Messrs. Chatham and Walker satisfy the criteria for beingMs. Bell qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated byS-K.
The duties and responsibilities of the SecuritiesAudit Committee are set forth in its charter, which may be found at https://investors.fadv.com/corporate-governance/documents-charters, and Exchange Commission.include assisting the Board of Directors in overseeing the following:
The audit committee is solely responsible for
Compensation Committee. The compensation committee is responsible for recommending compensation arrangements for our executive officers; evaluatingmonitoring the performance of our chief executive officer;internal audit function;
First Advantage Corporation | 2024 Proxy Statement | 13 |
The Audit Committee shall also prepare the report of the committee are independent under the standards for independence establishedrequired by the applicable NASDAQ Marketplace Rules. rules and regulations of the SEC to be included in our annual Proxy Statement.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Ms. Sim, who serves as the Chair, and Messrs. Clark and Osnoss. Each of Ms. Sim and Messrs. Clark and Osnoss has been determined to be “independent” as defined by our Corporate Governance Guidelines and Nasdaq listing standards.
The compensation committee met nine times during 2008. Our boardduties and responsibilities of directors has adopted a written compensation committeethe Nominating and Corporate Governance Committee are set forth in its charter, (a copy of which may be viewed onfound at https://investors.fadv.com/corporate-governance/documents-charters, and include the following:
Compensation Committee
Our Compensation Committee consists of Mr. Rudella, who serves as the Chair, and Mses. Bell, Price, and Stoica. Each of Mr. Rudella and Mses. Bell, Price, and Stoica has been determined to be “independent” as defined by our Corporate Governance pageGuidelines and Nasdaq listing standards applicable to boards of directors in general and compensation committees in particular.
The duties and responsibilities of the Investor Relations sectionCompensation Committee are set forth in its charter, which may be found at https://investors.fadv.com/corporate-governance/documents-charters, and include the following:
First Advantage Corporation | 2024 Proxy Statement | 14 |
Our Compensation Committee makes the final determination regarding the annual compensation of our Chief Executive Officer and our other executive officers, taking into consideration, among other things, each individual’s performance and contributions to the Company. As part of the Compensation Committee’s compensation setting process, the Compensation Committee will meet separately with the Chief Executive Officer, the Company’s principal human resources executive and any other corporate officers, as it deems appropriate, and the Compensation Committee may also invite any director, management of the Company and such other persons as it deems appropriate from time to time in order to carry out its responsibilities. Our Chief Executive Officer and other executive officers do not participate in the determination of their own compensation. With respect to non-employee director compensation, our Compensation Committee reviews and recommends to the board for approvalfull Board of Directors the form and amount of non-employee director compensation, and the full Board then reviews these recommendations and makes a final determination on the compensation of our incentive and equity compensation plans, oversees those who are responsible for administering those plans and approves all equity compensation plans that are not subjectdirectors.
Pursuant to stockholder approval. The compensation committee alsothe Compensation Committee Charter, the Compensation Committee has the authority to retain or obtain the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. The Company retained Pearl Meyer & Partners, LLC (“Pearl Meyer”) to serve as it deems necessaryits compensation consultant.
Committee Charters and Corporate Governance Guidelines
Our commitment to good corporate governance is reflected in our Corporate Governance Guidelines, which describe our Board of Directors’ views and policies on a wide range of governance topics. These Corporate Governance Guidelines are reviewed from time to time by our Nominating and Corporate Governance Committee and, to the sole authorityextent deemed appropriate in light of emerging practices, revised accordingly, upon recommendation to approve such consultant’s fees. When setting executive officer compensation, in the first quarterand approval by our Board of each year, theDirectors.
Our Corporate Governance Guidelines and other corporate governance information are available on our website at https://investors.fadv.com/corporate-governance/documents-charters.
Global Code of Conduct and Ethics
We have adopted a written code of business conduct and ethics that applies to all of our directors, officers, and employees, including our Chief Executive Officer, presentsChief Financial Officer, and Chief Accounting Officer. The Global Code of Conduct and Ethics sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws, use of our assets and business conduct and fair dealing. A current copy of the code is posted on our website at https://investors.fadv.com/corporate-governance/documents-charters. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of ethics on our website.
Oversight of Risk Management
The Board has extensive involvement in the oversight of risk management related to us and our business. Our Chief Executive Officer and other executive officers will regularly report to the non-executive directors and the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls.
First Advantage Corporation | 2024 Proxy Statement | 15 |
The Audit Committee is responsible for overseeing management of risks related to our financial statements and financial reporting process, business continuity, operational risks, and the Company’s technology security and data privacy programs, the qualifications, independence, and performance of our independent auditors, the performance of our internal audit function, legal and regulatory matters, and our compliance policies and procedures. Through its regular meetings with management, including the accounting, legal, and internal audit functions, the Audit Committee reviews and discusses significant areas of our business and summarizes for the Board the most material areas of risk and the appropriate mitigating factors. The Compensation Committee is responsible for overseeing management of risks related to our compensation committee containing his recommendationprograms and human resource functions. The Nominating and Corporate Governance Committee is responsible for overseeing management of risks related to our corporate governance functions. In addition, our Board receives periodic detailed operating performance reviews from management. We believe that the leadership of our Board of Directors provides appropriate risk oversight of our activities.
Hedging Policy
The Company’s Securities Trading Policy requires executive officers and directors to consult the Company’s General Counsel prior to engaging in transactions involving the Company’s securities. In order to protect the Company from exposure under insider trading laws, executive officers and directors are encouraged to enter into pre-programmed trading plans under Exchange Act Rule 10b5-1. The Company’s Securities Trading Policy prohibits directors and employees (including officers) from (i) trading in options, warrants, puts and calls, or similar instruments on the Company’s securities or selling such securities short and (ii) engaging in any transactions (including variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of the upcoming year’s salary, bonusCompany’s equity securities. In addition, directors, and long-term incentive award levelsemployees (including officers) are prohibited from purchasing the Company’s securities on margin, or borrow against any account in which the Company’s securities are held, or pledging the Company’s securities as collateral for a loan, without first obtaining pre-clearance from the Company’s General Counsel.
First Advantage Corporation | 2024 Proxy Statement | 16 |
Executive Officers of the Company
Set forth below is certain information regarding each of our current executive officers, other than himself. Scott Stapleswhose biographical information is presented under “Continuing Members of the Board of Directors.”
Name | Age | Principal Occupation and Other Information |
David L. Gamsey
| 66 | David L. Gamsey has served as our Executive Vice President and Chief Financial Officer since February 2016. Prior to First Advantage, Mr. Gamsey was at Air Serv Corporation from April 2008 to February 2016, where he served as Chief Financial Officer and Chief Operating Officer. Prior to this, Mr. Gamsey was the Chief Financial Officer at Beecher Carlson from January 2005 to February 2008, Innotrac Corporation from February 2000 to January 2005 and AHL Services, Inc. from September 1995 to February 2000. Mr. Gamsey spent 16 years of his career at Price Waterhouse and Arthur Andersen. Mr. Gamsey received his B.B.A. in Accounting, with distinction, from Emory University. Mr. Gamsey is a licensed CPA. |
Joseph Jaeger
| 65 | Joseph Jaeger has served as the President, Americas of First Advantage since January 2021. Before this role, he had served as our Chief Revenue Officer since September 2015. Prior to First Advantage, Mr. Jaeger held a variety of roles at human resources technology companies, including Vice President, Sales and Vice President Americas at Kronos from November 2008 to September 2015, Chief Executive Officer of Focal Point Solutions from April 2008 to November 2008 and executive sales, marketing and services leadership roles at Authoria from March 1999 to March 2008. He also served as Sales Director and Vice President, Sales and Marketing at Health Payment Review and HBO & Company in the healthcare software industry from March 1993 to December 1998. Mr. Jaeger graduated from Indiana University with a B.S. in Business and completed the “Leading High Impact Teams” Program at Northwestern University’s Kellogg School. |
Joelle M. Smith
| 48 | Joelle M. Smith has served as our President, Data, Technology, and Experience since May 2022. Before this role, she served as the Chief Experience Officer of the Company since January 2020 and as Executive Vice President, Resident and Investigative Research of the Company from July 2017 to December 2019. Before joining the Company, Ms. Smith held various roles as vice president at Mindtree from July 2012 to July 2017. Ms. Smith holds a Bachelor of Science from East Stroudsburg University of Pennsylvania. |
Bret T. Jardine
| 57 | Bret T. Jardine has served as our Executive Vice President, General Counsel and Corporate Secretary since January 2011. From November 2009 to December 2010, Mr. Jardine was the head of the legal department of the First Advantage business, which had been an operating division within First American and was later spun off to a company that became known as Corelogic and then was subsequently sold in December 2010. Prior to that, in 2009 when First Advantage was previously a public company, Mr. Jardine was acting General Counsel until November of that year. Before joining First Advantage in August 2004, Mr. Jardine practiced law at Zimmet, Unice, Salzman, Heyman and Jardine PA for nearly a decade, with experience in class actions and regulatory inquiries as well as corporate transactional work and corporate governance. Mr. Jardine holds a B.A. in Political Science from the University of Florida and a J.D. from Stetson University College of Law. |
First Advantage Corporation | 2024 Proxy Statement | 17 |
PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The committee takesAudit Committee has selected Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2024. Although ratification is not required by our Bylaws or otherwise, the Chief Executive Officer’s report under advisementBoard is submitting the selection of Deloitte & Touche LLP to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm. If our stockholders fail to ratify the selection, it will be considered as notice to the Board and meetsthe Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.
A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting. The representative will also have the opportunity to make a statement if he or she desires to do so, and the representative is expected to be available to respond to appropriate questions.
The shares represented by your proxy will be voted “FOR” the ratification of the selection of Deloitte & Touche LLP unless you specify otherwise.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION
OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR 2024.
First Advantage Corporation | 2024 Proxy Statement | 18 |
Audit and Non-Audit Fees
The following table presents fees for professional services rendered by our independent registered public accounting firm, Deloitte & Touche LLP, for the years ended December 31, 2023 and 2022:
| 2023 | 2022 |
Audit fees(1) | $1,920,000 | $2,100,000 |
Audit-related fees(2) | -- | -- |
Tax fees(3) | 326,140 | 317,150 |
All other fees(4) | -- | -- |
Total | $2,246,140 | $2,417,150 |
The Audit Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Deloitte & Touche LLP’s independence and concluded that it was.
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm
Consistent with SEC rules regarding auditor independence and the Audit Committee’s charter, the Audit Committee has responsibility for the appointment, compensation, retention, oversight and, when necessary, termination of the independent registered public accounting firm. In exercising this responsibility, the Audit Committee has established procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm and, subject to the next sentence, pre-approves all audit and permitted non-audit services provided by any independent registered public accounting firm prior to each engagement. As part of such procedures, the Audit Committee has delegated to its own compensation consultant. To obtain objective compensation information, in 2008chair the compensation committee engaged Mercer LLC as its compensation consultant. The committee has the full authority to manage all aspects of Mercer’s engagement, including approving Mercer’s compensation on a monthly basisreview and pre-approve any such services in between the ability, inAudit Committee’s regular meetings. Any such pre-approval will be subsequently considered and ratified by the compensation committee’s sole discretion, to terminateAudit Committee at the engagement. Examples of projects assignednext regularly scheduled meeting. All services to the consultantCompany provided by Deloitte & Touche LLP in 2023 were approved in accordance with the pre-approval policy.
First Advantage Corporation | 2024 Proxy Statement | 19 |
REPORT OF THE AUDIT COMMITTEE
The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under “The Board of Directors and Certain Governance Matters—Board Committees and Meetings—Audit Committee.”
The Audit Committee assists the Board in its oversight of: (i) the integrity of the Company’s financial statements and other financial information provided to its stockholders; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the qualifications, independence and performance of the Company’s independent auditor; (iv) the performance of the Company’s internal audit function; and (v) the integrity of the Company’s internal control over financial reporting and its financial reporting processes. The Audit Committee also oversees risk management with respect to cybersecurity in coordination with the Board.
Management of the Company is responsible for the preparation and presentation of the Company’s financial statements, the effectiveness of internal control over financial reporting, and maintaining procedures that are reasonably designed to assure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), is responsible for performing an independent audit of the consolidated financial statements and of the Company’s internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes on behalf of the Board of Directors.
In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with management and Deloitte the audited financial statements for the fiscal year ended December 31, 2023. The Audit Committee has reviewed and discussed with management and Deloitte the quarterly financial statements for each quarter in such fiscal year, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, Deloitte’s evaluation of the compositionCompany’s internal control over financial reporting as of that date, and audit plans and results. The Audit Committee has also discussed with Deloitte the matters required to be discussed with the independent auditor by the applicable requirements of the peer groupPCAOB.
The Audit Committee has received from Deloitte the written disclosures required by applicable requirements of companies usedthe PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, and has discussed with Deloitte its independence. The Audit Committee has also considered whether the provision of specific non-audit services by Deloitte is compatible with maintaining its independence and determined that the services provided by Deloitte for fiscal year 2023 were compatible with, and did not impair, its independence.
Based upon the review and discussions described in the preceding paragraphs, the Audit Committee recommended to evaluate appropriatethe Board that the audited financial statements of the Company be included in the 2023 Form 10-K for filing with the SEC.
Submitted by the Audit Committee of the Company’s Board of Directors:
Susan R. Bell, Chair
Bridgett R. Price
Judith Sim
First Advantage Corporation | 2024 Proxy Statement | 20 |
PROPOSAL NO. 3—NON-BINDING VOTE ON EXECUTIVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordance with Rule 14a-21 under the Exchange Act and as required pursuant to Section 14A of the Exchange Act, the Company requests that our stockholders cast a non-binding, advisory vote to approve the compensation levels, evaluation of levels ofour named executive officers as described in the section titled “Executive Compensation” in this Proxy Statement, including the “Compensation Discussion and Analysis” section, the compensation tables and the accompanying narrative disclosure contained therein.
As described in detail under the heading “Executive Compensation—Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, motivate, and retain our named executive officers, who are critical to our success. Please read the aforementioned section beginning on page 22 of this Proxy Statement for additional details about our executive compensation programs. We are asking our stockholders to indicate their support for our named executive officer compensation as compareddescribed in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, provides our stockholders the opportunity to general marketexpress their views on the compensation dataof our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices for named executive officers described in this Proxy Statement.
The Board recommends that shareholders vote “FOR” the following resolution:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis,” compensation tables and related narrative discussion, is hereby APPROVED.
The say-on-pay vote is advisory, and therefore not binding on the Company, the Board or the Compensation Committee. However, the Board and the peer companies’Compensation Committee value the opinions of our stockholders and intend to consider our stockholders’ views regarding our executive compensation data,programs. The Board values constructive dialogue on executive compensation and evaluationother significant governance topics with the Company’s stockholders and encourages all stockholders to vote their shares on this important matter.
Frequency of proposed compensation programs or changesSay on Pay Vote
At our 2023 Annual Meeting of Stockholders, held on June 8, 2023, our stockholders recommended an annual say-on-pay vote, and our Board of Directors subsequently adopted that recommendation. Accordingly, our next advisory say-on-pay vote (following the non-binding advisory vote at this Annual Meeting) is expected to existing programs.occur at our 2025 Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” The compensation committee believes that both management and the consultant provide useful information and points of view to assist the compensation committee in determining its own viewsapproval, on compensation. Although the compensation committee receives information and recommendations regarding the designan advisory (non-binding) basis, of the compensation of our named executive officers.
First Advantage Corporation | 2024 Proxy Statement | 21 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and leveleach material element of compensation for the fiscal year ended December 31, 2023, which we also refer to as 2023.
We have provided this information for each person who served as our principal executive officer, our principal financial officer and our three most highly compensated executive officers from bothemployed at the consultantend of 2023 (other than our principal executive officers and management,our principal financial officer), all of whom we refer to collectively as our Named Executive Officers.
Our Named Executive Officers for 2023 were:
Compensation Philosophy and Objectives
As a leading global provider of employment background screening and verification solutions, we operate in a highly competitive business environment, which is characterized by rapidly changing market requirements and the emergence of new market entrants. To succeed in this environment, we must continually develop and refine new and existing products and services and demonstrate an ability to quickly identify and capitalize on new business opportunities. We recognize that our success in this environment is in large part dependent on our ability to attract and retain talented employees. Therefore, we maintain, and intend to modify as necessary, an executive compensation committee makesand benefits program designed to attract, retain, and incentivize a highly talented, deeply qualified, and committed team of executive officers to share our vision and desire to work toward these goals.
We endeavor to create and maintain compensation programs that reward performance and serve to align the final decisions as to the design and levels of compensation for these executives.
The compensation committee uses the chief executive officer’s report, together with reports that may be prepared by its consultant, to set executive officer salaries and bonuses for the upcoming year. Executive officers are not present during compensation committee or board of directors deliberations concerning their compensation. The chairman of the board is present when setting the chief executive officer’s salary and bonus.
Compensation Committee Interlocks and Insider Participation. The members of the compensation committee for 2008 were Ms. Kanin-Lovers and Messrs. McMahon, Nickelson and Robert. As noted above, Mr. McMahon is a Vice
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Chairman of First American, our parent company. Noneinterests of our executive officers have served on the boardand stockholders. The principles and objectives of directors orour compensation committee of any other entity that has or has had one or moreand benefits program for our executive officers are to provide compensation opportunities that:
To do this, we evaluate our executive compensation philosophy and objectives, focusing on the following principles when formulating our compensation committee duringpolicies and making compensation decisions:
First Advantage Corporation | 2024 Proxy Statement | 22 |
As our needs evolve, we intend to continue to evaluate our philosophy and objectives and compensation programs as circumstances require, and, at a minimum, we will review executive compensation annually.
NominatingProcess for Setting Compensation
Role of Compensation Committee
The Compensation Committee of our Board of Directors, which is comprised solely of non-employee directors, is responsible for establishing, implementing, and Corporate Governance Committee. Our boardevaluating our executive officer compensation and benefit programs.
The Compensation Committee discharges the responsibilities of directors has established a nominating and corporate governance committee to (i) assist the board in identifying individuals qualified to become directors and recommendingour Board of Directors relating to the board nomination of candidates for election or reelection to the board or to fill board vacancies, (ii) develop and recommend to our board a set of corporate governance principles and (iii) lead the board in complying with those principles. All members of the nominating committee are independent under the standards for independence established by the applicable NASDAQ Marketplace Rules. The nominating and corporate governance committee met twice during 2008.
The nominating and corporate governance committee acts under a written charter adopted by our board of directors (a copy of which may be viewed on the Corporate Governance page of the Investor Relations sectioncompensation of our website located at www.fadv.com or obtained by making a written requestNamed Executive Officers, according to Bret T. Jardine, Corporate Secretary of First Advantage Corporation, at 100 Carillon Parkway, St. Petersburg, Florida 33716) specifying, among other things,its charter. The Compensation Committee annually evaluates the following minimum qualifications for candidates recommended for election to the board:
impeccable character and integrity;
the ability to communicate effectively with members of the board, management, auditors and outside advisors;
a willingness to act independently;
substantial experience in business, with educational institutions, governmental entities or non-profit organizations;
the ability to read and understand financial statements and financial analysis;
the ability to analyze complex business matters;
no criminal history or a background which could reasonably be expected to damage the reputationperformance of our company;
does not currently serve as a director, officer or employee of, or a consultant to, a direct competitor ofNamed Executive Officers, establishes the base salaries, cash bonus awards, and long-term incentive compensation opportunities for our company;Named Executive Officers, and
does not cause our company to violate independence requirements under applicable law or the NASDAQ Marketplace Rules.
The committee also will consider, among other factors, whether an individual has any direct experience with our company or its subsidiaries (whether as a director, officer, employee, supplier or otherwise); the individual’s experience in the industry in which our company operates; the individual’s other obligations and time commitments; whether the individual is an employee of a company or institution having a board of directors on which a senior executive of our company serves; whether the individual has specific knowledge, skills or experience that may be of value to our company or a committee of the board; whether an individual has been recommended by a stockholder of our company, an independent member of the board, another member of the board, senior management of our company or a customer of our company; and the findings of any third parties that may be engaged to assist the committee in identifying directors.
The nominating and corporate governance committee regularly assesses the appropriate size of the board and whether any vacancies on the board are anticipated. Various potential candidates for director are then identified. Candidates may come to the attention of the committee through current board members, professional search firms, stockholders or industry sources. In evaluating the candidate, the committee considers factors other than the candidate’s qualifications, including the current composition of the board, the balance of management and independent directors, the need for audit committee expertise and the evaluations of other prospective nominees. In connection with this evaluation, the committee determines whether to interview the prospective nominee, and if warranted, one or more members of the committee, and others as appropriate, interview prospective nominees. After completing this evaluation and interview, the committee makes a recommendation to the full board as to the persons who should be nominated by the board, and the board determines the nominees after considering the recommendation and report of the committee.
The nominating and corporate governance committee recommended the slate of directors proposed for election at the annual meeting, which was unanimously approved by the full board of directors, including unanimous approval by the independent directors.
As part of its role in developing and complying with corporate governance policies, the nominating and corporate governance committee advises the board and the various committees on effective management and leadership, reviews the governing documents of the company (including our certificate of incorporation, bylaws, corporate governance policies and guidelines and code of conduct), provides ongoing advice with respect to conflicts of interest that may arise, and evaluates the current and future governance needs and obligations of the company, our board and the committees in light of “best practices” developments.
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Procedure for Stockholder Nominations of Directors
Nominations for the election of directors may only be made by the board of directors in consultation with its nominating and corporate governance committee. As noted above, FirstMark may designate a nominee to the board of directors under the terms of the stockholders agreement dated as of December 13, 2002 among First American, FirstMark Capital and us. However, FirstMark has not designated a nominee to the board of directors. In addition, a stockholder of record who has the power to vote ten percent or more of the outstanding capital stock of our company may recommend to the committee up to one candidate for consideration as a nominee in any 12-month period. The committee will consider a stockholder nominee only if a stockholder gives written notice to Bret T. Jardine, Corporate Secretary of First Advantage Corporation, at 100 Carillon Parkway, St. Petersburg, Florida 33716 not later than the close of business on November 1 of the year immediately preceding the year of the annual meeting of stockholders at which the stockholder desires to have his or her candidate presented to the board. Each such notice must include the name, address and telephone number of the potential nominee; a detailed biography of the potential nominee; and evidence of stock ownership by the presenting stockholder, including the number of shares owned. Nominees properly proposed by eligible stockholders will be evaluated by the nominating and corporate governance committee in the same manner as nominees identified by the committee. To date, no stockholder or group of stockholders having the power to vote ten percent or more of our capital stock has put forth any director nominees.
Stockholder Communications
Our stockholders may communicate directly with the members of the board of directors or individual members by writing directly to it or them in care of Bret T. Jardine, Corporate Secretary of First Advantage Corporation, at 100 Carillon Parkway, St. Petersburg, Florida 33716. Stockholders are required to provide appropriate evidence of their stock ownership with any communications. Communications received in writing are distributed to our board or to individual directors as appropriate depending on the facts and circumstances outlined in the communication received.
CODE OF CONDUCT
We have adopted a code of conduct that applies to our chief executive officer, chief financial officer, controller and all of our other officers, employees and directors (a copy of which may be viewed on the Corporate Governance page of the Investor Relations section of our website located at www.fadv.com or obtained by making a written request to Bret T. Jardine, Corporate Secretary of First Advantage Corporation, at 100 Carillon Parkway, St. Petersburg, Florida 33716).
BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS
Relationships with First American
We effectively commenced operations on June 5, 2003 with our acquisition of First American’s screening technology division and US SEARCH.com, Inc. As consideration for these acquisitions, we issued 100% of our outstanding Class B common stock to First American and 100% of our Class A common stock to former stockholders of US SEARCH.com, Inc. Each share of our Class B common stock entitles the holder to ten votes in any meeting of stockholders. As a result, First American received approximately 80% of the outstanding capital stock of our company and approximately 98% of the voting power in our company. Former stockholders of US SEARCH.com, Inc. received the remaining approximately 20% of our outstanding capital stock. FirstMark, formerly a stockholder of US SEARCH.com, Inc., received approximately 10% of our Class A common stock in the transaction. First American and FirstMark entered into a stockholders agreement concurrently with the acquisitions that granted FirstMark certain registration rights and the right to sell shares of our Class A common stock at the same time First American sells any of our shares under certain circumstances, and generally requires First American to vote for one nominee for director designated by FirstMark. As a controlled subsidiary of First American, we have various relationships with First American, which are described below.
We entered into a reimbursement agreement dated October 11, 2005 with First American whereby we reimburse First American for the actual expenses incurred by us in connection with the participation by certain of our employees in First American’s supplemental benefit plan. In 2008, we reimbursed First American $400,055 for actual and interest costs for Anand Nallathambi’s participation in the supplemental benefit plan.
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On November 7, 2005, we entered into an operating agreement with a subsidiary of First American that sets forth the terms under which we, along with the First American subsidiary, jointly own and operate LeadClick Holding Company, LLC. We have ownership of 70% of LeadClick Holding Company LLC, with the remaining 30% being owned by the First American subsidiary.
First American provides certain legal, financial, technology, administrative and managerial support services to us pursuant to a service agreement that was entered into on January 1, 2004. Under the terms of the service agreement, human resources systems and payroll systems and support, network services and financial systems are provided at an annual cost of approximately $0.3 million. In addition, certain other services including pension and 401(k) expenses, corporate and medical insurance, personal property leasing and company car programs are provided at actual cost. The initial term of the agreement was for one year, with automatic self renewals every six months. First American incurred approximately $8.5 million in service fees for the year ended December 31, 2008.
First American and certain of its affiliates provided sales and marketing, legal, financial, technology, leased facilities, leased equipment and other administrative services to the Credit Information Group. As part of our 2005 acquisition of the Credit Information Group from First American, we entered into an amended and restated services agreement with First American on September 14, 2005. Under the terms of this agreement, First American provides human resources systems and payroll systems and support, network services and financial systems at an annual cost of approximately $4.5 million. In addition, First American provides certain other services (including pension and 401(k) expenses, corporate and medical insurance, personal property leasing and company car programs) at actual cost. The initial term of the agreement was for one year, with automatic self renewals every six months. The amounts allocated to the Credit Information Group are based on management’s assumptions (primarily usage, time incurred and number of employees) as to the proportion of the services used by the Credit Information Group in relation to the actual costs incurred by First American and its affiliates in providing the services. The company incurred approximately $4.5 million in service fees for the year ended December 31, 2008.
We also have an agreement with the First American Corporation dated September 14, 2005 to lease the Credit Information Group’s office space in Poway, California. The lease has an initial term of five years with a one-time option to renew the term for an additional five years. The rent payable under the lease is approximately $169,000 per month, and we are obligated to pay all costs and expenses related to the property, including operating expenses, maintenance and taxes, which were approximately $2.0 million for the year ended December 31, 2008.
Effective January 1, 2003, we entered into an agreement with a subsidiary of First American whereby we act as an agent in selling renters insurance. We receive a commission of 12% of the insurance premiums and 20% of the profits (as defined in the agreement) of the insurance premiums written. Commissions earned in 2008 were approximately $2.5 million.
We also perform employment screening, credit reporting and hiring management services for First American. Total revenue from First American was approximately $4.1 million for the year ended December 31, 2008.
First American Real Estate Solutions, LLC (“FARES”), a joint venture between First American and Experian, owns 50% of a joint venture that provides mortgage credit reports and operations support to a nationwide mortgage lender. In accordance with the terms of the joint venture operating agreement, the mortgage and consumer credit reporting operation of FARES receives a merge fee per credit report issued and is reimbursed for certain operating costs. In connection with the acquisition of the Credit Information Group, FARES entered into an outsourcing agreement where we continue to provide these services to the nationwide mortgage lender. These earnings totaled $5.3 million for the year ended December 31, 2008. Effective January 1, 2008, the Company entered into two agreements (Computer License agreement and a Service Agreement) with Rels Reporting Services, LLC which replaced the original agreements that had provided for charging merge fees on credit reports issued and the reimbursement of the majority of operating costs. These new agreements incorporate a transaction fee and a fixed fee for services, and minimize the reimbursement of operating costs. This management fee is included in service revenue and was $9.8 million for the year ended December 31, 2008. The residual reimbursement for operating costs were $0.4 million for the year ended December 31, 2008.
We, through a subsidiary, perform tax consulting services for First American pursuant to a training grants & incentives services agreement which was entered into in August 2007. We identify grants and tax credits, and match them with First American’s training curriculum and complete the necessary applications as a part of the service offering. Our fees for the training grant services are payable at twenty percent (20%) of the total amount of each approved training grant arranged by us for the benefit of First American. As of this date, there has been no significant revenue recognized under this agreement.
We, through a subsidiary, provide publicly available bankruptcy information to First American pursuant to a data license and information services agreement dated December 27, 2007. The annual fee for these services is $75,000 ($6,250 per month).
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Our Lender Services segment has partnered with First American CoreLogic (“FACL”) through a series of agreements to provide major national lender consumer data from the FACL databases in a Fair Credit Reporting Act compliant method. In 2008, we purchased data from FACL for a total of $1.9 million.
We have a flood zone determination wholesale service provider agreement, dated March 1, 2008, between First American Hazard Certification LLC, a subsidiary of First American and First Advantage Credco, LLC. Under the terms of this agreement, we are permitted to resell flood products provided by First American to First Advantage Credco’s end-user customers. All product costs and pricing are market-based.
We entered into a hiring management license and service agreement, dated January 11, 2008, between a subsidiary of ours, First Advantage Enterprise Screening Corporation, and First American. Under the terms of the agreement, we will license hiring management solution software to First American and provide certain services and maintenance for the software. The fees for this agreement will be an annual fee of $305,000 (invoiced quarterly). The parties, however, have agreed to suspend performance of this agreement until such time that First American determines to proceed with its previously announced spin-off of a portion of its business.
Relationships with Experian
Experian owns approximately 6.3% of a combination of First Advantage’s Class A and Class B common shares and is considered a related party. The cost of credit reports purchased by us from Experian was $24.9 million for the year ended December 31, 2008. We sell background and lead generation services to Experian. Total revenue from these sales was $0.1 million for the year ended December 31, 2008. We have also entered into a registration rights agreement in September 2005 (and which was amended in November 2005) with Experian pursuant to which we have agreed, under certain terms and conditions, to register shares of our Class A common stock that Experian owns.
Related Party Transaction Approval Policy
It is our policy that the audit committee review and approve in advance all related party transactions that are required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the Securities and Exchange Commission. If advance approval is not feasible, the audit committee must approve or ratify the transaction at the next scheduled meeting of the committee. Transactions required to be disclosed pursuant to Item 404 include any transaction between First Advantage and any officer, director or certain affiliates of First Advantage that has a value in excess of $120,000. In reviewing related party transactions, the audit committee evaluates all material facts about the transaction, including the nature of the transaction, the benefit provided to First Advantage, whether the transaction is on commercially reasonable terms that would have been available from an unrelated third-party and any other factors necessary to its determination that the transaction is fair to First Advantage. Our board of directors has adopted a written Statement of Policy With Respect to Related Party Transactions (a copy of which may be viewed on the Corporate Governance page of the Investor Relations section of our website located at www.fadv.com or a printed copy may be obtained by making a written request to Bret T. Jardine, Corporate Secretary of First Advantage Corporation, at 100 Carillon Parkway, St. Petersburg, Florida 33716).
EXECUTIVE OFFICERS
(Listed in alphabetical order)
Our executive officers, in addition to Parker Kennedy and Anand Nallathambi are listed below:
Evan Barnett, 61, president of our multifamily services segment since 2003. Previously, Mr. Barnett held senior management positions with Omni International Corporation and related entities, including positions as CFO and Executive Vice President. Prior to his tenure with Omni International, he was employed as a certified public accountant with Grant Thornton LLP. Mr. Barnett served as president of the National Association of Screening Agencies from 2000 to 2003. Mr. Barnett holds agent licensure for property and casualty insurance. He graduated from The American University with a Bachelor of Science degree in accounting and a master’s degree in business administration in financial management.
Bret T. Jardine, 42, was appointed Vice President, Associate General Counsel and Corporate Secretary in October 2008 and has been with the company since 2004, acting as Corporate Secretary since 2006. Prior to joining the company, Mr. Jardine was a partner in the law firm of Zimmet, Unice, Salzman, Heyman and Jardine PA. and has been practicing law for nearly 20 years. Mr. Jardine received his undergraduate degree from the University of Florida and his law degree from Stetson University College of Law.
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John Lamson, 58, chief financial officer and executive vice president since 2003. Prior to joining the company, Mr. Lamson served as chief financial officer of First American Real Estate Information Services Inc., a wholly-owned subsidiary of First American, a position he held from September 1997 to June 2003. Prior to joining First American, Mr. Lamson spent over five years as a self-employed consultant. Prior to that, Mr. Lamson served as chief financial officer of a financial institution and as a certified public accountant with Arthur Andersen Co. Mr. Lamson is a member of the American Institute of Certified Public Accountants and holds a Bachelor of Arts degree in business administration from the University of South Florida.
Andrew Macdonald, 45, was appointed senior vice president of corporate development in September 2007 and continues to serve as president of the First Advantage Investigative and Litigation Services segment, a position he has held since January 2005. Mr. Macdonald joined the company in 2002 through the HireCheck, Inc. acquisition of Employee Health Programs, Inc. where he served as president and chief financial officer. Following the acquisition, Mr. Macdonald served as president of First Advantage Occupational Health Services Corp. and then as vice president and corporate development officer for First Advantage. He is a member of the Oxford College Board of Counselors. Mr. Macdonald received his Bachelor of Arts degree in business administration from Emory University.
Todd Mavis, 47, joined the company as executive vice president-operations on August 1, 2007. Prior to joining the company, Mr. Mavis served as president and chief executive officer of Danka Business Systems from April 2004 to March 2006, having joined Danka Business Systems in 2001. From 1997 to 2001, Mr. Mavis was executive vice president of Mitchell International, a leading information provider and software developer for insurance and related industries. From 1996 to 1997, Mr. Mavis was senior vice president—worldwide sales and marketing of Checkmate Electronics, Inc. Mr. Mavis holds a Bachelor of Arts degree in marketing and administration from the University of Oklahoma and a masters degree in business administration from San Diego State University.
Akshaya Mehta, 49, has been the executive vice president-corporate infrastructure since August 2007. From 2003 to August 2007, Mr. Mehta served the company as chief operating officer and executive vice president. Previously, Mr. Mehta served as executive vice president and chief operating officer of American Driving Records, Inc., a wholly-owned subsidiary of ours. Mr. Mehta has over 15 years of management experience and over 20 years of technology development expertise. Prior to joining American Driving Records, Inc. in 1999, Mr. Mehta served as division vice president of product development at Automatic Data Processing, Inc., vice president of development at Security Pacific Bank, and Deputy Head of Development at UBS London. Mr. Mehta earned a masters degree in computer science at the Imperial College of the University of London after obtaining a Bachelor of Science degree in physics and medical physics from Queen Elizabeth College of the University of London.
Thomas Milligan, 53, was appointed Vice President and Corporate Treasurer in 2003. He previously served as Treasurer of First American Real Estate Information Services, Inc. which he joined in January 1998. Among other duties, Mr. Milligan manages the corporate treasury function, and other financial management, planning and related analysis for the company. Prior to 1998, Mr. Milligan was Director of Finance for IMC Mortgage Company. Before joining IMC, he provided acquisition financing with Household Commercial Finance and worked in the Chicago office of Deloitte & Touche. Mr. Milligan received his undergraduate business degree from the University of Florida and an MBA from Keller Graduate School of Management. He is also a Certified Public Accountant.
Lisa Steinbach, 45, was appointed Vice President and Corporate Controller in 2003. Prior to joining the company, Ms. Steinbach was Controller of First American Real Estate Information Services Inc., a position she held since joining the company in 1997. Other prior experience includes over 12 years of increasing responsibility with certified public accountants Cherry Bekaert and Holland, Alfa Romeo Distributors of North America, and Eckerd Corporation. Ms. Steinbach is a certified public accountant in Florida and received her Accounting degree from Florida State University.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth information, as of March 10, 2009, concerning (a) each person who is known to us to be the beneficial owner of more than 5% of First Advantage Corporation’s Class A common stock and Class B common stock; (b) each of our named executive officers; (c) each director; and (d) all of the directors and executive officers as a group. Unless otherwise indicated, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares, except to the extent spouses share authority under applicable law. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In computing the number and percentage of shares beneficially owned by a person, shares that may be acquired by such person within 60 days of March 10, 2009 are counted as outstanding, while these shares are not counted as outstanding for computing the percentage ownership of any other person.
Class A Common | Class B Common | |||||||||
Name(1) | Number of Shares Beneficially Owned | Percent of Class(2) | Number of Shares Beneficially Owned | Percent of Class(2) | ||||||
Holders of 5% or More | ||||||||||
FADV Holdings LLC(3)(4) The First American Corporation First American Real Estate Information Services, Inc. First American Real Estate Solutions LLC 1 First American Way Santa Ana, California 92797 | 47,726,521 | 79.9 | % | 47,726,521 | 100 | % | ||||
FirstMarkCapital, L.L.C.(5) 1221 Avenue of the Americas New York, New York 10020 | 2,152,421 | 17.9 | % | 0 | * | |||||
Ronald J. Juvonen(6) c/o Downtown Associates 674 Unionville Road Suite 105 Kennett Square Pennsylvania 19348 | 714,880 | 5.9 | % | 0 | * | |||||
Experian Information Solutions, Inc.(4)(7) 475 Anton Boulevard 4th Floor Costa Mesa, California 92626 | 3,784,642 | 6.3 | % | 0 | * | |||||
Maverick Capital, Ltd.(8) 300 Crescent Court 18th Floor Dallas, Texas 75201 | 1,084,915 | 9.0 | % | 0 | * | |||||
Dimensional Fund Advisors LP(9) Palisades West, Building One 6300 Bee Cave Road Austin, Texas 78746 | 876,388 | 7.3 | % | 0 | * | |||||
FMR LLC(10) 82 Devonshire Street, Boston Massachusetts 02109 | 1,090,698 | 9.1 | % | 0 | * | |||||
Directors | ||||||||||
Parker Kennedy(11)(18) | 38,513 | * | 0 | �� | * | |||||
Anand Nallathambi(12) | 416,813 | 3.4 | % | 0 | * | |||||
J. David Chatham(11)(13) | 16,111 | * | 0 | * | ||||||
Barry Connelly(11) | 14,611 | * | 0 | * | ||||||
Frank McMahon(11)(18) | 10,013 | * | 0 | * | ||||||
Donald Nickelson(11) | 14,611 | * | 0 | * | ||||||
Donald Robert(11) | 19,611 | * | 0 | * | ||||||
Jill Kanin-Lovers(11) | 6,279 | * | 0 | * | ||||||
D. Van Skilling(11) | 14,611 | * | 0 | * | ||||||
David Walker(11) | 17,611 | * | 0 | * | ||||||
Named Executive Officers Who Are Not Directors | ||||||||||
John Lamson(14) | 256,716 | 2.1 | % | 0 | * | |||||
Todd Mavis(15) | 26,803 | * | ||||||||
Akshaya Mehta(16) | 246,473 | 2.0 | % | 0 | * | |||||
Evan Barnett(17) | 132,059 | 1.1 | % | 0 | * | |||||
All Directors and Current Executive Officers as a group (14 persons) | 1,230,835 | 10.2 | % | 0 | * |
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The following table sets forth as of March 10, 2009 the total number of common shares of First American beneficially owned and the percentage of the outstanding shares so owned, based on 93,100,373 shares of First American common stock outstanding on that date, by:
each director;
each named executive officer; and
all of the directors and executive officers as a group.
Unless otherwise indicated in the notes following the table, those listed are the beneficial owners of the listed shares of First American with sole voting and investment power approves (or, in the case of our Named Executive Officers, recommends for approval by the Board of Directors) all equity awards. The Compensation Committee’s objective is to ensure that the total compensation paid to our Named Executive Officers is fair, reasonable, and market competitive while incentivizing the creation of long-term value for our stockholders.
The Compensation Committee has overall responsibility for overseeing our compensation and benefits policies generally, overseeing, evaluating, and approving the compensation policies, practices, and plans applicable to our executive officers, determining the compensation of our Named Executive Officers, determining and overseeing the process of evaluating our Chief Executive Officer’s performance, and overseeing the preparation of, reviewing, and approving this Compensation Discussion and Analysis.
The Compensation Committee reviews the base salary levels, annual cash bonus opportunities, and long-term incentive compensation opportunities of our Named Executive Officers each fiscal year, or more frequently as warranted. Each fiscal year, the Compensation Committee reviews our financial and operational performance and the corresponding projected payments under our annual bonus plan.
When selecting and setting the amount of each compensation element, the Compensation Committee generally considers the following factors:
First Advantage Corporation | 2024 Proxy Statement | 23 |
All equity awards (other than those granted to our Named Executive Officers, which are granted by our Board of Directors) have been granted by the Compensation Committee. In determining the amount of long-term incentive compensation, if any, to be granted by our Board of Directors to our Named Executive Officers as part of its annual compensation review, the Compensation Committee also considers the accounting impact of the proposed awards on our earnings.
These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each Named Executive Officer. No single factor is determinative in setting pay levels, nor is the impact of any factor on the determination of pay levels quantifiable. Our Compensation Committee retains significant authority to adjust compensation levels of our Named Executive Officers based on these and other factors that it may deem appropriate to achieve our overall compensation goals.
Role of Management
Our Chief Executive Officer works closely with the Compensation Committeein determining the compensation of our Named Executive Officers (other than his own). Our Chief Executive Officer also identifies and recommends corporate and individual stockholders, shared powerperformance objectives for our annual incentive plan for approval by the Compensation Committeebased on our business plan and strategic objectives for the relevant fiscal year, and makes recommendations on the size, frequency, and terms of equity incentive awards and new hire compensation packages. These recommendations from our Chief Executive Officer are often developed in consultation with members of his senior management team, including our Chief Human Resources Officer ..
At the request of the Compensation Committee, our Chief Executive Officer typically attends a portion of each Compensation Committeemeeting. From time to time, various members of management and other employees attend Compensation Committeemeetings to make presentations and provide financial and other background information and advice relevant to Compensation Committeedeliberations. Our Chief Executive Officer and other Named Executive Officers may not participate in, or be present during, any deliberations or determinations of our Compensation Committeeregarding their compensation or individual performance objectives.
First Advantage Corporation | 2024 Proxy Statement | 24 |
Role of Competitive Data
For purposes of comparing our executive compensation against the competitive market, the Compensation Committeereviews and considers the compensation levels and practices of a group of comparable companies from certain industries.
In 2023, our Compensation Committee, with the input of data and analysis from both our compensation consultant and management, developed and approved the following compensation peer group for purposes of understanding the competitive market (which is unchanged from the peer group approved for 2022):
Company Name | Business Segment |
ACI Worldwide, Inc. | Application Software |
Alarm.com Holdings, Inc. | Application Software |
Blackline, Inc. | Application Software |
Box, Inc. | Application Software |
Calix, Inc. | Communications Equipment |
Ceridian HCM Holding Inc. | Application Software |
Commvault Systems, Inc. | Systems Software |
Coursera, Inc. | Education Services |
CSG Systems International, Inc. | Data Processing and Outsourced Services |
Dun & Bradstreet Holdings, Inc. | Research and Consulting Services |
HireRight Holdings Corporation | Human Resource and Employment Services |
Instructure Holdings, Inc. | Application Software |
Pegasystems Inc. | Application Software |
SPS Commerce. Inc. | Application Software |
Sterling Check Corp. | Human Resource and Employment Services |
Verra Mobility Corporation | Data Processing and Outsourced Services |
Vertex, Inc. | Application Software |
The companies in this compensation peer group were selected using the following process: (i) the revenue scope for the pool of peer candidates was set between $250 million and $2.5 billion (approximately 1/3rd to 3x of our revenue); (ii) the candidate pool was based on size-appropriate North American public companies and then narrowed based on the following industries: technology, software, and IT services; and (iii) candidate companies were removed from the pool based on dissimilar business models and/or weaker financial viability. The list was finalized based on input from management regarding competition for business and executive talent. To analyze the compensation practices of the companies in our compensation peer group, our Compensation Committeegathered data for the peer group companies from public filings. This market data was then used as a reference point for the Compensation Committeeto assess our current compensation levels in the course of its deliberations on compensation forms and amounts.
The compensation peer group above was used by our Compensation Committeeduring 2023 as a reference for understanding the compensation practices of companies in our industry sector and compensation peer group. Our intention has been that the target level of annual incentives, together with base salary, will result in total annual target cash compensation in line with the peer group.
For each Named Executive Officer, we have also used market data from third party surveys reviewed by our compensation consultants and human resources personnel as a consideration in setting annual base salary and the target level of annual incentives, with the intention that such individual’s spouse) overtarget amounts, together with base salary, will result in total annual target cash compensation in line with the shares listed. First American common shares subjectmarket survey group. These comparisons are part of the total mix of information used to rights exercisable within 60 daysevaluate base salary, short-term incentive compensation and total cash compensation. We have also generally used survey data of March 10, 2009 are treated as outstandingthis type when determining the amount and percentage beneficially owned by a person or entity.size of equity award grants.
Name | Number of The First American Corporation Common Shares | Percent of Class | |||
Directors | |||||
Parker Kennedy(1)(2) | 3,316,918 | 3.6 | % | ||
Anand Nallathambi(3) | 112,750 | * | |||
J. David Chatham(4) | 33,692 | * | |||
Barry Connelly | 0 | * | |||
Frank McMahon(5) | 235,396 | * | |||
Donald Nickelson | 0 | * | |||
Donald Robert | 732 | * | |||
Jill Kanin-Lovers | 0 | * | |||
D. Van Skilling(6) | 34,108 | * | |||
David Walker | 0 | * | |||
Named Executive Officers Who Are Not Directors | |||||
John Lamson(7) | 4,800 | * | |||
Todd Mavis | 0 | * | |||
Akshaya Mehta(8) | 8,642 | * | |||
Evan Barnett(9) | 5,780 | * | |||
All Directors and Executive Officers as a group (14 persons) | 3,752,818 | 4.1 | % |
First Advantage |
25 |
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Role of Compensation Consultant Our independent consulting firm, Pearl Meyer, was first engaged by our Compensation Committee in 2021 and reports directly to our Compensation Committee. Pearl Meyer provides our Compensation Committee with input and guidance on all components of our executive compensation program. Pearl Meyer advised the Compensation Committee on current and upcoming trends and issues in executive compensation and on the compensation structure and levels of our Named Executive Officers during 2023. Except for services provided to the Compensation Committee related to executive and other management compensation and non-employee director compensation, Pearl Meyer did not provide any additional services for the Company during 2023. The Compensation Committee has evaluated whether any work performed by Pearl Meyer raised any conflict of interest and determined that it did not. Executive Compensation Practices We have incorporated the following principles of good governance when making decisions on compensation for the Named Executive Officers in 2023. • Pay-for-performance:A significant portion of the total compensation for our Named Executive Officers is designed to encourage them to remain focused on both our short-term and long-term operational success and to reward outstanding individual performance. • Align Incentives with Stockholders: Our executive compensation program is designed to focus our Named Executive Officers on our key strategic, financial, and operational goals that will translate into long-term value-creation for our stockholders. • No tax gross-ups: We do not provide tax gross-ups to our Named Executive Officers, other than in connection with tax liabilities incurred with relocations. • No pension or deferred compensation plans: We do not maintain any defined benefit pension or nonqualified deferred compensation plans. Incentive Compensation Clawback Policy In October 2023, the Compensation Committee adopted our Incentive Compensation Clawback Policy to comply with SEC and Nasdaq requirements. In addition, our 2021 Omnibus Incentive Plan (as amended by the First Amendment, dated as of May 10, 2023, the “2021 Equity Plan”) and equity agreements contain provisions relating to incentive compensation recoupment under specified circumstances. We believe that these policies further reduce the potential risk that an executive officer would intentionally misstate results to benefit under an incentive program.
The are base salary, annual cash
Base Salary Annual base salaries compensate our Named Executive Officers for fulfilling the requirements of their respective positions and provide them with a level of cash income predictability and stability with respect to a portion of their total compensation. Generally, our Named Executive Officers’ initial base salaries were established through arm’s-length negotiation at the time the individual was hired, taking into account his or her qualifications, experience, prior salary level, and market compensation benchmarks for the role. Thereafter, the base salaries of our executive officers are reviewed annually by our Compensation Committee, and adjustments are made as deemed appropriate. The following table summarizes the base salary rates of the Named Executive Officers for 2022 and 2023.
(1) Mr. Jardine received a base salary increase effective on April 1, 2023 from $351,750 to $375,000. Mr. Jardine received this base salary increase based on the Company’s review of peer compensation benchmarking to create a stronger alignment with the market.
Management Incentive Compensation Plan We maintain a Management Incentive Compensation Plan (“MICP”), pursuant to which participants (including our Named Executive Officers) may receive a discretionary cash bonus each year, in an amount determined by the Compensation Committee. Bonus payments under the MICP are made following the completion of the Company’s annual financial audit, typically in March of the following year. Individual bonus targets under the MICP are generally established as a percentage of each participant’s base salary. The Compensation Committee determines the amount of funds to be paid out each year under the MICP in its discretion, but reviews the level at which certain financial metrics are achieved for such year in determining the amount payable. In determining the bonus payment under the MICP in 2023, the Compensation Committee decided to base it on the level of Adjusted EBITDA and revenue achieved compared to internal targets, with each such metric weighted at 50%. Based on the levels at which each such metric was achieved for the year and other factors including performance versus internally established performance goals, the Compensation Committee determined that each individual bonus under the MICP for 2023 would pay out at approximately 20% to 30% of the applicable employee’s annual target bonus amount based on a variety of individual performance factors. The following table summarizes the fiscal 2023 bonus earned under the MICP in 2023 based on actual bonus achieved, as compared to the target opportunity, for each of our Named Executive Officers.
(1) Amounts shown reflect each Named Executive Officer’s MICP allocation for 2023. (2) Amounts shown for Mr. Jardine reflect his salary increase from $351,750 to $375,000, effective as of April 1, 2023, and pro-rated target bonus opportunity for 2023 as a result of such salary increase. Long-Term Equity Incentive Compensation We use equity awards to incentivize and reward our executives officers, including our Named Executive Officers, for long-term corporate performance based on the value of our common stock and, thereby, to align the interests of our executive officers with those of our stockholders. We use equity
The Compensation Committee has not established a formal policy for equity award grants to our Named Executive Officers or other employees. Historically, equity awards have been granted in connection with an executive’s initial employment or promotion, and thereafter on a periodic basis in order to retain and reward our Named Executive Officers based on factors such as individual performance and strategic impact, retention goals, and competitive pay practices. The Compensation Committee determines the amount of long-term incentive compensation for our Named Executive Officers after taking into consideration the recommendations of our Chief Executive Officer (except with respect to his own long-term incentive compensation), the outstanding equity holdings of each Named Executive Officer, criticality of position and individual performance (both historical and expected future performance). 2023 Option and RSU Grants On May 11, 2023, we granted Mr. Jardine 15,749 nonqualified options
None of our other Named Executive Officers received an equity award in 2023. Performance Award Vesting Modification In May 2023, the Board of Directors approved a modification of the vesting terms of all outstanding unvested and unearned performance-based vesting nonqualified stock options (“Performance Options”) and all outstanding performance-based vesting restricted shares and RSUs (“Performance Awards”) previously issued under its equity plans, including those held by the Named Executive Officers (“Performance Award Vesting Modification”). The
Other Compensation Retirement Benefits We maintain a defined contribution plan (the “401(k) Plan”) for all full-time United States employees, including our Named Executive
Health and We provide various employee benefit programs to
No Pension Benefits
No Nonqualified Deferred Compensation During 2023, our employees, including the
No Perquisites
Change in Control
Compensation Committee Report The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in Submitted by the Compensation Committee of John Rudella, Chair Susan R. Bell Bridgett R. Price Bianca Stoica
Summary Compensation Table The following table sets forth information concerning the compensation earned by our Named Executive Officers, during our fiscal year ended December 31, 2023. SUMMARY COMPENSATION TABLE
(1) Amounts reported in this column for Messrs. Staples, Gamsey, Jaeger and Jardine reflect their base salary earned during 2023. For Mr. Jardine, this includes his salary increase which was effective as of April 1, 2023. (2) The amounts reported in this column represent the annual incentive bonus amounts earned by each Named Executive Officer pursuant to our MICP (as described above under “—Management Incentive Compensation Plan”). (3) With respect to Mr. Jardine for 2023, we granted RSUs under our 2021 Equity Plan pursuant to a form of restricted stock unit agreement (the “RSU Agreement”). 100% of the RSUs are subject solely to time-based vesting criteria. Amounts also reflect the incremental compensation expense incurred for each of our Named Executive Officers under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 as a result of the Performance Award Vesting Modification (as described above under “—Performance Award Vesting Modification”). See Note 10 (“Share-based Compensation”) to our audited consolidated financial statements included in our 2023 Form 10-K for a discussion of the valuation of our equity-based awards. (4) With respect to Mr. Jardine for 2023, we granted stock options under our 2021 Equity Plan pursuant to a form nonqualified stock option agreement (the “Options Agreement”). 100% of the stock options are subject solely to time-based vesting criteria. Amounts also reflect the incremental compensation expense incurred for each of our Named Executive Officers under FASB ASC Topic 718 as a result of the Performance Award Vesting Modification (as described above under “—Performance Award Vesting Modification”). See Note 10 to our audited consolidated financial statements included in our 2023 Form 10-K for a discussion of the valuation of our equity-based awards.
(5) The amounts reported in this column represent the discretionary employer matching contribution under the 401(k) Plan for each Named Executive Officer. (6) Under applicable SEC rules, we have excluded compensation for each Mr. Jardine and Ms. Smith for 2021, as they were not Named Executive Officers during 2021. Employment Agreements with Named Executive Officers The Company entered into an employment letter agreement with each of our Named Executive Officers, which sets forth standard terms summarizing annual base salary, bonus, and benefits. Staples Employment Agreement Pursuant to Mr. Staples’ employment letter agreement, dated March 1, 2017 (the “Staples Employment Agreement”), Mr. Staples serves as our Chief Executive Officer. The following terms are provided by the Staples Employment Agreement: Employment Term The Staples Employment Agreement has no specified employment term and may be terminated by either the Company or
Compensation and Benefits Mr. Staples is entitled to an initial base salary of $450,000 (increased to $600,000 in 2021), which is subject to annual review and increase pursuant to employee compensation policies in effect from time to time. In addition, he is eligible to receive an annual performance cash bonus under the MICP in a Gamsey Employment Agreement Pursuant to Mr. Gamsey’s employment letter agreement, dated December 17, 2015, (the “Gamsey Employment Agreement”), Mr. Gamsey serves as our Chief Financial Officer and Executive Vice President. The following terms are provided by the Gamsey Employment Agreement. Employment Term The Gamsey Employment Agreement has no specified employment term and may be terminated by either the Company or Compensation and Benefits Mr. Gamsey is entitled to an initial base salary of $400,000 (increased to $500,000 in 2021), which Jaeger Employment Agreement Pursuant to Mr. Jaeger’s employment letter agreement, dated August 14, 2015 and amended on May 19, 2016 (“the
Employment Term The Jaeger Employment Agreement has no specified employment term and may be terminated by either the Compensation and Benefits Mr. Jaeger is entitled to an initial base salary of
Smith Employment Agreement Pursuant to Ms. Smith’s employment letter agreement, dated May 31, 2017, (the “Smith Employment Agreement”), Ms. Smith was initially engaged as an Executive Vice President and, since May 11, 2022, serves as our President, Data, Technology, and Experience. The following terms are provided by the Employment Term The Smith Employment Agreement has no specified employment term and may be terminated by either the Company or Ms. Smith at any time and for any reason or no reason, upon written notice to the other party. Compensation and Benefits Ms. Smith is entitled to an initial base salary of
an Jardine Employment Agreement Pursuant to Mr. Jardine’s employment letter agreement, dated March 30, 2011, (the “Jardine Employment Agreement”), Mr. Jardine serves as our General Counsel. The following terms are provided by the Employment Term
Compensation and Benefits Mr. Jardine is entitled to an initial base salary of $200,000 (increased to $375,000 in 2023), which is subject to annual review and adjustment pursuant to employee compensation policies in effect from time to time. In addition, he is eligible to participate in the Restrictive Covenants Applicable to Named Executive Officers
of employees and non-solicitation of customers, suppliers, and other business relations during employment and for Grants of The following table provides information
(1) The RSUs granted on May 11, 2023 to Mr. Jardine are
(2) The Time Options granted on May 11, 2023 to Mr. Jardine are scheduled to vest 25% on each of the first four anniversaries of May 11, 2023 subject to Mr. Jardine’s continued employment through the applicable vesting date. (3) Amounts in this column reflect the grant date fair value of the RSUs and
Outstanding Equity Awards at 2023 Year End The following table includes certain information with respect to OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
(1) Amounts represent nonqualified stock options that were vested as of December 31, 2023. (2) Amounts in this column represent the number of time-based vesting nonqualified stock options (“Time Options”) that have not vested on or prior to December 31, 2023. The Time Options (other than those granted to Ms. Smith in 2022 and Mr. Jardine in 2023) provide that, subject to the executive’s continued employment through the applicable vesting date, 20% of the Time Options become vested on each of the first five anniversaries of January 31, 2021. Subject to their continued employment through the applicable vesting dates, 25% of the Time Options granted to Ms. Smith and Mr. Jardine become time vested on each of the first four anniversaries of May 11, 2022 and May 11, 2023, respectively. Amounts in this column also represent the number of performance-based vesting nonqualified stock options (“Performance Options”) that have not vested on or prior to December 31, 2023. In May 2023, the Board of Directors approved a modification of the vesting terms of outstanding unvested and unearned Performance Options previously issued under its equity plans (“Performance Award Vesting Modification”). The Performance Award Vesting Modification, effective on May 10, 2023, allowed for unvested and
original vesting terms, which provide that, subject to the executive’s continued employment through the applicable vesting date, upon each occurrence of
(3) On August 8, 2023, the Company’s Board of Directors declared a one-time special cash dividend of $1.50 per share to
(4) Amounts in this column represent the number of time-based vesting restricted shares and RSUs (“Time Awards”) that have not vested on or prior to December 31, 2023. The Amounts in this column also represent the number of performance-based vesting restricted shares and RSUs (“Performance Awards”) that have not vested on or prior to December 31, 2023. In May 2023, the Board of Directors approved the Performance Award Vesting Modification. The
(5) Amounts reported have been calculated using $16.57, which was the closing price of our common stock on December 29, 2023, the last business day of our 2023 fiscal year.
Option Exercises and Stock Vested in 2023 The following table shows the number of shares acquired upon exercise of option awards and the
(1) The dollar amount reported represents the amount realized on exercise by multiplying the number of shares subject to the stock option that were exercised by the difference between the exercise price and the fair market value of the Company’s common stock on the applicable exercise date. (2) Represents the gross number of shares acquired upon vesting and settlement of restricted stock and RSUs, without taking into account any shares withheld to satisfy applicable tax withholding obligations. (3) The dollar amount reported represents the amount realized by multiplying the number of shares subject to the restricted stock or RSU award that vested by the fair market value of the Company’s common stock on the day of the applicable vesting. Potential Severance Payments or Benefits on a Termination without Cause or for Good Reason under Named Executive Officer Employment Agreements Each Named Executive Officer is entitled to severance payments and benefits pursuant to their respective employment letter agreement. Such Named Executive Officer’s receipt of severance payments and benefits is conditioned upon the Name Executive Officer’s execution of an effective release of claims in favor of the Company and continued compliance with certain restrictive covenants set forth in the respective employment letter agreement. The severance entitlement for each Named Executive Officer is described below: • Mr. Staples is not entitled to any severance payments upon termination due to death, disability, for Cause or without Good Reason (as such terms are defined in the Staples Employment Agreement). Pursuant to the Staples Employment Agreement, if the Company terminates Mr. Staples’ employment without Cause or he resigns for Good Reason, then subject to his continued material compliance with restrictive covenants and his timely execution, without revocation, of an effective release of claims in favor of the Company and its affiliates, he will be entitled to continued payment of his base salary for the lesser of (i) 12 months and (ii) the period commencing on his termination date and ending on the day preceding the date he begins to provide at least half-time services (whether as an employee, contractor or otherwise) to another person or entity, to be paid in accordance with the • Mr. Gamsey is not entitled to any severance payments upon termination for Cause or without Good Reason (as such terms are defined in the Gamsey Employment Agreement). Pursuant to the Gamsey Employment Agreement, if the Company terminates Mr. Gamsey’s employment without Cause or he resigns for Good Reason, then subject to his continued material compliance with restrictive covenants and
effective release of claims in favor of the Company and its affiliates, he will be entitled to (i) continued payment of his base salary for a period of nine months following the termination date, to be paid in accordance with the standard payroll schedule; and (ii) reimbursement for the monthly COBRA premium paid by Mr. Gamsey and his spouse for a period of nine months following the termination date. Pursuant to the Gamsey Employment Agreement, upon termination due to death or disability, Mr. Gamsey’s estate will be entitled to receive a pro-rata bonus, to be paid after March 15 of the year following termination. • Mr. Jaeger is not entitled to any severance payments upon termination for Cause or without Good Reason (as such terms are defined in the Jaeger Employment Agreement). Pursuant to the Jaeger Employment Agreement, if the Company terminates Mr. Jaeger’s employment without Cause or he resigns for Good Reason, then subject to his continued material compliance with restrictive covenants and his timely execution, without revocation, of an effective release of claims in favor of the Company and its affiliates, he will be entitled to (i) continued payment of his base salary for a period of 12 months, to be paid in accordance with the standard payroll schedule and (ii) a pro-rata bonus in an amount equal to at least 6 months of his base salary, to be paid after March 15 of the year following termination, and only if the Company has met its financial targets qualifying management bonuses to be paid. Pursuant to the Jaeger Employment Agreement, upon termination due to death or disability, Mr. Jaeger (or his estate, as applicable) will be entitled to receive a pro-rata bonus in an amount equal to at least 6 months of his base salary, to be paid after March 15 of the year following termination, and only if the Company has met its financial targets qualifying management bonuses to be paid. • Ms. Smith is not entitled to any severance payments upon termination due to death, disability, for Cause or without Good Reason (as such terms are defined in the Smith Employment Agreement). Pursuant to the Smith Employment Agreement, if the Company terminates Ms. Smith employment without Cause or she resigns for Good Reason, then subject to her continued material compliance with restrictive covenants and her timely execution, without revocation, of an effective release of claims in favor of the Company and its affiliates, she will be entitled to continued payment of her base salary for a period of six months following the termination date, to be paid in accordance with the standard payroll schedule. • Mr. Jardine is not entitled to any severance payments upon termination due to death, disability, for Cause or without Good Reason (as such terms are defined in the Jardine Employment Agreement). Pursuant to the Jardine Employment Agreement, if the Company terminates Mr. Jardine’s employment without Cause or he resigns for Good Reason, then subject to his continued material compliance with restrictive covenants and his timely execution, without revocation, of an effective release of claims in favor of the Company and its affiliates, he will be entitled to continued payment of his base salary for a period of six months following the termination date, to be paid in accordance with the standard payroll schedule. For purposes of all of the employment letter agreements: “Cause” is generally defined as: • A willful act or omission constituting dishonesty, fraud, or other willful malfeasance, that is injurious to the financial condition of business reputation of the Company; • Conviction of, or pleading no contest to, any felony or misdemeanor involving moral turpitude; • A material misrepresentation or significant breach of any of the terms of or failure to carry out obligations under the employment letter agreement (and, solely with respect to the Staples Employment Agreement and Gamsey Employment Agreement, subject to certain cure provisions); and • Any judgment made by a court or any binding arbitration award by an arbitral body against the Named Executive Officer that has the effect of materially diminishing the Named Executive Officer’s ability to perform duties under the employment letter agreement.
“Good Reason” is generally defined as: • A material diminution or significant reduction to the applicable Named Executive Officer’s duties, position, or responsibilities; • A reduction in the Named Executive Officer’s base salary, except for a base salary reduction as part of across-the-board reductions in base salary for all executive officers (up to 10% with respect to the Jardine Employment Agreement only); • Other than with respect to the Staples Employment Agreement, a relocation of the Named Executive Officer’s place of employment to a location more than 35 miles from his or her current place of employment (or a material change in the geographic location at which the Named Executive Officer performs services, with respect to the Gamsey Employment Agreement and Smith Employment Agreement only); • With respect to the Staples Employment Agreement, Gamsey Employment Agreement and Smith Employment Agreement only, a material breach by the Company of the terms of the respective employment letter agreement. Potential Accelerations of Vesting under Named Executive Officer Equity Award Agreements upon Termination or Change in Control The equity award agreements governing the outstanding restricted stock, restricted stock units, and stock options held by the Named Executive Officers provide for certain accelerated vesting of the underlying award, as summarized below: Termination Without Cause (or, where applicable, for Good Reason) During Change in Control Protection Period (or Following a Change in Control in which Performance Options or Performance Awards Are Assumed and the Investor Group has Fully Exited) With respect to all unvested restricted stock awards, options, and RSUs held by our Named Executive Officers (except for Ms. Smith), if the participant is terminated without Cause during the 12 month period following a change in control (as defined in our 2021 Equity Plan), then all unvested time vesting awards will vest upon such termination and the time vesting condition will be satisfied with respect to all of the performance vesting awards on the closing of the change in control. With respect to all unvested options and RSUs held by Ms. Smith, if she is terminated without cause or resigns for good reason during the 24 month period following the change in control, all unvested options and RSUs shall become fully vested upon date of termination. In connection with the Performance Award Vesting Modification, the Performance Options and Performance Awards were amended to provide that, if a change of control occurs and the Investor Group (as defined in the award agreement) does not retain any direct or indirect interest in the Company following such change in control and any Performance Options or Performance Awards are assumed by the acquirer of the Company or any successor entity following such change in control, any such assumed Performance Options or Performance Awards that do not vest in connection with such change in control will vest if the Named Executive Officer’s employment is terminated without Cause (as defined in the award agreement) during the 12-month period following the change in control. Termination due to Death or Disability If a Named Executive Officer’s employment is terminated due to death or disability, awards outstanding will receive the following treatment: • With respect to the Time Options (except for the Time Options granted to Ms. Smith in 2022 and Mr. Jardine in 2023), each outstanding unvested option terminates and expires. With respect to the Time Options granted to Ms. Smith in 2022 and Mr. Jardine in 2023 only, each outstanding unvested option which would have become vested
on the vesting date immediately following the date of termination had each remained in service to the Company through such vesting date, will vest as of the date of her death or disability. • With respect to the Performance Options, each outstanding vested option remains exercisable for one year after the Named Executive Officer’s death or disability. • With respect to the RSUs and restricted stock (except for the RSUs granted to Ms. Smith and Mr. Jardine), each outstanding unvested award immediately terminates and is forfeited for no consideration. With respect to RSUs granted to Ms. Smith in 2022 and Mr. Jardine 2023 only, each RSU outstanding which would have become vested on the vesting date immediately following the date of termination had Ms. Smith and Mr. Jardine remained in service to the Company through such vesting date, will vest as of the date of each’s death or disability. Summary of Potential Payments on Termination and/or Change in Control The following table sets forth, for each of our Named Executive Officers, the amount of the severance payments and benefits and the accelerated vesting of equity awards that the Named Executive Officer would have been entitled to under the various termination and change in control events described above, assuming they had terminated employment on December 29, 2023.
(1) With respect to Mr. Gamsey and Mr. Jaeger only, amounts represents the full annual cash performance bonus amount for 2023. The Gamsey Employment Agreement provides for a pro-rata bonus. The Jaeger Employment Agreement provides for a pro-rata bonus in an amount equal to at least 6 months of Mr. Jaeger’s base salary, subject to the Company meeting financial targets qualifying management bonuses to be paid. (2) With respect to Mr. Gamsey only, amount represents the value of continued health and welfare benefits at active employee rates, based upon his benefit election as of January 1, 2024, for a period of 9 months upon a termination without cause or for good reason.
(3) Amounts shown are calculated by aggregating the sums determined by multiplying, for each stock option, (x) the number of stock options that receive accelerated vesting as a result of the applicable termination of employment, by (y) the closing stock price on December 29, 2023 of $16.57 less the exercise price per share of the stock option. The value of accelerated performance vesting stock options is calculated assuming that the applicable performance measures are achieved if a change in control occurred on December 29, 2023. (4) Amounts shown are calculated by aggregating the sums determined by multiplying, for each award, (x) the number of shares of restricted stock and RSUs that receive accelerated vesting as a result of the applicable termination of employment, by (y) the closing stock price on December 29, 2023 of $16.57. The value of accelerated performance vesting restricted stock and RSUs is calculated assuming that the applicable performance measures are achieved if a change in control occurred on December 29, 2023. (5) Represents a cash severance amount equal to 12 months of base salary. (6) Represents a cash severance amount equal to 9 months of base salary. (7) Represents a cash severance amount equal to 6 months of base salary. Chief Executive Officer Pay Ratio As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Regulation S-K of the Exchange Act, we are providing the following information about the relationship of the annual total compensation of our CEO and the annual total compensation of our employees for 2023 (our “CEO pay ratio”). Our CEO pay ratio information is a reasonable good faith estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the rule’s flexibility, the method we used to determine the median employee may be different from our peers, so the ratios may not be comparable. Methodology for Determining Our Median Employee For purposes of the CEO pay ratio disclosure, we are required to identify a median employee based on our worldwide workforce, without regard to their location, compensation arrangements, or employment status (full-time versus part-time). The median employee is determined by identifying the employee whose compensation is at the median of the compensation of our employee population (other than our CEO). The following outlines the methodology, material assumptions, and estimates used to determine the median employee for 2023: Employee Population: We determined that, as of December 31, 2023, the date we selected to identify the median employee, our employee population consisted of approximately 5,000 individuals working for the Company. Compensation Measure Used to Identify the Median Employee: Given the geographical distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements of our employees. Consequently, for purposes of measuring the compensation of our employees to identify the median employee, rather than using annual total compensation, we selected annualized base salary for 2023 as the compensation measure. We did not make any cost-of-living adjustments in identifying the median employee. The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees for 2023 was 105 to 1. This ratio was based on the following: • The annual total compensation of our CEO for 2023, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, was $704,996. • The median of the annual total compensation of all employees (other than our CEO), determined in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, was $6,686.
Pay Versus Performance As required by Item 402(v) of Regulation S-K (“Item 402(v)”), the Company is providing the following information regarding the relationship between the executive compensation actually paid by the Company and the financial performance of the Company using selected financial performance measures over the applicable time period of the disclosure, calculated in a manner consistent with Item 402(v). Please refer to our “Compensation Discussion and Analysis” section for a discussion of the Company’s executive compensation policies and programs and an explanation of how executive compensation decisions are made at First Advantage. The following table includes a calculation of compensation, “compensation actually paid,” that differs significantly from the way in which the Company views annual compensation decisions, as discussed in the Compensation Discussion and Analysis, and from the Summary Compensation Table calculation of compensation.
(a) The Principal Executive Officer (“PEO”) for each of 2021, 2022, and 2023 was Mr. Staples. The non-PEO Named Executive Officers for 2021 were Messrs. Gamsey and Jaeger. The non-PEO Named Executive Officers for 2022 and 2023 were Messrs. Gamsey, Jaeger, and Jardine and Ms. Smith. (b) The dollar amounts reported represent the total compensation for our PEO from the Summary Compensation Table included in this Proxy Statement. (c) The dollar amounts reported represent compensation actually paid to the PEO, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned or paid during the applicable year. The below table describes the amounts that were deducted from or added to the Summary Compensation Table included in this Proxy Statement. The Performance Award Vesting Modification did not have an impact on the fair value of the related awards. As such, no incremental adjustment is required to the amount reported as compensation actually paid.
(d) The dollar amounts reported represent the total compensation for our Non-PEO Named Executive Officers from the Summary Compensation Table included in this Proxy Statement. (e) The dollar amounts reported represent the average compensation actually paid to the non-PEO Named Executive Officers, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned or paid during the applicable year. The below table describes the average amounts that were deducted from or added to the Summary Compensation Table included in this Proxy Statement. The Performance Award Vesting Modification did not have an impact on the fair value of the related awards. As such, no incremental adjustment is required to the amount reported as compensation actually paid.
(f) Reflects our cumulative shareholder returns for the years ended December 31, 2023, 2022, and 2021, assuming the investment of $100 in our common stock at the close of the market on June 23, 2021, the date of our IPO, and that dividends paid by Company are reinvested. (g) Our peer group is hereby incorporated by reference to our peer group identified in this proxy statement in the Compensation Discussion and Analysis. This column reflects the peer group’s cumulative shareholder returns
for the years ended December 31, 2023, 2022, and 2021, assuming the investment of $100 in the peer group and the reinvestment of all dividends. The calculation is additionally adjusted for HireRight Holdings Corporation, Instructure Holdings, Inc., and Sterling Check Corp., each having their IPO on October 29, 2021, July 22, 2021, and September 23, 2021, respectively. (h) Net income and revenues are as reported in our audited consolidated financial statements our 2023 Form 10-K. Revenues were determined to be the most important financial performance measure linking Compensation Actually Paid to Company performance for 2023 and therefore was selected as the 2023 “Company-Selected Measure” as defined in Item 402(v). Relationship Between Compensation Actually Paid and Company Performance Since a significant portion of our CEO’s and other Named Executive Officers’ compensation is performance-based and delivered as equity awards, compensation actually paid has been directionally aligned with our total shareholder return since the date of our IPO. Financial Performance Measures The three financial performance measures listed in the following table represent an unranked list of the “most important” financial performance measures linking compensation actually paid to the Named Executive Officers for 2023 and company performance. We do not consider any one of the following financial performance measures to be the most important measure for our company or executive compensation program. Additional financial performance measures, based on an absolute and relative basis, and other measures were used to link executive pay to company performance as further described in the Compensation Discussion and Analysis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In The following table contains information concerning the compensation of Ms. Bell, Mr. Clark, Dr. Price, and Ms. Sim. Messrs. Osnoss and Rudella and Ms. Stoica are employees of Silver Lake and did not receive any compensation as directors of the Company. Mr. Staples does not receive additional compensation for serving as a director. The compensation paid to Mr. Staples, our Chief Executive Officer, for 2023 is presented in the Summary Compensation Table above.
(1) Amounts reflect the aggregate amount of cash retainers paid during 2023. (2) Amounts reflect the full grant-date fair value of RSUs granted during 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. See Note 10 to our audited consolidated financial statements included in our 2023 Form 10-K for a (3) Dr. Price was appointed to our Compensation Committee as of April 28, 2023.
As of December 31, 2023, the following non-employee directors held the following number of RSUs:
(1) The RSUs of Mr. Clark and Mses. Bell and Sim are scheduled to vest as follows: 13,341 on June 6, 2024 and 5,000 on June 25, 2024. The RSUs of Dr. Price are scheduled to vest as follows: 13,341 on June 6, 2024, 5,080 on June 17, 2024, and 5,080 on June 17, 2025.
EQUITY COMPENSATION PLAN INFORMATION The following table sets forth, as of December 31, 2023, certain information related to our compensation plans under which shares of our common stock may be issued.
(1) Weighted average exercise price relates only to outstanding options. (2) The 2021 Equity Plan and the 2021 Employee Stock Purchase Plan allow for future grants of securities. The maximum number of shares that may be granted under the 2021 Equity Plan is 17,525,000 shares without giving effect to any “evergreen” increase, pursuant to which such “Absolute Share Limit” is automatically increased on the first day of each calendar year commencing on January 1, 2022 and ending on January 1, 2030 in an amount equal to the lesser of (x) 2.5% of the total number of shares of common stock outstanding on the last day of the immediately preceding calendar year and (y) a number of shares as determined by the Board. Restricted stock, stock options, and restricted stock units are counted on a one-for-one basis. The securities reflected in the table above do not reflect vested and unvested shares of restricted stock that were issued under the 2021 Equity Plan. Number of securities to be issued upon exercise or vesting includes securities that may be issued upon satisfaction of performance criteria. The maximum number of shares that may be granted under the 2021 Employee Stock Purchase Plan is 1,525,000 shares without giving effect to any “evergreen” increase, pursuant to which such “Absolute Share Limit” is automatically increased on the first day of each calendar year commencing on January 1, 2022 and ending on January 1, 2030 in an amount equal to the lesser of (x) 0.75% of the total number of shares of common stock outstanding on the last day of the immediately preceding calendar year and (y) a number of shares as determined by the Board. (3) Represents shares issuable under the Class B LP Option Grant Agreements after conversion of the pre-IPO options pursuant to the form of option conversion notice in connection with our IPO. The Class B Options expire ten years subsequent to the date of grant. The Company will not make future grants under the Class B LP Option Grant Agreements. See also Note 10 to our audited financial statements included in our 2023 Form 10-K.
OWNERSHIP OF SECURITIES The following table sets forth information regarding the beneficial ownership of shares of our common stock as of April 25, 2024 by (1) each person known to us to beneficially own more than 5% of our outstanding common stock, (2) each of our directors and Named Executive Officers, and (3) all of our directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC, and includes common stock of which that person has the right to acquire beneficial ownership within 60 days of April 25, 2024.
* Indicates less than one percent of common stock. (1) Represents shares of common stock held of record by SLP Fastball Aggregator, L.P. SLP V Aggregator GP, L.L.C. is the general partner of SLP Fastball Aggregator, L.P. Silver Lake Technology Associates V, L.P. is the managing member of SLP V Aggregator GP, L.L.C. SLTA V (GP), L.L.C. is the general partner of Silver Lake Technology Associates V, L.P. Silver Lake Group, L.L.C., is the managing member of SLTA V (GP), L.L.C. The managing members of Silver Lake Group, L.L.C. are Egon Durban, Kenneth Hao, Gregory Mondre, and Joseph Osnoss. The principal business address for each of the entities identified in this paragraph is c/o Silver Lake Group, L.L.C., 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025. (2) The number of shares of common stock reported includes 18,341 shares underlying RSUs that vest within 60 days of April 25, 2024. (3) Mr. Osnoss is a Managing Partner and Managing Member of Silver Lake, and each of Mr. Rudella and Ms. Stoica is a Director of Silver Lake. (4) The number of shares of common stock reported includes 18,421 shares underlying RSUs that vest within 60 days of April 25, 2024. (5) Includes 911,801 shares of unvested restricted stock and 1,247,514 shares underlying vested options. (6) Includes 189,960 shares of unvested restricted stock and 260,448 shares underlying vested options.
(7) Includes 265,942 shares of unvested restricted stock and 365,507 shares underlying vested options. The number of shares of common stock reported includes 5,000 shares underlying RSUs that vest within 60 days of April 25, 2024. (8) Includes 250,043 shares underlying vested options. The number of shares of common stock reported includes 99,962 and 24,905 shares underlying options and RSUs, respectively, that vest within 60 days of April 25, 2024. (9) Includes 82,280 shares underlying vested options. The number of shares of common stock reported includes 3,937 and 975 shares underlying options and RSUs, respectively, that vest within 60 days of April 25, 2024. (10) Includes 1,367,703 shares of unvested restricted stock and 2,205,792 shares underlying vested options. The number of shares of common stock reported includes 103,899 and 104,324 shares underlying options and RSUs, respectively, that vest within 60 days of April 25, 2024.
Statement of Policy Regarding Transactions with Related Persons Our Board of Directors has adopted a written Related Person Transaction Policy to assist it in reviewing, approving and ratifying transactions with related persons and to assist us in the preparation of related disclosures required by the SEC. This Related Person Transaction Policy supplements our other policies that may apply to transactions with related persons, such as the Corporate Governance Guidelines of our Board of Directors and our Global Code of Conduct and Ethics. The Related Person Transaction Policy provides that all transactions with related persons covered by the policy must be reviewed and approved or ratified by the Audit Committee or disinterested and independent members of the Board of Directors and that any employment relationship or transaction involving an executive officer and any related compensation must be approved or recommended for the approval of the Board of Directors by the Compensation Committee. In reviewing transactions with related persons, the Audit Committee or disinterested members of the Board of Directors, as applicable, will consider all relevant facts and circumstances, including, without limitation: • the relationship of the related person to the Company; • the nature and extent of the related person’s interest in the transaction; • the material terms of the transaction; • the importance of the transaction both to the Company and to the related person; • the business rationale for engaging in the transaction; • whether the transaction would likely impair the judgment of a director or executive officer to act in the best interest of the Company; • whether the value and the terms of the transaction are substantially similar as compared to those of similar transactions previously entered into by the Company with non-related persons, if any; and • any other matters that management or the Audit Committee or disinterested directors, as applicable, deem appropriate. The Audit Committee or disinterested members of the Board of Directors, as applicable, will not approve or ratify any related person transaction unless it determines in good faith that, upon consideration of all relevant information, the related person transaction is in, or is not inconsistent with, the best interests of the Company. The Audit Committee or the disinterested and independent members of the Board of Directors, as applicable, may also conclude, upon review of all relevant information, that the transaction does not constitute a related person transaction and thus that no further review is required under the policy. Generally, the Related Person Transaction Policy applies to any current or proposed transaction that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K in which: • the Company was or is to be a participant; • the amount involved exceeds $120,000; and • any related person (i.e., a director, director nominee, executive officer, greater than 5% beneficial owner and any immediate family member of such person) had or will have a direct or indirect material interest.
Transactions Related to Directors, Equity Holders, and Executive Officers Stockholders’ Agreement In connection with the IPO, we entered into a stockholders’ agreement with Silver Lake, Workday, Inc. and management stockholders (as subsequently amended on February 28, 2024). This agreement grants Silver Lake the right to nominate to our Board of Directors a number of directors proportionate to the percentage of the issued and outstanding common stock owned by Silver Lake and its affiliates and certain transferees so long as Silver Lake and its affiliates and certain of their transferees own at least 5% of our outstanding common stock. In addition, in the event of a vacancy on the Board of Directors, Silver Lake, its affiliates and certain transferees who designated such director shall have the right to have the vacancy filled by a In addition, the stockholders’ agreement grants to In the stockholders’ agreement, we granted Silver Lake and The stockholders’ agreement also requires us to indemnify certain of our stockholders and their affiliates in connection with any registrations of our securities. Agreements with Officers In addition, we have certain agreements with our officers which are described in the section entitled “Executive Compensation.” Director Indemnification We have entered into indemnification agreements with our directors, which agreements require us to indemnify these individuals to the
STOCKHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING If any stockholder wishes to propose a matter for consideration at our 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”), the proposal should be mailed by certified mail return receipt requested, to our Corporate Secretary, In addition, our Bylaws permit stockholders to nominate candidates for director and present other business for consideration at
In addition to satisfying the foregoing requirements under the Company’s bylaws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than First Advantage’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 8, 2025. HOUSEHOLDING OF PROXY MATERIALS SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices of internet availability of proxy materials with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies by reducing printing and mailing costs. While the
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Corporate Secretary First Advantage Corporation 1 Concourse Parkway
Atlanta, Georgia 30328
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