United StatesTable of Contents
Securities and Exchange Commission
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2054820549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No. )
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o | Confidential, for Use of the Commission Only (as | |
ý | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to |
ExlService Holdings, Inc.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
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Date Filed: |
280
320 Park Avenue, 3829th Floor
New York, New York 1001710022
(212) 277-7100
April 28, 2017
26, 2019
Dear Stockholder:
On behalf of the board of directors of ExlService Holdings, Inc., we are pleased to invite you to the 20172019 Annual Meeting of Stockholders, which will be held on June 22, 201717, 2019 in New York, New York.
The Annual Meeting will begin with discussion and voting on the matters set forth on the accompanying Notice of the Annual Meeting and Proxy Statement, followed by discussion of other business matters properly brought before the Annual Meeting.
Pursuant to rules promulgated by the Securities and Exchange Commission, we are providing access to our proxy materials over the Internet. On or about April 28, 2017,26, 2019, we will mail a Notice of Internet Availability of Proxy Materials (the “Internet Notice”"Internet Notice") to each of our stockholders of record and beneficial owners at the close of business on April 26, 2017,18, 2019, the record date for the Annual Meeting. On the date of mailing of the Internet Notice, all stockholders and beneficial owners will have the ability to access all of the proxy materials on a website referred to in the Internet Notice. These proxy materials will be available free of charge.
Even if you choose to attend the Annual Meeting in person, you are encouraged to review the proxy materials and vote your shares in advance of the meeting by Internet or phone. The Internet Notice will contain instructions to allow you to request copies of the proxy materials to be sent to you by mail. Any proxy materials sent to you will include a proxy card that you may use to cast your vote by completing, signing and returning the proxy card by mail (or voting instruction form, if you hold shares through a broker). Your vote is extremely important, and we appreciate you taking the time to vote promptly. If you attend the Annual Meeting, you may withdraw your proxy should you wish to vote in person.
The board of directors and management look forward to seeing you at the Annual Meeting.
Sincerely, | | |
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Garen K. Staglin Chairman | | Rohit Kapoor |
Vice Chairman and CEO |
NOTICE OF 20172019 ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
You are cordially invited to the 20172019 Annual Meeting of Stockholders of ExlService Holdings, Inc., a Delaware corporation (the “Company”"Company"). The Annual Meeting will be held at the New York offices of the Company, 280320 Park Avenue, 3829th Floor, New York, New York 1001710022 on June 22, 201717, 2019 at 9:008:30 AM, Eastern Time, for the purposes of voting on the following matters:
If you are a stockholder of record at the close of business on April 26, 2017,18, 2019, you are entitled to vote at the Annual Meeting. A list of stockholders as of the record date will be available for examination for any purpose germane to the Annual Meeting, during ordinary business hours, at the Company’sCompany's executive offices at 280320 Park Avenue, 3829th Floor, New York, New York 10017,10022, for a period of 10 days prior to the date of the Annual Meeting and at the Annual Meeting itself.
Please note that there are identification, verification of ownership and other requirements for in-person attendance at the Annual Meeting, as described in the enclosed Proxy Statement beginning on page 7 under the heading "Information Concerning Voting and Solicitation."
Whether or not you expect to attend the Annual Meeting in person, the Company encourages you to promptly vote and submit your proxy by (i) Internet (by following the instructions provided in the Internet Notice), (ii) by phone (by following the instructions provided in the Internet Notice) or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Voting by proxy will not deprive you of the right to attend the Annual Meeting or to vote your shares in person. You can revoke a proxy at any time before it is exercised by voting in person at the Annual Meeting, by delivering a subsequent proxy or by notifying the inspector of elections in writing of such revocation prior to the Annual Meeting. YOUR SHARES CANNOT BE VOTED UNLESS YOU EITHER (I) VOTE BY USING THE INTERNET, (II) VOTE BY PHONE, (III) REQUEST PROXY MATERIALS BE SENT TO YOU BY MAIL AND THEN USE THE PROXY CARD PROVIDED BY MAIL TO CAST YOUR VOTE BY COMPLETING, SIGNING AND RETURNING THE PROXY CARD BY MAIL OR (IV) ATTEND THE ANNUAL MEETING AND VOTE IN PERSON.
By Order of the Board of Directors | ||
Ajay Ayyappan Senior Vice President, | ||
General Counsel and Corporate Secretary | ||
New York, New York
April 26, 2019
TABLE OF CONTENTS
Page | ||
1 | ||
7 | ||
11 | ||
CORPORATE GOVERNANCE | ||
24 | ||
31 | ||
EXECUTIVE COMPENSATION | ||
33 | ||
Compensation, Discussion and Analysis | ||
33 | ||
Compensation Committee Report | 49 | |
Summary Compensation Table | 50 | |
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL OWNERS | 68 | |
71 | ||
72 | ||
PROPOSAL 1: AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A PHASED DECLASSIFICATION OF THE BOARD OF DIRECTORS OVER THE NEXT THREE YEARS | 73 | |
75 | ||
PROPOSAL | 77 | |
PROPOSAL | 80 | |
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE | 82 | |
MISCELLANEOUS | 83 | |
OTHER MATTERS | 84 |
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PROXY STATEMENT |
Summary |
Below is a summary of selected key components of this proxy statement, including information regarding this year's stockholder meeting, nominees for our board of directors, summary of our business, performance highlights and selective executive compensation information. This summary does not contain all of the information that you should consider prior to submitting your proxy, and you should review the entire proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the "2018 Form 10-K").
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Annual Meeting Information | | |||
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Time and Date: 8:30 AM (Eastern Time) June 17, 2019 | | |||
April 18, 2019 |
PROXY STATEMENT
| ExlService Holdings, Inc. 320 Park Avenue, 29th Floor New York, New York 10022 | |
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Voting: | Stockholders as of the record date are entitled to vote | |||
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Meeting Agenda, Voting Matters and Recommendations |
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| The Board of Directors recommends a vote | | ||||
| | 1. | | the amendment of the Company's amended and restated certificate of incorporation to effect a phased declassification of the board of directors over the next three years (page 73); | | |
2. | | the election of three Class | ||||
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| 3. | | the ratification of the | |||
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4. | | the approval, on a non-binding advisory basis, of the compensation of the named executive officers of the Company (page | ||||
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the transaction of such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. | | |||||
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Board and Corporate Governance Highlights |
Board of Directors Composition
Board Accountability
| Director Qualifications |
| Our board of directors reflects an effective and diverse mix of skills and experience appropriate for our Company and industry. Our directors have the following attributes: |
| Executive Leadership | | | Board Experience | ||
| Finance and Accounting | | | Client and Industry Expertise | ||
| Global Experience | | | Risk Oversight / Management |
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Class I Board Nominations | |
Name (Year Joined Board) | Principal Occupation* | Committee Membership | | |||||
Rohit Kapoor (November 2002) | Co-founder of EXL Inc. in April 1999; Vice Chairman and CEO of the Company since April 2012 | N/A | ||||||
| Anne Minto (March 2013) | Qualified lawyer and member of Law Society of Scotland; former executive of Centrica plc, Shell UK and Smiths Group plc; non-executive director for Tate and Lyle and Shire plc (2010-2018) | Compensation Committee (Chair), Nominating and Governance Committee | | ||||
Jaynie Studenmund (September 2018) | Former Chief Operating Officer of Overture Services, Inc.; Director for CoreLogic, Inc. and Pinnacle Entertainment, Inc. | Audit Committee, Compensation Committee | ||||||
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Audit committee financial expert under applicable SEC rules and regulations.
Our Business
We are an operations management and analytics company that helps businesses enhance revenue growth and improve profitability. Using our proprietary platforms, methodologies and toolsour full range of digital capabilities, we look deeper to help companies improve globaltransform their businesses, functions and operations, enhance data-driven insights, increaseto help them deliver better customer satisfaction,experience and managebusiness outcomes, while managing risk and compliance. We serve our customers in the insurance, healthcare, travel, transportation and logistics, banking and financial services and utilities industries, among others. Headquartered in New York, we have approximately 26,00029,100 professionals in locations throughout the United States, Europe, Asia (primarily India and the Philippines), Latin America, Australia and South Africa.
Performance Highlights for 2016
Company 3 Year Performance Revenue and Segment Information ($ in millions) | |||
Revenue (Year-over-year growth %) | |||
2014 | 2015 | 2016 | |
Insurance Segment | $151.3(1) | $199.9 (32.1%) | $206.3 (3.2%) |
Healthcare Segment | $42.9 | $55.2 (28.7%) | $68.7 (24.5%) |
Travel, Transportation and Logistics Segment | $47.5 | $62.2 (30.9%) | $69.4 (11.6%) |
Finance and Accounting Segment | $92.0 | $78.5 (-14.7%) | $79.4 (1.2%) |
Analytics | $65.6 | $122.2 (86.3%) | $165.7 (35.6%) |
All Other | $100.0 | $110.5 (10.5%) | $96.5 (-12.7%) |
Consolidated | $499.3(1) | $628.5 (25.9%) | $686.0 (9.1%) |
Performance Highlights for |
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| | Company 3 Year Performance Revenue and Segment Information ($ in millions) | | ||||||||||||||||||
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| | Revenue (Year-over-year growth %) | | ||||||||||||||||||
| | | 2016 | | YOY% | | 2017 | | YOY% | | 2018 | | YOY% | | ||||||||
| Insurance Segment | $ | 206.3 | | 3.2 | % | $ | 234.8 | | 13.8 | % | $ | 258.1 | | 9.9 | % | | |||||
| Healthcare Segment | 68.7 | 24.4 | % | 77.0 | 12.2 | % | 84.4 | 9.6 | % | ||||||||||||
| Travel, Transportation and Logistics Segment | | 69.4 | | 11.4 | % | | 71.0 | | 2.3 | % | | 70.2 | | -1.0 | % | | |||||
| Finance and Accounting Segment | 79.4 | 1.2 | % | 86.5 | 9.0 | % | 97.9 | 13.2 | % | ||||||||||||
| All Other | | 96.5 | | -12.7 | % | | 83.1 | | -13.9 | % | | 87.2 | | 4.8 | % | | |||||
| Analytics Segment | 165.7 | 35.7 | % | 209.9 | 26.7 | % | 285.3 | 35.9 | % | ||||||||||||
| Consolidated | $ | 686.0 | | 9.1 | % | $ | 762.3 | | 11.1 | % | $ | 883.1 | | 15.8 | % | | |||||
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We improved our annual revenues from $628.5$762.3 million in fiscal year 20152017 to $686.0$883.1 million in fiscal year 2016,2018, and also achieved numerous other successes, including the following:
acquisition of a healthcare analytics company and a $150 million strategic investment in our Company by The Orogen Group. For more information regarding these and other business highlights, please see page 23pages 33 to 34 below and the 20162018 Form 10-K.
The graphs below compare our 1-year, 3-year and 5-year total stockholder return (“TSR”("TSR") with that of the companies comprising Nasdaq, S&P 500 and our peer group. As shown in the table, our 3-year TSR outperformed all but one of our market benchmarks while our 5-year TSR outperformed all of our market benchmarks.
2018.
2016 Compensation Highlights
2018 Compensation Highlights |
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Named Executive Officers | | |||||
Name | Title | | ||||
Rohit Kapoor | Vice Chairman and CEO | |||||
| Vishal Chhibbar | Executive Vice President and CFO | | |||
Pavan Bagai | President and Chief Operating Officer | |||||
Nagaraja Srivatsan | Executive Vice President | | ||||
Nalin Miglani | Executive Vice President and Chief Human Resources Officer | |||||
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| 2018 Standard Annual Compensation | | |||||||||||||||||||
| Compensation Component | Rohit Kapoor | Vishal Chhibbar | Pavan Bagai | Nagaraja Srivatsan | Nalin Miglani | |||||||||||||||
| Salary | | $ | 720,000 | | $ | 437,671 | | $ | 301,448 | | | $ | 441,370 | | | $ | 440,137 | | ||
| | Non-Equity Incentive Plan Compensation | | 532,748 | | 173,210 | | 133,946 | | | 172,987 | | | 164,579 | | | |||||
| Equity Awards | | 3,791,277 | | 928,709 | | 1,339,363 | | | 753,076 | | | 809,936 | | |||||||
| | Other Compensation(1) | | 61,484 | | 11,465 | | 74,407 | | | 8,640 | | | 8,640 | | | |||||
| Total | | $ | 5,105,509 | | $ | 1,551,056 | | $ | 1,849,164 | | | $ | 1,376,073 | | | $ | 1,423,292 | | ||
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2016 Standard Annual Compensation | |||||
Compensation Component | Rohit Kapoor | Vishal Chhibbar | Pavan Bagai | Rembert de Villa | Nalin Miglani |
Salary | $615,027 | $411,054(1) | $262,895 | $407,514 | $407,514 |
Non-Equity Incentive Plan Compensation | $525,043 | $210,992 | $200,449 | $341,543 | $231,104 |
Equity Awards | $4,005,938 | $747,775 | $1,335,313 | $640,950 | $640,950 |
Other Compensation(2) | $47,129 | $108,340 | $83,623 | $8,340 | $8,340 |
Total | $5,193,137 | $1,478,161 | $1,882,280 | $1,398,347 | $1,287,908�� |
On an annual basis, we submit to our stockholders a vote to approve, on a non-binding advisory basis, the compensation of our named executive officers as described in this proxy statement. We refer to this vote as “say-on-pay”"say-on-pay". Please refer to our Compensation Discussion and Analysis, startingbeginning on page 2333 for a complete description of our 20162018 compensation program.
Below are a few highlights of our executive compensation:
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Beginning with the 2016 performance-based restricted stock units. We achieved 90.52% of the revenue target for the revenue-linked restricted stock units we altered our equity incentive grants to removeresulting in 5.24% of target funding of those grants. The Company's TSR performance was at the banking feature that allowed an executive to earn a portion40th percentile amongst its peer group, resulting in the executives earning 68.25% of the award prior2016 relative TSR-linked restricted stock units pursuant to the vesting date if specific interim performance targets were achieved.
Compensation Mix:
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Auditor Matters
As a matter of good corporate practice, we are seeking your ratification of ErnstDeloitte & YoungTouche LLP as our independent registered public accounting firm for fiscal year 2017. 2019. The following sets forth fees of Deloitte & Touche LLP, who served as our independent registered public accounting firm for fiscal year 2018.
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| | 2018 (in thousands) | | |||
| | Audit Fees | | | $ | 1,425 | | |
| | Audit-Related Fees | | | — | | ||
| | Tax Fees | | | 523 | | | |
| | All Other Fees | | | 54 | | ||
| | Total | | | $ | 2,002 | | |
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For more information on our auditors, including individual components of 20162018 audit fees and our change in auditors, see page 66.pages 77 to 79.
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6
INFORMATION CONCERNING VOTING AND SOLICITATION |
INFORMATION CONCERNING VOTING AND SOLICITATION
This Proxy Statement is being furnished to you in connection with the solicitation by the board of directors of ExlService Holdings, Inc., a Delaware corporation (“("us,” “we,” “our”" "we," "our" or the “Company”"Company"), of proxies to be used at our 20172019 Annual Meeting of Stockholders (the “Annual Meeting”"Annual Meeting") to be held at the New York offices of the Company, 280320 Park Avenue, 3829th Floor, New York, New York, 1001710022 on June 22, 2017,17, 2019, at 9:008:30 AM, Eastern Time, and any adjournments or postponements thereof.
In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”"SEC"), instead of mailing a printed copy of our proxy materials to each stockholder of record, the Company furnishes proxy materials via the Internet. If you received a Notice of Internet Availability of Proxy Materials (the “Internet Notice”"Internet Notice") by mail, you will not receive a printed copy of our proxy materials other than as described herein. Instead, the Internet Notice will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Internet Notice also instructs you as to how you may submit your proxy over the Internet or by phone. If you received an Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting proxy materials included in the Internet Notice.
It is anticipated that the Internet Notice will be sent to stockholders on or about April 28, 2017.26, 2019. This proxy statement and the form of proxy relating to the Annual Meeting will be made available via the Internet to stockholders on or prior to the date that the Internet Notice is first sent.
Who Can Vote
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Only stockholders who own shares of our common stock at the close of business on April 18, 2019, the record date for the Annual Meeting, can vote at the Annual Meeting. As of the close of business on April 18, 2019, the record date, we had 34,354,362 shares of common stock outstanding and entitled to vote. Each holder of common stock is entitled to one vote for each share held as of the record date for the Annual Meeting. There is no cumulative voting in the election of directors.
How You Can Vote |
If your shares are registered directly in your name with Computershare Trust Company, N.A., our transfer agent (which means you are a "stockholder of record"), you can vote your proxy by (i) Internet, (ii) by phone or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Please refer to the specific instructions set forth in the Internet Notice. You will not be able to vote your shares unless you use one of the methods above to designate a proxy or by attending the Annual Meeting.
If you are the beneficial owner of shares held in the name of a brokerage, bank, trust or other nominee as a custodian (also referred to as shares held in "street name"), your broker, bank, trustee or nominee will provide you with materials and instructions for voting your shares. In addition to voting by mail, a number of banks and brokerage firms participate in a program provided through Broadridge Financial Solutions, Inc. ("Broadridge") that offers telephone and Internet voting options. Votes submitted by telephone or by using the Internet through Broadridge's program must be received by 11:59 p.m. Eastern Time, on June 16, 2019.
If your shares are registered directly in your name with Computershare Trust Company, N.A., our transfer agent (which means you are a “stockholder of record”), you can vote your proxy by (i) Internet, (ii) by phone or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. Please refer to the specific instructions set forth in the Internet Notice. You will not be able to vote your shares unless you use one of the methods above to designate a proxy or by attending the Annual Meeting.
If you are the beneficial owner of shares held in the name of a brokerage, bank, trust or other nominee as a custodian (also referred to as shares held in “street name”), your broker, bank, trustee or nominee will provide you with materials and instructions for voting your shares. In addition to voting by mail, a number of banks and brokerage firms participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that offers telephone and Internet voting options. Votes submitted by telephone or by using the Internet through Broadridge’s program must be received by 11:59 p.m. Eastern Time, on June 21, 2017.
Voting at the Annual Meeting |
Voting by Internet, phone or mail will not limit your right to vote at the Annual Meeting if you decide to attend in person. Our board of directors recommends that you vote by Internet, phone or mail as it is not practical for most stockholders to attend the Annual Meeting. If you are a "stockholder of record," you may vote your shares in person at the Annual Meeting. If you hold your shares in "street name," you must obtain a proxy from your broker, bank, trustee or nominee giving you the right to vote the shares at the Annual Meeting or your vote at the Annual Meeting will not be counted.
Revocation of Proxies |
You can revoke your proxy at any time before it is exercised in any of the following ways:
Required Vote; Effect of Abstentions and Broker Non-Votes
Quorum
A quorum, which is a majority of the issued and outstanding shares of our common stock as of April 26, 2017, must be present, in person or by proxy, to conduct business at the Annual Meeting. A quorum is calculated based on the number of shares represented by the stockholders attending the Annual Meeting in person and by their proxy holders. If you indicate an abstention as your voting preference for all matters to be acted upon at the Annual Meeting, your shares will be counted toward a quorum but they will not be voted on any matter.
Proposal 1: Election of Directors
Under our Fourth Amended and Restated By-Laws (our “by-laws”), directors who are standing for election at the Annual Meeting will be elected by the affirmative vote of a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) by stockholders in person or represented by proxy and entitled to vote at the Annual Meeting. If any incumbent nominee for director receives a greater number of votes “against” his or her election than votes “for” such election, our by-laws provide that such person shall tender to the board of directors his or her resignation as a director. You may cast your vote in favor of electing all of the nominees as directors, against one or more nominees, or abstain from voting your shares. For purposes of the vote on Proposal 1, abstentions and broker non-votes (as described below) will have no effect on the results of the vote.
Other Proposals
The ratification of the appointment of our independent registered public accounting firm, the approval of the compensation of our named executive officers, the determination of how frequently the stockholders should hold a non-binding advisory vote to approve the compensation of the named executive officers of the Company, and each other item to be acted upon at the Annual Meeting will require the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. You may cast your vote in favor of or against these proposals or you may abstain from voting your shares. For purposes of the vote on Proposals 2 (ratification of the appointment of our independent registered public accounting firm), 3 (approval of the compensation of our named executive officers), 4 (determination of how frequently the stockholders should hold a non-binding advisory vote to approve the compensation of our named executive officers), or such other items
A quorum, which is a majority of the issued and outstanding shares of our common stock as of April 18, 2019, must be present, in person or by proxy, to conduct business at the Annual Meeting. A quorum is calculated based on the number of shares represented by the stockholders attending the Annual Meeting in person and by their proxy holders. If you indicate an abstention as your voting preference for all matters to be acted upon at the Annual Meeting, your shares will be counted toward a quorum but they will not be voted on any matter.
Proposal 1: Amendment of the Amended and Restated Certificate of Incorporation to Effect a Phased Declassification of the Board of Directors over the Next Three Years
We are seeking approval of an amendment of Section 6 of our Amended and Restated Certificate of Incorporation to declassify the board over a three-year phase out period (see pages 73 to 74 below), which when completed will allow for the election of all directors on an annual basis. This requires the affirmative vote of the holders of at least 662/3% of the voting power of the
then-outstanding shares of the Company, voting together as a single class. For purposes of the vote on Proposal 1, abstentions and broker non-votes (as described below) will have the effect of a vote against Proposal 1.
Proposal 2: Election of Directors
Under our Fourth Amended and Restated By-Laws (our "by-laws"), directors who are standing for election at the Annual Meeting will be elected by the affirmative vote of a majority of votes cast (meaning the number of shares voted "for" a nominee must exceed the number of shares voted "against" such nominee) by stockholders in person or represented by proxy and entitled to vote at the Annual Meeting. If any incumbent nominee for director receives a greater number of votes "against" his or her election than votes "for" such election, our by-laws provide that such person shall tender to the board of directors his or her resignation as a director. You may cast your vote in favor of electing all of the nominees as directors, against one or more nominees, or abstain from voting your shares. For purposes of the vote on Proposal 2, abstentions and broker non-votes will have no effect on the results of the vote.
Other Proposals
The ratification of the appointment of our independent registered public accounting firm, the advisory (non-binding) approval of the compensation of our named executive officers and each other item to be acted upon at the Annual Meeting will require the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. You may cast your vote in favor of or against these proposals or you may abstain from voting your shares. For purposes of the vote on Proposals 3 (ratification of the appointment of our independent registered public accounting firm), 4 (advisory (non-binding) vote on executive compensation), or such other items properly presented and to be acted upon at the Annual Meeting, abstentions will have the effect of a vote against these proposals. Broker non-votes will have the effect of a vote against Proposal 4, but because Proposal 3 is a "routine" proposal where brokers have discretionary authority to vote in the absence of instruction, there will be no broker non-votes.
If you submit your proxy, but do not mark your voting preference, the proxy holders will vote your shares (i) FOR the amendment of the amended and restated certificate of incorporation, (ii) FOR the election of the Class I nominees for director, (iii) FOR the
ratification of the appointment of our independent registered public accounting firm, (iv) FOR the approval on an advisory (non-binding) basis of the compensation of our named executive officers, and (v) as described below, in the judgment of the proxy holder on any other matters properly presented at the Annual Meeting.
Shares Held in "Street Name" by a Broker
If you are the beneficial owner of shares held in "street name" by a broker, then your broker, as the record holder of the shares, must vote those shares in accordance with your instructions. If you fail to provide instructions to your broker, under the New York Stock Exchange rules (which apply to brokers even though our shares are listed on the NASDAQ Stock Market), your broker will not be authorized to exercise its discretion and vote your shares on "non-routine" proposals, including the election of directors and approval on an advisory (non-binding) basis of the compensation of our named executive officers. As a result, a "broker non-vote" occurs. However, without your instructions, your broker would have discretionary authority to vote your shares only with respect to "routine" proposals, which at the Annual Meeting is the ratification of the appointment of our independent registered public accounting firm.
properly presented and to be acted upon at the Annual Meeting, abstentions will have the effect of a vote against these proposals. Broker non-votes will have the effect of a vote against Proposals 3 and 4, but because Proposal 2 is a “routine” proposal where brokers have discretionary authority to vote in the absence of instruction, there will be no broker non-votes.
If you submit your proxy, but do not mark your voting preference, the proxy holders will vote your shares (i) FOR the election of the nominees for director, (ii) FOR the ratification of the appointment of our independent registered public accounting firm, (iii) FOR the approval of the compensation of our named executive officers, (iv) FOR holding a non-binding advisory voteevery year to approve the compensation of our executive officers, and (v) as described below, in the judgment of the proxy holder on any other matters properly presented at the Annual Meeting.
Shares Held in “Street Name” by a Broker
If you are the beneficial owner of shares held in “street name” by a broker, then your broker, as the record holder of the shares, must vote those shares in accordance with your instructions. If you fail to provide instructions to your broker, under the New York Stock Exchange rules (which apply to brokers even though our shares are listed on the NASDAQ Stock Market), your broker will not be authorized to exercise its discretion and vote your shares on “non-routine” proposals, including the election of directors, approval of the compensation of our named executive officers and approval of how frequently the stockholders should hold a non-binding advisory vote to approve the compensation of our named executive officers. As a result, a “broker non-vote” occurs. However, without your instructions, your broker would have discretionary authority to vote your shares only with respect to “routine” proposals, which at the Annual Meeting is the ratification of the appointment of our independent registered public accounting firm.
Other Matters to Be Acted Upon at the Meeting |
Our board of directors presently is not aware of any matters, other than those specifically stated in the Notice of Annual Meeting, which are to be presented for action at the Annual Meeting. If any matter other than those described in this proxy statement is presented at the Annual Meeting on which a vote may properly be taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting those shares.
Adjournments and Postponements |
Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.
Solicitation of Proxies |
We will pay the cost of printing and mailing proxy materials and posting them on the Internet. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of shares of our common stock.
Internet Availability of Proxy Materials |
Our Notice of Annual Meeting, proxy statement and form of proxy card are each available atwww.proxyvote.com. You may access these materials and provide your proxy by following the instructions provided in the Internet Notice.
Important
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Please promptly vote and submit your proxy by (i) Internet (by following the instructions provided in the Internet Notice), (ii) by phone (by following the instructions provided in the Internet Notice) or (iii) by requesting that proxy materials be sent to you by mail that will include a proxy card that you can use to vote by completing, signing, dating and returning the proxy card in the prepaid postage envelope provided. This will not limit your right to attend or vote at the Annual Meeting. All Annual Meeting attendees may be asked to present valid, government-issued photo identification (federal, state or local), such as a driver's license or passport, and proof of beneficial ownership if you hold your shares through a broker, bank, trust or other nominee (or a proxy signed by a stockholder of record delegating voting authority to the attendee), before entering the Annual Meeting. Attendees will be required to sign in, and may be subject to security inspections. Video and audio recording devices and other electronic devices will not be permitted at the Annual Meeting.
If you have any further questions about voting your shares or attending the Annual Meeting, please call our Investor Relations Department at (212) 624-5913.
If you have any further questions about voting your shares or attending the Annual Meeting, please call our Investor Relations Department at (212) 624-5913.
OUR BOARD OF DIRECTORS |
Our board of directors currently consists of ten directors divided into three classes, with each director serving a three-year term and one class being elected at each year's annual meeting of stockholders.* The current composition of our board of directors is as follows:
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Class I (Term expires 2019)* | Class II (Term expires 2020)* | Class III (Term expires 2021)* | ||||||
Rohit Kapoor | David Kelso | Deborah Kerr | ||||||
| Anne Minto | Som Mittal | Nitin Sahney | | ||||
Jaynie Studenmund | Clyde Ostler | Garen Staglin | ||||||
Vikram Pandit** | ||||||||
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2019 Nominees |
Upon the recommendation of our Nominating and Governance Committee, we are pleased to propose our three (3) existing Class I directors as nominees for re-election as directors at the Annual Meeting.
If Proposal 1 is approved by the Company's stockholders, upon the filing of the amendment to the certificate of incorporation set forth on Appendix A attached hereto, the classification of our board of directors will be phased out over the next three Annual Meetings of Stockholders, such that directors will be elected annually. Accordingly, (i) at the Annual Meeting, each of the Class I director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, (ii) at the 2020 Annual Meeting of Stockholders, each of the Class I and Class II director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, and (iii) at the 2021 Annual Meeting of
Stockholders, each of Class I, Class II and Class III director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, and thereafter the classification of the board of directors will terminate in its entirety. As such, if elected, each of the Class I director nominees will serve a term or one year on our board of directors, until our 2020 Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws.
If Proposal 1 is not approved by the Company's stockholders, and if elected, each of the Class I director nominees will serve a term of three years on our board of directors, until our 2022 Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws.
We believe that our director nominees and continuing directors, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to maintain an effective board to serve the best interests of the Company and its stockholders.
Director Qualifications
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The board of directors considers it paramount to achieving excellence in corporate governance to assemble a board of directors that, taken together, has the skills, qualifications, experience and attributes appropriate for functioning as the board of directors of our Company and working productively with management. The Nominating and Governance Committee of the Board is responsible for recommending nominees that are qualified and that bring a diverse set of skills and qualifications to oversee the Company effectively.
The Nominating and Governance Committee has not formally established any minimum qualifications for director candidates. However, in light of our business, the primary areas of experience, qualifications and attributes typically sought by the Nominating and Governance Committee in director candidates include, but are not limited to, the following primary areas:
Executive Leadership | ||
Experience holding significant leadership positions, including as a CEO or head of a significant business, to help us drive business strategy, growth and performance. | ||
Finance and Accounting | ||
Experience with finance, accounting or financial reporting processes, to help drive financial performance. | ||
Global Experience | ||
Experience working outside of the United States or with multinational companies, to help facilitate our global expansion. | ||
Board Experience | ||
Understanding of public company board of | ||
Client and Industry Expertise | ||
Experience with | ||
Risk Oversight / Management | ||
Experience assessing and overseeing the overall risk profile of multinational public companies. |
We note that, in addition to satisfying these general qualifications considered by the Nominating and Governance Committee in connection with a director nomination, Vikram S. Pandit was appointed to the Board on October 4, 2018 as a Class III director pursuant to the
terms of an Investment Agreement, dated as of October 1, 2018 (the "Investment Agreement"), between the Company and Orogen Echo LLC, an affiliate of The Orogen Group LLC (the "Purchaser"). The Investment Agreement was entered into in connection with our issuance to the Purchaser of $150,000,000 in aggregate principal amount of 3.50% Convertible Senior Notes due October 1, 2024 (the "notes"). For so long as the Purchaser has the right to nominate a director to the Board under the Investment Agreement, we have, subject to the terms of the Investment Agreement, agreed to include such person in our slate of nominees for election to our board of directors at each of our annual meetings of stockholders at which directors are to be elected, and to use our reasonable best efforts to cause the election of such person to our board of directors. The Purchaser's right to nominate a director will terminate if Purchaser and its affiliates beneficially own less than 50% of the number of shares of our common stock deemed beneficially owned by the Purchaser and its affiliates immediately following the issuance of the notes (which, for purposes of the Investment Agreement, includes shares of our common stock issuable upon conversion of the notes).
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Audit committee financial experts under applicable SEC rules and regulations.
The election of our Class II directors will take place at the Annual Meeting. If elected, each of the Class II director nominees will serve on our board of directors until our 2020 Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws.
Board of Directors
The names, ages and principal occupations (which have continued for at least the past five years unless otherwise indicated) and other information, including the specific experience, qualifications, attributes or skills that led to the conclusion that such person should serve as a director of the Company, with respect to each of the nominees and continuing directors are set forth below. There are no family relationships among any of our directors or executive officers.
Class I Directors (Terms Expiring at the Annual Meeting)
Rohit Kapoor | | Director since November 2002, Vice Chairman and CEO since April 2012 | Independent: No |
Rohit Kapoor—Age: 54—co-founded EXL Inc. in April 1999 and has served as our Vice Chairman and CEO since April 2012 and as a director since November 2002. He previously served as our President and CEO from May 2008 to March 2012. Mr. Kapoor's business experience and directorships are detailed below. The Company has concluded that, in connection with Mr. Kapoor's experience as a founder and current role as CEO of the Company, Mr. Kapoor should serve as a |
Committees:N/A
Business Experience at the Company
Other Business Experience
Public Directorships during Past Five Years
Other Relevant Experience
Anne E. Minto | | Director since March 2013 | Independent: Yes |
Anne E. Minto—Age: 65—is a qualified lawyer and member of the Law Society of Scotland. Ms. Minto's business experience and directorships are detailed below. The Company has concluded, based in part on Ms. Minto's extensive experience as a member of international company boards and of management in the human resources field, together with |
Committees:Compensation (Chair), Nominating and Governance
Business Experience
Public Directorships During the Past Five Years
Other Relevant Experience
Jaynie M. Studenmund | | Director since September 2018 | Independent: Yes |
Jaynie M. Studenmund—Age: 64—is a seasoned executive with significant experience advising and leading digital companies. Ms. Studenmund's business experience and directorships are detailed below. The Company has concluded, based in part on Ms. Studenmund's extensive public company board experience, together with her knowledge and experience in the digital, financial services, health care and consumer business sectors, that Ms. Studenmund should serve as a director. |
Committees:Audit*, Compensation
Business Experience
Public Directorships During the Past Five Years
Other Relevant Experience
Class II Directors (Terms Expiring in 2020)
David Kelso | | Director since July 2006 | Independent: Yes |
David B. Kelso—Age: 66—is a financial advisor for Kelso Advisory Services, a company he started in 2003. Mr. Kelso's business experience and directorships are detailed below. The Company has concluded, based in part on Mr. Kelso's business experience with Inductis, his management and operating experience at major public companies, his expertise in finance, strategy and investments, and his board and committee service at other global companies, that Mr. Kelso should serve as a director. |
Committees:Audit*, Nominating and Corporate Governance (Chair)
Business Experience
Public Directorships During Past Five Years
Other Directorships
Other Relevant Experience
Som Mittal | | Director since December 2013 | Independent: Yes |
Som Mittal—Age: 67—has held various corporate leadership roles in the IT industry since 1989 and extensive experience in the engineering and automotive sectors. His business experience and directorships are detailed below. The Company has concluded, based in part on Mr. Mittal's business experience as President of NASSCOM and his knowledge of the global outsourcing industry, that Mr. Mittal should serve as a director. |
Committees:Compensation, Nominating and Corporate Governance
Business Experience
Public Directorships During Past Five Years
Other Directorships
Other Relevant Experience
Clyde Ostler | | Director since December 2007 | Independent: Yes |
Clyde W. Ostler—Age: 72—is a retired executive of Wells Fargo and during his 40-year tenure held numerous senior leadership positions within that organization. The Company has concluded, based in part on Mr. Ostler's business experience through his positions at Wells Fargo & Company, that Mr. Ostler should serve as a director. |
Committees:Audit (Chair)*, Compensation
Business Experience
Public Directorships During the Past Five Years
Other Directorships
Class III Directors (Terms Expiring in 2021)
Deborah Kerr | | Director since January 2015 | Independent: Yes |
Deborah Kerr—Age: 47—is a proven technology leader in the software industry with more than 25 years of diverse management experience. Ms. Kerr's business experience and directorships are detailed below. The Company has concluded, based in part on Ms. Kerr's experience in the technology, digital, marketing, operations and software and services industries, and her general management experience, that Ms. Kerr should serve as a director. |
Committees:Compensation, Nominating and Corporate Governance
Business Experience
Public Directorships during Past Five Years
Other Directorships
Vikram S. Pandit | | Director since October 2018 | Independent: Yes |
Vikram S. Pandit—Age: 62—is Chairman and Chief Executive Officer of the Orogen Group, which makes significant long-term strategic investments in financial services companies and related businesses. Mr. Pandit's business experience and directorships are detailed below. Mr. Pandit was appointed to the Board pursuant to the terms of an Investment Agreement, dated as of October 1, 2018, between the Company and Orogen Echo LLC, an affiliate of The Orogen Group LLC. The Company has concluded, based in part on Mr. Pandit's more than 30 years of experience in the financial services industry, including his experience as Chief Executive Officer and a member of the board of directors of Citigroup Inc. (NYSE: C), that Mr. Pandit should serve as a director. |
Committees:Audit
Business Experience
Public Directorships During the Past Five Years
Other Relevant Experience
Nitin Sahney | | Director since January 2016 | Independent: Yes |
Nitin Sahney—Age: 56—is a leader in the healthcare industry with over 25 years of experience across all areas of healthcare. Mr. Sahney's business experience and directorships are The Company has concluded, based in part on Mr. Sahney's experience as CEO of Omnicare, Inc. and his expertise in the healthcare industry garnered from more than two decades of experience, that Mr. Sahney should serve as a director. |
Committees:Audit, Compensation
Business Experience
Other Relevant Experience
| Director | Independent: Yes |
Garen K. Staglin—Age: 74—has over 40 years of experience in
Committees:Compensation, Nominating and Corporate Governance |
Business Experience
Public Directorships during Past Five Years
Other Directorships
Other Relevant Experience
CORPORATE GOVERNANCE |
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Class III Directors (Terms Expiring in 2018)
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Class I Directors (Terms Expiring in 2019)
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There are no family relationships among any of our directors or executive officers.
Director Independence
Our
In determining director independence, the board of directors considered the transactions and relationships set forth below under "Certain Relationships and Related Person Transactions—Related Party Transactions." Based on its review of all applicable relationships, our board of directors has determined that all of the members on our board of directors, other than Mr. Kapoor, meet the independence requirements of the Nasdaq Stock Market and federal securities laws.
Meeting Attendance
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Our directors are expected to attend all board of directors meetings and meetings of committees on which they serve. Directors are also expected to spend sufficient time and meet as frequently as necessary to discharge their responsibilities properly. Each member of our board of directors attended at least 75% of the aggregate meetings of our board of directors and the committees on which they served during 2018. It is our policy that all of our directors should attend our Annual Meetings of Stockholders absent exceptional cause. All of the persons who were members of the board of directors at the time of our 2018 Annual Meeting of Stockholders attended such meeting.
Board Leadership Structure |
Our board of directors is currently led by Garen K. Staglin, our Chairman, and Rohit Kapoor, our Vice Chairman and CEO.
Our by-laws provide that our Chairman or, in the absence of our Chairman, our Lead Director (if there is a Lead Director serving at such time), or in the absence of both our Chairman and Lead Director, our CEO, shall call meetings of our board of directors to order and shall act as the chairman thereof. In the absence of our Chairman, our Lead Director (if there is a Lead Director serving at such time), and our CEO, a majority of our directors present may elect as chairman of the meeting any director present. Independent directors meet at least quarterly in executive session without any management directors or members of the Company’s management present. The Lead Director or, in the absence of the Lead Director, a director chosen by the directors meeting in executive session, presides at all executive sessions.
Consolidating the Vice Chairman and CEO positions allows our CEO to contribute his experience and perspective regarding management and leadership of the Company towards the goals of improved corporate governance and greater management accountability. In addition, the presence of our Chairman ensures that the board can retain sufficient delineation of responsibilities, such that our Chairman and our Vice Chairman and CEO may each successfully and effectively perform and discharge their respective duties and, as a corollary, enhance our prospects for success. The Company will thus benefit from the ability to integrate the collective leadership and corporate governance experience of our Chairman and our Vice Chairman and CEO, while retaining the ability to facilitate the functioning of the board of directors independently of our management and to focus on our commitment to corporate governance.
For the foregoing reasons, our board of directors has determined that its leadership structure is appropriate and in the best interests of our stockholders at this time.
Our by-laws provide that our Chairman or, in the absence of our Chairman, our Lead Director (if there is a Lead Director serving at such time), or in the absence of both our Chairman and Lead Director, our CEO, shall call meetings of our board of directors to order and shall act as the chairman thereof. In the absence of our Chairman, our Lead Director (if there is a Lead Director serving at such time), and our CEO, a majority of our directors present may elect as chairman of the meeting any director present. Independent directors meet at least quarterly in executive session without any management directors or members of the Company's management present. The Lead Director or, in the absence of the Lead Director, a director chosen by the directors meeting in executive session, presides at all executive sessions.
Consolidating the Vice Chairman and CEO positions allows our CEO to contribute his experience and perspective regarding management and leadership of the Company towards the goals of improved corporate governance and greater management accountability. In addition, the presence of our Chairman ensures that the board can retain sufficient delineation
of responsibilities, such that our Chairman and our Vice Chairman and CEO may each successfully and effectively perform and discharge their respective duties and, as a corollary, enhance our prospects for success. As a result, the Company will benefit from the ability to integrate the collective leadership and corporate governance experience of our Chairman and our Vice Chairman and CEO, while retaining the ability to facilitate the functioning of the board of directors independently of our management and to focus on our commitment to corporate governance. For the foregoing reasons, our board of directors has determined that its leadership structure is appropriate and in the best interests of our stockholders at this time.
Majority Voting in Director Elections
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Under our by-laws, directors who are standing for election in an uncontested election are elected by the affirmative vote of a majority of votes cast (meaning the number of shares voted "for" a nominee must exceed the number of shares voted "against" such nominee) in person or represented by proxy and entitled to vote at the meeting. If any incumbent nominee for director in an uncontested election receives a greater number of votes "against" his or her election than votes "for" such election, our by-laws provide that such person shall tender to the board of directors his or her resignation as a director. (In contested elections, directors will be elected by the affirmative vote of a plurality of votes cast in person or represented by proxy and entitled to vote at the Annual Meeting.) An uncontested election means an election in which the number of nominees for director is not greater than the number to be elected.
incumbent nominee for director in an uncontested election receives a greater number of votes “against” his or her election than votes “for” such election, our by-laws provide that such person shall tender to the board of directors his or her resignation as a director. (In contested elections, directors will be elected by the affirmative vote of a plurality of votes cast in person or represented by proxy and entitled to vote at the Annual Meeting.) An uncontested election means an election in which the number of nominees for director is not greater than the number to be elected.
Committees |
Our board of directors currently has three standing committees: the Audit Committee, the Nominating and Governance Committee and the Compensation Committee.
Audit Committee.
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Our Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent registered public accounting firm, and our independent registered public accounting firm reports directly to our Audit Committee. Our Audit Committee also reviews and approves specified related-party transactions as required by the rules of the Nasdaq Stock Market, and oversees the Company's cyber security program and cyber strategy-related risks. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). Our Audit Committee annually reviews and assesses the adequacy of the Audit Committee charter and its own performance. A copy of our Audit Committee charter can be found on our website at www.exlservice.com. Information on our website referred to in this proxy statement does not constitute a part of this proxy statement.
The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the "Exchange Act"). Our Audit Committee annually reviews and assesses the adequacy of the Audit Committee charter and its own performance. A copy of our Audit Committee charter can be found on our website at www.exlservice.com. Information on our website referred to in this proxy statement does not constitute a part of this proxy statement.
The members of our Audit Committee are appointed by our board of directors. All members of our Audit Committee must also be recommended by our Nominating and Governance Committee. Our board of directors has determined that all of the members of the Audit Committee meet the independence and experience requirements of the Nasdaq Stock Market and the federal securities laws for audit committee membership.
Nominating and Governance Committee.
The members of our Audit Committee are appointed by our board of directors. All members of our Audit Committee must also be recommended by our Nominating and Governance Committee. Our board of directors has determined that all of the members of the Audit Committee meet the independence and experience requirements of the Nasdaq Stock Market and the federal securities laws for audit committee membership. During 2016, our Audit Committee met six times.
Nominating and Governance Committee.Our Nominating and Governance Committee identifies individuals qualified to become members of our board of directors (consistent with criteria approved by our board of directors), selects, or recommends that our board of directors select,is responsible for: (i) identifying and recommending candidates for election to our board of directors developsusing selection criteria approved by our board of directors, (ii) developing and recommendsrecommending to our board of directors Corporate Governance Guidelines that are applicable to us, and oversees(iii) overseeing our board of director and management evaluations. A copy of our Nominating and Governance Committee charter can be found on our website at www.exlservice.com.Our Nominating and Governance Committee has a policy, reflected in such committee’s charter, of considering director candidates recommended by our stockholders. Candidate recommendations should be sent to our Nominating and Governance Committee, c/o ExlService Holdings, Inc., 280 Park Avenue, 38th Floor, New York, New York 10017, Attention: Corporate Secretary. Our Nominating and Governance Committee evaluates all candidates in the same manner regardless of the source of the recommendation. Our Nominating and Governance Committee, in making its selection of director candidates, considers the appropriate skills and personal characteristics required in the light of the then-current makeup of our board of directors and in the context of our perceived needs at the time. The Nominating and Governance Committee considers a number of factors in selecting director candidates, including, among others, ethical standards and integrity; independence; diversity of professional and personal backgrounds; skills and experience; other public company directorships; and financial literacy and expertise; communication skills; and ability and willingness to comply with Company policies and procedures.Our Nominating and Governance Committee reviews written and oral information provided by and about candidates and considers any additional criteria it feels is appropriate to ensure that all director nominees possess appropriate skills and experience to serve as a member of our board of directors.Although our Nominating and Governance Committee does not have a formal policy with regard to diversity of board members, pursuant to our Corporate Governance Guidelines, our board of directors seeks members from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. This assessment includes an individual’s independence, as well as consideration of diversity, age, skills and experience in the context of the needs of the board of directors. Our Nominating and Governance Committee reviews and makes recommendations regarding the composition of our board of directors in order to ensure that the board has an appropriate breadth of expertise and its membership consists of persons with sufficiently diverse and independent skill sets and backgrounds. The Nominating and Governance Committee also oversees our director onboarding and training program, which provides new directors with training regarding the Company’s policies and procedures and specific requirements that may be needed based on the director’s committee memberships. Our Nominating and Governance Committee annually reviews and assesses the adequacy of the Nominating and Governance Committee charter and its own performance.The members of our Nominating and Governance Committee are appointed by our board of directors. During 2016, our Nominating and Governance Committee met five times. Our board of directors has determined that all of the members of the Nominating and Governance Committee meet the independence requirements of the Nasdaq Stock Market and federal securities laws.Compensation Committee.
Our Nominating and Governance Committee has a policy, reflected in such committee's charter, of considering director candidates recommended by our stockholders. Candidate recommendations should be sent to our Nominating and Governance Committee, c/o ExlService Holdings, Inc., 320 Park Avenue, 29th Floor, New York, New York 10022, Attention: Corporate Secretary. Our Nominating and Governance Committee evaluates all candidates in the same manner regardless of the source of the recommendation. Our Nominating and Governance Committee, in making its selection of director candidates, considers the appropriate skills and personal characteristics required in the light of the then-current makeup of our board of directors and in the context of our perceived needs at the time. The Nominating and Governance Committee considers a number of factors in selecting director candidates, including, among others, ethical standards and integrity; independence; diversity of professional and personal backgrounds; skills and experience; other public company directorships; and financial literacy and expertise; communication skills; and ability and willingness to comply with Company policies and procedures.
Our Nominating and Governance Committee reviews written and oral information provided by and about candidates and considers any additional criteria it feels is appropriate to ensure that all director nominees possess appropriate skills and experience to serve as a member of our board of directors.
Although our Nominating and Governance Committee does not have a formal policy with regard to diversity of board members, pursuant to our Corporate Governance Guidelines, our
board of directors seeks members from diverse professional and personal backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. This assessment includes an individual's independence, as well as consideration of diversity, age, skills and experience in the context of the needs of the board of directors. Our Nominating and Governance Committee reviews and makes recommendations regarding the composition of our board of directors in order to ensure that the board has an appropriate breadth of expertise and its membership consists of persons with sufficiently diverse and independent skill sets and backgrounds. The Nominating and Governance Committee also oversees our director onboarding and training program, which provides new directors with training regarding the Company's policies and procedures and specific requirements that may be needed based on the director's committee memberships. Our Nominating and Governance Committee annually reviews and assesses the adequacy of the Nominating and Governance Committee charter and its own performance.
The members of our Nominating and Governance Committee are appointed by our board of directors. Our board of directors has determined that all of the members of the Nominating and Governance Committee meet the independence requirements of the Nasdaq Stock Market and federal securities laws.
Compensation Committee.
Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our directors, officers and employees and is responsible for approving the compensation of our Vice Chairman and CEO and other executive officers. Our Compensation Committee also reviews, evaluates and makes recommendations to our board of directors with respect to our incentive compensation plans and equity-based plans and administers the |
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issuance of awards under our equity incentive plans. Our Compensation Committee charter permits the committee to form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Nasdaq Stock Market. Any such subcommittee must have a published committee charter.
Our Compensation Committee charter also permits the committee to retain advisors, consultants or other professionals to assist the Compensation Committee to evaluate director, Vice Chairman and CEO or other senior executive compensation and to carry out its duties. For 2018, our Compensation Committee retained the services of Frederick W. Cook & Co., Inc. ("FW Cook"), a qualified and independent compensation consultant, to aid the Compensation Committee in performing its review of executive compensation including executive compensation benchmarking and peer group analysis. Our Compensation Committee annually reviews and assesses the adequacy of the Compensation Committee charter and its own performance. Additional information regarding our Compensation Committee's processes and procedures for considering executive compensation are addressed in the Compensation
Discussion and Analysis below. A copy of our Compensation Committee charter can be found on our website at www.exlservice.com.
The members of our Compensation Committee are appointed by our board of directors. All new members of our Compensation Committee must be recommended by our Nominating and Governance Committee. Our board of directors has determined that all members of the Compensation Committee meet the independence requirements of the Nasdaq Stock Market and federal securities laws for compensation committee membership.
Risk Oversight |
Our board of directors provides risk oversight. Our management assists the board in identifying strategic and operating risks that could affect the achievement of our business goals and objectives, assessing the likelihood and potential impact of these risks and proposing courses of action to mitigate and/or respond to these risks. These risks are reviewed and discussed periodically with the full board of directors as part of the business and operating review.
Our management is responsible for management of our day-to-day risks, and, because we are exposed to financial risks in multiple areas of our business, day-to-day risk management activities and processes are performed by multiple members of our senior and other management. Our board of directors primarily relies on the Audit Committee for oversight of our risk management and cyber security risk. The Audit Committee regularly reviews and discusses with management our major financial risk and cyber security exposures and the steps management has taken to monitor, control and manage such exposures, including our risk assessment and risk management guidelines and policies. In addition, our management maintains, as part of our disclosure controls and procedures, a separate disclosure committee that, as part of its review of our quarterly and annual reports, helps facilitate understanding by
Our management is responsible for management of our day-to-day risks, and, because we are exposed to financial risks in multiple areas of our business, day-to-day risk management activities and processes are performed by multiple members of our senior and other management. Our board of directors primarily relies on the Audit Committee for oversight of our risk management and cyber security risk. The Audit Committee regularly reviews and discusses with management our major financial risk and cyber security exposures and the steps management has taken to monitor, control and manage such exposures, including our risk assessment and risk management guidelines and policies. In addition, our management maintains, as part of our disclosure controls and procedures, a separate disclosure committee that, as part of its review of our quarterly and annual reports, helps facilitate understanding by the Audit Committee and our full board of directors of new or changing risks affecting us. Once a year, the full board receives a report from management on the Company's readiness and capability to prevent, detect and respond to a cyber-attack.
In addition, we maintain Risk Appetite Guidelines that describe certain categories of risk and qualitative and quantitative thresholds considered by the Company to be consistent with its strategic objectives. These guidelines are designed to serve as a reference in assessing and implementing strategy, and to be actionable by management such that they are meaningful from an operational perspective.
the Audit Committee and our full board of directors of new or changing risks affecting us. Once a year, the full board receives a report from management on the Company’s readiness and capability to prevent, detect and respond to a cyber-attack.
In addition, in February 2017 we implemented our Risk Appetite Guidelines that describe certain categories of risk and qualitative and quantitative thresholds considered by the Company to be consistent with its strategic objectives. These guidelines are designed to serve as a reference in assessing and implementing strategy, and to be actionable by management such that they are meaningful from an operational perspective.
Compensation Committee Interlocks and Insider Participation |
Ms. Kerr, Ms. Minto, Mr. Mittal, Mr. Ostler, and Mr. Staglin and Ms. Studenmund are the members of our Compensation Committee.
During 2016, none of our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our board of directors or Compensation Committee.
During 2018, none of our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our board of directors or Compensation Committee.
Other Directorships |
The Board maintains a practice whereby our directors disclose to the Board any offers to be a director of any other organization, which is then evaluated by the Board for potential business and other conflicts.
Code of Conduct and Ethics; Corporate Governance Guidelines |
Our board of directors has adopted a Code of Conduct and Ethics that is applicable to our directors, officers and employees and which outlines the high ethical standards that we support and details how our directors, officers and employees should conduct themselves when dealing with fellow employees, clients, suppliers, competitors and the general public. Our Code of Conduct and Ethics is reviewed annually by the Audit Committee. A copy of our Code of Conduct and Ethics can be found on our website at www.exlservice.com.
Our board of directors has also adopted a set of Corporate Governance Guidelines to assist our board of directors in the exercise of its responsibilities. The Corporate Governance Guidelines reflect the commitment of our board of directors to monitor the effectiveness of policy and decision-making, both at the board and senior management levels, and to enhance stockholder value over the long term. A copy of our Corporate Governance Guidelines can be found on our website at www.exlservice.com.
Our board of directors has also adopted a set of Corporate Governance Guidelines to assist our board of directors in the exercise of its responsibilities. The Corporate Governance Guidelines reflect the commitment of our board of directors to monitor the effectiveness of policy and decision-making, both at the board and senior management levels, and to enhance stockholder value over the long term. A copy of our Corporate Governance Guidelines can be found on our website at www.exlservice.com.
Communications with the Board |
Stockholders interested in contacting our board of directors, our Chairman or any individual director are invited to do so by writing to:
Board of Directors of ExlService Holdings, Inc.
c/o Corporate Secretary
ExlService Holdings, Inc.
280 Park Avenue, 38th Floor
New York, New York 10017
All other stockholder communications addressed to our board of directors will be referred to our Chairman and tracked by our Corporate Secretary. Stockholder communications specifically addressed to a particular director will be referred to that director.
Board of Directors of ExlService Holdings, Inc.
c/o Corporate Secretary
ExlService Holdings, Inc.
320 Park Avenue, 29th Floor
New York, New York 10022
All other stockholder communications addressed to our board of directors will be referred to our Chairman and tracked by our Corporate Secretary. Stockholder communications specifically addressed to a particular director will be referred to that director.
Complaints and concerns relating to our accounting, internal accounting controls or auditing matters should be communicated to our Audit Committee, which consists solely of non-employee directors. Any such communication may be anonymous and may be reported to our Audit Committee through our General Counsel by writing to:
Audit Committee of the Board of Directors
ExlService Holdings, Inc.
320 Park Avenue, 29th Floor
New York, New York 10022
Attn: General Counsel
All such concerns will be reviewed under Audit Committee direction and oversight by our General Counsel, our Head of Internal Audit or such other persons as our Audit Committee determines to be appropriate. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of our Audit Committee. We prepare periodic summary reports of all such communications for our Audit Committee.
Complaints and concerns relating to our accounting, internal accounting controls or auditing matters should be communicated to our Audit Committee, which consists solely of non-employee directors. Any such communication may be anonymous and may be reported to our Audit Committee through our General Counsel by writing to:
Audit Committee of the Board of Directors
ExlService Holdings, Inc.
280 Park Avenue, 38th Floor
New York, New York 10017
Attn: General Counsel
All such concerns will be reviewed under Audit Committee direction and oversight by our General Counsel, our Head of Internal Audit or such other persons as our Audit Committee determines to be appropriate. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of our Audit Committee. We prepare periodic summary reports of all such communications for our Audit Committee.
Section 16(a) Beneficial Ownership Reporting Compliance |
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership on Forms 3, 4 and 5 with the SEC. Officers and directors are required to furnish us with copies of all Forms 3, 4 and 5 they file. Based solely on a review of the reports furnished to us, or written
representations from reporting persons that all reportable transaction were reported, the Company's officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a) with respect to transactions during fiscal year 2018, except for the following Form 4s that were filed subsequent to the due date on account of administrative error: one report (one transaction) for each of Messrs. Staglin, Kapoor, Bagai, Bhalla, Chhibbar, Miglani and Srivatsan and one report (one transaction) for each of Mr. Rembert de Villa and Ms. Nancy Saltzman, each a former officer of the Company.
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership on Forms 3, 4 and 5 with the SEC. Officers and directors are required to furnish us with copies of all Forms 3, 4 and 5 they file. Based solely on a review of the reports furnished to us, or written representations from reporting persons that all reportable transaction were reported, the Company’s officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a) with respect to transactions during fiscal year 2016.
OUR EXECUTIVE OFFICERS |
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Rohit Kapoor (age 54) | Vice Chairman and CEO | See section entitled "Our Board of Directors" above. | ||||||
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| Ajay Ayyappan (age 41) | Senior Vice President, General Counsel and Corporate Secretary | Mr. Ayyappan has served as our Senior Vice President, General Counsel and Corporate Secretary since December 2018 and our Vice President, Acting General Counsel and Corporate Secretary since August 2018. He previously served as Vice President, Deputy General Counsel and Assistant Secretary from April 2014 to August 2018 and Vice President and Assistant General Counsel from March 2007 to March 2014. Prior to joining us, Mr. Ayyappan was a corporate associate at the law firm of Morgan, Lewis & Bockius LLP. | | ||||
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Pavan Bagai (age 57) | President and Chief Operating Officer | Mr. Bagai has served as our President and Chief Operating Officer since April 2012, as our Chief Operating Officer from May 2008 to March 2012 and as Vice President, Head of Outsourcing Services of EXL India from June 2006 until April 2008. He previously served as Vice President, Research and Analytics of EXL India from December 2004 to May 2006, as Vice President, Operations of EXL India from November 2003 to November 2004 and as Vice President, Strategic Businesses of EXL India from July 2002 to November 2003. Prior to joining us, Mr. Bagai served in various capacities in several business areas across markets in Europe and Asia, including India, at Bank of America beginning in 1985. | ||||||
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| Vikas Bhalla (age 47) | Executive Vice President and Head of Insurance | Mr. Bhalla has served as our Executive Vice President and Head of Insurance since January 2014, and as our Head of Outsourcing since November 2009. He previously served as Vice President, Operations of EXL India from June 2006 to October 2009 and as Vice President, Migrations, Quality and Process Excellence of EXL India from April 2002 to June 2006 and as Director, Quality Initiatives of EXL India from May 2001 to March 2002. From May 1998 to May 2001, Mr. Bhalla served in various capacities at General Electric, including as the Quality Leader and E-Business Leader for GE Plastics India. | | ||||
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Vishal Chhibbar (age 51) | Executive Vice President and CFO | Mr. Chhibbar has served as our Executive Vice President and CFO since April 2012 and as our CFO since June 2009. He has over 25 years of professional experience in finance. Prior to joining us, Mr. Chhibbar was with GE Capital in various leadership roles. Since 2005, Mr. Chhibbar has served as the Regional Head, Group Financial Planning for Strategy and Treasury for GE Capital, Australia and New Zealand. In 2004 and 2005, Mr. Chhibbar was Chief Financial Officer for GE Capital, South Korea. From 1998 to 2004, Mr. Chhibbar was the Chief Financial Officer for GE Capital, Indonesia and Malaysia. Mr. Chhibbar is a Chartered Accountant and an Associate Member of CPA, Australia. | ||||||
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| Samuel Meckey (age 48) | Executive Vice President | Mr. Meckey has served as an Executive Vice President since November 2018. Prior to joining us, Mr. Meckey served as President of UnitedHealth Group's Optum Global Solutions and before that has held various executive roles at UnitedHealth Group, where he was employed from May 2004 to June 2018. Prior to joining UnitedHealth Group, Mr. Meckey was an officer and naval aviator in the United States Navy from May 1992 to August 2002. | | ||||
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Nalin Miglani (age 58) | Executive Vice President and Chief Human Resource Officer | Mr. Miglani has served as our Executive Vice President, Chief Human Resource Officer since December 2014. Mr. Miglani is responsible for the global human resources function at the Company. Prior to joining the Company, he was the Chief HR and Corporate Development Officer for Nutreco, based in Amsterdam, Netherlands, from March 2013 to November 2014. Mr. Miglani also served as the Chief HR and Communications Officer for Tata Global Beverages Company, London, UK, from June 2008 to February 2013. In addition, Mr. Miglani held various global and regional HR leadership roles around the world during his career at The Coca-Cola Company and British American Tobacco. | ||||||
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| Nagaraja Srivatsan (age 52) | Executive Vice President and Chief Growth Officer | Mr. Srivatsan joined the Company as Executive Vice President and Chief Growth Officer in December 2016. Mr. Srivatsan is responsible for overseeing our sales and marketing, consulting, and strategy functions. Previously, he worked at Cognizant Technology Services beginning in 2002, where he served as Senior Vice President and Venture Partner, working with emerging businesses and ventures in the healthcare and life science industry. Mr. Srivatsan was Senior Vice President of Client Solutions at Silverline Technologies from 2001 to 2002, Chief technology Officer and Executive Vice President of Global Delivery at SeraNova from 1998 to 2001, and a Director at SEI Information Technology from 1992 to 1998. | | ||||
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EXECUTIVE COMPENSATION |
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Compensation Discussion and Analysis
Named Executive Officers
As determined in accordance with SEC rules, our "named executive officers" for 2018 are:
Executive Summary
2018 Financial Highlights
We improved our annual revenues from $762.3 million in fiscal year 2017 to $883.1 million in fiscal year 2018 (an increase of over 15%), completed one acquisition and closed a strategic $150 million convertible notes investment from The Orogen Group. In addition, we increased our global footprint with the opening of three delivery centers, won 50 new clients, received numerous awards and industry recognitions and launched a global version of our analytics-driven subrogation platform Subrosource™ to derive additional recoveries, which has been deployed across Europe, UK, Europe and Asia.
Our Compensation Committee paid bonuses as a result of our achievement of 97.7% of our revenue target and 88.2% of our adjusted profits before tax ("Adjusted PBT") target, and based on achievement of individual and other performance measures as described below.
Total Stockholder Return
The graphs below compare our 1-year, 3-year and 5-year total stockholder return ("TSR") with that of the companies comprising Nasdaq, S&P 500 and our peer group. As shown in the table, our TSR outperformed all but one of our market benchmarks.
Acquisitions, Finance and Equity Transactions
Awards and Industry Recognition
Clients and Operations
Summary of Key Compensation Considerations & Decisions in 2018
The following highlights the Compensation Committee's key considerations and compensation decisions in 2018 and with respect to performance for 2018.
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Key Corporate Governance Features
Our compensation programs, practices and policies are reviewed and re-evaluated periodically and are subject to change from time to time. Our executive compensation philosophy is focused on pay for performance and is designed to reflect appropriate governance practices aligned with the needs of our business. Listed below are some of the Company's more significant practices and policies that were in effect during fiscal 2018, which were adopted to drive performance and to align our executives' interests with those of our stockholders.
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What We Do | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ✓ | Align Our Executive Pay with Performance | Link a significant portion of
Variable compensation is "at-risk" and rewards performance and contributions to both short- and long-term financial performance. | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✓ | Use Appropriate Peer Groups When Establishing Compensation | Established a peer group to help us review market practices and design a competitive compensation program. The criteria for peer group selection include similar market capitalization, scope of operations, potential mobility of talent and industry alignment. Set compensation of our executive officers at levels that we believe are | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ✓ | Ensure Equity Compensation Best Practices | Design equity incentives to encourage Hold dividends accrued under our equity awards, if any, until the recipient vests in the underlying shares or units. | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Compensation Committee is advised by an independent consultant who reports directly to the Compensation Committee & provides no other services to the Company or management. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ✓ | Mitigate Risks | Mix and design of our compensation programs serves to mitigate operational, financial, legal, regulatory, strategic & reputational risks. | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✓ | Maintain a Clawback Policy | Maintain a compensation recovery policy that allows the Company to recover compensation (including both cash and/or equity awards) previously paid to one or more officers in the event of a financial restatement caused by noncompliance with reporting requirements that impacts the applicable performance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ✓ | Maintain a Robust Stock Ownership Policy | Maintain a stock ownership policy that requires our CEO to maintain stock ownership equal to at least six times his base salary and We maintain a similar stock ownership policy for our As of December 31, 2018, all covered executives and | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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What We Don't Do | ||||||||
| ✘ | No Option Repricing | We prohibit option repricing without stockholder approval. | | ||||
✘ | No Excessive Overhang or Dilution | We do not have excessive overhang or dilution from equity grants. | ||||||
| ✘ | No Excessive Perquisites | We provide our named executive officers with only limited perquisites and personal benefits that serve an important business purpose in addition to the regular benefits offered to all employees. We consider the perquisites and personal benefits that we offer to our executives in India to be customary benefits which allow us to remain competitive for top talent. | | ||||
✘ | No Tax Gross-Ups | We do not provide "gross-ups" to any of our named executive | ||||||
| ✘ | No Hedging or Pledging | We maintain a policy that prohibits our officers and In addition, under this policy, Reporting Persons are only permitted to pledge shares of our | | ||||
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Overview of Compensation Policies and Philosophies
We believe that the long-term success of companies that provide outsourcing, transformation and analytics services globally is linked to their ability to recruit, train, motivate and retain employees at every level. There is significant competitive pressure in our industry for qualified managers with a track record of achievement. It is critical that we recruit, train, motivate and retain highly talented individuals at all levels of the organization who are committed to our core values of innovation, collaboration, excellence, integrity and mutual respect. We believe that our executive compensation programs are integral to achieving this end.
Our Compensation Committee bases its executive compensation programs on the following objectives, which guide us in establishing all of our compensation programs:
> | Compensation should be based on the level of job responsibility, individual performance and | |||||
return for top-tier individual and company performance; conversely, where individual performance and/or our performance falls short of expectations, the | ||||||
> | Compensation should balance long-term focus that is linked to stockholder value as well as short-term financial objectives. Consistent with this philosophy, equity-based compensation should be higher for persons with higher levels of responsibility and |
greater influence on long-term results, thereby making a significant portion of their total compensation dependent on long-term stock price appreciation. In addition, compensation should focus management on achieving short-term performance goals in a manner that supports and ensures long-term success and profitability. | ||||||
> | Compensation should reflect the value of the job in the marketplace. We compete for talent globally. In order to attract and retain a highly skilled workforce, we must remain competitive with the pay of other employers who compete with us for talent in the relevant markets. |
> | Compensation programs should be easy to understand. We believe that all aspects of executive | ||||||||||||||||||||||||
how their efforts can affect their pay, both directly through individual performance accomplishments, and indirectly through contributing to our
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Our Compensation Committee's Processes
Our Compensation Committee has established a number of processes to assist it in ensuring that our executive compensation programs are achieving their objectives. Among those are the following:
executive officers made under our incentive bonus program and also influences any changes in base salary.
The compensation data for our peer group is compiled directly by FW Cook, the independent consultant to the Compensation Committee. The peer group compensation data was supplemented by global general industry and industry-specific survey data. The data from the surveys was scaled to our size by FW Cook based on revenues or corresponding revenue ranges as provided by the surveys. Management separately engaged Aon Consulting for the limited purpose of providing a survey of compensation data (the parameters of which were not prepared by Aon Consulting) for individuals in our global general industry holding analogous positions to our executive officers. While the Compensation Committee reviewed and considered the data provided by these surveys, it did not consider or review the compensation paid to executives at the component companies included within such surveys and did not use this information or any other data as a definitive benchmark to set executive compensation for fiscal year 2018. Our Compensation Committee uses the compensation data to obtain a general understanding of current market practices, so it can design our executive compensation program to be competitive. Market data is not used exclusively, but rather as a point of reference to draw comparisons and distinctions. The Compensation Committee also takes into account an executive officer's job responsibilities, performance, qualifications and skills in determining individual compensation levels.
Components of Executive Compensation for 2018 For 2018, the compensation of executive officers consisted of the following five primary components:
Compensation Mix Consistent with our compensation philosophy, our compensation program balances base salary, short-term incentive and long-term incentive opportunities provided to our executive officers. The following charts illustrate the mix of target compensation components for the Vice Chairman and CEO and the other named executive officers during the 2018 fiscal year. As illustrated by the charts below, the majority of compensation that may be earned by our named executive officers is tied to the achievement of financial performance metrics (annual performance bonuses and PRSUs) or fluctuates with the underlying value of our common stock (RSUs). Detailed Review of Compensation Components Base Salary As discussed above, we provide our executive officers fixed compensation commensurate with their performance, experience, responsibilities, skill set and market value. This attracts and retains an appropriate caliber of talent for the position and provides a base wage that is not subject to our performance risk. In setting base salaries for 2018, our Compensation Committee considered:
Upon completing its review and as shown in the table below, and considering base salaries were held constant for 2017, the Compensation Committee determined that it was appropriate to increase the base salary for each of our named executive officers in recognition of their individual contributions and the Company's performance. The fixed compensation paid to Mr. Bagai is paid in Indian Rupees but we have included the percentage increase with respect to his fixed compensation in U.S. dollars. Further, this amount covers not only base salary for Mr. Bagai, but also amounts available as a travel allowance, an automobile allowance, a housing allowance, a medical allowance and a cash supplementary allowance, consistent with compensation practices in India.
Incentive Bonus We have established an annual incentive bonus program in order to align our executive officers' goals with our performance targets for the current year and to encourage meaningful contributions to our future financial performance. Our Compensation Committee approved the framework of our incentive bonus program in December 2017 for the year 2018 for bonuses payable in respect of 2018 performance. Under the program, bonus target amounts, expressed as a percentage of base salary or annual fixed compensation, are established for participants at the beginning of each year unless their employment agreements contain different terms. Funding of potential bonus payouts for the year are determined by our financial results for the year relative to predetermined performance measures and our assessment of each named executive officer's performance relative to his predetermined individual performance goals. If our performance falls short of target, our aggregate funding of the annual cash bonus incentive pool declines. If we do not achieve a minimum threshold for the established financial performance objectives, then the bonus pool is not funded for that particular objective. Although the Compensation Committee has not historically done so, it has the discretion to adjust an award payout from the amount yielded by the formula at the end of the performance period. Our Compensation Committee considered the following when establishing the awards for 2018:
percentage of base salary or annual fixed compensation) as well as maximum bonus targets for each named executive officer.
In 2018, the Compensation Committee continued to set the business line and other Company performance goals as well as the individual performance goals described above for all named executive officers to ensure the executives were properly focused on both the Company's Adjusted PBT and revenue goals, aggregate of business units' performance on revenue and Adjusted PBT goals and other areas of performance that are unique to their positions within the organization. We decided to move away from basing our annual bonus in part on Adjusted EPS and, instead, to base it in part on Adjusted PBT targets because of the uncertain effect of proposed U.S. tax reforms on the Company and the Adjusted EPS calculation. Adjusted PBT, by its nature, is a measure that is unaffected by the then-current year's taxation. The Compensation Committee believes achievement of these performance metrics will drive our business and, in turn, lead to increased stockholder value.
ranged from zero to 200% of target depending on the achievement of performance goals, as follows:
In 2018, our Compensation Committee established an Adjusted PBT target of $141.3 million and a revenue target of $867.0 million. Based on our performance during the 2018 fiscal year, we achieved 88.2% of our Adjusted PBT target, and 97.7% of our revenue target. The bonus pool funding for employees whose bonuses are tied to the performance of specific business lines is determined by targets established for such businesses by our Compensation Committee.
Long-Term Equity Incentives The Committee continues to believe that long-term equity awards provide employees with the incentive to stay with us for longer periods of time, which in turn, provides us with greater stability as we grow. These incentives foster the long-term perspective necessary for continued success in our business because the value of the awards is directly linked to long-term stock price performance, and they ensure that our executive officers are properly focused on stockholder value. Moreover, the Committee favors restricted stock unit awards as these awards offer executives the opportunity to receive shares of our common stock on or shortly following the date that the restrictions lapse. Such awards serve both to reward and retain executives because value is linked to the price of our stock on the date that the restriction lapses, and the executive must generally remain in employment through the date that the restrictions lapse. Restricted stock unit awards provide a significant degree of alignment of interests between our executives and stockholders. The Committee also believes that the mix between Time-Vested RSUs and Performance-Vested RSUs provides an appropriate balance between incentivizing our executives to continue their employment with the Company and to ensure they are focused on long-term financial performance and generating stockholder value, which will enable them to realize additional compensation. Finally, restricted stock units are potentially less dilutive to stockholders' equity than stock options because restricted stock awards are full value awards, and our Compensation Committee can award fewer shares than an equivalent value of stock options. Fiscal Year 2018 Awards Under our equity compensation program, our executive officers received restricted stock units under the 2015 Amendment and Restatement of the 2006 Omnibus Award Plan (the "2015 Plan"). Subsequent awards were made pursuant to the 2018 Omnibus Incentive Plan approved by the Company's stockholders at the annual meeting of stockholders held in June 2018. We awarded restricted stock units to all of our named executive officers in the portions shown below.
The table below shows the amount of Time-Vested and Performance-Vested RSUs our Compensation Committee awarded our named executive officers in 2018. In general, the Compensation Committee believes that the size of the award granted to an executive officer should increase based on the executive officer's level of responsibility within the Company.
Payout of Awards Granted in Prior Fiscal Years This was the third and final performance year for the 2016 performance-based restricted stock units. We achieved 90.52% of the revenue target for the revenue-linked restricted stock units resulting in 5.24% of target funding of those grants. The Company's TSR performance was at the 40th percentile amongst its peer group, resulting in the executives earning 68.25% of the 2016 relative TSR-linked restricted stock units pursuant to the terms of the original grant. Benefits and Perquisites We offer employee benefits coverage in order to:
The benefits available for all U.S. employees include customary medical and dental coverage, disability insurance and life insurance. In addition, our 401(k) plan provides a reasonable level of retirement income reflecting employees' careers with us. A number of our U.S. employees, including our U.S.-based named executive officers, participate in these plans. The cost of employee benefits is partially borne by our employees, including our named executive officers. Our named executive officer in India, Mr. Bagai, is eligible to participate in the Company's pension benefit, health and welfare and fringe benefit plans otherwise available to executive employees in India. We generally do not provide significant perquisites or personal benefits to executive officers other than our Vice Chairman and CEO and our executive officers in India. Our Vice Chairman and CEO is provided a limited number of perquisites which we believe are reasonable and consistent with market trends, which are intended to be part of a competitive overall compensation program. A discussion of the benefits provided to our Vice Chairman and CEO is provided under "Employment Agreements" beginning on page 52. Risk and Compensation Policies Our Compensation Committee has taken into account its discussions with management and FW Cook regarding our compensation practices and has concluded that any risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. This conclusion was based on the features of our compensation programs, practices and policies set forth under "Key Corporate Governance Features" beginning on page 35. Severance and Change-in-Control Benefits Each named executive officer is party to an employment agreement or letter that sets forth the terms of his or her employment, including compensation, which was negotiated through arms'-length contract negotiations. Under these employment agreements or letters, we are obligated to pay severance or other enhanced benefits upon termination of their employment. A discussion of the severance and other enhanced benefits provided to our named executive officers is provided under "Potential Payments upon Termination or Change in Control at Fiscal 2018 Year-End" beginning on page 58. We have provided change-in-control severance protection for some of our executive officers, including our named executive officers. Our Compensation Committee believes that such protection is intended to preserve employee morale and productivity and encourage retention in the face of the disruptive impact of an actual or rumored change in control. In addition, for executive officers, the program is intended to align executive officers' and stockholders' interests by enabling executive officers to consider corporate transactions that are in the best interests of our stockholders and other constituents without undue concern over whether the transactions may jeopardize the executive officers' own employment. Senior executive officers, including our named executive officers, have enhanced levels of benefits based on their job level, seniority and probable loss of employment after a change in control. We also consider it likely that it will take more time for senior executive officers to find new employment. Looking Forward to 2019 For fiscal 2019, we generally continued the annual bonus program and our long-term equity incentives for fiscal 2018, subject, of course, to new performance goals. As mentioned previously, the Adjusted PBT target was in place for determining a portion of the annual incentive awards in 2018 due to the uncertain effect of U.S. tax reform on the Company. Since the enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017, the Compensation Committee determined to return to the Adjusted EPS target for that portion of the 2019 annual incentive awards. Deductibility Cap on Executive Compensation
As in the past, our Compensation Despite the process by which we establish performance goals or evaluate performance against pre-established goals with respect to compensation paid to our named executive
The Compensation Committee of the board of directors of ExlService Holdings, Inc. has reviewed and discussed the Compensation Discussion and Analysis with our management and, based on such review and discussion, has recommended to the board of directors of ExlService Holdings, Inc. that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31,
Summary Compensation Table for Fiscal Year The following table sets forth information for compensation earned in fiscal years
Unless otherwise specified, U.S. dollar figures in this proxy statement have been converted from Indian rupees at a rate of
Grants of Plan-Based Awards Table for Fiscal Year The following table sets forth information concerning grants of stock and option awards and non-equity incentive plan awards granted to our named executive officers during fiscal year
2018:
Employment Agreements In addition to the terms described below, the employment and severance agreements for each of our named executive officers include severance, termination and/or noncompetition provisions which are described below under 58. Rohit Kapoor Mr. Kapoor serves as our Vice Chairman and CEO, and is based at our executive offices in New York, New York. Salary, Bonus and
Personal We provide Mr. Kapoor with certain personal benefits, including certain club memberships, home office supplies, term life insurance policy (with a face value of $500,000), once-a-year business class airfare between the United States and India for the executive and his family, up to $12,000 for personal tax and estate planning expenses, up to $1,400 per month car allowance, up to $12,000 per year for expenses associated with maintaining an automobile in India (including cost of a driver), personal security for the executive and his family while in India, reimbursement for first-class business travel, and a per diem allowance for certain trips. In addition, his employment agreement entitles him to certain other benefits in the event he is relocated to India, but which are not applicable currently as he maintains a U.S. residency. Mr. Kapoor's employment agreement also includes severance, termination and noncompetition provisions which are described below under "Potential Payments upon Termination or Change in Control at Fiscal 2018 Year-End" beginning on page 58. Vishal Chhibbar Mr. Chhibbar serves as our Executive Vice President and CFO, and was based in India until December 31, 2015. We entered into an employment agreement with him, effective January 1, 2016 which will continue throughout Mr. Salary, Bonus and Mr. Chhibbar's employment agreement also includes severance, termination and noncompetition provisions which are described below under "Potential Payments upon Termination or Change in Control at Fiscal 2018 Year-End" beginning on page 58. Pavan Bagai Mr. Bagai serves as our President and Chief Operating Officer, and is based in India. We entered into an employment agreement with him, effective July 31, 2002 and a severance letter, effective March 15, 2011, each of which will continue throughout Mr. Salary, Bonus and Mr. Bagai's agreements also includes severance, termination and noncompetition provisions which are described below under "Potential Payments upon Termination or Change in Control at Fiscal 2018 Year-End" beginning on page 58.
Mr. December 10, 2016, which will continue throughout Mr. Srivatsan's employment with the Company. Salary, Bonus and Mr. Srivatsan's employment agreement also includes severance, termination and noncompetition provisions which are described below under "Potential Payments upon Termination or Change in Control at Fiscal 2018 Year-End" beginning on page 58. Nalin Miglani Mr. Miglani serves as our Executive Vice President and Chief Human Resources Officer, and is based at our executive offices in New York, New York. We entered into an employment agreement with him, effective December 1, 2014, which will continue throughout Mr. Salary, Bonus and Mr. 58. Outstanding Equity Awards at Fiscal The following table sets forth the equity awards we have made to our named executive officers that were outstanding as of December 31,
2018:
Option Exercises and Stock Vested During Fiscal Year The following table provides additional information about the value realized by our named executive officers on option award exercises and stock award vesting during fiscal year
2018:
Pension Benefits For Fiscal Year The following table discloses the present value of accumulated benefits payable to each of the named executive officers and the years of service credited to each named executive under the Gratuity Plan for Indian Employees as of December 31,
We are required to provide all Indian employees with benefits under the Gratuity Plan, a defined benefit pension plan in India. Distributions from the Gratuity Plan are made in a single lump sum following retirement from the Company. An $10,869. Potential Payments upon Termination or Change in Control at Fiscal The following tables summarize the amounts payable to each named executive officer upon a change in control or termination of his employment with us on December 31, Rohit Kapoor
Change-in-Control Cash Death or Noncompetition and Nonsolicitation Annual Equity
Release of 15 days after we have given him notice of such breach and his resignation from the board of directors and all committees thereof, if requested by the Company. Code Section Indicative Payouts for Rohit Kapoor
Vishal Chhibbar Either Mr. Chhibbar or we may terminate Mr. On a
outstanding Revenue-Linked PRSUs will become fully vested if, following or in specific contemplation of a change in control, he is terminated without cause or, following a change in control, he (i) terminates his employment for good reason or, (ii) dies. If Mr. Chhibbar dies prior to the end of the performance period and no change in control has occurred, Mr. Chhibbar will become vested in a portion of the outstanding Revenue-Linked PRSUs equal to (x) the number of completed full months during the 3 year performance period up to the date of Mr. Chhibbar's death divided by (y) 36 multiplied by (z) 100% of Mr. Chhibbar's Revenue-Linked PRSUs. Mr. Indicative Payouts of Vishal Chhibbar
Pavan Bagai Either Mr. Bagai or we may terminate Mr. On a 60. Mr. Indicative Payouts for Pavan Bagai
Either Mr. On a 60. Mr. thereafter. Indicative Payouts for
Nalin Miglani Either Mr. Miglani or we may terminate Mr. terminated by the Company without On a 60. Mr. Indicative Payouts for Nalin Miglani
Certain Defined Terms Definition of Cause The following definition of fraud, embezzlement, gross negligence, self-dealing, dishonesty or other gross and willful misconduct which causes serious and demonstrable injury to us; (iii) the executive materially violates any of our material Definition of Good Reason For Mr. Kapoor, is adversely changed; however, if following a change in control, his new title and authority are similar to his old title and authority, then any change in the The following definition of agreement. If the executive plans to terminate his employment for good reason, he must notify us within 30 days following the date the executive first becomes aware of the circumstances giving rise to good reason and must allow us 30 days to remedy the problem. Definition of Change in Control A CEO Pay Ratio Pursuant to SEC rules, we are required to provide an estimate of the ratio of our CEO's total compensation to our median employee's total compensation (our "Pay Ratio"). Due to the size and complexity of our organization, which is made up of over 29,100 professionals throughout the world, with delivery centers over 10 countries, our Pay Ratio is based on reasonable assumptions and estimates described below. We calculated our Pay Ratio by looking at our entire employee population (excluding our CEO) as of December 31, 2018, but excluding leased employees and independent contractors. We then calculated each employee's "total pay" using the sum of his or her fixed pay / base salary and variable pay (including any performance bonus, sales commission, and retention or signing bonus). We also annualized total pay for all full-time and part-time employees that were employed for less than the full 2018 fiscal year. For all employees located in jurisdictions other than the United States, a cost-of-living adjustment was made to align their compensation with the cost-of-living standards in the United States, the jurisdiction in which our CEO resides. Finally, we identified the median employee and calculated his or her annual total compensation and the CEO's annual total compensation in the manner required by Item 402(u) of Regulation S-K, to determine the pay ratio shown in the table below.
Approximately 91% of our employees are located outside of the United States, primarily in India and the Philippines. As is common with many global companies, our compensation programs are market based, and as such they may differ for employees based on the country where an employee works. Accordingly, we believe that it is important to show our pay-ratio calculated in a similar manner as described above using the median U.S.-based employee to provide a commensurable view of our pay practices.
Director Compensation for Fiscal Year The following table sets forth information for compensation earned in fiscal year
2018:
For receive an additional annual fee of $10,000. There are no additional fees payable for attendance at our board or committee meetings (whether in person, telephonic or otherwise). We make quarterly cash payments to our directors who elect to receive a portion of their director fees in the form of cash. Holders of restricted stock units do not receive the underlying shares of common stock until the units have vested and are settled. The restricted stock units issued to each of our non-employee directors will settle on the earliest of:
Unless otherwise indicated, the table below sets forth information with respect to the beneficial ownership of our common stock by:
The amounts and percentages of common stock beneficially owned below are as of March
Review and Approval of Related Party Transactions We review all relationships and transactions in which we, our directors and executive officers or their immediate family members and our 5% stockholders are participants to determine whether such persons have a direct or indirect material interest in such transactions. Our Code of Conduct and Ethics instructs our directors, officers and employees to report the facts and circumstances of any such transaction or potential transaction to our General Counsel or our Audit Committee. Our board of directors has adopted a policy regarding the review of potential related party transactions. Under this policy, our General Counsel will review the facts and circumstances of any covered transaction. If our General Counsel determines that the transaction involves a related party transaction and that the amount involved does not equal or exceed $120,000, our General Counsel will approve or disapprove the transaction. If our General Counsel determines that the transaction involves a related party transaction and that the amount involved equals or exceeds $120,000, our General Counsel will refer the transaction to our Audit Committee for
Related Party Transactions As required under SEC rules, transactions that are determined to be directly or indirectly material to us or a related person and which involve amounts exceeding $120,000 in the previous fiscal year are disclosed in our proxy statement.
On October 1, 2018, the Company entered into the Investment Agreement with the Purchaser, an affiliate of The Orogen Group LLC. One of the Company's directors, Vikram Pandit, is the Chairman and Chief Executive Officer of The Orogen Group LLC. Under the terms of the Investment Agreement, the Company issued to the Purchaser $150,000,000 in aggregate principal amount of 3.50% Convertible Senior Notes due October 1, 2024. In addition, we appointed Mr. Pandit, a nominee of the Purchaser, to our board of directors pursuant to the Investment Agreement. After considering the facts and circumstances regarding the relationship, the Board has determined that the Investment Agreement does not impair Mr. Pandit's independence under applicable Nasdaq standards and federal securities laws.
The Audit Committee of the board of directors of ExlService Holdings, Inc. assists our board of directors in fulfilling its oversight responsibilities with respect to the following:
In connection with these responsibilities, the Audit Committee met with management and Based on the review and discussions referred to above, the Audit Committee approved the inclusion of the audited financial statements in the
You are being asked to approve an amendment to the Company's Amended & Restated Certificate of Incorporation (the "charter"), which will have the effect of phasing out and eliminating the classifications of the board of directors over the next three years.
Currently, the charter divides the Company's board of directors into three classes (Class I, Class II and Class III), each with a three-year term. The terms of the classes are staggered, so that only one of the three classes stands for election for a three-year term at each Annual Meeting of Stockholders. The
Under the Charter Amendment, director nominees standing for election at each annual meeting of stockholders, commencing with the Annual Meeting, will be elected for a one-year term expiring at the next Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws. The Charter Amendment will not shorten the term of any current director. If the Charter Amendment is approved by the stockholders of the Company by the requisite vote at the Annual Meeting, then the Charter Amendment will become effective upon the filing of the Charter Amendment with the office of the Secretary of State of the State of Delaware, which the Company intends to cause to occur promptly after it is determined that the Charter Amendment has been approved by the requisite vote of stockholders at the Annual Meeting. Phased Declassification As mentioned above, if the Charter Amendment is approved by the Company's stockholders, the classification of the board of directors will be phased out over the next three Annual Meetings of Stockholders, such that: (i) at the Annual Meeting, each of the Class I director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, (ii) at the 2020 annual meeting of stockholders, each of the Class I and Class II director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, and (iii) at the 2021 annual meeting of stockholders, each of the Class I, Class II and Class III director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our by-laws, and thereafter the classification of the board of directors will terminate in its entirety. If the Charter Amendment is not approved by the Company's stockholders by the requisite vote at the Annual Meeting, the Company will continue to have a classified board as currently provided by the Charter. Required Vote The ratification of the Charter Amendment requires the affirmative vote of at least 662/3% of the voting power of the then-outstanding shares of the Company, voting together as a single class. Unless marked to the contrary, proxies received will be voted "FOR" ratification of the Charter Amendment.
The Nominees Our Nominating and Governance Committee has nominated, and our board of directors has designated, Mses. Minto and Studenmund and Mr. Kapoor to stand for election as Class I directors at the Annual Meeting. Ms. Minto and Mr. Kapoor are standing for re-election and Ms. Studemund was appointed since the last annual meeting of stockholders and is standing for her first stockholder election. Ms. Studenmund was identified and recommended to the Nominating and Governance Committee by a third-party search firm. Term of Office If Proposal 1 is approved by the Company's stockholders, upon the filing of the amendment to the charter set forth on Appendix A attached hereto, the classification of the Board of Directors will be phased out over the next three annual meetings of stockholders as described in Proposal 1, such that (i) at the Annual Meeting, each of the directors in Class I will be elected to hold office for a term of one year, (ii) at the 2020 Annual Meeting of Stockholders, each of the Directors in Class I and Class II will be elected to hold office for a term of one year, and (iii) at the 2021 Annual Meeting of Stockholders, each of the Directors in Class I, Class II and Class III will be elected to hold office for a term of one year, and thereafter the classification of the Board of Directors will terminate in its entirety, and if elected, each of the Class I director nominees will serve a term or one year on our board of directors, until our 2020 annual meeting of stockholders or until their successors are duly elected and qualified in accordance with our by-laws. If Proposal 1 is not approved by the Company's stockholders, and if elected, each of the Class III director nominees will serve a term of three years on our board of directors, until our 2022 Annual Meeting of Stockholders or until their successors are duly elected and qualified in accordance with our by-laws. Voting Instructions and Substitutes The proxies given to the proxy holders will be voted or not voted as directed and, if no direction is given, will be voted FOR these three nominees. Our board of directors knows of no reason why any of these nominees should be unable or unwilling to serve. However, if for any reason any nominee should be unable or unwilling to stand for election, the shares represented by proxies will be voted for the election of any substitute nominee designated by our board of directors to fill the vacancy. General Information About Nominees The age, tenure on our board of directors and committee membership, if any, of each nominee appears below. Information regarding the business experience during at least the last five years and directorships of other publicly owned corporations of each nominee can be found above under
Required Vote The affirmative vote of a majority of votes (meaning the number of shares voted
Our Audit Committee has In retaining Deloitte as the Company's independent registered public accounting firm, the Audit Committee considered whether the provision of non-audit services by Deloitte was compatible with maintaining Deloitte's independence and Change in Accountants Ernst & Young LLP ("EY") audited our consolidated financial statements for fiscal years 2017 and 2016. On February 27, 2018, pursuant to the Audit Committee determination, the Company dismissed EY as the Company's independent registered public accounting firm. EY's reports on the Company's consolidated financial statements as of and for the fiscal year ended December 31, 2017 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. During the fiscal years ended December 31, 2016 and 2017, and the subsequent interim periods through February 27, 2018, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between the Company and EY on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to EY's satisfaction, would have caused EY to make reference thereto in their reports; and (ii) no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K. In connection with the filing of the Company's Current Report on Form 8-K dated February 27, 2018 (the "Form 8-K"), the Company provided EY with a copy of the above disclosures, and requested that EY furnish a letter addressed to the SEC stating whether or not EY agrees with the statements in the immediately preceding paragraph. The Company subsequently received the requested letter, and a copy of EY's letter, dated March 1, 2018, was filed as Exhibit 16.1 to the Form 8-K. As of February 28, 2018, pursuant to the Audit Committee's determination, the Company engaged Deloitte to serve as its independent registered public accounting firm for fiscal year 2018. During the fiscal years ended December 31, 2016 and 2017 and the subsequent interim periods through February 28, 2018, neither the Company nor anyone on its behalf has consulted with Deloitte regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that Deloitte concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K. The change in independent registered public accounting firm did not result from any dissatisfaction with the quality of professional services rendered by EY. Audit and Non-Audit Fees The following is a summary of the fees billed or expected to be billed to us by
Audit
All Other Our Audit Committee pre-approves and is responsible for the engagement of all auditing services provided by our independent registered public accountants and all non-auditing services to be provided by such accountants to the extent permitted under Section 10A of the Exchange Act, including all fees and other terms of engagement. Our Audit Committee may delegate the authority to pre-approve audit and permitted non-audit services between meetings of our Audit Committee to a designated member of our Audit Committee, provided that the decisions made by such member are presented to our full Audit Committee for ratification at its next scheduled meeting. All of the fees paid to Required Vote The ratification of the appointment of
Proposal At the
In addition, our philosophy places more emphasis on variable elements of compensation (such as incentive bonuses and equity-based compensation) than fixed remuneration. Our stockholders have the opportunity to vote for, against or abstain from voting on the following resolution:
The above-referenced disclosures related to the compensation of our named executive officers appear beginning at page Required Vote The approval, on an advisory (non-binding) basis, of the compensation of our named executive officers requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted
Table of Contents
Stockholder proposals intended to be included in our proxy materials for the Stockholders who intend to submit proposals at the Any notice of proposed business or nomination, whether or not included in our proxy statement, must include the information required under our by-laws, including Section 2.11.4, in order for the matter to be eligible for consideration at the
Delivery of Documents to Stockholders Sharing an Address If you are the beneficial owner, but not the record holder, of shares of our common stock, your broker, bank, trust or other nominee may only deliver one copy of this proxy statement and the Electronic Access to Proxy Statement and Annual Report This proxy statement and our
Our board of directors does not know of any other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, your proxy holders will vote on it as they think best unless you direct them otherwise in your proxy instructions. Whether or not you intend to be present at the Annual Meeting, we urge you to submit your signed proxy promptly.
New York, New York
26, 2019 We will furnish without charge to each person whose proxy is being solicited, upon the written request of any such person, a copy of the Annex A CERTIFICATE OF AMENDMENT
I, the undersigned, being the officer designated by the board of directors to execute this Certificate of Amendment to the Amended and Restated Certificate of Incorporation of ExlService Holdings, Inc. (the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware do hereby certify:
1. The first paragraph ofSection 6.2 of the Amended Restated Certificate of Incorporation, as amended, is hereby amended and restated in its entirety to read as follows:
SECOND: That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. The foregoing amendments shall be effective upon filing with the Secretary of State of the State of Delaware.
VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on June 16, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. EXLSERVICE HOLDINGS, INC. 320 PARK AVENUE, 29th FLOOR NEW YORK, NEW YORK 10022 VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 16, 2019. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E75473-P24645 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. EXLSERVICE HOLDINGS, INC. The Board of Directors recommends you vote FOR proposal 1. For Against Abstain ! ! ! 1. The amendment of the Company's amended and restated certificate of incorporation to effect a phased declassification of the board of directors over the next three years For Against Abstain The Board of Directors recommends you vote FOR the following: ! ! ! 4. The approval, on a non-binding advisory basis, of the compensation of the named executive officers of the Company 2. Election of Directors Nominees: For Against Abstain NOTE: The proxies are authorized to act upon such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof ! ! ! ! ! ! ! ! ! 2a. Rohit Kapoor 2b. Anne Minto 2c. Jaynie Studenmund The Board of Directors recommends you vote FOR proposals 3 and 4. ! ! ! 3. The ratification of the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for fiscal year 2019 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. E75474-P24645 EXLSERVICE HOLDINGS, INC. Annual Meeting of Shareholders June 17, 2019 8:30 A.M. EDT This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Vishal Chhibbar and Ajay Ayyappan, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of EXLSERVICE HOLDINGS, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 8:30 A.M., Eastern Daylight Time on June 17, 2019, at 320 Park Avenue, 29th Floor, New York, New York 10022, and any adjournment or postponement thereof. The undersigned hereby also authorize(s) the proxy, in his discretion, to vote on any other business that may properly be brought before the meeting or any adjournment or postponement thereof to the extent authorized by Rule 14a-4(c) promulgated by the Securities and Exchange Commission. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations, and accordingly, will be voted FOR each of the Board of Directors’ nominees for director specified in Proposal 2, and FOR Proposals 1, 3 and 4, unless a contrary choice is specified, in which case the proxy will be voted as specified. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders, dated on or about April 26, 2019, and the Proxy Statement furnished therewith. Continued and to be signed on reverse side
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